Healthcare Costs Accelerate

Data released by S&P Indices for the S&P Healthcare Economic Composite Index indicate that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 5.61% over the 12-months ending June 2011. Since posting its lowest annual growth rate in its more than six-year history - +5.37% in April 2011 - the rate for this index accelerated in both May and June.

Over the year ending June 2011, healthcare costs covered by commercial insurance increased by 7.48%, as measured by the S&P Healthcare Economic Commercial Index. Medicare claim costs rose at an annual rate of 2.50%. This was the lowest annual growth rate recorded for the Medicare Index in its history, which goes back to January 2005.

The Hospital and Professional Services Indices reported increases of 5.16% and 5.89%, respectively, from their June 2010 levels. For the Hospital Index, this rate is slightly higher than the +5.08% posted in May 2011, whereas the Professional Services Index is marginally lower than its +5.91% rate posted in May.

The S&P Healthcare Economic Indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered under traditional Medicare and commercial health insurance programs in the U.S. The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year.