Annual Growth Rates Moderately Increased in June 2013 According to the S&P Healthcare Economic Indices

NEW YORK, Aug. 15, 2013 /PRNewswire/ -- Data released today by S&P Dow Jones Indices for the S&P Healthcare Economic Composite Index indicates that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 3.00% over the 12-months ending June 2013, accelerating from the 2.96% annual growth rate recorded in May.

Eight of the nine S&P Healthcare Economic Indices showed higher annual growth rates for June 2013 compared to May 2013. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans rose by 4.14% in June, up from 4.09% reported in May. Annual growth rates in Medicare costs increased by 1.27% in June, according to the S&P Healthcare Economic Medicare Index, up from a 1.22% rate recorded last month.

The Hospital Index's growth rate posted 2.05% in June, up from 1.97% reported in May. The Hospital Medicare Index recorded a 2.17% annual rate in June, up from 2.09% posted last month. The Hospital Commercial annual growth rate posted 1.95% in June, up from 1.85% recorded last month.

The Professional Services Index annual growth rate was 3.86% in June, marginally up from the 3.85% May value. The Professional Services Commercial Index accelerated to 6.08% in June, up from 6.06% reported last month. The Professional Services Medicare annual growth rate hit a new low of -0.39% in June, down from -0.38% recorded in May.

"Following a period when health care cost growth rates were dropping, we're now seeing increases in most of the indices.  Even after this month's figures, the indices growth rates are among the lowest since the indices' start dates in 2005. Eight of the nine headline indices' annual rates moderately accelerated in June," says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "The annual growth rate for the S&P Healthcare Composite Index was 3.00%, the annual growth rate for the Commercial Index was 4.14%, and for the Medicare Index was 1.27%.

"After 13 months of deceleration, the Hospital Commercial Index accelerated by ten basis points in the annual growth rate. It has the highest acceleration among the healthcare indices covered.

"The Professional Services Medicare Index annual growth rate hit a new low of -0.39% in June, one basis point down from last month. It has the lowest annual growth rate among our healthcare indices and remains the only negative one. The Professional Services Commercial Index posted a 6.08% rate in June, two basis points up from its May rate. It remained the highest among the healthcare indices we cover."

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.

The S&P Healthcare Economic Composite Index is a weighted average of the S&P Healthcare Economic Commercial Index and the S&P Healthcare Economic Medicare Index.  Alternatively, it is a weighted average of the S&P Healthcare Economic Hospital Index and the S&P Healthcare Economic Professional Services Index, as each of these indices has the analogous Commercial and Medicare component.

The table below summarizes the year-over-year change in the S&P Healthcare Economic Indices for the 12-month period ending June 2013. With each monthly release, the index levels, including the 12-month moving averages, are recalculated for the full history of the indices, whenever there are revisions to underlying data used in the models. The entire revised history, as well as full results for the underlying S&P Healthcare Economic Indices, is available from S&P Dow Jones Indices as a subscription service.  

As observed in the past, medical costs funded by commercial insurance plans significantly exceed those funded by Medicare.

The S&P Healthcare Economic Indices were developed in consultation with Health Index Advisors, a joint venture between Aon Hewitt and Milliman, Inc., and were derived from the former Milliman, Inc. Health Cost Index™ which was first published in 1987. The complete methodology, fact sheet and supporting research for the S&P Healthcare Economic Indices are available at http://www.spindices.com/index-family/specialty/healthcare-cost

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For more information:

Dave Guarino
Communications
S&P Dow Jones Indices
[email protected]
212-438-1471

David Blitzer
Managing Director and Chairman of the Index Committee
S&P Dow Jones Indices
[email protected]
212-438-3907

SOURCE S&P Dow Jones Indices