Per-Capita Health Care Costs Show Modest Growth

Twitter icon
Facebook icon
LinkedIn icon
e-mail icon
Google icon

Representing a fourth consecutive month of modest cost growth acceleration, the average per-capita cost of health care services covered by commercial insurance and Medicare grew by 5.73% over the 12 months ending in August, Standard & Poor's(S &P) Healthcare Economic Indices show.

The index lowest annual growth rate in its the indices' six-year history, an increase of 5.37%, was posted this past April. Since that juncture, however, the rate of growth has accelerated slightly each month. Health care costs surpassed the 3.8% growth in overall inflation as measured by the Consumer Price Index for the same 12-month period ending in August, figures from the Bureau of Labor Statistics demonstrate.

Moreover, a breakdown of the S &P data reveals that for the year ending August 2011, health care costs covered by commercial insurance increased by 7.89%, as measured by the S &P Healthcare Economic Commercial Index.

Medicare claim costs also trended upward during this period, rising, as measured by the S &P Healthcare Economic Medicare Index, at an annual rate of 2.16%. This growth rate was the lowest ever recorded for Medicare claim costs in the index’s history.

The Medicare index showed its highest annual growth rate—an increase of 8.02%-- in November of 2009. However, the latter figure has consistently and sharply decelerated by about 5.86 percentage points since then, S &P said.

"As the summer of 2011 ended, we continued to observe the recent trend of a deceleration in the annual growth rates of Medicare costs and a sustained acceleration in the annual rates of commercial healthcare costs," writes David M. Blitzer, chairman of the Index Committee at S &P Indices, in the report. "With this month's data, the Medicare index is almost one-fourth of its peak annual rate of +8.02% recorded in November 2009. This is a very sharp deceleration."

Read the report.