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Life Health > Health Insurance

Healthcare Costs Rise 7.32% From Aug. 2009

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The Standard & Poor’s Healthcare Economic Composite Index data released Thursday show that the average per capita cost of healthcare services covered by private insurance and Medicare programs has increased by 7.32% over the 12 months ending in August 2010.

Claim costs for commercial health plans, as measured by the S&P Healthcare Economic Commercial Index, increased at a higher rate, hitting 8.66% for hospital and physician claims for covered patients. The S&P Healthcare Economic Medicare Index revealed that Medicare claim costs for the same categories rose a less drastic 5.08%.

The Composite, Commercial, and Medicare indices track, by month, the per capita change in Medicare and commercial health insurance revenue for hospital and professional services facilities for the services they provide to patients. Annual growth rates are calculated by the percentage change of 12-month moving averages compared with the same month of the preceding year.

David M, Blitzer, chairman of the Index Committee at S&P, had this to say in a statement regarding the indices and the rates of increase: "Healthcare costs continued to rise in the month of August. The annual rates of change for the Composite, Commercial and Medicare Indices were +7.32%, +8.66% and +5.08%, respectively. August data shows that the most significant rise in healthcare costs was those covered by commercial health insurance plans. If you look at these data by service provider, the annual change in hospital claims costs, at +7.41%, are only slightly above those for professional services, +7.01%. This is far different than what we witnessed in the middle of 2009, when hospital claims costs were rising close to 8.0% per year, while professional services were growing at a more modest 6.0%.

"Looking across the family of S&P Healthcare Indices, we have seen a trend of moderation in the annual growth rates, particularly in the last 12 months. This is most prominent with Medicare claims costs. In November 2009 those costs were rising at an annual rate of 7.94%. With August's report we see that the rate has fallen to +5.08%.”

Blitzer points out that the indices do not reflect any impact of the health care reform law, and that there are differences between the Medicare and commercial indices governed by regulatory issues.


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