Annual Growth Rates Accelerate In October

NEW YORK, Dec. 20, 2012 /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 5.28% over the 12-months ending October 2012. This is an acceleration from the +5.09% annual growth rate recorded in September 2012.

Seven out of nine S&P Healthcare Economic Indices posted acceleration in their annual growth rates in October 2012. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans increased by 7.16% over the year ending October 2012, up from +7.09% reported for September 2012. Annual growth rates in Medicare claim costs rose by 2.41%, according to the S&P Healthcare Economic Medicare Index, up from +2.04% recorded in September 2012.  The Professional Services Index annual growth rate was +6.63% in October 2012, up from +6.16% September print. The Hospital Index's growth rate hit its seven-and-a-half year historic low of +3.83% in October from +3.86% recorded in September 2012. It was driven by the Hospital Commercial Index, which hit a new recent low with an annual growth rate of +4.78% – its lowest rate since October 2009. It posted +5.15% annual rate last month.

The Professional Services Commercial Index accelerated to +9.08% in October, up from +8.54% reported in September. It was the highest rate since July 2008. The Professional Services Medicare annual growth rate accelerated to +1.92% in October after reaching its historic low of +1.57% in September 2012. The Hospital Medicare annual growth rate posted +2.55% in October, it was up from its +2.17% September rate.

"Out of nine headline healthcare indices we post, seven showed acceleration in their annual growth rates in October 2012," says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "The Composite Index posted an annual rate of +5.28%, the Commercial Index +7.16% and the Medicare Index +2.41%. These three rates are higher than their respective September 2012 levels.

"Two indices that showed annual rates deceleration in October were the Hospital Index and the Hospital Commercial Index. With October data, we observe that the growth rate in the Hospital Index has decelerated for six consecutive months, from a recent high of +5.75% in April 2012 to its historic low of +3.83%, posted in October. This downward trend was driven by a deceleration in hospital commercial plans, which also slowed down for six consecutive months. The +4.78% annual rate in October for Hospital Commercial is 0.37 percentage points below the +5.15% rate recorded in September and 3.95 percentage points below the 8.73% annual rate recorded in April 2012.

"The Professional Services Commercial Index showed the most substantial acceleration from its September level.  In October, the annual rate was +9.08%, 0.54 percentage points above its September +8.54% print. It remains the highest index among healthcare indices we cover.

"The Hospital Medicare was up 2.55%, 0.38 percentage points above its September rate. The Professional Services Medicare Index posted +1.92% in October, 0.35 percentage points above its annual rate historic low of +1.57% posted in September. It has the lowest annual growth rate among our healthcare indices."

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 October 2012. 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

About S&P Dow Jones Indices

S&P Dow Jones Indices LLC, a subsidiary of The McGraw-Hill Companies is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500^® and the Dow Jones Industrial Average^SM, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of institutional and retail investors. More assets are invested in products based upon our indices than any other provider in the world. With over 830,000 indices covering a wide range of assets classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com.

It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, and their respective affiliates, parents, subsidiaries, directors, officers, shareholders, employees and agents (collectively "S&P Dow Jones Indices") does not sponsor, endorse, sell, or promote any investment fund or other vehicle that is offered by third parties and that seeks to provide an investment return based on the returns of any S&P Dow Jones Indices index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices or its affiliates do not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

STANDARD & POOR'S and S&P are registered trademarks of Standard & Poor's Financial Services LLC.  "Dow Jones" is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones").

For more information:
Dave Guarino
Communications
S&P Dow Jones Indices
dave_guarino@spdji.com
201-755-5334

David Blitzer
Managing Director and Chairman of the Index Committee
S&P Dow Jones Indices
david_blitzer@spdji.com
917-376-1204

SOURCE S&P Dow Jones Indices