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Healthcare costs' growth rate increases in the new year

The average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 6.29 percent over the year ending in January, according to Standard & Poor’s S&P Healthcare Economic Composite Index. It's the first time the growth rate has accelerated since May 2010.

The S&P Healthcare Economic Indices, which also include the commercial and Medicare indices, estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered by Medicare and commercial health insurance programs.

The S&P Healthcare Economic Commercial Index found an 8.03 percent increase in healthcare costs covered by commercial insurance for the year ending in January. The S&P Healthcare Economic Medicare Index found an increase of 3.4 percent for Medicare claims costs for hospital and professional services.

"In January, we saw the annual growth rates in healthcare costs picking up slightly after six consecutive months of decelerating rates in the latter half of 2010," said David M. Blitzer, chairman of the index committee at Standard & Poor's, in a statement. “The annual growth rates for these headline indices – Composite, Commercial and Medicare – are up 0.24, 0.31 and 0.13 percentage points from their respective December 2010 rates. If you look at all of the sub-indices in this family, only the Hospital Medicare Index reached a new low, +1.72 percent in January 2011 versus the same month in 2010."

"In the past year we began to see a trend of deceleration in annual growth rates for the nine indices in this family, especially in the second half of 2010. The first month of the new year shows a departure from this trend, but it is too soon to predict if this is an anomaly or a sign of what 2011 has in store for us,” Blitzer continued. “The S&P Healthcare Economic Hospital and Professional Services Indices annual growth rates were +5.64 percent and +6.76 percent for January 2011, respectively, versus December 2010 prints of +5.56 percent and +6.34 percent."

"As observed for the majority of these indices six-year history, the rate of change in expenditures associated with commercial health insurance plans continues to outpace expenditures for Medicare," Blitzer said. "The only time we ever saw this relationship reversed was for a brief period in late 2005. In the past year alone, the gap has widened by more than 3 percentage points."

Go to the next page to see a table of the year-over-year change in the S&P Healthcare Economic Indices for the year ending in January.