S&P: Annual growth rates broadly decelerate in December

Today S&P Dow Jones Indices announced the results of S&P Economic Healthcare Indices for 2012. Data released 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 3.73% over the 12 months ending December 2012. This is a deceleration from the +4.46% annual growth rate recorded in November 2012 and the lowest rate in the eight-year history of the index.

All nine S&P Healthcare Economic Indices posted deceleration in their annual growth rates in December 2012. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans increased by 5.39% over the year ending December 2012, down from +6.19% reported for November 2012. Annual growth rates in Medicare claim costs rose by 1.20%, according to the S&P Healthcare Economic Medicare Index, down from +1.81% recorded in November 2012. It is the lowest growth rate in the history of the Medicare Index.

The Professional Services Index annual growth rate was +4.78% in December 2012, down from the +5.68% November rate. The Professional Services Commercial Index decelerated to +7.34% in December, down from +8.17% reported in November. The Professional Services Medicare annual growth rate was -0.12% in December, down from +0.92% posted in November 2012. It is the first appearance of negative annual growth rate in the history of the index.

The Hospital Index’s growth rate hit its historic low of +2.56% in December from +3.12% recorded in November 2012. It was driven by the Hospital Commercial Index, which hit its lowest rate since the index inception in January 2005. It posted a +3.01% annual rate in December and +3.77% last month. The Hospital Medicare annual growth rate posted +1.93% in December, down from its +2.23% November rate.

“The second half of 2012 showed deceleration in the annual growth rates across most healthcare indices we cover,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “In December 2012 all nine headline healthcare indices we publish showed deceleration in their annual growth rates. The Composite Index posted an annual rate of +3.73%, the Commercial Index +5.39%, and the Medicare Index +1.20%.

“In December, five of the nine healthcare indices hit their historic lows. They were the Composite Index at +3.73%, the Medicare Index at +1.20%, the Professional Services Medicare Index at -0.12%, the Hospital Index at +2.56% and the Hospital Commercial Index at +3.01%. The Commercial Index posted a recent low of +5.39% in December—the lowest rate since October 2009.

“For the first time in the index history, the Professional Services Medicare posted a negative annual growth rate. It was at -0.12% in December, 1.04 percentage points down from its November rate. It has the lowest annual growth rate among our healthcare indices.

“In December, the Professional Services Commercial Index was +7.34%, 0.83 percentage points down from its November rate. It remains the highest index among healthcare indices we cover.”

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