S&P Dow Jones Indices has launched a new indicator that measures claims data from 33 health insurance companies and other organizations to calculate the growth in commercial healthcare costs.
Data from the S&P Healthcare Claims Indices reveal that medical and prescription drug costs combined rose 3.5 percent for the 12 months through May 2013 compared with the year-ago period when the total cost grew 4.7 percent, said a company release Wednesday. The figures represent the most current data available in the industry. Itemizing that indicator, medical costs increased 4.2 percent and prescription drug costs rose 0.6 percent.
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While the rate of increase in medical care spending is slowing, it is still rising faster than disposable personal income, said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.
“Where possible, healthcare expenditures do respond to economic incentives,” he said in the release. “Comparing branded and generic pharmaceuticals, unit costs … rose 16.1 percent for branded vs. 3.0 percent for generic.” At the same time, use of generics grew 9.7 percent while branded sank 16.8 percent.
According to the data, two factors which appear to have contributed to the slowing trend in medical and pharmaceuticals costs were shifts from inpatient to outpatient treatments and from branded to generic pharmaceuticals. Despite the shift, outpatient spending growth as of May 2013 was still lower than the previous year, at 6.0 percent compared to 7.8 percent in the 2012 period.
The healthcare claims indices offer transparency into healthcare costs. “By benchmarking and assessing plan performance against an objective measure of underlying healthcare trend, employers, insurers, health providers and consumers can make more informed decisions around their health strategies and achieve better outcomes,” said Timothy Nimmer, chief healthcare actuary at Aon Hewitt, which helped to develop the measure.
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In addition to the cost, utilization and unit costs of healthcare services, the indices are calculated for four lines of business: large, small and individual insured plans, and administrative services only (ASO) plans. The data from health insurance plans and large data providers cover 40 percent of the total commercially enrolled private fee-for-service insurance market.
The S&P Healthcare Claims Indices are published monthly with a quarterly information release about the data.
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