The average per capita cost of commercial and Medicare health services rose 5.11 percent in the 12-month period ending in October 2011, up from 4.74 percent annual growth the month before, according to the S&P Healthcare Economic Composite Index.
The growth was largely driven by a 6.91 percent increase in the cost of commercially insured healthcare services, which made October the fourth consecutive month in which the annual growth rate accelerated.
The growth rate of Medicare claims costs also increased from 2.03 to 2.39 percent, and other indices tracking healthcare expenses found similar, substantial spikes.
"Over the last four months we have generally observed modest increases in the Composite's growth rate, with these increases driven by increasing growth trends in hospital costs," said S&P Indices Index Committee chairman David Blitzer. "During this time period the Professional Composite Index fell each month between June and September and increased in October; while the annual growth rate in the Hospital Composite Index has steadily increased over the same months. Looking closely at the hospital costs, the most recent increases have been driven more by increases on the commercial insurance side."
Blitzer also noted the current trend is a reversal of slowing cost growth seen in 2010. The cost may make workers perceive employers offering healthcare benefits as more desirable while simultaneously making it more difficult for employers to sustain such services. Employee benefit consultants may find some opportunities in the situation.
