Healthcare Expenditures for Commercial Plans up 3.2% in the Year to February 2014: S&P Healthcare Claims Indices - Tucson News Now

Healthcare Expenditures for Commercial Plans up 3.2% in the Year to February 2014: S&P Healthcare Claims Indices

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SOURCE S&P Dow Jones Indices

- Total U.S. Medical Costs continue to rise at a slower pace

- Expenditures on Prescription drugs are now rising faster than Hospitalization

- Healthcare cost trends remain one to two percentage points above overall rate of inflation

NEW YORK, June 30, 2014 /PRNewswire/ -- S&P Dow Jones Indices, a leading global provider of financial market indices, announced today the results of the S&P Healthcare Claims Indices showing healthcare costs rose 3.5% in the 12 months ended February 2014 compared to the 4.9% rise for the 12 months ended February 2013. Medical costs – inpatient and outpatient hospitalization plus professional services – rose 3.1% and prescription drugs rose 3.5% over the same period. All but prescription drugs rose at a slower pace than a year earlier.

The S&P Healthcare Claim Indices are based on actual claims data obtained from 33 leading health insurance companies and other healthcare data providers covering approximately 60 million commercially insured Americans across all 50 States.

Among the key components of medical costs, inpatient fee-for-service rose 2.6% compared to 4.3% in the earlier period while outpatient fee-for-service costs rose 4.9% compared to 6.3% in the earlier period. Prescription drugs expenditures were up 3.5% versus 1.5% one year ago. These figures, which represent the most current data available, are based on expenditures incurred in the 12 months ended February 2014.

Due to standard industry lags in invoicing claims and resolving disputed charges, it is not possible for the indices to be calculated without a lag. Trends in healthcare expenditures are calculated as the average index level in the 12 months ended February 2014 compared to the average index level in the 12 months ended February 2013 and stated as a percentage, in accordance with the usual practice with healthcare cost analyses.

The table on the next page summarizes key changes in healthcare costs in the twelve periods ended in February 2014 and February 2013. These figures show expenditures and utilization per insured plan member and unit costs defined as expenditure divided by utilization. The indices reflect the expenditure or utilization per plan member per month, in effect the per capita expenditure and usage for individuals covered by commercially available health insurance.


Change in Expenditures, Unit Cost and Utilization

per Insured Plan Member for Selected Cost Categories

12 Months Ended

Feb '14

Feb '13


Total Medical Cost



Medical Cost



Prescription Drugs



Inpatient and Outpatient Compared

Inpatient Cost



Outpatient Cost



Branded and Generic Pharmaceuticals Compared

Branded Cost



Branded Unit Cost



Branded Utilization



Generic Cost



Generic Unit Cost



Generic Utilization



Source: S&P Dow Jones Indices


"With the exception of prescription drugs, healthcare expenditures are growing more slowly than a year ago," says David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. "The overall trends in healthcare costs are lower than that seen a year or two ago, but remain one to two percentage points above the overall rate of inflation.  The greater growth in prescription drug costs reflects a combination of higher prices for both generic and branded pharmaceuticals and shifting market shares between generic and branded.

"Among the principal lines of business, expenditures for large and small groups and administrative services only (ASO) plans show stable growth rates. Individual plans, where a participant is not part of a group plan based on employment, are the smallest segment as well as the most volatile. While the growth in costs moved down through 2013, the most recent data suggest a jump in expenditures for this category. Since this is the segment that the will be most affected by Obamacare going forward, it is likely to be closely watched as the new healthcare law is implemented in coming years.

"The rise in total healthcare costs at 3.2% over the 12 months ended with February 2014, is slightly greater than the increase in current dollar GDP from the first quarter of 2013 to the first quarter of 2014 of 2.9%. Moreover, the 2014 first quarter GDP was weakened by unusually severe winter weather and a small decline in consumer spending on health services. With healthcare cost trends moderating, the share of GDP devoted to healthcare may be stabilizing as well."

The S&P Healthcare Claims Indices are a series of indices providing data on the cost, utilization and unit costs of healthcare services covering inpatient and outpatient services and prescription pharmaceuticals. The expenditure and utilization measures cover inpatient and outpatient care, and generic and branded prescription pharmaceuticals. The indices are calculated for four lines of business: large insured plans, small insured plans, individual plans, and Administrative Services Only (ASO) plans.

The data used to calculate the indices are provided by several large data providers and leading health insurance plans and cover approximately 40% of the total commercially enrolled private Fee-for-Service (FFS) U.S. healthcare insurance market.

The development of the S&P Healthcare Claims Indices is the result of collaboration between S&P Dow Jones Indices and Health Index Advisors LLC (HIA), a joint venture between Aon Consulting, Inc. and Milliman, Inc. HIA's primary role is to provide consultation to S&P Dow Jones Indices in relation to the indices. S&P DJI also obtains advice and assistance from an advisory panel composed of the senior actuaries of several leading health insurance plans contributing data to the indices.

The S&P Healthcare Claim Indices are published on a monthly basis, with a press release published quarterly. An annual schedule of index release dates, as well as a methodology document and FAQ on the S&P Healthcare Claim Indices, is published to History of the indices dates back to March 2008.

For more information, please visit:

About S&P Dow Jones Indices
S&P Dow Jones Indices LLC, a part of McGraw Hill Financial, 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™, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of investors. More assets are invested in products based upon our indices than any other provider in the world. With over 1,000,000 indices covering a wide range of asset 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

Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC, a part of McGraw Hill Financial. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones").  These trademarks have been licensed to S&P Dow Jones Indices LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

For more information:

David Blitzer
Managing Director, Chairman of the Index Committee
S&P Dow Jones Indices
(+1) 212 438 3907

David R. Guarino
Director, Global Communications
S&P Dow Jones Indices
(+1) 212 438 1471

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