The average per capita cost of health care services covered by commercial insurance and Medicare programs increased by 5.58 percent over the 12-months ending May 2011, according to data from Standard & Poor’s Healthcare Economic Composite Index.

The index shows health care costs covered by commercial insurance increased by 7.35 percent over the year and Medicare claim costs rose at an annual rate of 2.64 percent. The commercial and Medicare indices are respectively 0.25 and 0.16 percentage points above their April 2011 annual rates.

The annual growth rate for the composite accelerated from its all-time low of +5.37 percent posted in April 2011. This is still 3.16 percentage points below the highest rate for the composite index, which was up 8.74 percent over the 12-months ending May 2010.

“Over the past 12-15 months, the story has been a moderation in the rate of increase in health care cost, as indicated by the decelerating growth rates across the S&P Healthcare Economic Indices,” says David Blitzer, chairman of the index committee at S&P Indices.

“The composite, Medicare and hospital indices all posted record low annual rates in their six-year history with April’s report. Since May’s data covers only one month, we need more time to determine if the trend is changing or if this is a temporary blip, like we saw in January,” he says.

Both office visit and hospital admission trends are relatively low, which may be a reflection of the overall consumer pullback in medical treatment, Blitzer says. Additionally, providers are trying to address health care reform and are looking for ways to control costs.

The S&P Healthcare Economic Indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered under traditional Medicare and commercial health insurance programs in the U.S. The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year.

Instant Insights /

S&P: Health care costs up 5.38 percent for year

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