Health-Care Costs for Commercial Plans Up 3.2%
NEW YORK -- Total medical costs rose 3.2% in the 12 months ended Aug. 31 compared to the 4.8% rise for the 12 months ended Aug. 31, 2012. Medical costs -- inpatient and outpatient hospitalization plus professional services -- rose 3.7% and prescription drugs 0.9% over the same period.
Of the key components of medical costs, inpatient fee for service rose 4.2% compared to 4.4% the year before while outpatient fees for services rose 5.7% compared to 7.9% in the earlier period, according to the most recent S&P 500 Healthcare Claims Indices. Prescription drugs expenditures were up 0.9% versus 2.9% in the year-ago period.
The S&P Healthcare Claim Indices are based on claims data obtained from 33 health insurance companies and other health-care data providers that cover some 60 million commercially insured Americans in all 50 states.
"The S&P Healthcare Claim Indices show health-care expenditures rose less in the most recent period," said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a prepared statement. "This confirms other reports that the supposedly inexorable rise in health-care costs is moderating. While the slower cost increases are most welcome, there is debate over the cause. For some categories there is sufficient detail to examine price and [who uses them] separately. For instance, in inpatient fee for service, one area showing relatively stable cost increases, the indices show that declining usage is contributing to the slowdown while unit costs rise at about 6% annually.
"One often-cited source of moderation is the growth of generic pharmaceuticals which compete with their branded counterparts on price," he continued. " Among branded prescription drugs, prices continue to climb at more than 15% annually. Apparently, the purveyors of branded pharmaceuticals chose to respond to price competition by increasing prices to offset declining usage. Compared to the branded where usage is dropping by 15% annually, generics see consistent increases.
“It is too soon to credit the slower cost increases to Obamacare,” Blitzer noted. “Going forward the indices will show whether the slowing of cost growth continues.”
Published by The Business Journal, Youngstown, Ohio.
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