Data released today by S&P Indices for the S&P Healthcare Economic Composite Index indicate that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 5.61% over the 12-months endingJune 2011. Since posting its lowest annual growth rate in its more than six-year history – +5.37% inApril 2011– the rate for this index accelerated in both May and June.

Over the year endingJune 2011, healthcare costs covered by commercial insurance increased by 7.48%, as measured by the S&P Healthcare Economic Commercial Index. Medicare claim costs rose at an annual rate of 2.50%, as measured by the S&P Healthcare Economic Medicare Index. This was the lowest annual growth rate recorded for the Medicare Index in its history, which goes back toJanuary 2005.

The Hospital and Professional Services Indices reported increases of 5.16% and 5.89%, respectively, from theirJune 2010levels. For the Hospital Index, this rate is slightly higher than the +5.08% posted inMay 2011; whereas the Professional Services Index is marginally lower than its +5.91% rate posted in May.

"With June's data, we saw general acceleration in the annual growth rates in healthcare costs primarily led by medical costs funded by commercial insurance plans," saysDavid M. Blitzer, Chairman of the Index Committee at S&P Indices. "The Medicare Index, on the other hand, was down 0.18 percentage points from itsMay 2011annual rate and recorded its lowest annual growth rate in its more than six-year history. The Composite Index rose by 5.61%, the Commercial Index by +7.48% and the Medicare Index by +2.50%, compared to theirJune 2010levels.

"Overall, healthcare costs continue to rise as observed by the S&P Healthcare Economic Indices. However, while the Composite and Commercial Indices saw increases in annual growth rates, the Medicare Index decelerated and posted a record low annual rate with June's report. With +4.46% and +0.97% respective annual rates, the Professional Services Medicare and Hospital Medicare Indices also saw decelerating annual growth rates compared to their May readings. The Hospital Medicare Index is only 0.04 percentage points above its lowest annual rate of +0.93%, seen inApril 2011.

"Although rates have been slightly up in most indices over the past two months, the overall story continues to be moderation in trends over the past 12-15 months. As noted in prior reports, some market participants are reporting relatively low trends in office visits and hospital admissions, as well as steps being taken to address healthcare reform and control costs. If true, these could be contributing to these lower trends. Based on historic patterns, we also would expect a reduction in healthcare spending on a delayed basis following an economic downturn, due to the considerable lag between investments in healthcare and increased supply. So, much of the reduction in trends could be driven by reduced capital spending during the recession. We will need more data to determine whether the slight increase in the past two months is a temporary increase or if it is a sign that trends are beginning to rise."

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.

The S&P Healthcare Economic Composite Index is a weighted average of the S&P Healthcare Economic Commercial Index and the S&P Healthcare Economic Medicare Index. Alternatively, it is a weighted average of the S&P Healthcare Economic Hospital Index and the S&P Healthcare Economic Professional Services Index, as each of these indices has the analogous Commercial and Medicare component.

The table below summarizes the year-over-year change in the S&P Healthcare Economic Indices for the 12-month period endingJune 2011. With each monthly release, the index levels, including the 12-month moving averages, are recalculated for the full history of the indices, whenever there are revisions to underlying data used in the models. The entire revised history, as well as full results for the underlying S&P Healthcare Economic Indices, is available from S&P Indices as a subscription service.