Thomson Reuters Index: Insurance Costs Climb 4 Percent For Q3 2011

ANN ARBOR — The cost of healthcare for individuals with employer-sponsored health insurance rose 4.0 percent in the third quarter of 2011 versus the third quarter of 2010 and 0.9 percent versus the second quarter of 2011, according to the Thomson Reuters Healthcare Spending Index for Private Insurance.

The index, which measures historical and current levels of per capita healthcare spending for people with employer-sponsored coverage, provides a benchmark measure of healthcare inflation.

The index tracks key healthcare spending components such as hospital care, physician services, and prescription drugs.  Hospital costs again showed the steepest growth through the third quarter of 2011, increasing 5.9 percent annually and 1.3 percent over the second quarter of 2011.  Physician costs reflected a 2.9 percent year-over-year hike and drug costs increased 1.3 percent. Both figures also reflect increases over their marks for the second quarter of 2011.

“Insurance costs are still on the rise,” said Gary Pickens, chief research officer at the Thomson Reuters Center for Healthcare Analytics. “While there has been a slight slow down to the pace of growth, overall rates are still increasing nationwide.”

“What’s most noteworthy here is that medical spending is continuing to accelerate at a significantly faster rate than the Consumer Price Index; an unsustainable pace for our economy,” said Raymond Fabius, chief medical officer at the health care business of Thomson Reuters. “As a society, we need to figure out how to moderate this trajectory; we simply cannot afford to have hospital care costs for example advancing at 2-3 times general inflation in this country.”

Index estimates are based on the Thomson Reuters MarketScan databases, a repository of health care claims for inpatient and outpatient services. The index represents the real-world treatment patterns and costs of more than 12 million employees and their dependents.  Preliminary estimates are released quarterly, approximately 90 days after the period in which the healthcare services were used.

For a copy of the latest index findings, visit this link.

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