The Health Cost Index Forecast (HCIF) tracks cost trends and changes across the U.S. on a monthly basis. Using Standard & Poor’s claims-based indices covering 60 million lives across the country, the HCIF focuses on claim cost per member per month. The HCIF takes advantage of the long established relationships between the broader U.S. economy and healthcare to project forward hospital, physician, and prescription drug costs. The forecast covers preferred provider organizations and other fee-for-service claims payers.
Compiled by a team of actuaries, analysts, and statisticians, the HCIF predicts what will drive healthcare costs in the future, noting trends in costs per person per month and economic, hospital, and prescription drug patterns. The index shows trends and spikes in volatility inherent in health risks, providing additional insight into actuarial risk and actuarial underwriting opportunities.
The HCIF comes out monthly and is updated after S&P’s data is released. Projections cover three years. Subscribers to the S&P indices can purchase a subscription to the HCIF. Standard & Poor’s releases these monthly healthcare indices based on various healthcare economic costs, which can serve as a replacement for medical CPI or survey data. The information is claims-based and can be broken down by geographic region and other factors.
With risk securitization through financial products—traditionally used in property and casualty insurance—now being woven into healthcare, health insurers, provider organizations, and employers are starting to examine the pros of risk spreading tools like catastrophe bonds and rate or cost guarantees. The S&P index can help insurers prepare for the issues they face.