After 20 plus years of publishing the Health Cost Index (HCI), we, in partnership with Standard and Poor’s (S&P) and Aon Consulting, have created a new set of healthcare cost indices based on various healthcare economic inputs. Our objective was to improve upon the HCI in several ways:

• By increasing transparency of the indices
• By improving timeliness of the indices updates
• Through being more representative of the commercial market cost changes

With recent changes related to healthcare reform and increased regulatory scrutiny at both the federal and state levels, these improvements to the indices have become even more crucial.

The new indices are more timely (published monthly), more transparent (utilizing a published methodology), and even more representative of the U.S. healthcare market than the current indices (with improved tracking accuracy through new methodologies). By having Standard & Poor’s, the world’s leading index manager, publish them, you can be confident that the indices will be maintained and calculated by an organization that is independent of the healthcare industry. We believe these indices will become the leading indicator of healthcare cost changes across the United States, thereby creating a national benchmark that can be followed by industry representatives, the media, and end users of healthcare services.

More information, as well as details on how to acquire the new indices, can be found at the link below:

We will be leaving this site up for now, so you will have continued access to the older HCI Issues and Commentaries. Eventually all of the recent HCI issues will be included.

Attached below is the 4th Quarter 2010 Commentary, by John P. Cookson, FSA (Publisher), comparing the HCI to the new S&P Healthcare Economic Indices. Graphical comparisons are included in the Commentary.

S&P, as an independent publisher of indices, does not provide consulting or forecasting services. Milliman will develop new forecasts (one- and three-year) and other add-ons, which will not be a part of the S&P indices, and which you may want to consider acquiring. We are prepared to provide any related consulting services you may need. Please contact us with questions at kathy.ahn@milliman.com.