A Look at What Is Driving Rising Healthcare Spending on Children

Healthcare spending for children covered by employer-sponsored insurance (ESI) rising faster than the rest of the ESI population, Health Care Cost Institute report finds.

Researchers attribute the increase in children’s healthcare spending to rising healthcare prices in the industry. A report published by the Health Care Cost Institute discovered that despite a decline in emergency room visits and use of prescription drugs, per capita spending on children still increased by nearly $400 during a 3-year span between 2010 and 2013, reaching a cost of about $2500 per capita by 2013.

HCCI focused on the children ages 0-18 years covered by employer-sponsored insurance (ESI) and discovered that spending on children in this group grew at an average rate of 5.7% per year, faster than the rate for the total population of individuals with an ESI plan, which encompasses ages ranging from 0-64 years.

When examining the use of prescription drugs among the children population, researchers found that spending on prescription drugs accounted for only 13.4% of healthcare spending for this group in 2013. Albeit a common trend to shift from branded to generic prescriptions, the report discovered that spending on generic prescriptions increased by 8.2%, a growth rate that was slower than the previous years.

“We hope this report gives researchers, policymakers, and consumers a clearer picture of healthcare spending trends for children,” Amanda Frost, Senior Researcher of HCCI, said in a statement. “While we know that prices have fueled much of the spending growth, future research should examine whether these expenditures are yielding valuable health outcomes and what the implications are for the future of children’s healthcare.”

HCCI researchers credit increased children’s healthcare spending to a number of factors, including an increased per capita spending on inpatient and outpatient facility services as well as an increase in spending on professional procedures.

In addition to a decline in emergency room visits, HCCI also found that spending was higher for boys than it was for girls and the lowest spending occurred for children between the ages of 4 and 8 years.

The report was based upon fee-for-service claims for 10.2 million children per year who were covered by ESI, where half of all children in the United States are covered by ESI as of 2013.