Despite a decline in the number of commercially insured children, healthcare spending on children grew at a faster rate than healthcare spending on adults from 2007 to 2010, according to a new report from the Health Care Cost Institute (HCCI).
According to HCCI, "Children's Health Care Spending Report: 2007-2010" is the first analysis that tracks the changes in spending, prices and use of healthcare services by children covered by private employer-sponsored health insurance.
Specifically, the report found per capita spending on children rose 18.6 percent in the four-year period to $2,123, with spending on toddlers and infants disproportionately high. While children under 3 years old comprised 17 percent of the covered child population, healthcare costs for this group account for 31.4 percent of the healthcare dollars spent on children in 2010. Per capita spending for this age group totaled $3,896 in 2010.
Teenagers showed the highest increase in per capita spending growth, rising 22.3 percent from 2007 to 2010 with a an increase in spending on prescription medications and outpatient services.
"Children tend to use less expensive healthcare, so a bump in children's healthcare spending is troubling because it could indicate that kids are getting sicker or receiving unnecessary tests or excess procedures," said Martin Gaynor, Professor of Economics and Public Policy at Carnegie-Mellon University and HCCI Governing Board Chairman in a prepared statement.
Services seeing steep increases in utilization over the four years include mental health and substance abuse counseling, which increased more than 24 percent. Use of central nervous system medications to treat such conditions as anxiety, depression and attention-deficit hyperactivity disorder increased more than 10 percent in this period. Mental health and substance abuse admissions also increased 23.8 percent between 2007 and 2010.
"The data on spending for mental health and substance abuse services is particularly worrying," added Gaynor. "We need to look further into why there is such a high use of prescription drugs for mental health problems among children and whether this expenditure is yielding valuable health outcomes."
Other significant findings of the report include:
- West spends less than Northeast. Between 2007 and 2010 spending grew more than 25 percent in the Northeast, compared to just 14.8 percent in the West. In 2007, per capita spending for children in the West was $105 less than in the Northeast. By 2010 that difference had increased to $311.
- Cost-sharing increases. Consumers paid 17.5 percent of all healthcare costs in 2010 for children, compared with the cost-sharing rate for the overall population of 16.2 percent. Out-of-pocket spending was highest for children under 4 years ($491 in 2010), yet grew fastest for teens, increasing 8.8 percent from 2009 to 2010 to $433.
- Increase in prescription drugs. While prescription drug use declined 1.6 percent overall compared to 2007, the fastest growing prescription drugs used by children were cardiovascular drugs (24.8 percent); hormones, (20.8 percent); and central nervous system drugs, (10.4 percent).