Children’s Healthcare Prices Rose, Use of Services Declined in 2014

WASHINGTON, D.C. — Rising prices were the chief driver of growth in spending for children’s healthcare in 2014, a new report from the Health Care Cost Institute (HCCI) finds. A widespread drop in children’s use of medical care that same year — a relatively new trend in HCCI’s reporting — saw decreases in doctor visits, ER visits, and hospital admissions, and lower prescription-drug use, particularly for anti-infective drugs such as penicillin, among younger children and babies.

Per-capita spending on healthcare for children covered by employer-sponsored insurance (ESI) grew an annual average of 5.1{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} per year between 2010 and 2014, reaching $2,660 in 2014. At the same time, there was a general decline in the use of healthcare services between 2012 and 2014. Out-of-pocket spending on children increased annually by an average of 5.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} to $472 in 2014. This growth was due in part to higher out-of-pocket spending on ER visits, which increased annually by 11.7{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} on average, or $21 per capita.

“The decline in children’s use of healthcare services is a relatively new trend that we need to continue monitoring,” said HCCI Senior Researcher Amanda Frost. “While we know that prices have fueled much of the spending growth in 2014, future research should examine whether these higher expenditures are leading to better healthcare outcomes for children.”

For the first time, HCCI examined children’s healthcare spending trends at the state level, reporting on Arizona, Connecticut, Florida, Illinois, Maryland, Ohio, Texas, Virginia, and Wisconsin, as well as the District of Columbia (D.C.) Among the states studied, Arizona had the lowest per-capita spending ($2,151 per child in 2014), while Wisconsin had higher per-capita and out-of-pocket spending than the national average in every year studied, reaching $3,017 per capita in 2014, and $577 in out-of-pocket costs. In 2014, the District of Columbia had the highest rate of spending ($3,040 per capita), but lowest out-of-pocket payments ($362). High spending in D.C. was in part driven by an increase in the number of hospital admissions for sick newborns. Additionally, D.C. had the most emergency-room visits as compared to the other states examined.