Spending for Children’s Healthcare Rising Faster Than Total Population

WASHINGTON, D.C. — Spending on healthcare for children (birth to age 18) covered by employer-sponsored insurance (ESI) grew an annual average of 5.7{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} per year between 2010 and 2013, compared to 3.9{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} for the total population (birth to age 64) with ESI, finds a new report from the Health Care Cost Institute (HCCI).

Per-capita spending on children reached $2,574 by 2013, a $391 increase from 2010. The rise in children’s spending in 2013 occurred despite a drop in the use of prescription drugs and visits to the emergency room, demonstrating that rising healthcare prices were an important driver behind the spending increase. The report also showed growth in spending on children’s inpatient services, which contributed to the overall increase in spending.

Spending on inpatient admissions rose in 2013 as a result of rising prices and slightly higher admission rates for children, particularly newborns. The average price of an inpatient admission for a child increased by $744 in one year, hitting $14,685 in 2013. For infants and toddlers, inpatient admissions accounted for about 40{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of their per-capita healthcare spending.

For the first time in the study period, HCCI observed a drop in overall prescription use by children in 2013. This trend, along with a continued shift from the use of branded drugs to generics, meant spending on children’s prescriptions grew more slowly in 2013 than previous years. For example, between 2011 and 2013, use of generic prescriptions for medications commonly used to treat asthma and allergies rose by more than 300{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} for babies, more than 700{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} for younger children (ages 4-8), more than 800{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} for pre-teens (ages 9-13), and more than 500{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} for teenagers (ages 14-18). At the same time, use of branded versions of these drugs declined to nearly zero.

“We hope this report gives researchers, policymakers, and consumers a clearer picture of healthcare spending trends for children,” said HCCI Senior Researcher Amanda Frost. “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.”