Costs, Not Utilization Are Driving Children’s Healthcare Spending

In 2014, rising prices were largely to blame for the growth in children’s health care spending, according to a report from the Health Care Cost Institute (HCCI). Health care spending  for children under employer-sponsored plans grew 5.1% a year from 2010 to 2014, reaching $2,660 in 2014. But the use of health care services declined from 2012 to 2014. HCCI senior researcher Amanda Frost said, “The decline in children’s use of health care services is a relatively new trend…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 health care outcomes for children.” The survey also reveals the following:

  • Out-of-pocket health care spending on children increased 5.5% a year to $472 in 2014. This growth was due partly to higher out-of-pocket spending on ER visits, which increased 11.7% annually.
  • The average price for brand prescriptions went from $7 a day in 2010 to $16 a day in 2014.
  • The rise in the average price of brand prescriptions drove spending increases. In 2014, spending for brand prescriptions rose 6.8%. The average price for generic prescriptions remained stable.
  • In 2010, the average price of a surgical admission for a child was $35,423, and jumped to $53,372 in 2014.
  • ER visits accounted for 8% of health care spending for children in 2014.
  • The average price of an ER visit increased $298 from 2010 to 2014. At the same time, the number of ER visits dropped from 181 visits per 1,000 children in 2010 to 177 visits in 2014.
  • In 2014, there were 3,228 doctor visits per 1,000 children, down slightly from the previous year.
  • Doctor visits accounted for 12% of spending in 2014 ($339 a child), and made up the largest share of health care spending for the average child.

Spending Is Up While Utilization is Down for the Privately Insured

Privately insured Americans used fewer medical services in 2013, but spent more on these services, according a report by the Health Care Cost Institute. There was a 3.9% increase in spending for enrollees of employer health plans, continuing the moderate growth trend that began in 2010. “Price growth for medical services and brand name drugs remained strong in 2013. Health spending grew moderately, but that was only because consumers used fewer services,” said HCCI Executive Director David Newman.

Spending averaged $4,864 per enrollee in 2013, up $183 from the year before. Out-of-pocket costs remained stable including co-payments and deductibles. In 2013, there was a decline in the use of brand prescription drugs, inpatient admissions, and outpatient services. Yet average prices increased for all three categories, and at higher rates than in 2012. Acute inpatient hospital admissions fell 2.3% while prices rose 6.7%, causing inpatient spending to rise 3.8%. The average price per-admission grew by $1,101, in 2013 to $18,030. Outpatient visits declined 0.8% while prices rose 6.4%. Total outpatient visit spending grew 5.5%.

The use of brand name prescriptions (filled days per 1,000 insureds) dropped 15.5% while the average price per filled day grew more than 21.2%. Total spending on brand name drugs grew 2.4%. The use of professional services grew in 2013, including office visits and lab tests. The use of generic prescriptions grew 4.5%. Preventive visits to primary care physicians and contraceptive hormone use both rose 5%. Antidepressants dominated generic prescription drug use, accounting for over 10% of all generic drugs used in 2013.

In 2013, consumers spent an average of $800 out-of-pocket — a 4% increase over 2012. Women 19 to 25 spent an average of $662 out-of-pocket — the same as the year before. This was almost completely due to a drop in out-of-pocket spending on generic and brand hormone contraceptives. Hormone contraceptives are generally covered without cost sharing, a provision of the Affordable Care Act that went into effect January 1, 2013. “This is the first time we have seen flat out-of-pocket spending growth by any group of the privately insured,” said HCCI Senior Researcher Amanda Frost.

In 2013, out-of-pocket spending for medical services went up (especially for acute inpatient admissions), but went down for brand and generic prescriptions. In 2013, women 19 to 54 used more outpatient and professional services compared to men. But after 54, the gender gap narrowed, as mens’ use of radiology, laboratory, and pathology services increased.

Adults 19 to 25 visited the ER more often than did adults 55 to 64. However, older adults had a higher average price for their visits, due partially to use of more intensive care. Spending on ER visits averaged $314 per capita for older adults, compared to $310 for young adults.

Anti-depressants account for 10% of generic drug use. In fact, anti-depressants were the most commonly filled class of CNS generic prescriptions and the most used generic drug class for young men, intermediate men, middle age women, and pre-Medicare women. For more information, visit

Study: 20% of prescriptions for seniors are inappropriate

One in five prescriptions written for older adults is ineffective or has a high risk for adverse events, according to an analysis of data from 19 studies in 11 Western nations. The study, published in PLoS ONE, found that drugs to treat allergies, pain and depression were the most overprescribed and the most likely to result in adverse events. ABC News/Reporter’s Notebook blog (8/23)

Last Updated 05/05/2021

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