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Pediatric Care Out-of-Pocket Spending Rose 5.5% in 2014

Medical care spending for children via employer-sponsored insurance grew 5.1 percent every year between 2010 and 2014. In fact, by 2014, pediatric care spending hit a high of $2,660.

By Vera Gruessner

Both public and private health payers have been searching for ways to reduce healthcare spending as a whole, but rising prices may be making it more difficult to combat medical care expenditure. The Health Care Cost Institute (HCCI) released a report showing that the spending related to pediatric care had grown in 2014 due to rising prices instead of greater healthcare utilization, according to an HCCI press release.

Out-of-Pocket Spending

“In 2014, growth in health care spending was largely due to rising prices,” HCCI Executive Director David Newman said in a public statement. “We hope policymakers, providers, and payers use this report to improve healthcare for kids.”

At the same time, the use of pediatric care had dropped throughout the country, the report found. There was a reduced number of doctor visits, emergency room visits, and hospitalizations within children's healthcare services.

Medical care spending for children via employer-sponsored insurance grew 5.1 percent every year between 2010 and 2014. In fact, by 2014, pediatric care spending hit a high of $2,660. Between 2012 to 2014, there was a decline in the use of healthcare services by infants and children, the report discovered.

Additionally, out-of-pocket spending for pediatric care rose by 5.5 percent in 2014. Part of this increase was due to a rise in price for emergency care among the pediatric population. The out-of-pocket cost for emergency room visits increased by 11.7 percent in 2014.

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The HCCI report looked at the trends of cost growth in the pediatric care sector in the following states: Arizona, Connecticut, Florida, Illinois, Maryland, Ohio, Texas, Virginia, Wisconsin, and the District of Columbia (DC).

The report discovered that Arizona had the lowest per capita spending for children’s healthcare services. Wisconsin ended up with higher per capita and out-of-pocket spending than the national average, according to HCCI.

“Arizona had the lowest per capita spending for children of all of the states studied in all years of the study period,” the report stated. “The most dollars per capita were spent on ER visits ($206 per capita in 2014) followed by surgical inpatient admissions.”

“Fewer dollars than the national average per capita were spent on those services in that year: $214 on ER visits and $182 on surgical admissions nationally. Despite lower spending in Arizona on those two services, the utilization rates were quite similar to the national usage per 1,000 children.”

In 2014, the District of Columbia had the highest rate of per capita spending while its out-of-pocket spending remained at the lowest level. This was due to a large number of hospital admissions for ill infants.

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When it comes to brand prescription drugs, the average price per filled day from 2010 to 2014 have more than doubled from $7 per day to $16 as it stands today. However, the costs for generic drug prescriptions has remained stable.

The average price for surgical hospital admissions among children also rose dramatically from $35,423 in 2010 to $53,372 in 2014. This is an increase of $17,949 in only four years. The cost for emergency care also increased but the utilization of these services dropped around the country.

“The decline in children’s use of healthcare services is a relatively new trend that we need to continue monitoring,” HCCI Senior Researcher Amanda Frost stated in the press release. “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.”

These rising prices could have led some families to focus their energies on preventing the need for some forms of medical care. To ensure all children receive necessary medical attention, it would benefit payers and providers to work together to reduce skyrocketing medical costs.

The average price for an emergency room visit increased by nearly $300 between 2010 and 2014. Additionally, pediatrician visits also declined slightly by 2014, the report found. There was a general increase in healthcare spending for children of 3.5 percent in 2014.

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Total healthcare spending for infants and toddlers was the highest, according to HCCI. The costs for medical care among teenagers was right below while younger children had the lowest costs in care.  

Health insurance companies can use the trends found in this report to further define their relationship with their network of providers, specifically those serving the pediatric population. For instance, health payers can work with hospitals to determine ways the price of surgical admissions among children is decreased.

The future of pediatric care will depend upon the ways providers and payers work together to define cost transparency and form new payment models to reduce the rising price of children’s healthcare.


Dig Deeper:

Arizona Declines Funding Children’s Health Insurance Program

Children’s Health Insurance Program Funding Extended to 2017


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