We spend a lot of time discussing health care spending for adults, especially the elderly. Some argue that's because we spend the majority of money on those populations. But as a pediatrician, parent, and health services researcher, I sometimes get annoyed at our lack of attention to children. Luckily, I subscribe to some journals that focus on children. From Pediatrics, "Comparison of Health Care Spending and Utilization Among Children With Medicaid Insurance":
BACKGROUND AND OBJECTIVES: Opportunities to improve health care quality and contain spending may differ between high and low resource users. This study’s objectives were to assess health care and spending among children with Medicaid insurance by their resource use.
METHODS: Retrospective cross-sectional analysis of 2012 Medicaid health administrative data from 10 states of children ages 11 months to 18 years. Subjects were categorized into 4 spending groups, each representing ?25% of total spending: the least expensive 80% of children (n = 2 868 267), the next 15% expensive (n = 537 800), the next 4% expensive (n = 143 413), and the top 1% (n = 35 853). We compared per-member-per-month (PMPM) spending across the groups using the Kruskal–Wallis test.
Like previous studies, this paper looked at Medicaid spending among different groups of spenders. Specifically, it looked at spending in 10 states in 2012 in the least expensive 80% of children, those in the 80-95 percentile, those in the 95-99 percentile, and the top 1% of spenders. They only looked at kids from 11 months to 18 years, so NICU births (which are VERY expensive) were excluded from the analysis. Each of these groups represented about one-quarter of Medicaid spending. That means the top 1% spent a quarter of health care dollars. The next 4%, and the next 15%, each spent about 25% of health care dollars. And the bottom 80% also spent the same 25%.
The researchers collected a host of other data as well, including demographic characteristics like age, gender, race, and ethnicity. They also noted whether the Medicaid plan was fee-for-service or managed care. Clinical characteristics included whether children had chronic conditions, needed technology assistance, or had a disability.
The data included almost 3.6 million children with a median age of 9 years. Just over half of them had at least one chronic condition. About half a percent of them required medical technology assistance, and 5.5% had a disability. About 60% were in a Medicaid managed care program. In general, those in managed care had lower medical complexity than those in fee-for-service programs.
The least expensive 80% of children spent about $816 a year. The next 15% of children spent $4188 per year. The next 4% spent $14,400 a year, and the top 1% spent $80,856.
Before we get into the weeds, let's acknowledge that kids are cheap. CMS reports show that in 2011, the average payments per beneficiary for children, in general, were $2198. But for the elderly, the average Medicaid payments were $15,489. Non-elderly adults spent $3306. Even though children comprised 47% of beneficiaries, then accounted for less than 20% of spending. But the most expensive kids, the top 1%, are still spending a lot of money. In 2009, the average spending per person in the top 1% of all people in the US was about $90,000 - which isn't that different from what we see in this study.
But what can we learn about pediatric Medicaid health care spending from this study? More expensive kids are older, with the median in the cheapest 80% being 9 years of age and 13 years old in the top 1%. Kids with chronic conditions are more expensive, too, as those with at least three chronic conditions comprising 3% of the cheapest 80% of kids and 62% of the top 1%. They also had more medical technology use (almost none versus 22%) and disabilities (3% versus 55%).
The type of care received makes a big difference. Inpatient care accounts for almost no spending in the cheapest 80% of kids, but it accounts for about 46% of spending in the most expensive 1%. Mental health care accounts for 7% of spending in the cheapest 80% of children, but accounts for 24% of spending in the most expensive 1%.
Primary care and emergency care account for 23% and 14% of spending, respectively, in the cheapest 80% of children, but a very tiny percentage of spending in the top 1%. But spending on primary and dental care was not much different at all across the spending groups. That's interesting, because it implies that the sickest, most expensive kids aren't getting any more primary care than those who are healthy.
Also worth noting is the importance of mental health care. About three-quarters of children in the most expensive 1% used mental health services, and they account for the highest or second highest type of spending in every group but the cheapest 80% of kids.
There's not nearly as much money to be "saved" in pediatrics as in geriatrics, because there's less spending in general. But those children who are sickest, and who require the most care, are still expensive and in need of further investigation. As we push for more primary care and prevention, it will be worth checking to see if they really are "cost-saving" measures.