I'm a big fan of the Health Care Cost Institute. I've covered their work many times here before on the AcademyHealth blog. While many organizations are happy to cover the fact that health care spending is increasing, and many more are happy to sensationalize that by screaming about the subsequent increases in the cost of insurance, the HCCI provides a lot of detailed information as to how and why that spending is going up. They also cover how spending happens in those with employer-sponsored health insurance (ESI), which covers about half of children in the US.
They have just released a report on children's health spending from 2010-2014:
For this study, we analyzed a population that averaged 10.2 million ESI children per year between 2010 and 2014, the “study period” (see “About the Data and Methodology”). The analytic dataset was weighted to be representative of the national population of children covered by ESI. As in previous studies, HCCI examined the per capita health care spending and the drivers of health care costs for this population of children.
In 2014, children covered by ESI spent about $2660 each, an increase 3.5% over the previous year. That was lower than the annual rate of increase of just over 5% over the entire study period. Babies cost the most ($4859), followed by teenagers ($2856), pre-teens ($1940), and younger children ($1745). In general, boys spend about $250 more per year than girls.
The highest out-of-pocket spending was on babies and toddlers ($607), but as a percentage, this was actually the lowest rate (12.4%). Conversely, the least amount of out-of-pocket spending was on young children, but comprised the highest percentage (21.6%).
Health care spending is dependent on two factors, in general. The volume of services consumed and the price of those services. Over the course of the study period, utilization fluctuated up and down, but prices consistently increased. IN 2014, utilization on acute inpatient visits remained unchanged, but it went down for outpatient visits (2%), other outpatient care (0.8%), and professional services (0.4%). Prices, however, went up in every one of these categories - acute inpatient (3.1%), outpatient visits (6.4%), other outpatient care (3.9%), and professional services (3.5%).
In other words, it was how much these services cost per unit that determined the increase in health care spending in 2014, not how often people used them. Focusing efforts on price, and not utilization, would likely be necessary to combat this.
Prescription drug spending increased 5.1% in 2014, with a 6.8% increase in brand-name drugs and a 2.6% increase in generic drugs. The most common drugs used were generic CNS and anti-infective agents. Use of the former grew almost 12% annually over the course of the study, though, while use of the latter declined.
The price per filled day of drugs went up more than I might have suspected, though. From 2010 to 2011, the average price of a filled day of a brand-name drug increased from $7 a day to $16 a day. That's more than a doubling. Brand hormones and synthetic substitutes went up even more, from $9 per filled day in 2010 to $26 in 2014. The price of generic drugs were much more stable, though, moving from $2 to $2.49. The highest generic price increase was in skin and mucous membrane agents, where it increased from $3 in 2010 per filled day to $5 in 2014.
Granted, child health care spending is a drop in the bucket when we're talking about national health care spending. But when we're trying to save money, every little bit helps. The HCCI report provides us with some useful information. It appears that when it comes to care, prices have recently been more of a driver of spending increases than utilization. With respect to prescription drug spending, the same is true, especially with respect to brand-name drugs. Efforts to reduce health care spending would be advised to make use of this information when planning future policy.