AIF Blog

The Future of Children's Health

By Martin Gaynor, E.J. Barone Professor of Economics and Health Policy, Carnegie Mellon University; Chair of the Board, Health Care Cost Institute
Jul 01, 2012
CATEGORY: Health, Science

Guest Blogger: Martin Gaynor

Martin Gaynor is the E.J. Barone Professor of Economics and Health Policy at the Heinz College of Carnegie Mellon University and chair of the governing board of the Health Care Cost Institute, an independent nonprofit dedicated to advancing knowledge about the determinants of US health care costs.

Last week's landmark Supreme Court decision was extremely important for the future of the Affordable Care Act. While both sides analyze its impact on access to health care, the basic fact remains that children will need care and parents will need to pay for it.  Unfortunately, it looks like health spending for children continues to climb and prices seem to be the culprit.

The Health Care Cost Institute works to advance knowledge about health care utilization and costs, so that policymakers, business leaders, and the public will have better information to address these issues. HCCI recently reported that spending on children’s health grew faster than spending for adults between 2007 and 2010 – a surprising and concerning finding. A new report HCCI released today at the Aspen Ideas Festival  further investigated that trend and found that rising spending for children is also primarily due to increasing prices.

Why should we care about rising prices?

If prices are the primary driver of increased spending, then kids aren’t getting any more care but we’re paying more for it. What is particularly striking is that this growth is occurring despite a decline in the number of children covered by commercial health insurance, and a drop in use of costlier health services like hospital stays.

This new Children’s Health Care Spending Report 2007-2010 is the first analysis to track changes in spending, prices and use of health services by children covered by private employer-sponsored health insurance. The report provides an important analysis of what factors influence use of health care today and it offers insight into a number of trends that bear further study.

For example, teens have the highest rate of spending growth, and children’s use of mental health and substance abuse services is rising significantly. The data show that use of antidepressants, drugs to treat hyperactivity, and anti-anxiety drugs (so-called “central nervous system” prescriptions), jumped 10 percent, with use highest among teenagers 14-18.

Having this information will help us pinpoint problems with children’s health care. Yet, unanswered questions remain.

Researchers still don’t know whether spending is higher for children than adults because of specific childhood conditions such as obesity or autism.  Policymakers don’t know if certain new policies that expand coverage for mental health encourages more use of mental health services and the effect that has on spending. And, we don’t know if rising out-of-pocket costs are causing parents to delay care.  Having more data like this will help us answer these questions.

Finally, we don’t know if these more rapidly rising costs for children are a temporary or a permanent phenomenon.  If this is permanent, then we may be facing a new and potentially ominous problem in addressing health care spending.

HCCI is only one of many organizations trying to address children’s health care spending and we need to encourage and support more work like this. Children are our future, and the money we spend (or don’t spend) on their health now will have a dramatic impact on all of our futures.

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