Short-term Persistence of High Health Care Costs in a Nationally Representative Sample of Children
Authors: Liptak Gregory S. , Shone Laura P. , Auinger Peggy , Dick Andrew W. , Ryan Sheryl A. , Szilagyi Peter G. 
Published: October 2006

OBJECTIVES. Little is known about the persistence of health care costs in children. Determining whether children with high health expenses continue to have high expenses over time can help in the development of targeted programs and policies to decrease costs, plan equitable health insurance strategies, and provide insights into the effects of costly conditions on families. The objectives of this study were to (1) identify the characteristics of children who are in the top 10th percentile for health costs, (2) investigate whether those in the top percentiles for costs in 1 year continue in the same percentiles the next year, and (3) identify factors that predict whether a child stays in the top percentiles.

METHODS. Data from 2 consecutive years (2000–2001) of the Medical Expenditure Panel Survey were analyzed. Changes in a child's position in the expenditure distribution were examined. An estimated multivariate model conditional on insurance was developed to predict the true resource costs of providing services. Statistical analyses, including logistic-regression and multivariate linear-regression modeling, were done to account for the weighted sampling used in Medical Expenditure Panel Survey.

RESULTS. A total of 2938 children were included in the survey for both years. In 2000, the top 10% of the children accounted for 54% of all costs. They had a mean total expenditure of $6422 with out-of-pocket expenditures of $1236; 49% of the children in the top decile in 2000 persisted in the top decile in 2001, whereas 12% dropped into the bottom half. Children who had been in the top 10% in 2000 were 10 times more likely than other children to be in the top 10% for 2001. Other characteristics in 2000 that predicted membership in the top decile for 2001 included age (11–15 and 16–17 years), having any insurance (public and private), being positive on the standardized Children With Special Health care Need screener, and having a functional limitation.

CONCLUSIONS. Almost half of the children in the top 10% for costs in 2000 persisted in the top 10% in 2001. Older children, children with special health care needs, and children with functional limitations were more likely to be in the top decile. These findings do not support the belief that black and Latino children who are on Medicaid account for a disproportionate share of costs or expenditures. Because the children who were among the top 10% used health care services in a variety of inpatient, emergency department, outpatient, and ancillary venues, providing care coordination throughout the entire health care system is important to address both the cost and the quality aspects of health care for the most costly children. Targeted programs to decrease expenditures for those with the greatest costs have the potential to save future health care dollars. Assessment of the factors that predict persistence of high expenditures can be used to help in the planning of equitable health insurance strategies such as catastrophic care, carve-outs, reinsurance, and risk adjustment. Clinicians should review regularly the extent of care coordination that they are providing for their high-need and high-cost patients, especially preteens and adolescents. Studies that examine the persistence of expenditures over longer periods and include assessment of quality of care are needed.