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Health Care Costs and Financing

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Children's health insurance coverage has increased, more care has shifted to outpatient sites, and expenditures have declined

Since 1987, insurance coverage for U.S. children has improved, the site of care has shifted toward ambulatory or outpatient sites, hospital use has declined, and expenditures for children as a proportion of total health care expenditures have decreased. These findings are the result of a study by Lisa Simpson, M.D., B.Ch., M.P.H., formerly deputy director of the Agency for Healthcare Research and Quality, and now professor of pediatrics at the University of Florida. Her colleagues for the study were Marc W. Zodet, M.S., Frances M. Chevarley, Ph.D., Pamela L. Owens, Ph.D., and Denise Dougherty, Ph.D., of AHRQ, and Marie McCormick, M.D., Sc.D., of the Harvard School of Public Health.

The researchers found that the proportion of children uninsured for an entire year declined from 10.4 percent in 1996 (7 million children) to 7.7 percent in 1999 (5.3 million). Overall use of hospital-based services declined significantly since 1987. Only 6.1 percent of children had at least one hospital outpatient visit in 1999 compared with 11.8 percent in 1987, a 48 percent decrease. Children with at least one hospital inpatient stay decreased from 4.7 percent in 1987 to 2.6 percent in 1999, a decrease of 45 percent. Also, the proportion of children with at least one emergency department visit declined from 17.1 percent in 1987 to 11.1 percent in 1999.

During this period, the site of ambulatory care shifted significantly toward office-based points of service, mostly due to a decline in hospital outpatient use from 7.3 percent to 3.7 percent. The percent of total expenditures attributable to children decreased substantially from about 14 percent in 1987 to about 10 percent in the late 1990s. Several of the observed changes from 1987 varied significantly by type of health insurance coverage, poverty status, and geographic region. These findings are based on an analysis of data from the Medical Expenditure Panel Survey (1996-2001), the 1987 National Medical Expenditure Survey, and the Nationwide Inpatient Sample (1995-2000) from the Healthcare Cost and Utilization Project.

See "Health care for children and youth in the United States: 2002 report on trends in access, utilization, quality, and expenditures," by Dr. Simpson, Mr. Zodet, Dr. Chevarley, and others, in the March 2004 Ambulatory Pediatrics 4(2), pp. 131-153.

Reprints (AHRQ Publication No. 04-R042) are available from the AHRQ Publications Clearinghouse.

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