In 2015, children aged 0 to 18 years accounted for an estimated 8% of total US health spending but represented approximately 24% of the population. This relatively small proportion of total spending raises the question of whether child health should be important to physician leaders, administrators, payers, and other groups that focus on improving the value of health care. The answer to this question, in part, may depend on the manner in which the magnitude of child health care spending is framed. When framed relative to adult spending, spending for children may seem so small that it could be perceived as an unimportant “rounding error” in the health care system.
However, even small percentages of total health care spending represent large expenditures given the sheer scale of the US system. For instance, in absolute terms, child health care spending totaled $277 billion in 2012, according to the National Health Expenditure Accounts. To put this amount in perspective, $277 billion represented 1.7% of US gross domestic product in 20123 and was more than the amount any other industrialized country spent on health care for its entire population in 2012, except for Germany and Japan. If child health care spending increased 3.4% per year between 2012 and 2017, as it did between 2010 and 2012, then child health care spending in 2017 would be approximately $327 billion—more than half the US defense budget in fiscal year 2017.
Whether child health care spending is framed using relative or absolute language is not mere semantics. As research in linguistics and psychology demonstrates, the manner in which information is framed can have powerful and potentially distortionary effects on perception. For example, the pharmaceutical industry has attempted to deter cost-control efforts by arguing that despite recent increases, retail prescription drug spending still represents just 10% of total US health care spending. Similarly, relative rather than absolute characterizations may promote the tendency to conceptualize child health care spending in terms of its smallness compared with adult spending, thus masking how large this spending is in absolute terms.
The resulting misperception that child health care spending is small may impede efforts to provide high-quality, value-based care to children. First, policy makers may have limited enthusiasm for implementing interventions to decrease unnecessary and potentially harmful care for children, even though emerging evidence suggests that potential savings could be substantial. For example, the use of just 20 low-value pediatric services has been estimated to result in $227 million in unnecessary annual spending among commercially insured children alone. In addition, evidence of large variations in care for common high-cost pediatric conditions, such as prematurity, suggests that cost savings are possible. These findings suggest that ongoing efforts to improve value in the health care system, including payment and delivery reforms to reduce low-value care, should span the entire age spectrum.
As a consequence, policy makers, researchers, payers, health care professionals, and health care organizations both inside and outside of pediatrics should reject language that frames child health care spending as small compared with adult spending. They should instead use language that appropriately frames child health care spending as a substantial burden to families and society. To be clear, appropriate framing alone is not sufficient to spark interest in optimizing the enormous amount of dollars spent on the health care of children. However, it is a necessary first step. If child health care spending is misperceived as small, it will be difficult to promote the judicious management of limited pediatric health care resources as a central clinical, ethical, and policy goal.