Healthcare Charges and Use in Commercially Insured Children Enrolled in Managed Care Health Plans in Washington State

Abstract

Objective: To determine the relative importance of enrollee, physician, medical group, and healthcare plan characteristics as determinants of healthcare use and expenditures in commercially insured children <18 years of age enrolled in managed care health plans. We focused on the effects of age and benefit level, the two most important predictors of cost and utilization in our study of adults. Methods: This study included 67,432 commercially insured children who were between 1 and 18 years of age, and were cared for by 790 primary care physicians, who practiced in 60 medical care groups in Washington State. Plan enrollment and utilization data for 1994 were linked to a survey of medical care groups contracting with three managed care health plans. Benefit level for each enrollee was defined as low, medium, or high and was based on cost sharing by the health plan for hospitalization, outpatient care, and emergency department services. The three outcome measures included estimated total per member per year charges, number of ambulatory visits, and hospital days. Results: In multivariate analysis, enrollee age was the most important determinant of total charges, with younger children incurring higher charges and utilization. For children 5 years and younger, mean total per member per year charges were $617 in the low-benefit category and $878 in the high category (p < .0001). These differences were less apparent for children 6–12 years ($355 versus $420, p = .012), and were not statistically significant for children 13 years and older ($503 versus $552, p = .14). The annual number of visits increased with benefit level for children of all ages. Conclusions: Enrollee age and benefit level were the most important determinants of healthcare use and expenditures in children enrolled in managed care health plans.