OBJECTIVES: Children with Special Health Care Needs (CSHCN) have markedly increased health care expenditure relative to children without special needs. This study aims to understand the contributors to growth in expenditure per CSHCN.

METHODS: Health expenditure was classified by types of care (office-based visits, ED visits, inpatient visits, outpatient visits, prescribed medicines, dental visits, and home health) and types of condition (mental, physical and well person care). Growth in average expenditure per child was decomposed by prevalence, volume and price. Retrospective data were used from the US Medical Expenditure Panel Survey (MEPS), years 2001 to 2017.

RESULTS: CSHCN accounted for 20% of the child population, 50% of total health expenditure and 72% of expenditure growth for all children. Average annual expenditure growth per CSHCN is 6.4%, with office-based care, hospital inpatient care and medication the largest contributors (1.6%, 2.8% and 1.2% respectively). Within these three types of care, price was a larger contributor to growth, compared to prevalence and volume (4.9%, 0.1% and 0.7%). There was larger growth in expenditure for physical care compared to mental and well person (4.5%, 1.0%, and 0.1% respectively). The price of inpatient visits for physical conditions is the single most important contributor to expenditure growth (3.6%).

CONCLUSIONS: The rise in expenditure for CSHCN is substantial over the last 17 years and predominantly driven by the price of hospital inpatient care. Such rises in the cost of hospital care warrant careful examination considering concerns regarding sustainability of health care expenditure.