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Member Research & Reports

Member Research & Reports

UAB Researcher Examines Expenditures and Characteristics of High-Cost Enrollees in CHIP

In order to develop effective means for containing public insurance costs, an accurate grasp of how healthcare spending is disbursed — in addition to an understanding of the traits of enrollees for whom high costs are incurred — is required. A study led by Dr. Bisakha Sen, professor in the department of health care organization and policy at the University of Alabama at Birmingham, aimed to ascertain if patterns of cost concentration in a public insurance program for children changed over time, changed in response to higher cost-sharing, or after expanding eligibility to high-income children. The study also sought to identify characteristics that distinguish high-cost enrollees versus others.

[Photo: Dr. Bisakha Sen]

Using data from 1999–2011 regarding enrollment in and claims from ALL Kids, the Alabama Children’s Health Insurance Program (CHIP) — which offers affordable healthcare coverage to children ages 19 and under who are low income but above Medicaid eligibility levels — the researchers analyzed not only the allocation of costs but also the health services that high-cost patients utilize, with the intention of identifying those expenditures that may be preventable.

Dr. Sen notes, “The top 10 percent (1 percent) of enrollees account for about 65.5 percent (24.7 percent) of total program costs. Inpatient and outpatient costs are the largest components of costs incurred by high-cost utilizers. Non-urgent emergency department costs are a relatively small portion. Average expenditure increases over time, particularly after expanded eligibility, and the share of costs incurred by the top 10 percent and 1 percent increases slightly. Multivariable logistic regression results indicate that infants and older teens, Caucasian children, and those with chronic conditions are more likely to be high-cost utilizers. Increased cost sharing does not reduce cost concentration or average expenditure among high-cost utilizers.”

These findings indicate that classifying and targeting possibly avoidable expenditures among the top 10 percent of high-cost enrollees may be the most effective approach to bending the cost curve for public insurance programs.

Co-investigators in the study are department colleagues Dr. Justin Blackburn, assistant professor; Ms. Monica S. Aswani, pre-doctoral fellow; Dr. Michael A. Morrisey, professor emeritus; Dr. David J. Becker, associate professor; and Dr. Meredith L. Kilgore, professor and chair; as well as UAB alumna Ms. Cathy Caldwell, director of the Bureau of Children’s Health Insurance, and Mr. Chris Sellers, director of data and evaluation, at the Alabama Department of Public Health; and Dr. Nir Menachemi, formerly at UAB and currently at Indiana University.

“Health Expenditure Concentration and Characteristics of High-Cost Enrollees in CHIP” was published in May in the journal Inquiry: The Journal of Health Care Organization, Provision, and Financing.

Journal article: