Increasing health care costs have directed public attention to changing rates of hospital care. We examined changes in hospitalization and surgical rates for children during the decade from 1972 to 1981. Total hospitalizations for children younger than 15 years of age increased by only 4% during the decade. For teenagers and young adults (ages 15 to 24 years), hospitalizations declined by 19%. Admissions for surgery declined more for the younger group than for the older one. For children younger than 15 years of age, inpatient tonsillectomies and adenoidectomies (T and A) decreased 43%, representing 58% of the total decline in surgical procedures for this age group. Teaching hospitals continued to provide a sizable proportion of all childhood surgeries and increased their share of both high- and low-technology procedures during the decade. Payment sources varied among procedures. Self-pay varied from a low of 1.6% for T and A to 13.5% for spina bifida. Private insurance or Blue Cross payment varied from 59% for congenital heart disease surgery to 84% for T and A. These data on payments suggest that some children may lack access to some surgical care. Furthermore, insofar as the bulk of payment is from nonfederal sources, changes in hospitalization for surgical procedures will likely come mainly from changing incentives in the private sector.