Children with Special Needs

The Case for a Collaborative Care System

Reductions in preventable diseases and recognition and improved outcomes of chronic illnesses in children mark the most dramatic changes in health care for children over the past 50 years. New knowledge and technology offer the possibility of cure or significant improvement for many children with chronic illnesses.

Approximately 70% of children are fundamentally healthy; the other 30% have chronic illnesses and are "children with special health care needs." Two-thirds of these 30% have mild chronic conditions such as asthma or chronic otitis media; one-third have disabling or life-threatening chronic illnesses that require special care.

Lack of Standardized Definition

Defining which children have special health care needs is difficult. Stein and colleagues state that such a child has an illness with a biological basis that is certain to last at least one year and requires continuing treatment, or has some functional disability More than 200 illnesses of varying severity fit this definition; almost all are rare. Asthma is the most common chronic illness; its prevalence in the U.S. age group under 18 years is approximately 50 per 1,000. However, only a small proportion of children with asthma have significant functional disabilities. Congenital heart disease affects approximately 3 per 1,000. Other chronic conditions such as epilepsy, cerebral palsy, diabetes, and Down syndrome affect I to 3 per 1,000. Most other conditions, including acute leukemia, neural-tube defects, cystic fibrosis, muscular dystrophy, hemophilia, and hereditary metabolic disorders affect fewer than 1 per 1,000.

Health Care System Changes

Recently the proportion of children covered by private insurance has markedly decreased. Medicaid, which was initially designed to provide insurance for the very poor, has been increasingly used to provide insurance for the nearly poor, for chronically ill children for whom health care insurance is not available or affordable, for adults with disabilities, and for long-term care for the elderly. Although children constitute more than 50% of Medicaid enrollees nationally, they incur less than 20% of Medicaid costs and, in Washington, less than 15%.

Supplemental Security Income (SSI) and Medicaid have become the major insurers of last resort for children, particularly those with chronic long-term problems. Approximately 9% of all Medicaid recipients younger than 18 years have significant chronic illnesses and incur at least a third of all Medicaid expenses used by children.

Since 1985, medical care for children has been provided by regionalized fee-for-service arrangements, and the care of complex patients has been concentrated in tertiary care centers. In 1993, Medicaid vigorously instituted the Healthy Options program (see page 30) for most recipients. All Medicaid enrollees who received Aid to Families with Dependent Children were enrolled in several competitive managed care programs where health plans provide a fixed payment per month for each enrollee (fully capitated). Adults and children with disabilities who receive SSI are being transitioned into Healthy Options managed care systems on a phase-in-schedule that should be complete in 1997. Capitated managed competition systems probably work well for 80-90% of the children with complex needs in fully capitated, competitive managed care health systems may suffer, especially if cost reductions in Medicaid accelerate.

Issues Related to Capitated, Competitive Managed Care

Access to Primary and Specialty Care

In the past, access to specialty care was determined by the geographic, social, and economic environment of families. Choice of providers and access to regional, specialized children's services was relatively unrestricted. The current regional system includes informal networks of tertiary care centers, local health department coordinators for children with special health care needs, early intervention services and centers, and specialized care resources.

In a managed competition model, this will change. Families and service providers who have developed relationships and respect for each other's knowledge could be separated by the institutional constraints of managed care organizations if health plans contracts only with specific service providers. Decreases in patient referrals and revenues to specialty programs and facilities could affect their services. The challenge will be to ensure that children with special health care needs have access to and appropriately use knowledgeable subspecialty pediatric practitioners, services, and facilities.

children playing
Children's Hospital and Medical Center Benefits and Services
The Medicaid benefit package has sufficed for most children with chronic conditions. Private health care providers offer no standard package for children with special health care needs or children in general. Only some health plans provide a comprehensive benefit package. Although recent changes in Washington's insurance laws provide some protection, families can still lose benefits with job changes or moves.

These factors increase the likelihood that parents will need to increase their out-of-pocket expenditures or impoverish themselves to qualify their children for Medicaid. In the worst cases, families may need to relinquish their children to medical foster care if they cannot care for them.

Risk Adjustments

Children with significant chronic illness incur expenses that are at least three times higher than for healthy children. Health plans that offer specialty services and sufficient benefit packages to serve these children will attract their families. Given freedom of choice and differences among health plan benefits, children with chronic problems will be distributed unevenly among health plans, and managed care plans will have economic disincentives to enrolling these children. Health plans that have a predominantly healthy population may lower premium rates and health plans with a greater number of chronically ill children will have to raise their rates. Unless risk adjustment mechanisms are in place to compensate for care needs of chronically ill children, some health plans may not be able to take care of these children or may not remain financially viable in a competitive market. The consequence is that managed care plans may decrease coverage to a low common denominator and not provide adequate benefits and services for these children and their families.

Quality Assurance Mechanisms

Many children's advocates hope that quality assurance mechanisms will protect these children. In fact, quality assurance measures do not cover the wide range of clinical problems that occur in this population. The only performance standards for childhood chronic illnesses that will be required by the Health Plan Employer Data and Information Set (HEDIS) are asthma admissions and retinopathy associated with diabetes mellitus. Better management systems are needed to protect children with multiple, diverse special health care needs. Effective measures would still only identify problems after the fact.

Other Issues For children who are dying of chronic illness, respite for parents and hospice care should be accessible. Resources for discussions of ethics regarding continuation of care or end of-life issues also need to be available for families and practitioners to explore the use of palliative or supportive rather than curative care. Support systems are needed to address the multiple psychosocial issues affecting the immediate and extended family. All of these services should be available wherever these children are enrolled.

Recommendations

Caring for children with chronic illnesses in any health care environment is difficult. Regional resources cannot be used effectively in a fragmented, fully-capitated, competitive health care system where there are disincentives for collaboration and where quality assurance or risk-adjustment mechanisms are lacking. Driven by need for immediate cost servings, such a system may accrue short-term financial gains to providers and investors, but the long-term cost to the health care system and society may negate these gains.

The 1995 Washington Legislature passed health reform legislation that replaced the Health Services Commission with the Health Care Policy Board (HCPB). The new law states that the HCPB is to study and intake recommendations to the governor and Legislature in January 1997 about a system of care for managing children with special needs. An HCPB work group is meeting to define these children and their benefit needs, and to address provider networks, system integration, quality assurance, and financing issues.

A regionalized health care system for children with special medical problems is needed. This cooperative system should use both public and private health care resources to identify and implement long-term strategies for care of this population. To do otherwise will be an unconscionable disservice to these children and their families. We should provide new technology and services to treat chronic conditions, and we should provide this care with realistic financial provisions, compassion, and consideration for the long-term effects on these children and their families.

Recommended Reading

Neff JM, Anderson G: Protecting children with chronic illness in a competitive marketplace. JAMA 1995;274:1866-1869.

Newacheck P, Taylor W: Childhood chronic illness: prevalence, severity, and impact. Am J Public Health 1992;82:364-372.

Stein R, et al: Framework for identifying children who have chronic conditions: The case for a new definition. J Pediatr 1993;122: 342-347.

Authors

Nanci Larter, R.N., M.S.N., is child health policy liaison at Children's, Hospital and Medical Center in Seattle.

John M. Neff, M.D., is medical director of Children's Hospital and Medical Center and associate dean and professor of pediatrics at the University of Washington School of Medicine.

Return to the Table of Contents

Return to Northwest Public Health

Created: 2/27/99 Updated: 7/14/99