Children with

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• Children with
• Special Health Care Needs
• Looking Back Looking Forward
• Gary L. Freed, MD, MPH
• Director, Division of General PediatricsDirector,
  Child Health Evaluation and Research (CHEAR)
  UnitUniversity of Michigan
• April 16, 2008

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Childrens Special Health Care Services

• Title V enrolled children
• Established by state legislature in 1927
• Eligibility based on residency, medical condition
  and age
• 2,600 qualifying diagnoses
• Families with incomes gt250 of FPL share in cost
  of treatment

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Traditional Model

• Specialty care to treat qualifying condition
• Fee-for-service
• No gatekeepers
• Children should see specialists as needed
• Multi-specialty clinics
• Crippled children should not be in HMOs

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Initial Thoughts about CSHCN and Managed Care

• HMOs were not configured to care for children
  with chronic conditions
• Focused on adults and well children
• Cost savings would reduce care quality
• CSHCN would suffer

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Mid 1990s Changing Economic/Political Environment

• Michigan received grant from RWJ Foundation
• Worked with Medicaid group in Boston
• Interviewed parents, advocates, primary and
  specialty providers
• In 1996 Michigan went into the HMO business

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Two Systems for Managed Care

• Initiated in October 1998
• Detroit Medical Center Childrens Choice
• University of Michigan and
• Henry Ford Health System Kids Care

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Key Components

• Care coordination
• Annual care plans for qualifying diagnosis
• Dually enrolled CSHCN receive comprehensive care
• Financing
• Cost settling at end of year for plans
• Physicians are paid FFS
• Care coordinators paid

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Actual and Perceived Issues

• Institutions were concerned
• Deliver care well
• Manage risk appropriately
• Achieve positive margin
• Caps wont work
• CSHCN have established needs

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Initial Effort

• No risk contracts
• Tried to determine risk rates
• Education of institutions by state
• Expenditures were predictable
• Capitation was a pooled, not individual risk

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InstitutionalPerceptions and Goals

• Capitation was viewed as a spending ceiling for
  each child
• Institutions only wanted cost-based programs, not
  risk based risk was too risky
• Medical expenditure would be greater than in FFS
• The State will change the rules later

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Challenges for Institutions

• Contracting incentives outside of SE Michigan
• Communities and volumes were too small
• Children always had the choice of managed care
  vs. FFS
• Few data on which to make significant financial
  decisions

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Challenges InvolvingPrimary Care Physicians

• Very few children for each practice
• Worth the hassle to get involved?
• Needed a critical mass of patients
• Pediatricians were already stretched thin
• Additional time to work with care coordinators
• A few physicians already had most of the CSHCN
  patients

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Challenges InvolvingPrimary Care Physicians

• Many not familiar with care coordination
• Increased expense of staff time to participate
• Enhanced payment rates not enough
• Longer visits for CSHCN patients
• Detroit was similar to rural Michigan
• Very few pediatricians
• Even fewer willing to participate
• Many did not feel comfortable caring for CSHCN
  patients

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Challenges for Subspecialists

• No incentives
• Academic institutions did not provide ownership
  or engagement
• Difficult to recruit to Michigan
• Asked to provide primary care when primary care
  provider not available

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Findings fromUniversity of Michigan Evaluation

• Emergency Department use
• 20 reduction in ED use in Managed Care vs. FFS
• Illness severity and complexity are most
  important determinants

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Findings fromUniversity of Michigan Evaluation

• Expenditures
• CSHCN mean expenditures 600 higher than average
  patients
• Significant variation by diagnosis and age
• Pharmaceutical costs significant
• Other variables minor in comparison
• Managed care enrollment had little, if any,
  effect on expenditures

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Findings fromUniversity of Michigan Evaluation

• Enrollment in managed care
• Overall, parents of children with more severe
  disease chose to keep their children in FFS
• Infants more likely to enroll in managed care
• Less potential to disrupt existing relationships
• Lack of existing medical home
• The State program was more of a medical home
  model vs. managed care model
• No effort to push favorable selection
• No effort to control costs

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Findings fromUniversity of Michigan Evaluation

• Utilization of health care services
• 70 had IHCPs as expected
• 30 had some aspect of care denied on IHCP
• Unclear impact on utilization
• Families not pursuing care?
• PCP no recommending or referring?
• 50 of children had a change of their LCC
• Only 27 of children received well child care
• Overall no difference between managed care and
  FFS in utilization by diagnosis

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Findings fromUniversity of Michigan Evaluation

• Satisfaction with service
• Similar for managed care vs. FFS
• gt80 rated their providers as excellent
• lt25 experienced problems obtaining needed care
• Lower satisfaction associated with having
  children in fair or poor health, regardless of
  managed care or FFS

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Findings fromUniversity of Michigan Evaluation

• Perceptions of LCCs and PCPs
• LCCs based in pediatric clinics are able to
  better coordinate care
• LCCs perceive parental input to IHCP as more
  important than PCP input
• Half of PCPs are not involved in IHCP development
• Most PCPs did not discuss IHCPs with families
• Many PCPs and LCCs (25) received care
  coordination payments for patients of whom they
  were unaware

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Going Forward

• Care coordination vs. managed care?
• Institutions unlikely to accept risk
• Primary care involvement essential
• Capitation for CSHCN makes providers nervous
• Little financial incentive for managed care
  providers

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