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University of MichiganHealth System
Children withSpecial Health Care Needs:
Looking Back; Looking Forward
Gary L. Freed, MD, MPHDirector, Division of General Pediatrics
Director, Child Health Evaluation and Research (CHEAR) Unit
University of Michigan
April 16, 2008
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University of MichiganHealth System
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University of MichiganHealth System
Children’s 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 >250% of FPL share in
cost of treatment
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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
Two Systems for Managed Care
• Initiated in October 1998
1. Detroit Medical Center: Children’s Choice
2. University of Michigan and Henry Ford Health System: Kid’s Care
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University of MichiganHealth System
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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University of MichiganHealth System
Actual and Perceived Issues
• Institutions were concerned– Deliver care well– Manage risk appropriately– Achieve positive margin– Caps won’t work
• CSHCN have established needs
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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System
Findings fromUniversity of Michigan Evaluation
• Satisfaction with service
– Similar for managed care vs. FFS– >80% rated their providers as excellent– <25% 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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University of MichiganHealth System
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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University of MichiganHealth System
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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University of MichiganHealth System