Beyond the Water's Edge: Charting the Course of Managed Care for People with Disabilities--Conference Resource Book (continued)

TAB 6: Track I: Managed Care for Children and Adults with Disabilities

PDF Version

OVERVIEW

Moderator Biographics

• Brian Burwell
• Sandra Tanenbaum

Managed Care for Children and Adults with Disabilities (Burwell and Tanenbaum)

SESSION 1: IMPACT OF MANAGED CARE ON CHILDREN WITH DISABILITIES

Reactor Biographies

• Ruth E.K. Stein
• Nancy R. Thaler

Evaluation of the District of Columbia's Demonstration Program: Managed Care System for Disabled and Special Needs Children (Irvin)

Families' Out-of-Pocket Expenses When Caring for Children With Special Needs: A Preliminary Report Comparing Children in Medicaid and a Commercial Product Line-- Presentation Summary (Shenkman)

The Managed Care Enhancement Project for Children with Special Health Care Needs (Allen)

Planning Grant: Services for Children with Chronic Illness and Disease in an HMO (Staub)

State Medicaid Managed Care Policies Affecting Children with Chronic or Disabling Conditions (Fox, McManus)

Families' Out-of-Pocket Expenses When Caring for Children With Special Needs: A Preliminary Report Comparing Children in Medicaid and a Commercial Product Line (Shenkman)

Managed Care Enhancement Project for Children with Special Health Care Needs: Family and Primary Care Clinician Needs Assessment Methods and Description of Survey Respondents

Managed Care Enhancement Project for Children with Special Health Care Needs: Primary Care Clinician Survey--Mail Survey

Managed Care for Children with Special Health Needs: Parent Survey

Overall Findings of Needs Assessment

SESSION 2: IMPACT OF MANAGED CARE ON ADULTS WITH MENTAL ILLNESS

Reactor Biographies

• Howard R. Goldman
• Michael F. Hogan

Severely Mentally Ill HMO Members (McFarland)

Colorado's Early and Preliminary Experience with Capitation for the Severely and Persistently Mentally Ill Adults (Bloom)

The Effects of Private Sector Mental Health Carve-Outs (McGuire)

The Massachusetts Mental Health System Change (Dickey)

Costs and Incentives in a Mental Health and Substance Abuse Carve Out (Ma, McGuire

Enrollment Duration, Service Use, and Costs of Care for Severely Mentally Ill Members of a Health Maintenance Organization (McFarland, Johnson, Hornbrook)

Managing the Care of Schizophrenia: Lessons From a 4-Year Massachusetts Medicaid Study (Dickey, Normand, Norton, Azeni, Fisher, Altaffer)

SESSION 3: IMPACT OF MANAGED CARE ON ADULTS WITH AIDS OR PHYSICAL DISABILITIES

Reactor Biographies

• Gerbon DeJong
• Tony Dreyfus
• Lex Frieden

Access, Use, and Satisfaction of the Under 65 Medicare-Disabled in HMOs and Fee-for-Service (Gruenberg)

How the Oregon Health Plan Serves People With Disabilities: System Design Issues and First-Year Impacts (Rosenbach)

Comparison of Physician and Hospital Use Among People with Chronic Illness in HMO and FFS Plans (Fama)

A Managed Care Program for Working-Age Persons with Physical Disabilities (Batavia, DeJong, Burns, Smith, Melus, Butler)

A Vision for the Future: Interview with Gerben DeJong, Ph.D. (Prince, Haas)

Perspective and Analysis--Market Forces: Medical Rehabilitation Undergoing Major Shakeup in Advanced Managed Care Markets (DeJong, Wheatley, Sutton)

Surviving Managed Care and Preparing for the Next Revolution in American Health Care (DeJong)

OVERVIEW

Moderator Biographies

Brian O. Burwell
Brian Burwell is the Director of Healthcare Organization and Economics within the Research and Policy Division of The MEDSTAT Group. The MEDSTAT Group is a healthcare information company which provides databases, analytical software and consulting services to employers, managed care companies, insurers, providers, and government, with headquarters in Ann Arbor, MI. Mr. Burwell has been conducting healthcare services research for 17 years, with a career focus on Medicaid, disability and long-term care policy. He has published extensively on Medicaid eligibility policies for long-term care, home and community-based care waiver programs, Medicaid spend-down, asset transfers, community-based approaches to supporting persons with developmental disabilities, and managed care models for persons with disabilities. He is currently working with the Department of Health and Human Services in Delaware on a project to develop managed long-term care policy options for all the Department's long-term care populations.

Sandra J. Tanenbaum, Ph.D.
Sandra Tanenbaum is Associate Professor of Health Services Management and Policy at the Ohio State University College of Medicine. A political scientist by training, Dr. Tanenbaum's research focuses on the Medicaid program, disability policy, and clinical decision-making. She is the author of Engineering Disability: Public Policy and Compensatory Technology (Temple, 1986) and serves as Book Review Editor of the Journal of Health Politics, Policy and Law.

Managed Care for Children and Adults with Disabilities: A Step in Which Direction?

Brian Burwell and Sandra Tanenbaum

INTRODUCTION

Managed care financing and delivery models have considerable potential for improving the value and quality of health care and supportive services provided to children and adults with disabilities. Managed care models that encourage flexibility in benefit coverage and which coordinate care across the full spectrum of the insurance benefit package are features that are particularly attractive to persons with disabilities. At the same time, however, managed care incentives to eliminate "inappropriate care" or care that is not "medically necessary" are of great concern to people with disabilities whose experience in obtaining access to needed health care services in the fee-for-service system is already problematic.

Both positive and negative effects of managed care for persons with disabilities are similarly reflected in the limited empirical research that has been conducted to date on the impacts of managed care on disabled populations. Some studies point to improvements in outcomes, while others have found significant reductions in service levels under managed care incentives. In brief, the jury is still out on how managed care models effect the health care status of persons with disabilities, and the challenge to the health care services research community is to monitor the enrollment of persons with disabilities into managed care systems closely, and to identify those factors which contribute to improved and worsened outcomes for these vulnerable populations.

CHILDREN AND ADULTS WITH DISABILITIES: WHO ARE THEY?

Part of the challenge in assessing the impact of managed care on persons with disabilities is that the population of children and adults with disabling conditions is extremely diverse, with broad-ranging differences in both types and levels of impairment. At the same time, managed care models are evolving into a variety of permutations that make the generalizability of managed care impact studies increasingly hazardous. In conceptualizing a research agenda for examining managed care impacts, it is critical that we begin with a fundamental understanding of the defined populations, and how the structure and incentives of managed care models may impact access, cost and quality outcomes for persons with severe and chronic disabling conditions.

Children with Disabilities

National survey data indicate that approximately one in ten children have a "severe chronic illness" (Neff and Anderson, 1995). This estimate obscures dramatic diversity in the characteristics of children with disabling conditions--many children with disabilities have conditions which do not result in health care use or costs significantly higher than the population of children without disabilities, while a significant minority of children with disabilities have severe and multiple conditions that require continuous and expert medical attention. Health care and supportive services for the population of children with special health care needs are also fragmented across a variety of financing and service settings that renders the transition from a fee-for-service framework to a managed care framework operationally cumbersome.

Importantly, within the population of children with high health care needs, there is a subset of children with extremely severe medical conditions that require continuous and highly specialized care. For example, within the target population of SSI children receiving services under the District of Columbia's Managed Care System for Disabled and Special Needs Children Demonstration, a Medicaid Section 1115 waiver program, children with Medicaid expenditures of over $50,000 per year constituted less than three percent of all SSI children in the District in the year prior to implementation of the demonstration program, yet they accounted for about 54 percent of all Medicaid spending for SSI children (Blanchon, 1996).

Childhood disability differs from disability in adulthood in that the nature and extent of the disability frequently changes during the developmental process. Many children experience improvements in functioning as they develop, and the disability may become less limiting with time. Other children with extremely severe medical conditions do not survive childhood at all. Moreover, the health care needs of children with disabilities is confounded over time by the interaction of the disability with the child's normal development, such as the onset of puberty. Consequently, access to appropriate pediatric and adolescent specialists may change frequently during the developmental process.

In regard to accessing health care, parents obviously take an active role in negotiating the health care system for their children. In brief, many parents take on the "coordination of care" role that is generally lacking in the fee-for-service system. Consequently, their interactions with the care coordination function of a managed care system may require a new accommodation of respective roles in managing the care of the disabled child. Managed care organizations are generally not used to the level of advocacy and health care system knowledge exhibited by parents of children with disabilities, and may not know how to positively incorporate that energy and knowledge into their internal care coordination systems.

A common concern of parents is the ability to maintain relationships with pediatric specialists, many of which have developed over the lifetime of the child, once the child is enrolled into a managed care plan. Consequently, in some Medicaid managed care initiatives, states require participating plans to continue to pay for ongoing physician-patient relationships, even if the specialty physician is not otherwise enrolled in the plan. This issue is of obvious concern to plans who feel that they are being paid to manage the care of the enrollee, but may not be given all the requisite tools to do so.

Children with disabilities differ from adults with disabilities in one other important respect--children are more likely to receive their health care through a fragmented financing system. Expansions in SSI and Medicaid eligibility for children with disabilities in recent years has meant that there are a growing number of children who have both private health care insurance and Medicaid coverage. Since the Medicaid benefit package is more comprehensive than private health insurance coverage, children and families often use their Medicaid coverage to finance services that are supplemental to their private insurance benefits, particularly home and community-based services and extended therapies. In addition, under the Individuals with Disabilities Education Act, local school systems are required to provide children with disabilities with educationally related services that often extend into the health care arena, particularly in the case of children with severe medical conditions. Lastly, under the Title V Program for Children with Special Health Care Needs, many states provide direct care services to children with disabilities on a categorical basis, not as part of the child's health insurance benefit. Since the implementation of managed care systems generally occurs within payers, not across payers, these multiple financing streams for children with disabilities create special challenges for the managed care marketplace.

Adults with Mental Illness and Substance Abuse Problems

Purchasers of health care services in both the private and public sectors have targeted services to persons with mental illness as prime candidates for managed care financing and delivery initiatives. In the private sector, many large companies have "carved-out" mental health and substance abuse benefits from their mainstream health care benefit programs, and have contracted with specialized vendors to administer these benefits. In the public sector as well, state Medicaid programs are building upon the infrastructure that has developed in managed behavioral health care to similarly "carve-out" at least a subset of mental health and substance abuse-related services covered under their own benefit packages to companies that specialize in the management of these services. On the research side, there is a larger body of research available on the impacts of managed mental health care than on how managed care impacts other services and/or populations.

While there has been significant penetration of managed care systems in the mental health/substance abuse market, it is important to recognize the differences in private and public markets as they relate to persons with mental health and substance abuse problems. In the private sector, purchasers finance mental health and substance abuse care for their employees, retirees and dependents. This population of workers and dependents is predominantly middle class and employed, with the concomitant array of mental health conditions that are most prevalent in this socio-demographic group. Depression and substance abuse disorders are diagnoses of high concern to private purchasers of health care, and the health care benefit programs of employers are structured to maximize value in the early identification and treatment of these conditions, with the objective of sustaining the productivity of their workforces.

In regard to coverage of mental health and substance abuse services for the dependents of employees, the goals are to provide coverage that is sufficiently attractive to recruit and retain a quality workforce (i.e. remaining competitive in the market for qualified workers) while limiting corporate expenditures for mental health and substance abuse care. Coverage of mental health and substance abuse care for adolescents with mental health conditions is often a major benefit issue for employers, since this population includes a subset of persons who account for a high percentage of total expenditures for these services.

In the public sector, the primary population of interest is persons with severe and persistent mental illnesses, particularly persons with disabilities associated with schizophrenia-related disorders. Approximately 30 percent of all adults under the age of 65 receiving SSI benefits, or about 1.5 million persons, qualified for SSI benefits on the basis of a mental disorder other than mental retardation (SSA, 1996). In addition, about 1 million persons with mental disorders received SSDI benefits, and are therefore insured under the Medicare program. As opposed to individuals receiving SSI benefits, persons receiving SSDI benefits have had a sufficient work history to obtain insured status under the Social Security disability system. On the whole, it is therefore reasonable to assume that SSDI beneficiaries have somewhat higher levels of functioning than persons receiving SSI.

Persons with severe and persistent mental illness have a broad range of medical, therapeutic, and supportive care needs, and a key issue in the application of managed care models to this population is what part of the care spectrum should be "managed." Although a number of state Medicaid programs have implemented mental health "carve-out" programs, it is important to recognize that states generally have only "carved-out" acute mental health services under these programs--inpatient care and outpatient follow-up care. Long-term supportive services, such as residential care programs, vocational training, day program services, and intensive case management services, have generally been excluded from the managed care contracts with carve-out vendors. Basic health care services are also usually provided by mainstream plans or the fee-for-service system.

The characteristics of persons with severe and persistent mental illness and their health and supportive service needs forcefully underscore the challenges of applying managed care models to the financing and delivery of services to this population. As a consequence, we are seeing a variety of managed care models emerging. Conceptually, one relatively simplistic way of classifying the service needs of this population is in three broad categories: (1) basic health care needs; (2) mental health-related services needed to deal with acute episodes of mental illness (short-term hospitalization, crisis intervention services); and (3) long-term supportive services intended to maintain individuals in independent or semi-independent community care settings.

As discussed above, most managed care initiatives for persons with severe and persistent mental illness have focused only on the management of one part of the total service continuum, i.e. the management of short-term hospitalizations and outpatient services. Basic health care services and long-term supportive services have, with few exceptions, not been made part of state managed care initiatives, as yet. A major reason for this segmentation of the total benefit package is related to infrastructure issues--states are building upon the infrastructure of managed behavioral health care vendors that have developed from demand created in the commercial marketplace. Another reason for this segmentation relates to the fragmentation of payments sources; Medicaid is generally the primary payer for acute mental health services for this population, while state Departments of Mental Health remain the primary payer for longer-term supportive services.

The limited scope of managed care initiatives for persons with severe and persistent mental illness has created "boundary" issues that affect the operationalization of these programs in critical ways, as well as how this population receives services. One fundamental issue is the boundary between mental health care and basic health care. Does it make sense for persons with severe mental illness to receive their primary health care through one system but have their "mental health" services managed by a separate system? If so, how is medication management coordinated across these dual systems? One major rationale for managed care is to coordinate care across a comprehensive benefit package for an enrolled population, and managed care initiatives which simply mirror the fragmentation of service delivery existent in the fee-for-service system are likely to fall short of this goal.

On the other hand, some state Medicaid programs have "carved-out" mental health services from managed care contracts for basic health care as a means to protect the population from the financial incentives of managed care to reduce services that may not be considered "medically necessary." There is considerable controversy in the commercial insurance market about the "savings" that have been achieved for health care purchasers by behavioral managed care vendors, and whether these savings are affecting mental health outcomes. Thus, in the public sector, mental health carve-outs have been used as a policy tool to protect mental health benefits from the incentives of managed care plans, most of whom have little experience in providing services to persons with severe and persistent mental illness. However, another factor in states' decisions to carve out mental health benefits has been advocacy by the specialized provider systems that serve this population to protect their market share.

Another boundary issue in designing managed care systems for persons with severe and persistent mental illness is whether to combine substance abuse programs with mental health services into an integrated managed care system. Although programmatically, there are strong reasons for bundling mental health and substance abuse benefits for this population in an integrated system, infrastructure issues and provider concerns often act to keep these services unbundled.

A final issue regarding the application of managed care models to persons with severe and persistent mental illness concerns the measurement of plan performance. What measures should purchasers (public or private) use to assess whether plans are doing a "good job?" Persons who support individuals with severe mental illness know that interventions of the highest quality can still lead to undesired outcomes in some individuals, while in other cases, people with mental illness somehow seem to get better or do okay despite inferior care or the absence of care. The relationship between good care and positive outcomes in this population is not straightforward, and the assessment of performance probably needs to measure average outcomes over sufficiently large samples of individuals, wherein the differentiation between inferior and superior care can be more reliability discerned.

Adults with Physical Disabilities and Persons with AIDS

The population of persons with severe and chronic physical disabilities, including persons with multiple sclerosis, cerebral palsy, muscular dystrophy, quadriplegia, and other conditions, encompasses a very broad range of disabilities and impairment levels. Persons with severe physical disabilities are often not well served by the fee-for-service health care system, and many experience the frustration of referrals to multiple specialists without any single physician taking overall responsibility for the oversight of their health care. If the care coordination functions of managed care models truly take hold, then managed care holds some promise for improving access and quality for persons with severe physical disabilities.

However, as with other disabled populations, many people with severe physical disabilities are skeptical that managed care organizations will provide them with access to comprehensive and coordinated medical care. Many worry that managed care organizations will be stringent in the allocation of resources in meeting their medical needs and will perceive them as "undesirable" enrollees, particularly if the cost of their care exceeds the average premium paid by their sponsor, be it an employer, Medicare, or Medicaid. For persons who require highly specialized care, many worry whether managed care plans will deny access to the most qualified specialists, and/or specialists with whom they have developed long-standing relationships.

On the purchaser side, private employers generally place little emphasis on ensuring that covered individuals with severe disabilities are adequately served in the managed care system. The disability programs of employers generally focus on short-term disability issues; the integrated management of their health insurance, workmen's compensation, and disability insurance programs; and rehabilitation initiatives which assist injured workers' to return to work as quickly as possible. The quality of health care provided to persons with severe and chronic conditions is generally not an issue of high concern to most private employers. Furthermore, the assessment of the performance of managed care plans by employers has largely focused on measures that are pertinent to large segments of their covered populations (e.g. prenatal care, immunizations, etc.) rather than on how plans treat individuals with rare conditions.

For persons with severe disabilities who do not have private insurance and are covered by Medicaid, it appears that mandatory enrollment in some kind of managed care system is increasingly inevitable. With completion of the enrollment of non-disabled Medicaid populations into managed care, states are now focusing their attention on the more difficult challenge of enrolling SSI recipients into managed care (Checkett, 1996). And unlike persons with severe mental illness, mental retardation and/or developmental disabilities, persons with severe physical disabilities generally do not have specific "sponsors" or "programs" within state government whose responsibility it is to look out for their welfare. Just as the needs of persons with physical disabilities often fall through the cracks in the current Medicaid system, there is equal danger that the needs of this population will be largely ignored in the headlong rush to achieve Medicaid savings through managed care approaches.

In contrast, persons with AIDS are receiving special attention in the development of Medicaid managed care models. Led by the model developed by the Community Medical Alliance in Boston, the concept of "specialized health plans" (SHPs) which target a single population type, is now being replicated in other states such as Maryland and New York. Specialized health plans are generally perceived as voluntary alternatives to mainstream managed care plans, rather than mandatory alternatives that persons with certain conditions would be required to enroll in. The development of specialized plans is not totally attributable to demand side factors. Another factor is that specialized provider networks with experience in providing health care services to specific populations want to be able to preserve their "product line" without having to diversify into being mainstream health plans.

The Community Medical Alliance model for managing the care of persons with AIDS places strong emphasis on the substitution of non-institutional care arrangements for institutional care, particularly during the terminal phases of the illness. The recruitment and training of medical care professionals that are committed to the treatment philosophy and culture of the Community Medical Alliance is another key component of the model.

Areas of Commonality Across Populations

Although children with severe disabilities, persons with severe and persistent mental illness, and adults with physical disabilities possess diverse characteristics that raise unique issues in the application of managed care models, there are some common characteristics shared by all of these populations. First, persons with severe disabilities of all types require access to specialty services that may be limited under managed care approaches. Closed panel plans may have few or no physicians with expertise in the care of conditions with low prevalence rates in the general population. Point-of-Service plans may allow enrollees to seek care outside of their networks, but at a higher cost to enrollees, who may have limited financial resources to utilize out-of-network providers.

Second, the health care costs of disabled populations are more predictable than the health care costs of non-disabled populations. Not only are they more predictable at the population level, but also, in many cases, at the individual level. This creates opportunities for health plans to maximize profitability by adopting business strategies to limit the enrollment (or increase disenrollment) of individuals whose health care costs are predictably above the payment rate made to the plan. Risk adjustment strategies which pay plans fairly for the expected costs of persons with disabilities, yet which still reward plans for efficient care, are critical to the application of managed care models to these populations, as well as to ensuring that persons with disabilities are provided quality care by the plans in which they are enrolled (Kronick et al, 1996). However, alternative mechanisms, other than risk adjusted capitated rates, for financially rewarding plans which enroll higher-cost individuals and providing quality services, also need to be explored. Risk-adjusted capitation may prove not to be the best solution to addressing these incentive issues, particularly given the technical and operational challenges of measuring risk and adjusting payments appropriately.

Third, the development of performance measures, which reliably assess the relative performance of plans in providing medical and supportive care to persons with disabilities of all types, is an area that requires extensive work and development. Workable approaches to eliciting the perspective of consumers, many of whom may have disabilities which impede traditional survey methods, is a key issue in the development of such measures.

Fourth, it is frequently the case that people with disabilities are receiving services from multiple payment sources and programs concurrently. The development of managed care models for these populations must respond to a set of needs that are broader than the financing and delivery of medical care. If care for these populations is to be truly integrated, then models need to be developed which consolidate the financing and delivery of health care services, rehabilitative services, long term care services, family supports, respite care, occupational supports, and personal counseling within integrated organizational structures. It may not be necessary for a single organization to possess all of these capabilities, but a managed care approach to these populations must include mechanisms for effectively coordinating the full array of medical and related services that are needed to help persons with disabilities maintain the highest level of independence possible.

What Does the Research Tell Us About the Impacts of Managed Care?

Empirical research which directly measures the health outcomes of persons with disabilities in fee-for-service versus managed care settings is extremely limited, and the research which has been conducted does not paint a consistent picture of the impacts of managed care. Research on the impacts of targeted managed care initiatives seems to paint a more positive picture, while general population studies of managed care impacts are more pessimistic. Also, considerably more research has been conducted of the impact of managed care on mental health populations than on populations with other types of disabilities.

Master et al (1996) describe improved outcomes among persons with severe disability and AIDS in a targeted Medicaid managed care program in Massachusetts. Positive outcomes included increased patient satisfaction, reduced inpatient hospital days, and improved decubitus ulcers and PCP. The study suggests that managed care can improve care for persons with severe disability through the use of innovative providers providing care in innovative settings, relative to the fee-for-service system. The results of this research may be questioned, however, given that the researchers also represent the senior management team of the managed care organization being studied. Similarly, Meyers et al (1987) found improved outcomes from managed care in a population of severely disabled adults in an independent living center, largely associated with increased resource allocation to care provided in the individual's home and centered around the person's individualized needs.

In an 11-year longitudinal study of persons with rheumatoid arthritis receiving care in fee-for-service settings versus prepaid group practice, Yelin et al (1996) found no evidence of differences in either the quantity of health care provided or in health care outcomes on either an annual or long-term basis across the systems of care.

Studies of populations in mainstream managed care plans seem less positive. An analysis of data from the Medical Outcomes Study (Ware et al, 1996) found that while health outcomes for the average patient did not differ between fee-for-service and managed care settings, health outcomes were decidedly poorer for patients who reported ill health at baseline. The study suggests that while managed care plans do quite well in maintaining the health of healthy patients, relative to fee-for-service, that people with higher medical needs fare less well in managed care, due to financial incentives among plans to reduce the level of resources applied to medical interventions. The findings of the Medical Outcomes Study support similar findings by the same research team ten years previously (Ware et al, 1986). Although the population of interest in the Ware study encompassed "chronically ill" persons, not persons with severe disabilities, it is reasonable to generalize the study findings to all populations with higher-than-average medical care needs. In another study of data from the Medical Outcomes Study, Safran et al (1992) found notable differences in dimensions of primary care provided to persons with chronic illness across fee-for-service plans, IPA-model plans, and traditional HMOs, but did not specifically associate these differing primary care paradigms with patient outcomes.

Research on the impacts of mental health managed care models is decidedly richer. The Medical Outcomes Study reported above found superior mental health outcomes in managed care for nonpoverty populations, but inferior outcomes in the poverty group (Ware et al, 1996). Wells et al (1990) found that one managed care network provided less intensive mental health services to their covered population but a higher quantity of services. Lurie et al (1992) found few differences in mental health outcomes among patients served in managed care versus fee-for-service with one exception--persons with schizophrenia showed superior outcomes in a fee-for-service setting. And in a study focusing on a population of persons with depression, Rogers et al (1993) reported that depressed patients declined, on average, in managed care settings, declines that were likely attributable to a drop-off in the prescription of anti-depressant drugs.

Other studies have reported more positive impacts of mental health managed care initiatives. Superior mental health outcomes under managed care, as well as reduced financial impacts on patients, were reported by Babigan et al (1992). Shern et al (1995) also reported greater reductions in problems, fewer unmet needs, and higher adherence to clinical protocols, among mental health clients in a managed care demonstration than in a comparison fee-for-service population.

A few studies have evaluated the impacts of mental health carve-out programs for Medicaid populations, and thus far, have generally reported favorable outcomes. Callahan et al (1995) conducted an evaluation of a Medicaid mental health carve-out in Massachusetts and reported that the carve-out vendor was successful in substantially lowering Medicaid costs for acute mental health services without any overall reduction in quality or access. Christianson et al (1995) also reported significant reductions in Medicaid expenditures for mental health services in the first year of a carve-out initiative, primarily due to reductions in inpatient admissions for mental health treatment, although mental health outcomes were not measured.

Studies that assess the impact of managed care on children with disabilities are very few, although a number of researchers have published on the potential dangers of managed care systems on children with disabilities. Fox et al (1993) reported findings from a survey of parents of children with disabilities, with mixed results. Parents were pleased with the reduced out-of-pocket costs associated with managed care systems, and with improved access to medical services, but at the same time reported increased difficulty obtaining access to specialty services and mental health care. The focus of managed care plans on requiring specialty care interventions to demonstrate rapid improvement was cited as a significant concern, and a barrier to care continuity.

Discussion: Is Managed Care for Children and Adults with Disabilities a Step Forward or a Step Backward?

Research on the impacts of managed care on children and adults with disabilities is decidedly mixed. The limited body of research published to date seems to suggest that the incentives of capitated financing mechanisms are not, in and of themselves, the primary determinants of outcomes. Rather, the research suggests that operational variables, i.e. how managed care models are applied, are equally important, if not more important, in determining how people with disabilities fare in the managed care world. Of particular interest is the nature of the managed care entity with whom the purchaser has contracted to provide care. Managed care organizations with missions to serve persons with disabilities, and organizations who provide specialized services, appear to achieve better outcomes for persons with disabilities than do mainstream plans which have no special focus on the needs of disabled populations.

As managed care models continue to evolve, and as purchasers increasingly pursue innovative managed care purchasing strategies, it will be increasingly important for researchers to help sort out which managed care models are associated with improved outcomes and reduced costs versus those managed care models which achieve reductions in health care costs only to the detriment of the populations they are intended to serve.

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Sturm, Roland, Catherine A. Jackson, Lisa S. Meredith, Winnie Yip, Willard G. Manning, William H. Rogers, Kenneth B. Wells. 1995. Mental Health Care Utilization in Prepaid and Fee-for-Service Plans Among Depressed Patients in the Medical Outcomes Study. Health Services Research 30(2): 319-340.

Sturm, Roland, Elizabeth A. McGlynn, Lisa S. Meredith, Kenneth B. Wells, Willard G. Manning, William H. Rogers. 1994. Switches Between Prepaid and Fee-for-Service Health Systems Among Depressed Outpatients: Results from the Medical Outcomes Study. Medical Care 32(9): 917-929.

Sturm, Roland, Lisa S. Meredith, Kenneth B. Wells. 1996. Provider Choice and Continuity for the Treatment of Depression. Medical Care 34(7): 723-34.

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SESSION 1: IMPACT ON MANAGED CARE ON CHILDREN WITH DISABILITIES

Reactor Biographies

Ruth E.K. Stein, M.D.
Ruth Stein is Professor and Vice Chairman of the Department of Pediatrics and Director of General Pediatrics at Albert Einstein College of Medicine. She is also Pediatrician-in-Chief at Jacobi Medical Center. She has been involved in developing models of care for children with special health care needs for many years. Her research is on chronic physical disorders in childhood and their psychological and social consequences. From 1983 to 1995, she was also the Principal Investigator of the Preventive Intervention Research Center for Child Health at the Albert Einstein College of Medicine/Montefiore Medical Center. She recently spent a sabbatical at the United Hospital Fund examining issues for the pediatric population under managed care.

Nancy R. Thaler
Nancy Thaler has been Deputy Secretary for Mental Retardation in the Pennsylvania Department of Public Welfare since 1992. She served as the Director, Bureau of Community Programs, for six years prior to being appointed Deputy Secretary. Before her career in State government, she worked for 16 years in a large nonprofit agency in southeastern Pennsylvania, Ken-Crest Services. While with that agency, she served eight years as a direct care worker, including four years as a houseparent and another eight years in administrative positions.

As Deputy Secretary for Mental Retardation, Ms. Thaler is responsible for the State's services to people with mental retardation. These services affect 3,240 people in State institutions, and 63,000 people in the community.

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Evaluation of the District of Columbia's Demonstration Program: Managed Care System for Disabled and Special Needs Children

Carol Irvin, Ph.D.
As a Health Economist at Abt Associates, Inc., Carol Irvin has conducted numerous studies on the use, costs, and outcomes of health care services provided under managed care and fee-for-service arrangements. In current work she is analyzing enrollment patterns among applicants to the Program for All-Inclusive Care for the Elderly (PACE)--a capitated day health center program for frail elders. Dr. Irvin is also currently involved in analyzing the impacts of a new pharmaceutical product on the use and costs of health care services and labor market participation among individuals with chronic progressive multiple sclerosis. In earlier work funded by the Health Care Financing Administration, she has done comparisons of care and customer satisfaction of families in Florida, Michigan, and Maine enrolled in Medicaid managed care and fee-for-service providers. She has also analyzed the impact on health care use and economic outcomes of a national capitation demonstration project among mine workers--a high risk industry population.

Dr. Irvin has also been actively researching health care issues pertaining to the maternal and child populations. Research in this area include assessing Missouri's 1988 Medicaid expansion and its impacts on enrollment patterns of pregnant women and infants, prenatal care, birth outcomes, and infant health care. Related work includes on-going analysis of the Community Integrated Service Systems (CISS) serving women and children and a series of analyses of the Special Supplemental Food Program for Women, Infants, and Children (WIC) program.

THE DEMONSTRATION

• Eligible Population
• Plan Structure
• Provider Network
• Benefit Plan

ENROLLMENT

• Enrollment Procedures
• Challenges to the Enrollment Process
• Current Enrollment Experience

COMPONENTS OF THE EVALUATION

• Analyses of Enrollment
• Implementation of the Demonstration
• Outcome Analyses

DATA TO BE COLLECTED

• Secondary Data Sources
• MMIS
  • Plan encounter data
  • SSI eligibility data
• Primary Data
  • Key informant interviews
  • Focus groups
  • Client survey
  • Medical record review

PRIMARY RESEARCH QUESTIONS

• Analyses of Enrollment
  • Which children enroll?
  • Which children are long-term enrollees?
• Implementation of the Demonstration
  • What can other states and managed care plans learn?
• Outcomes Analyses
  • What are the experiences of the District, the managed care plan, the providers, and the children and their families under this type of health care system?

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Families' Out-of-Pocket Expenses When Caring for Children With Special Needs: A Preliminary Report Comparing Children in Medicaid and a Commercial Product Line

Elizabeth A. Shenkman, Ph.D.
Elizabeth Shenkman is the Coordinator of Research and Program Evaluation at the Institute for Child Health Policy of the State University System of Florida, and an Assistant Professor of Pediatrics at the University of Florida. Dr. Shenkman is the Principal Investigator on the following research projects: Contractual Arrangements with Physicians: Implications for Pediatric Health Care, funded by the Robert Wood Johnson Foundation; Managed Care: Implications for Families' Out-of-Pocket Expenses When Caring for Children with Special Health Care Needs, funded by the Department of Health and Human Services, Assistant Secretary for Planning and Evaluation, Office of Health Policy; and the School Enrollment-Based Health Insurance (SEBHI) Program Evaluation, funded by the Florida Healthy Kids Corporation. In addition, she is the Co-Principal Investigator for the following project: Children with Special Health Care Needs Within Managed Care: the Department of Empirically-Based Models, funded by the Department of Health and Human Services, Maternal and Child Health Bureau.

BACKGROUND

• Concerns about children with special needs in managed care environments
• Limited data from managed care organizations about enrollees
• Strong financial burdens in fee-for-service system
• Will these burdens be greater in managed care?

PURPOSE

• Present preliminary information about families' out-of-pocket expenses when caring for children with special needs
• Two groups of children
  • Commercially-insured through a special program
  • Medicaid fee-for-service or primary care case management
• Continuing to collect data for both of these groups

THE THIRD PARTY PAYERS

• Commercial Product Line
  • Insured through a special program providing subsidized premiums
  • About 30,000 enrollees
  • Comprehensive benefit package
  • Private not-for-profit corporation negotiates contracts with health maintenance organizations
  • Health maintenance organizations bear risk and maintain the provider network
  • Currently four participating
  • Primary care provider serving as gatekeepers
  • Program enrollment is voluntary
• Medicaid Product Line
  • About 49% of the children are enrolled in primary care case management
  • Comprehensive benefit package
  • Children covered varies according to Federal Poverty Level
  • Medically Need Program available

THE BENEFIT PACKAGE

• Well child care visits and immunizations
• Primary and specialty physician office visits
• In-patient hospital care
• Surgical procedures
• Emergency services and transportation
• Prescriptions
• Vision screening and glasses
• Hearing screening and hearing aids
• Physical, occupational, speech therapy
• Mental health services

HOW WERE THE CHILDREN SELECTED?

• Identified initially from claims data from participating health maintenance organizations and Florida Medicaid
• Used International Classification of Diseases, 9th Revision
• High and low prevalence conditions included
• Screening questions used to identify those with greatest needs
  1. Because of a physical or mental condition, does your child require more supervision than other children of his/her age?
  2. Does your child require extra or specialized medical care, therapies, supplies, or medical equipment because of a special health care need?
  3. Has your child had his/her special health care need for 6 months or longer?
• Must meet a or b or c

OUT-OF-POCKET EXPENSES MEASURED

• Direct expenses--medical care expenditures for diagnosis, treatment, continuing care, rehabilitation and terminal care
• Other direct expenses--expenditures items or services such as respite care, special diets or formulas, medical supplies, special or additional clothing, and others
• Indirect expenses--time spent in providing care for the child and lost employment opportunities

CAREGIVERS' OUT-OF-POCKET EXPENSE SURVEY

• Panel of reviewers
• Field testing
• 45 to 60 minutes to administer as telephone survey

WHAT WAS CONSIDERED AN OUT-OF-POCKET EXPENSE

• If the item or service was paid for entirely or in part by:
  • A parent or guardian
  • Another family member residing in the household
  • The child's supplemental security income check
• Co-payments categorized according to the expense incurred

OTHER CATEGORIES MEASURED:

• Child's functioning using the Functional Status Rating Scale short form
  • Addresses mood, interest level, communication
• Diagnostic information
• Demographic information

DIAGNOSTIC CATEGORIES

• Array of diagnoses represented
• Used diagnostic categories to group the children
• Also used scores on Functional Status Rating Scale to describe the children
• Wide variation in functioning seen both within and between diagnostic groupings

SUMMARY AND RECOMMENDATIONS

• Highest expenses for families in "Other Direct" category
• Regressive patten of expenditures for both groups of children
• Benefit packages must consider broad array of services and items
• Significant caregiving time
• Health care cost savings can be achieved; but at what price to families?

FUTURE WORK

• Include influence of participation in State Title V Children with Special Health Care Needs Programs
• Explore unmet needs
• Explore lost employment opportunities
• Link to actual health care use data

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The Managed Care Enhancement Project for Children with Special Health Care Needs

Deborah Allen
As the Director of the Division for Children with Special Health Care Needs of the Massachusetts Department of Public Health, Deborah Allen is responsible for assuring family-centered, community-based care for children with special health care needs and their families. Her division is the lead agency for implementation of Part H of the IDEA in Massachusetts and for the provision of case management services to SSI-eligible children. Ms. Allen is the Principal Investigator for the federally funded Managed Care Enhancement Project for Children with Special Health Care Needs. She is also responsible for two grants funded by Title IV of the Ryan White Care Act: MassCARE (Massachusetts Community AIDS Resource Enhancement), which focuses on pediatric and family care needs, and MCAP (the Massachusetts Women's HIV Care and Advocacy Project), which promotes identification and care of women with HIV prior to or early in pregnancy.

Ms. Allen has master's degrees in Health Policy and Management and Maternal and Child Health from the Harvard School of Public Health and is, as we speak, in the final stages of her doctoral research on "Predictors of Voluntary HIV Testing During Pregnancy," also at Harvard. She is absolutely committed to making this the last formal education she ever undertakes.

OUTLINE OF PRESENTATION

• Health care in Massachusetts
• MassHealth Managed Care
• The Managed Care Enhancement Project
• Needs assessment
• Interventions
• Evaluation
• Concluding thoughts

HEALTH CARE IN MASSACHUSETTS--A WHIRLWIND TOUR

• Extensive tertiary medical system
• Widespread influence of academic medicine
• Extensive CHC network
• Extensive HMO penetration
• No county health departments
• Limited clinical role of local health departments
• Comprehensive Medicaid program

MASSHEALTH OVERVIEW

• Target population - 450,000 Medicaid recipients
• All Medicaid clients except:
  • Individuals with private insurance and Medicaid
  • Individuals with Medicare and Medicaid
• Enrollment started April, 1992

SSI RECIPIENTS IN MASSHEALTH

• Special procedures for
  • Outreach
  • Enrollment
  • Assignment
• For adults and children on SSI

MASSHEALTH COMPONENTS

• Health Benefits Advisor Program
• Primary Care Clinician Program
• Mental Health/Substance Abuse Program
• HMO Program

PCC PROGRAM

• Approximately 1300 practices
• Almost 2500 physicians
• Eligible providers are:
  • Internists
  • Pediatricians
  • Family practitioners
  • Ob-gyns
  • Nurse practitioners

PCC PROGRAM OPERATIONS

• No capitation at present
• PCC receives $10 bonus per primary or preventive visit
• PCC responsible for:
  • Primary care
  • Specialty referrals
  • Authorization of most medical services
• Mental health, substance abuse do not require PCC authorization

PCC PROGRAM ENROLLMENT

• Current enrollment approximately 290,000
• 80% of Medicaid enrollees in PCC program
• 80% of children with special health care needs in PCC program

HMO PROGRAM

• 8 vendors statewide
• 1 special contract for disabled individuals
• Enrollment is voluntary
• Current enrollment 81,000

MANAGED CARE ENHANCEMENT PROJECT OVERVIEW

• Four year grant ending Sept. 1997
• Funded by HRSA--Maternal and Child Health Bureau
• Joint Title V--Division of Medical Assistance administration
• Active, diverse advisory committee

MCEP GOALS

• Improve health status of children with special health care needs in MassHealth
• Improve quality of life for families of children with special health care needs in MassHealth
• Increase appropriate use of health resources for care of children with special health care needs while averting unnecessary costs
• Enhance understanding of optimal systems of care for children with special health care needs

MCEP NEEDS ASSESSMENT

• Utilization data
• Family survey
• Provider survey
• Family focus groups
• Provider focus groups
• National key informant interviews

FINDINGS ON UTILIZATION

• CSHCN claims reveal:
  • Equal or greater use of primary care
  • More use of
    • Inpatient care
    • Home health care
    • Prescriptions
    • DME
  • Less use of
    • Dental
• Than other children in MassHealth Managed Care

FAMILY SURVEY METHODS

• Inclusion criteria
  • SSI enrollment or at least one EI claim
  • At least one full year of Medicaid with < 45 day interruption
• Sample
  • 1,000 families chosen at random
  • Overselection of Spanish-speaking families
• Implementation
  • Two mailings in English and Spanish
  • 800 number for questions or if phone administration preferred
• Response
  • 32% response rate
  • 254 English surveys returned or completed by phone
  • 67 Spanish surveys returned or completed by phone

FAMILY SURVEY FINDINGS

• High level of general satisfaction
• Areas for improvement
  • Access to information
  • Family supports
  • Coordination of services
• Survey also revealed weak links between primary care and
  • Schools
  • Discharge planning
  • Home care

PROVIDER SURVEY METHODS

• Target population
  • Pediatricians, family practitioners
  • Participating in Primary Care Clinician Plan
• Sample
  • 906 physicians
• Implementation
  • Initial attempt at phone administration
  • Shift to administration by mail
• Response
  • 31% response rate
  • 196 surveys completed by mail
  • 89 surveys completed by phone

PROVIDER SURVEY FINDINGS

• High level of general satisfaction
• Some areas of provider concern
  • Coordination of care
  • Information needs
  • Time constraints

OTHER NEEDS ASSESSMENT STRATEGIES

• Confirmed and expanded upon needs assessment findings
• Identified possible interventions

INTERVENTIONS

• Special Care Coordinator
  • 4 sites
  • 3.5 FTE's
• Parent manual
  • Focus on system "how to's"
  • Parent role in writing, editing
• Enhanced provider education
• Enhanced customer service
• Enhanced PCC/case management linkage

EVALUATION OF SCC INTERVENTION

• Parent questionnaires
  • Two points in time
  • Comparison group
  • Child functional status
  • Family functional status
  • Parent satisfaction
• Utilization
  • Admissions
  • ER use
  • EPSDT compliance
  • Over one year relative to comparison group
• Post-implementation PCC review
  • Qualitative interviews at 4 sites

EVALUATION OF MANUAL

• Parent survey
  • Use
  • Strengths and weaknesses
  • Usefulness
• Provider survey
  • Use
  • Strengths and weaknesses
  • Impact on practice

CONCLUDING THOUGHTS

• Medicaid managed care offers opportunities to change system for the better
• To seize that opportunity must have relevant players in a given state at the table listening to each other
• Key elements to make managed care work for cshcn are being to emerge
• These elements must be addressed at each stage of implementation, from early planning to final evaluation

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Planning Grant: Services for Children with Chronic Illness and Disease in an HMO

Barbara E. Staub, M.D.
Barbara Staub has been at the White Bear Lake Clinic for 13½ years and enjoys her practice. As a general pediatrician, she sees a wide range of illness as well as doing a lot of preventive, well-child care. Dr. Staub's special interests are in chronic illness and disability.

Dr. Staub received her medical degree at the Albany Medical College in 1980. She did her pediatric internship and residency at the University of Minnesota Medical School and was board certified in 1986. Her other professional activities have been a Clinical Assistant Professor, Department of Pediatrics, University of Minnesota Medical School; and Fellow, American Board of Pediatrics.

A COLLABORATIVE PROJECT

• PACER Center
• University of Minnesota
• HealthPartners

STUDY OBJECTIVES

• Comprehensive assessment of the needs and services, and the costs of services for a pediatric population with chronic illness and disability in a managed care environment.
• Examine the interface between our managed care system and education and social services.

STUDY COMPONENTS

• Parental Evaluation
• Cost and Utilization Data
• Primary Care Physician Survey
• Community Advisory Board

PARENTAL ASSESSMENT

• Family Advisory Board
• Family Interviews

PARENT ADVISORY BOARD

• Case Management Services Desired
• Mental Health Services Desired
• Information Source About HP Policies Desired

PHYSICIAN SURVEY

• 29 Physicians Surveyed
• Time
• Benefits
• Care Coordination

COMMUNITY ADVISORY COUNCIL

• Case Management
  • Agency's Perspective
  • Family Perspective
• Improved Communication Between Agencies and Health Systems
• Monitoring of Short and Long-Term Outcomes
• Monitoring of Costs

HEALTHPARTNERS PROVIDES

• Access to Subspecialist Care
• Medical Care Management by Pediatrician
• Benefits which are Supplemented by other Sources

NEXT STEPS

• Provide Family-Centered Case Management
• Address Mental Health Needs
• Provide Comprehensive Assessment of Total Costs
• Create Outcome Measures
• Provide Coordination among Agencies Involved in these Children's Lives

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State Medicaid Managed Care Policies Affecting Children with Chronic or Disabling Conditions

Harriette B. Fox
Harriette Fox is the President of Fox Health Policy Consultants, a small Washington-based consulting firm specializing in the financing and delivery of maternal and child health services, and the co-director of the Maternal and Child Health Policy Research Center. She has had extensive experience managing projects examining Medicaid, private health insurance, and other financing arrangements to support services to children, with a particular focus on issues pertaining to managed care and health insurance reform. Her work has included analyses of Federal laws and policy options; evaluations of State Medicaid and maternal and child health programs; surveys of State and private industry insurance practices; and consultation to numerous State and private organizations. She has published extensively on the subject of health care financing and children. Before establishing Fox Health Policy Consultants in 1982, Ms. Fox was the Senior Program Analyst for the Select Panel for the Promotion of Child Health. She also had served as a consultant to the Institute of Medicine and the National Health Policy Forum.

Margaret McManus
Margaret McManus is President of McManus Health Policy, Inc., a small consulting firm which specializes in managed care and health insurance reform affecting children. She also co-directs a Maternal and Child Health Policy Research Center for Paul Newacheck and Harriette Fox, funded by the Federal Maternal and Child Health Bureau. For the past 15 years, Ms. McManus has consulted with the American Academy of Pediatrics' Committee on Child Health Financing and a variety of other national, State, and local organizations. She has recently assisted the Maternal and Child Health Bureau in convening a series of managed care work groups on definitions, capitation and risk adjustment, quality of care, and family participation. Ms. McManus has published extensively on the subject of health care financing and children. Most recently, with Harriette Fox, she has completed a report entitled, Medicaid Managed Care for Children with Chronic or Disabling Conditions: Improved Strategies for States and Plans.