 | The 131st Annual Meeting (November 15-19, 2003) of APHA |
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| The 131st Annual Meeting (November 15-19, 2003) of APHA |
Sema K. Aydede, PhD, Institute for Child Health Policy, University of Florida, 5700 SW 34th Street, Suite 323, Gainesville, FL 32608, 352-392-5904 x269, ska@ichp.edu, Elizabeth A. Shenkman, PhD, Dept. of Pediatrics and Institute for Child Health Policy, University of Florida, 5700 SW 34th Street, Suite 323, Gainesville, FL 32608, Andrew Dick, PhD, Community and Preventive Medicine, University of Rochester, Box 644, School of Medicine and Dentistry, Rochester, NY 14642, David Sappington, PhD, Department of Economics, University of Florida, Matherly Hall, Room 204, Gainesville, FL 32601, and W. Bruce Vogel, PhD, Health Policy and Epidemiology, University of Florida, PO Box 100177, Gainesville, FL 32610.
Objective: To examine consequences of reimbursement strategies for children’s health insurance with an emphasis on children with special health care needs. Methods: Enrollment and claims data on 188,556 children with at least 6 (aged 1-19) or 3 (newborns) months continuous enrollment during 1999 from a State’s Medicaid, Title V and Title XXI programs were employed. Children were grouped into nine Clinical Risk Group (CRG) categories (such as healthy, malignancies and catastrophic). Reimbursement models considered include demographics-adjusted capitation, health-status adjusted capitation, carve-outs and reinsurance for children with annual charges above a threshold. Results: Premium estimates from demographics-adjusted capitation model showed little variation across CRG categories within each program ($133 PMPM for healthy and $170 PMPM for moderate/dominant chronic in the Title XXI program) resulting in profits on healthy ($42 PMPM) and losses on chronic CRG categories. While results from health-status adjusted capitation model indicated wide disparity in premium estimates across CRG categories, there still was wide variation in expenditures within each CRG category creating incentives to risk select. Financial risks to health plans and providers were reduced slightly in carve-out model. More pronounced reductions in financial risk were provided by reinsurance. Conclusions: This study shows that demographics-adjusted capitation fails to account for diverse financial needs of children with chronic conditions. Health-status adjusted capitation, on average, supports varying needs of children with chronic conditions, but the likelihood of risk selection remains. Reinsurance further reduces incentives to risk select, but incentives to control health care costs are lost once charges exceed the threshold.
Learning Objectives:
Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.