Modeling the determinants of Medicaid home care payments for children with special health care needs: A structural equation model approach

Research Objective:
Evidence abounds on the state variability and financial burden of raising children with special needs. We use Structural Equation Modeling (SEM) to estimate the effects of children’s strengths and needs on total expenditures for Medicaid home care.

Study Design:
We retrospectively assessed secondary data on children, ages 4–20, receiving Texas Medicaid Personal Care Services (PCS). All information about a child’s health status came from family caregiver responses recorded by a case manager or from a case manager’s observations of the child during the Medicaid assessment process. The study sample (n=2760) represented more than half of all children receiving and being evaluated for PCS in 2009. The major endogenous (dependent) variable in our analyses was Medicaid home care payments over a period of 6 months period in 2009, obtained from the Texas Medicaid claims data. Exogenous variables included several child characteristics, clinical conditions and functional measures.

Population Studied:
Children aged 4-20 with special needs

Principal Findings:
Approximately 60% of children were female with a mean age of 12.07 years. Almost half of all subjects reported mild, moderate or severe ID diagnosis. About 60% of subjects received some type of rehabilitation services. The mean ADL score was 5.27 and on average, children exhibited two behaviors directed out towards others. Caseworkers authorized an average of 25.5 hours of PCS support per week

The SEM revealed three elements with only indirect effects: Cognitive problems, health impairments, and age. All three affect expenditures, but they operate completely through other variables. Other elements accumulate effects (externalizing behaviors, PCS hours, and rehabilitation) and send them on a single path to the dependent variable. A few elements exhibit a relatively complex position in the model by having both significant direct and indirect effects on home care expenditures---medical conditions, intellectual disability, region, and ADL function.

Conclusions:
When one seeks the most important drivers of home care expenditures for children, they are among those elements that have both meaningful direct and indirect effects. Our findings indicate these drivers are medical conditions, intellectual disability, region and ADL function. The only one of these factors that may be within the sphere of policy manipulation is the difference among costs in different regions.