Health Care Utilization by Children With Chronic Illnesses: A Comparison of Medicaid and Employer-insured Managed Care

Abstract

Objectives. This study compared utilization of health care services by children with chronic conditions who were insured by either Medicaid or an employer group in 1992 and 1993. Five chronic conditions were selected to illustrate patterns of service use: asthma, attention deficit disorder, diabetes, epilepsy, and sickle cell anemia. Methodology. Administrative databases were used to develop estimates of health services utilization for children <18 years of age with the five selected conditions, who had been enrolled for at least 6 continuous months. All claims for a child identified with one of these five conditions were included in the analysis, including claims for diagnoses and procedures not directly related to the primary diagnosis. Estimates were derived for eight services (eg, hospital admissions, emergency department (ED), home health). Data were used from two Independent Practice Association model health plans in two states. Differences across the states were controlled by selecting one Medicaid and one employer-insured program from each of the two plans in both states. Regional variation was controlled for because both health plans were located in one geographical region. In each case, physicians were paid on a fee-for-service basis, with generally open access to specialists rather than primary care gatekeeper models of delivery:t tests were used to compare service use rates between Medicaid and employer-insured populations. Results. A total of 8668 children across all health plan groups had at least one of the selected conditions. Because Medicaid enrolled-children tended to be younger, analyses were adjusted for age. In both systems, a greater percentage of Medicaid children had these five study conditions (5%) compared with employer-insured children (3%), suggesting that the Medicaid population was sicker. Mean length of enrollment during the 2-year study was longer for children in employer-insured programs. Children with chronic conditions enrolled in Medicaid managed care generally used services at a higher rate compared with children with similar conditions enrolled in employer-insured managed care. The extent of the increased use varied by condition, by service type, and by plan. Children with any of the chronic conditions studied had from 2 to almost 5 times more ED visits if they were enrolled in Medicaid than if they were enrolled in employer-based managed care, depending on the specific condition. In one of the two plans, Medicaid-enrolled children had more outpatient services, laboratory services, and radiography services than their counterparts in employer-based managed care. The same pattern of use was found for home health services (except for children with diabetes) and for office visits (except for children with sickle cell). The results show higher use of all services by children with asthma and diabetes in Medicaid managed care compared with employer-based managed care. In contrast, the pattern is mixed for children with epilepsy and sickle cell. The sample size of children with these conditions was smaller than with the three other conditions, which may account, in part, for a varied pattern of results. The pattern of use for attention deficit hyperactivity disorder (ADHD) was generally different from the other conditions. Children with ADHD in employer-based managed care had more hospital admissions, hospital days, and office visits than their counterparts in Medicaid managed care. In contrast, Medicaid-enrolled children with ADHD had more ED visits, laboratory services, outpatient hospital visits, and radiography services. Other than ED visits, the differences in service use between Medicaid and employer-insured children with ADHD were minimal. Of note, the pattern for ADHD is the same for most services for Plans A and B (excluding home health visits). This utilization pattern may reflect service use for comorbid conditions. Part of this difference may be explained by differences in Medicaid eligibility criteria used by the two plans. Medicaid eligibility regarding level of poverty was more stringent in Plan A than in Plan B. Plan A showed consistently high service utilization for Medicaid children compared with employer-insured children; Plan B showed less consistency. There are several patterns of utilization common to all disease and insurance groups. The majority of care seems to be delivered in physicians' offices, rather than in other locations. When comparing the differences by disease categories, asthma shows more statistically significant differences in utilization between Medicaid and commercially-insured children than the other conditions. Asthma is the most prevalent condition of these five, which increases the power to detect statistical significance for this defined population. These results show the importance of evaluating conditions other than asthma, because utilization comparisons for different services may vary depending on the condition studied. Conclusion. This study of children with selected chronic health conditions indicates that: 1) a higher percentage of children enrolled in Medicaid managed care (5%) have these conditions compared with children enrolled in employer-insured managed care programs (3%); 2) on average, children with chronic health conditions who are enrolled in Medicaid managed care use more services than children with similar conditions who are insured through employers; and 3) although utilization rates are generally higher for children enrolled in Medicaid managed care than for children enrolled in employer-based managed care, the differences in rates vary greatly by service, by diagnosis, and by plan. Differences between the children enrolled in Medicaid and children enrolled in employer-based programs were more pronounced in one of the plans we studied compared with the other. Children with chronic conditions in Medicaid managed care have substantially different patterns of service use compared with children with similar conditions in employer-based managed care. This finding has major implications for policy development related to legislative proposals regarding referral practices, quality assurance, and capitation rates. Our results demonstrate the importance of examining a broad spectrum of chronic conditions and services when comparing Medicaid to employer-insured children with special needs. Utilization of several services, including ED, was higher for Medicaid children than for employer-insured children. Further analysis is recommended that controls for breadth-of-benefit package, severity of illness, and age. Also, differences across plans suggest that research at more than one site is critical for comprehensive policy analyses.