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Children with medical complexity and Medicaid: spending and cost savings
Jay G Berry1, Matt Hall2, John Neff3
1Jay G. Berry (jay.berry@childrens.harvard.edu) is an assistant professor of pediatrics in the Department of Medicine and Division of General Pediatrics, Boston Children's Hospital and Harvard Medical School, in Massachusetts.
Insights
Children with medical complexity covered by Medicaid drive high pediatric healthcare costs, primarily from hospitalizations. Investing in outpatient and community care can reduce these expenses and improve outcomes.
Area of Science:
- Pediatric Health Economics
- Healthcare Management
- Public Health Policy
Background:
- Children with medical complexity represent a growing population with significant healthcare needs.
- Medicaid covers a substantial portion of these children, influencing pediatric healthcare spending.
- Current spending patterns show a disproportionate allocation towards hospital care.
Purpose of the Study:
- To analyze healthcare expenditures for children with medical complexity insured by Medicaid.
- To identify potential cost savings through shifts in care delivery.
- To propose reinvestment strategies for enhanced outpatient and community-based services.
Main Methods:
- Expenditure analysis across the care continuum for Medicaid-enrolled children with medical complexity.
- Development of a business case modeling cost savings from reduced hospital and emergency department utilization.
- Estimation of potential investments in alternative care settings.
Main Results:
- High proportion of pediatric healthcare spending is attributed to children with medical complexity on Medicaid.
- Spending is heavily concentrated in hospital care, with less investment in primary and home care.
- Reductions in hospital and emergency department use can generate cost savings.
Conclusions:
- Shifting resources from acute care to outpatient and community-based services can be cost-effective.
- These findings have implications for Medicaid quality of care and ongoing healthcare reform efforts.
- Strategic investment in non-hospital settings can improve care for children with medical complexity.
Abstract:
A small but growing population of children with medical complexity, many of whom are covered by Medicaid, accounts for a high proportion of pediatric health care spending. We first describe the expenditures for children with medical complexity insured by Medicaid across the care continuum. We report the increasingly large amount of spending on hospital care for these children, relative to the small amount of primary care and home care spending. We then present a business case that estimates how cost savings might be achieved for children with medical complexity from potential reductions in hospital and emergency department use and shows how the savings could underwrite investments in outpatient and community care. We conclude by discussing the importance of these findings in the context of Medicaid's quality of care and health care reform.
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