Purpose Raising children is expensive and many families struggle financially. Over 20% of families with children who require more medical care than average (designated as Children with Special Health Care Needs, CSHCN) report financial problems due to their child's condition (Newacheck & Kim, Archives of Pediatric & Adolescent Medicine, 159, 10-17, 2005). Research on the needs of these families is essential as CSHCN are found in more than one in five (21.8%) households in the U.S (USDHHS, 2008, http://www.cdc.gov/nchs/slaits/cshcn.htm#2005CSHCN). This research analyzes the out-of-pocket medical expenditures for CSHCN who have a broad range of conditions. Out-of-pocket expenditures are analyzed by health insurance type, examining the potential moderating effect of having a medical home. The medical home variable, operationalized through the definition developed by the Child and Adolescent Health Measurement Initiative, includes four components: 1) the child has a usual source of medical care and/or personal provider; 2) the care provided is “family centered;” 3) care coordination services are received; and 4) the family has no problems getting all the referrals they need.24 Nearly 55% of children in our private insurance sample and 42% of children in our public insurance sample meet criteria for all four components and thus receive care in a medical home. We hypothesize that CSHCN who have a medical home will incur lower out-of-pocket medical costs.
Methods The 2005-2006 National Survey of Children with Special Health Care Needs is used, including only CSHCN who have health insurance at some point during the survey year (n=31,808). The dependent variable, out-of-pocket medical costs per $1000 in household income, is censored at zero so a two-part model correcting for selection bias, the Heckman model, is used for this analysis. Separate models are estimated for CSHCN with and without a full medical home.
Results For families who incur out-of-pocket medical costs for their CSHCN, these costs comprise 2.2% to 3.9% of income. Results from the two-part, multivariate model suggest that, on average, having a medical home reduces out-of-pocket costs per $1000 of household income by nearly 50% (from $33 to $17 per $1000 of income). Having public insurance also significantly reduces out-of-pocket medical costs per $1000 of income. For CSHCN without a medical home, those who report receiving family centered care have significantly higher out-of-pocket costs ($35 per $1000 of income) while those who report receiving care coordination services have significantly lower out-of-pocket costs ($29 per $1000 of income) relative to those without these services. For all CSHCN whose families incur out-of-pocket medical costs for their care, these costs were highest for families in poverty and lowest for those with public insurance or incomes above 300% of poverty. The most expensive conditions for CSHCN were cystic fibrosis, cerebral palsy, or muscular dystrophy, and diabetes. Out-of-pocket costs increase with severity of condition in both samples.
Implications Families with CSHCN incur lower out-of-pocket medical costs when their children receive health care in a setting where either care coordination or all of the components of the medical home are in place.