Social HMOs and Other Capitated Arrangements for Children with Special Health Care Needs

Objective: Children with special health care needs are increasingly enrolling in managed care arrangements. However, existing managed care organizations, including traditional HMOs, are often poorly suited for caring for this population. In the adult health care area, new managed care entities, called Social HMOs (S/HMO) and Programs for the All-inclusive Care for the Elderly (PACE), have been created to integrate health and health-related services for chronically ill and disabled adults. We describe these models and assess their potential for serving children with special health care needs. Method: We reviewed the literature on managed care for children with special health care needs and evaluation findings from the S/HMO and PACE models for the elderly. Results: Evaluations of the S/HMO and PACE models have yielded mixed findings. Some of the more positive accomplishments include lower use and expenditures for long-term care services compared to other demonstration projects, greater integration of primary care physicians in decision making concerning long-term care, and improved management of transitions between care levels. On the negative side, start-up has been slow, prospective members have been hesitant to enroll, intermittent and sometimes frequent operating deficits have emerged, no discernible positive effects on health or social outcomes are apparent, and no significant overall savings have emerged. Conclusions: With mixed results so far, caution is required in applying these or similar models for vulnerable child populations. However, given the inadequacies of traditional managed care for this population, we believe experimentation with new models of care that integrate health and health-related services is important. Such experimentation should be fostered only to the extent that the models are carefully designed and then implemented in a manner that protects the interests of children with special health care needs.