Health Conditions, Utilization, and Expenditures of Children in Foster Care. Additional Research Questions Raised by This Study


This study raised a number of questions that remain unanswered. First, what accounts for the significant variation in diagnoses, utilization, and expenditure patterns across states? Utilization and expenditures, for example, were consistently lower in California than in the other two states. (The level of chronic illness and disability was also lower, but this may be endogenous due to our reliance on claims data for this measure.) This study should motivate policymakers to consider factors that account for such variations within the foster care population. One factor may be the role of child welfare and health agencies in coordinating and advocating for health care services for children in foster care. California, for example, implemented health passports for children in foster care in 1995, well after the other two states (Lutz and Horvath 1997). Another factor may be differential involvement of the courts in mandating evaluation and treatment of physical or mental health conditions (Halfon et al. 1992(b); English and Freundlich 1997). State variation may also be a function of the propensity of states to cover certain services through Medicaid (such as case management in Florida or EPSDT services in Pennsylvania). Other factors that may be associated with state-level variation include the availability of providers to serve this population, their knowledge of services needed by the population, the generosity of reimbursement rates, differences in case mix, or level of stigma about accessing services. This study has taken a first step to document differences across states. Further research is required to explain them.

In addition to observing state-level variation, we observed variation within subgroups of the foster care population (for example, variations by age, length of Medicaid eligibility, health condition, SSI status, and Title IV-E status). More consideration needs to be given to why certain groups of foster care children experience lower levels of utilization and expenditures than others whether they are driven by different levels of need or whether factors other than clinical need account for the variation. One foster care subgroup that appears to be particularly vulnerable and at-risk is adolescents; they have particularly high mental health needs and utilization and lower levels of routine preventive care. Given that, policymakers, providers, and advocates should focus attention on assuring that adolescents in foster care have adequate access to the health care system, particularly to help them prepare for their independence.

Another question raised by this study concerns the extent of unmet need in the foster care population. It is possible that lower rates of utilization among certain groups of foster care children reflect an underutilization of health care services, or conversely, that higher rates in certain groups may reflect inappropriate, or overutilization. Without external benchmarks against which to evaluate patterns of care, together with more detailed clinical assessments, we cannot tell definitively whether lower rates of utilization are indicative of access barriers or simply of lower health care needs. This is of particular concern for those children who ostensibly have "no chronic conditions" according to the approach we used to classify health conditions. Because the classification of chronic health conditions is conditional upon having a claim with a particular set of diagnoses, those who do not use any services de facto cannot be classified as having a chronic condition. Therefore, the lower level of use in the "no condition" group reflects an averaging of utilization patterns among those who truly have none of the specified CDPS conditions, and those who  due to access barriers  have unmet needs. While it is reassuring to observe substantially higher levels of utilization among those with one or more chronic health conditions, it is unclear whether those with no chronic conditions are receiving an adequate level of care that meets their needs. This is certainly true for preventive and dental care, where we would not expect to observe such disparities between children who have chronic health conditions and those who do not.

Policymakers and researchers might consider various approaches to further explore the extent of unmet need in the foster care population. One approach is to conduct a prospective or retrospective medical record review to ascertain compliance with external standards (CWLA 1988; AAP 1994). Another approach is to survey foster care families and case managers to assess their perceptions of the adequacy of health care received by the children in their custody. Such assessments could be gathered for those receiving services through the fee-for-service sector as well as those enrolled in managed care. This way the two systems of care could be compared.

Another issue raised by this study is how children receiving adoption assistance fare relative to other children, especially those in foster care. Children receiving adoption assistance clearly were different from foster care children, in terms of their demographic characteristics, eligibility dynamics, diagnoses, utilization, and expenditures. In general, adopted children had more continuous Medicaid coverage than those in foster care, fewer diagnosed conditions, and lower expenditures and utilization. More continuous Medicaid coverage would be expected for children receiving adoption assistance since adoption is a lifetime legal relationship and foster care is a temporary service for the protection of a child. To the extent that Medicaid claims accurately represent patterns of diagnoses, utilization, and expenditures among adopted children, it would appear that adopted children are healthier than those in foster care, possibly explaining the lower levels of utilization and expenditures. One caveat, however, is that we cannot tell whether adopted children had other third-party coverage through their adoptive families so that Medicaid served as the payer of last resort, providing coverage when benefits were exhausted or for services not covered by commercial plans. In such cases, diagnoses, utilization, and expenditures would be understated in Medicaid claims. Further investigation is required to better understand the differences. The lower level of preventive care and dental care in the adoption assistance group deserves further exploration as well.