Health Conditions, Utilization, and Expenditures of Children in Foster Care. Diagnosed Health Conditions


1. Chronic Illness and Disability

Previous research has shown that children in foster care have a high prevalence of mental health conditions (Halfon et al. 1992(b); Chernoff et al. 1994; Takayama 1994), but no studies, to our have knowledge systematically compared the diagnoses among children in foster care to those of other children enrolled in Medicaid. Differences in the diagnostic mix could have implications for service delivery under Medicaid (especially with ongoing transitions to managed care). For example, higher levels of mental health conditions may require access to a specialized set of services and providers that most Medicaid programs do not traditionally offer. Likewise, management of complex physical disabilities in a community-based setting may involve personal nursing, medical equipment, transportation, and other ancillary services.

In recent years, with the expansion of Medicaid managed care, advocates have acknowledged the challenges of placing foster care children in managed care due to their special health care needs (Battistelli 1996; Battistelli 1997). Their needs involve multiple systems of care (medical, mental health, juvenile justice, special education), and managed care networks often exclude the necessary providers or are not equipped to facilitate the linkages across systems of care. Dreyfus and Tobias (1998) stress the importance of developing financing mechanisms to create appropriate incentives for the delivery of services to this population.

To measure the frequency of chronic illness and disability in the Medicaid population, we used the Chronic Illness and Disability Payment System (CDPS).(5) The CDPS classifies selected diagnoses into hierarchical cost categories, based on Medicaid claims data. Because Florida did not include diagnoses on outpatient claims, we were able to produce this information only for California and Pennsylvania. Table III.8 shows the diagnostic categories included in the CDPS and provides examples of diagnoses within each category. For purposes of analysis, we have grouped the diagnoses into two broad categories: mental health conditions, which include psychiatric and substance abuse conditions; and physical conditions, which cover all other conditions, including developmental disabilities.


Table III.8: Overview of Chronic Illness and Disability Payment System (CDPS) Diagnostic Categories and Sample Diagnoses.

Table III.8 (Continued)
Diagnostic Categories Sample Diagnoses
Nervous system  
  High-cost Quadriplegia, amyotrophic lateral sclerosis and other motor neuron disease
  Medium-cost Paraplegia, muscular dystrophy, multiple sclerosis
  Low-cost Epilepsy, Parkinson's disease, cerebral palsy, migraine, cerebral degeneration
  Incomplete Normal pregnancy, complications of pregnancy
  Complete Normal delivery, multiple delivery, delivery with complications
  High-cost Schiophrenia
  Medium-cost Biplorar affective disorder
  Low-cost Other depression, panic disorder, phobic disorder
  Very high-cost Cystic fibrosis, lung transplant, tracheostomy status, respirator dependence
  High-cost Respiratory arrest or failure, primary pulmonary hypertension, selected bacterial pneumonias
  Medium-cost Other bacterial pneumonnias, chronic obstructive asthma, adult respiratory distress syndrome
  Low-cost Viral pneumonias, chronic bronchitis, asthma, COPD, emphysema
  Very high-cost Chrinic renal failure, kidney transplant status or complications
  Medium-cost Acute renal failure, chronic nephritis, urinary incontinence, cystostomy or urinostomy
  Low-cost Kidney infection, kidney stones, hematuria, urethral stricture, bladder disorders
Skeletal and connective  
  Medium-cost Chronic osteomyelitis, aseptic necrosis of bone
  Love-cost Rheumatoid arthritis, osteomyelitis, systemic lupus, traumatic amputation of foot or leg
  Very low-cost Osteoporosis, musculoskeletal anomalies, thoracic and lumbar disc degeneration
  Extra low-cost Osteoarthrosis, skul fractures, other disc and vertebral disorders
  High-cost Decubitus ulcer
  Low-cost Other chronic ulcer of skin
  Very low-cost Cellulitis, burn, lupus erythematosus
Substance abuse  
  Low-cost Opioid, barbiturate, cocaine, amphetamine abuse or dependence, drug psychoses
  Very low-cost Alcohol abuse, dependence or psychosis
Note: COPD is chronic obstructive pulmonary disease. AIDS is acquired immunodeficiency syndrome. HIV is human immunodeficiency virus. A complete description of CDPS diagnostic categories by ICD codes is available at

As shown in Table III.9 and Figure III.4, about one in three foster care children in California had a CDPS condition in the Medicaid claims (32 percent), versus two in five in Pennsylvania (41 percent).(6) The rate of CDPS conditions in the foster care population was nearly double the level in the general Medicaid population (16 percent in California and 24 percent in Pennsylvania).(7)

Table III.9: Frequency of Chronic Illness and Disability, by Category of Medicaid Eligiblity, 1994.


Figure III.4: Frequency of Chronic Illness and Disability, by Category of Medicaid Eligibility, 1994.

Table III.10 and Figure III.5 present further detail on the types of mental and physical conditions affecting foster care children. Psychiatric conditions were the single most common diagnostic condition among children in foster care; of the children with a CDPS condition, about half had a mental health condition, either alone or in combination with a physical condition (17 percent in California; 21 percent in Pennsylvania). The most common physical conditions within the foster care population were those associated with the central nervous system (5 percent) and pulmonary conditions (6.5 percent). The rate of substance abuse diagnoses (1.1 percent) was highest in the foster care population, although the rate was still very low.(8)

Table III.10:
Rates of Chronic Illness and Disability Among Children Enrolled in Medicaid,
Based on the Chronic Illness and Disability Payment System (CDPS), 1994
Condition California Pennsylvania
All Childrena
Foster Care
Adoption Assistance
All Children(a)
Adoption Assistance
Adoption Assistance
Percent with chronic illness or disability 16.4 31.7 10.8 18.3 58.7 24.1 41.3 29.4 23.1 63.2
Cancer 0.2 0.2 0.1 0.1 2.7 0.3 0.3 0.2 0.2 1.6
Cardiovascular 1.3 1.8 0.7 1.4 7.3 1.7 2.4 1.4 1.6 5.7
Cerebrovascular 0.1 0.2 0.1 0.1 1.2 0.1 0.2 0.1 0.1 0.7
Central nervous system 2.2 5.1 2.6 1.8 27.2 4.8 8.0 7.4 3.5 27.5
Diabetes 0.2 0.2 0.1 0.2 0.8 0.3 0.4 0.3 0.3 0.9
Developmental disabilities 0.3 0.6 0.4 0.1 8.3 0.7 1.1 1.7 0.2 8.0
Eyes 0.2 0.3 0.1 0.2 1.4 0.2 0.4 0.3 0.2 0.7
Genital 0.3 0.6 0.1 0.4 0.8 0.6 1.0 0.3 0.6 0.9
Gastrointestinal 2.5 2.4 0.8 2.9 6.8 3.4 3.4 1.6 3.5 5.9
Hematological 0.3 0.3 0.1 0.3 2.2 0.7 1.3 0.5 0.8 2.7
Infectious disease 1.1 1.0 0.2 1.3 2.4 1.2 1.3 0.5 1.3 1.5
Metabolic 0.7 1.6 0.6 0.6 6.7 1.1 2.8 1.6 0.8 4.9
Psychiatric 2.0 16.5 4.4 1.6 10.9 5.2 21.3 14.4 3.8 21.7
Pulmonary 5.0 6.5 2.1 6.1 11.6 5.0 5.9 4.3 5.5 9.8
Renal 0.8 1.2 0.4 0.8 3.1 1.2 1.8 1.8 1.0 4.5
Skeletal 1.9 2.6 1.0 2.0 9.2 3.3 4.7 2.9 3.1 8.7
Skin 1.8 2.2 0.5 2.3 3.8 2.5 2.5 1.1 2.7 4.2
Substance abuse 0.1 1.1 0.1 0.1 0.4 0.3 2.3 0.3 0.2 0.7
Source:  HCFA State Medicaid Research Files.
Note:  Numbers may not sum to total due to rounding. Excludes children enrolled in Medcaid managed care.
a.  Includes children in other categories of Medicaid eligibility.

Figure III.5:
Percent of Foster Care Children with Chronic Illness and Disablity, by Type of Condition, 1994

Figure III.5: Percent of Foster Care Children with Chronic Illness and Disablity, by Type of Condition, 1994.

In general, the rate of CDPS conditions among adoption assistance children was quite a bit lower than the rate among foster care children, especially in California. This would suggest that children who were adopted had fewer medical conditions than those who remained in foster care.(9) This could be a function of either the risk selection in the adoption process (that is, healthier children are adopted) or the more stable risk profile of children who have been in adoptive families for several years.

The AFDC population was less likely to have a CDPS condition as well; the rate was nearly half that of the foster care population. However, this was entirely due to lower rates of mental health/substance abuse conditions diagnosed in the AFDC population, given that the rate of physical conditions was somewhat higher.

Finally, as expected, the likelihood of having a CDPS condition was higher for the SSI population than the foster care population, which largely is a function of the higher rate of physical conditions and developmental disabilities among SSI children. SSI children were more likely to have conditions associated with the central nervous system, such as cerebral palsy and epilepsy; pulmonary conditions, such as cystic fibrosis and asthma; and skeletal conditions, such as arthritis. In addition, about 8 percent of SSI children had a diagnosis of mental retardation or developmental disability (MR/DD), versus 1 percent or less in the foster care population.(10)

We also considered the frequency of comorbidities among those with at least one CDPS condition. (Comorbidity is defined as having a condition in more than one diagnostic group.) Multiple diagnoses add significantly to the complexity and cost of care (Kronick et al. forthcoming). Of the foster care children with at least one CDPS condition, about 30 percent had more than one type of condition (Table III.11). Not surprisingly, the rate of comorbidities was higher among SSI children; nearly half of those with a condition had more than one. The rate of comorbidity was lower in the adoption assistance and AFDC groups.

Table III.11
Number of Diagnostic Categories Among Those with Chronic Illness or Disability,
by Category of Medicaid Eligibility, 1994
Number of Diagnostic Categories All Childrena Category of Medicaid Eligibility
Foster Care Adoption Assistance AFDC SSI
California (N=474,895) (N=31,513) (N=1,982) (N=278,701) (N= 35,623)
   1 80.0% 70.8% 77.1% 82.8% 52.8%
   2 15.3 21.2 17.0 14.2 26.8
   3 or more 4.7 8.0 5.9 3.0 20.5
Pennsylvania (N=144,606) (N=10,315) (N=1,114) (N=59,792) (N=19,628)
   1 75.4% 67.8% 73.4% 78.7% 55.0%
   2 18.0 22.2 18.6 16.8 26.8
   3 or more 6.6 10.0 8.0 4.5 18.2
Source:  HCFA State Medicaid Research Files.
Note:  Numbers may not sum to 100% due to rounding.
a.  Includes children in other categories of Medicaid eligibility.

Given the frequency of mental conditions within the foster care population, we performed a more detailed analysis of the severity of mental conditions. The CDPS creates a hierarchical distribution of conditions within a diagnostic category, permitting an analysis of case mix variations. Table III.12 shows the hierarchy and types of diagnoses included in each of the psychiatric categories. The CDPS also includes two categories known as "extra low" and "not well defined," which are not counted in the CDPS classification of chronic illness and disability, either because these conditions are not considered to add significantly to costs or because there is no general agreement about the diagnosis and/or treatment of these conditions. As such, the "extra low" and "not well defined" conditions were excluded from previous frequencies. We include these conditions here to show the full magnitude of mental health conditions in the foster care population.

Table III.12
Hierarchical Classification Scheme for Psychiatric Diagnoses Included
in the Chronic Illness and Disability Payment System
Psychiatric Cost Categories ICD-9 Codes Code Descriptions
  295.xx Schizophrenic disorders
  301.83 Borderline personality disorder
  296.4x-296.7x Bipolar affective disorder-manic, depressed, mixed, unspecified
  307.1x Anorexia nervosa
  307.5x Other and unspecified disorders of eating
  293.0 Acute delerium
  293.1 Subacute delerium
  293.83 Organic affective syndrome
  296.0x-296.1x Manic disorder, single and recurrent episodes
  296..2x-296.3x Major depressive disorder, single and recurrent episodes
  296.8x Manic-depressive psychosis, other and unspecified
  296.9x Other and unspecified affective psychoses
  297.xx Paranoid states
  298.xx Other nonorganic psychoses
  299.xx Psychoses with origin specific to childhood
  300.01 Panic disorder
  300.2x Phobic disorders
  300.3 Obsessive-compulsive disorders
  300.4 Neurotic depression
  300.5 Neurasthenia
  300.6 Depersonalization sydrome
  300.7 Hypochondriasis
  300.8 Other neurotic disorders
  300.9 Unspecified neurotic disorder
  309.xx Adjustment reaction(a)
  310.xx Specific nonpsychotic mental disorders due to organic brain damage
  311.xx Depressive disorder, not elsewhere classified
  314.0x Hyperkinetic syndrome of childhood
  780.1x Hallucinations
Extra low  
  293.8x Other specified transient organic mental disorders(b)
  306.xx Physiological malfunction arising from mental factors
Not well defined  
  293.9x Unspecified transient organic mental disorder
  294.xx Other organic psychotic conditions(c)
  300.0x Anxiety states(d)
    300.1x Hysteria
      301.xx  Personality disorders
  302.xx Sexual deviations and disorders
  307.xx Special symptoms or syndromes, not elsewhere classified(e)
  308.xx  Acute reaction to stress
  309.0x Brief depressive reaction
  309.9x Unspecified adjustment reaction
  312.xx Disturbance of conduct not elsewhere classified
  313.xx Disturbance of emotions specific to childhood and adolescence
  314.xx Hyperkinetic syndrome of childhood(f)
  316.xx Psychic factors associated with diseases classified elsewhere
NOTE:  The "extra low" and "not well defined" categories are not counted in the CDPS due to lack of clinical certainty regarding diagnosis and treatment.
a.  Excluding 309.9 Unspecified adjustment reaction.  This is classified as "not well defined."
b.  Excluding 293.83 Organic affective syndrome.  This is classified as "low."
c.  Excluding 294.1 Dementia.  This is classified elsewhere.
d.  Excluding 300.01 Panic disorder.  This is classified as "low."
e.  Excluding 307.1, Anorexia nervosa and 307.5 Other and unspecified disorders of eating.  These are classifed as "medium."
f.  Excluding 314.0x Attention deficit disorder.  This is classified as "low."

As shown in Table III.13, most children had psychiatric diagnoses that were classified in the low-cost category (such as panic disorder and adjustment reaction). Less than 1 percent had high-cost psychiatric diagnoses (such as schizophrenia). Below the dotted line, we show the frequency of "extra low" and "not well defined" psychiatric diagnoses (such as conduct disorder and acute reaction to stress). When these conditions are included, the differential in the frequency of psychiatric diagnoses widens between foster care children and those in other groups (increasing to 24.2 percent of all foster care children in California and 31.5 percent in Pennsylvania). These "extra low" and "not well defined" diagnoses are clearly more prevalent in the foster care population. Within the foster care population, we see considerable variation among subgroups in the frequency of CDPS conditions (Table III.14). Beginning with California, the rate increased with age, doubling from 17 percent among infants to 35-37 percent among those age 10 and up. This increase was attributable to the manifestation of psychiatric and substance abuse conditions in the preteen and teenage years. It is unknown whether these conditions are a cause or consequence of or unrelated to foster care placement. The higher rate of mental health conditions among adolescents is consistent with previous research by Halfon and colleagues (1992b), also based on California Medi-Cal claims data. The age-related patterns were slightly different in Pennsylvania. The absolute rates were quite a bit higher than in California across all age groups, except that they converged in the adolescent age group (15 to 18).

Table III.13
Variations in Psychiatric Case Mix, by Category of Medicaid Eligibility, 1994
  All Children(a) Category of Medicaid Eligibility
Foster Care Adoption Assistance AFDC SSI
California 1994 (N = 2,891,620) (N = 99,468) (N = 18,495) (N = 1,523,080) (N = 60,705)
  Total Psychiatric 2.1% 16.5% 4.3% 1.6% 11.0%
  High 0.1 0.3 0.1 # 0.6
  Medium 0.1 0.4 0.1 # 0.4
  Low 1.9 15.8 4.1 1.6 10.0
  Extra Low/Not Well Defined(b) 1.1 7.7 1.4 1.1 3.8
Pennsylvania 1994 (N = 599,508) (N = 25,002) (N = 3,792) (N = 259,428) (N = 31,076)
  Total Psychiatric 5.2% 21.4% 14.5% 3.9% 21.7%
  High 0.1 0.8 0.3 0.1 0.9
  Medium 0.2 0.7 0.4 0.1 0.9
  Low 4.9 19.9 13.8 3.7 19.9
  Extra Low/Not Well Defined(b) 1.8 10.1 3.1 1.6 5.1
Source:  HCFA State Medicaid Research Files.
Note:  Numbers may not sum to total due to rounding.
a.  Includes children in other categories of Medicaid eligibility.
b.  "Extra low" and "not well defined" are not counted in CDPS, and are not included in the total for psychiatric diagnoses.
Table III.14
Percent of Foster Care Children with Chronic Illness and Disability,
by Demographic Characteristics, 1994
California (N = 99,468) Pennsylvania (N = 25,002)
Characteristic Any Condition (Percent) Physical Only (Percent) Mental Only (Percent) Both (Percent) Any Condition (Percent) Physical Only (Percent) Mental Only (Percent) Both (Percent)
Total 31.7 14.1 11.7 5.9 41.3 17.7 15.7 7.9
Less than 1 16.7 15.3 0.8 0.6 43.9 40.7 0.9 2.4
1 to 4 27.4 21.6 3.2 2.6 43.5 36.3 3.3 4.0
5 to 9 31.0 12.5 12.6 6.0 45.9 15.8 20.0 10.1
10 to 14 36.7 10.8 17.9 8.0 48.2 12.0 24.9 11.3
15 to 18 35.3 11.0 16.1 8.3 34.1 12.0 15.0 7.2
Male 33.2 14.5 12.5 6.3 39.9 16.9 15.3 7.7
Female 30.0 13.7 10.9 5.4 43.3 18.8 16.2 8.3
White 32.1 12.6 13.1 6.5 43.2 16.1 17.8 9.3
Black 33.9 19.0 9.4 5.5 39.4 19.3 13.5 6.6
Hispanic 29.1 14.3 10.4 4.4 43.1 17.2 16.9 9.0
Other/Unknown 26.5 13.5 8.1 4.9 32.6 15.4 13.5 3.7
Urban/Rural Location
Large MSA 30.9 13.3 11.7 5.9 40.3 17.6 15.3 7.4
Small MSA 34.5 17.5 11.4 5.6 41.5 17.6 15.8 8.1
Non-MSA 39.5 18.3 14.8 6.4 45.9 18.2 17.4 10.4
Length of Medicaid Eligibility
1 to 5 months 10.4 4.7 4.7 1.0 11.6 5.5 5.6 0.6
6 to 11 months 28.6 13.6 10.8 4.2 31.0 13.4 12.7 4.9
12 months 36.8 16.1 13.4 7.3 48.2 20.5 17.9 9.8
SSI Eligibility
SSI eligibility 71.9 25.3 24.3 22.3 74.0 23.5 26.5 24.1
No SSI eligibility 31.0 13.9 11.5 5.6 40.5 17.5 15.4 7.5
Type of Foster Care Assistance
Title IV-E Assistance 33.7 15.9 11.8 6.1 45.1 20.2 16.1 8.8
No Title IV-E Assistance 27.2 10.2 11.6 5.5 31.4 11.2 14.6 5.6
Source: HCFA State Medicaid Research Files.

There was little difference in the overall rate of CDPS conditions by gender in both states. White foster care children were slightly more likely to have mental conditions, and black foster care children were slightly more likely to have physical conditions than other children (apparently due to a higher rate of asthma among black foster care children).(11) In both states, foster care children in rural areas had a slightly higher frequency of chronic illness and disability, compared to children in urban areas. Children who were enrolled in Medicaid the full year were more likely to have a chronic condition than those enrolled at least half the year (but not the full year); these children in turn, were more likely to have chronic conditions than children enrolled less than half the year. This pattern persists across the three diagnostic groups (physical only, mental only, and both). One possible explanation is that foster care children who are often ill have more continuous Medicaid coverage. On the other hand, this could be endogenous, in that the longer children are enrolled, the more likely they are to have a Medicaid claim with a CDPS diagnosis.

There were differences in the diagnostic profile according to type of benefits received. Foster care children who also received SSI benefits had a substantially higher likelihood of a CDPS condition; indeed, they were three to four times more likely to have both physical and mental conditions than those who were not eligible for SSI. In addition, those receiving Title IV-E assistance were more likely to have a condition than those not receiving such assistance; this was mostly attributable to the higher likelihood of having a physical condition.

2. Comparison of Delivery Rates

In addition to examining variations in chronic illness and disability within the Medicaid population, we compared the rate of deliveries among teenage girls. Little is known about the birth rate among girls in foster care compared to that of girls in other categories of Medicaid eligibility and the general population.

As shown in Figure III.6, the delivery rate for girls in foster care ranged from 35.4 per 1,000 in California to 67.6 per 1,000 in Florida. The foster care delivery rate was substantially lower than the rate in the AFDC population but higher than that in the SSI population.

Figure III.6
Deliveries per 1,000 Girls Age 15-17,
by Category of Medicaid Eligibility, 1994

Figure III.6: Deliveries per 1,000 Girls Age 15-17, by Category of Medicaid Eligibility, 1994.

Sources:  Medicaid reates derived from 1994 State Medicaid Research Files. State benchmarks from Ventura, et al (1996).
Note:  State benchmarks reflect births per 1,000 while Medicaid rates reflect deliveries per 1,000.

Compared to the state benchmarks, the delivery rate among girls in foster care was lower than the general population in California, but higher than the general population in Florida and Pennsylvania. These findings should be considered illustrative (rather than definitive) because of differences in the way the rates are constructed using claims data versus birth certificates.(12)