Effects of an Integrated Care System on Children with Special Health Care Needs' Medicaid Expenditures

Objective: The Children’s Medical Services Network, a carved-out fee-for-service health care delivery system for Florida’s Children with Special Health Care Needs (CSHCN), chose to develop an Integrated Care System (ICS) for its enrollees. The goal of this study is to analyze the effects of the ICS managed care program on the Medicaid expenditures of CSHCN. Data Sources: Administrative data from 3,947 CSHCN enrolled in Florida’s Medicaid program between 2006 and 2008 for two treatment and control counties were included in the analyses. Methods: To account for the unique nature of health care expenditures data, five econometric models were constructed. These models were used to estimate differences in health care expenditures between CSHCN in the reform and control counties before and after the implementation of the ICS controlling for demographic and individual health status. Principal Findings: The ICS program decreased outpatient, inpatient, pharmacy, and total costs. These effects were statistically significant for one of the reform counties. Emergency room costs increased slightly, though not significantly. Among the econometric models, the Generalized Linear Models outperforms the Ordinary Least Squared regressions. Conclusions: This analysis provides evidence that Managed Care programs such as Florida’s ICS have the potential to reduce health care expenditures.