Harnessing Medicaid Payment Reform to Improve Child Health

Child health stakeholders have eagerly followed the progress in New York State’s First 1,000 Days Initiative aimed at using value-based purchasing (VBP) in Medicaid to assure a healthy start and school readiness. Now, the United Hospital Fund (UHF) – the backbone of New York’s effort – has published a brief that explores the context and rationale for broad stakeholder engagement in developing child-specific VBP. It is accompanied by a Guide for Action that describes activities that stakeholders and Medicaid policymakers can jointly undertake to support payment reform for children.

To date, most Medicaid payment reform efforts have generally skipped over children and are focused on incentivizing providers to lower health care costs – for example, by reducing preventable hospitalizations – for high cost, high need individuals. This is because the potential for immediate cost savings in Medicaid is more limited for children, who are generally healthy and have the lowest health care costs.

While finding ways to improve health outcomes and bend the cost curve is important, limiting reform efforts to higher cost populations is shortsighted. Supporting children’s healthy development and school readiness can deliver a return on investment that is broader and longer term than Medicaid’s immediate bottom line by:

  • Improving school attendance and performance
  • Lowering special education costs
  • Reducing involvement with child welfare and juvenile justice systems
  • Lessening the chance that a child will become a “super utilizer” in the future as the result of chronic conditions that are rooted in childhood

Notably, the U.S. consistently ranks in the lower one third of wealthy countries in terms of child health and well-being. In particular, we score poorly on birth outcomes and behavioral health indicators. Given the importance of Medicaid to low-income pregnant women and children, these are ripe areas for Medicaid payment and delivery system reform.

The UHF’s Guide to Action provides a blueprint for facilitating collaboration between child health stakeholders and Medicaid that is focused on child health. For more information, listen to our webinar on NY’s First 1,000 Days or visit their website. It’s important to note that UHF’s new resources are not solely based on NY’s effort. The authors, Suzanne Brundage and Chad Shearer, who provided technical support to the First 1,000 Days Initiative, also integrated feedback from stakeholders in four other states that have adopted child-focused payment reforms.

We’re excited that our friends at UHF have provided these resources and tools based on experience from the field. As they noted, these are not likely to be the last words on the subject but they may help stakeholders initiate efforts that effectively use payment reform to move toward better outcomes for children.

Tricia Brooks is a Research Professor at the Center for Children and Families (CCF), part of the McCourt School of Public Policy at Georgetown University.