Technology Dependent Children: Hospital

Vs. Home Care

May 1987

NTIS order #PB87-194551
Recommended Citation:

U.S. Congress, Office of Technology Assessment, Technology-Dependent Children: Hospital v. Home Care—A Technical Memorandum, OTA-TM-H-38 (Washington, DC: U.S.

Government Printing Office, May 1987).

Library of Congress Catalog Card Number 87-619805

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402-9325

(order form on p. 107)
Foreword

This technical memorandum is about problems arising out of success. Recent advances in medical technology have permitted sick children who once would have died

to survive with the assistance of sophisticated equipment and intensive nursing care.

Often, the assistance is needed for just a short time, but sometimes the dependence on

life-sustaining technology is permanent. As technology for helping keep children alive

has improved, a new population of technology-dependent children has emerged.

This small but growing population of children raises new problems for the health

care system. Because the care is expensive—often more expensive than most American

families can afford—children and their families depend on third-party payers—insurance

companies, Medicaid, or philanthropists—to finance the needed care. But the structure

of the health insurance system has not kept pace with the needs of these children. Most

technology-dependent children are eligible for Medicaid coverage in the hospital, but

coverage of home care is more limited. Consequently, some children have remained

hospitalized even when their families are able to provide good, lower cost care in the

home.

OTA was requested by the House Energy and Commerce Committee and the Senate Labor and Human Resources Committee to examine the problems of health care

financing encountered by technology-dependent children as part of a larger assessment,

Technology and Children’s Health. The committees wanted to know how many children are technology dependent, how home care and hospital care compare in cost, and

how well private and public third-party payers cover the services needed by these children.

This technical memorandum provides a working definition of technology dependence and estimates the prevalence of technology dependence among American children. A principal finding is that the size of the population varies dramatically with the

clinical criteria used in the definition. OTA has also found that the cost-saving potential of home care depends to a great extent on attributes of the family and the home

environment. The ability and willingness of family members to provide ongoing nursing care for a substantial part of the day are central to lowering costs to third-party

payers, although they may require great sacrifice on the part of the family.

The conduct of this study was guided by the advisory panel for the OTA assessment, Technology and Children Health, chaired by Harvey Fineberg. In addition, many

government officials and health care professionals were consulted. Information and insights provided by parents of technology-dependent children were also very helpful.

Key OTA staff involved in the analysis and writing of the technical memorandum were

Elaine J. Power and Judith L. Wagner.

Director
Advisory Panel on Technology and Children’s Health

Harvey Fineberg, Chairman

Harvard School of Public Health, Boston, MA

Lu Ann Aday

Center for Hospital Administration Studies

University of Chicago

Chicago, IL

Julianne Beckett

Child Health Specialty Clinic

University of Iowa

Iowa City, IA

Donald Berwick

Quality of Care Measurements

Harvard Community Health Plan

Boston, MA

Alexander Capron

Medicine and Public Policy

University of Southern California

Los Angeles, CA

Norman Fost

Program on Medical Ethics

Department of Pediatrics

University of Wisconsin Hospital

Madison, WI

Robert Goldenberg

Department of Obstetrics and Gynecology

University of Alabama

Birmington, AL

Michael Grossman

Health Economics Research

National Bureau of Economic Research

New York, NY

Robert Haggerty

W.T. Grant Foundation

New York, NY

Patricia King

Georgetown Law Center

Washington, DC

Phyllis Leppert

Perinatal Research

St. Lukes/Roosevelt Hospital Center

Columbia University

New York, NY

Harvey Levy

IEM-PKU Program, Childrens’ Hospital

Boston, MA

Edward Lis

Division of Services for Crippled Children

University of Illinois

Chicago, IL

Joanne Macon

Holman Health Region

Chicago Department of Health

Chicago, IL

John MacQueen

Child Health Specialty Clinic

University of Iowa

Iowa City, IA

Janet Reis

School of Nursing/SUNY Buffalo

Buffalo, NY

Sarah Rosenbaum

Children’s Defense Fund

Washington, DC

Barbara Starfield

Division of Health Policy

Johns Hopkins University

School of Hygiene and Public Health

Baltimore, MD

NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the advisory panel

members. The panel does not, however, necessarily approve, disapprove, or endorse this technical memorandum.

OTA assumes full responsibility for the technical report and the accuracy of its contents.

iv
OTA Project Staff–

Technology-Dependent Children Hospital v. Home Care

Roger C. Herdman, Assistant Director, OTA,

Health and Life Sciences Division

Clyde J. Behney, Health Program Manager

Judith L. Wagner, Project Director

Elaine J. Power, Study Director

Other Contributing Staff

David Alberts, Research Assistant

Pony Ehrenhaft, Senior Analyst

Marvin Feuerberg, Analyst

Mary Ann Hughes, Research Analyst

Virginia Cwalina, Administrative Assistant

Carol Ann Guntow, P.C. Specialist

Karen T. Davis, Secretary/Word Processor Specialist

Contractor

Harriette Fox, Fox Consultants, Inc., Washington, DC
Contents

Page

Chapter l: Summary . . . . . . . . . . . . . . . . . . . 3

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Summary of Findings . . . . . . . . . . . . . . . . . . . 3

The Population . . . . . . . . . . . . . . . . . . . . . . 3

Relative Effectiveness and Costs of

Home v. Hospital Care . . . . . . . . . . . . . 5

Sources of Financing for Home

Medical Care . . . . . . . . . . . . . . . . . . . . . . 7

Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Chapter 2: The Size of the TechnologyDependent Child Population . . . . . . . . . . . . . 13

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Problems in Defining the Population. . . . . . 14

Estimating the Prevalence of Technology

Dependence. . . . . . . . . . . . . . . . . . . . . . . . . . 16

OTA’s Working Definition . . . . . . . . . . . . 16

Data Sources and Sampling Problems . . . 17

Estimating Prevalence . . . . . . . . . . . . . . . . . 19

Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Trends in the Population . . . . . . . . . . . . . . . . 26

General Trends in Chronic Illness

and Disability. . . . . . . . . . . . . . . . . . . 26

Future Changes Due to New Maintenance

and Treatment Technologies . . . . . . . 28

Changes in Medical Practice . . . . . . . . . . . 28

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Chapter 3: Comparing Effectiveness and

Costs of Home v. Hospital Care . . . . . . . . . 35

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Evidence of the Effectiveness of

Home Care . . . . . . . . . . . . . . . . . . . . . . . . 35

Factors Influencing the Quality and

Effectiveness of Home Care . . . . . . . . . . 36

cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Components of Home Care Costs . . . . . . 38

Issues in Comparing the Costs of

Hospital and Home Care. . . . . . . . . . . . 42

Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Chapter 4: Sources of Financing.. . . . . . . . . 51

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Private Health Insurance Coverage for

Technology-Dependent Children . . . . . . . 51

Extent of Coverage . . . . . . . . . . . . . . . . . . . 51

Adequacy of Coverage . . . . . . . . . . . . . . . . 52

Medicaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Background Issues. . . . . . . . . . . . . . . . . . . . 55

Page

Special Options for Financing the

Home Care of Technology-Dependent

Children Under Medicaid. . . . . . . . . . . . 59

State Use of Medicaid Options to

Serve Technology-Dependent

Children . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Practices Limiting Use of the Medicaid

Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

State-Provided Services for Children With

Special Health Care Needs.. . . . . . . . . . . . . . 67

A Comparison of Home Care Benefits in

Five States: Three Hypothetical Cases. . . . . 71

Case l: “KM . . . . . . . . . . . . . . . . . . . . . . . . . 72

Case 2: “M” . . . . . . . . . . . . . . . . . . . . . . . . . 73

Case 3: “T’’. . . . . . . . . . . . . . . . . . . . . . . . . . 73

Department of Defense. . . . . . . . . . . . . . . . . . 75

Other Public Programs and Services . . . . . . 76

Charitable Organizations . . . . . . . . . . . . . . . . 77

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Appendix A. Acknowledgments . . . . . . . . . . 81

Appendix B. Workshop Participants and

Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Appendix C. Implications of the

Population Definition . . . . . . . . . . . . . . . 85

Appendix D. Alternative Settings of Care . 88

Appendix E. The Educational System

as a Source of Health Care

Services and Funding . . . . . . . . . . . . . . . 92

Appendix F. Glossary and Acronyms . . . . . 94

References . . . . . . . . .

Boxes

Box

A.

B.

c.

D.

E.

. . . . . . . . . . . . . . . . . . . 99

Page

ator-Dependent

. . . . . . . . . . . . . . . . . . . 15

Profile of a Venti

Child . . . . . . . . . . .

Bronchopulmonary Dysplasia . . . . . . . . . 29

Changing Technology in the Neonatal

Intensive Care Unit . . . . . . . . . . . . . . . . . . 30

Individual Benefits Management Among

Private Insurers . . . . . . . . . . . . . . . . . . . . . 56

Reimbursement for Subacute Care in

California . . . . . . . . . . . . . . . . . . . . . . . . . . 91

Tables

Table No. Page

1. Summary of OTA Estimates of the

Size of the Technology-Dependent

Child Population, 1987 . . . . . . . . . . . . . . 4

vi
Contents—continued

Table No. Page

2.

3.

4.

5.

6.

7.

8.

9.

10.

11,

12.

13.

14.

15

The Population of Children Currently

Served in Programs Emphasizing

Alternatives to Hospital Care . . . . . . . 1 6

Major National Health Surveys and

Data Systems. . . . . . . . . . . . . . . . . . . . . . . 18

Data Sources Used as Bases for OTA

Estimates. . . . . . . . . . . . . . . . . . . . . . . . . 19

Estimates of the Number ofVentilatorDependent Children . . . . . . . . . . . . . . 20

Estimates of the Number of Children

Requiring Parenteral Nutrition. . . . 21

Basis for Estimate of the Population of

Children Requiring Extended

Intravenous Drug Therapy . . . . . . . . . . . 23

Basis for Estimate of the Number

of Children Requiring Other Nutritional

and Respiratory Support . . . . . . . . 24

Estimated Prevalence of Selected

Chronic Conditions in Children,

Ages 0 to 20, 1983 . . . . . . . . . . . . . . . . . . 25

Estimated Incidence of Bronchopulmonary

Dysplasia, 1984 . . . . . . . . . . . . . . . . . . . . . 29

Checklist of Respiratory and Infusion

Skills for Home Care Patients and

Families. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Supplies Needed for Four Home

Infusion Therapies . . . . . . . . . . . . . . . . . . 39

Sample Home Respiratory Care Costs

That Were Reimbursedby a ThirdParty Payer, 1985 . . . . . . . . . . . . . . . . . . . 40

Summary of Comparative Average

Monthly Charges Presented in the

Literature of Ventilator-Dependent

Individuals in Hospital and Home

Settings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Comparative Charges for Home

v. Hospital Administration of

Intravenous Antibiotics as Reported

in the Literature . . . . . . . . . . . . . 46

Table No. rage

16.

17.

18.

19,

20.

21.

22.

23.

24.

25.

26

Number and Percent of Children Aged

O to 12 Years Covered Only by Private

Health Insurance, by Income Status,

United States, 1986 . . . . . . . . . . . . . . . . . . 52

Surveys of Employer-Sponsored Group

Health Insurance Plans . . . . . . . . . . . . .54

Medicaid Hospital Inpatient Stay

Maximums and Units of Payment in

the 50 States and District of

Columbia, 1985 . . . . . . . . . . . . . . . . . . . . . 58

Summary of Medicaid Home Health

Services Provided in so States and the

District of Columbia, 1984 . . . . . . . . . . . 60

Comparison of State Medicaid Options

for Expanded Home- and CommunityBased Care . . . . . . . . . . . . . . . . . . . . . . . . . 61

State Activity in Medicaid Home- and

Community-Based Service Options as

of Apr. 15, 1986. . . . . . . . . . . . . 65

State Policies and Practices That Limit

Participation Under the Regular

Waiver Programs That Theoretically

Could Serve Physically Disabled

Children, April 1986 . . . . . . . . . . . . . . . . 68

State Policies and Practices That Limit

Participation Under the Model Waiver

Programs, April 1986 . . . . . . . . . . . . . . . . 69

State Policies and Practices That Limit

Participation Under the State Plan

Amendment, April 1986 . . . . . . . . . . . . . 70

Total Amount of Expenses Allocated

for Programs of Selected Foundations,

1979 and 1980 . . . . . . . . . . . . . . . . . . . . . . 77

Some Conditions That May Lead to

Dependence on Respiratory or

Nutritional Support . . . . . . . . . . . . . . . . 86

vii
Chapter 1

Summary
Chapter 1

Summary

INTRODUCTION

Long-term dependence on expensive and sophisticated health technology, and its use in settings other than the acute-care hospital, is not

new. The polio epidemics of the first half of this

century led to the use of respiratory rehabilitation centers (131 ), and by the end of the 1950s

there were over a thousand polio survivors requiring respiratory support living at home (102). Since

then, sophisticated technologies such as hemodialysis, intravenous feeding, and now intensive ventilator care have been moved home. With each

have come newly recognized needs for patient and

family training and, increasingly, full-time complex nursing care.

Unlike the children who were part of the earlier

polio population, the present population of technology-dependent children is a diverse group of

individuals with a great range of medical diagnoses, many of them very rare. These children

require a broad array of technologies and have

similarly diverse care and nursing needs. Without recent advances in medical technology, 1 many

of these children would not be alive. Positivepressure ventilation, using machines that force air

into the lungs through a face mask or through a

surgical opening directly into the trachea (windpipe), began to be used regularly on hospital patients outside the operating room in the 1950s (31).

SUMMARY OF FINDINGS

The Population

“Technology-dependent” is a term used to describe a small subset of the disabled child population who rely on life-sustaining medical technology and typically require complex, hospital-level

nursing care. In this technical memorandum, the

The sophistication of these devices and their management to make them suitable for long-term use

on infants fueled the subspecialties of neonatology and critical care pediatrics in the 1960s (69).

New intravenous feeding technologies were added

to the neonatologists’ repertoire over the next decade; the first person in the United States to respond to long-term total intravenous feeding was

an infant born without a functional intestine in

1968 (46). But it is only since the beginning of the

1980s that more than a handful of hospitals and

physicians have begun to consider the home environment appropriate for high-risk, technologydependent children.

When these sophisticated medical technologies

should be used, how and where they should be

provided, and who should pay for them are currently subjects of public debate. To provide some

of the foundation for this debate, this technical

memorandum addresses four specific questions.

They are:

1.

2.

3.

4.

Who are the technology-dependent children?

How many technology-dependent children

are there in the United States?

What services do these children require, and

what are the costs and effects of receiving

those services at home rather than in institutional settings of care?

To what extent does private and public insurance cover the services needed by technology-dependent children?

technology-dependent child is defined as one who

needs both a medical device to compensate for

the loss of a vital body function and substantial

and ongoing nursing care to avert death or further disability. This definition is independent of

the setting of care or the particular credentials of

3
4

the caregiver. The ongoing nursing care, usually

required for substantial parts of each day, may

be provided by a professional nurse or by a

trained and skilled parent or other lay caretaker.

This definition can apply to a wide variety of

cases, ranging from children requiring the continuous assistance of a device and highly trained

caretaker to those requiring less frequent treatment and intermittent nursing care. Where one

draws the line on this continuum largely determines the size of the population categorized as

technology dependent. OTA identified four separate populations, distinguished from one another

by their clinical characteristics, that might reasonably be considered technology dependent:

●

●

●

●

Group I: Children dependent at least part of

each day on mechanical ventilators.2

Group II: Children requiring prolonged intravenous administration of nutritional substances or drugs.

Group III: Children with daily dependence

on other device-based respiratory or nutritional support, including tracheotomy tube

care, suctioning, oxygen support, or tube

feeding.

Group IV: Children with prolonged dependence on other medical devices that compensate for vital body functions who require

daily or near-daily nursing care. This group

includes:

—infants requiring apnea (cardiorespiratory)

monitors,

—children requiring renal dialysis as a consequence of chronic kidney failure, and

—children requiring other medical devices

such as urinary catheters or colostomy

bags as well as substantial nursing care in

connection with their disabilities.

The first three groups are narrowly defined and

limited to children whose technology dependence

is both life-threatening and requires frequent and

complex nursing tasks. The fourth group of chil2 In this technical memorandum, ventilators refer both to devices

that apply negative pressure, such as the “iron lungs” that were used

to treat polio patients, and to devices that use positive pressure to

force air into the lungs.

dren is less susceptible than the others to longterm hospitalization, largely because the frequency or complexity of required nursing care is

substantially lower than for the first three groups.

Under a very strict definition of technology dependence, this fourth group might not be included. OTA has included it to demonstrate how

rapidly the technology-dependent population

grows as additional groups are included in the definition.

Table 1 presents OTA’s estimates of the prevalence of technology-dependent children in each

of the four groups. Precise estimation of prevalence is impossible because of data limitations, so

a range of estimates is provided for each group.

Table 1 makes it clear that the number of technology-dependent children is quite small (less than

17,000 children) when the definition is limited to

Groups 1-111 but increases dramatically when

Group IV is included. Furthermore, a large number of additional children not captured by this

device-based definition of technology dependence

require at least as great a level of care as the children in Group IV. These children include the proportion of children with chronic diseases such as

diabetes, hemophilia, and epilepsy who require

constant or very frequent nursing care as a consequence of the complexity and quantity of drugs

and therapy they receive. If the definition of techTable 1.—Summary of OTA Estimates of the Size of

the Technology-Dependent Child Population, 1987

Estimated number

Defined population of children

Group 1:

Requiring ventilator assistance . . . . . . . 680 to 2,000

Group II:

Requiring parenteral nutrition. . . . . . . . . 350 to 700

Requiring prolonged intravenous drugs 270 to 8,275

Group ///:

Requiring other device-based

respiratory or nutritional support . . . . 1,000 to 6,000

Rounded subtotal (1+11+111) . . . . . . . . 2,300 to 17,000

Group IV:

Requiring apnea monitoring . . . . . . . . . . 6,800 to 45,000

Requiring renal dialysis . . . . . . . . . . . . . . 1,000 to 6,000

Requiring other device-associated

nursing . . . . . . . . . . . . . . . . . . . . . Unknown, perhaps

30,000 or more

SOURCE: Office of Technology Assessment, 1987
5

nology dependence were broadened to include

these chronically ill children, the population of

technology-dependent children might be several

times again as large.

In large measure, medical practice and parental attitudes determine how many technologydependent children exist. In an area where parents and physicians are aggressive in managing

high-risk infants, terminally ill children, and severe trauma victims, many children may survive

with long-term technology dependence. In contrast, such children may die or may subsist with

less intensive long-term support in areas where

treatment is less aggressive due to social preference, customary practice patterns, a lack of facilities, or low payment. The physician’s decision

regarding when to wean a child from a life-sustaining device such as a mechanical ventilator also

affects the number of technology-dependent children, and there are large variations in weaning

practices among different physicians and different hospitals.

There is little evidence regarding the proportion of technology-dependent children who are

hospitalized, except that it seems to vary widely

among States. Children currently cared for at

home generally meet discharge criteria such as a

capacity for self- or family care; supportive, stable home environments; and funding for necessary equipment, supplies, and professional nursing services. Those who remain hospitalized are

less likely to meet these criteria.

The population of technology-dependent children has increased in both size and visibility over

the past 25 years, and it will probably continue

to increase for several more. In 1960, only 3 out

of every 10 very-low-birthweight (under 1,500 g)

newborns survived for at least a month; by 1980,

nearly twice as many were surviving (170,171).

Most newborn infants in this weight group require

at least temporary respiratory assistance, and the

increased survival rate has certainly increased the

rate of technology dependence. In fact, much of

the survival is a result of that technology. Twentyfive years ago, the technology for long-term intravenous nutrition did not exist; now, children

who have never been able to digest food are surviving to adulthood.

New technologies, such as improvements in the

ability to prevent chronic lung disease in newborns, could reduce the size of the population,

but they will not have substantial effects on the

incidence of respiratory dependence for at least

2 to 5 years. Meanwhile, the number of very-lowbirthweight infants surviving will probably continue to rise, increasing the total number of children with respiratory dependence. The spread of

acquired immunodeficiency syndrome (AIDS) in

the U.S. population will increase the number of

children with dependence on intravenous nutrition and medication. Aggressive treatment of patients with ultimately fatal diseases such as cystic fibrosis and muscular dystrophy, and of infants

with intestinal tract disorders that would otherwise be fatal within days, also is becoming more

widespread. These developments will expand the

population of children who are dependent on respiratory and nutritional technologies well into

adulthood. Payment policies that adequately

cover long-term care for these children will

strengthen this trend. Thus, it is likely that the

incidence 3 of dependence on the technologies used

by children in Groups I, II, and III may as much

as double in the next few years, stabilizing or even

declining somewhat in later years. Long survival

of those who are dependent, however, means that

the total number of technology-dependent children will probably not decline.

Relative Effectiveness and Costs of

Home v. Hospital Care

Little objective evidence exists on the relative

effectiveness of home v. institutional care on the

medical status and development of technologydependent children. Hospitals have generally been

considered the most appropriate and effective setting for complex medical care, while the family

home has been considered the most appropriate

and effective setting for child growth and development. Considerable experience has been gained

in moving complex medical care into the home

in recent years, with much success. Many parents

and health care professionals now consider the

‘Incidence is the number of new cases during a specified period

of time, Prevalence, by comparison, is the total number of cases

during a period of time.
6

home preferable to an institution as a setting of

care for even the most technology-dependent child

whenever home care is possible.

Effective home care is not an unqualified achievement, however. First, and most importantly, effective home care requires that parents want their

child home. Second, families must be able to cope

with living with the child and the intrusions on

their own private lives as a consequence of the

many other people also involved in the child’s

care. Third, the effectiveness of home care depends on the quality of services that are provided

to the family. These include:

●

●

●

●

●

●

●

●

●

adequate family training and preparation,

professional caregivers trained in the relevant

nursing skills,

appropriately designed and well-maintained

equipment,

adequate social and psychological support

services,

high-quality respite care,’

appropriate home renovation,

appropriate transportation,

locally available emergency facilities, and

competent case management services. 5

Thus, while most family homes can be expected

to be appropriate and effective settings of care for

technology-dependent children, a few will not be

effective for reasons inherent in the family situation. Some others can be effective only if especially strong social support and nursing services

are provided. Reducing the level or quality of

these services decreases the cost of home care to

third-party payers (at least in the short term), but

it also decreases home care effectiveness. Inadequately prepared families and home environments

(as might sometimes occur in very aggressive early

discharge programs) are likewise a threat to highquality, effective home care.

The costs of caring for technology-dependent

children are both high and highly variable. In the

hospital, these costs depend largely on the duration of dependence and the intensity of need for

medical care. The care of ventilator-dependent

4Respite care is any care designed to give the family some relief

from constant caregiving,

‘Case management is the coordination and oversight of the package of health care and related services provided to an individual,

children tends to be most costly in acute-care hospitals because these children typically require the

very intense level of nursing found in intensive

care units; less expensive institutional care can

usually be found only in special respiratory units

of rehabilitation or long-term care facilities. Other

technology-dependent children can be cared for

in a variety of hospital settings, and some require

a level of care that can be provided by a skilled

nursing facility. However, nursing homes and

other nonhospital facilities that accept young children and are equipped to serve their needs are

rare,

The costs of home care depend less on the

child’s clinical condition and more on the attributes of the family and home environment. In the

home, families have tended to bear a relatively

high proportion, and third-party payers a relatively low proportion, of the total costs to society. This situation has occurred because the families of these children have provided most of the

highest cost services—nursing and housing—

themselves.

The care of many technology-dependent children is likely to be least costly both to society and

to public or private insurers when it is provided

at home. Because the cost of home care depends

so heavily on social and environmental, rather

than medical, factors, it is not possible to identify a specific group of technology-dependent children based on clinical criteria alone for whom

home care will be cost saving to third-party

payers. However, if a child is medically stable,

the home has a good potential for being a less expensive setting of care than an inpatient facility.

If family members are willing and able to provide

some or most of the required nursing care, and

if the child will be home long enough to offset the

one-time startup costs such as training and renovation, the home is very likely to be the least expensive setting of care for insurers. However, the

use of family members to care for these children

can involve very high costs to the family in terms

of lost income, career opportunities, leisure time,

or time for routine household tasks. Reducing

these costs to the family—e.g., by paying for a

nurse when parents work outside the home—

raises home care costs to the payer,
A few technology-dependent children cannot

or should not live at home. For these children,

foster care, hospital care, or other institutional

care must be sought, and the relative costs and

quality of care in these settings must be evaluated.

Foster home care is often sought for children

whose natural parents cannot provide their care,

although this setting raises costs to the government over care in an appropriate natural home.

It may be preferred over institutional care, but

it is likely to be difficult to find foster placement

for all technology-dependent children who need

it. Other potential settings of care are:

transitional or subacute wards of acute-care

hospitals,

rehabilitation or chronic care hospitals (particularly specialty wards of these hospitals),

subacute care facilities,

pediatric skilled nursing facilities, and

specialized community group homes (which

may sometimes be considered “group” foster homes).

In many areas, few or none of these alternatives may be available. Yet they are important

alternative sources not only of long-term care, but

of transitional and respite care.

Sources of Financing for

Home Medical Care

Both public and private payers have expanded

the coverage of alternative care options for

technology-dependent children in the past 5 years.

However, payment for nonhospital care is still

hindered by lack of coverage and poor coordination between private and public payers.

Technology-dependent children are more likely

than other children to lack adequate private insurance. When they are insured, their benefits

often do not cover their extraordinary expenses,

particularly in the home, and they are likely to

use up their families’ insurance benefits rapidly.

High lifetime maximum benefits (e.g., $1 million

rather than the still common $250,000) and case

management while under private insurance can

extend private coverage, so long as the parent

does not lose employment. Ultimately, however,

virtually all very-long-term technology-dependent

7

children requiring a high level of nursing assistance will exceed the limits of their families’ private insurance policies, will be uninsurable in the

self-purchase insurance market because they are

poor risks, and will end up on Medicaid. Poor

technology-dependent children, or those whose

families are uninsured, must turn to Medicaid

from the start.

In most States, Medicaid does not routinely pay

for full-time home nursing and other complex

home medical services. Nor are many technologydependent children normally eligible for Medicaid until their families have become impoverished.

Since 1981, however, the Federal Government has

permitted States to waive certain Federal rules regarding eligibility and services, allowing States

to provide alternative mechanisms (separate from

States’ regular Medicaid programs) to pay for intensive home care for technology-dependent children. Three alternative options’ are currently

available to States:

1. regular 2176 “home- and community-based

services” waivers, under which States can

provide augmented Medicaid services to specified populations;

2. model 2176 waivers, a subset of the above

waivers that can be targeted to very small

and specific populations; and

3. amendments to State Medicaid plans to

waive certain restrictive eligibility income requirements for individuals who meet specified criteria.

As of April 1986, 14 States had model 2176

waivers directed specifically at technology-dependent or other severely physically disabled children. ’ Ten States have now amended their State

plans to extend Medicaid eligibility to more children in this population (59).

--

‘Between 1981 and 1Q84, individual waivers of Nledlcaid eltgibllity restrictions were also awarded to a few technolog}~-dependen” t

children acro~s the country. These I\’aI ~’er~ J re n (1 1 onger awarded

although a number are still I n ctfect t(lr the ch 11 dren tvh (1 rec e]ved

them Approximately 14 States still have children ser~red un(ier ln -

d]l]dual L\<ll\rt’rs (So)

“The exact number of States serving technology-dependent children under these wa]\er\ I\ unknown States may co~er ~u( h chlldr(’n under tht,] r 2 17tJ ~~.a I ver> but nc)t actual 1}’ serve an}’, and man}

States J% ere rene~iin~ the]r 2170 ~valvers In 1080, with some ne w

pro~l<lons”
8

—

Although these options have enhanced the

availability of Medicaid services to technologydependent children, Medicaid still suffers from

two general problems regarding home care coverage for this population. First, the Federal Government prohibits States from providing waivers

of the usual Medicaid rules if program costs would

increase by doing so. If Medicaid hospital payments in a State are routinely restricted (as, for

example, when Medicaid limits the number of

covered hospital days), it can be very difficult to

show reductions in Medicaid costs when extensive home services are necessary. This restriction

prevents many technology-dependent children

from receiving home services. Second, apart from

the waivers, States cannot offer expanded benefits to a small, defined population; once covered,

a service must be made available to any Medicaid beneficiary who needs it. Both Federal and

State governments have feared that expanding

services to technology-dependent children would

mean greatly increased expenditures as other beneficiaries also use these services. Medicaid’s experience with expanded home benefits for the

elderly has been that these benefits tended to increase, rather than decrease, program costs.

Where States have used available options to

cover home care for technology-dependent children on a case-by-case basis, they have had some

success in both increasing effective services and

decreasing costs. However, neither States nor the

Federal Government are too willing to put in place

more general programs where costs will not be

so tightly controlled. For the same reason, States

have even been cautious in applying the waiver

and State plan amendment options.

On the other hand, States are sometimes using

Medicaid funds in ways that may not be strictly

in line with Federal regulations in order to serve

technology-dependent children more effectively.

Many States find the Federal Medicaid rules increasingly complex and difficult to understand and

implement.

Because the federally supported State Services

to Children with Special Health Care Needs

(CSHCN) programsg offer more flexibility in im-

‘Until recently, these programs were referred to as Crippled Children’s Services (CCS).

plementation, a number of States have chosen

them as the primary vehicle to provide and coordinate home services to technology-dependent

children. The role of CSHCN as the source of case

management and coordination for children served

under Medicaid waivers has been particularly

strong in some States (47). The CSHCN programs

are more commonly perceived as active supporters of care for the disabled than is Medicaid.

However, the freedom that allows State CSHCN

programs to choose which groups of children they

will support (e. g., ventilator-dependent children)

also allows for extreme variation among States

in available services, and variation within States

regarding which disabled children receive extensive assistance. Other public programs (such as

home-based social services) and services provided

by charitable organizations supplement existing

payment for home-based medical care to varying degress across States and localities. Thus, the

availability of home medical care and related services depends on the State in which the child lives

and his or her particular medical condition. A

technology-dependent child may receive adequate

services in one State through Medicaid, in another

through the CSHCN program, in another through

a combination of diverse sources, and in a fourth

not at all. A child requiring intravenous nutrition

may have access to adequate home services in one

State, while one who needs mechanical ventilation in that same State may receive no home services at all. And even if the child lives in a State

where home benefits to serve his or her medical

condition are theoretically adequate, the child’s

family may be given insufficient or conflicting information regarding the availability of those

services.

Where adequate coverage of home medical

services is available, other problems have begun

to arise. As well-compensated alternatives to hospital care become more widely available, payers

have incentives to limit the availability of hospital care for technology-dependent children, and

hospitals have increasing incentives to discharge

them, even if the family is not adequately prepared to take the child and no other options have

been developed. This danger is both very real and

very great.
Y

IMPLICATIONS

Home care is not only feasible and desirable for

many technology-dependent children but in many

cases can also reduce costs incurred by insurers.

Consequently, interest in extending home care

benefits to technology-dependent children is likely

to increase. A difficult question for third-party

payers is how to offer such benefits. Enhanced

home care benefits could be offered to all beneficiaries, but this strategy would substantially increase insurance costs and might discourage efficient use of such services. If insurers choose to

offer enhanced benefits to a narrowly defined set

of beneficiaries, issues of fairness arise. There are

no clinical criteria that can neatly separate children who deserve such benefits from those who

do not. The definition used in this technical

memorandum which is based on the use of a medical device, does not capture all children who need

substantial nursing care in the home. It is not

necessarily directly applicable in an insurance

context.

Any expansion of home care benefits is likely

to increase the number of technology-dependent

children at home and will have important secondary

●

●

●

effects. These will include:

Increased early discharge from neonatal intensive care units. Some hospitals are beginning to encourage earlier discharge of premature newborns (24). Increased payment for

home nursing, home phototherapy, apnea

monitoring, and other services are likely to

strengthen the trend.

Increased numbers of technology-dependent

children discharged to homes before families

feel prepared to accept them. Overenthusiasm in discharging children to the home

could have very serious consequences for the

health of these children. Quality of care could

be seriously impaired if children were discharged home without adequate long-term

nursing support, equipment maintenance,

and backup plans if home care becomes infeasible.

Problems in the quality of nursing care and

equipment support in the home. A shortage

of trained professional nurses and inadequate

equipment-related support is already reported in some places. The shortage could

get much worse if financing availability outstrips service availability. The lack of uniform guidelines and technology-related skill

certification among home care nurses will exacerbate the difficulty in obtaining skilled,

high-quality nursing.

Increased charges for home services. Greater

demand for high-technology home care services offers opportunities for home health

agencies to enter this field with high prices,

particularly in geographic areas where there

is little competition or in areas where professional nurses trained in these techniques are

in great demand.

Greater-than-anticipated costs to payers due

to the “woodwork effect. ” To at least some

extent, enhanced home care benefits will replace family care rather than hospital or

other institutional care. This is certainly

desirable to most of the families involved and

may prevent later institutionalization of

many children, Nonetheless, this factor will

tend to increase program costs above what

was originally anticipated.

Increased demand for appropriate foster care

or institutional care. Few options exist outside of the acute-care hospital for children

who cannot return to a family home. Availability and payment for care in small group

homes, pediatric nursing facilities, and other

facilities is likely to become a significant issue. The need for a source of respite care outside of the home will add to the demand for

appropriate facilities.

Increasing numbers of technology-dependent

children attending public schools. More children living outside of institutions will lead

to more children in the schools. However,

there are no Federal or State guidelines regarding who pays for the health care needed

by these children while attending school, or

who bears liability for any adverse effects

they suffer in this setting. A lack of resolution of these issues could needlessly prevent

many technology-dependent children from

attending school.

Need to better define the role of case man-
10

.

ager and to ensure that the manager is in a nology and underlying

position to balance the interests of the fam- its character. Children

ily, the third-party payer, and other involved ney failure do not raise

—

diseases continually alter

needing dialysis for kidthe same concerns as chilparties. dren needing ventilation, for the most part beThe population of technology-dependent chil- cause payment for dialysis services is largely

dren is one with a constant undercurrent of assured and outpatient or home care has become

change. Although “technology-dependent” has routine in most cases. New approaches to medical

often been used as a euphemistic label for chil- practice and health care financing may yet accomdren whose home care was expected to be less ex- modate the most complex of today’s and tomorpensive than institutional care, changes in tech- row’s technology-dependent children as well.
Chapter 2

The Size of the Technology=

Dependent Child Population
Chapter 2

The Size of the TechnologyDependent Child Population

INTRODUCTION

Although the technology-dependent population

is frequently discussed, it has never been defined.

Simply put, technology-dependent’ children are

a vaguely defined subset of the much larger disabled child population. In this technical memorandum, the term “technology-dependent” refers

to those children who use a medical technology

(embodied in a medical device2

) that compensates

for the loss of normal use of a vital body function, and who require substantial daily skilled

nursing care to avert death or further disability.

This definition has four important characteristics. First, medical devices are used as a basis

for defining the population, because device use

is observable. Second, OTA is including only lifesustaining technologies in the definition. A great

many other children exist with extensive health

care needs, but they are not included here. Third,

the dependence is assumed to be prolonged. “Prolonged” is not defined directly, and its meaning

varies somewhat with the type of technology, but

it is assumed not to include situations such as a

premature newborn who outgrows the need for

ventilation after only a few weeks. Finally, “skilled

nursing care, ” as used in this technical memorandum, means any care that requires highly technical nursing skills, including care provided by

nonprofessionals such as parents trained in these

] Some people prefer the term “technology-assisted” to the term

“technology -dependent,” but the latter term has been more common in recent legislation and is used in this technical memorandum.

2A medical device is any instrument, apparatus, or similar or related article that is intended to prevent, diagnose, mitigate, or treat

disease or to affect the structure or function of the body (161).

skills. 3 Technology-dependent children often have

mental, behavioral, or emotional disabilities in

addition to the above characteristics, but they are

set apart by the level and nature of care—both

in terms of medical device support and skilled

nursing care—required by their chronic physical

disabilities.

This chapter begins with a description of some

of the problems encountered in defining technology dependence and the use of this term by others. q

The chapter then translates the general definition

into a working definition for the purpose of estimating the number of technology-dependent children. Four clinically distinct groups of children

are identified. Three are unquestionably technology dependent under the general definition; the

fourth group meets the technical definition of technology dependence but has nursing needs that are

substantially lower than those of the first three

groups. (App. C presents some potential implications of this working definition. Those implications are not discussed directly in this chapter. )

The central part of this chapter presents the existing evidence on how many children are in each

group. Finally, the chapter describes trends in the

population at risk of technology dependence, particularly evidence on changes in the number and

survival of children with chronic diseases, highrisk infants, and children with progressive, terminal illnesses.

3Nursing services are generally recognized as a group of medical

services that cannot be performed by the average person without

considerable training. They differ from custodial and personal care

services (e g., dressing, bathing, or feeding a patient ) which less

trained people can perform safely.

‘The development of this chapter was greatly aided by the discussion at a workshop conducted by OTA on the subject. The workshop agenda and a list of participants are included in app. B.

13
PROBLEMS IN DEFINING THE POPULATION

The need to define the technology-dependent

child population arises not from any inherent attribute of this group but from the organization

and priorities of the health care payment system

in the United States. The home health care benefits of most third-party payers—private insurers,

State governments, and Federal health programs

—have been limited both in scope and in amount.

The adaptation of sophisticated medical devices

and services to the home setting were likewise

limited. Over the past decade, however, the adaptation of these technologies to the home has greatly

expanded. Today, there are children with very

high long-term hospital costs who could be cared

for at home with such technology if payment for

that intense level of home care were available,

Many third-party payers have come to pragmatically define technology-dependent children as

those children whose care is likely to be very expensive, who could safely be cared for at home

given sufficient services, and who are likely to cost

less to the payer if cared for in this environment.

But such a definition does not provide clinical or

functional criteria for identifying technology-dependent children. Rather, it is a criterion for caseby-case waivers of a payer’s usual limits to home

health benefits and services.

This pragmatic, payment-based definition presents a serious problem because it excludes seemingly similar technology-dependent children who

might benefit greatly from nonhospital care, but

who may cost more in the home due to their particular family or home characteristics. Moreover,

this pragmatic definition provides no basis for estimating the number of technology-dependent children, even the number who would fit the definition as stated, because there exists no systematic

way to count such children.

Legislation introduced in 1985 attempted to provide more specific definitions of “technology dependent. ” S. 1793 defined a “medical technology

dependent child” as “an individual under the age

of 21 who has a medical condition (specified by

the Secretary in regulations) which would require

inpatient hospital services in the absence of home

or community-based care, and who is dependent

upon medical technology in order to avoid death

or serious injury” (emphasis added). In contrast,

H.R. 2703 would have provided home care benefits only to ventilator-dependent people, irrespective of age. These persons would be eligible for

benefits if they required a ventilator at least 6

hours per day; had required this technology for

a month while in a hospital or skilled nursing facility; and would require institutionalization if the

necessary respiratory services were unavailable

at home.

These definitions illustrate two congressional

concerns regarding a definition of the technologydependent child population. First, the population

of greatest concern is those children who, but for

the availability of special services and financing,

could not be cared for at home. Second, “technology” has been used to mean medical devices,

rather than only skilled medical services. Both of

these criteria reflect a desire to accommodate the

needs of technology-dependent children while

maintaining control over Medicaid costs.

The prototype of the technology-dependent

child is one who cannot breathe without a mechanical ventilator (see box A). The life of such

a child depends on an expensive and sophisticated

piece of equipment, trained personnel to perform

the necessary procedures that accompany its use,

and a multiplicity of other devices, drugs, and

therapies, Until very recently, such a child was

nearly always cared for in an acute-care hospital

until the child died or could be weaned from the

ventilator, a process that could take months or

years.

While all agree that the child on a ventilator

is technology dependent, there is still a great deal

of confusion over what other groups of children

meet this description. The population of children

who might be considered technology dependent

is enormously diverse, Variations occur in the

length of dependence; a child may be ventilatordependent for 10 years, or 2 years, or 2 months.

Care needs vary in frequency and intensity across

children as well. While one child may need skilled

nursing care 24 hours a day, another might need

such care only 8 hours a day, or 2 times a day

for 2 hours each. Some children require minimal

medical equipment but a great deal of skilled nurs-
15

Box A.–Profile of a Ventiilator-Dependent Child

Conditions leading to ventilator dependence may develop anytime in childhood or adolescence. A

teenager, for example, may suffer permanent breathing impairment due to chronic illnesses such as cystic

fibrosis or muscular dystrophy. Spinal cord trauma, which can damage the nerves that enable breathing,

is also a fairly common cause of ventilator dependence in children and adolescents. Or, ventilator dependence may be due to breathing difficulties present at birth.

A ventilator-dependent child sometimes begins life as a premature baby, initially given oxygen and

24-hour ventilator support because he (or she) is unable to breathe adequately on his own. Since the baby

is also unable to suck adequately, he must be tube fed as well. A physician may create a gastrostomy (a

surgical opening into the stomach) to make feeding easier.

When attempts are made to reduce mechanical ventilation, it becomes clear that the infant cannot

breathe on his own even for a few minutes. The infant’s windpipe becomes irritated from having the nasal

tube changed. The physician creates a tracheotomy (a surgical opening in the throat) so ventilation can

be administered more directly to the lungs. A tube, which can be connected directly with the ventilator,

is inserted into the windpipe; this tube must be suctioned frequently, so it does not become clogged with

secretions, and changed regularly with great care to prevent infection at the tracheotomy site. Since a

clogged tracheotomy tube would cut off all air, the infant must be watched constantly. The nurse must

perform these duties as well as administer nutrients several times a day through the gastrostomy tube, take

frequent blood samples to check the level of oxygen and other gases, administer aerosols and antibiotics

to moisten the airway and prevent infection, and still offer all the normal comfort and care a newborn

infant must receive. A physical therapist may begin exercises to help the infant maintain physical development; a respiratory therapist may perform procedures to help his breathing. The infant’s parents may spend

a great deal of time with him to hold him and learn to care for him. If circumstances permit, they may

take him home.

As the infant matures, he may gradually be able to sustain breathing for longer and longer periods

of time on his own and may begin to learn to eat normally. Finally, if he becomes able to both eat and

breathe satisfactorily on his own, the tracheotomy and gastrostomy openings are surgically closed. No

longer so dependent on equipment, he may still receive frequent treatments for respiratory infections and

asthma-like attacks. He continues to receive physical and speech therapy to bring him up to the level of

other children his age.

ing (e. g., a child with both uncontrolled diabetes

and severe epilepsy), while others may need sophisticated medical equipment but only periodic

supervision (e. g., a capable older child receiving

overnight intravenous nutrients).

Because of the lack of existing criteria and the

diversity of the population that might be considered technology dependent, it is difficult to distinguish technology-dependent children from the

larger population of disabled children of which

they are a part. As a child’s disability becomes

gradually more (or less) immediately life-threatening

, and the frequency and level of skilled medical intervention increases (or lessens), the boundaries between technology dependence and less

life-threatening disabilities blur. A child with

muscular dystrophy, for instance, loses muscle

strength gradually, first requiring braces, then a

wheelchair, then occasional supplemental oxygen

or ventilation, and perhaps finally a full-time ventilator. The process may be reversed for an infant on a ventilator whose breathing problems resolve over time.

Table 2 describes children who are presently

served by several programs that offer alternatives

to hospital care for severely physically impaired

children. These children display a wide range of

medical problems. While many are obviously technology dependent, requiring both highly sophisticated medical equipment and highly skilled and

intensive nursing care, others require constant

caretaking and monitoring that depends neither

on expensive equipment nor on intensive medical training.
16

Table 2.—The Population of Children Currently Served in Programs Emphasizing Alternatives to Hospital Care

Categories Description Services Sample diagnoses

Children who have acute

medical/surgical problems

Children who have a terminal

illness

Children who are severely

intellectually disabled

Children who have chronic

medical problems

Children who have chronic

respiratory problems

Children who have Central

Nervous System (CNS)

dysfunction

Children with acute medical/

surgical problems who are

discharged early from the hospital

but who continue to need

individualized technical care

for limited periods of time

Children requiring technical care

for a terminal illness that is

expected to result in death within

6 months.

Children who as the result of an

illness, trauma, congenital

anomaly, or hereditary disease are

severely intellectually disabled so

that they cannot and will not in

the future be able to care for

themselves.

Children who will have chronic

medical problems for long periods

of time and are dependent on

technical care.

Children who will be oxygen

dependent for relatively long

periods of time.

Children who need ventilation

assistance for periods of time

Children who are completely

ventilator dependent

Children who have CNS problem,

either the result of trauma or CNS

disease so that they cannot and

will not be able to care for

themselves.

These children may require

medications, unusual feedings,

monitoring of vital signs, certain

forms of technical treatment, etc.

These children may for a period of

time require oxygen, assistance in

feeding, and/or medication for

comfort.

These children require varying

degrees of assistance in feeding,

defecation, urination, positioning,

and other personal care.

These children may require

complex alimentation, certain

medications, suctioning,

catheterization, intravenous

therapy, tracheotomies,

equipment monitoring, prescribed

therapy regimens, and/or

colostomies/ ileostomies.

These children will require oxygen

and may require suctioning or

cardiopulmonary monitoring

These children will require

ventilator care and bronchial

suctioning. They may require

cardiopulmonary monitoring and

gastrostomy feeding.

These children require constant

ventilator care, bronchial

suctioning, and cardiopulmonary

monitoring and may require

gastrostomy feeding.

These children may require

assistance in physical positioning,

feeding, defecation, and/or

urination. (Some may also be

ventilator dependent.)

Severe infectious disease

Postoperative conditions

Low-birthweight infants

Terminal cancer

Renal failure

Severe microcephaly

Severe post meningitis

Severe hydrocephalus

Chronic malabsorption

syndrome

Severe cystic fibrosis

Multiple congenital anomalies

Severe seizure disorder

Dystrophies

Atrophies

Myasthenia

Chronic aspiration syndrome

Short gut syndrome

Chronic bronchopulmonary

dysplasia (BPD)

Chronic BPD

Post encephalitis

Progressive CNS disease

Tracheo-bronchial malacia

Ondine’s curse

Chronic BPD

Post encephalitis

Progressive CNS disease

Progressive CNS disease

Spinal cord trauma

SOURCE J MacQueen, “Alternatives to Hospital Care, ” unpublished, Aug. 5, 1986

ESTIMATING

OTA’s Working

THE PREVALENCE OF TECHNOLOGY DEPENDENCE

Definition sources must be available whose categories are

consistent with the definition. The most easily

To estimate the size of a population quickly and identifiable aspect of technology-dependent chilwith reasonable accuracy, criteria are needed that dren is their continual dependence on a medical

can easily distinguish this population from others, device to replace or compensate for a vital body

Therefore, concrete characteristics (e.g., a particu- function or avert immediate threat to life. Thus,

lar diagnosis or the use of a very visible technol- in this study, four groups of children are identiogy) should be the basis of the definition, and data fied whose reliance on medical devices and nurs-
ing care for maintenance of life make them candidates for classification as technology dependent:

●

●

●

●

Group I: Children dependent at least part of

each day on mechanical ventilators. s

Group II: Children requiring prolonged intravenous administration of nutritional substances or drugs.

Group III: Children with daily dependence

on other device-based respiratory or nutritional support, including tracheotomy tube

care, suctioning, oxygen support, or tube

feeding.

Group IV: Children with prolonged dependence on other medical devices that compensate for vital body functions who require

daily or near-daily nursing care. This group

includes:

— infants requiring apnea (cardiorespiratory)

monitors,

—children requiring renal dialysis as a consequence of chronic kidney failure, and

—children requiring other medical devices

such as urinary catheters or colostomy bags

as well as substantial nursing care in connection with their disabilities.

The groups are designed to be mutually exclusive.

If a child requires technologies from more than

one group, he or she is considered only as part

of the applicable group with the lowest number.

For example, a child requiring both ventilation

and parenteral nutrition would be placed in Group

I.

Groups I, II, and III comprise children whose

characterization as technology dependent is generally accepted in discussion among parents, providers, payers, and policy makers (although the

range of service needs of such children varies

widely). In contrast, Group IV encompasses a

broad range of children whose technology dependence is less life-threatening and requires less frequent or less complex nursing tasks. The children

in this group are less susceptible than children in

In this technical memorandum, ventilators refer both to devices

that apply negative pressure, such as the “iron lungs” that were used

to treat polio patients, and to devices that use positive pressure to

force air into the lungs.

17 — .

the first three groups to long-term institutionalization as a consequence of their disabilities, and

they are not universally recognized as technology

dependent. They are included here because they

demonstrate how the numbers of technology-dependent children change as additional groups are

included in the definition.

Data Sources and Sampling Problems

The lack of a formal definition of technology

dependence, its rarity, and the difficulty in detecting it have thus far prevented any reasonable

estimation of the size of the population from existing common health surveys. Table 3 summarizes a number of these surveys and the populations they describe. They are generally of two

types: institution-based surveys, such as surveys

of hospital discharge records (which list items such

as age, diagnosis, and surgical procedures for a

large sample of hospital patients); and household

interview surveys, in which family members are

asked about various aspects of their health. None

of the information from these surveys is directly

correlated with technology dependence as defined

in this technical memorandum.

Approximately 2 percent of noninstitutionalized children (over 1 million children) are limited

in their major daily activity (e. g., attending school)

(123,124). An additional group of mentally and

physically handicapped children reside in institutions. Whatever the exact size of the technologydependent child population, it must be considerably less than this total disabled population. There

are two basic approaches to estimating the size

of such a small population: counting it directly,

and statistical estimation based on a sample of

children. Because technology dependence is rare,

a sound statistical estimate would require a very

large sample. As table 3 shows, there are no major national health surveys that are comprehensive enough or detailed enough to support a prevalence estimate for this population.

The primary sources of data used as the bases

for the OTA estimate of the number of technology-dependent children are State-based programs

(in most cases relating to home care provided under public medical aid programs) and national

home nutrition program registries. Table 4 sum-
Table 3.— Major National Health Surveys and Data Systems

Survey or data system Population surveyed

National Health Interview Survey

(NH IS)

NHIS Child Health Supplement

National Medical Care Utilization

. .

Approximately 40,000

households (about 30,000

children).

1 child per above household

(about 15,000 children)

and Expenditures Survey

National Hospital Discharge

Survey

National Ambulatory Medical

Survey

Care

National Health and Nutrition

Examination Survey

Birth Defects Monitoring Program

office of Special Education

Survey of Institutionalized Persons

Census of the Population

Approximately 6,600

households (about 4,500

chiIdren)

Discharges from approximately

420 short-stay hospitals

Office visits to approximately

3,000 physicians

Households, Including about

6,000 to 7,000 children

Discharges from 928 hospitals,

about 22% of U.S. births

State-reported data on children

served in special education

programs

Persons living in facilities with

average stays over 30 days

All households; sample of

institutionalized persons

Periodicity Relevant data elements Selected limitations

. ——.

Annually

1981; may be

done in future

again

1977, 1980,

planned 1987

Annually

Annually from

1983-1981 ; 1985

1971-1975;

1976-1 980;

planned 1988

Annually

Annually

1976 only

Every 10 years

. .

Activity limitations, certain

chronic conditions, hospital and

physician use

Detailed perinatal and child care,

child development, child health

problems

Same as NHIS plus additional

data on income, Insurance,

medical expenditures

Age, race, sex, medical diagnoses,

procedures done in the hospital

Age, race, sex, reason for visit,

diagnoses, procedures performed

Data from physical exam and

laboratory tests

Discharge abstract data for 161

birth defect categories

Number of children served by

handicapping condition categow

Age, race, sex, cost of care,

condition treated, physical

limitations

Age, race, sex, education, region,

type of institution

Institutional population excluded, sample

too small to detect very rare conditions,

functional limitation measures very

general

Same as NHIS

Same as NHIS

Sample too small to detect very rare

conditions, not an unduplicated count of

persons, no data on outpatients,

nonhospitalized children

Sample too small to detect very rare

conditions, excludes clinic and

institutional visits, not an unduplicated

count of persons

Small sample, institutionalized

population excluded

May not be representative sample of

births, newborn data only, cannot directly

detect technology dependence

Handicapped categories very broad,

categories not consistently defined

among States, do not include children

not served by programs

Limitation categories very broad,

noninstitutionalized population excluded,

data old, analysis excluded some

institutions

No health-related functional data

included, institutional categories very

broad

SOURCES: F M. Ellman, National Association of State Directors of Special Education, Inc , Washington, DC, personal communication. January 1976, M A. McManus, S.E. Malus, C H Norton, et al , Guide to

National Data on Maternal and Child Health (Washington, DC: McManus Health Policy Inc., 1966), U S. Department of Commerce, Bureau of the Census, 1976 Survey of Institufionalfzed Persons”

A Study of Persons Receiving Long-Term Care, Current Population Reports Special Studies, series P-23. no. 69, June 1978, U S Department of Education, Office of Special Education, 9th Annual

Report to Congress on the Implementation of the Education of the Handicapped Act, 1987
Source

State data

I I I I nols

Louisiana

Maryland

Massachusetts

New Mexico

North Carolina

Wlsconsln

American Associatlon

Respiratory Care

for

Table 4.— Data Sources

Population Included

19

Used as Bases for OTA Estimates

All ventilator-dependent children in State; all

other children served In State program for

handicapped children

Ventilator-dependent children served in special

State home care program

Children dependent on respiratory support

devices who are served in special State home

care program

People dependent on ventilators for longer than

3 weeks

Ail children served by State Medicaid waiver for

technology-dependent children; other similar

children identified in State but not eligible for

the program

All children in State who are ventilator

dependent and have been medically stable for

at least 2 months

Children eligible for Medicaid home services on

the basis of being disabled and at a level that

would otherwise require institutionalization

Res Respiratory therapists nationwide via their State

representatives (37 States responded); asked to

provide information on all ventilator-dependent

patients they were serving

Commercial nutrition reaistries Individuals served by companies or

organizations maintaining ‘the registries between

October 1984 and April 1985

OAISIS registry, Oley

Foundation

Hambrecht & Quist home

infusion market analysis

Abbott Laboratories home

infusion market analysis —

Patients served by hospital and community -

based programs responding to a 1985 survey of

such programs

National hospital discharge data and detailed

information from a nonrandom sample of

hospitals

Not specified

Original purpose of information collection

State Information; evaluation program for similar

State programs

State Information, evaluation program for similar

State programs

State Information, evaluation program for similar

State programs

Survey to determine the numer of ventilator

dependent Individuals

State Information, Medicaid requirements

Demonstrate potential need for pediatric

respiratory unit

State information, Medicaid requirements

Document the number of ventilator-de~endent

persons and the degree of institutionalization

Develop a database of persons on home

nutritional support technologies

Develop ongoing database of characteristics of

persons using home nutritional support

Provide estimates of the current and future

market for home Infusion technologies

Provide estimates of the current and future

market for home Infusion technologies

SOURCES M J Altken and L A Aday, Home Care for the Chron/ca//y /// and/or Dmab/ed Technology Ass/sfed Ch//d An Eva/uat/on Model, unpublished. November 1985

E LIS, Crippled Children’s Serwces Chicago, IL, personal communlcatlon, April 198Q K Valdez, Human Services Department, Santa Fe NM, personal

commu nlcat!on July 22, 1986, P Tschumper, Department of Health and Soc Ial Serv!ces, M adtson. WI, personal communl cat ton J u I y 22. 1986. G Worley,

Duke Unlverslty Medical Center, Durham NC, personal commun!catlon, July 1986, Care for Life, paper prepared for U S Congress Off Ice of Technology

Assessment 1985, Oley Foundation, paper prepared for U S Congress, Off Ice of Technology Assessment 1985, B B Rucker and K A Holmstedt Home

/ndustry Therapy Industry (San Francisco CA Ham brecht & Qulst, April 1984), Blue Cross and Blue Shield Assoclat!on, /n fusion Therapfes In Home Hea/th

Care (Chlcaco, IL BC/BSA January 1986)

marizes these data sources and some of their characteristics. The OTA estimates are not derived

from large random samples; their validity rests

on the fact that very different and independent

sources of information yield estimates that are

within an order of magnitude of each other.

Estimating Prevalence

The number of cases of a disease in the population can be described in three ways:

• the number of new cases during a period of

time (incidence),

● the total number of cases during a given

period of time (period prevalence), and

● the total number of cases at a single point

in time (point prevalence).

The size of the technology-dependent population depends on which of these measures are used

and, for incidence or period prevalence, the length

of the period. Point prevalence is analogous to

an instantaneous total count of the population.

Period prevalence is more relevant to surveys,

which often take several months to conduct, and

to programs, which usually estimate budgets for

serving a population over a period of a year. Thus,

period prevalence—specifically, the estimated total number of technology-dependent children during 1987—is used in this technical memorandum.
20

A major problem with the data sources used

in this chapter to estimate the prevalence of technology dependence is that they enumerate cases

during different time periods. Some of the surveys present the prevalence of a condition (e. g.,

ventilator dependency) over one or more months,

rather than over a year. To obtain the total prevalence in a year, one should add to this monthly

total the number of new cases that arose during

the succeeding months in that year. However,

there is no basis for estimating how many of those

new cases would arise. In such cases OTA assumes an incidence and duration of technology

dependence consistent with what few data are

available. That assumption is stated in the discussion of the estimate.

In deriving consistent prevalence figures from

the data, OTA also uses the implicit assumption

that the incidence and duration of technology dependence are stable. However, there are indications that duration of technology dependence may

be increasing as children on these technologies survive longer. Incidence may also be rising with increased survival of extremely premature babies

and the advent of acquired immunodeficiency

syndrome (AIDS), two conditions that can lead

to technology dependence. An increase in either

incidence or duration of technology dependence

would increase the prevalence of the population.

These and related issues are discussed further in

the second half of this chapter.

Estimates

Group I: The Ventilator-Dependent Population

The most soundly-based estimates are those for

ventilator-depedent children. To estimate the size

of this population, OTA used the numbers obtained from each of the States and organizations

that have attempted to identify such children.

From these numbers, OTA obtained a rate per

child under the appropriate age group (e. g., under age 18) in the State. That rate was then applied to the entire U.S. child population to obtain

an estimate of the number of ventilator-dependent

children that would exist if every State’s medical

practice patterns and other relevant characteristics were similar to the reference State. To accommodate differing age boundaries, OTA provides

estimates both for children under age 18 and children under age 22. ’

Table 5 presents the estimated number of ventilator-dependent children in six States and one

multi-State survey documented during the past

3 years. The populations varied considerably

among the States; different States identified or reported children in different age groups, ranging

from children under age 16 (Massachusetts) to

— .——b

In extrapolating estimates to the different age groups, the lower

bound of an estimate assumes that no individuals between the ages

of 18 and 22 require the technology, while the upper bound assumes

that these individuals have this attribute at the same rate as those

under age 18,

Table 5.—Estimates of the Number of Ventilator-Dependent Children

Number Rate per Extrapolation to US. Extrapolation to U.S.

Survey Survey Age ventilator million per survey period per yeara

Percent in

State year period group dependent children Under 18 Under 22 Under 18 Under 22 institutions

Illinois . . 1985 1 year 0-21 74 19,0 1,191 1,500 1,191 1,500 3 6 %

Louisiana . . . . . 1986 1 year 0-21 35 23.8 1,305 1,643 1,305 1,643 1 3 %

Maryland . . . . . . 1985 1 yearc

0-17 26 23.9 1,498 1,886 1,498 1,886 2 3 %

Massachusetts . 1983 1 month 0-15 14 13.5d

843 1,062 1,096 1,381 8 6 %

New Mexic o 1986 <1 month 0-21 4 74 577 726 753 948 7 5 %

North Carolina . . 1986 1 month 0-17 7

f

4.3 268 337 421 530 43 ”/0

AARC survey

(37 States) . . . . 1985 1 month 0-17 445 8.3 520 655 679 845 5 5 %

asee footnote7 in text for explanation of conversion from monthly to annual Prevalence

bllllnois, Louisiana and Maryland have active programs to place ventilator-dependent children at home

cNOt reported, apparently at least a Year

dAdjusted for 82 percent response rate Remalnlng lflstltutions were assumed slmliar to responding Ones

eFigure applles t. ail patients in the survey, Including adults

fFour of the seven ~hlldren had been discharged home on ventilators during tfle past s years lt IS unknown Wflettler all four children cared for at home are still alive

and ventilator-dependent, but they were assumed to be so for the purposes of this table Thus, (n converting from monthly to annual prevalence, 4/7 of the U.S extrapolation was not converted up, stnce this part of the number represents a 3-year prevalence rather than a I.month one

SOURCES. Office of Technology Assessment, 1987 Data from K Klrkhart, Children’s Hospital, New Orleans, LA, personal communication, January 1987; M.J Altken

and L A Aday, Home Care for the Chron/ca//y /// and/or Dsabled Technology Ass/steal ChI/d An Eva/uaf/on Model, unpublished, November 1985, K Valdez,

Human Services Department, Santa Fe, NM, personal communication, July 1986, G. Worley, Duke Un!verslty Medical Center, Durham, NC, personal commu.

nlcatlon, July 1986, Care for Life, “Life Sustaining Technologies and the Elderly Prolonged Mechanical Ventllat!on, ” paper prepared for U S Congress, Office

of Technology Assessment. 1985
21

children under age 22 (Maryland and New Mexico). The operational definition of individuals on

“prolonged” ventilation also varied.

The lower bound of the ventilator-dependent

estimate is based on a survey conducted during

one month in 1985 by the American Association

for Respiratory Care. This survey yielded data

from 37 States, which when extrapolated to the

U.S. population as a whole yielded an estimated

520 ventilator-dependent children under age 18

that month, or roughly 680 children per year.7

This estimate is slightly higher than the lowest

State-based estimate. It is used instead of that

number because of the evidence that at least a few

States have much higher prevalence. The highest estimate is based on data from Maryland

which imply a nationwide population of 1,886

ventilator-dependent children per year under age

22. OTA has arbitrarily increased this number by

“TO de-r~ve an annual prevalence from a monthly one, OTA assumes an average duration of 3 years for ventilator dependence

( Prc)bab]y ]OW but consistent with pre-1 984 data from Louisiana).

The monthly incidence is then multiplied by 11 and added to the

monthly prevalence to yield annual prevalence.

10 percent, to 2,000, to obtain an upper estimate.

This upper bound accounts for both a possible

undercount of the universe of ventilator-dependent

children in Maryland and for any increases in the

population between 1985 and 1987.

Group II: The Intravenous Therapy Population

Parenteral (Intravenous) Nutrition.—To estimate the number of children requiring parenteral

nutrition, OTA extrapolated from the available

State data to the United States as a whole and

compared those numbers with nutritional registry data. Extrapolations and registry figures are

summarized in table 6.

The State data from Illinois, New Mexico, and

Wisconsin are underestimates of the children on

parenteral nutrition in these States, because they

include only home patients who are monitored

by these programs. However, since the universe

of ventilator-dependent children is known in 11-

linoisr and the proportion of those children served

by the Services to Children with Special Health

Care Needs program is also known, an estimate

Table 6 .—Estimates of the Number of Children Requiring Parenteral Nutrition

Source Basis for estimate Comments on manipulation Extrapolated U.S. estimate

Commercial registries, 373 children under age 18 on

1984-85 home parenteral nutrition

documented on one of two

registries supported by home

nutrition companies.

Illinois, 1985 5 children requiring parenteral

nutrition served by State

program (compared to 22

children in program on

vent i Iators).

New Mexico, 1986 2 children on parenteral

nutrition served by State

program (compared to 5

children in program on

ventiIators).

Wisconsin, 1986 4 children on parenteral

nutrition served by State

program (compared to 5

children in program on

ventilators).

Assumed to be a national

minimum estimate.

Total of 74 ventilatordependent children known in

entire State. Assumed

children on parenteral

nutrition are represented in

proportion.

Probably not total State

population of children on

parenteral nutrition, Used

simple extrapolation.

Probably not total State

population of children on

parenteral nutrition, Used

simple extrapolation.

373 children on parenteral

nutrition under age 18 (per

7-month period).

341 children on parenteral

nutrition under age 22 (at time

of program documentation).

232 children on parenteral

nutrition under age 18; 292

under age 22 (at time of

survey).

At least 192 children on

parenteral nutrition under age

18 (at time of documentation).

Fewer children on parenteral

nutrition than on ventilators,

About 13°/0 of patients in

commercial registries under

age 18; apply to this figure.

Hambrecht & Quist Estimated U.S. home care

market estimate, 1983 market of 2,700 patients per

year requiring parenteral

nutrition,

SOURCES Oley Foundation “Nutriltional Support and Hydration for critically and Terminally Ill Elderly, ” paper prepared for Office of Technology Assessment, September

1985, E Lisj Crippled Children’s Services, Chicago, IL, personal communication, April 1986, G Cleverly, Human Services Department, Santa Fe, NM, personal

communication 1986 P Tschumper, Department of Health and Social Services, Madison, Wl, personal communication, April 1986, B B Rucker and K A

Holmstedt, Home Infusion Therapy Industry (San Francisco CA Hambrecht & Quist, Inc , April 1984)

351 children on parenteral

nutrition under age 18 in 1983

(for 12-month period); market

assumed growing.
22

of the universe of children on intravenous nutrition in Illinois can be derived by assuming that

the latter children are represented in the program

at the same rate as the former. If children on

parenteral nutrition are less likely than ventilatordependent children to be served by this program

(e.g., if Medicaid or private insurers cover home

parenteral nutrition costs more comprehensively

than ventilation costs), this method will underestimate the nutrition population. g

Equivalent calculations cannot be performed

with the Wisconsin or New Mexico estimates.

Nonetheless, these data provide additional evidence that there are somewhat fewer children on

prolonged parenteral nutrition than on prolonged

ventilation.

The commercial registries provide the most

comprehensive data on children who received

home parenteral nutrition. The registry data available cover only 7 months, however, and not all

patients served are represented by these data. The

cumulative total from this source roughly agrees

with the estimate from the market analysis report.

Both sources are underestimates of the prolonged

parenteral nutrition population, because they assume that no such children reside in institutions.

Based on these figures and the State extrapolations, OTA’s estimated lower bound for the number of U.S. children receiving prolonged parenteral nutrition is 350 children per year.

An upper bound for this population would accommodate several assumptions: 1) that the population documented in the registry would have

been higher had the registry covered a full year,

2) that all children served at home even during

that 7 months were not documented on the registry, 3) that some additional children on parenteral nutrition reside in institutions, and 4) that

the population has increased somewhat since

1985. An upper bound of 700 (double the minimum estimate) accommodates these hypotheses

to a reasonable degree. However, even this upper bound may soon be an underestimate given

-—— —-—

“Children requiring parenteral nutrition would be more likely to

have adequate home care insurance coverage than ventilator-dependent children, for example, if shift (e. g., 8-hour) nursing were an

uncommon benefit. Lack of nursing is more likely to absolutely prohibit a ventilator-dependent child from going home than a nutritional-dependent child.

current trends in diseases and therapy (discussed

later in this chapter).

Intravenous Antibiotic Therapy and Chemotherapy.—Intravenous drug therapies are generally

administered for weeks or months, rather than

months or years as is the case for other technologies. They are included here because they are

technologies that require substantial skilled nursing and involve issues in nonhospital care that are

very similar to the issues surrounding parenteral

nutrition.

Market analyses and literature reports on the

number of individuals served in various home intravenous drug programs are used as the basis of

estimates of the size of this portion of the Group

11 population, because they are the only sources

available. Table 7 summarizes these sources and

the estimate derived from them. The foundation

of the estimate is a market analysis figure. The

primary data sources and reliability of the market analyses are unreported in detail. Data from

specific programs are used to estimate the proportion of the relevant population that is children.

To the extent that these programs are geared

towards adults rather than children, they underestimate the population. Home program numbers

were adjusted by OTA to account for equivalent

children not served at home.

An estimate of the number of children who receive intravenous drugs and chemotherapy is particularly sensitive to whether one is considering

patients per year or patients actually receiving intravenous therapy at a single point in time. The

number of cases per year is estimated here. Based

on the information presented in the table, between

268 and 8,275 children receive prolonged intravenous drug therapy per year.

Group III: Children Dependent on Other

Nutritional or Respiratory Support

Group 111 children are similar in many ways to

Group I and 11 children. Their nursing needs are

often less intensive and complex than those of children in the first two groups, however, and these

children may be more likely to be served at home

or in other nonhospital settings, particularly children with very-long-term dependence.
2 3

— .

Table 7.—Basis for Estimate of the Population

of Children Requiring Extended Intravenous

Drug Therapy

/intravenous antibiotic therapy:

Total home intravenous antibiotic therapy

market, 1984 (patients/year)a . . . . . . . . . . . 2,000 to 5,000

Proportion children (range given

in Iiterature reports of individual

programs) b . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3°/0 to 46.6°/0

Implied total number of children per year

on home therapy . . . . . . . . . . . . .

Inflation for past exclusion of patients for

home care due to financial, medical, or

psychosocial reasonsc 

. . . . . . . . . . . . . . . .

Total number of children per year

receiving prolonged antibiotic therapy . .

Intravenous chemotherapy:

Total home intravenous chemotherapy

market, 1984 (patients/year)a 

. . . . . . . . . . .

Approximate proportion childrend 

. . . . . . . .

Total number of children per year,

minimum estimate . . . . . . . . . . .

California hospital discharges of children

with leukemia undergoing venous

catheterization (discharges/year)e 

. . .

Extrapolation to U.S. (discharges/year) . .

Leukemia as proportion of all childhood

cancers f

. . . . . . . . . . . . . . . . . . . . . . . . . .

Extrapolated U.S. number, all childhood

cancers . . . . . . . . . . . . . . .

Total number of children per year undergoing chemotherapy . . . . . . . . . . . . . . . .

Total intravenous drug therapy

population, children per year . . . . .

. .

. .

. .

. .

. .

.—

86 to 2,330

166 ”/0

143 to 3,868

2,500

5%

125

160

1,469

33%

4,407

125 to 4,407

268 to 8,275

a

bSee reference 137

see references 50,78,%,130,151

CUp to 40 percent of all patients I n the studies cited here were rejected for home

therapy for these reasons Since 4 of every 10 original pattents were excluded

and 6 of every 10 were Included, the figure for potential home antibiotic therapy

must be re-inflated by 1660/0 to estimate the total maximum number of children

that would be eligible if these barriers did not exist

dA Pennsylvania report on 139 patients receiving outpatient (not home) chemotherapy gives the range of ages of these patients as 16 to 86, with a mean age

of 57 (86) It IS unlikely that more than 5 percent of these pattents were under

age 21

‘See reference 15

‘See reference 98

SOURCE Off Ice of Technology Assessment, 1987

Estimates of the number of children in Group

III are derived primarily from two sources. First,

the size of this population is estimated based on

the prevalence of these children relative to ventilator dependence and other categories of disability in the various States. Second, registries of individuals on home enteral and parenteral nutrition

programs are used as baselines to compare extrapolated estimates for tube feeding. In this case,

however, comparisons are somewhat uncertain

because many tube-fed patients may also be dependent on respiratory support.

From the data presented in table 8, the minimum number of medically stable children requiring Group III respiratory and nutritional support

in the United States could be as low as 1,000. This

would be the case if one assumed that most of the

children on enteral nutritional support also require

respiratory support. The upper bound, however,

is much higher. Maryland data suggest that there

are over 3,500 children on respiratory support

(other than mechanical ventilation) alone; the high

relative prevalence of Group 111 children in North

Carolina, Wisconsin, and New Mexico indicates

that these children may be more than 10 times as

prevalent as ventilator-dependent children in some

States. The Illinois-based extrapolation of about

2,500 Group 111 children is a more moderate middle estimate. Based on these numbers, a range of

1,000 to 6,000 Group III children seems reasonable. The actual number could easily reach the

higher estimate if early hospital discharge of premature infants becomes more common.

Group IV: Children Requiring Other

Life-Sustaining Medical Devices and

Associated Skilled Care

Group IV comprises children who require lifesustaining medical devices but whose nursing care

needs are generally less complex, less prolonged,

or less frequent than the needs of children in

Groups I through III. It includes three subgroups:

1) infants requiring apnea monitors, 2) children

requiring renal dialysis, and 3) children requiring other life-sustaining medical devices in conjunction with substantial nursing care.

The Food and Drug Administration has estimated that approximately 40,000 to 45,000 home

apnea monitors for infants are currently in use

(173). There is considerable controversy regarding the appropriate indications for monitoring,

and many of these children may be monitored for

reasons not considered by all physicians to be

sufficient. A National Institute of Health panel

estimated that approximately 6,800 to 17,000 of

home monitors are prescribed as a result of an

apparentl y life-threatening episode in an infant

(173). OTA has used 6,800 as the lower bound

and 45,000 as the upper bound for an estimate

of the number of medically necessary home apnea monitors in use and makes the simplifying as-
24

Table 8.—Basis for Estimate of the Number of Children Requiring Other Nutritional and Respiratory Support

Information source Data Implications Comments

OASIS registry, Oley

Foundation

147 children ages 0-10 in

registry; 92 require parenteral

nutrition

Ratio of enteral to parenteral

nutrition is 1:1.67

Proportion of children also

using respiratory support

unknown; proportion of tubefed population covered by

registry unknown

Same as Oley Foundation

registry

Commercial registries 368 children in registry

requiring enteral nutrition (i.e.,

tube feeding)

7,500 persons in U.S. received

home tube feeding in 1983

Ratio of enteral to parenteral

nutrition is 1:1 .01

990 tube-fed children

in the U.S. at home

Hambrecht & Quist

market analysis

Based on discharge data and

sample of hospitals.

Extrapolation assumes that

13.2% of tube-fed populaton

are children (from commercial

registry proportion)

Unknown basis for estimate.

Same assumption of 13.2%

children as above

Of net addition to population

of 82 gastrostomies, assumes

each child received only one

gastrostomy and required it

for one year

Ratio of ventilator: Group Ill

children in program 22:36;

apply this to extrapolation of

1,500 ventilator-dependent

children in U.S. to yield total

Group Ill estimate

Assumes Maryland identified

the universe of such children

in the State

Presumably is an

underestimate if not all

similar children are served by

State program. Probably

considerable overlap between

tube feeding and respiratory

support groups. Prevalence of

Group II probably overstated

One-month survey,

hospitalized children only

per year

per year

through

Abbott Laboratories

market analysis

5,500 persons in U.S. received

home tube feeding in 1983

726 tube-fed children

in the U.S. at home

California hospital 777 children tube-fed

discharge data for

children

97 gastrostomy procedures,

15 closures in 1983 gastrostomies each year

State data:

Illinois

2,445 Group Ill children per

36 children on Group Ill year in the U.S.

technologies served by home

care program

Maryland

Wisconsin

87 children in State requiring

respiratory support; 61 require

other than ventilators

3,513 children in the U.S. per

year requiring respiratory

support other than ventilators

2,401 U.S. children requiring

tube feeding at any one point

in time; up to 4,800 requiring

respiratory support. Ratio of

ventilator: Group Ill supports

about 1:10

49 children served in State

program require tube feeding;

49 require respiratory assist

devices (other than

ventilators)

North Carolina

New Mexico

8 hospitalized children in

State with prolonged oxygen

dependence (compared to 3

on ventilators)

Ratio of ventilator: oxygen

support about 3:8

Ratio of ventilator: Group Ill

supports about 1:18

Prevalence of Group Ill

probably overstated due to

1 ventilator-dependent child;

18 other children requiring

respiratory and nutritional

support

small number of ventilatordependent children served

SOURCES: M,J. Aitken and L.A. Adav. Home Care for the Chrorrica//v Ill and/or Disabled Tecfrno/oav Assisted Child: An Evaluation Model, untwblished. November 1985.

J Bates, San Diego Children’s Hospital, San Diego, CA, personal communication, July-{986; Blue Cross/Blue Shield Association, infusion Therapies in Home

Health Care (Chicago, IL: Blue Cross/Blue Shield Association, January 1966); G. Cleverly, Human Services Department, Santa Fe, NM, personal communication,

August 19&; L.L Heaphey, The Oley Foundation, Albany, NY, personal communication, August 1986, E. Lis, Crippled Children’s Servjces, Chicago, IL, personal

communication, April 198B; Oley Foundation, Inc , “Nutritional Supporf and Hydration for Critically and Terminally Ill Elderly” Utilization in the Home,” contract

paper prepared for the Office of Technology Assessment, U S Congress, Washington, DC, September 1985; B B Rucker and K A. Holmstedt, l+orrre Infusion

Therapy Industry (San Francisco, CA Hambrecht & Quist, April 19B4), and P Tschumper, Department of Health and Social Services, Madison, WI personal

communication, April 1986.
—..— .

25

—

Table 9.—Estimated Prevalence of Selected Chronic

Conditions in Children, Age O to 20, 1983

Approximate number

Prevalence per of children in the

Condition 100,000 children, 1980 United States, 1983

Mental retardation ., . . . . . . . . . .:. . . . . . .

—— —

2,500 1,781,300

Asthma (moderate and severe) . . . . . . . . . . . 1,000 712,500

Diabetes mellitus ... . . . . . . . . . . . . . . . . 180 128,300

Congenital heart disease (severe) . . . . . . . . 50 35,600

Spina bifida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 28,500

Sickle cell anemia . . . . . . . . . . . . . . . . . . 28 20,000

Cystic fibrosis . . . . . . . . . . . . . . . . . . . 20 14,300

Hemophilia . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 10,700

Leukemia (acute Iymphocytic leukemia) . . . . . 11 7,800

Chronic renal failure . . . . . . . . . . . . . . . . . . . . . 8 5,700

Muscular dystrophy. . . . . . . . . . . . . . . . . . 6 4,300

Traumatic brain injury . . . . . . . . . . . . . . 5 3,600

SOURCE Prevalence rates from G L Gortmaker and W. Sappenfleld “Chronic Childhood Disorders: Prevalence and Impact,

Pediatric Clinics of North America 31(1) 318, February 1984 Population size estimates calculated by OTA based

on prevalence rates and U S Census population data

sumption that this range represents the number

of monitors in use per year.

The minimum estimate of the number of children requiring renal dialysis is from Medicare EndStage Renal Disease Program data. The Health

Care Financing Administration, which administered Medicare, documented 1,713 patients age O

to 19 receiving dialysis in 1985 (110,166). Adding a minimum of 171 patients to this figure to

account for patients age 20 to 21 (one-tenth, or

2 average age years, of the initial figure) and inflating the total figure by 3.6 percent per year (the

increase documented from 1983 to 1984), yields

a minimum of 2,022 children under age 22 on dialysis during 1987. This number underestimates

the number of children requiring dialysis, since

some are covered by private insurance. A maximum estimate assumes that all children with

chronic renal failure require dialysis. The prevalence of this condition has been estimated at 8 per

100,000 children, or nearly 6,000 children under

age 22 in the United States (see table 9).

There exist no appropriate data at all to estimate the number of children requiring other devices and associated nursing care such as urinary

catheterization and colostomy care. 9 This group

— —-.

911ata from the National Center for Health Statlstlcs, which sur-

\’e}rs a large sample ok ho~pital d]schar~es every year, suggett that

the annual incidence of colost<~rnies and ileostornles {n children may

be a tew thousand per year ( 172). The sur~’ey ]s not large enough

to estimate an accurate number of these proceciures for children,

but it IS certainly less than 10,000 per }rear and probabl> less than

5,000

is very large; indeed, it may be larger than all

other groups combined. If this group is included

in the population of technology-dependent children, the size of that population will increase dramatically. Many children with spina bifida and

other spinal conditions, for example, require urinary catheterization. The total number of children

in this group could easily be 30,000 or more (see

table 9).

If the definition of technology dependence used

in this technical memorandum were not limited

to children using medical devices, this group could

potentially include a substantial proportion of

children with hemophilia, insulin-dependent diabetes, and many other chronic diseases. While

most such children require periodic injections of

medications and a relatively modest amount of

nursing care by family members, a few have more

intensive needs for monitoring and nursing. It is

only the lack of dependence on a major medical

device, not necessarily a difference in nursing and

care needs, that distinguishes this population from

those children included in Group IV.

Table 9 presents prevalence estimates for several serious chronic illnesses in children. Unfortunately, no quantitative information on the level

of technology and nursing needs for this or any

other subpopulation of children with chronic illness exists. Some of these children have already

been included in groups mentioned above; for example, children with cystic fibrosis, muscular dystrophy, traumatic brain injury, or severe asthma
2 6

who meet the definition of technology dependence

likely need respiratory or nutritional assistance

and would be included in Groups I through III.

Children with rheumatoid arthritis and leukemia

would be included under Group 11 if they required

periodic intravenous drug therapy.

Wisconsin data illustrate how large the population of “technology-dependent” children could

be if the definition did not require dependence on

a device that compensates for a vital body function as a necessary criterion (but retained the “substantial nursing needs” criterion). Wisconsin operates a program that, among other criteria, enables

children to receive certain health care benefits if

they would be permanently institutionalized without these benefits and could be served less expensively at home. Of 181 children served by this program in mid-1986, one-third of the total required

a very high level of care but did not require nutritional, respiratory, or other mechanical support.

What sources of information might be tapped

in the future for more precise estimates of the

number of technology-dependent children? One

possibility might be a school-based survey, tarTRENDS IN THE POPULATION

Future changes in the size of the technologydependent population will depend on three separate

1.

2.

3.

factors:

changes in the number of children who have

the diseases and conditions that lead to technology dependence;

technological change, which can either increase the size of the population (if new technologies lead to increased survival dependent

on long-term life-saving equipment), or decrease population size (if new technologies

allow less intensive equipment and service

needs, or prevent the development of disabling conditions); and

changes in medical practice and social attitudes, which are themselves affected by factors such as the emergence of new technologies and the availability of third-party

payment,

geted at the population most likely to include a

significant proportion of technology-dependent

children—those children who have been individually assessed prior to educational placement. A

similar approach is currently being used in an ongoing study to estimate more accurately the number of children with hemophilia, cystic fibrosis,

and spina bifida (73). The approach is fraught

with its own problems, not the least of which is

that very young children and children living in

hospitals or long-term care institutions would not

be captured. Also, technology-dependent children

are rare even among children assessed for possible special education placement .’” A very large

survey would be required to produce a reliable

estimate of size of the population. Still, this source

offers one possibility for estimating future apparent or real changes in the prevalence of technology dependence.

I ~In Fairfax county, Virginia, for instance, 700 children Were

served in home or school-based special education preschool programs (ages 2 to 4 ) in August 1986 (14). Of these 700 children, 6

might have qualified as technology dependent (4 served in classrooms had tracheostom ies or gastrostom ies, and 2 served at home

had special medical problems).

General Trends

and Disability

in Chronic Illness

Trends in chronic illness and disability over

time are somewhat difficult to identify. National

surveys show that the proportion of children with

reported major activity limitation has increased

substantially in recent years, from approximately

1.1 percent in 1967 to the present 2 percent (124).

However, this finding may be caused by any of

a number of influences. Some of the apparent increase may be due to changes in survey methodology and in families’ awareness of illness over

time (123,124), rather than to real changes in disability rates. Another explanation is increased survival of children with certain chronic illnesses,

such as cystic fibrosis and spina bifida. A third

possible explanation is that new technologies and

new systems of care, such as intensive care units

for newborn infants, are resulting in more chil-
2 7

dren who survive birth or trauma but with severe

long-term disabilities. The absolute number of disabled and chronically ill children will increase as

the children survive longer, even if the rates of

onset of various disorders are unchanged .1’

The number of children with inherited chronic

diseases that can lead to technology dependence

is unlikely to change significantly due to changes

in the incidence of these disorders. Gortmaker and

Sappenfeld conducted an extensive review of the

literature in 1980 to investigate the prevalence of

a number of common childhood chronic diseases

(72). They noted that the incidence of most such

diseases has been stable over time. It is now possible that new technologies permitting prenatal

diagnosis of muscular dystrophy and cystic fibrosis may decrease the incidence of these diseases,

if couples choose to terminate pregnancies when

a fetus has been identified as having a genetic

marker associated with the disorder, However,

these prenatal diagnostic technologies are unlikely

to have a major effect on overall incidence of

chronic disease.

A more important factor affecting the number

of children with chronic diseases, and one with

implications for technology dependence, is the significant improvements in survival for children

with many life-threatening diseases. Improvements over the past two decades in survival rates

for children with leukemia, diabetes, certain heart

defects, sickle-cell anemia, and chronic kidney disease have greatly increased the number of such

children who live to adulthood (72). Better and

more aggressive treatments for spina bifida and

muscular dystrophy have also increased the survival of children with these disorders (35). Children with cystic fibrosis who would have died in

early childhood two decades ago are now surviving, and over 50 percent of them live into adulthood (109). Long-term survival of children with

intestinal malformations will greatly increase the

1 I Evidence frc)m pub] ic scho(>] records tends to supwrt the Premise

that the number {~t children with severe dlsabilitles, or at least the

number being served b}’ pub] ]{ sc h(~~~ls, has I ncreawd. The pr[~p(]rt](~n of multihandlcapped children, F(>r Instance, increased from 0, 12

t(> 0.16 percent of sch(~(}l enrollment between 1 Q70-77 and 1982-83

( 187), Ho~vcver, >ch[)(]l data (In ct]sabillty IS generally c(~n~]dered

unre]iab[[’ because 01 the ~reatl} \ar}’ing det Irutlon< dltterent scho(~l

d]str]c t\ L1$L’

total number of children requiring parenteral nutrition.

Changes in head and spinal cord injury rates,

and changes in the survival of severe trauma patients, could affect the size of the population.

More important, however, is the rising incidence

of acquired immunodeficiency syndrome (AIDS).

AIDS is likely to continue to spread in infants as

it spreads in women, since the virus can be communicated from mother to fetus at or before birth

(40). This disease is likely to increase the number

of children receiving prolonged intravenous drug

therapy, nutritional support, and considerable

nursing care. A few hospitals have experienced

dramatic increases in the number of babies with

AIDS and in the number of those babies growing up in the hospital (22).

The most profound changes in the incidence

and prevalence of disorders leading to technology dependence seem to be occurring in neonatal care. It has been widely asserted that the increased survival of very-low-birthweight (less

than 1,500 g) infants, due to improved, aggressive neonatal intensive care, has resulted in a

sharp surge in the number of ventilator- and other

technology-dependent children. If this is true, continued advances towards survival of very-lowbirthweight infants can be expected to increase the

number of such children. If, on the other hand,

technologies are successfully developed that can

prevent prematurity y or moderate the development

of chronic lung disease in newborn infants, the

number of infants on long-term ventilation and

nutritional support may be considerably reduced.

Most medical evidence thus far supports the

contention that the increased survival of very-lowbirthweight infants has not increased overall rates

of disability, but it may have increased the actual number of severely disabled children. A study

of changes in infant morbidity and neonatal mortality between 1976 and 1978-79 found that neonatal mortality decreased by 18 percent during

this time, while infant morbidity also decreased

by 16 percent (144). Overall, therefore, newborn

survival did not lead to an increase in long-term

disability. However, the detected decrease in disability was among the minor disability categories;

“the proportion of children with severe or mod-
28

crate congenital anomalies or developmental delay did not change” (144). Other evidence supports three conclusions:

1.

2.

3.

within groups of infants of a given birthweight, handicap rates remain stable or decrease over time;

handicap rates are greatest in the lowest

birthweight groups; and

infants in the lowest birthweight groups are

surviving in increasing numbers (162).

If the incidence of severe disorders is unchanged

or even declines somewhat, but the total number

of neonatal survivors increases, then the number

of infants with severe disabilities increases overall. Box B describes a common source of respiratory disability in infants and the differing rates

of incidence of this disorder in infants of different birthweights.

Future Changes Due to

New Maintenance and

Treatment Technologies

The most promising technologies to decrease

the incidence of long-term technology-dependence

are those aimed at preventing the need for longterm respiratory support in infants. Current efforts to combat chronic lung disease in newborns

are described in box C. One or more of these technologies may eventually greatly reduce the number of infants with long-term technology dependence. However, significant changes are not likely

to be apparent for a few years yet.

New technologies may have other direct effects

on trends in the technology-dependent population, aside from their effects in reducing the underlying disorders that lead to technology dependence. For example, advances in implantable

infusion pumps for long-term chemotherapy and

implantable phrenic nerve pacers to stimulate

breathing could reduce the constant, complex

nursing needs associated with many technologydependent children.

Enhanced access to transplant technology may

either increase or decrease the number of children

requiring intensive long-term nursing services. As

the number of infants and children receiving bone,

liver, heart, and other organ transplants grows

due to increased transplant experience and enhanced insurance coverage, children recuperating

from transplants may become a group for whom

intensive home medical care is both socially and

financially desirable. Access to intensive medical

services in the home setting might allow these children to leave the hospital earlier than would

otherwise be possible, and they may have ongoing nursing and technology needs. On the other

hand, increased transplant success could obviate

the need for very-long-term dependence on technologies such as insulin (through pancreas transplants), parenteral nutrition (through bowel transplants), and dialysis (through kidney transplants).

Changes in Medical Practice

The wide range of prevalence estimates for technology dependence suggests that medical practice

patterns may vary considerably among regions,

States, and medical centers. Some of these differences may be in simple treatment protocols. For

example, there is some evidence that differences

in medical practice can inadvertently affect the

incidence of chronic lung disease in newborns. In

an examination of treatments and rates of bronchopulmonary dysplasia in eight hospitals with

regional neonatal intensive care units, Avery and

colleagues found that the rates of this newborn

chronic lung disorder varied considerably among

centers, even after adjusting for differences in the

newborn populations (11). They concluded that

the differences in routine treatment practices

among these centers were probably responsible

for the differences in the rates of this disorder,

implying that changes in the routine practices of

hospitals with higher rates could reduce the incidence of dependence on long-term respiratory

support.

Other researchers have documented the variation in routine treatment patterns among physicians treating people with fatal chronic diseases.

A 1981 study demonstrated that positive-pressure

ventilation may extend the lives of children and

adults with muscular dystrophy by an average of

7 years (12). Only one-third of the patients in the

study had tracheotomies. By comparison, in a

1985 survey of Muscular Dystrophy Association
—

29

Box B.-–Bronchopdrnmary Dysplasia

One of the most common sequelae of neomtal intensive care, and one with particular implications

for technology dependence, is bronchopuhnonary dysplasia (BPD). First remgnized in the early 1960s (154),

this condition sometimes occurs in infants requiring mechanical ventilation soon afterbirth. An infant with

BPD is unable to be weaned from ventilation during the first month after birth due to certain changes in

the lung that can often be detected by X-ray (71).

Pneumonia, meconium aspiration, patent ductus arteriosus, and apnea of prematurity are among the

many conditions that can lead to the initial need for assisted ventilation (and, thus, sometimes BPD) in

newborns (71). The most common reason for initial ventilation, however, is respiratory distress syndrome.

This syndrome, characterized in its initial stages by an increasing need for oxygen, is often experienced

by very premature infants because art essential lining layer in the lung (pulmonary surfactant) has not yet

developed (99).

Table 10 presents estimates of the annual incidence of BPD by birthweight category. There are no

nationally representative data on the incidence of BPD. A multi-center study of 700 to 1,500 g babies in

1983 and 1984 found that one-third of the survivors had chronic lung disease (11). OTA used this 33 percent estimate for very-low-birthweight infants, although other researchers reported rates of BPD incidence

among their institutional populations varying from 25 to 75 percent of respiratory distress syndrome survivors under 800 g at birth, and from 13 to 62 percent of survivors weighing less than 1,000 g at birth

(17,25,45,74,85,138).

Researchers have not reported in the literature on BPD incidence among the larger Iow-birthweight

infants, but the authors of a recent review article about BPD estimated its incidence at 10 to 20 percent

among infants with RDS who receive mechanical ventilation and survive (71). OTA adopted the low end

of this estimate, 10 percent, in calculating the BPD incidence among babies weighing 1,501 to 2,500 g.

Only a relatively small proportion of the babies developing BPD are obvious candidates for technologydependent home care. In their eight-center study, Avery and colleagues found that about 4 percent of infants weighing less than l,500 g at birth still needed supplemental oxygen at 3 months of age (although

the range among institutions was considerable) (11). BPD can take mild, moderate, or severe forms, and

infants are weaned from the ventilators and/or oxygen support after variable periods of time.

In the future, the incidence of BPD will likely decline, although extremely Iow-birthweight babies susceptible to BPD—including babies weighing less than 500 g at birth-are increasingly surviving (162). Refinements of existing techniques and newly introduced neonatal technologies might substantially reduce BPD

in premature infants within a few years.

Table 10.-Estimated incidence of Bronchopuimonary Dyspiasia, 1984

Birthweight U.S. births U.S. neonatal Neonatal Percent survivors Total infants with

(grams) (1964) mortality (1960) survivors with BPD BPD per year

500-1,500g 39,045 43.1 % 22,217 33% 7,332

l,501-2,500g 202,606 2.4% 197,743 1 %

a

1,977

Total . . . . . . . . . . 9,309

%oldberg and Bancalari (71) estimate that approximately 10 percent of Inftmt$ with ra$pkatoty dktreas syndrome (RDS) get BPD. If approximately 10 percent

of all surviving infants get RDS (174), then approximataty 1 parcent of etl suwlvora oat 8PD.

SOIJRCE: Office of Technology Assessment, 1S87. Numbers of U.S. btrtha from U.S. DepertrneM of He8ith and Human Services, Public Health Service, National

Center for Heafth Statistics, “Advance Report of Finai Netaflty Statlstica, 1SS4, Table 24,” W@ St8t/st/cs Repofl 35 (4, SUPP.):JUIY 18, 1988. Neonatal

mortality rates from U.S. Department of Health and Human Sewices, Publk Heetth Service, Oantere for Disease Control, “National Infant Mortality

Surveillance (NIMS),” unpublished tablea, May 1988. BPO Incidence rates approximated from M,E. Avary, Boston Children’s Hospitai, Boston, MA,

personal communication, July 23, 1988; and ranges presented in J.D. Horbar, “A Multicenter Suwey of 28 Day Survival end Suppiementat Oxygen

Administration in infants 701-1500 Grams,” paper presented at the Rosa Laboratories Special Conference on Topics on Neonataiity, Washington,

DC, Dec. 7-9, 1s88.
30

Box C.–Chang@g Tedmolo& in the Neonatal Intensive Care Unit

Preven~ the coqdidbts of mechanical ventilation in newborns has been a focus of research for

some time. Changes in the way artificial ventilation is dministered to newborns have been an important

pm of that rew~ (~,~~). However, medkd _ and the use of t@mokwY a vw *h-OIW

perinatal centers. Avery and her colleagues surveyed eight centers in 1983 and 1%!4 for their experience

with chronic lung disease in infants weighing 700 to 1,S00 g, The msearc hers found that some institutions

did significantly better than others, and that routine mmagemmt techniques used for the very small infants might explain the differences (11). Refinements in existing techniques may thus hold promise for reducing the development of brcmchopuhmmary dysplasia (BPD) in ventilated infants in the future. Some

new technologies, such as the high frequency ventilator (which delivers multiple smaII breaths instead of

slower, larger ones) and extracorporeal membrane oxygenation (essentially a heart-lung machine for newborns with severe asphyxia), may also have some effect.

Other technologies under investigation focus on preventing respiratory distress syndrome (RDS), the

Precurser of BPI) in most infants. The administration of steroids to mothers in preterm labor in order to

accelerate infant lung maturation has been used and studied for 16 years (9), but concerns about the longterrn effects of the therapy have prevented its routine use (43). Recent large-scale studies are somewhat

contradictory buts- that the technology can rwha th~ incidence and severity of RDS, and may improve survhd in some very prenwture infants, with no evidence of negative Iong-tem e-s (43,174).

Even if antenatal steroid therapy does become generally accepted as useful, however, it will have several

limitations. It clearly does not work for all babies. And in addition, because the therapy must be initiated

at least M hours before delivery in order to be effective, many women in preterm labor cannot be candidates for its use.

Treating surfactant defkiency by administering artifidal or natural (animal lung) surfactant to the lungs

of very premature babies at or soon after birth has the potential to greatly reduce the incidence of severe

RDS. The bask chemistry of lung surfactant has beeh known for a lo% time, but research is ongoing regarding the best mixture, the optimum dose, and the timing and frequency of administration. At least five

recent clinical trials testing natural surkctants document that surfactant-treated infants have less severe

RDS (and, pl’W3Wi ably, less Mkelihood of developirqjllP13) than control infants (66,89,100). Studies with

artificial& produced surf~ant, on *he other hand, have shown essentially no benefit to respiratory function (76,183). ‘

Lqe+cale, multi-center trials are being uncktaken h Ihwope, Jq=, and the United states to COntinue to test surfactant experimentally. It is possibl~ that surfactant therapy could become generally available for preterm babies within 2 to 5 years (10,143).

clinics around the country, 43 percent of ventilated patients were found to have permanent

tracheotomies (35). This difference may represent an increasing willingness over time to treat

end-stage muscular dystrophy patients aggressively,

The 1985 clinic survey also revealed that 24 percent of the responding physicians did not provide

respiratory support systems to individuals with

degenerative neuromuscular disorders, while 33

percent prescribed such supports routinely and the

remaining 42 percent provided them only under

specialized circumstances (35). The researchers

found no standard patient-selection processes or

established protocols for respirator use. If all physicians applied the same criteria for ventilator

support as those physicians who prescribe this

treatment routinely, the number of people with

end-stage muscular dystrophy using mechanical

ventilation could triple.

Other differences in medical practice and social

attitudes may also be reflected in rates of technology dependence. Some centers now treat newborns weighing less than 500 g (1.1 lbs) aggressively, although these babies are highly unlikely

to survive (74). The promulgation of “Baby Doe”

regulations and accompanying social attitudes has

probably had at least some marginal influence on

physicians’ decisions to treat severely premature

or disabled infants aggressively in the United

States (14.5). It is likely that the trend toward ag-
31

gressive treatment of very small newborn babies

will continue, at least in the short term.

Whatever the reasons, differences among medical centers and geographic areas do exist. As has

been noted by one clinician, “There are some

centers that just don’t seem to have children that

require home ventilation” (91 ). Whether this difference is due to more aggressive attempts to wean

ventilated children in those centers, or other factors that result in fewer infants who both survive

and require long-term ventilation, is unclear.

Finally, improved access to funding for nonhospital long-term care, particularly home care,

could result in more technology-dependent children and their more visible participation in sociCONCLUSIONS

Defining the population of technology-dependent children is a necessary first step for both

enumerating the population and providing health

care benefits directed at this population. That arriving at such a definition is not easy is clear from

the fact that, after 5 years of public debate about

the issue, no satisfactory definition exists. From

a clinical perspective, the crucial distinguishing

characteristic of these children is that they require

special equipment and an intense level of medical services that are beyond the normal capabilities of untrained families. From an insurance program perspective, the crucial characteristic of

these children is that it may be possible to care

for them more appropriately and less expensively

at home if the funding and services are made available. Although the two populations described by

each of these characteristics overlap considerably,

in that both require some form of hospital care

if services in other settings are unavailable or unaffordable, they are not identical.

OTA’s estimates of the size of the medically stable, technology-dependent child population at any

one point in time, based on available sources of

data for four alternative groups, are as follows:

1. Approximately 680 to 2,000 children per

year in the United States are substantially or

completely dependent on mechanical ventilation.

ety. It is possible that providing opportunities for

children to be in home or home-like settings, combined with enhanced funding for long-term care,

eliminates some of the social, financial, and medical disincentives to initiate and maintain longterm technology dependence. The three States

with the highest identified prevalence of ventilator-dependent children all have aggressive home

care programs to serve such children; North Carolina, a State with few ventilator-dependent children, does not. More families may consider it

worthwhile to maintain the life of a terminally

ill child as long as possible if they can afford to

take the child home, and more physicians may

consider it appropriate medical care to prescribe

long-term ventilation for children.

2.

3.

4.

Approximately 600 to 9,000 children require

intravenous therapy each year, including 350

to 700 children dependent on intravenous

nutrition.

Approximately 1,000 to 6,000 children are

dependent on some other kind of device-based

respiratory or nutritional support, such as

suctioning, tracheotomy care, oxygen, or

tube feeding. The cumulative number of children in the above three groups is between

approximately 2,300 and 17,000 technologydependent children per year.

Expanding the definition of technology-dependent children to include children requiring apnea monitors and kidney dialysis would

increase the size of the technology-dependent

child population to between approximately

11,000 and 68,000 children per year. Adding children requiring urinary catheterization

and colostomy/ileostomy care to this population could raise the upper bound of this

estimate to as high as 100,000 children.

There is no evidence of overall increase in the

incidence of most severe chronic disabling conditions. However, the number of technology-dependent children appears to have been increasing over

the past ten years, due primarily to increased survival of very-low-birthweight infants, who have

a high incidence of chronic lung disease, and in-
32

creased survival of children with certain inherited

and congenital chronic disorders, particularly cystic fibrosis, muscular dystrophy, and congenital

anomalies. AIDS is also increasing the technologydependent population. This trend is likely to continue for several years. In the long run, it is not

clear whether the trend will continue, level off,

or represent a “bump, “ analogous to the polio and

rubella epidemics that produced many severely

disabled children earlier this century.

Factors that may increase the size of the population include:

●

●

●

●

●

●

wider acceptance of medical practices such

as aggressive treatment of individuals with

end-stage disease, severe trauma, and severe

newborn disabilities; and less aggressive attempts to wean ventilated children;

consequent increased survival of children

with conditions that would be fatal if not aggressively treated, and are highly likely to

result in technology dependence if they are

treated;

new severe chronic diseases, such as AIDS;

lessened acceptance of abortion;

sufficient financing to encourage aggressive

medical practices;

technologies that improve survival outcomes

for burn patients or transplant patients, but

at the cost of extended recuperative care; and

● increases in the apparent size of the existing

population due to new opportunities to obtain funding for home care.

Factors that may decrease the size of the population

●

●

●

●

It

include:

improved prenatal

chronic disease;

technologies that

dent prevention),

diagnostic tests for severe,

can prevent trauma (accipremature births (prenatal care), and specific neonatal disorders;

technologies that can lessen the intensity or

duration of technology dependence, such as

oral insulin or transplants to correct diabetes;

and

increased acceptance of palliative care for fatal disorders.

is likely that the expansion of current medical practices tending to increase the size of the

technology-dependent population will continue in

the short run, perhaps for a decade or longer.

Thus, the population size estimates given in this

chapter will probably be lower than the actual

population size within a short time. In the longer

term, opposing factors—most significantly, technologies to prevent premature birth or its complications—may eventually lead to stabilization or

even a decrease in the technology-dependent population.
.- —

,/

Chapter

Comparing

Effectiveness and costs

of Home v. Hospital Care
Chapter 3

Comparing Effectiveness and Costs

of Home v. Hospital Care

INTRODUCTION

The purpose of this chapter is, first, to sub- chapter presents evidence regarding the costs of

marize existing evidence on the effectiveness of home v. hospital inpatient care. More discussion

home care for technology-dependent children and of alternative settings of care can be found in apthe components that may affect it. Second, the pendix D.

EFFECTIVENESS

Evidence of the Effectiveness of

Home Care

There is a broad assumption in the home care

literature that, compared to institutional care,

home care is both more desirable and more effective in promoting the mental, emotional, and

physical health of children. This assumption seems

a reasonable one for many, perhaps most, technology-dependent children. There is little reason

to believe that when a family wants its child at

home, and adequate medical services and support

are available, the home is not an effective setting

of care.

Unfortunately, concrete evidence on how much

more effective home care is, or the circumstances

under which it is as effective, is lacking. There

is also virtually no evidence in the literature on

the relative effects, either medical or psychological, of care across various alternative settings for

the technology-dependent population, including

alternatives such as board and care homes.

A few studies have attempted to document the

beneficial effects generally ascribed to pediatric

home health care, or to special services associated

with this care. The largest and most rigorously

designed of these studies was performed as part

of an evaluation of the Pediatric Home Care (PHC)

unit at the Albert Einstein College of MedicineBronx Municipal Hospital in Bronx, New York

(150). In that evaluation, chronically ill children

were randomly assigned either to the PHC unit

or to standard outpatient clinic-based care (with

no special services). Standard inpatient care was

not compared. PHC services included delivery of

health services, patient and family training, service coordination, and patient advocacy. Services

were delivered by an interdisciplinary team whose

core was the pediatrician, pediatric nurse practitioner, and family, but which also included physician specialists, a psychiatrist, a social worker,

and a physical therapist.

Children enrolled in the PHC program had better psychological adjustment, families reported

significantly higher satisfaction with care, and

mothers showed reduced psychiatric symptoms

compared to the control group (150). There was

no difference between the experimental and control groups in the impact on the child’s functional

status, or in the impact of the child’s illness on

the family. The researchers in this study hypothesized that the social and psychological support

offered by the program balanced the family’s burden of caring for the child at home, resulting in

no change in net impact on family activities, structure, or burden.

An evaluation of the impact of the home care

coordination and support programs for ventilatordependent children in three States (Louisiana, lllinois, and Maryland) is currently being conducted

by researchers at the University of Chicago (3).

Results from this evaluation are expected in late

1987.

3 5
36

Numerous parents and clinicians have asserted

for some time that home care is superior to hospital care for medically stable, technologydependent children. Children cared for in the

home are believed to make faster medical and developmental progress, and have better psychosocial development, than children in the hospital

(69,95,141,156). There are no published objective

investigations of this hypothesis. It is a difficult

one to test, since one cannot compare a child’s

progress at home with his or her progress in the

hospital during the same time period.

The rate of chronic rehospitalization of children

placed in family homes can be considered a measure of effectiveness of home care. It is to be expected that technology-dependent children will

have occasional brief hospitalizations for acute

episodes of infections and illnesses and for evaluation, but the ability of a program to reduce or

eliminate avoidable rehospitalizations and emergency room visits could be a useful measure of

its effectiveness.

Factors Influencing the Quality and

Effectiveness of Home Care

Two sets of factors influence the effectiveness

of home care: those internal to the home environment, including parental abilities and attitudes;

and those external to the home, such as the availability of trained professional nurses and the quality of equipment available.

Internal Factors

A crucial condition for effective home care is

that the family wants the child at home, and that

it is willing and able to help care for the child (1)

or to accept and support a professional, full-time

caregiver into the household. Parents have expressed strong desires to have their child at home,

and they commonly take over much of the child’s

nursing needs (60,156). They may become so

proficient in providing the necessary nursing that

they train some of the the professionals who assist in their child’s care (156).

However, there are families for whom full-time

long-term home care may not be the best alternative for either the child or the family. The families of chronically ill children can sometimes encounter severe and ongoing psychological and

emotional stress (54,173,180). Some families may

be simply unable or unwilling, for physical, psychological, or financial reasons, to cope with intensive home care for the child. Other families

might want to have the child at home, but might

need a long adjustment period, or might need to

feel confident that respite or long-term care outside the home is available if the stress becomes

too great. In a few cases, a parent might be willing to care for a child but be unable to do so

safely. These factors lead to less effective home

care and the need for alternative settings of care.

External Factors

The availability of services in various settings

is also crucial to the quality and effectiveness of

home care relative to institutional care. Home care

may not be more effective than hospital or other

institutional care if the appropriate range of services are not provided. If a child can receive therapy or other vital services in the hospital but not

at home due to lack of insurance coverage, home

care is likely to be relatively ineffective. Conversely, if a child receives more intense, individualized therapy and education at home, home care

is likely to be more effective than hospital care.

Professional nursing skills are a particularly important factor in the effectiveness of care, but

skilled nurses are not always available for home

care. In an acute-care hospital, nursing services

for a technology-dependent child are most likely

to be provided by a registered nurse (RN), and

often by an RN with extensive training in pediatrics or intensive care. In home settings, on the

other hand, professional nursing is much more

variable. Some home care agencies specialize in

“high-technology” home care or pediatric home

care. Others, however, may not have nurses (whatever their certification level) trained to provide

the specialized care needed by technology-dependent children. Most licensed practical nurses (LPNs)

and many RNs, for example, are not trained to

operate ventilators and provide respiratory care.

Third-party payers may place restrictions on

the services that a nurse with a particular set of

credentials can provide, although there is consid-
37

erable controversy over the relationship between

credentials and quality of care. In New Mexico’s

Medicaid program, for example, RNs may provide any respiratory- or nutritional-support home

care; LPNs can provide most such care, but not

ventilator-related care or parenteral nutrition; and

paraprofessional attendants may not provide any

such complex care (34). In Louisiana, on the other

hand, families needing assistance at home rely

heavily on trained paraprofessionals even for

ventilator-related care (97). These different conventions are associated with differences in service availability, but they also reflect different implicit evaluations of the relationship between

credentials and quality. The differences in the

quality of home care provided by family members, paraprofessionals, LPNs, RNs, and specialty

nurses has not been addressed explicitly in the

literature. Undoubtedly, the level of skill-specific

training is an important variable, regardless of the

general certification of the provider.

Certain quality issues arise at home that rarely

arise in the hospital because of established routines or protocols in the latter, but not the former,

setting. For example, home chemotherapy introduces substantial concerns regarding the use and

disposal of very toxic chemicals (87), Widespread

use of and dependence on home ventilators introCOST

Cost considerations

role in the evolution of

have played a substantial

home care for technologydependent children. When the Federal Government first waived certain Medicaid rules to permit hospital-bound, technology-dependent children to receive Medicaid payment for equivalent

home services, it did so on two grounds: that the

home was equal or preferable to the hospital as

a setting for a child’s care and development, and

that home care would be a fraction of the cost

of hospital care to Medicaid. These criteria, and

particularly the second, have endured. From 1981,

when the first exception was granted, to 1986,

Medicaid (and other third-party payers) has continued to require a showing of program cost savduces concerns regarding the quality of maintenance of equipment and issues of how the widely

dispersed users are informed about potential mechanical defects (118).

Concerns about monitoring the quality of home

health care have been raised before (160). These

concerns are particularly relevant in the context

of widespread emphasis on early hospital discharge. In a number of States, Medicaid pays hospitals a preset rate per discharge regardless of the

actual length of hospital stay of a child (101).

Once home care for technology-dependent children is widely accepted in an area, and funding

becomes available, hospitals may be very reluctant to keep these children, whose length of stay

is generally quite long. If the third-party payer’s

interests also lie in encouraging home care, parents could be forced to take a child home, possibly with insufficient services, before they are adequately prepared. Or, parents could be forced into

home care when they are unable and unwilling

to provide the service at all. Anecdotal reports

suggest that, in some cases where home care is

a funded option, hospitals or payers are indeed

putting pressure on families to take these children

when the families are not ready to do so (104,120).

These circumstances could have serious negative

implications for the quality of home care.

ings before paying for home care for many technology-dependent children. Of course, program

cost savings and social cost savings are not necessarily the same.

This section first describes the components of

home care costs—i.e., the factors that influence

the costs of home care for different technologydependent children. It then presents the issues and

problems involved in comparing the costs of care

across alternative settings. Finally, it presents existing evidence from the literature and from home

care programs regarding comparative average total costs of technology-dependent children across

settings.
38

Components of Home Care Costs

Startup Costs

Startup costs are one-time costs that are usually incurred before the child is placed in the

home. They include the costs of home improvements, major equipment, and caregiver training.

Home improvements are often a necessary prerequisite to home care, particularly for ventilatordependent children. Home modification needs can

include:

●

●

●

●

wiring and other electrical work;

construction (storage and preparation space,

wheelchair ramps, equipment accommodation);

special needs (e.g., a generator for emergency

power in rural areas) (178); a nd

general upgrading that requires the family to

move (e.g., moving from an unsanitary apartment or one inaccessible to a wheelchair to

other housing where appropriate modifications can be made).

The costs of necessary home modifications can

vary substantially; in the first 3 years of Louisiana’s home care program for ventilator-dependent children, home modification charges ranged

from $0 to $13,500 (97).

Equipment can be a major component of startup costs, particularly for children on ventilators

or oxygen. (If the child is not expected to be technology-dependent at home for long, or if an insurer will only pay for rented equipment, much

of the child’s equipment will be rented rather than

purchased. ) Special equipment for a ventilatordependent child might include two ventilators (a

primary and a backup ventilator), an emergency

battery, an oxygen tank, a suction machine, a

nebulizer (to deliver aerosol medication), a manual resuscitator, and an infusion pump (to control the administration of nutrients). The child

may also need other supportive equipment such

as a wheelchair, a commode, a special bed, and

various other adaptive furniture and devices. A

child dependent on intravenous feeding, by com-

‘Extra space may be needed, for instance, for preparing nutrient

solutions or for cleaning and sterilizing equipment

parison, might have startup equipment costs that

are a negligible proportion of total home costs.

Training in the necessary medical procedures,

which may take days or weeks, is a vital first step

for families. Even if they will have professional

nursing help, they must learn to perform the necessary procedures as a guard against emergencies

(e.g., resuscitation) or in situations where the

regular nurse might be incapacitated or absent.

Table 11 shows a list of skills the family of a child

on respiratory support or infusion therapy (intravenous drugs or parenteral or enteral nutrition)

might need to learn.

Training time and costs differ by training institution, by level of care the child requires, and

by the family members’ ability to assimilate information and perform the necessary tasks. Institutions training families in respiratory care may

do this in several days of intensive training (13).

Or, they may gradually encourage family members to provide care while the child is in the hospital, perhaps requiring that the family provide

total care for 48 hours before discharge (57,65).

Training in intravenous techniques can also be

time-consuming; one program reported a 3-week

training period for home patients (181).

Ongoing Supplies and Services

Supplies are often purchased monthly through

the hospital or home care agency. Table 12 details the supplies needed for intravenous therapy

and tube feeding. The highest ongoing supply

costs are probably incurred by children requiring total parenteral nutrition, because their nutrient formulas—consisting of “pre-digested” fat,

carbohydrate, and protein solutions—are individualized, require special handling and storing, and

have expensive components. In a 1982 survey,

average charges for nutrition supplies and solutions were reported as $3,059 per month for hospital-supplied solutions and $4,615 per month for

nonhospital-supplied (possibly pre-mixed) solutions (122). The range of charges, however, was

very wide; the highest charges were nearly double the average in both categories.

Ventilator-dependent children also have high

ongoing supply costs. As is shown by the child
39

Table 11 .—Checklist of Respiratory and

Respiratory skills:

1. The disease process:

● lung disease and Its treatment

● short- and long-term prognosis and goals

2. Pulmonary hygiene measures:

Infusion Skills for Home Care Patients and Families

6. Educational and diversional activities:

● encouraging chiId self-care

● sedentary activities

7. Access to services:

● nurses

● avoidance of infection (hand-washing and sterile ● physicians

technique) . respiratory equipment suppliers

● adequate systemic hydration ● therapists

● chest physiotherapy procedure ● emergency power

● steriIe suctioning procedures ● other services

● tracheostomy care procedure Infusion skillsb

● tracheostomy tube cuff care procedure 1. Understanding of components of home lnfusion

● signs of airway infection and cor pulmonae that therapy:

should be reported to the doctor 2. Sterile procedures:

3. Use and maintenance of the equipment: ● caring for medications and solutions

● daiIy maintenance of the ventiIator ● preparing medications and solutions for infusion

● oxygen use, abuse, and hazards 3. Infusion techniques:

● cleaning and changing of ventiIator circuits ● measuring components, using syringes, bottles,

● resuscitation bag use and cleaning and bags

● suction machine use and cleaning ● setting up the infusion

4. Nutrition counseling:a

● starting the i n fusion

● maintenance of ideal body weight ● discontinuing the infusion

● special dietary restrictions as needed ● operating the infusion pump

5. Physical therapy: 4, Recognizing complications:

● ambuIation, where possible ● of the catheter

● general strengthening exercises ● of the infusion

● relaxation exercises ● of the medications

aThls table IS based on one for adults Most In

f

ants on ventilators requl re enteral lube feeding for at least the beg[nnlng weeks or months Thus the ‘aml I Ies of these

children must also be tral ned In I nfus!on skills relatlng to tube feeding and care

bNot all SKI115 are applicable to all k!nds of lnfuslon therapy

SOURCES List of respiratory skills adapted from J Feldman and P G Tuteur Mechanical Ventilation From Hospital Intensive Care to Home Heart & Lung 11 (2)162 165

March April 1982 Infusion skiIls adapted from Blue Cross and Blue Shteid Association In fusion Therapies in Home Health Care (Chicago, I L BC/BSA, January 1986)

Table 12.—Supplies Needed for Four Home Infusion Therapies

Therapies for” which supplies are needed

Parenteral Enteral Intravenous

Supplies nutrition nut ri t ion antibiotics

Intravenous catheter . ... ... . ... . x

- x

Intravenous tubing . ... x x

Medications . . . . . . . . . ... . x x

Nutrient solutions (e.g., lipids) ... . . . . . . ... . . . . . x

Intravenous solutions (dextrose or saline) ., . ... x x

Infusion pumps . . . . . . . . . ... ... . x x x

Heparin lock and dilute solution ... . . ... ... ... ... x x

Needles and syringes . . . . . . ... . . . . . . . ... . . . . . . . . x x

Dressings (gauze and tape or transparent . . . . . . . . . . . . x x x

Nasogastric, gastrostomy, jejunostomy tubes ... ... ... x

Enteral bag and tubing ., . . . . ... ... . . x

Cheroot herapy

x

x

x

x

x

x

x

x

Enteral feeding preparations . ... . . . . . ... . . . . . . . x

SOURCE “Blue Cross and Blue Shield Association Infusion Therapies in Home Health Care (Chicago IL: BC/BSA, January 1986)
40

whose reimbursable expenses are detailed in table 13, monthly costs for major supplies may total over $1,600 (116). Medications, special nutrient solutions, and equipment maintenance can

add substantially to this cost.2

Nursing needs are highly varied and, for many

children, are the most expensive component of

home costs. Outlays for nursing care are inversely

related to the amount of unpaid care that the family is willing and able to provide. As has been

noted (148), most of the reduction in charges reported for ventilator-dependent patients at home

results from shifting the burden of nursing costs

from the payer to the family. Similarly, a significant part of the reduction in home charges observed by numerous intravenous therapy programs (96,130,132,151) is due to the fact that the

patients in these programs receive little or no

professional nursing at home.

‘Inadequate or poorly coordinated equipment maintenance can

present a major problem to a home care program and a significant

expense to families or third-party payers (104). Programs are still

accumulating experience in working with manufacturers and suppliers to minimize problems.

Table 13.—Sample Home Respiratory Care Costs That

Were Reimbursed by a Third-Party Payer, 1985

one-time Durchase of eauipment Unit cost

Suction equipment. . . . . . . . . . . . . . . . . . . . . . . $ 714.29

Manual resuscitator. . . . . . . . . . . . . . . . . . . . . . 157.31

Emergency 12V battery . . . . . . . . . . . . . . . . . . 70.00

Heating nebulizer. . . . . . . . . . . . . . . . . . . . . . . . 324.00

Total one-time cost . . . . . . . . . . . . . . . . . . . . $ 1,265.60

Monthly services and supplies Monthly cost

Home assistance:

Nursing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,320.00

Rentals:

Backup ventilator . . . . . . . . . . . . . . . . . . . . . . 200.00

Ventilator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450,00

Suction device . . . . . . . . . . . . . . . . . . . . . . . . 50.00

Apnea monitor . . . . . . . . . . . . . . . . . . . . . . . . 200.00

Oxygen system . . . . . . . . . . . . . . . . . . . . . . . . 130.00

Supplies:

Ventilator tubing . . . . . . . . . . . . . . . . . . . . . . 100.00

Oxygen masks . . . . . . . . . . . . . . . . . . . . . . . . 55.20

Liquid oxygen . . . . . . . . . . . . . . . . . . . . . . . . . 816.00

Nebulizer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123.60

Sterile water . . . . . . . . . . . . . . . . . . . . . . . . . . 79.50

Tracheotomy tubes . . . . . . . . . . . . . . . . . . . 143.70

Suction catheter w/ gloves . . . . . . . . . . . . . . 315.00

Cardiac leads . . . . . . . . . . . . . . . . . . . . . . . . . 10.00

Total monthly cost. . . . . . . . . . . . . . . . . . . $9,993.00

SOURCE’ M Mikol, SKIP of New York, Inc , New York, NY, personal communica.

tion, June 1986

Actual nursing care expenditures for a technology-dependent child depend on three factors: the

complexity of care required, the amount of paid

nursing care required (e. g., 3 hours per day v. 24

hours per day), and the certification level of the

nurse. In general, 24-hour ventilator-dependent

children with tracheotomies need the most constant and complex nursing care. Other children,

such as those receiving intravenous nutrition or

therapies, may need complex or intensive care for

several specified hours per day; or they may need

less complex care but need it constantly in order

to avoid a life-threatening event (e.g., children requiring trachea suctioning).

Professional home nursing costs can be substantial and vary considerably with the certification

level of the nurse. In New Mexico, for example,

Medicaid pays $17 per hour for RNs and $13 per

hour for LPNs, slightly more than the charges of

the lowest priced home nursing agency in that

State (34). If all care were provided by professional nurses, the monthly Medicaid payments for

a child requiring an 8-hour professional nurse

would range from $3,120 to $4,080; payments for

a 24-hour nurse would range from $9,360 to

$12,240. If Medicaid paid agency charges, as some

insurers do, payments could be as high as $18,000

per month for a 24-hour RN.

Other factors can also affect nursing costs. For

example, the need for an escort to accompany a

nurse to work in a high-crime area would raise

costs. Or, nurses might demand higher pay when

working in such areas.

Specialized therapy is needed by most technology-dependent children in order to progress.

Speech therapy, physical therapy, and occupational therapy are commonly provided to these

children in one or more weekly visits. Basic respiratory therapy, however, often becomes a required skill of the primary caregiver, both because

it is often required so frequently and because

many third-party payers do not pay for home respiratory therapy visits.

Outpatient services to technology-dependent

children in home care can include regular visits

to one or more specialty physicians (e.g., a pediatric pulmonologist), frequent laboratory workups, and visits to a local pediatrician or family
41

physician who oversees the

care. ” A local physician who

child’s “well child

is familiar with the .

child’s health status and medical needs is particularly important for families who live a great distance from the specialty clinic or tertiary care hospital. Even with these outpatient visits, children

in home care may have frequent hospitalizations

for in-depth assessment, initiating new treatments,

respite care, or complications or sudden emergencies relating to their conditions. These rehospitalization are often overlooked when comparing

home and institutional care costs.

Although outpatient visits and laboratory tests

are often relatively minor compared with other

home care costs, they are ongoing and by no

means negligible. For example, the individuals included in a 1982 survey of home parenteral nutrition programs averaged $23 to $32 per month in

physician and clinic costs (for patients served by

hospital- and nonhospital-programs, respectively), with extremes ranging from $6 to $83 (122).

Laboratory work for stable patients in this survey averaged $69 and $82 per month for hospitaland nonhospital-supplied patients, respectively,

and ranged from $4 to $350 per month (122).

Transportation to outpatient services and to

school is required by technology-dependent children in home care and can be a substantial cost

for some children. Children receiving intravenous

antibiotic therapy or chemotherapy may require

physician visits as often as twice a week (130).

For stable ventilator-dependent children, visits

may be less frequent—weekly or monthly—but

transporation costs may be very high because the

transportation vehicle must be spacious enough

to accommodate respiratory equipment and a

wheelchair. Children served by the Louisiana

home program for ventilator-dependent children

travel up to 385 miles round-trip for physician and

clinic visits (97). Of 23 children whose transportation needs were detailed by this program as of

June 1985, 7 used the family car; 3 used special

vans purchased for that purpose; 3 used public

transportation; 1 child used an institutional van;

and 8 children used ambulances.3

‘Three of the children using ambulances did so for emergency or

lnterhospital transfer purposes only, while they resided in institutions or nursing homes. One other child required an ambulance twice

for tracheotomy tube changes. Of the remaining 4 children using

ambulances for transportation, 3 eventually died. No other forms

of transportation are recorded for any of these 8 children,

Respite care is care that gives the family some

relief from ongoing nursing care. It may be in the

form of an occasional professional nurse or other

person who provides care in the home. Or, it may

be in the form of a nearby hospital or other facility that cares for the child while the family is on

vacation or pursuing other activities. Respite care

raises the immediate costs of home care, but it

may lower total costs if the assurance of occasional respite enables the family to provide most

ongoing care.

Case management-coordination and oversight

of the package of services provided to an individual—is a vital service to most technologydependent children because of the multiplicity of

startup and ongoing services needed, Case management may be performed by a health care professional, such as the child’s pediatrician (112) or

a specially trained pediatric nurse (129). Or, thirdparty payers may provide case managers (as part

of an individual benefits management program)

to ensure, first, that the appropriate mix of services are available to enable the child to receive

appropriate care at home; second, that those services continue to be provided as arranged; and

third, that the child’s progress is monitored, so

that appropriate changes in service are made.

Case management can sometimes minimize the

costs of care for children already being cared for

at home. The Florida “Rural Efforts to Assist Children at Home” (REACH) program, a Medicaid

demonstration project, succeeded in reducing rehospitalizations and emergency room visits of

chronically ill children in that program as compared to equivalent children not served by the

program (129). The program, targeted at high-cost

children (not necessarily technology-dependent

children) eligible for both Medicaid and Services

to Children with Special Health Care Needs, used

community-based pediatric nurses as case managers, coordinators, and consultants to help families make the most appropriate use of medical

services (129).

The most important aspect of case management

is that it can serve both the interests of the family and of the third-party payer. At present, it is

closely linked with the expectation of cost savings,

and the process of ensuring those savings. If a private insurer expects to eventually pay out the

maximum lifetime benefit, however, the incentive
4 2

—

to provide case management may be weakened.

There is also a danger that case management will

be superficial. Managers whose activities are

limited by the payer’s interests, or by a large

caseload, may be hampered by not being intimately acquainted with the child’s needs, or by

ignorance of important resources that could be

made available.

Issues in Comparing the Costs of

Hospital and Home Care

1. Cost to whom?—The relative costs of hospital and home care depend on whether one is

considering costs to Medicaid, costs to private insurers, costs to the family, or total resource costs.

Home care might often involve fewer total resource costs than hospital care, but it might not

cost the third-party payer less. For example, in

some States, Medicaid pays hospitals a set rate

per patient or per admission, regardless of the actual length of stay for that patient or the services

provided. In these States, paying for adequate

home care for technology-dependent children

could cost the State and the Federal Government

more than financing those children’s care in a hospital at the fixed rate. (Of course, the uncompensated costs to the hospital caring for children in

this situation are very high. )

Home costs may be lower to third-party payers

than institutional costs because of certain uncompensated costs incurred by the family when the

child lives at home. The two most notable examples of such uncompensated costs are the costs of

basic room and board, and the unpaid time of parents or other volunteer caregivers.

For some children, paid home services may be

replacing not institutional care but care previously

provided by the family at great expense. These

services reduce the costs to the family while increasing the net cost to the third-party payer.

2. Comparing equivalent costs.—Different

sources of information on costs of technologydependent children use different concepts of cost.

For example, one may report hospital charges,

while another reports third-party payments to the

hospital. Hospital charges themselves may not be

equal to the actual costs associated with providing a service. For example, one analysis of intensive care unit (ICU) services found that the charges

in one hospital for room and board in the ICU

were only slightly more than one-half of calculated actual costs to the hospital (77a). Even comparing average hospital charges (say, per month)

with average home care charges for a technologydependent child can be misleading if the two include different services. For example, hospital

charges often include acute-care services such as

surgery, while home charges do not. Inconsistency

in comparing the appropriate equivalent costs

(i.e., maintenance and recuperative treatment

costs) in each setting is a major problem in the

literature.

3. Biased sources of data.—Most third-party

payers offering intensive home care services require that it be cheaper for them to pay for care

in this setting. Consequently, most data on technology-dependent children served at home will,

by definition, show that home care is cheaper,

There may be some children who are not discharged home because it will not be cheaper to

the payer, but since these children are not served

at home their presumably higher home costs are

not recorded.

4. Different costs for different children. -In the

hospital, costs depend largely on medical need and

on the physician’s judgment and style of medical

practice. At home, however, the costs of care vary

not only with the type and severity of disability,

but also with the family and home environment.

Factors such as the ability of family members to

provide most nursing care, and the extent of home

care renovations needed, have great impact on

costs of home care.

5. Cost in which setting? —Given sufficient

equipment and services, many technology-dependent children could, if necessary, receive care in

any of a number of settings that are intermediate

between the acute-care hospital and home (see

app. D). In some urban areas, several of these intermediate options may actually be available; in

other areas, none may be. Thus, while for one

child it may be appropriate to consider the relative costs and effectiveness of care in a long-term

rehabilitation hospital as well as home and acutecare hospital costs, for another child the rehabilitation hospital may be unavailable, even if it theoretically offers the lowest cost care.
43

The primary reason for variations in average

cost across institutional settings is that different

settings offer a different mix of services and different levels of service intensity. For example, one

setting may cost more because it offers full-time

respiratory therapists on staff. However, cost is

not a direct measure of effectiveness or services.

Costs and effectiveness are related (e.g., adding

home services to enhance effectiveness may increase costs), but, given no other information, one

cannot deduce the relative effectiveness of different settings from their relative costs.

Evidence

There are two types of evidence on the costs

of home care for technology-dependent children

compared to care in other settings. First, there is

evidence on the costs of care for children requiring ventilators and other device-based respiratory

supports. Since the evidence is sparse, some information of the costs of care for ventilatordependent adults is also included here. Second,

there is literature regarding the cost of home care

for people receiving home intravenous nutrition

or drug therapy

. In this case, there is little evidence specifically for children, and the programs

generally do not send home individuals whose

families cannot provide the necessary nursing

services. Published comparisons of home care

costs with the costs of nonhospital institutional

care (e. g., nursing homes) are nonexistent for

technology-dependent children in either group.

There is some evidence regarding costs of care

for children with less intensive needs, such as

those on dialysis or apnea monitors. It is not discussed here because the relative costs of care for

these children is less of an issue than the costs of

care for children requiring respiratory and nutritional supports.

Evidence on Relative Costs of Care for

Ventilator-Dependent Children

The evidence on the relative costs of caring for

ventilatordependent children in alternative settings is incomplete. Cost estimates are typically

based on charges or payments and are available

for small numbers of children enrolled in a particular program or discharged from a particular

institution. All comparisons of home and hospital costs for these children show that their care

is almost inevitably less expensive at home. These

comparisons demonstrate that there are a considerable number of children for whom home care

appears to be less expensive, often dramatically

so. However, up to now no payer has reimbursed

for an exceptional 1evel of home care unless it is

less expensive than hospitalization, so the ventilator-dependent children now on home care are

by definition less expensive to care for in this

setting.

Table 14 summarizes comparative hospital and

home charges for ventilator-dependent people

from the literature. Because of the few reports

available, adults as well as children have been included, The figures in this table suffer from many

of the problems discussed above. The services included in hospital costs are generally much more

extensive than those included in home costs, and

the fact that the figures are averages disguises high

variations in the amount of paid nursing the patients required. Despite these methodological

problems, however, table 14 still provides compelling evidence that for some technology-dependent children the home care charges are substantially less that those for intensive or intermediate

hospital care,

The primary reason for this difference is simple: when a child is cared for at home, the costs

of housing and much of the nursing are borne by

the family rather than by the hospital or health

care payer. If a child required 24-hour paid nursing at $20 per hour (slightly higher than Medicaid pays in New Mexico), monthly home nursing costs alone would total $14,400—nearly as

much as monthly hospital costs in several of the

studies in table 14. Thus, the extent to which total home care charges are less than total hospital

charges depends largely on the extent to which

the family is able and willing to provide nursing

care and appropriate facilities for the technologydependent child. The difference in charges also

depends on whether less expensive nursing can be

substituted for more expensive care, and on the

medical effectiveness of home care. Home care becomes relatively cheaper if it speeds the time until a child achieves minimal dependence (or delays total dependence), and if it minimizes the
Table 14.—Summary of Comparative Average Monthly Charges Presented in the Literature

of Ventilator-Dependent Individuals in Hospital and Home Settings

— . , , - —- . - - . .— - , J

Source

Banaszak, et al., 1981 . . . . . . . . . . .

Burr, et al., 1983. .

Cabin, 1985 ., . .

Care for Life, 1985

Dorm, 1982 . . . . . . .

Feldman, et al., 1982 . . . . . . . . . . . .

Goldberg, 1983 . . . . . . . . . . . . . . . . .

Goldberg, et al., 1984 . . . . . . . . . . . .

Kahn, 1984 . . . . . . . . . . . . . . . . . . . . .

Lee, 1983 . . . . . . . . . . . . . . . . . . . .

Perry and Lierman, 1985 . . . . . . . . .

Sherman, et al., 1982 . . . . . . . . . . . .

Sivak, et al., 1983 . . . . . . . . . . . . . . .

Splaingard, et al., 1983 . . . . . . . . . .

Average

hospital

charge

$15,469

19,613

29,113

25,063

19,071

17,500

27,435

24,590

22,000

40,590

51,517

40,332

15,600

15,000

Average Home COSts Incluoe

home Number of Adults (A)/ some professional

charge patients children (C) shift nursing Comments

$3,535 2

2,388 6

5,201 1

1,853 —

389 12

5,704 2

7,310 2

7,425 2

5,400 26

5,490 8

7.361 2

1,943 9

1.760 10

775-16,900 47

A

c

c

A,C

c

A

c

c

c

c

c

c

A

c

No

Not given

Not given

Not given

No

Yes (1 patient)

Yes

Yes

NO (if included, home

charges are $8,000)

Not given

Yes (1 patient)

Not given

Yes (4 patients)

Yes (patient represented by

high home charge figure)

—

All hospital charges (not just maintenance charges)

are included In hospital figure.

Hospital charges include charges before patient was

medically stable. Home charges include first month

home.

Based on survey of State respiratory therapist representatives’ estimation of average charges.

Received nasal oxygen only (not ventilation).

—

.

—

Hospital charges from intermediate care unit.

Charges are averages during one year, not necessarily before initial discharge home. Two patients

were not hospitalized that year.

Hospital charges include surgery, acute care. Home

“charges” Include estimated cost of some services

provided at no charge.

Charges presented here are averages of ranges given

in Iiterature report,

Hospital charges are estimated and include physician

charges. Home charges do not include physician

charges or initial costs. If startup charges are

included, home charges rise to $1,894.

Hospital is a rehabilitation hospital. Home care cost

does not Include drugs.

SOURCES See references 13, 26, 28, 32, 42, 55, 68, 69, 92, 103, 128, 146, 147, and 149
4 5

frequency of rehospitalization for infections or

other problems.

An analysis of more detailed charge and payment data from children who have been served

by high-service home care programs is illuminating. Maryland has computed the monthly hospital

and home payments for 25 children served by the

State’s home care program for children requiring

respiratory support (93). For these children, the

mean third-party payment for the last month of

hospitalization (a proxy for typical hospital costs

of a child when medically stable) was $24,715

(range: $210 to $41,057). These children were hospitalized an average of 421 days before discharge.

The average monthly home care payments for

these children, excluding the first month home,

was $9,267 (range: $300 to $25,000). First-month

payments averaged $9,798, or an average of $531

per child for one-time expenses (93).

In Louisiana, average third-party payments for

the last month of hospitalization were comparable to those in Maryland ($25,995 for 19 children),

but average monthly home care costs to the Louisiana program were considerably lower (97).

Home payments (computed for 21 children) averaged only $3,012 per month, excluding startup

costs. Children in this study were all at least partly

ventilator dependent. Louisiana Medicaid, the

source of support for many of these children, does

not pay for home shift nursing, which may explain why the home care payments are so low.

Data from Illinois demonstrate the potential

differences between private payers and Medicaid

in cost-savings of home care to third-party payers.

For children whose care was compensated only

by Medicaid, payments for the last month of hospitalization averaged $16,984, while monthly

home care payments averaged $6,358 (104). For

children who had at least some private coverage,

the payment for the last month of hospitalization

averaged $26,616, while equivalent home care

payments were $6,922. Thus, while the monthly

home care payments for children in these two

groups are roughly equivalent, the cost savings

of home care experienced by private payers (or

that would have been experienced had they covered home care) was substantially greater than

that experienced by Medicaid alone. (Illinois’

Medicaid program pays for a maximum of 45 hospital days per year, which limits program hospital expenditures. )

Evidence on Relative Costs of Home v.

Hospital Administration of

Intravenous Therapies

Intravenous therapies—prolonged parenteral

nutrition and drugs—have followed the pattern

of renal dialysis and hemophilia treatment, in

which treatments once received exclusively in the

hospital have been adapted to the home. (Intravenous drug therapy may also be administered

in outpatient settings. ) Drug therapy usually takes

a few weeks, compared with the months or years

common with parenteral nutrition, but in other

ways the two therapies have many similarities,

There is little information in the literature regarding relative costs of care in different settings

for individuals receiving chemotherapy, but all

programs reporting their experiences with home

antibiotic therapy have reported substantially

lower charges for home treatment compared to

hospital inpatient treatment (table 15). In all cases

in these programs, patients or their families

administered the infusion at home. Patient selection was a vital component of these programs,

because inadequately administered infusions can

result in ineffective treatment and rehospitalization. In one study, 40 percent of the patients receiving prolonged antibiotic therapy were rejected

by the home care program for reasons including

inability to administer the antibiotic, poor family support, and poor motivation. Thus, patients

who would have required substantial professional

nursing to receive home treatment (had it been

available)—and thus might have had more expensive home care—could not participate in the program. The major differences in charges for home

and hospital treatment in the programs reported

in the literature are the need for patient training,

planning, and clinic or nurse visits for home patients; and the hospital room charge for hospitalized patients.

Most individuals on parenteral nutrition, too,

go home only after they or their families have

mastered the techniques and can provide all home

care. One case has been reported in which a 58-
46

Table 15.—Comparative Charges for Home v. Hospital Administration of Intravenous Antibiotics

as Reported in the Literature

Study Home charges

Antoniskis, et al., 1978 ... .. .$69 per day

Eron, 1984 ... ... ... ... ... .$10 per day in charges

incurred only by home

patients (training clinic

visits)

Harris, et al,, 1986 . . . . . . . . .$207 per day

Hospital charges

$243 per day

$170 per day in charges

incurred only by hospital

patients (room charge in

community hospital)

$428 per day

Rehm and Weinstein, 1983 .. .$1,652 per illness $7,380 per illness

Stiver, et al., 1978...........$40 per day $137 per day

NOTE All home lnfusions in these studies were administered by patients or their families

SOURCES See references 6, 50, 78, 132 and 151

year-old patient was discharged home on parenteral nutrition under the supervision of full-time

home nurses (105), When this patient first went

home, requiring 12 hours per day of parenteral

nutrition administered by a nurse, her home care

charges were comparable to charges for hospital

care. Her need for parenteral nutrition and the

associated nursing care diminished over time,

however, lowering the home care charges (105).

The previously-mentioned 1982 survey of home

nutrition programs found home care charges for

parenteral nutrition that were roughly $3,400 per

month for hospital-supplied patients and $4,900

per month for nonhospital-supplied patients (122).

Individual programs have reported program costs

of serving patients of approximately $1,800 per

month (in 1976-78) and approximately $2,700 per

month (in 1982-83) for the first year, when costs

are highest (48,181). Even after adjusting for inCONCLUSIONS

There is no concrete evidence regarding the relative effectiveness of home and hospital care,

Home care is generally considered more effective

in promoting the psychological and emotional

health of children; hospital care is generally considered more effective at providing medical and

Comments

Separate home and hospital

groups studied.

Other charges (for services

provided to both home and

hospital patients) are assumed

equal.

Charges are for patients treated

initially in the hospital, then at

home. Hospital charges may

include surgery.

Hospital charges are estimates

(patients all got home care).

Charges are averages over 4

years of the program.

Hospital charges are estimates

(patients all got home care).

flation, these costs are probably substantially less

than the costs of a patient receiving parenteral nutrition in an acute-care hospital. A third study has

reported per-patient monthly home care charges

of $1,445, compared with hospital charges that

would have been approximately $6,170 (23).

Thus, for both intravenous drugs and nutrition,

the literature suggests that home treatment provided under an organized program is substantially

less expensive to the payer than care in an acutecare hospital, provided that patients are carefully

selected and can perform all necessary procedures

themselves or with the help of family members.

The literature also suggests, however, that home

care charges for adult patients who require substantial professional nursing may approach hospital care charges. None of this literature specifically addresses the relative costs of offering these

therapies to children in different settings.

nursing care when necessary to promote physical health. With the adaptation of sophisticated

technologies and care systems to the home, however, there is no reason to believe that home settings cannot be equally effective at promoting

physical health. The desire of the family to have
—

47

the child home, however, and the availability and

quality of these sophisticated technologies and

care systems, are critical determinants of effectiveness.

Cost savings to third-party payers have become

an important factor in their willingness to finance

intensive home care. Such cost savings are likely

to exist for most children whose families are willing to bear some of the costs of home care, particularly nursing costs, by providing those services at no cost to the payer. However, because

the technology-dependent child population is so

diverse, and the nonmedical characteristics of the

children and their families are so important a factor in nonhospital health care costs, there are no

medical or clinical criteria that can be used to classify children according to their expected cost saving. Payers can ensure a high probability of overall cost savings only on a case-by-case basis,

where each child is evaluated and the likely total

costs of care for that child in alternative settings

estimated. Still, some general factors that tend to

increase or decrease relative costs (and, sometimes, relative effectiveness) can be identified.

1. Nursing Costs: Home care becomes more

favorable to third-party payers as family

nursing can be substituted for professional

nursing, as less expensive professional or

paraprofessional help can be safely substituted for more expensive help, and as intensive nursing needs decline. Paid 24-hour

nursing may make home care as expensive

as hospital care.

2. Expected Duration of Dependence: The high

startup costs associated with home care can

be more easily justified if a child is expected

to be technology-dependent for a very long

time and ongoing home care costs are relatively low.

3. Family and Other Environmental Factors:

Some children cannot or should not return

to a family home. If foster care cannot be

found, there are often few options other than

acute-level hospital care for such children,

although other appropriate options (e. g., rehabilitation hospitals, pediatric skilled nursing facilities, or group homes) may be less

expensive when available.

4. Availability of Services: Inadequate availability of respite care or caregivers trained

in the appropriate skills can make hospital

care the only viable option even where home

care might be less expensive if those services

existed. Or, choices in home services may

be so constrained that families and thirdparty payers may be forced to pay high

prices for the services.

5. Substitution of Care: Home care will be

likely to reduce third-party payments only

if it can substitute for institutional care,

rather than augmenting the care of children

already being cared for at home by their families. In many cases, however, augmented

care—particularly respite care and case management—may be effective in increasing the

quality of care and of life for these children,

and may reduce rehospitalizations.
Chapter 4

Sources of Financing
Chapter 4

Sources of Financingl

INTRODUCTION

Technology-dependent children typically incur

high annual treatment costs that may go on for

a number of years. As chapter 3 has shown, these

costs are substantial in any setting. For example,

in Maryland’s program for children dependent on

ventilators and other respiratory supports, the

average third-party payment for long-term care

in the hospital was approximately $24,700 per

month in 1985 (93). Home care for such children

was about $9,3oo per month. Although the number of children who become technology dependent each year is small, the financial burden on

their families can be staggering. In the absence of

public or private insurance, other public funding,

or private philanthropy and charity care, these

costs would exceed or severely strain the resources

of all but the wealthiest families.

The extent to which technology-dependent children have access to adequate financing for health

J I’arts (~t this chapter are adapted tr(>m a background p~per prcp~r~~ under contract t(]r OTA b} I{arrlette F(IX and Ruth }’oshpe

ent lt led, ‘Tee hn[)lt~gy-[leptn~ient C“h]ldren \ AC ces> tt~ N!edlcalli

1 l(~me Care Flnanc In~, ” Augu\t ] Q8~

care, and particularly for home care, depends on

three factors:

1.

2.

3.

the degree to which this population is covered by private insurance or public health

care programs,

whether the insurance or program covers

long-term care at home for this population,

and

whether the home care benefits are sufficient

to finance most of the medical needs of these

children.

This chapter first discusses the extent of private

insurance coverage among technology-dependent

children and the adequacy of insurance for those

who are covered. It then discusses the extent of

public payment for home care services across the

spectrum of available sources of public third-party

payment. These sources include not only Medicaid, but also diverse programs targeted to specific

groups or providing specific services.

PRIVATE HEALTH INSURANCE COVERAGE FOR

TECHNOLOGY-DEPENDENT CHILDREN

This section examines the adequacy of private

health insurance in covering the costs associated

with the care of technology-dependent children

in the hospital and at home. The question is

framed as follows: what is the likelihood that a

technology-dependent child will have private insurance coverage that is adequate to cover the

costs of care in the setting that is most appropriate for child and family?2 The answer to this ques-

—

‘Note that this question ci]fters from the usual approach to dc>fln -

Ing the adequ~clr (JI lnsurancc c[~verage, where health} pe~~ple makt,

]ucigment~ ab(>ut their willingness to pa} to co~er the risk. (~t given

levels ot expense That a frjori que~ti[~n ma} have ~ ~ery ciit terent

an~wer t r(]m the (>x p( Kt ~ac (CJ quest Ion addressed I n t h ]t wc t ltln ~ \ee

reterenct’ 521

tion depends on two factors: the likelihood that

a technology-dependent child will be privately insured at all; and, once insured, the amount and

scope of coverage that the child is likely to have.

Extent of Coverage

Private health insurance is available to children

through two avenues: employer-based group health

policies offering coverage of employees’ dependents, and self-purchase by the family. Self-purchased insurance is generally a great deal more

expensive to the family than employer-based group

insurance and covers only about 6 percent of all

privatel y insured children (41).

51
52

—

Table 16.—Number and Percent of Children Aged O to 12 Years Covered Only by Private Health Insurance,

by Income Status, United States, 1986

Income status

Less than 100% 1000% to 199% More than 2000/.

of poverty of poverty of poverty Total

Total number of children

(in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,861.6 9,997.7 23,658.9 44,518.2

Number with private health insurance

(in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,520.6 6,198.6 20,346.6 28,065.8

Percent with private health insurance . . . . . . . . . . 14 ”/0 620/o 860/0 630/o

SOURCE U S Department of Commerce, Bureau of the Census, Current Population Survey, unpublished data, March 1986.

A substantial majority—62 percent—of American children between the ages of O and 12 have

private health insurance as their sole source of

third-party coverage (table 16). The likelihood of

having private insurance depends primarily on the

marital status of the mother and on income status, Almost 86 percent of children with family incomes above 200 percent of the Federal poverty

level have private health insurance, while only 14

percent of poor children do (41).

Of course, lack of private health insurance does

not necessarily imply lack of coverage. Many children (16 percent of those under age 13 in 1986)

are covered by Medicaid, Medicare, or the Civilian Health and Medical Program of the Uniformed

Services (CHAMPUS). A small proportion of children (4 percent in 1986) have a mixture of public

and private insurance. Nonetheless, about 19 percent of all American children under 13 years of

age—8.5 million young children—had no health

insurance of any kind in 1986. 3

Technology-dependent and other severely disabled children may be less likely to have private

health insurance than children without major

health problems. The 1982 National Health Interview Survey found that 53.8 percent of noninstitutionalized children with severe limitations of

activity had private insurance, compared with

74.3 percent of children without any limitations

(58). The reasons for these disparities may include

unavailability of individual coverage for severely

disabled children, lack of coverage of preexisting

‘This estimate is based on the Current Population Survey (4]),

which asks about health insurance coverage for the previous year,

It is not clear whether the estimate relates tc~ a point in time or to

the entire previous year, The estimate is in line with point-in-time

estimates of other surveys (see reference 152).

conditions under group plans, lack of coverage

beyond lifetime maximum limits, differences in

the employment status of parents in the two

groups, and parental decisions to rely on public

sources of support.

Adequacy of Coverage

The fact that a technology-dependent child is

covered under a private health insurance policy

does not necessarily mean that the insurance provides adequate financial resources. The insured

person’s exposure to out-of-pocket expenses depends on the following aspects, which vary widely

among insurance plans:

●

●

●

●

●

First Dollar Deductible: the amount that the

insured must pay each year before he or she

is eligible for coverage. This amount may

vary by type of benefit (e. g., hospital v.

medical).

Coinsurance Rate: the percent of the cost of

covered services for which the insured is responsible.

Catastrophic Stop-Loss on Out-of-Pocket Expenses: typically an annual upper limit on the

beneficiary’s out-of-pocket payments for insured services.

Overall Plan Maximums: limits on the total

amount the insurer will pay out on the policy, calculated either as annual, per episode,

or life- time limits.

Limits on Covered Services: limits on the

type or number of insured services, such as

maximum hospital days or home care visits

covered.

Because expenses for technology-dependent children are typically catastrophic in nature, and be-
53

cause these children often require complex care,

the three most important features of private health

insurance plans for these children are the overall

plan maximums, the catastrophic stop-loss provisions, and the covered services.

Overall Plan Maximums and Stop-Loss Provisions. —The most direct information on the exposure of privately insured children to overall

plan maximums comes from the 1977 National

Medical Care Expenditure Survey. In that year,

approximately 50 million children under 18 years

of age had private health insurance, and about

41 million (84 percent) had major medical coverage. 4 Of those children with major medical coverage, only 23 percent had overall plan maximum

limits above $250,000 (53).

Several more recent surveys of employee group

health plans, summarized in table 17, show how

plan maximums and stop-loss features are distributed among private sector group plans. These surveys indicate that over three-fourths of plans (and

employees) are subject to some kind of overall

plan maximum, with more than one-half of all

employees under policies with life-time maximum

limits of $500,000 or less.5

Data on new group health insurance policies

written by insurance companies in 1984 show a

definite trend toward higher overall maximum

limits. Ninety-three percent of the employees covered by a sample of new group policies written

by commercial insurance companies had maximum limits of $1 million or more (80). Although

the data from all sources taken together suggest

substantial improvement in adequacy since 1979,

it is probable that over one-half of privately insured families still have insurance that is inadequate for the catastrophic expenses associated

with long-term technology-dependent conditions,

Maryland and Illinois programs for children requiring respiratory support. If hospitalized, Maryland children would, on average, exceed a $250,000

maximum in about one year (even if the insurer

paid only 80 percent of charges). Yet the average

length of hospital stay for these children was 14

months (93). Even at home, these children would

exceed this lifetime maximum within about 3 years.

Of 63 children in Illinois’ home care program, 42

were supported exclusively through Medicaid, 23

because their private insurance had lapsed (104).

The situation is somewhat better with respect

to catastrophic stop-loss coverage. In 1984, more

than three-fourths of plans and employees had an

annual catastrophic limit on out-of-pocket expenses. Catastrophic limits ensure that families

will not be wiped out by coinsurance requirements

in the early months or years of expenditures for

a technology-dependent child, but they do not

lessen the exposure of families to lifetime maximum benefit limits.

Limitations on Covered Services.—Of particular interest to technology-dependent children is

the availability of home care coverage. Almost

one-half of employees in medium and large business establishments were without any home health

care benefits in 1984 (175). Although home health

benefits have been introduced increasingly in the

recent past as a cost-containment measure (e. g.,

11 percent of plans in a survey of large firms reported adding home health care benefits between

1980 and 1982 (121)) it appears that many children would not be eligible under their current

plans. (Note that although health maintenance

organizations are often thought of as providing

comprehensive coverage, they too may have limited home health benefits. )

Not only is home health frequently an uncoThe impact of low lifetime maximums can be vered service in private insurance policies, but as

demonstrated with preliminary data from the structured, these benefits typically do not meet

the needs of a child requiring continual nursing

‘Nlaj(}r medical c(lverage prc~vldes fOr a wide array ok serlrices care. For example, although over 90 percent of

and u~ually Include> an annual deductible, coinsurance requirements, Blue Cross/Blue Shield plans covered home health and m~xtmum benetit llmlt~, By comparison, ba$ic benetlt plans

u~uallt’ prov lde f}rst-dc~ll ar cot’era~e, but cover (~nlt’ a \’er}, nar - services in 1984, 95 percent of such plans limited

row set (lt ser~ri ce~, the number of professional nursing visits, b About

‘The only exception ]s reported bv Fox and }’[)shpe, who surve}ed

a small ;ample (60 f i rm> t ~~t employer-s, This sample may be biased one-half of the plans had annual limits on the

because it was drawn from a data source ]isting firms with net asset —

values ab{>ve a threshold, suggest in~ that e~’en the smaller t lrms ‘Blue Cross Blue Shield covers about 13 percent <Jt employees

]n the sample are dlsprop(lrt ionately wealth}’ (.58). In medium and large firms ( 175 I
Study

U.S. DOL-BLS . . . .

Wyatt Co .. .

Hewitt Associate s

Fox & Yosphe. . . . . . .

Battelle/EBR l

Survey

year(s)

1984

1978-84

1979-84

1986

1977-78

Table 17.—Surveys of Employer-Sponsored Group Health Insurance Plans

Sample

Probability sample of 1,326 -

business establishments meeting

industry-specific minimum size

requirements (ranging from 100

to 240 employees)

In 1984, 1,115 firms of all sizes

(but mostly large) participating

in the study

250 major employers; 680/0 in

Fortune 100, 32% in Fortune 500

Random sample of 60 firms of

all sizes selected from Dunn &

Bradstreet’s U.S. Business

Directory (small firms) and

Business Insurance Directory

(medicine and large firms)

Probability sample of small

nonagricultural business

establishments (less than 250

employers) — — - — — .

Employee

groups covered

by survey

Full-time

employees

Salaried

employees

Salaried

employees

All employees

All employees

Percent of plans

(p) or employees

(e) with maximums

1984: 82% (e)a –

1984: 870/0 (p)

1980: 880/0 (p)

1984: 82-870/0 (p)

1979: 89-900/0 (p)

1986: 67% (p)

1978: 75-830/. (e)c

Percent of plans

(p) or employees

(e) with lifetime

maximums of

$500,000 or less

1984: 52-570/o (e)

1984: 52% (p)

1980: 600/0 (p)

1984: 560/0 (p)b

1979: 750/o (p)

1986: 16,30/, (p)

Percent of plans

(p) or employees Percent of plans

(e) with lifetime (p) or employees

maximums of (e) with stop-loss

less than catastrophic

$1 million coverage

1984: 53-58°/0 (e) 1984: 76°/0 (e)

1984: 880/0 (p)

1984: 870/0 (p)

1979: 590/, (p)

1986: 25.50/. (p) 1986: 800/0 (p)

— %alculated as percent of employees with major medical coverage who are subject to overall plan maximum About 90 percent of plan participants In this sample had major medical coverage The rematnder

had bas!c benefits only, which may not be subject to lifetime Ilmlts but which are often subject to spec!flc maximum Ilmlts on services

bcalculatedas the percent of all employees w!th Ilfetlme maximums less than this amount An additional 4 percent of emplOyeeS who were not subject to Ii fetlme maximums In 1984 were subject to annual

or ‘‘per cause” maximum

cThls ,s an overstatement, because employees subject to more than one maximum are double-counted

SOURCES See references 33, 58, 83. 175. 186
5 5

number of visits, with a median limit of 90 visits

per year; only 7 plans covered at least 2 visits per

week (20). These plans also vary in the specific

home health services covered. For example, physical therapy is covered by all plans with home

health benefits, but respiratory therapy is not a

covered service in 22 percent of plans (20). None

of the Blue Cross/Blue Shield plans in the 1984

survey included hourly (“shift”) nursing as a regular home health benefit.

Increasingly, States are using their regulatory

authority to require health insurers to offer home

health benefits. At present, 13 States have laws

requiring coverage of home health services under

health insurance plans (5). These State laws cover

only those policies written by health insurance

companies and do not apply to health plans provided by employers on a self-insured basis. The

latter are exempt from State regulation by Section 514 of the Employee Retirement and Income

Security Act of 1974 (ERISA, Public Law 93-406).

The exemption from State regulation has been a

powerful spur to self-insurance by employers, and

further increases in mandated benefits are likely

to increase the proportion of employers who selfinsure (7). Thus, to the extent that families are

insured through employer self-insurance, State action to mandate home health benefits is not likely

to be an effective mechanism to increase coverage of services to technology-dependent children

in the home.

Recent initiatives within the insurance industry itself are more promising. Several health insurance companies have initiated individual benefit

management programs, in which the contractual

limitations on covered services are waived for certain high-cost patients. Under these programs, the

insurance company will pay for services in home

MEDICAID

Background Issues

Medicaid” provides health insurance to very

poor people who are also aged, blind, disabled,

and other settings that would normally not be

covered, provided that by doing so the company

will reduce the rate of outflow of total benefit payments. Four examples of such individual management programs are presented in box D. In a recent survey of employer-sponsored health plans,

Fox and Yoshpe found that 53 percent of employers had an individual benefits management program (58), ’ although these programs may not all

operate to encourage nonhospital care for technology-dependent children.

As promising as they are, individual management programs by insurers do not eliminate the

problems caused by low overall plan maximums,

for the insurer typically will not pay beyond those

contractual limits. Individual case management

can extend the length of time before the maximums are reached. However, insurers may have

little incentive to offer this important service if

they think they will still end up paying out the

maximum amount.

A handful of private insurance plans have considered increasing coverage of specific complex

home services to beneficiaries as a group. For example, three of the plans responding to the Blue

Cross/Blue Shield 1984 survey reported that they

were developing or implementing pilot programs

specifically for chronically ill children, including

ventilator-dependent children. Another three plans

were implementing programs for expanding hightechnology services in the home, such as intravenous nutrition and drug therapy, but these programs were not specifically targeted at children

(20).

—— ..—
56

m’?% m--d~* Aan4m# Prhmt8 hsarara

- 

_*

d@!wna $@protide cam benefits to tWhdOgy.

*X~~“~oti **&in# ~b*la Blckly to save roomy, or at least

to &tt&d the kqgth of tim t& !ckild v@ k covered befora re&hhw a Wtirdi maximum. Po- are “

brief ~

ke Cro#atti $$tak3 RMkdf ml#6$@4as BqMftt$ Pra$ram “

‘n!w ~U@ Gom#BIue $$@&t Jba@doa &$@MiatM, VX$ bddf (lfthe 90 independent pk’MJ, a benefits

Packa$e 4m’%tm~ Wh’h”tk U*!?+ O!mm d NkW@mmt. This cmtract is one of many heaith insurance options that a Rderal pm#+~ maydwhoae. Ml WMhws @ Blue Shield plans agree to provide

thb benefit p+a&e, to elW@&!d -~ qnqdpyees m their ]oad @5sdktions. ‘!k present cmktmct pM3-

VJkk employe&a Withti Qp#Un in!a ‘%@h*’ plan, with knefits including 90 home ~th days ~y~d~ ~nij Wt; W ~ ‘%W’’@4lkM , with a kwmr premium, Mgher

d&kctibks @ CMfri&&ab, a W M&m l@it on covered benefits, and ma home health bendfits.

hkr a pikt pro-; bq#tm when the fh%t ease was brou@t to the atteqtion of &@ program in 1983,

* Bh! CI’os#/Elw can provide llc%rnebenefit$ in excess of the contracted

benefits t o? iiwkling chikk, who: 3) would be digibk for cover~

if in the hospital, and-s) @be km ~to care fdr a! h-e @55). A number of individuals who

have been extettdmf speci# Mmefits uncle? W plkt project have been children, pdmarily infants with respiratory dkrders, hea?tdfsease, tube keCMn@ or parented rmtr’ition requkements, and multiple handicaps.

Aetna Life /k Casualty is a natimal fwq?4’K@t kurance Cc?fnpany wkh regkmal offices that adminkter

its plans. The wmpany @m *-MXbmwfits to any policyholder who would be eligible for

coverage if in the hospital and will b h~to care for at hmne. Aetna has provided this service

dnce 19$3 to all age @oup#. m campy esWMMes that thll? pro#am saved $&S million in the first year

of impkrmmtation, $M million in the sectmcl VW, ad $26 dkn iR tk tid W).

Aetna had served 26 chikkm ander w 16 in tk program as of March 19$6. Saviqgs for each case under

the program are cakukte#”at kast every 6 rnomthsky~ed cases over $6,000 in cost or with care lasting

longer than 6 monthg are tmmitmed and revkwed Cumpany’s nldical director. Benefits can range

from an apnea monitor phmhase, home nwdifkatkms, nursing, and therapy. Benefits cease when the patient is compktely rekbilitated or the lifetime benefit level is reached. In the latter

cam, the patien$ may ke@p purehad @quip!nent (W.

The Equitable

The Equitable Life AsWranm Society uf thelikited States, &for-profit insurance company, offers a Medi~ c= ~=t~a$ an b@mud Wwn&rWtt to *Phealth insurance policies. The policy

amendment MM Carr@l ma W@ Cha%$e, @tin agmmrqj * t~ hammdment the group policyholder (the

emplckyar) agrees to pay the curer of a.- mordinamr for my mlevartt Ca=s ~bt*9~ of J-w

1, 194M, 2S5 group pdicyhokiers had a medicai case man ~t agreement with The ikpdtabfe, covering

apprmdmatdy 910,m en@Oyem abont Z,*,OQO total persons (employees plus @@le depemkmts) (M).

Patients may be referred to the cam mamgement program by the company’s pm-admission review service, the wurce of eli#billity wdfkakn, tk employer, the employee or dependent, claims personnel, or

prwiders. The cmnp~$ Wes a~W-r for of appropriate cases to ensure

early referral and th-+potity to mtxtblkh a rapport with the patient, family, and provider. Included

in the diagnostic profik “m’ * fimnba d diqymses amnciated with neonatal problems (e.g., congenital

bart anOmali@s,w mapkWwy _~drom4 and trauma. Mare diagmatic categories can be added

to accommodate the C&k’s id CM)* “
5 7

Under the case management program, case coordinators at The Equitable screen potential cases, assess

the medical and other needs of accepted patients, prepare care plans, coordinate the necessary care, and

monitor progress. Patients in the program can receive services that would not be reimbursed under the

usual insurance contract, such as home modification, family counseling, and transfer to a special rehabilitation hospital (136).

John Hancock

John Hancock Mutual Life Insurance Co., which has a health insurance component, operates a medical

case management program that is very similar to The Equitable’s. It concentrates on serving trauma patients, high risk infants, and (in the case of older patients) stroke. The program brings a case consultant

to certain of these cases to coordinate care and provide benefits not normally available to beneficiaries,

such as specialized rehabilitation services and home services, in order to reduce costs while providing appropriate care (56).

members of families with dependent children, or

first-time pregnant women (“categorically eligible”). In 35 States and the District of Columbia,

people in these categories can also qualify for

Medicaid if their medical expenses are sufficiently

high that they become poor as a consequence

(“medically needy”). Each State has an approved

Medicaid plan that details eligibility, coverage,

and reimbursement features in that State.

Two features of the Medicaid program are particularly important in the context of care for technology-dependent children. First, eligibility is a

vital issue because the Medicaid program is often

the third-party payer of last resort for a technology-dependent child. Second, the coverage of

complex health services under the State’s usual

Medicaid rules, and the way these services are

paid, affect the setting and amount of care the

child receives. Over the past 5 years, concerns

about these two features of the program have led

to changes in the Federal statute and regulations

regarding coverage and reimbursement under special Medicaid rules. Many States have taken advantage of these changes, described later in this

section, to enhance coverage for community services provided to technology-dependent children.

Eligibility

All persons receiving payments under the Aid

to Families with Dependent Children program

(AFDC) are automatically eligible for Medicaid.

(Note that in some States, two-parent families

cannot qualify for AFDC even if they are very

poor. ) In addition, Medicaid eligibility in most

States is extended to all aged, blind, and disabled

individuals (including children) who receive cash

assistance under the Federal Supplemental Security Income (SSI) program.9 Medically needy persons—those who would qualify for these programs but for their incomes, and who have very

high medical expenses—can also be made eligible if the State opts to include them.

To be eligible for SSI, an individual must have

a disability that is expected to last at least a year

(or until death) and must have available income

and resources no higher than established limits.

By statute, the income and resources of certain

relatives, specifically a parent or spouse if he or

she is living in the same household as the individual, must be deemed available to the individual. After one month in an institution, however,

the individual is considered to be not living in the

family household and the relative’s income and

resources are irrelevant to the eligibility determi91n providing Medicaid coverage to SS1 beneficiaries, States may

select one of two options. They can make all SS1 recipients eligible

and, if they choose, also provide Medicaid to individuals receiving

only optional State payments; or they can limit Medicaid eligibility to individuals who meet requirements more restrictive than those

under SS1. The State may be more restrictive in setting financial

requirements for income or resources, more restrictive in defining

blindness or deafness, or both. Each requirement, however, may

not be more restrictive than that in effect under the State’s Medicaid plan on Jan. 1, 1972. As of 1983, 14 States required SS1 recipients to meet eligibility standards more restrictive than the Federal

standard (168),
58

nation (20 U.S.C. 416). In some circumstances,

the application of these rules may encourage the

institutionalization of individuals who could be

cared for at home if Medicaid financing were

available.

The linkage of Medicaid eligibility to SSI payments, and SSI payments to institutionalization,

allows a child with a long-term disability and inadequate private insurance to receive hospital

services under Medicaid, regardless of the income

of the child’s family. A number of technologydependent children who would not otherwise be

eligible for Medicaid can thus receive hospital

services under this rule without their families having to become impoverished. However, until very

recently these children were almost invariably ineligible to receive Medicaid reimbursement for

equivalent medical care at home, because once

home, their families’ resources would be deemed

to be available to them. This situation received

national attention in 1981, after the family of a

hospitalized ventilator-dependent child appealed

her case to Congress and the President. Limited

options for the States to avoid the link between

hospitalization and Medicaid benefits now exist

and are described later in this section.

Basic coverage and reimbursement

States may pay for hospital care in a number

of alternative ways, and they may place restrictions on the amount of hospital care they will pay

for (see table 18). States pay hospitals according

to a variety of methods, including:

●

●

●

●

the costs incurred in serving Medicaid patients;

prospectively set rates per day, or per admission;

prospectively set rates arrived at through

competitive hospital bidding or through predicted Medicaid caseloads as a proportion of

hospital budget; or

prepaid health plans, in which a health care

provider is paid a set amount per enrolled

Medicaid individual, regardless of the actual

medical care use of that individual.

Under the prepaid or prospectively set rate systems, hospitals have an incentive to reduce the

length of hospital stays as much as possible, beTable 18.—Medicaid Hospital Inpatient Stay

Maximums and Units of Payment in the

50 Statesa and the District of Columbia, 1985

Inpatient hospital

State stay maximum

Alabama . . . . . . . . . . . 12 days/year

Alaska ., . . . . . . . . . .

Arizona . . . . . . . . . . .

Arkansas . . . . . . . ..35 days/year

California . . . . . . .

Colorado ... . . . . . . .

Connecticut . . . . . . . .

Delaware ... . . . . . . . .

District of Columbia .

Florida . . . . . . . . . . . . . . .45 days/year

Georgia . . . . . . . . . . .

Hawaii . . . . . . . . . . . . .

Idaho ... ... .. . .40 days/year

Illinois ... ... ... .. .45 days/year

Indiana ... . . ... . .

lowa. . . . . . . . . . ... .

Kansas . ... . . . . .

Kentucky ... ... .. ,14 days/spell of

illness

Louisiana ., . . . . . . . . ..15 days/year

Maine. ... . . . . . . . . .

Maryland . . . . . . . separate

maximums for

each case type

Massachusetts . . . .

Michigan ., ... .. ....18 days/year

Minnesota ., ... ...

Mississippi ., ... ... ,15 days/year

Missouri ... ... .. .

Montana . . . . . .

Nebraska. ... . . . . .

Nevada ... ... ., .,

New Hampshtre . ,

New Jersey. . . . . . . . . . .

New Mexico . . . . . . . . .

New York . . ... .

North Carolina . . . . . maximums per

diem

North Dakota ... . .

Ohio . . . . . . . . . . . . . . . . .30 days/spell of

illness

Oklahoma . . . . .......10 days/spell of

iIlness

Oregon . . . . . . . .. ..18 days/year

Pennsylvania . . . . . . . .

Rhode Island . . . . . . . . .

South Carolina . .......12 days/year

South Dakota .. .

Tennessee . . . . .......20 days/year

Texas . . . . . . . . . . . . ..30 days/spell of

iIIness

Utah . . . . . . . . . . . . . . . . .

Vermont ... ... .. .

Virginia . . . . . . .......21 days/spell of

illness

Washington . . .

West Virginia . . . . .. ..20 days/year

Wisconsin . . . . . . . . . . . .

Wyoming . . . . . . . . . . . .

Inpatient unit

of payment

per diem

percentage of charges

competitive bidding

per diem

per diem

per case

per case

cost-based

per case

per case

per case

per case

per case

per diem

cost-based

per diem

per diem

per diem

per case

global charges

per case

percentage of charges

per case (DRGs)

per case (DRGs)

per diem

per diem

cost-based

per diem

per case/per diem

cost-based

per case (DRGs)

cost-based

per diem

per diem

cost-based

per case (DRGs)

per diem

per case (DRGs)

per case (DRGs)

global charges

cost-based

per case (DRGs)

per diem

cost-based

per case (DRGs)

per diem

per diem

per case (DRGs)

cost-based

per case

cost-based

aArlzona~ ~rogram IS a statewide Medlcald demonstration Pro9ram.

bsome States with Ilmlted covered hospital days allow longer stays for EpSDT

ellgibles

c Early and perlodlc Screening, D!agnosis and Treatment program

SOURCE US Department of Health and Human Serwces, Health Care Ftnanclng

Administration, Hea/fh Care Financing Program Sfatisfics ” Arra/ys/s of

State Medicaid Program Characteristics, 1984 (Baltimore, MD DHHS,

August, 1985), and S.S Laudecina, A Cornparat/ve Survey of Medicaid

Hospita/ Refrnbursernerrf Systems for /rrpatient Services, Slate by State,

1980-1985 (Washington, DC George Washington Unlverslty 1986)
—

cause they do not recoup any extra payment for

longer stays or extra services. Furthermore, even

in some States with cost-based reimbursement,

hospitals are paid by Medicaid for care only up

to a limited number of days. The net effect of these

payment methods and limits is to provide hospitals with an incentive to discharge patients as soon

as possible, or as soon as the day limit has been

reached. If a child cannot be cared for outside the

hospital, the hospital is faced with providing indefinite charity care. Medicaid payment thus may

cover only a small fraction of the total hospital

costs of caring for a technology-dependent child.

States are not required to cover either pediatric

nursing home stays or pediatric home care in their

Medicaid programs. If they do cover the former,

however, they must also cover the latter; and,

covering home care means that certain minimum

services must be provided. 10 States covering pediatric home care as a normal part of their Medicaid programs (all but three do) must provide some

basic services, such as home nursing visits, medical equipment, and supplies (167). States may

also cover numerous optional services. As is evident from table 19, the result is considerable variation in the services covered (and the limits to

coverage) across States.

Very few States cover the full range of services and technologies needed by a technologydependent child in a nonhospital setting as a part

of their regular Medicaid benefits. For example,

30 States provided no home shift nursing (i.e., private duty nursing) at all in 1984 (167). Furthermore, Medicaid home services vary dramatically

in amount even where they are provided. All

States covering home services under Medicaid

must offer intermittent or part-time home nursing, for instance, but the number of covered nursing visits varies from 50 to 300 visits per year

(167).

‘“As of 1980, States may, at their option, pr(>t]~e case management and hc~me resplrat(jry care services under hfedica id ~ [>LIb] ic

Law QQ-453 ~

5 9

- —

Special Options for Financing the

Home Care of Technology -Dependent

Children Under Medicaid

Four special options have been available under

the Medicaid program for States to use in extending eligibility and expanding the range of covered

services for technology-dependent children who

can be cared for in their homes. Three of these

options require the States to obtain a federally approved waiver of usual Medicaid rules in order

to provide additional services, while the fourth

allows changes in eligibility rules but not services.

The

1.

2.

3.

4.

A

options are: -

the individual “Katie Beckett” waiver (phased

out after 1984),

the Section 2176 regular home- and community-based waiver,

the Section 2176 model home- and community-based waiver, and

an amendment to a State’s Medicaid plan.

summary of the various provisions of each

of these options is presented in table 20.

Individual Waivers

An individual waiver program, created in 1982

by the Secretary of the Department of Health and

Human Services (DHHS), was the first Medicaid

option designed to address the problems of individuals who remained institutionalized because

returning home for less costly medical treatment

would result in the loss of SSI and Medicaid eligibility. Commonly referred to as “Katie Beckett”

waivers (after the first child to receive one), they

were intended as a temporary strategy to permit

specified individuals to have Medicaid coverage

at home while States pursued the longer range options of 2176 waivers or State plan amendments

(47 FR 24274).

Requests for these waivers were accepted from

State Medicaid agencies between June 1982 and

December 1984. A DHHS interdepartmental review board determined whether or not the usual

SSI deeming rules should be applied in each particular case. 11 For each nominated child, the board

‘ ‘Due to the large number [~i applicatic~ns that t~ere not rew~lved,

the board continued to act into IQ86.
60
I

Table 20.—Comparison of State Medicaid Options for Extended Home- and Community-Based Care

—. — — —

Number of —

individuals able

-—

Categorical Allowable

eligibility

Disabled Individuals who,

because of relatives income,

would otherwise be eliglble

for Medicaid only if

institutionalized

State may target to aged or

disabled, mentally retarded or

developmentally disabled, or

mentally ill. Individuals must

require level of care provided

in ICF, ICF/MR, SNF, or

hospital

States can define specific

categories of disabled

individuals, Individuals must

require level of care provided

in ICF, in ICFIMR, SNF, or

hospital

Disabled individuals under age

19 who, because of relatives’

income, would otherwise be

eligible for Medicaid only if

institutionalized; individual

must require level of care

provided in a hospital, ICF,

ICF/MRi or SNF

Income

eligibility — —— Option to participate Geographic areas services Time period

—— — —

Individual waivers

(no longer newly

awarded) . . . . . One person per Not applicable

waiver

Regular State Medicaid

services only

Individuals eligible

until waiver no

longer needed

Deeming rules are

waive

Regular 2176

waiver . States may waive

deeming rules; may

increase income

eligibility to 3000/0

of SSI standard

All persons meeting May be less than

eligibility criteria statewide

Can offer certain services

otherwise not authorized

under Medicaid law; can

provide more extensive

coverage of regular

services

3-year waiver;

5-year renewal

Model 2176

waivers . States must waive

deeming rules

50 or fewer slots per May be less than

waiver program statewide

Similar to regular 2176

waivers; must offer at least

one service in addition to

those provided by regular

Medicaid

3-year waiver;

5-year renewal

State plan

amendment . . Deeming rules are

waived

All persons meeting statewide

eligibility criteria

Regular State Medicaid

services only

State option

.—. — SOURCE H B Fox and R Yoshpe, “Technology-Dependent Children’s Accross to Medlcald Home Care Financing, ” prepared for the Office of Technology Assessment, U S. Congress, August 1966—

I
62

determined whether it would be inequitable under the circumstances to consider family income

and resources in assessing the child’s eligibility for

SSI payments (and thus Medicaid). For the board

to waive the deeming requirements, it had to decide that:

1. enabling the individual to be eligible for homebased care would result in reduced Medicaid expenditures, and

2. the quality of the home-based care would be

as good as or better than that provided in

an institution.

The board also could impose additional standards in particular cases, depending on the facts

presented.

Once a waiver was approved, it remained in

effect—and the individual retained Medicaid eligibility at home—until the waiver was no longer

appropriate. This would be the case if the individual could no longer meet the SSI disability criteria; if the countable income and resources of the

parent (or spouse) fell below the SSI or State supplement standard; or if a waivered child reached

the age of 19, at which time he or she could qualify for SSI and Medicaid as an adult without consideration of parental income and resources.

The obvious attraction of the individual waiver

option for States was the ability to provide more

appropriate Medicaid coverage for selected individuals. States pursued the option as a short-term

response to a small number of extraordinary cases,

usually in the face of significant public pressure.

But since the waiver only entitled individuals to

regular Medicaid services, States without many

Medicaid home care benefits may have found it

difficult to use this option unless other sources of

home care financing were available to the child

as well.

States used this option not only to cover institutionalized children who needed the deeming rules

waived in order to return home, but also to cover

disabled children already at home. In some instances, these children needed Medicaid benefits

as a backup for private insurance; in others, they

already were SSI- and Medicaid-eligible and needed

the deeming rules waived so that their parents

would be permitted to earn higher incomes.

Regular 2176 Waivers

These waivers, authorized by Congress in Section 2176 of the Omnibus Budget Reconciliation

Act of 1981 (Public Law 97-35), enable States to

finance a wide array of home- and communitybased services for Medicaid recipients who otherwise would require institutionalization. Under the

waivers, States can designate specific target populations who will be subject to broader income

eligibility policies and receive a wider range of

home- and community-based services than normally covered under the State plan.

Eligibility for regular 2176 waiver programs is

limited to Medicaid recipients who, in the absence

of home and community services, would require

long-term care in a skilled nursing facility (SNF),

intermediate care facility (ICF), or hospital. Special reference to hospital-level care for the ventilator population (Public Law 99-272) and for all

other individuals (Public Law 99-509) was added

to the statute in 1986. Even before the addition,

States could have included hospitalized individuals in these waiver programs, but this policy was

unwritten and not clearly communicated to the

States (59).

States must specify a projected number of people to be served under the waiver. In defining the

population to be served, States must select a target group from one of the following three categories or subcategories of Medicaid recipients:

aged or disabled, or both; mentally retarded or

developmentally disabled, or both; or the mentally ill. (States can have more than one waiver

if they wish to serve more than one group. ) In

addition, they may restrict eligibility for participation in the waiver to:

individuals residing within a certain geographic area of the State,

individuals being discharged from a longterm care institution, or

those particular individuals for whom the

Medicaid cost of providing home- and community-based services is less than the cost of

providing institutional care.

A State can also expand income eligibility for

the target waiver population beyond that of the

regular Medicaid program in two ways. One is
63

to increase Medicaid income eligibility limits to

a level equal to three times the maximum payment made to an individual under the SSI program. (Individuals becoming eligible under this

higher income standard, however, would be required to contribute to the cost of their care. ) The

other option is not to deem a certain portion of

the family’s income to be available to an individual who receives care at home. Once a State has

set its eligibility criteria for a 2176 waiver program, all individuals who apply to the program

and meet the specified criteria must be accepted

until the projected limit is reached.

States may provide services under the waiver

that are otherwise not allowed by Medicaid, such

as respite care and habilitation services. 12 They

can also expand the amount, duration, or scope

of coverage of regular Medicaid services offered

in that State, Among the various regular Medicaid services that have been offered more extensively under the waiver are case management,

hourly nursing care, home health aides, personal

care services, medical supplies, and durable medical equipment. States may also offer other services approved by the Secretary, such as minor

home modifications and utility expenses.

To receive waiver approval, it is essential for

a State to show that its proposed program of augmented services will be no more costly to the Medicaid program than institutional care. Estimated

per capita expenditures for all Medicaid services

provided to all long-term care recipients, including both home and hospitalization, cannot be

greater than they would have been in the absence

of the waiver (42 CFR 441). States that want to

serve technology-dependent children are able to

compare the cost of their home care to the cost

of hospitalization using the prescribed formula.

Given that the waiver naturally increases the number of Medicaid recipients receiving long-term care

services in the home, a waiver application usually is expected to demonstrate cost savings in two

ways: by showing that the total cost of home- and

community-based services is less than the total

cost of institutional care, and by documenting that

the waiver will afford a reduction in the number

.

‘

2 Habilitation services now include prevocational, educational,

and supported employment services for discharged nursing home

patients (effective Apr. 6, 19861 (Publlc Law 99-272).

of Medicaid beneficiaries receiving institutional

care.

The advantage of the regular 2176 waiver is its

flexibility. Eligible groups can be defined narrowly

or broadly, and the waiver can be applied to the

entire State or only to a small area. States can,

if they wish, use a regular 2176 waiver to serve

a relatively small group of disabled children who

otherwise would be hospitalized. The often prolonged process of completing the very detailed

waiver application, however, may have discouraged States from targeting these waivers to this

small population. Regular 2176 waivers generally

are perceived by the States as being for larger and

more inclusive populations, such as the elderly

and disabled, and incorporating technology-dependent children into such a waiver is not attractive

to all States. For one thing, States appear reluctant to waive the SSI deeming rules for the large

number of recipients who would be eligible under the waiver. For another, they seem to prefer

to control the number of very high-cost individuals who come into the program for fear of exceeding their original cost estimates and having

their renewal request denied. 13

Model 2176 Waivers for the Disabled

Using its statutory authority for regular 2176

waivers, the Health Care Financing Administration (HCFA) developed a “model” 2176 waiver

in December 1982 to encourage States to provide

home- and community-based services to certain

disabled individuals who otherwise would lose

Medicaid eligibility outside of an institution. A

model waiver is similar to a regular waiver except in two essential respects:

1. it may serve no more than 50 blind or disabled children and adults at any one time, *5

and

I JA]though the States perceive this as a real obstacle, HCFA staff

report that they routinely grant approval for higher cost ceilings

where States have incurred unanticipated expenses for medically necessary services. (Between March 1985 and April 1986, before Public Law 99-272 prohibited this practice, the Health Care Financing

Administration had been denying Federal matching payments for

Medicaid expenditures that exceeded a State(s original cost ceilings, )

l~see the State Medicaid Manual, Part S—Eligibility, transmittal

no. 1, February 1983 and final regulations at 42 CFR 441.300.

*’Prior to the enactment of Public Law 99-272 in 1985, States operating under a model waiver ~’ere able to serve only .s0 unduplicated

recipients, which meant that participants who died or left the program for any reason could not be replaced.
64

2. it must provide that the SSI income deeming rules are waived to permit Medicaid eligibility for noninstitutional services.

HCFA’s intention was to assist States in moving quickly through the waiver application process and to eliminate the need for individual waivers

(47 FR 24274). States applying for the model waiver

must meet all of the basic statutory and regulatory requirements for regular 2176 waivers but

are required to offer only one home- or community-based waivered service. As under the regular 2176 waiver, States may target their programs

to particular subgroups of the disabled population.

Once a model waiver is approved, States can

admit only those eligible individuals whose estimated home care costs are below the estimated

costs for institutionalization. By contrast, under

a regular waiver, States need only show that Medicaid’s average per capita costs with the waiver

would be less than they would be without the

waiver.

The advantage of the model waiver is that it

gives States a built-in cap on costs and a chance

to gain experience with home care for the disabled on a small scale. In addition, States interested in serving children who otherwise would be

hospitalized generally find that a model waiver

request is more likely to be approved by HCFA

than a regular waiver request. The standardized

application form makes it possible to isolate a

small, closely defined group of these children and

show, on a case-by-case basis, the often dramatic

program cost savings of caring for them at home.

If the model waiver is targeted exclusively to technology-dependent children, the State also can

avoid the requirement of the regular waiver to

document a reduction in the number of nursing

home residents. The 50-person limit, however,

may mean that some States must apply for more

than one waiver to serve this population adequately.

State Plan Amendment

In addition to the waiver options, States have

the option of amending their State plans to expand Medicaid eligibility to disabled children under age 19 living at home who, because of the SSI

deeming rules, otherwise would be eligible for

Medicaid only if institutionalized (Public Law 97-

248). Only the normal range of covered Medicaid services in that State are available under this

option; special services cannot be added solely for

this particular group. States must ascertain for

each child that home care is appropriate, and that

the cost of this care is less than it would be in an

institution of the appropriate care level. Once a

State amends its plan, all children meeting the

eligibility criteria, whether or not institutionalized, must be allowed to participate. A State can

elect to discontinue coverage for this group of children at any time.

The State plan option does not require a State

to prepare cost documentation or to await a

lengthy approval process. States are free to develop their own implementing regulations. Yet,

some States have viewed the option as being too

broad and having the potential of extending Medicaid eligibility to large numbers of children who

are currently being cared for in the community.

From the perspective of families and providers,

however, the option’s major drawback is that in

States with meager Medicaid home care benefits

a technology-dependent child’s requirements for

services may not be adequately met.

State Use of Medicaid Options to

Serve Technology= Dependent Children

An overview of State experience with the four

Medicaid options is presented in table 21. This

table summarizes waivers serving physically disabled, but not mentally or developmentally disabled, children. Although at least one State (New

Mexico) uses a waiver for the developmentally

disabled population as its major vehicle for providing extended Medicaid home care services to

technology-dependent children, and other States

may serve a few such children under such waivers,

most States thus far include technology-dependent

children under waivers for the physically disabled.

Thirty-three States were serving technologydependent and other physically disabled children

through a waiver as of April 1986.16 Eight States

were providing these children with special home

16A number of states Were renewing waivers in 1986, so these

numbers may have changed.
65

Table 21.–State Activity in Medicaid Home” and Community”Based Service Options as of Apr. 15, 1986

Regular waivers serving Model waivers serving State plan

disabled children disabled children amendment

Number of Number of Number of Indiwdual waivers

Approved children Approved children Approved

State

children for children

waivers served waivers sewed plan change served (number of waivers)

Alabama 1 9

Alaska

Arizona

Arkansas Yes 47

California 1 60

—

Colorado Yes (7)

Connecticut 1 6

Delaware

District of Columbta ‘-

Yes (8)

Florida —— —

Georgia 3 7 Yes 0 Yes (18)

Hawaii

Idaho 1 31 1 3 Yes 100

Illinois 1 50 Yes (30

Indiana Yes (1)

Iowa 1 14 Yes (10) — . .

Kansas

Kentucky 1 36

Louisiana Yes (2)

Maine Yes 66

Maryland

——

1 13 —

Massachusetts Yes a Yes (28)

Michigan 2 38

Minnesota 1 14 Pendingb

—

Mississippi 1 0

Missouri 1 2 T — -

Montana l

–

30

Nebraska —

Nevada — –

— .

Yes 5 Yes (2) —

New Hampshire——.

New Jersey 1 3 3 40 Yes (6)

New Mexico

— .

1 25 Yes (1)

New York 1 3 Yes (6)

North Carolina 1 7

North Dakota

Ohio 1 24

Oklahoma

— —

--

Oregon —

Pennsylvania Yes (13)

Rhode Island Yes 12

South Carolina

South Dakota

Tennessee—

Texas -

‘*- =

Utah

Vermont

— —

Virginia

Washington 1 1 5

West Virginia Yes (2) —

Wisconsin

-.

Yes 100 —

Wyoming

—

Total “yes” answers 8 207 19 244 9 331 14 134 —

aMassachusetts began admitting children under this eligibility provision in fiScal Year 1987.

bMlnnesota’5 State Plan Amendment has been approved by the State and Is pending in HCFA.

SOURCE: H.B Fox and R Yoshpe, ‘( Technology .Dependent Ch!ldren’s Access to Medicaid Home Care Financing, ” prepared for the Office of Technology Assessment, U.S Congress, August 1986.
66

care services under a regular 2176 waiver and 14

States were broadening their eligibility as well as

their benefits through 19 separate model waivers.

In addition, nine States had amended their plans

(a tenth has now been added) and 14 had requested and received individual waivers.

Together these options have been serving 938

physically disabled children. Technology-dependent children who require device-based respiratory or nutritional support (equivalent to Groups

I through III in this Technical Memorandum) appear to comprise over 60 percent of the under 21

population receiving home care under one of the

three waiver programs (47).* 7 Among the other

physically disabled children covered by the waivers,

about 25 percent have central nervous system disorders (e.g., cerebral palsy, quadriplegic, or spina

bifida), and about 10 to 15 percent are characterized by congenital, metabolic, or immune disorders (e.g., cystic fibrosis or congenital heart disease, ) or by injury-induced trauma.

In the 17 States without either waivers or a State

plan amendment, technology-dependent children

are subject to the same Medicaid eligibility requirements and home care coverage that other

Medicaid recipients are. In these remaining States,

children who cannot qualify for Medicaid as categorically eligible or medically needy may rely on

Maternal and Child Health program funds for

some home services; or they may remain in an

institution in order to retain Medicaid eligibility.

Children who can qualify for Medicaid as poor

or medically needy individuals may receive regular Medicaid home services; or, in one or two

States, they may be able to receive certain additional home services under the Medicaid Early and

Periodic Screening, Diagnosis and Treatment

(EPSDT) program. 18

17 Comparable diagnostic information was not available for children receiving home care services under a State plan amendment.

18 EPSDT is a separately authorized program under Medicaid

offered to all low-income, Medicaid-eligible children. Its funct ion

is to detect and treat correctable abnormalities in children, such as

vision and dental problems. EPSDT services are not subject to the

same Federal limits and requirements as other Medicaid services,

and under EPSDT States can offer services to poor children that

are not available to other Medicaid beneficiaries.

Practices Limiting Use of

the Medicaid Options

The special Medicaid options that can be used

to extend services to technology-dependent children are limited by Federal statute and regulations,

State implementation, and insufficient knowledge

and understanding of the options. While some

limits are unintended, others are the result of conscious efforts to control costs, or the result of serving technology-dependent children under waivers

that were tailored primarily for the elderly population. For example, the requirement that a State

must prove that a 2176 waiver will not increase

Medicaid costs is one that for many States entails

expensive and difficult documentation. In a second example, the fact that children with eligibility under the State plan amendment option can

receive only regular Medicaid home health coverage means that this option may be only minimally useful in some States unless general coverage is expanded. And, expanding coverage would

mean extending the home services available to all

Medicaid recipients, including the elderly, which

many States fear will be very costly.

A number of States have argued that HCFA

procedures for waiver approval are unduly confusing and time-consuming. HCFA, on the other

hand, argues that the process is relatively straightforward if States are adequately prepared and that

HCFA itself offers assistance in preparing the applications. Both of these perspectives are probably valid. A lack of communication and understanding between HCFA and the States seems to

have contributed to a reluctance on the part of

some States to apply for waivers (or to implement

State plan amendments), to follow through on the

applications, or to tailor the waivers to the needs

of technology-dependent children.

Although a substantial number of 2176 waivers

and State plan amendments are in effect, in many

States not as many technology-dependent children

as might be expected are receiving the benefits of

these options. Variation in the use of waivers is

frequently a function of the way a program is

structured with regard to income eligibility, categorical eligibility, cost-saving determinations, and

service coverage. Specific State restrictions that
.-

can limit access of technology-dependent children

to Medicaid services include:

not waiving SSI deeming rules (possible only

under the regular 2176 waivers, since these

rules must be waived under a model waiver),

restricting eligibility for a waiver only to certain disease categories (possible only under

model waivers),

allowing waivered services only to individuals actually discharged from an institution,

not allowing home care costs to be compared

against the costs of hospitalization (as opposed to SNFs or ICFs),

limiting reimbursable hospital days (which

may make it difficult to show program cost

savings from home care to Medicaid),

not covering skilled shift nursing (i. e., private duty nursing) as a regular or a waivered

service, and

not expanding in other ways the range of

regula Medicaid home services available

when relying on an individual waiver or

State plan amendment to serve the needs of

the technology-dependent population.

Tables 22, 23, and 24 summarize the restrictions

of the various home care options in specific States.

In some instances, the State’s “attitude” toward

financing the care of these high-cost children, a

more subtle program feature to capture, is the real

determinant of how many technology-dependent

(and other physically impaired) children receive

Medicaid home care benefits. For example, only

about one-half of the States operating Section

2176 waiver programs that include children routinely inform the families of children who face

long-term hospitalization of their right to be

evaluated for waiver program participation (59).

Moreover, only one-fourth of the States with

regular waivers and 15 percent of those with

model waivers report that they publicize the availability of their programs. In Georgia, which

sought (and received) three model waivers in response to great political pressure to help a few

particular children, not even hospital discharge

planners have been told about the waivers. Indeed, even among the Medicaid agency staff, there

is much confusion and misinformation about

whether additional children may be covered. A

similar situation exists in Mississippi.

Many of the waiver and amendment programs

have had long initial delays, often due to a shortage of case managers and home health agency personnel. In such instances, disabled children, like

other potential participants, have been unable to

obtain the intended home care benefits.

For the most part, the 2176 waiver programs—

particularly the regular waivers—have been designed and used to serve populations other than

physically impaired children. Accordingly, these

waiver programs often have State restrictions intended as gatekeeping mechanisms to reduce program costs, but in practice the restrictions act to

limit the usefulness of these programs for technology-dependent children.

STATE-PROVIDED SERVICES FOR CHILDREN

WITH SPECIAL HEALTH CARE NEEDS

Prior to 1981, States provided a number of specific health services to women and children under

a series of categorical grants, authorized under Title V of the Social Security Act and jointly funded

by the States and the Federal Government. These

services included maternal and child health services; crippled children’s services; supplemental

security income services for disabled children; hemophilia treatment centers; and other programs

aimed at specific groups or health problems. The

1981 Omnibus Budget Reconciliation Act (Public Law 97-35) replaced these categorical grants

with a single block grant to each State, eliminating most of the requirement for specific services

and allowing greater State discretion, A specified

portion of the total funding continued to be set
State

(year

Table 22.—State Policies and Practices That Limit Participation Under the Regular Waiver Programs

That Theoretically Could Serve Physically Disabled Children, April 1986

Service limitations
Table 23.—State Policies and Practices That Limit Participation Under the Model Waiver Programs, April 1986

(1985) -(loo%)

New Mexico 25 x x

(1984) — — (loo%)

New York I 3 x x

(1984) (loo%)

New York II o x x

(1983) (100%)

\,

aMlchigan compares the cost Of home care to 60 percent of the DRG howmal remtnmement —

bThe Mlsslsslppl model waiver has not Served any cllents and ther@fore has m w09rarn exmrleflce

cKJeW Jersey’s Medically Ne@ Program began in July 1966, but the waiver programs do not cover the medlcall Y needy.

SOURCE H B. FOX and R Yoshpe, “Technology-Dependent Children’s Access to Medicaid Home Care Flnanclng, ” prepared for the Office of Technology Assessment, U S Congress, August 966
70

Table 24.—State Policies and Practices That Limit Participation Under the State Plan Amendment, April 1986

Service limitations Service cost limitations

State relies heavily

Number of State plan on private insurance, Does State plan limits Does State plan does

State children covered does not voluntary services, not use hospital coverage not use not cover SNFs

(year under this cover skilled and/or family hospital cost and allows no SNF cost for individuals

implemented) provision shift nursing delivered services comparison exemptions comparison under age 21 —

Arkansas 47 x

– —

x

(1985) ——

Georgia

—-

0 x x x

(1982)

Idaho 100 x x x x

(1984) —————

Maine 49 X

a

(1983) — .

Massachusetts

— O

b

(1986)

Nevada 5

(1982)

Rhode Island 12 ‘–x

(1985) ——

South Dakota

—.

l – x x

(1985) —

Wisconsin ‘

–

100

—

x

(1 983) —

aMalne~ amending Its State plan to Include skilled nUrsin9.

———

bMasSaChu~ett~ began admlttln~ ~hlldren under this eligibility provision In fiscal year 1987

SOURCE H B Fox and R Yoshpe, “Technology-Dependent Children’s Access to Medicaid Home Care Financing, ” prepared for the Off Ice of Technology Assessment,

U S. Congress, August 1986

aside, however, for special demonstration projects, training, and genetic disease and hemophilia

programs (158).

Under the present Maternal and Child Health

(MCH) block grant program, States must match

every 4 Federal dollars with 3 State dollars. 19 An

evaluation of the implementation of the block

grant program by the General Accounting Office

(GAO) found that States tended to spend their

allotments in ways substantially similar to prior

patterns (158), In all 13 States studied by GAO

in 1984, States were offering extensive services to

crippled children (recently redesignated “children

with special health care needs” (CSHCN)). Services offered by the States were extensive. Most

States had actually increased their funding for

these services, and four of the 13 States had added

new services. The programs themselves showed

great diversity, however, maintaining differences

that existed before the block grant was established.

Most program funds are now spent on screening

— . —

l~The Federa] Government Spent $67 mi]]ion on handicapped children’s services in 1983, most of it from the block grant (amounting

to 23 percent of the total MCH grant) (8). States spent an additional

$247.6 million, some of which was matching MCH funds.

and treatment of handicapping conditions. However, they also fund a variety of ongoing support

services such as counseling and case management.

A few States operate State-owned hospitals for

handicapped children.

The population served by the CSHCN program

has changed considerably since 1935, when the

program was first enacted. Originally, Title V

specified that the program was to provide diagnostic, corrective, and rehabilitation services to

children with crippling conditions, such as polio

and cerebral palsy. Over time, however, the original program has expanded in many States to serve

children with a wide range of chronic health conditions, and the ventilator-dependent child is a recent example of the new population (107).

The States interviewed by GAO typically provided CSHCN services through State health agencies and physicians on a fee-for-service basis. Services include “screening, diagnosis, surgical and

other corrective procedures, hospitalization and

after care, and speech, hearing, vision, and psychological care” (158). The Federal legislation

establishing the MCH block grant prohibits the

charging of fees to low-income mothers and chil-
71

dren and requires that when fees are charged they

reflect the income, resources, and family size of

the beneficiary. A number of States have sliding

fee schedules for services (158).

CSHCN is a strongly clinic-based program in

most States, actually providing some or all of the

covered services (rather than simply reimbursing

for them, as Medicaid does) (36). It is often coordinated with Medicaid; in many clinics, the

CSHCN program provides the services and Medicaid reimburses the clinic for services provided

to Medicaid-eligible individuals (135).

Despite the traditional emphasis of clinic-based

care, most CSHCN programs fund or provide at

least a limited amount of home care services, and

some provide a fairly wide array of such services.

The CSHCN program in Los Angeles County,

California, for example, will provide or pay for

home nursing services, physical and occupational

therapy, respite care, and other home services.

The program also provides case management for

children receiving home health services, and training for families of technology-dependent children

(103).

The CSHCN programs area particularly significant source of funded care for technology-dependent children in Illinois, Louisiana, and Maryland.

Between 1983 and 1986, these three States were

recipients of MCH demonstration project funds

for Special Projects of Regional and National Significance (SPRANS). They developed programs,

extentions of their CSHCN programs, aimed at

appropriate long-term care for ventilator-dependent children. The programs had two principal

design objectives:

1. to develop a regionalized system of care for

such children; and

2. to develop a comprehensive, coordinated

model of care.

The SPRANS programs of the three States differ in a number of ways. Illinois and Louisiana

originally targeted only ventilator-dependent children under age 22, while Maryland targeted all

children requiring some specialized respiratory

support under age 18. Louisiana and Illinois run

their programs out of single hospital-based centers, while Maryland’s program is based in a consortium of several hospitals with a coordinating

board. All programs, however, emphasize training of parents and professionals, case management

and coordination of care, and care in nonhospital settings.

Through the SPRANS projects, the CSHCN program has focused attention on ventilator-dependent children and their problems in acquiring community care, These projects, and programs in

certain other States, have centered on the CSHCN

program as a coordinator of care. Observers and

program administrators have noted that children’s

health services have tended to be fragmented and

disease-specific, and that State CSHCN programs

should seek a role in the coordination, not just

the provision, of services required by technologydependent children (106,177). Some of the State

CSHCN agencies appear eager to take on this responsibility.

A COMPARISON OF HOME CARE BENEFITS IN FIVE STATES:

THREE HYPOTHETICAL CASES

Because eligibility criteria, covered services, and

payment mechanisms for Medicaid and CSHCN

services vary so dramatically across the 50 States,

it is difficult to describe generally a technologydependent child’s access to publicly financed home

health services. A child may have access to excellent services in one jurisdiction but be able to

receive little or no financial assistance for noninstitutional care in another. Furthermore, a State

that offers little access to Medicaid services to one

child may offer substantial services through its

CSHCN program, and the reverse might be true

in another State. Some States that seem, on paper, to offer few services in reality have innovative ways of extending certain vital services to at

least a limited population, On the other hand,

States with apparently generous benefits may be

very strict in actually authorizing them.

In order to portray the diversity among States,

this section examines the opportunities for home

care covera~e that three hypoothetical children
could expect in five different States: California,

Georgia, Kansas, Maryland, and Missouri. The

States were chosen to reflect diversity in size,

geography, and urban-rural composition, and

also to represent a wide range of Medicaid and

CSHCN program designs. The services available

to the three hypothetical children in each State

are described below.

Case 1: “K ”

“K” is a hospitalized 8-month-old infant

with severe bronchopulmonary dysplasia.

She is medically stable but still requires fulltime ventilator and tracheotomy care (suctioning up to 50 times a day) and special formula feeding through a nasogastric tube five

times a day. She also receives medication

treatments, chest physical therapy, and range

of motion exercises four times daily. The

monthly cost of her home care is projected

to be about $7,620 ($6,650 for paid nursing,

$300 for equipment, $600 for supplies, $50

for medication, and $20 for a physician

visit). There would be additional initial costs

of approximately $900 to cover equipment

and supplies. Costs could decline as she is

weaned from the ventilator.

“K” 's mother is single and unemployed;

she will rely on AFDC and food stamps to

support “K” and two other children. “K”

grandmother also lives with the family.

Medicaid Services

“K,” as an AFDC recipient, would be automatically eligible for regular Medicaid home care services in all five States, In Maryland, California,

and Missouri, “K” would be eligible to receive

augmented home services through a 2176 waiver

program. (Maryland has a model waiver program

to serve severely disabled children. California and

Missouri both operate regular waiver programs

that can include disabled children and allow home

care costs to be considered against the cost of hosvitalization. ) In these three States, the waivers are

routinely used to serve ventilator-dependent children and could provide all of the home care benefits that “K” requires.

Although Georgia operates a model waiver program specifically for ventilator-dependent children

and “K” would meet the established eligibility criteria, it is not clear whether she could participate.

Thus far, the State has elected to serve only three

ventilatordependent children, each of whom is

comatose. Medicaid staff report that, for financial reasons, the agency is not interested in increasing the number of children receiving intensive

home care services under the model waiver.20

“K” would be dependent on nonwaivered Medicaid services in Kansas and probably also in

Georgia. 21 In Kansas, most of her home care needs

could be reimbursed through EPSDT, because the

State allows home care benefits up to $240 per

day through this special Medicaid program. However, “K” ‘s home care needs most likely could

not be met in Georgia, where she would receive

only those Medicaid services regularly available

under the State plan—physician services, medication, a limited number of intermittent nursing

visits, and the ventilator equipment itself.

CSHCN Support

Extensive case management assistance for “K” ‘s

family could be provided in California, Kansas,

Maryland, and Missouri, because the CSHCN

program in each of these States has agreed to manage the care of Medicaid children with complex

medical needs. In Georgia, though, CSHCN case

management expertise would not be available.

Basic differences in home care benefits among

CSHCN programs could affect “K” ‘s potential for

hospital discharge. In California and Maryland,

two States in which Medicaid benefits available

to “K” are already substantial, CSHCN programs

would be willing to provide certain gap-filling

services that may not be fully financed through

Medicaid. Missouri CSHCN also could provide

20Many chi]&en m=t the model waiver criteria but have not been

brought into the program. At present, in one hospital alone, there

are more than 20 ventilator-dependent children unable to obtain

home care financing.

“Georgia uses a maximum monthly home care service limit of

$1,200 in determining an individual child’s eligibility. Kansas uses

a standard of $240 per day. However, since total parenteral nutrition would be an additional inpatient hospital cost, it is calculated

as an additional home care cost above the maximum day rate.
. .

73

equipment, supplies, and some therapeutic services. Yet in Georgia, neither Medicaid nor the

CSHCN program would cover “K” ‘s skilled nursing care.

Case 2: “M”

“M” is an 18-month-old toddler who has

been hospitalized since birth due to multiple metabolic and developmental problems,

including insulin-dependent diabetes, congenital heart disease, seizures, liver dysfunction, and failure to thrive. “M” ‘s mother,

who is divorced and has no other children,

is eager to bring him home and would provide much of his care herself. Once home,

“M” will continue to require an evaluation

and adjustment of his diet on a daily basis,

monitoring of his blood glucose level four

times each day, and 12 different medications,

some of which must be taken two or three

times daily. The estimated monthly cost of

his home care is $4,320 ($3,700 for nursing,

$70 for equipment, $280 for supplies, $250

for medication, and $20 for a physician

visit).

“M” ‘s mother earns $14,5OOper year and

has saved $2,800. Her employee health benefits were meager and ran out quickly during “M” 's prolonged hospital stay.

Medicaid Services

“M’”s disability and low family income make

him eligible to receive SSI cash benefits. In four

of the five States—California, Georgia, Kansas,

and Maryland—he, therefore, would be eligible

for Medicaid (and regular Medicaid home health

benefits) as well. Missouri, however, has elected

not to provide Medicaid benefits to SSI recipients

under age 21 unless they are residents of an ICF.

“M,” in fact, would have no opportunity to be

covered by Medicaid in Missouri. His mother’s

income places them far above the AFDC payment

level and Missouri does not provide benefits to

the medically needy.

Under the Maryland and California waiver programs, “M” could be covered by Medicaid for his

complete home care package. He would also be

covered in Kansas under its EPSDT program,

which in that State is used to fund extensive treatment services for certain chronically ill children.

In Georgia, the most expensive part of his care—

the skilled shift nursing service—could not be reimbursed, although medication, equipment, supplies, and physician visits could. Although Georgia has three model waivers for disabled children,

“M” would not be able to participate in any of

these.

CSHCN Support

In Maryland and Kansas, two of the three

States where “M’”s home care needs could be

financed adequately by Medicaid, case management and family training would be provided

through an arrangement with the CSHCN program. The Maryland and also the California program could contribute certain services, supplies,

and equipment in the event that these were not

covered by Medicaid. The California CSHCN

program does not charge Medicaid recipients, but

the Maryland program would require “M’”s family to pay a small co-payment charge. In Georgia, where the Medicaid home care benefits available to “M” would be minimal, the CSHCN

program could provide his family no additional

assistance. “M” would be financially eligible for

CSHCN services at no charge, but the agency neither finances nor arranges for skilled shift nursing care at home.

In Missouri, where “M” would not have access

to Medicaid benefits at all, he would be financially

eligible for all CSHCN services, although his family would have to pay a small fee. The program,

however, does not provide skilled shift nursing

or other extended home care services. It would

cover only “M’”s physician visits, equipment, supplies, and medication.

Case 3: “T”

“T” was diagnosed at birth as having short

gut syndrome and malabsorption. Now age

6, he has been hospitalized approximately

20 times for varying periods. When at home,

“T” attends school regularly with a nurse.

His daily home care requirements include 20

hours of intravenous nutrients, care of the

central line, and frequent monitoring of his
74

glucose level. The monthly cost of his care

is $17,035 ($10,000 for nutritional supplies,

$7,000 for nursing, and $35 for a physician

visit).

“T” ‘s parents, who have three children,

both are employed full time and have a combined annual salary of $.52,000. They have

$6,500 in the bank, two cars, and are paying off the mortgage on their home. “T” ‘s

hospital and home care both had been covered under his father’s company insurance

plan, but the family recently reached the

$1,000,000 lifetime benefit maximum.

Medicaid Services

“T” cannot become eligible for Medicaid in Missouri, where the medically needy are not covered,

but in the other four States he could become eligible as a medically needy recipient. His parents,

however, would have to reduce their savings and

incur very substantial medical expenses in order

for him to qualify. The actual amounts would

vary from State to State:

●

●

●

in California, the family first would have to

reduce its savings to $3,000 and then spend

$2,405 for medical care each month to become eligible;

in Georgia, the family first would have to reduce its savings to $2,700 and then spend

$16,332 in each 6-month period before becoming eligible (an average of $2,722 per

month); and

in Kansas, the family first would have to reduce its savings to $1,700 and then spend

$15,438 in each 6-month period (an average

of $2,573 per month) .22

— .

ZZThese spend-down figures are based on the SS1 eligibility determination methodology and each State’s medically needy income

level (MNIL) for one person. (The family’s monthly income and an

estimated $30 in bank interest were added together, $336 was subtracted as a living allowance for the other two children, $1,008 was

subtracted as a living allowance for the parents, and $65 plus $2o

was subtracted as an exclusion from the parent’s earned income.

The remainder, minus a $2o exclusion, was deemed available to the

disabled child, Then each State’s MNIL for one person was applied,

as appropriate, on a l-month or 6-month basis. )

None of the State Medicaid agency staff contacted by Fox and

Yoshpe (s9) would have followed the SS1 methodology as it is

prescribed by the Social Security Administration. In fact, one of

the States would have used its AFDC methodology. Of the three

that would have used the SS1 methodology, two would have used

a different methodology appropriate when no other children are in

Spend-down requirements of this magnitude

(ranging from $28,860 to $32,664 annually) obviously would place an enormous financial burden on the family. Only in Maryland could “T”

be brought into the Medicaid program without

his family first having to meet the spend-down

requirement, because under Maryland’s model

waiver “T’”s family income would not be deemed

available to him.

Georgia operates three model waiver programs,

but “T’”s condition is not covered by any of them.

Having amended its State plan, Georgia also provides Medicaid to certain children who, because

of the deeming rules, otherwise would be eligible

only in an institution. Under this provision,

though, the State restricts eligibility to children

whose home care costs would be less than the cost

in an SNF or ICF, and “T” would not qualify .23

In California, “T” could participate in the regular waiver program, but since the SS1 deeming

rules would not be waived, “T” would be eligible for the program only after his family met the

medically needy standard. Both California and

Maryland offer parenteral nutrition as a regular

Medicaid benefit and provide skilled shift nursing care as a waivered service.

In the two States where “T” could receive only

non waivered services, his chances for adequate

benefit coverage would differ dramatically. Kansas

covers all necessary treatment services for children through its EPSDT program, which is not

subject to the service limits of its regular Medicaid plan. Thus, after an initial screening, “T’”s

parenteral nutrition and skilled nursing care both

could be authorized under EPSDT.24 Georgia, in

contrast, does not use EPSDT to expand coverage for treatment services beyond what is regularly available under the State plan. “T” would

be covered for the intravenous equipment, physician visits, and rehospitalizations, but not for

the family, two would have used the MNIL for either a three- or

five-person family, and none would have included the unearned bank

interest income.

IJGeorgia uses a maximum monthly home care service limit of

$1,200 in determining an individual child’s eligibility.

ZdKansa5 u5es a standard of $240 per day. However, since total

parenteral nutrition would be an additional inpatient hospital cost,

it would be calculated as an additional home care cost above the

maximum day rate.
his nutritional products or skilled shift nursing

care.

CSHCN Support

CSHCN programs in three of the States—Kansas, Maryland, and Missouri—provide case management and family training services to technology-dependent children enrolled in Medicaid.

“T’”s family, therefore, could receive these services in Kansas and Maryland, where he would

qualify for Medicaid coverage.

In California and Kansas, where SSI deeming

rules could not be waived, “T” would need case

management and any other available CSHCN

services prior to meeting the Medicaid spenddown requirement. In California, the CSHCN

program could purchase “T’”s equipment and

parenteral nutrition, deliver 3 months of skilled

shift nursing care, and provide continuous case

management support; his family would be charged

an amount equal to two times their State income

tax. In Kansas, though, CSHCN covered services

DEPARTMENT OF DEFENSE

The Department of Defense (DOD) provides

medical care, or payment for medical care, to the

dependents of active and retired military personnel. It does so in two ways: through its own hospitals, operated independently through each of the

four Armed Services branches; and through

CHAMPUS, which pays for care that cannot be

obtained in the military hospitals. Armed services hospitals and CHAMPUS are operated independently of one another, but they provide access to the same general categories of services.

DOD pays for nonhospital long-term care in

two ways. First are the regular home health benefits available under CHAMPUS. These benefits

include:

durable medical equipment, including ventilators;

oxygen;

parenteral and enteral nutrition therapies;

physical therapy;

skilled nursing care;

75

—which include many of the services “T” needs—

are available only to children whose family income falls below the poverty line or who are eligible for Medicaid. “T” could not receive these services during the spend-down period.

CSHCN services in Georgia, not unlike many

other States, do not include any high-cost home

care services. If “T” and his family lived in Georgia, therefore, they could not depend on either

Medicaid or the CSHCN program to finance, even

partially, the skilled shift nursing care that “T”

requires.

Unfortunately, in Missouri, where “T” has no

opportunity at all for Medicaid coverage, he also

would have no way of obtaining home care services through CSHCN. The program, like Georgia’s, emphasizes treatment of crippling conditions

and, while it has purchased sophisticated equipment on occasion, “T’”s family would be financially ineligible

income cut-off

even for this benefit. The annual

for a family of four is $19,000.

. medications and medical supplies; and

● physician visits.

Many technology-dependent children, however,

may not be judged eligible for the full extent of

these home benefits, however, because neither

military hospitals nor CHAMPUS may provide,

or pay for, “custodial care” (164). CHAMPUS’s

policy manual defines “custodial care” as care rendered to a patient:

1.

2.

3.

4.

who has a mental or physical disability that

is expected to be prolonged;

who requires a protected, monitored, or controlled environment, whether in an institution or in the home;

who requires assistance to support the essentials of daily living; and

who is not under active treatment that will

reduce the disability to the extent necessary

to enable the patient to function outside the

protected environment (164).
76

If a military hospital (for a hospitalized child) or

a CHAMPUS intermediary should determine that

a technology-dependent child fits this definition,

that child is then eligible only for a subset of the

usual home benefits. These limited benefits include

medications and medical supplies and up to 1 hour

per day of nursing care.

CHAMPUS began a home care demonstration

program on July 1, 1986, under which it provides

extensive home care benefits (including 100 percent coverage of most costs and coverage of homemaker services) to patients who would otherwise

be receiving hospital care. These patients could

include children receiving intravenous drug therapy and many infants who can gradually be weaned

from their dependence on respiratory or nutritional support. However, a child “must be receiving inpatient hospital care that is an otherwise

authorized CHAMPUS benefit” in order to be

eligible for the program (51 FR 23809). This provision still could exclude many technology-dependent children under current policy.

A second source of long-term care coverage is

the Program for the Handicapped (PFTH), a special CHAMPUS benefit for handicapped dependents of military personnel. In order to receive

benefits under this program, an individual must

show that he or she cannot get services from public programs or institutions. Prior approval is required for coverage of all supplies and services

under the program (164). PFTH covers institutional, outpatient, and home care but pays a maximum of only $1,000 per month in benefits (164).

In addition to those supplies and equipment covered under the basic program, it covers physical,

occupational, and speech therapy and special

educational services. Skilled shift nursing and

homemaker services are not covered. PFTH, like

the regular benefits program, does not cover custodial care,

OTHER PUBLIC PROGRAMS AND

A wide variety of programs and services financed by Federal or State governments can affect

the resources and services available to technology-dependent children. For example, the Federal

Government provides SSI maintenance payments

to disabled individuals, and it provides certain

adoption and foster care incentive payments to

assist in finding homes for needy children (159).

States can, and often do, supplement these payments with their own. For example, most States

provide supplemental payments to foster parents

who provide care for handicapped or other children with special needs (159).

Certain in-home services, funded jointly by the

States and by Federal Title XX social service block

grants (Public Law 97-35), may be provided to

low-income disabled individuals. Title XX funds

are provided to States in order to prevent or

remedy abuse of children and other family members; reduce inappropriate institutional care; secure admissions to and services in institutions

when such a setting is appropriate; and prevent

SERVICES

or moderate the dependence of individuals on

other persons (159). Services may include homemaker, home health aide, and other basic home

services (e.g., transportation) that can supplement

the home-based medical services available through

Medicaid.

States may also have their own special programs, funded entirely through State and local

taxes, that provide special benefits to targeted

groups. Wisconsin, for example, has a State program that provides “gap-filling” funds to individuals, including children, who are at risk of institutionalization. Wisconsin also has a family support

program that provides, separately from SSI, up

to $3,000 per year cash assistance to families with

severely disabled children living at home (37).

This example demonstrates that the resources

available to a child can be enormously varied, depending on where the child lives—and on the access of that child’s family to appropriate information and coordination of services.
77

—

CHARITABLE ORGANIZATIONS

Charitable organizations have long been visible sources of research and services to aid the disabled. About 20 national children’s health charities operate in this field, ranging in size from very

large organizations such as the National Easter

Seal Society to small organizations such as the

Retinitis Pigmentosa Foundation (117). The missions, disease orientations, and structures of the

various charities are similarly diverse. The majority

of national charitable organizations focus their efforts on one disease or closely associated set of

diseases. However, an organization may concentrate on research, public education and political

lobbying, direct provision of services, family education and support, or any of a number of other

activities.

Charitable organizations have functioned as

last-resort providers for many families with technology-dependent children. One of their most important functions in this regard is as a provider

of family support and education. Table 25 lists

the expenses of selected foundations for various

services, including medical services and patient

education, Spending for these services range from

15 percent of expenditures (March of Dimes) to

92 percent of expenditures (Easter Seal Society)

(27). “There is no strong relationship between

prevalence of a chronic condition and relative

magnitude of foundation support. . . . Consequently, children with certain disabilities have

more resource available to them than others” (27),

Researchers who interviewed a number of national charitable organizations concluded:

Although foundations expend a significant

amount on direct services, they tend to provide

assistance to cover only those services that are

not otherwise reimbursable and that place an unreasonable financial strain on families with disabled children. These services included transportation, educational and recreational activities,

physicial and occupational therapy, special medical equipment, and to a lesser extent, medical

care (27).

Table 25.—Total Amount of Expenses Allocated for Programs of Selected Foundations,

1979 and 1980 (millions of dollars)

Total Medical services Public and

program and patient professional Community

Private foundation services Research education education services/advocacy

Muscular Dystrophy Association, 1979 . $56.6 $18.0 $33.3 $5.3

March of Dimes, 1980 . . . . . . . . . . . . . . . . . . 49,9 10.2 7.6 18.4 $13.6

Cystic Fibrosis Foundation, 1980 . . . . . . . . 11.1 1.7 4.2 3.6 1.5

American Diabetes Association, 1980 . . . . 9.7 1.7 2.7 3.6 1.7

Arthritis Foundation, 1980 . . . . . . . . . . . . . . 6.0 2.9 a 2.3 0.8a

Leukemia Society of America, 1980 . . . . . . 3.9 2.2 1.0 0.5 0.2

American Kidney Fund, 1979 . . . . . . . . . . . . 1.5 0.04 0.9 0.2 0.4

Easter Seal Society, 1979b . . . . . . . . . . . . . . 85.7 0.5 79.1 6.1 —

aThe AflhrltlS FOUf_tdatlOn combines patient and COmm Unity SeNICeS Into One cate90rY

bThe Easter Seal Society Includes the comb!ned expenditures for the national and all State and tf3VltOri$31 Easter Seal SOCietles

SOURCE J A Butler, P Budettl, M A McManus, et al , “Health Care Expenditures for Children With Chron!c Illnesses “ /n N Hobbs and J M Perrln (eds ), /ssues

In the Care of Ch//dren W(h Chron/c ///ness (San Franc!sco, CA Jossey.Bass, 1985)

CONCLUSIONS

It is impossible to provide any accurate estimate surance is a major source of third-party payment

of the proportion of technology-dependent chil- for children, as presently structured it is inadedren with private insurance whose insurance cov- quate to provide for the needs of technology-deerage includes intensive home care benefits, but pendent children. It fails in several ways. First,

it is possible to get a sense of how likely compre- many children are left uninsured as a result of their

hensive coverage is, Although private health in- families’ economic positions. Second, some tech-
78

nology-dependent children may find it difficult

or impossible to obtain private insurance. Third,

even those children who are privately insured

have coverage that is likely to be inadequate to

cover the expenses associated with these medical

conditions. Finally, the structure of benefits under many policies is too rigid to deal with the

needs of technology-dependent children when

they are cared for in the home. Parents whose children require full-time monitoring and medical care

dare not give up employment to provide some of

this care, and yet in the majority of cases their

insurance will not pay for a qualified professional

caretaker.

Notwithstanding the seriousness of the current

insurance situation for these families, the private

insurance industry has made strides over the past

5 years towards accommodating payment systems

to complex medical care in the home setting. It

has done so primarily through case-by-case exception to normal home coverage limits.

The willingness of private insurers to provide

at least case-by-case exception is vital to both beneficiaries and to public payers, because many

technology-dependent children quickly lose their

private benefits by reaching the maximum allowable benefit amount. The longer these children can

stretch out private insurance through home care,

the longer they have before they become dependent on Medicaid for health insurance.

Medicaid has likewise made some progress in

the past few years towards accommodating this

population. Showing cost savings to Medicaid by

caring for a technology-dependent child at home

is by no means impossible, and the current waiver

programs have shown considerable success at

serving at least a few children in this setting at

less cost to the program. It is, however, generally much more difficult to show cost savings to

Medicaid than cost savings to a private insurer,

because Medicaid pays much less in the hospital.

States have attempted to limit home and community costs by restricting eligibility or services in

some cases. Unfortunately, the exclusion of certain expensive services-particularly skilled shift

nursing—can absolutely prevent many technology-dependent children from coming home.

DOD has found it more difficult than Medicaid to adapt its payment system and benefits to

technology-dependent children. While the usual

home benefits under CHAMPUS can be substantial, those benefits are not available to a technology-dependent child who is judged to need very

prolonged, supportive care. Unless the regulations

defining custodial care are changed, or the military hospitals and CHAMPUS undertake a much

more liberal interpretation of the regulations when

the prolonged care is very complex, long-term

home care benefits for many technology-dependent children are unlikely to be forthcoming.

To the CSHCN programs in many States, the

complex needs of nonhospitalized technologydependent children offer a new opportunity to be

a primary player in a significant health care issue. These programs have often acted as advocates for their clientele in the past, and they now

have a significant new role to play as coordinators of payment and community services to this

group of disabled children. The degree to which

the programs are prepared to play this role, and

their proficiency at it, undoubtedly varies from

State to State. But the role seems an appropriate

one, and it may give many of the programs new

purpose and direction.

It is very possible that the extension of private

and public insurance benefits into the home care

setting will replace charity care to some extent.

Charitable organizations, including local community and religious organizations, have helped many

children obtain certain equipment and facility renovation. However, care coordination and skilled

shift nursing have never been the province of

charitable organizations, and these are the areas

in which improved health insurance benefits are

most likely to have an impact.

None of the solutions being implemented at the

moment regarding technology-dependent children

are applicable to children who will, due to some

medical or home characteristic, be more expensive to care for at home than in the hospital. For

some such children, home care may be the most

effective and desirable even if it is not the least

expensive. For other children, however, particularly those without a supportive family, other care

alternatives will be necessary. Unfortunately, at

present, appropriate and effective long-term care

options other than the family home and the hospital are extremely rare.
Appendixes
‘

Appendix A

Acknowledgments

The OTA staff would like to express its appreciation to the Advisory Panel for Technology and Child Health

and to the following

Elizabeth Ahmann

Baltimore, MD

Marlene Aitken

Center for Hospita

 people for providing information and assistance:

Administration Studies

University of Chicago

Chicago, IL

Duane Alexander

National Institute of Child Health and Human

Development

National Institutes of Health

Bethesda, MD

Jonathan Bates

Children’s Hospital

San Diego, CA

Marilyn Bergner

School of Hygiene and Public Health

The Johns Hopkins University

Baltimore, MD

Kelly Burch

LeBonheur Children’s Medical Center

Memphis, TN

John Butler

Children’s Hospital

Boston, MA

Georgia Cleverly

New Mexico Human Services Department

Santa Fe, NM

Harvey Colton

Children’s Hospital

St. Louis, MO

Robin Cooper

Department of Health and Social Services

Madison, WI

Carl Cranor

University of California

Riverside, CA

Thomas Culley

Aetna Life & Casualty

Hartford, CT

Susan Epstein

Project SERVE

Boston, MA

Joseph Fitzgerald

John Hancock Mutual Life Insurance Co.

Boston, MA

Juanita Fleming

College of Nursing

University of Kentucky

Lexington, KY

Harriette Fox

Fox Health Policy Consultants

Washington, DC

Dale Garell

California Children’s Services

Los Angeles, CA

Allen Goldberg

The Children’s Memorial Hospital

Chicago, IL

David Greenberg

School of Education

I. U. P.U. I.

Indianapolis, IN

Dorothy Guyot

Department of Pediatrics

Albert Einstein College of Medicine

Bronx, NY

Lenore Heaphey

The Oley Foundation

Albany, NY

Janet Heinrich

American Nurse’s Association

Washington, DC

Jo Anne Kaufman

Coordinating Center

Care

Millersville, MD

Kathryn Kirkhart

Children’s Hospital

New Orleans, LA

Art Kohrmann

for Home and Community

La Rabida Children’s Hospital and Research Center

Chicago, IL

81
82 —

Mary Grace Kovar

National Center for Health Statistics

Hyattsville, MD

Maxine Lange

Blue Cross and Blue Shield Association

Chicago, IL

Connie Lierman

Children’s Hospital National Medical Center

Washington, DC

Gregory Liptak

Department of Pediatrics

University of Rochester Medical Center

Rochester, NY

Gerald Long

Office of Civilian Health and Medical Program of

the Uniformed Services

Aurora, CO

Margaret Mikol

SKIP of New York, Inc.

New York, NY

Naomi Morris

School of Public Health

The University of Illinois

Chicago, IL

Nancy Murray

Omaha, NE

Paul Newacheck

Institute for Health Policy Studies

University of California

San Francisco, CA

Peter S. Oliphant

Governor’s Council on the Prevention of Mental

Retardation

Trenton, NJ

Judith Palfrey

Children’s Hospital

Boston, MA

James Perrin

Massachusetts General Hospital

Boston, MA

Patricia M. Pierce

Family Health and Habilitative Services, Inc.

Gainesville, FL

Jan Roughan

The Equitable Life Assurance Society of the U.S.

Brea, CA

Jim Scalese

Zoorhees Pediatric Facility

Gibbsboro, NJ

Karen Shannon

SKIP, Inc.

Severna Park, MD

Donald Shapiro

Department of Pediatrics

University of Rochester Medical School

Rochester, NY

George Silver

Institution for Social and Policy Studies

Yale University

New Haven, CT

Ruth Stein

Pediatric Ambulatory Care

Albert Einstein College of Medicine

Bronx, NY

Margretta Styles

American Nurses’ Association, Inc.

Kansas City, MO

Eileen Thomas

Federal Employee Health Benefits Program

Blue Cross and Blue Shield Association

Washington, DC

Phyllis Tschumper

Department of Health and Social Services

Madison, WI

Robert Wardwell

Health Care Financing Administration

Baltimore, MD

Daniel Whitlock

Minneapolis Children’s Medical Center

Minneapolis, MN

Gordon Worley

Department of Pediatrics

Duke University Medical Center

Durham, NC

Penny Pollard

Department of Health and Human Services

Washington, DC
Appendix B

Workshop on Technology-Dependent

Children

Participant List

John Butler, Chairman

Research Associate, Children’s Hospital, Boston, MA

Lu Ann Aday

Associate Professor of Behavioral Sciences

School of Public Health

The University of Texas

Austin, TX

Marlene Aitken

Research Project Specialist

Center for Hospital Administration Studies

University of Chicago

Chicago, IL

Jonathan Bates

Senior Vice President for Planning and External Affairs

Children’s Hospital

San Diego, CA

Julianne Beckett

Program Assistant

Child Health Specialty Clinic

University of Iowa

Iowa City, IA

Thomas Culley

Medical Director

Aetna Life & Casualty

Hartford, CT

Susan Epstein

Project Co-Director

Project SERVE

Boston, MA

Harriette Fox

President

Fox Health Policy Consultants

Washington, DC

Dale Garell

Medical Director

California Children’s Services

Los Angeles, CA

Dorothy Guyot

Research Director

Health Care Financing Project

Department of Pediatrics

Albert Einstein College of Medicine

Bronx, NY

Jo Anne Kaufman

Executive Director

Coordinating Center for Home & Community Care

Millersville, MD

Kathryn Kirkhart

Program Coordinator

Ventilator Assisted Care Program

Children’s Hospital

New Orleans, LA

Mary Grace Kovar

Special Assistant for Data

Policy and Analysis

National Center for Health Statistics

Hyattsville, MD

Edward Lis

Director

Division of Services for Crippled Children

University of Illinois

Chicago, IL

John MacQueen

Director

Child Health Specialty Clinic

University of Iowa

Iowa City, IA

Merle McPherson

Acting Director

Division of Maternal & Child Health

Bureau of Health Care Delivery & Assistance

Rockville, MD

83
84

Paul Newacheck

Assistant Professor of Health Policy

Institute for Health Policy Studies

University of California

San Francisco, CA

Barbara Starfield

Professor& Head

Division of Health Policy

The Johns Hopkins University

School of Hygiene and Public Health

Baltimore, MD

Ruth Stein

Professor of Pediatrics

Pediatric Ambulatory Care

Albert Einstein College of Medicine

Bronx, NY

Robert Wardwell

Chief, Medicaid Special Issues Branch

Health Care Financing Administration

Baltimore, MD

Daniel Whitlock

Medical Director

Chronic Care Program

Minneapolis Children’s Medical Center

Minneapolis, MN

Agenda

Workshop on Technology-Dependent Children

Office of Technology Assessment

600 Pennsylvania Avenue, S.E.

Washington, D.C.

April, 11, 1986

9:00 Refreshments

9:15 Opening remarks

Clyde Behney, OTA Health Program Manager

Judith Wagne' Project Director Technologies and Child Health

Elaine Power, Study Director, Technology Dependent Children

9:30 Defining the population of technology-dependent children

● discussion of economic implications of alternative definitions for children, providers, payers

● current research on definitions

● potentially useful combinations of candidate definitions

● definitions not included in candidate list

● the place of case-by-case review in defining for Medicaid eligibility purposes

11:00 Break

11:15 Defining the population (continued)

● discussion of criteria for judging definitions

● assessment of candidate definitions according to criteria

12:30 Lunch

1:30 Data sources

● approaches to getting data

● programs, offices, states, etc. collecting data on this group

2:00 Changes in the technology-dependent population

● current evidence on trends

● changes due t. extension of current technology (e.g., more NICUS, trauma centers, extended access

to treatments)

● changes due to new technologies (e.g., artificial surfactants)

● apparent changes due to the new availability of home services

4:00 Summary and closing remarks
Appendix c

Implications of the Population Definition

Introduction

The way the population of technology-dependent

children is defined and enumerated has clear implications for the costs to third-party payers of paying for

care, and the access of these children to different care

alternatives. The broader the definition, the larger the

number of children who may become eligible for special benefits. Providing enhanced insurance coverage

for technology-dependent children may itself lead to

an increase in the size of the population, through encouragement of more aggressive medical practices.

The definition of technology dependence presented

in Chapter 2 was developed for the purpose of enumerating the population, not for describing it for insurance or program eligibility purposes. These two definitional purposes overlap to some extent, but they can

also conflict. The pragmatic, data-based definition applied in this technical memorandum would be inappropriate if applied in a program context without other

considerations. To be applied appropriately to eligibility, a definition of technology dependence must take

into consideration the following questions:

●

●

●

●

●

Does the definition include all children who would

reasonably be considered to be technology dependent?

Is the definition flexible, or would it need to be

revised frequently to accommodate new groups

of deserving children?

Can the definition identify children with similar

needs for health care, so that they can receive the

same level of benefits (horizontal equity); and can

it distinguish those with greater need from those

with lesser need (vertical equity)?

Can the definition distinguish between children

for whom home care is less expensive than institutional care from those for whom it is more expensive (possibly because the child would not be institutionalized even in the absence of home care

benefits)?

Is the definition compatible with distinguishing

children for whom home or community-based

care is feasible and desirable, and can it provide

a basis for estimating the cost of services provided

in these environments?

Three potential specific approaches to identifying

the population are to use: 1 ) diagnosis, 2) functional

limitation, or 3) medical services needed. These approaches are not necessarily mutually exclusive, but

their benefits and drawbacks can be discussed separately from one another.

Three Alternative Approaches

Definition Based on Diagnoses

Diagnoses could be used as a basis for identifying

children as technology dependent, an approach that

has two attractions. First, in most cases diagnoses provide distinct and verifiable information. Second, diagnostic data on hospitalized patients are regularly collected and analyzed on a national basis. 1 A definition

of technology dependence based on diagnosis could

be specific (e. g., bronchopulmonary dysplasia) or

broad (e.g., any chronic lung disease).

There are a number of serious problems with using

this approach. First, there is not a one-to-one correspondence between diagnoses and the need for longterm intensive nursing care. Table 26 lists a few of the

many diseases (some of them very rare) that can lead

to life-sustaining dependence on respiratory or nutritional support. Maintaining a comprehensive list might

be very difficult, preventing some technology-dependent children from being included. Also, only a small

proportion of the children with these diseases require

prolonged technology supports. For example, of children with muscular dystrophy or cystic fibrosis, only

those in the later stages require ventilators or even less

intensive respiratory support such as frequent suctioning and oxygen (4,79). Thus, any definition that includes diagnostic criteria must rely heavily on other

criteria as well.

Defining the population based on broader categories of diagnoses or disorders would be considerably

less cumbersome but correspondingly less specific. It,

too, would produce categories that are larger, probably many times larger, than the population of children that is usually institutionalized and is dependent

on life-sustaining medical devices.

Definition Based on Functional Limitation

Identifying disabled people, particularly the elderly,

according to their functional limitations and their ability to carry out certain activities of daily living has

been common for some time. Activity limitation questionnaires have been used in surveys to provide na1 Diagnoses are coded onto hospital discharge abstracts, acc(}rding to the conventions of the International Classification of Diseases,

Qth Revision, Clinical Modification (I CD-9-CM ) coding system.

These codes and other information from discharge abstracts are then

maintained, summarized, and anal }~zed b}. a number of different

government and private organizati[~ns,

8 5
Table 26.–Some Conditions That Can Lead to

Dependence on Respiratory or Nutritional Support

Conditions that can lead to dependence on respiratory support:

brainstem aneurysm

bronchopulmonary dysplasia

central hypoventilation syndrome (Ondine’s curse)

congenital heart disease

cystic fibrosis

Ellis-van Creveld syndrome

encephalitis

interrupted phrenic nerves

multiple sclerosis

muscular dystrophy

myelodysplasia

near-drowning

nemaline rod myopathy

neonatal asphyxia

Pierre-Robin syndrome

Pompe’s disease

radiation lung damage

severe head injury

spinal muscular atrophy

subglottic stenosis

upper spinal cord injury

Werdnig-Hoffman disease

Conditions that can lead to dependence on nutritional support:

Alagielle’s syndrome

chronic diarrhea

congenital bowel defect

cystic fibrosis

failure to thrive

inflammatory bowel disease

ischemic bowel disease

liver disease

milklsoy protein intolerance

motility disorder

necrotizing enterocolitis

neoplasms

neurological disorders of swallowing

radiation enteritis

NOTE These diagnoses constitute only a partial IISt of conditions that can lead

to dependence on respiratory or nutritional support Conditions Iisted here

are actual diagnoses of children using these technologies, as recorded

i n a national nutritional support database and a summary of chiIdren

served by special Title V programs in three States in 1985

SOURCES L Heaphey, The Oley Foundation, Albany, NY, personal communication, Aug. 21, 1986; M J Aitken and L A Aday, “Home Care for the

Chronically Ill and/or Technology Assisted Child An Evaluation

Model, ” unpublished, November 1985

tional estimates of disability prevalence and severity

in the population (63) and in studies of resource utilization among nursing home residents (133,140,182).

Scales to measure activity limitation are relatively well

developed and seem to be good predictors of the intensity of required nursing and personal care services

for many elderly and disabled people.

The main limitations of these scales are that each

person must be assessed individually and frequently,

which is time-consuming and leaves considerable discretion to the assessor;- and the scales are not well

suited to identifying the specific skilled nursing services an individual may need. z

Another approach could be to identify children by

the limitations of their normal body functions, such

as eating or breathing. This approach (the one used

in this technical memorandum) has intuitive appeal,

because it would identify those children who use specific technologies that replace or compensate for normal body functions. The limitation of this approach

is the difficulty in distinguishing levels of care needed

in conjunction with the various technologies.

Definition Based on Type or Amount

of Services Needed

A third approach might be to identify technologydependent children by the type or amount of medical

services they require. This might take the form of

defining the population according to the need for certain nursing services, such as catheterization. Or, it

might take the form of an indirect but explicit indication of level of services needed, such as prior institutionalization or time in a neonatal intensive care unit.

Finally, the population might be identified by the type

of long-term care plan required by its members. For

example, the defined population might include children whose documented care plans specify hospice care

and long-term chronic, continuous care, but not children requiring intermittent monitoring, occasional crisis care, or post-acute, recuperative care.

Considerations in Applying

the Definition

Within the group of children identified as technology dependent, there will exist considerable variation

in health and social needs. Ideally, an appropriate definition should be able to be applied in such a way that

differences in need among children can be discerned,

with appropriate differences in benefits provided to

them. For example, two children might be equally ventilator dependent, but one might be able to dress and

feed himself while the other cannot. This example emphasizes the value of functional assessment in applying a definition equitably.

Home care may be feasible and desirable, but not

cheaper than institutional care, for some children. If

‘Although there is considerable experience in applying specific

assessments of a person’s ability to function, few of these applications have assessed any limitations in basic body functions that require nursing skills (e.g., the need for colostomy care). One survey

that includes these categories is currently being conducted on children with six types of disability and chronic illness (73).
8 7

these children are to be included, the definition should

have a mechanism for detecting those children for

whom the medical, psychological, and developmental benefits of home care are high in relation to the

additional costs of home care. This criterion again implies that the definition should include some indication of relative need and prognosis over time. A child

with a long-term or terminal illness, for example,

might benefit more from the psychological and social

aspects of home care than a child recovering rapidly

from an acute condition, and consequently it might

be desirable to be able to distinguish the former child

from the latter for the purposes of providing benefits.

Meeting a particular definition need not necessarily

imply absolute access to a special program or set of

benefits. A definition can also be thought of as a

screening mechanism to most easily identify the bulk

of children who would benefit from extensive individual assessment and a particular set of services. One

possibility is that some fairly rigid, easily identified

characteristics be used for rapid screening purposes,

but that actual eligibility y for benefits be dependent on

the child’s functional or nursing assessment score,

where activity limitations, degree of independence capability, and limitations of body functions are all

evaluated.
Appendix D

Alternative Settings of Care

Introduction

Most of the public discussion surrounding technology-dependent children, and most of the evidence discussed in this technical memorandum contrasts two

settings of care for these children: hospital care, usually in an acute-carel hospital; and home care with the

children’s natural families. Within acute-care hospitals, technology-dependent children have access to the

full spectrum of medical services and equipment, monitoring, intensive nursing, professional backup, and

emergency services that can be mobilized immediately.

The children typically reside in intensive care units or

specialty wards (e. g., burn units), but they may reside

in general nursing wards (for children not requiring

mechanical ventilation) or, sometimes, “step-down”

transitional care wards.

In contrast to acute-level hospital care, home care

offers an environment most nearly like those in which

non-technology-dependent children grow up. From the

perspective of third-party payers of health care, traditional home care offers the financial advantage of basic

living expenses that are borne by families. Many technology-dependent children currently living at home

have highly trained and motivated parents and other

caregivers, whose time attending the child is also free

to the payer. At home, unlike in an institution, the

needed quantity of some services—e. g., the number

of paid nursing hours or the amount of respite care—

depend as much on the social, psychological, and financial characteristics of the family as on the physical condition of the child.

As more payers finance and perhaps even emphasize nonhospital care, other settings of care may also

become important for technology-dependent children.

These alternative settings of care may serve three possible purposes:

1. Transitional care for children who are moving

from hospital to home or other long-term care.

Transitional care is appropriate after the child

has become medically stable, while the home (or

other setting) is being prepared for the child and

the myriad of financial and administrative details are being completed. It usually includes an

emphasis on training the family and gradually

increasing the care the family provides. Transitional care can be provided in a special hospital unit or in a separate rehabilitative or subacute care facility.

“’Acute-care hospital” as used here means a hospital that provides complex medical care to patients and has an average length

of patient stay of less than 30 days.

88

2.

3

Respite care for technology-dependent children

who are living at home. Institutional or foster

home respite care may be an important option

in situations where qualified professional nurses

are not available for home respite care, or where

a family vacation or emergency might make the

home an inappropriate setting of care for a short

period of time.

Long-term — care for children whose parents are unwilling to have them home, negligent, abusive,

or simply unable to cope with them. Extensive

supportive home services and counseling may

help parents cope with having a technologydependent child at home. Even so, there will be

a small group of children for whom care settings

other than a natural home must be explored as

a long-term option,

A Michigan task force on home care guidelines for

ventilator-dependent children summarized the need for

these three types of options as follows:

As the child’s condition stabilizes, there should be

progression from the intensive care setting to one of

habilitation/rehabilitation and eventually to a homelike environment. If the home is not a short or long

term option for care, alternative, home-like situations

such as foster homes and small group homes must be

explored. Such institutional alternatives must always

remain an option to avoid crisis when home care ceases

to be feasible or is not longer the best option for the

responaut [ventilator-dependent child], family, community and fiscal agencies (114).

Foster and Adoptive Care

For technology-dependent children who cannot return to their natural family home (temporarily or longterm), a foster or adoptive home may become the setting of choice. If home care services and financing become more accessible to children whose families are

able and willing to accept them and help care for them,

children needing foster or adoptive homes are likely

to become a growing proportion of the residual institutionalized population.

Foster home need is likely to be greater among this

population than the child population in general, because in addition to the need to find homes for children with incompetent or abusive parents, there is a

need to find homes for technology-dependent children

whose parents simply cannot accept their extensive disabilities. Furthermore, technology-dependent children

are considered to be harder to place in foster homes

than other children. A concerted drive to serve all
89

—

technology-dependent children at home would soon

run up against a shortage of available foster homes.

A lack of foster and adoptive homes may become

an equal or greater barrier to home care than a lack

of sufficient home medical care benefits. The total

number of foster care homes in the United States

dropped from 594,000 in 1977 to 187,680 in 1984, attributed in part to greater efforts to keep children with

their natural parents (the number of foster children has

dropped from roughly 500,000 in the late 1970s to

roughly 250,000 in 1984) but also to a greater drop

in families willing to take in foster children (77,9 o).

The Federal Government provides matching subsidies with the States to families who adopt children with

special needs, as well as to those families who provide

them with foster homes (Public Law 96-272). Children

in both categories for whom Federal subsidies are provided are automatically eligible for Medicaid. Ironically, those same children may not be eligible for Medicaid if they remain with their natural families.

Community Group Homes2

The group home provides a community-based

option, midway between institutionalization and a

family home, that could be attractive for some

technology-dependent children if it were available.

Group homes for adults who are ventilator-dependent

due to polio have existed in England and France for

a number of years (67), and a few similar group homes

have recently opened in California (115), though

apparently none are accepting young children at

present. Louisiana is considering the establishment of

a group home that could accommodate ventilatordependent children as well as other developmentally

disabled children (97).

For some children, the costs of group home care

might actually be lower than either hospital or family

home care because a single trained nurse might be able

to care for more than one technology-dependent child.

However, OTA knows of no present examples of

group homes that accept, or were designed for, technology-dependent children. The relative rarity of such

children in the population suggests that group homes

organized for this purpose would probably be practical

solutions only in densely populated areas.

Institutional Settings of Care

who cannot, for whatever reason, be placed in home

care. None of these are likely to be appropriate for all

such children, nor are they likely to be preferred over

hospital care (e.g., in a special long-term care unit) in

all cases. But they may well be appropriate options

for a proportion of the population. Unfortunately,

even when they might be appropriate, they are likely

to be unavailable.

Hospital Settings

Some acute-care hospitals have “step-down” units

with the capacity for intensive care but an emphasis

on transition to a less intensive setting. A few hospitals have experimented with special wards in which

the parent cares for the child during part or all of the

day (51,119).

A fairly recent phenomenon is the development of

special pediatric respiratory centers, focused specifically on the long-term care needs of medically stable,

ventilator-dependent children. Such centers may be in

acute-care tertiary hospitals, or in chronic care and rehabilitation hospitals. In both cases, the centers have

generally been developed as “step-down” units that

serve the needs of ventilator-dependent children (and

their families) in the transition to long-term community-based care. However, in practice many children

live on such wards indefinitely.

Children’s Hospital of Philadelphia has one of the

best-known pediatric respiratory units in an acute-care

hospital. Similar units exist at a few other acute and

long-term care hospitals, though not all are exclusively

pediatric. 3 Ranchos Los Amigos Hospital, for example, a rehabilitation hospital that serves some children

as well as adults, first established a special respiratory

unit in 1952 to better serve its long-term polio patients

on respirators (2). Other pediatric respiratory units and

intensive care units in extended-care hospitals exist

(e.g., in Chicago, IL; Pittsburgh, PA; Washington,

DC; and Baltimore, MD) or are being contemplated,

but they are still rare.

Skilled Nursing and Intermediate

Care Facilities

Skilled nursing facilities (SNFS) are an important

source of care for many elderly, chronically ill people, but they do not generally have sufficient staff to

provide intensive nursing services and usually do not

With appropriate enhancement of facilities and staff,

a multitude of subacute institutional settings could be ‘The distinction between rehabilitation, chronic care, and other

appropriate for many technology-dependent children types of long-term care hospitals is largely one of self-definition,

associated with how a hospital sees its mission. It is not clear that

rehabilitate ion hospitals are more likely than chronic care hospitals

‘Nlany group homes are apparentl y regulated as foster home~ (or vice \’ersa I to establish respiratory units.
90

provide an environment conducive to pediatric care

and child development. The children most likely to be

found in SNFs, where they are accepted at all, are those

who are comatose or have low mobility but few constant skilled medical needs—perhaps daily medications

or, at most, the need for multiple daily tube feedings

(97). Intermediate care facilities (ICFs) are more likely

to care for children, but they are even less likely to

be able to provide intensive medical care than SNFs.

SNFs do sometimes accept technology-dependent

adults. For instance, a 1985 survey of ventilatordependent patients in long-term care facilities in Pennsylvania documented 55 such patients in 4 nursing

homes and 1 skilled/intermediate care facility, all of

whom were adults (94). Likewise, a few SNFs in California accept ventilator-dependent patients, but none

are known to accept such patients under age 16 (115).

At least two SNFs in the United States (one in New

Jersey and one in Ohio) are equipped to serve children

exclusively and can provide the complex care needed

by technology-dependent children (139). In many

ways, these SNFs are more similar to pediatric longterm care hospitals than they are to geriatric SNFs. For

example, the pediatric SNF in New Jersey is staffed to

provide 6.5 nursing hours per patient per day, almost

three times the nursing intensity provided in geriatric

SNFs in that State (139).

A trend towards making SNFs a more common site

of care for ventilator-dependent individuals and other

individuals (not necessarily children) needing postacute complex care seems to be taking place. Three

States have recently proposed or established regulations for “super-SNF” subacute care, and at least 13

others have instituted some reforms that can allow for

extra payments to nursing homes for complex care patients (88). California, for example, has proposed regulations that will enable its Medicaid program to pay

for care in specially certified SNF units that have a

higher level of nursing intensity and skill than normal

SNF care (30). These subacute units will receive a

higher per diem rate than the usual SNF rate. A description of California’s subacute care regulations is

presented in box E.

ICFs are less oriented toward complex medical care

than SNFs, and they are thus even less likely to accept technology-dependent patients or to be able to

provide them with comprehensive care. ICFs are typically institutions in which most residents require relatively little skilled nursing but considerable custodial

care (e. g., dressing, feeding, bathing, or just frequent

attention). Homes for the mentally retarded are probably the most familiar form of ICFs. There may be a

few technology-dependent children who are alert but

need a highly protected environment and for whom

an ICF with enhanced services and staff might be an

appropriate setting.
91

Box E.—Medicaid Coverage of S@mcute Care in California

California has recently confronted the problem of appropriate institutional placement (and payment)

for technologydependent persons when home care is not feasible. On August 19,1986, the State held public hearings on proposed Medicaid regulations establish~ a category of subacute care in skilled nursing

facilities (SNFS). (As of March 1987, it appeared that the Health Care Financing Administration will allow

California to implement these regulations, but Federal approval was not yet final.) The revised text of the

proposed regulations adopts additions to State Medicaid regulations, as follows.

Definition.-”Subacute level of care means a level of care needed by a patient who does not require

acute care but who requires more intensive licensed skilled nursing care than is provided to the majority

of patients in a skilled nursing facility.” A subacute care unit is “an identifiable unit of a skilled nursing

facility accommodating beds including contiguous rooms, a wing, a floor, or a building that is approved

by the Department for such purpose” (30). Subac@e C- U@J -subject tO all Of the State ce~ification

and licensing requirements appli~able to skilled nursing facilities. They may be in hospital-based or freestanding SNFs.

x.–’’suba~te -tits ddl ernploy sufficient licensed staff to provide a minimum daily average

of 4.8 actual licensed nursing hours per patient day for non ventilator dependent patients, and a minimum

daily average of 6,2 actual licensed nursing hours per patient day for ventilator dependent patients” (30).

At least one registered nurse (RN) and one licensed vocational nur= (LVW must be on each sh~~ ~d

the ratio of LVNS to RNs cannot exceed 4 to 1. Both RNs and LVNS must have prior acute care experience.

The unit must be able to provide, within the institution orthrcmgh contract, laboratory, X-ray, respiratory -

therapy, and pharmacy services.

Services.-The proposed regulations define subacute care services as “a type of skilled nursing faciiity

service which is provided by a subacute care unit” (30). Patients must be under the care of a physician

who makes frequent visits and must have 24-hour access to services in an acute-care hospital. They must

require special supplies or equipment, 24-hour nursing, and administration of three or more of the following treatment procedures:

1. traction and pin care for fractures;

2. total parenteral nutrition;

3. inpatient physical, occupational, and/or speech th=apy, at least 2 howper daY# 5 daYS per w*k;

4* tube feeding;

5. tracheotomy care with suctioning;

6. oxygen therapy and/or inhalation therapy treatments at least four times per day;

7. continuous or frequent intravenous therapy via a peripheral and/or central line;

8. medically necessary isolation;

9. debridement, packing, and medicated irrigation with or without whirlpool treatment; and

10. continuous mechanical ventilation for at least 50 percent of each day (30).

Medicaid Payment.–The State calculated payment amounts for these new subacute facilities based

on hourly costs of nursing care and facility costs reported by SP?FS, adjusted by the more intense nursing

requirements of the subacute care units and predicted higher use of supplies and electricity (29). The resultant recommended maximum daily rates for SNF subacute level of care were:

● $221.93 for ventilator-dependent patients in hospital-based units,

● $187.71 for other eligible patients in hospitid-b~sed units,

. $140.62 for ventilatordependent patients in freestanding units, and

● $109.62 for other eligible patients in freestanding units.
Appendix E

The Educational System as a Source

of Health Care Services and Funding

Introduction

An important aspect of the cost of care for technology-dependent children in the home setting is that substantial portions of this cost may be borne by public

schools. Public schools are mandated by Federal law

to provide educational and necessary related supportive services to handicapped children (Public Law 94-

142). Schools, through special education programs,

regularly provide medical services such as physical and

speech therapy, medication administration, and even

urinary catheterization to children (179). Since school

attendance may account for more than one-fourth of

a child’s time and care needs, one consequence for

technology-dependent children of this Federal mandate

is to shift substantial portions of the cost of a child’s

medical care services from Federal to State and local

governments (i.e., from Medicaid to public schools),

and from private health insurers to the public.

The issue of who will pay for the medical care of

these children in the schools is a growing one. Public

schools, pressed for funds, may often be reluctant to

pay for additional full-time nurses and special transportation vehicles and to assume legal liability for

medical care during school hours. At the same time,

private insurers—and Medicaid—will seek to minimize

their costs of serving technology-dependent children

at home by shifting financial responsibility to the

schools. School districts may respond by serving most

of these children with occasional home visits in order

to avoid the extraordinary nursing costs and potential lawsuits. Clear Federal and State policies on this

issue could greatly aid in minimizing total costs, encouraging education in the environment most appropriate to the individual child, allocating public dollars

appropriately (e. g., to Medicaid or to public school

assistance), and preventing the emotional and financial stress of legal battles.

Local Options for Complex Medical

Care in Schools

The issue of complex medical care for children attending public schools can be summarized in three

questions:

1. Where is this care provided?

2. If it is provided in the school, who provides it?

3. If it is provided in the school, who pays for it?

For some children, such as those with frequent and

uncontrollable seizures, home education may be the

only feasible choice. In these cases, school districts may

provide an individual teacher for a few hours a week

in the child’s own home. In such cases, the child’s nursing needs are usually met by the normal home caregiver (a parent or home nurse), and reimbursement for

that care is indistinguishable from reimbursement for

the child’s usual home care. The school system pays

for the teacher’s time and transportation.

Many technology-dependent children receive their

education in special classes or schools. In some of these

schools, nursing care is provided by full-time professional nurses. In others, the teachers themselves, or

a classroom aide, may be trained to provide these services. In either case, the school system generally pays

for the medical care, since the nurses or teachers are

providing care to a number of children.

The third setting of care and education for a technology-dependent child is in a normal classroom. This

setting is particularly appropriate for a child who is

intellectually normal and has no mental or emotional

constraints to maintaining a normal class schedule.

However, the dilemmas regarding who shall provide,

and pay for, the nursing care needed by a technologydependent child are particularly acute in this setting.

Three options exist for providing nursing care in a

normal school classroom. First, care may be provided

by a school nurse. In most schools, a nurse provides

services to all children, and the nurse may even serve

more than one school. The school district is responsible for the salary of the nurse and any other costs associated with nursing services. Technology-dependent

children, however, are characterized by their need for

the uninterrupted availability of nursing services. For

a school to provide such services, the school district

must hire an additional full-time nurse or aide for each

technology-dependent child in the district, as well as

the regular nurse. Under this option, the insurer avoids

all nursing costs during school hours.

A second option for providing care in a normal

classroom is through a home nurse, whose salary and

expenses are covered through Medicaid or another

third-party payer, who accompanies the child while

at school. Although the effect of this option is the same

as the first—a full-time nurse for every technologydependent child—it is clearly less desirable to the thirdparty payer, which must now pay the costs, and more

92
93 —

desirable to the school district, which need not. If Medicaid is paying for home care, the nurse would be paid

for through public funds in any case, but the source

of the funds is administratively distinct.

A third option is to train teachers and other regular

school personnel to provide the necessary nursing care.

Louisiana, for example, has chosen to train bus drivers, teachers, school nurses, and principals to perform

both routine and emergency procedures that might be

needed by ventilator-dependent children (97). In this

case the costs incurred are training costs, which may

be paid by the district, the health insurer, or some

other source, and possibly the costs of a smaller student-to-teacher ratio in the classes that include these

children so that the teachers are not overburdened.

There are few Federal or State legal or administrative guidelines regarding who should pay for these

nursing services in the schools, or how they should

be provided, A survey of education and public health

departments in all 50 States (but not the District of Columbia) regarding the provision of a specified list of

nursing practices’ found that 13 States (26 percent) had

no written State guidelines regarding the provision of

any of these services in the schools (184). An additional

13 States had guidelines only for medication administration. Only six States (12 percent) had guidelines

covering all listed procedures. The remaining 18 States

(36 percent) had written guidelines covering some, but

not all, of the specified procedures. The lack of comprehensive guidelines in most States may reflect the

fact that serving medically complex students is an issue that is usually addressed on the local rather than

the State level (184).

‘The nursing practices included i n the su r~’ey ~~.ere catheterization, seizure management, medication administration, respirator}

care, tube feeding, positioning, colostomy ileostom~r care, and other

(including allergy shots),
Appendix F

Glossary of Terms and Acronyms

Glossary of Terms

Acute-care hospital: A hospital in which the average

length of stay is less than 30 days.

Apnea monitor: A medical device that detects the cessation of breathing.

Asphyxia: Lack of oxygen resulting in suffocation or

near-suffocation.

Augmented care: Care of a greater level, scope, or duration than that normally provided under a particular program or protocol.

Bronchopulmonary dysplasia: A chronic lung disease

in newborns, often defined by a characteristic

appearance of the lungs on X-ray and the need for

mechanical ventilation for more than 4 weeks.

Case management: Coordination and oversight of the

package of services provided to an individual. Case

management may be provided by an insurer, a pediatrician, a parent, a social worker, or some other

health care professional. The comprehensiveness of

case management, and its goals, depend on the

manager.

Cerebral palsy: A paralysis of varying severity that

results from nonprogressive

or around birth.

Copayment: In insurance, a

whereby the insured pays a

point of service or use (e.g.,

Coinsurance.

Coinsurance: That percentage

damage to the brain at

form of cost-sharing

specific amount at the

$10 per visit). See also

of covered medical expenses, after subtraction of any deductible, for

which an insured person is responsible. Under Medicare Part B, after the annual deductible has been

met, Medicare will generally pay 80 percent of approved charges for covered services and supplies;

the remaining 20 percent is the coinsurance, for

which the beneficiary is liable. Also see Copayment

and Deductible.

Colostomy: A surgical opening between the colon

(part of the large intestine) and the surface of the

body. A colostomy is perfomed when normal defecation is difficult (e. g., because of lack of control

of the necessary muscles) or harmful.

Congenital: Present at birth. Congenital anomalies

usually refer to birth defects that result from imperfect development during pregnancy.

Cystic Fibrosis: An inherited disorder caused by the

production of a unique glycoprotein that results in

abnormal mucous secretions. It is usually fatal before age 20. Death is due to excess mucus in the lungs

and to pancreatic insufficiency.

Deductible: The amount of health care charges that

an insured person must pay each year before he or

she is eligible for coverage.

End stage renal disease: Chronic renal failure that occurs when an individual irreversibly loses a sufficient amount of kidney function so that life cannot

be sustained without treatment. Chronic renal dialysis, kidney transplant surgery, and continuous

ambulatory peritoneal dialysis are forms of therapy.

Gastrostomy: A surgical opening into the stomach. A

gastrostomy tube allows food to be introduced directly to the stomach, bypassing the mouth and

throat. A jejunostomy tube (which connects with

the top of the large intestine) may also perform this

function.

Hemophilia: A hereditary bleeding disorder distinguished by a deficiency of one or more blood coagulation factors—e.g., Factor VIII (hemophilia A) or

Factor IX (hemophilia B).

Home health care: Medical and related services provided in the home.

Hospice care: Medical care rendered to terminally ill

patients that is intended to be palliative rather than

curative.

Ileostomy: A surgical opening between the ileum (the

end portion of the small intestine) and the surface

of the body. See also colostomy.

Incidence: The frequency of new occurrences of a condition within a defined time period, usually 1 year.

Compare prevalence.

International Classification of Diseases, 9th Revision,

Clinical Modification (ICD-9-CM): A two-part system of coding patient medical information used in

abstracting systems and for classifying patients into

DRGs for Medicare. The first part is a comprehensive list of diseases with corresponding codes compatible with the World Health Organization’s list of

disease codes. The second part contains procedure

codes, independent of the disease codes.

Intravenous therapies: Nutrients, medications, or other

treatments administered directly into the bloodstream (specifically, into a vein).

Long-term care: Health care of prolonged or indefinite duration. Long-term care hospitals usually have

an average length of stay of 30 days or more.

Meconium aspiration: The existence of meconium, a

dark substance normally found in the intestine of

a full-term fetus, in the airway. Meconium aspiration can cause difficulties in breathing after birth.

Medical device: Any instrument, apparatus, or simi94
.

95

lar or related article that is intended to prevent, diagnose, mitigate, or treat disease or to affect the

structure or function of the body.

Medical technology: The drugs, devices, and medical

and surgical procedures used in medical care, and

the organizational and support systems within

which such care is provided.

Multiple sclerosis: A progressive, crippling disease of

unknown cause that destroys the myelin sheath that

insulates nerve cell axons. This results in slowed

nerve conduction. Symptoms commonly include

weakness, lack of coordination, and speech and

visual disturbances.

Muscular dystrophy: A group of inherited neuromuscular diseases that result in the progressive deterioration of muscle function.

Neonatology: The medical specialty of newborn care.

Parenteral nutrition: The intake of nutrients directly

into the bloodstream (intravenously), circumventing the digestive tract. Strictly speaking, intramuscular administration of nutrients is also parenteral

nutrition, but the term as normally used in health

care implies bloodstream administration.

Patent ductus arteriosus: Incomplete closing of a fetal

blood vessel that allows blood that is low in oxygen to be returned to the body rather than to the

lungs.

Phototherapy: The treatment of diseases, such as jaundice in newborns, with light.

Prevalence: In epidemiology, the number of cases of

disease, infected persons, or persons with disabilities or some other condition, present at a particular

time and in relation to the size of the population.

Also called “prevalence rate. ” Compare incidence.

Private duty nursing: Services provided by a professional nurse to a patient who needs individual and

continuous care beyond the level normally provided

by a visiting nurse (in the home) or the nursing staff

(of a hospital or skilled nursing facility).

Pulmonary surfactant: A substance present in the lungs

that aids in oxygen absorption.

Quadriplegia: Paralysis of all four limbs.

Respite care: Care provided in order to give family

caregivers some relief. Respite care is a broad category that can include occasional home nursing or

custodial care or institutional care.

Sequelae: Aftereffects or secondary consequences.

Shift nursing: Nursing provided in the home in hourly

shifts (usually 8-hour shifts), as distinguished from

nursing provided in visits (usually of an hour or

less). See also private duty nursing.

Skilled nursing care: In this technical memorandum,

any care that requires highly technical nursing skills,

including care provided by nonprofessionals such

as parents trained in such skills.

Spina bifida: A birth defect of unknown cause that results in incomplete or improper development of the

spine, usually associated with the protrusion of the

spinal cord through the bony spine.

Suctioning: As it applies to children with breathing

difficulties, suctioning is the removal of secretions

from the airway and is particularly important when

the child has a tracheotomy tube (artificial airway)

that could be blocked by these secretions.

Surfactant: See pulmonary surfactant.

Technology-dependent children: Those children who

use a medical technology (embodied in a medical

device) that compensates for the loss of normal use

of a vital body function, and who require substantial daily skilled nursing care to avert death or further disability.

Third-party payment: Payment by a private insurer

or government program to a medical provider for

care given to a patient.

Trachea: The airway extending from the back of the

mouth and nose to the bronchial tubes (which lead

to the lungs).

Tracheotomy: A surgical opening into the trachea.

A tracheotomy tube is an artificial airway (a tube

in the trachea) that opens to the outside at the

tracheotomy, where it can be connected to a mechanical ventilator.

Urinary catheterization: The introduction of a tube

into the urinary tract to withdraw urine.

Ventilator: A mechanical device used to assist in or

control respiration by delivering an appropriate volume of gas to the airways or by promoting inspiration. In this report, it refers to both positive- and

negative-pressure devices that cause or help a person to breathe.

Glossary of Acronyms

AFDC —Aid to Families With Dependent

Children

AIDS —acquired immunodeficiency syndrome

BPD —bronchopulmonar y dysplasia

CHAMPUS—Civilian Health and Medical Program

of the Uniformed Services

(Department of Defense)

CNS —central nervous system

CSHCN —Children with Special Health Care

Needs

DOD —US Department of Defense

EPSDT —Early and Periodic Screening,

Diagnosis and Treatment (program)

ERISA —Employee Retirement Income

Security Act

GAO –General Accounting Office (U.S.

Congress)
96

HCFA —Health Care Financing

Administration (DHHS)

ICD-9-CM —International Classification of

Diseases, 9th Revision, Clinical

Modification (ICD-9-CM)

ICF —intermediate care facility

ICU —intensive care unit

LPN —licensed practical nurse

LVN —licensed vocational nurse

MCH –Maternal and Child Health

(program)

MNIL —medically needy income level

NIH –National Institutes of Health (PHS)

NHIS —National Health Interview Survev

O TA

PFTH

PHC

RDS

REACH

RN

SNF

SPRANS

SSI

—Office of Technology Assessment

(U.S. Congress)

—Program for the Handicapped

(CHAMPUS)

—Pediatric Home Care

—respiratory distress syndrome

—Rural Efforts to Assist Children at

Home

—registered nurse

—skilled nursing facility

—Special Projects of Regional and

National Significance

—Supplemental Security Income

(program) (SSA)
References
References

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

Ad Hoc Committee, Respiratory Care Section,

American College of Chest Physicians, “LongTerm Mechanical Ventilation: Guidelines for

Management in the Home and at Alternate Community Sites, ” Chest 90(l,supp.):lS-37S, July

1986.

Affeldt, J. E., Bower, A. G., Dail, C. W., et al.,

“Prognosis for Respiratory Recovery in Severe

Poliomyelitis, “ Arch. Phys. Med. Rehab. 38:290-

295, January-June 1957.

Aitken, M. J., and Aday, L. A., Home Care for

the Chronically Ill and /or Disabled Technology

Assisted Child; An Evaluation Model, unpublished, November 1985.

Alexander, M. A., Johnson, E. W., Petty, J., et

al., “Mechanical Ventilation of Patients With

Late Stage Duchenne Muscular Dystrophy: Management in the Ho me,” Arch. Phys. Med. Rehab. 60:289-292, July 1979.

American Medical Association, Department of

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