Protecting Children With Chronic Illness in a Competitive Marketplace

Health care for children with chronic illnesses is significantly more expensive than for the average child. Children with chronic illnesses are especially vulnerable in a competitive health care environment because of the higher ongoing cost associated with treating their illnesses and the inherent pressures to reduce services to manage within the capitated rate. To minimize the adverse impact a competitive market could have on these children, a "carve-out" for specific medical conditions is discussed. A capitation pricing system that reflects their higher costs is proposed, as well as a delivery system that is focused on their needs.