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Reauthorizing SCHIP: Opportunities for Promoting Effective Health Coverage and High-Quality Care for Children and Adolescents

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The deadline for reauthorization of the State Children's Health Insurance Program (SCHIP) on September 30, 2007, is fast approaching. This has generated intense discussion of SCHIP's impact over the past 10 years and the extent to which it has met its original legislative intent. The successes of SCHIP are well documented. Over the last decade, there has been expanded access to health coverage for millions of children, improvements in the quality and effectiveness of the services delivered, and substantial growth in the knowledge, tools, and strategies available to measure and further improve quality.

SCHIP reauthorization presents an opportunity to build on these gains—to transform the "good" coverage and quality of care provided by SCHIP into "great" coverage and quality. In fact, both the House and Senate versions of the SCHIP reauthorization bill contain important, though somewhat different, provisions for improving the quality of the programs, the coverage and benefits they provide, and the care to which they would enable access. At the same time, the reauthorization process is opening the door for reforms in the Medicaid program, as well as the possibility for both Medicaid and SCHIP to work together seamlessly to advance the quality of children's health care.

As large health care purchasers, the SCHIP and Medicaid programs play a powerful role in shaping the quality of coverage and care provided through public programs. SCHIP and Medicaid have dramatically expanded enrollees' access to and use of care, and reduced delays in receiving care, unmet needs, and health care disparities. Because early intervention services can correct problems and help ensure better long-term health, educational, and social outcomes, ensuring high-quality health care for children can also improve adults' outcomes.

In this report, we present a framework for promoting effective health coverage and achieving high quality in SCHIP and Medicaid through the following strategies:

  1. ensuring access to care through eligibility, enrollment, and retention policies;
  2. providing a robust benefit package;
  3. strengthening provider capacity;
  4. improving system performance;
  5. measuring performance;
  6. improving quality;
  7. providing incentives for quality; and
  8. promoting the use of health information technology.

Ensuring Access to Care Through Eligibility, Enrollment, and Retention Policies
SCHIP and Medicaid eligibility requirements, such as income eligibility thresholds, are determined by each state and vary considerably among states. Policies that govern enrollment and retention, also established by states, strongly influence program participation. Numerous studies have shown that eligible children who are enrolled in SCHIP/Medicaid and insured without interruption in coverage are more likely than children who experience gaps in coverage to have a usual source of care, well-child visits, and preventive care, and consequently have fewer unmet medical and medication needs and experience fewer delays in care.

To ensure access to stable coverage, we suggest that:

  • The degree to which states achieve stable coverage among all eligible children should be monitored and reported.
  • States should examine the impact of instability in coverage on children's access to and quality of care, as well as the impact of various program policies on rates of coverage renewal among eligible children.
  • The SCHIP reauthorization could provide incentives to states to enhance outreach activities and achieve stable enrollment.
  • Demonstration programs testing innovative strategies to simplify renewal processes and increase retention could be supported through additional federal investments.

Providing a Robust Benefit Package
The right benefits are essential for children to receive appropriate, effective, and high-quality care. The scope of benefits covered in SCHIP should ensure access to comprehensive and appropriate services that promote the development of optimal physical and mental health as well as social functioning into adulthood.

To ensure that children receive the right benefits, we suggest:

  • In describing the standards for coverage, SCHIP could focus on preventive and developmental services as a preferred design for state benchmark plans. This standard could be aligned with the American Academy of Pediatrics policy on benefits.
  • Future SCHIP reporting requirements should monitor states' provision of preventive and developmental services.
  • The development, dissemination, and use of knowledge, tools, and best practices to improve benefit design and implementation, case management, and community-based services should be supported by additional federal resources.

Strengthening Provider Capacity
A high-quality SCHIP or Medicaid program should ensure that there are sufficient pediatric providers to deliver services. Many office-based private physicians will not accept large numbers of SCHIP or Medicaid patients because Medicaid/SCHIP programs frequently reimburse at lower rates than in the private sector. As a result, care of children enrolled in SCHIP or Medicaid is concentrated among safety net providers, and there are widespread problems in terms of access to dental care, mental health services, and specialty services.

To strengthen providers' capacity to deliver high-quality care in SCHIP and Medicaid, we suggest:

  • State strategies to enhance provider capacity, such as improved reimbursement, incentives to practice in underserved areas, and medical school loan forgiveness, should be identified and disseminated.
  • It is also essential to monitor providers' capacity to serve Medicaid/SCHIP eligible children as program expansions occur and more children are enrolled.

Improving System Performance
The Commonwealth Fund Commission on a High Performance Health Care System recently defined the key characteristics of a high performance health system: accountability, transparency, capacity to improve, efficiency, integration, and partnerships. To achieve a high performance health system for children and youth, there need to be adjustments to the federal–state partnership through which SCHIP and Medicaid are managed. In particular, improved federal oversight and coordination among federal and state governments are needed. This could be achieved by linking advisory entities at the national and state levels and including families' perspectives in the advisory process.

To improve system performance, we suggest:

  • The creation of a commission focused on children and youth to advise Congress on strategies to achieve high-performing SCHIP and Medicaid programs, just as the Medicare Payment Advisory Commission advises Congress on issues affecting the Medicare program.
  • At the state level, the creation of child health and development councils could be encouraged by federal policy and charged with: fostering collaboration across diverse state programs serving children and youth; applying the national vision in their own state; identifying state-specific quality measures; and coordinating quality measurement activities across SCHIP/Medicaid programs.

Measuring Performance
Performance measurement is an essential step to improve the quality of care for children and youth. Yet, no single quality measure is consistently available from all 50 SCHIP programs, and not all states use Healthcare Effectiveness Data and Information Set (HEDIS) methodology consistently making comparisons across states difficult.

To measure the performance of SCHIP and Medicaid programs, we suggest:

  • A core measure set should be developed through a public/private process (rather than legislatively specified) to enable consistent reporting across states.
  • Investments in development, testing, refinement, and adaptation of new quality measures, as well as data collection and reporting systems, are needed.
  • Provisions to report and compare performance across states, and to benchmark state performance against national averages, should be made to facilitate the identification of best practices and cross-state learning. Performance data could also be assigned to the Agency for Healthcare Research and Quality (AHRQ) for analysis and inclusion in the National Healthcare Quality Report and National Healthcare Disparities Report.
  • Federal incentives for reporting should be created, similar to those in Medicare.
  • It is also important to establish and fund learning networks, implementation resources, and a clearinghouse for states to identify tools and models for measuring health care quality.

Improving Quality
Our ability to improve the quality of care for children and youth has grown tremendously in the last five years. The quality improvement recommendations set forth here build on efforts already under way at the Centers for Medicare and Medicaid Services (CMS), such as the emphasis on value-driven health care.

To improve the quality of care in SCHIP and Medicaid, we suggest:

  • Efforts currently under way through CMS and AHRQ to support Medicaid medical directors could be expanded to other senior Medicaid staff, leading to the formation of a child health improvement corps.
  • The establishment of one or more National Resource Center, such as AHRQ's National Resource Center for Health Information Technology, could accelerate learning, innovation, and dissemination of effective improvement approaches among states.
  • It will be important for CMS to provide proactive guidance to states on the parameters and approaches for using matching funds under SCHIP/Medicaid for the development of state-based, public–private improvement partnerships, such as the successful program in Vermont.
  • Engaging patients and families in all stages of the process to maintain a family-centered approach to care is important. CMS could coordinate with the Maternal and Child Health Bureau to expand support for state-based Family-to-Family Health Information Centers to train and support families interested in improving the quality of the health system.

Providing Incentives
Providing incentives to states to improve the quality of care delivered through SCHIP/Medicaid can help spread exemplary practices and innovations. Incentives have included enhanced federal matching rates for specific actions, financial rewards for demonstrated high performance, and demonstration funds to support innovation or diffusion or exemplary practices. Pay-for-performance (P4P) programs are also being promoted as a strategy to improve quality. Although the potential effects of P4P programs on children's health have not been well studied, a recent survey found that, in five years, nearly 85 percent of state Medicaid programs plan to have such programs.

To provide incentives for states to improve their SCHIP and Medicaid programs, we suggest:

  • The creation of a national demonstration program, with CMS leadership, involving at least five states, consistent metrics, and a robust evaluation of the effects of various incentives on the quality of children's health care. Such a program could have a profound impact on the utilization and adoption of incentives across states.

Promoting the Use of Health Information Technology
Electronic health records, personal health records, personal digital assistants, health information exchange, computerized order entry systems, e-prescribing, and disease-specific or population registries are key tools for improving the quality and efficiency of care. Use of such health information technologies (HIT) has been shown to eliminate health disparities for children in some settings. SCHIP and Medicaid could play a significant role in the promotion and adoption of HIT in the care of children and youth.

To promote use of HIT in SCHIP and Medicaid, we suggest:

  • Congress could complement private-sector efforts by funding demonstrations on the role of clinical HIT in improving care for children, especially chronically ill children.
  • States could sponsor the development of Medicaid-specific electronic health records or opt to share clinically relevant information from claims data about Medicaid patients at the point of care.

With the SCHIP reauthorization deadline nearing, there is a prime opportunity to build on the successes of SCHIP and Medicaid in providing access to effective coverage to children and youth. It is also time to capitalize on investments in research and health systems innovation in order to improve the quality of care provided not only to publicly insured children, but to all children in the United States.

Publication Details



L. Simpson, G. Fairbrother, S. Hale, and C. Homer, Reauthorizing SCHIP: Opportunities for Promoting Effective Health Coverage and High-Quality Care for Children and Adolescents, The Commonwealth Fund, August 2007