A Children’s Health and Wellness Fund: A New Way for States to Support Children’s Long-Term Health

In the United States, the rate of children living in poverty is nearly 1.5 times higher than that of working-age adults, and children of color are more likely to be exposed to economic and social factors that negatively impact health. The COVID-19 pandemic’s impact on the economy further exacerbated children’s health and social needs.

Evidence suggests that investment in children’s socioeconomic needs can lead to long-term improvements in health outcomes. A Children’s Health and Wellness Fund is an approach to collecting and administering funding from different sources that states can use to support social determinants of health (SDOH) initiatives for children and families. Such a fund brings together local public and private stakeholders and builds on existing Medicaid and Children’s Health Insurance Program (CHIP) investments.

On August 27 and September 14, 2021, the Milbank Memorial Fund, Manatt Health, and Nemours Children’s Health hosted convenings on Children’s Health and Wellness Funds for health officials from California, Delaware, Nevada, North Carolina, Oregon, and Tennessee. The facilitators included Kara Walker, executive vice president and chief population health officer for Nemours Children’s Health, and Cindy Mann, a partner at Manatt Health.

“A Children’s Health and Wellness Fund is a way to galvanize efforts focused on SDOH investments for children,” Walker said. “A Fund can be more than a bank account that facilitates multisector investments and spending; by bringing together diverse actors, all with a strong interest in children, a Children’s Health and Wellness Fund can focus attention on children’s needs and spur action on their behalf.”

In the first convening, facilitators explained how a positive childhood experience, with few or no adverse childhood events (ACEs) can provide children with a strong foundation. Fewer ACEs are often associated with better physical and mental health, fewer behavioral problems, higher educational achievement, higher employment productivity, and less involvement with social services and the criminal justice system as adults.

“Despite increased appreciation that social factors have a strong effect on children’s development, SDOH interventions led by the health care sector have generally not focused on children,” said Ms. Mann. She pointed out that financial returns from SDOH interventions to the health care sector — and likely to education and child welfare — occur on a 5- to 20-plus-year time horizon, giving rise to what is known as the “wrong pockets” problem, in which the entity that bears the cost of implementing a practice or program does not receive the primary benefit.

This multistakeholder approach to funding children’s SDOH investments can help address this problem. The framework involves health, business, and education sectors, as well as children’s agencies and the juvenile and criminal justice systems.

The second convening focused on the technical and financial sides of setting up and sustaining a Children’s Health and Wellness Fund. The facilitating team showed several funding options for states, including:

• Medicaid Managed Care Organization contributions
• Other Medicaid or CHIP funding opportunities
• Legislative action or appropriation
• Voter referendum
• Federal funding opportunities outside of Medicaid or CHIP
• Time-limited COVID-19-related funding
• Hospital contributions
• Philanthropic funds

In explaining funding for these services, the facilitators outlined creating a governance structure, selecting funding sources, using complementary financing to enhance the impact of a fund, and choosing evaluation methods.

In addition, they pointed out that the 2021 American Rescue Plan Act allocated $350 billion, to be spent by December 31, 2024, for state, local, territorial, and tribal government to respond to the COVID-19 public health emergency. Recipients have flexibility in using the payments to meet the needs of their populations, which could be applied to a children’s fund.

Facilitators highlighted three successful similar programs as exemplars: Florida’s Children’s Services Councils, which provides county-based grants to local organizations that serve children and families; the Virginia Children’s Services Act, which serves 15,000 children and families per year; and the Massachusetts Prevention and Wellness Trust Fund, which provided $60M in grants over four years.

Following the convenings, Manatt will provide intensive technical assistance to states that are interested in moving forward with the development of a Children’s Health and Wellness Fund. Health officials interested in learning more should contact Mandy Ferguson (mferguson@manatt.com).