Studies indicate that children with severe chronic illnesses are at least twice as likely to have serious psychological problems as other children and that the effects frequently spill over to their parents and siblings. This finding goes to the heart of what is wrong with our society's approach to serious childhood chronic illness: Although we spend generously on biomedical research and lavish untold amounts for the most intensive medical treatments, we fail to respond adequately to the social, intellectual or psychological needs of these more than 1 million children and their families.

As a result, too many chronically ill youngsters grow up devoid of social skills and ill-equipped to lead productive lives, in effect taking on an additional handicap to their physical one.

Ironically, we know a good deal about how to enhance normal development in these youngsters, but there is an appalling lack of action. There is virtually no funding for services that have been shown to improve outcome, such as coordination of care among medical specialists, patient education and support services. Instead, families face impenetrable regulations and red tape at every turn. A blatant example is to be found in current policies affecting home care for chronically ill children.

It is widely accepted today that these children generally develop better socially and emotionally the more their lives are spent outside hospitals. Thanks to new technology, medically fragile youngsters who not long ago would have lived in hospitals can now be cared for at home. But new technology only makes expanded home care possible; to make it a reality, policies relating to a range of services must be revised, a task that has less to do with new spending than with new thinking.

One major barrier to home care for these children is the requirement of many insurance companies that the patient be homebound. Not only do children rarely meet this requirement, but it misses the essential point of home care, which is not to confine the child in the house but to enable him to live as normally as possible in his community.

Insurers fear that a more liberal policy will end up serving families in which parents might manage without special assistance. But more realistic criteria surely can be devised that, even if more complex to administer, will protect insurers and still meet real needs.

Other insurers, including Medicaid, cover home care only when it can be documented to save money from year one and every year thereafter. This policy puts families in terrible dilemmas. If a child's condition reaches a plateau, which frequently happens, the family can lose home care benefits because of lack of demonstrable improvement. On the other hand, a child who improves substantially, for example, from full-time ventilator dependence to ventilator dependence only at night may be in danger of losing all benefits on the ground that he is too well to be hospitalized and there is no saving in home care.

A syndrome familiar to pediatricians who treat severe chronic illness is the need families feel to conceal that their child is getting better.

A bill introduced in the current session of Congress by Senator Edward Kennedy would require employers to provide home-care coverage for technology-dependent children equal to but not exceeding what is already covered on an inpatient basis. While the effort to promote home care is encouraging, the bill targets a relatively small number of children and overemphasizes short-term reductions in medical costs. The greatest economic benefits to society from home care will derive not from short-range savings but from giving sick children the opportunity to develop into productive adults.

Of course, the advantages of home care will vary from one family to the next and, in some instances, it simply may not be feasible. Still, a growing body of research suggests the effectiveness of several kinds of programs. One group deals with youngsters with relatively stable conditions but constant medical needs, children who require intravenous feedings or total parenteral nutrition or care of a tracheotomy. Other programs involve hospice services for terminally ill youngsters. Others have targeted children whose conditions are subject to frequent change and whose daily care requires special training of family members as well as help coordinating very complex care needs and fragmented services.

Integral to these programs are measures to prevent secondary problems, reduce morbidity and enhance social integration for the children and their families. Recent research demonstrates the benefit of getting this support to families before they become overwhelmed. Too often today it becomes available only afterward.

Studies have also shown the importance of social and psychological support, such as that provided by adult volunteers, who keep in regular touch with the families, or by teenagers with diseases of long standing, who counsel other adolescents and help them adjust to a new diagnosis. Unfortunately, the modest funds required to sustain, implement and supervise such efforts are hard to come by once the initial effectiveness has been demonstrated.

Although our society has done extraordinarily well in extending the lives of desperately ill children, much remains to be done to prevent prolonged lives from becoming wasted lives. Let us have more research on the causes and cures of these many diseases. But let it not be at the expense of humane, comprehensive services for children who must live with the stresses and harsh demands common to all severe chronic illness.

Ruth E.K. Stein, MD, is a professor of pediatrics at the Albert Einstein College of Medicine, Bronx, N.Y., where she directs the Preventive Intervention Research Center for Child Health.