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Using HMOs to serve the Medicaid population: what are the effects on utilization and does the type of HMO matter?

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  • Bradley Herring
  • E. Kathleen Adams

Abstract

States have increasingly used Health Maintenance Organizations (HMOs) to provide medical services to the Medicaid population. However, the effects of these initiatives on total health‐care expenses, the mix of utilization, and access to care remain unclear. We examine the effect of changes in Medicaid HMO penetration between 1996 and 2002 on these outcomes using data for the nonelderly Medicaid population in the Community Tracking Study's Household Survey. We develop market‐level measures of Medicaid HMO penetration from CMS and InterStudy data, distinguish whether the HMOs specialize in serving the Medicaid population, and use a market fixed‐effects model to focus on changes in HMO penetration rates over time. Although limited by imprecise estimates, we find some evidence that utilization and access are related to the market penetration rates of commercial and Medicaid‐dominant HMOs, but the pattern of results we observe does not appear to be consistent with welfare improvements. Copyright © 2010 John Wiley & Sons, Ltd.

Suggested Citation

  • Bradley Herring & E. Kathleen Adams, 2011. "Using HMOs to serve the Medicaid population: what are the effects on utilization and does the type of HMO matter?," Health Economics, John Wiley & Sons, Ltd., vol. 20(4), pages 446-460, April.
    • Handle: RePEc:wly:hlthec:v:20:y:2011:i:4:p:446-460
    DOI: 10.1002/hec.1602
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    1. Lindsey Woodworth, 2016. "A Leak in the Lifeboat: The effect of Medicaid managed care on the vitality of safety-net hospitals," Journal of Regulatory Economics, Springer, vol. 50(3), pages 251-270, December.
    2. Marianne P. Bitler & Madeline Zavodny, 2014. "Medicaid: A Review of the Literature," NBER Working Papers 20169, National Bureau of Economic Research, Inc.
    3. Mohammad Usama Toseef & Gail A Jensen & Wassim Tarraf, 2020. "Medicaid managed care and preventable emergency department visits in the United States," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-15, October.
    4. Lee, Ajin, 2020. "How do hospitals respond to managed care? Evidence from at-risk newborns," Journal of Public Economics, Elsevier, vol. 184(C).
    5. James Marton & Aaron Yelowitz, 2015. "Health insurance generosity and conditional coverage: Evidence from medicaid managed care in Kentucky," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 535-555, October.
    6. Jonathan Gruber, 2017. "Delivering Public Health Insurance through Private Plan Choice in the United States," Journal of Economic Perspectives, American Economic Association, vol. 31(4), pages 3-22, Fall.
    7. Marton, James & Yelowitz, Aaron & Talbert, Jeffery C., 2014. "A tale of two cities? The heterogeneous impact of medicaid managed care," Journal of Health Economics, Elsevier, vol. 36(C), pages 47-68.

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