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A Tale of Two Cities? The Heterogeneous Impact of Medicaid Managed Care

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  • Marton, James
  • Yelowitz, Aaron
  • Talbert, Jeffrey

Abstract

Evaluating Accountable Care Organizations is difficult because there is a great deal of heterogeneity in terms of their reimbursement incentives and other programmatic features. We examine how variation in reimbursement incentives and administration among two Medicaid managed care plans impacts utilization and spending. We use a quasi-experimental approach exploiting the timing and county-specific implementation of Medicaid managed care mandates in two contiguous regions of Kentucky. We find large differences in the relative success of each plan in reducing utilization and spending that are likely driven by important differences in plan design. The plan that capitated primary care physicians and contracted out many administrative responsibilities to an experienced managed care organization achieved significant reductions in outpatient and professional utilization. The plan that opted for a fee-for-service reimbursement scheme with a group withhold and handled administration internally saw a much more modest reduction in outpatient utilization and an increase in professional utilization.

Suggested Citation

  • Marton, James & Yelowitz, Aaron & Talbert, Jeffrey, 2014. "A Tale of Two Cities? The Heterogeneous Impact of Medicaid Managed Care," MPRA Paper 54105, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:54105
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    References listed on IDEAS

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    Cited by:

    1. James Marton & Angela Snyder & Mei Zhou, 2016. "Enhanced Citizenship Verification And Children'S Medicaid Coverage," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1670-1683, July.
    2. Sean Orzol & Lindsey Leininger & Lauren Hula & Cara Orfield & Richard Chapman & Matthew Mleczko, "undated". "The Impact of Transitioning Stairstep Children from Separate CHIP to Medicaid on Use of Health Services: Evidence from Colorado and New York," Mathematica Policy Research Reports 599e8e49017642e0abf6a13fe, Mathematica Policy Research.
    3. Charles Courtemanche & James Marton & Benjamin Ukert & Aaron Yelowitz & Daniela Zapata, 2016. "Impacts of the Affordable Care Act on Health Insurance Coverage in Medicaid Expansion and Non-Expansion States," NBER Working Papers 22182, National Bureau of Economic Research, Inc.
    4. Aaron Yelowitz, 2017. "Local housing costs and basic household needs," Empirical Economics, Springer, vol. 52(3), pages 901-923, May.
    5. James Marton & Aaron Yelowitz, 2015. "Health insurance generosity and conditional coverage: Evidence from medicaid managed care in Kentucky," Southern Economic Journal, Southern Economic Association, vol. 82(2), pages 535-555, October.
    6. Maria Apostolova-Mihaylova & Aaron Yelowitz, 2018. "Health Insurance, Fertility, And The Wantedness Of Pregnancies: Evidence From Massachusetts," Contemporary Economic Policy, Western Economic Association International, vol. 36(1), pages 59-72, January.
    7. repec:aea:jecper:v:31:y:2017:i:4:p:3-22 is not listed on IDEAS

    More about this item

    Keywords

    Medicaid; Managed Care; Child Health;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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