title: A tale of two cities? The heterogeneous impact of Medicaid managed care.
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.
authors.affiliation: Department of Economics and Georgia Health Policy Center, Andrew Young School of Policy Studies, Georgia State University, United States. Electronic address: marton@gsu.edu.
authors.forename: James
authors.initials: J
authors.lastname: Marton
authors.affiliation: Department of Economics, University of Kentucky, United States. Electronic address: aaron@uky.edu.
authors.forename: Aaron
authors.initials: A
authors.lastname: Yelowitz
authors.affiliation: College of Pharmacy, University of Kentucky, United States. Electronic address: jtalb1@uky.edu.
authors.forename: Jeffery C
authors.initials: JC
authors.lastname: Talbert
mesh_terms: D060866:Accountable Care Organizations / Q000191:economics* / Q000331:legislation & jurisprudence / Q000458:organization & administration; D002648:Child; D002669:Child Welfare / Q000191:economics* / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data; D003363:Cost Control / Q000379:methods; D018588:Fee-for-Service Plans / Q000191:economics* / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data; D006801:Humans; D007629:Kentucky; D008329:Managed Care Programs / Q000191:economics* / Q000331:legislation & jurisprudence / Q000458:organization & administration; D008484:Medicaid / Q000191:economics* / Q000331:legislation & jurisprudence / Q000458:organization & administration; D058991:Patient Protection and Affordable Care Act; D011785:Quality Assurance, Health Care / Q000191:economics* / Q000331:legislation & jurisprudence / Q000379:methods; D012052:Reimbursement, Incentive / Q000191:economics* / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data; D014481:United States
keywords: Child health; Managed care; Medicaid