Medicaid managed care: lessons from five states

The Future of Health Care Reform: What Is Driving Enrollment?

Against a backdrop of ongoing operational challenges, insurance market turbulence, and the ever present pull of partisanship, enrollment in the ACA's programs has soared and significant variations have developed across states in terms of their pace of coverage expansion. Our article explores why ACA enrollment has varied so dramatically across states. We explore the potential influence of party control, presidential cueing, administrative capacity, the reverberating effects of ACA policy decisions, affluence, and unemployment on enrollment. Our multivariate analysis finds that party control dominated early state decision making, but that relative enrollment in insurance exchanges and the Medicaid expansion are driven by a changing mix of political and administrative factors. Health politics is entering a new era as Republicans replace the ACA and devolve significant discretion to states to administer Medicaid and other programs. Our findings offer insights into future directions in health reform and in learning and diffusion.

Mental Health Carve-Outs: Effects and Implications

To control the rise in expenditures and to increase access to mental health and substance abuse (MH/SA) services, a growing number of employers and states are implementing a “carve-out.” Under this arrangement, the sponsor separates insurance benefits by disease or condition, service category, or population and contracts separately for the management of care and/or associated risks. A carve-out allows a unique set of managed care techniques to be applied to a subset of particularly costly or complex benefits. This article describes various carve-out models, discusses the potential advantages and disadvantages of a full carve-out, and summarizes recent public and private sector research regarding the strategy’s effects on access and use, cost savings and shifting, and quality of care. It concludes by discussing approaches to the assessment and monitoring of the processes and outcomes associated with a MH/SA carve-out.

A Leak in the Lifeboat: The effect of Medicaid managed care on the vitality of safety-net hospitals

States are increasingly adopting Medicaid managed care in efforts to address budgetary concerns. The intent is that by releasing Medicaid oversight to private organizations, competition will drive down healthcare expenditures so that savings may be passed to the state. Yet there are concerns that this competitive solution to cost savings might compromise safety-net hospitals. Managed care organizations cut costs by restricting the providers that enrollees are allowed to see. If movement in Medicaid patients disrupts safety-net hospitals' casemix, this could affect their ability to cross-subsidize care. This study estimates the impact of Medicaid managed care on safety-net hospitals by exploiting a Florida pilot program that required Medicaid recipients in five counties to enroll in managed care. The results suggest this mandate led to a small reduction in safety-net hospitals' average ratio of payment-to-cost. There is also some evidence that the effect on safety-net hospitals was disproportionate. This disproportionality was such that hospitals nearest the margin were pushed the furthest towards the edge.

Interest Group Conflict Over Medicaid Expansion: The Surprising Impact of Public Advocates

OBJECTIVES

We examined the potential economic, policy, and political influences on the decisions of the 50 US states to expand Medicaid under the Affordable Care Act.

METHODS

We related a measure of relative state progress toward Medicaid expansion updated to 2015 to each state's economic circumstances, established policy frameworks in states, partisan control of state government, and lobbyists for businesses, medical professionals, unions, and public interest organizations.

RESULTS

The 9201 lobbyists working on health care reform in state capitols exerted a strong and significant impact on Medicaid expansion. Controlling for confounding factors (including partisanship and existing policy frameworks), we found that business and professional lobbyists exerted a negative effect on state Medicaid expansion and, unexpectedly, that public interest advocates exerted a positive effect.

CONCLUSIONS

There are 3.1 million adults who lack coverage because they live in the 20 states that refused to expand Medicaid. Although political party and lobbyists for private interests present significant barriers in these states, legislative lobbying on behalf of the uninsured appears likely to be effective.

The evolution of an innovation: variations in medicaid managed care program extensiveness

This article utilizes a theoretical framework of policy innovation, diffusion, and reinvention to investigate the evolving nature of Medicaid managed care programs over time. By estimating two separate models, one for primary care case management (PCCM) and a second for risk-based program enrollment, this study seeks to disentangle two different paths of learning (internal and external), investigate the potential effects of vertical diffusion of policy, and examine the impact of internal state characteristics on the extent of Medicaid managed care. With respect to diffusion and learning, the data reveal that earlier adopters implement more extensive programs. The data fail to reveal much internal learning, although there is evidence of some. External impacts are clear: managed care enrollments in neighboring states and changes in the federal waiver process affect states' decisions. Other policy choices are important: states with more generous Medicaid eligibility rules implement more extensive managed care programs. Complementing other studies of Medicaid, we find that politics and economics make a difference for the extent of managed care programs; unlike other Medicaid studies, we find no effect of race and ethnicity.

Participant satisfaction methods and outcomes in Medicaid managed care

Participant satisfaction is an important outcome in evaluating the effectiveness of healthcare programs and benefits. With vulnerable populations, such as Medicaid beneficiaries, determining participant satisfaction poses unique challenges. The purpose of this article is to discuss participant satisfaction methods and outcomes from a multi-year experience of surveying Medicaid Managed Care (MMC) participants in Nebraska (2000-2005). Using a variety of survey methods, the foci were to measure satisfaction with MMC enrollment, understanding of MMC guidelines, and satisfaction with education services provided. Results illustrate response rate patterns and outcome trends that contribute to quality improvement knowledge useful for others surveying Medicaid populations.

Health plan notification and feedback to providers is associated with increased filling of preventer medications for children with asthma enrolled in Medicaid

OBJECTIVE

To test the hypothesis that children enrolled in Medicaid managed care health plans that provide asthma-specific communication to providers would be more likely to have adequate asthma medication filling.

STUDY DESIGN

We conducted a historical cohort study of 4498 children (2-17 years old) with moderate-severe asthma in Washington State and Tennessee Medicaid managed care programs from 2000 to 2002. Interviews with health plans were conducted to identify communication strategies health plans used to improve asthma care by providers in the plan. The main outcome measure was guideline-recommended filling of asthma preventer medications.

RESULTS

Children in plans that provided specific feedback to providers about asthma quality and notified providers when children had an asthma-related event had the highest mean days plus or minus SE of filling in the 365-day follow-up period (164.6 +/- 13 days) compared with children in plans with neither (135.3 +/- 10.8 days; P < .05). In children with the greatest asthma severity, enrollment in a plan with both features was associated with 27.1 additional days of filling (95% CI, 0.7-53.4 days) during the follow-up period.

CONCLUSION

Health plan communication to providers was associated with increased preventer filling in children with moderate-severe asthma in 2 state Medicaid programs.

The voice of advocates in health care policymaking for the poor

Connecticut's Medicaid Managed Care Council gave advocates for the poor an opportunity to monitor the state's Medicaid reform and provided a forum for public discussion of the program's main goals: cost control; improved quality and access to mainstream health care services. Participants engaged in an active discussion of the first two goals, but largely ignored mainstream access. We discuss why this issue did not generate public debate even though many advocates expressed concern about the issue during private interviews. We conclude that they chose not to discuss the issue publicly because they felt that an attainable solution did not exist.

State Medicaid managed care enrollment: understanding the political calculus that drives Medicaid managed care reforms

The objective of this article is to understand the political motivations underlying Medicaid managed care reforms by examining the determinants of enrollment of beneficiaries in managed care plans in the fifty states. To highlight the role of the model variables, including measures of the political environment, public interest, and special interests, a distinction is made between capitated and fee-for-service managed care enrollment. The results show that cost containment within the context of the Medicaid program is perceived as strongly favored by voters. Accordingly, the relative cost and tax price of providing Medicaid services are important factors in states' decision to enroll Medicaid beneficiaries in managed care plans, particularly capitated ones. The results also indicate a surprisingly significant influence by labor unions that generally oppose managed care enrollment for fears of lost jobs. The recipient population and provider groups also play an important role in shaping the Medicaid managed care landscape. The influence of variables measuring states' ability and willingness to pay and median voter preferences suggest that, within the context of Medicaid managed care enrollment, the public's interests are being served; however, the results also point toward inequities within the program and implications concerning financing arrangements between states and the federal government.

Efforts to reform medicaid in a time of fiscal stress: are we merely shuffling chairs on the deck of the titanic?

With states facing their worst financial crisis since World War II, Medicaid programs across the nation are facing a period of significant stress. Medicaid expenditures are a major part of most states' budgets, which make them an important target when policy makers and legislators are faced with budget deficits. This study compares programs across states and identifies major reform trends being used by state officials as they try to balance the needs of their Medicaid recipients with the realities of budget shortfalls. Our research illustrates that the short-term view prevails: many states have relied heavily on one time funding sources, such as tobacco settlement monies in conjunction with traditional cost controlling mechanisms (e.g., freezing provider reimbursement rates, reducing program eligibility levels, requiring prior authorization for services) as their means of addressing the current crisis.

Trends in maternal and infant health in poor urban neighborhoods: good news from the 1990s, but challenges remain

OBJECTIVES

During the 1990s, numerous public policy changes occurred that may have affected the health of mothers and infants in low-income neighborhoods. This article examines trends in key maternal and child health indicators to determine whether disparities between high-poverty neighborhoods and other neighborhoods have declined.

METHODS

Using neighborhood-level vital statistics and U.S. Census data, we categorized "neighborhoods" (Census tracts) as being high poverty (greater than 30% of population below the federal poverty level in 1990) or not. We compared trends in four key indicators--births to teenagers, late prenatal care, low birth-weight; and infant mortality--over the 1990s among high-poverty and other neighborhoods in Cuyahoga County, Ohio; Denver, Colorado; Marion County, Indiana; and Oakland, California.

RESULTS

In all four metropolitan areas, trends in high-poverty neighborhoods were more favorable than in other neighborhoods. The most consistently positive trend was the reduction in the rate of teen births. The metropolitan areas with the most intensive programs to improve maternal and child health--Cuyahoga County and Oakland-saw the most consistent improvement across all indicators. Still, great disparities between high-poverty and other neighborhoods remain, and only Oakland shows promise of achieving some of the Healthy People 2010 maternal and child health goals in its high-poverty neighborhoods.

CONCLUSIONS

While there has been a reduction in maternal and infant health disparities between high-poverty and other neighborhoods, much work remains to eliminate disparities and achieve the 2010 goals. Small area data are useful in isolating the neighborhoods that should be targeted. Experience from the 1990s suggests that a combination of several intensive interventions can be effective at reducing disparities.

De Facto Disentitlement in an Information Economy: Enrollment Issues in Medicaid Managed Care

This article discusses enrollment issues in New Mexico's Medicaid managed care (MMC) system and seeks to illuminate reasons for persistent problems reported by workers and clients. It argues that between 1997 and 2000, the MMC and welfare reforms raised enrollment barriers by complicating and dehumanizing the system, thus "technically disenfranchising" workers and clients. Specifically, the new system increased the need for professional, in-person enrollment assistance precisely when the state decreased its provision of it. Some aspects of the State Child Health Insurance Program (SCHIP) reforms indirectly aggravated those same problems, and though they also significantly lowered barriers in some areas, overall the new system was plagued with preexisting barriers as well as new, unmet needs that produced "de facto disentitlement" to health services.

Quality Oversight In Medicaid Primary Care Case Management Programs

As health maintenance organizations (HMOs) have curtailed participation in Medicaid, enrollment in primary care case management (PCCM) programs has grown. To examine state Medicaid agencies' monitoring of PCCM and HMO programs, we surveyed Medicaid agency directors of forty-six states and the District of Columbia. Agencies were less likely to collect performance data in PCCM programs than in HMO programs. Few PCCM programs reported performance results for the public or providers. Reporting states tended to emphasize utilization results over quality-measure results. Despite growing enrollment, PCCM programs appear less likely to use the quality-oversight strategies employed by Medicaid health plans.

A framework for evaluating safety-net and other community-level factors on access for low-income populations

The framework presented in this article extends the Andersen behavioral model of health services utilization research to examine the effects of contextual determinants of access. A conceptual framework is suggested for selecting and constructing contextual (or community-level) variables representing the social, economic, structural, and public policy environment that influence low-income people's use of medical care. Contextual variables capture the characteristics of the population that disproportionately relies on the health care safety net, the public policy support for low-income and safety-net populations, and the structure of the health care market and safety-net services within that market. Until recently, the literature in this area has been largely qualitative and descriptive and few multivariate studies comprehensively investigated the contextual determinants of access. The comprehensive and systematic approach suggested by the framework will enable researchers to strengthen the external validity of results by accounting for the influence of a consistent set of contextual factors across locations and populations. A subsequent article in this issue of Inquiry applies the framework to examine access to ambulatory care for low-income adults, both insured and uninsured.

Expanding the scope of health reform: application in the United States

Since the demise of the Clinton national health plan in the early 1990s, a number of states in the US have continued to pursue health reform. The reforms reflect the on-going debate in the US and throughout the world over market-minimizing versus market-maximizing strategies to improve healthcare systems. This paper describes the limits of this debate and supports a broader view that focuses on how health policy can improve population health. Performance measures and indicators traditionally used to evaluate market minimizing/maximizing strategies for reforming healthcare are redefined for evaluating strategies to improve health. Differences in the two views are illustrated by describing state reforms in the US using the market-minimizing/maximizing framework and evaluating the reforms based on the health-related framework.

Consumer perspectives on Medicaid managed care: a comparison between rural and urban enrollees in one selected health plan

This report presents the findings from a telephone survey of 313 respondents who have family members enrolled in Medicaid managed care in a multicounty region that encompasses both rural and urban counties in Wisconsin. Some demographic differences were noted between the rural and urban families that might affect their impressions of the health care system, their needs for services and their abilities to use those services appropriately. Families in the urban counties had poorer access to health care, as they were more likely to report at least one child not being assigned to a primary care provider. Inadequate preventive health behaviors were found among both rural and urban families, as evidenced by children being overdue for immunizations or health checkups. Yet respondents reported being happy with the care they received. Rural families in particular seemed to fare well in this managed care system.

Does managed mental health care reallocate resources to those with greater need for services?

Evidence points to the existence of two coexisting inefficiencies in mental health care resource allocation: those with need receive too limited or no care while those with no apparent need receive services. In addition to reducing costs, managed mental health care is expected to reallocate treatment resources to those with greater need for services. However, there are no empirical findings regarding this issue. This study tests whether managed mental health care has had a differential impact by level of need. Data consist of three waves of a community sample with a control group. The study finds that managed care has not succeeded in reallocating resources from the unlikely to the definite "needers."

Health insurance expansion through states in a pluralistic system

The United States continues to stand almost alone among developed nations in its lack of universal health care coverage. In this essay, we argue that even though the debate over whether the federal government or states should lead the effort to expand health care coverage under the federal system is relevant in strategizing how to cover the uninsured; the more critical issues stem from the challenge of the mixed and fragmented mode of public-private financing of our pluralistic health care system. We base this argument on (1) an in-depth review of Oregon's and Tennessee's five years of experience with broad coverage reform in the context of the United States health care system and on (2) a more abbreviated review of other state experiences in providing health care coverage. We conclude from our review that when the will exists, states can substantially expand coverage. However, as one moves up the income scale, political support and resources are harder to come by. Further, concerns grow about the interface of public and private coverage, with issues of "crowd out" and other distributional questions dominating the discussion of coverage expansion as policy makers focus less on how to cover people than on how to make sure one kind of coverage doesn't preempt another. Concern for crowd out can then lead to policies that keep out some of the very people policy makers may want to cover. In this context the question whether states or the federal government is more likely to succeed in expanding coverage is eclipsed by the more fundamental challenges raised by pluralism. Neither federal nor state government is likely to be fully successful without first identifying ways of better coordinating public and private activities and resources to provide continuous and affordable coverage.

Evaluating medicaid managed care programs for children

Nearly every state has implemented some form of managed care for Medicaid recipients, partly in response to rapid increases in Medicaid expenditures. The unique features of children's health and the differences among states in the implementation and scope of their Medicaid managed care programs provide child health services researchers many opportunities to identify program features that result in favorable health outcomes and those that are less successful. Key stakeholders with interest in this information include state governments and managed care organizations charged with developing and implementing efficient delivery systems, as well as providers interested in understanding the best mechanisms for delivering care to children. This paper outlines potential approaches to evaluating Medicaid managed care programs for children, focusing on identification of appropriate data sources and selection of quality measures encompassing the structure, processes, and outcomes of health care.

Translating behavioral health services research into benefits policy

This article uses a 4-pronged statistical approach to examine the impact of a mental health carve-out at a major employer. To examine net financial impact of the carve-out, the authors perform a pre-post, multivariate regression analysis of changes in costs. Using a random-effects model, the authors explore the ultimate financial impact of the carve-out for patients and for the firm. Using a multinomial logistic regression, they examine differing program effects by intensity of use. A fixed-effects negative binomial regression models the episodic nature of outpatient care, controlling for patient-specific unobserved characteristics that influence health care utilization. The carve-out slightly reduced overall mental health costs and utilization while expanding entry-level access to routine services. At the same time, the specific carve-out shifted financial burdens from the firm onto high-utilization patients. Therefore, this carve-out appears poorly suited to the care of individuals experiencing severe and debilitating psychiatric disorders.

Building pharmacoepidemiological capacity to monitor psychotropic drug use among children enrolled in Medicaid

This study's objective was to develop a methodology to apply pharmacoepidemiological research toward understanding and improving psychotropic drug use among children enrolled in Medicaid. Using Kansas Medicaid data for 1995-1996, we summarized drug claims, diagnoses, and demographics for children under 20 who received at least one psychotropic drug prescription over either year. The sequence of steps needed to assure a quality improvement role is discussed. Use of key personnel in less regulatory and more clinical data applications is critical. Illustrating this approach, we found disproportionate numbers of children receiving psychotropic drugs who were young boys and larger numbers of white children receiving psychotropic prescriptions relative to their Medicaid enrollment than either African-American or Hispanic children. Medicaid agencies can expand epidemiological capacity to understand service use among segments of the population they insure as part of an overall commitment to improving quality.

Medicaid, managed care, and the care of patients hospitalized for acute myocardial infarction

BACKGROUND

TennCare, beginning in January 1994, channeled all Medicaid-eligible patients into managed care while expanding Medicaid coverage to large numbers of previously uninsured patients. We assessed the impact of TennCare on (1) coronary revascularization of patients who had had an acute myocardial infarction (AMI), (2) the likelihood of the patient having a usual provider of care after discharge from the hospital, and (3) health and functional status 1 to 3 years after the index AMI.

METHODS AND RESULTS

With the use of 1996 to 1997 survey data from 438 patients hospitalized for AMI in 1993 and 1995 who were under age 65 years at the index admission, multivariate analysis was used to calculate effects of TennCare on utilization and outcomes. TennCare patients were as likely as privately insured patients to have received coronary revascularization within 30 days of the index AMI (odds ratio 0.87, P =.69). Persons enrolled in TennCare and in traditional Medicaid who received a revascularization procedure were much less likely to have received coronary angioplasty than coronary bypass surgery than were the privately insured (TennCare: odds ratio 0.37, P =.05; Medicaid: odds ratio 0.28, P =.08). Virtually all TennCare enrollees (94%) reported having a usual provider of care in the year before the survey versus 85% for privately insured patients with AMI in 1995 (P =.05). On health and functional status, TennCare enrollees overall fared as well as those with private insurance.

CONCLUSIONS

Our results suggest that TennCare brought patients who otherwise would have been uninsured or enrolled in Medicaid into the medical mainstream, measured both in terms of utilization of services and health and functional status.

Florida's Medicaid mental health carve-out: lessons from the first years of implementation

Florida, like many other states, has embarked on an experiment with managed mental health care for Medicaid enrollees. Under a 1915(b) waiver, the state's Medicaid agency began a mental health carve-out demonstration in March 1996 in the Tampa Bay area. This qualitative case study seeks to ascertain the impact of the carve-out (and, by comparison, HMO arrangements) on the public mental health sector. Findings suggest that the carve-out demonstration has succeeded in creating a fully integrated mental health delivery system with financial and administrative mechanisms that support a shared clinical model. However, other findings raise concerns about the HMO model in terms of stability, access to care, efficiency, and more generally about the shifting of risk and public responsibility "downstream" to private organizations without sufficient governmental oversight. These findings may offer guidance for other states implementing major managed care policy initiative for disabled Medicaid enrollees.

Homelessness: health service use and related costs

OBJECTIVES

This study examines health service use and costs for homeless and domiciled veterans hospitalized in psychiatric and substance abuse units at Department of Veterans Affairs (VA) medical centers, nationwide.

METHODS

A national survey of residential status at the time of admission was conducted on all VA inpatients hospitalized in acute mental health care units on September 30, 1995. Survey data were merged with computerized workload data bases to assess service use and cost during the 6 months before and after the date of discharge from the index hospitalization.

RESULTS

Of 9,108 veterans with complete survey data, 1,797 (20%) had been literally homeless at the time of admission, and 1,380 (15%) were doubled up temporarily, for a total homelessness rate of 35%. Combining patients from general psychiatry and substance abuse programs, the average annual cost of care for homeless veterans, after adjusting for other factors, was $27,206; $3,196 (13.3%) higher than the cost of care for domiciled veterans (P < 0.0001). Approximately 26% of annual inpatient VA mental health expenditures ($404 million) are spent on the care of homeless persons.

CONCLUSIONS

Homelessness adds substantially to the cost of health care services for persons with mental illness in VA, and most likely, in other "safety net" systems that serve the poor. These high costs, along with the prospect of declining public funding for health and social welfare programs, and an anticipated increase in the numbers of homeless mentally ill persons, portend a difficult time ahead for both homeless patients and the organizations that care for them.

State contracting initiatives for quality improvement in asthma care

This article examines the role of a state Medicaid program in standardizing and implementing quality performance measures for providers. It describes the Asthma Education and Primary Care Clinician Linkages Quality Improvement Program (QIP), one aspect of the ongoing Hospital Quality Initiative in Massachusetts. In October 1996, the second year of the initiative, the Massachusetts Division of Medical Assistance requested that all contracting hospitals submit quality improvement process and outcome measures related to asthma care, including practice guidelines, patient education materials, and documentation mechanisms to facilitate patients' appropriate follow-up contact with primary care clinicians. A team of evaluators reviewed these materials to determine whether hospitals had baseline data in place for asthma QIP development. Information forums were held with three reviewers and the hospitals to discuss various programs and progress toward quality improvement in asthma care. Reviewers also worked to identify hospital programs that could be used as models and those that would benefit from assistance in meeting the state's program goals.

Managed care and physician referral

In the era of managed care, fundamental changes are occurring in the American health care system that are altering physician referral patterns. Faced with higher premiums that erode profits and competitiveness, employers, government, and nonprofit agencies are contracting with managed care organizations, which control costs partly by imposing constraints and incentives on physician referral behavior. As more and more Americans are covered by managed care plans, it becomes more important to understand how managed care organizations control access to specialists and how these controls affect health outcomes. The authors present a model defining the expected influence of managed care on physician referral based on social exchange theory and the empirical literature. They conclude with a discussion of the future research implications of the model.

Expanding rural managed care: enrollment patterns and prospects

This paper synthesizes national data on rural HMO enrollment in commercial plans, Medicaid HMOs and prepaid plans, and Medicare risk-based plans. Although most rural counties now are included in the service area of at least one commercial HMO, rural HMO enrollment rates are still very low. The expansion of HMO capacity to serve rural enrollees, the continued implementation of Medicaid waivers, and the recent passage of the Balanced Budget Act of 1997 with substantial Medicare program revisions suggest increased rural managed care enrollment in the future.

Insurance matters for low-income adults: results from a five-state survey

Using survey data from 2,000 low-income adult respondents in each of five states, this DataWatch assesses how uninsured, low-income adults differ from low-income adults who have public or private insurance and how Medicaid expansions have affected insurance coverage patterns across states with different eligibility policies. Findings show that the proportion of low-income uninsured adults is two to three times higher in states that have not expanded Medicaid eligibility beyond relatively low welfare levels. Compared with persons who have either Medicaid or private insurance, uninsured persons report more difficulties getting needed care, are less likely to have a regular provider, and rate the care they do receive as lower quality.

The limits of social learning: translating analysis into action

In what respects does public-policy making reflect social learning, drawing lessons from previous experiences and from the experiences of governments in other settings? Starting with an examination of the effect of policy legacies on current policy making, I present a process model of social learning embedded within the larger policy-making process resting at the intersection of the nation's constitutional context, technological change, and political influences exogenous to social learning. The model first distinguishes between the structural and the social learning effects of policy legacies. I then conceptually divide social learning into separate streams of substantive learning and situational learning. The effect that each of these has on policy making depends on the relative position of three categories of participants in the policy-making process (experts, organized interests, and politicians), as well as on the scope of the policy issue being considered (ranging from routine change to major reform). This analysis, with reference to recent health care policy making, reveals the full extent to which social learning is often a decidedly political struggle over ideas and information in which advocates promote lessons that severe their specific interests within a given institutional context and political setting. I consider the implications of social learning for understanding likely policy responses to the rise of market forces in health care.

Medicaid managed care and community providers: new partnerships

Growing enrollment in managed care plans among Medicaid recipients represents a new market for these plans but presents challenges to those providers that traditionally have served this population. To continue serving Medicaid patients, community-based providers must develop contracts or other types of partnerships with Medicaid-contracting health plans. This paper reviews the challenges to such collaboration and discusses the practical issues that plans and community-based providers must resolve to develop productive working relationships. Keys to successful collaboration are identified. Ways in which federal and state governments can help the collaborative process are suggested.

Markets and public programs: insights from Oregon and Tennessee

Medicaid is the major national program promoting access to care for low-income populations, but the program also is a federal-state partnership. With costs rising and universal access still a remote objective, many states have turned to market-based strategies involving managed care, with the goals of generating savings for the state, improving access for Medicaid beneficiaries, and sometimes expanding coverage to those who were previously uninsured. Yet Medicaid is a complex social insurance system that over time has been used to finance a variety of needs, often using cross-subsidies. In addition, states vary in both the scope of their Medicaid programs and the sophistication of the skills and resources they can bring to bear in shaping them. Understanding how these influence the ability to implement market-based strategies in Medicaid and what the effects of these strategies appear to be is of crucial importance because most states now include some features of this approach in their programs.