Managing Medicaid managed care: are states becoming prudent purchasers?

This paper examines the extent to which five states are becoming "prudent purchasers" in their oversight of Medicaid managed care. Our conclusions are mixed. These states are making more sustained efforts along these lines than most private purchasers are and have improved the amount and quality of the data they collect on the experiences of Medicaid clients when compared with the traditional fee-for-service program. They have been less successful in ensuring data quality that is adequate to support contracting decisions and in developing the analytical or political capacity to use data to "manage" the managed care system. Becoming a prudent purchaser appears to be a complex task for states that may prove difficult to achieve.

Medicaid participation among urban primary care physicians.

OBJECTIVES: This article describes Medicaid participation among office-based primary care physicians in cities and examines its determinants. METHODS: Data used in this study were collected through the 1993 and 1994 American Medical Association Socioeconomic Monitoring System telephone surveys. The sample includes 1,300 primary care physicians. Our multivariate model includes a variety of personal, practice, community, and policy factors thought to influence participation. Logistic regression was used to examine determinants of accepting any Medicaid patients and ordinary least square regression was used to examine determinants of the extent of participation among participants. RESULTS: The authors found that 19% of respondents did not participate in Medicaid and 62% had practices with 9% or fewer Medicaid patients. Multivariate analyses indicated that Medicaid payment levels were not associated with observed patterns of Medicaid participation. Community sociodemographic characteristics and demand from Medicaid-eligibles, by contrast, play a significant role in influencing observed levels of participation. CONCLUSIONS: Strategies other than raising Medicaid payment levels will be needed to achieve equitable access to office-based primary care for the poor residing in cities.

Has Medicaid growth crowded out state educational spending?

Researchers have argued that the dramatic increase in Medicaid spending during the late 1980s and early 1990s "crowded out" state spending on other activities, particularly education. Medicaid growth has, at least in part, been driven by increased federal eligibility and service mandates, federal court decisions on hospital and nursing home rates, and health care inflation; and the need to respond to these outside forces has placed increasing pressure on state finances. Other evidence, however, suggests that the adverse effect of Medicaid growth on state finances has been overstated. During the late 1980s and early 1990s, states shifted many human service programs from general fund to Medicaid financing and took advantage of Medicaid rules governing the use of provider donations and assessments, such as state matching and claiming payments to disproportionate-share hospitals to increase federal reimbursement without increasing the claims on their own revenues. But the increased burden of Medicaid growth on state finances may be more apparent than real. In this article, we test the crowding-out hypothesis using a two-stage, least-squares fixed-effects model of Medicaid's impact on educational spending from 1980 to 1990. Our results indicate that Medicaid growth has had no significant effect on educational spending. Rather, educational spending has responded more to changes in states' own-source revenues than to growth in Medicaid spending.

Which physicians limit their Medicaid participation, and why.

OBJECTIVE: This study identifies factors differentiating Medicaid participating physicians who accept all Medicaid patients from those limiting their Medicaid participation. DATA SOURCES: Data come from periodic telephone surveys of random samples of physicians conducted by the American Medical Association (AMA). STUDY DESIGN: Surveys conducted in 1990-1993 were pooled to form a sample of 4,188 Medicaid-participating office-based physicians. Respondents were classified as accepting all Medicaid patients or as limiting their Medicaid participation. Descriptive statistics are used to examine differences between these groups with respect to selected personal, practice, community, and reimbursement variables. Logistic regression analysis is used to identify factors associated with physicians accepting all Medicaid patients or limiting their Medicaid participation in some way. DATA COLLECTION METHODS: Survey data were supplemented with 1990 census data, 1990 AMA Physician Masterfile data, and 1989 data on physician payment levels. PRINCIPAL FINDINGS: Less than half of Medicaid-participating physicians and only about one-third of participating primary care physicians accept all Medicaid patients. Higher Medicaid fees are associated with physicians participating fully, but the marginal effects of changes in fees on the probability of physicians participating fully is small. CONCLUSIONS: Increases in Medicaid reimbursement aimed at primary care physicians or those in underserved areas may convert limited participants into full participants and, in so doing, improve the access of Medicaid eligibles to care. The increases in payment level needed to increase the proportion of physicians participating fully would be substantial, however, and may not be politically feasible.

Medicaid and health reform: the case of New York.

New York State has the largest, most expensive state Medicaid program in the country. Thus, an examination of its Medicaid program can offer valuable lessons for other states that are considering reform of their health systems, as well as for reform at a nationwide level. Much recent growth in Medicaid in New York stems from shifting state-funded human service programs onto Medicaid and shifting the state's share of Medicaid onto nontraditional revenue sources. In contrast to other states, in which Medicaid is an unpopular program, New York's Medicaid provider constituency is large and diverse, and its clientele is relatively white and middle class. These two constituencies have made Medicaid harder to cut than in other states, in which Medicaid recipients lack political and economic clout. Current versions of national health reform will have little effect on Medicaid spending in New York, since they address neither spending on the elderly nor the "Medicaiding" of programs and revenue sources.

Medicaid and access to child health care in Chicago.

In this article we examine how increasing the reimbursement of physicians and expanding Medicaid eligibility affect access to care for children in Cook County, Illinois, which overlies Chicago. Using Medicaid claims and other data at the zip-code level, we compare the places where Medicaid children live with the places where all the physicians who treat children and those who accept Medicaid patients have their practices. Our findings suggest that the recent changes in legislation are unlikely to benefit extremely poor children, who are more likely to live in depressed inner-city areas, where there are few physicians. "Near-poor" children whose homes are dispersed throughout the county, who are now eligible for Medicaid as a result of the recent changes, are likely to see improvements in their access to care. Further changes in policy, aimed at enhancing the capacity of institutions providing care, could improve access for the children of the inner city.

Hospital outpatient services and Medicaid patients' access to care.

This article examines the relationship between the use of hospital outpatient services by Medicaid patients, Medicaid physician fees, and the use of office-based physician services. Past research has indicated that the use of outpatient facilities by Medicaid patients substitutes for care by private physicians and might be reduced by raising physician fees, but these studies may be estimated at too high a level of geographic aggregation and include many outpatient services that are not substitutes for office-based physician care. The results in this study, which are estimated using LISREL on county level Medicaid claims data from the state of Illinois, provide little evidence that outpatient care substitutes for care by physicians or that raising physician fees would reduce inappropriate outpatient usage by medicaid patients.

Medicaid patients' access to office-based obstetricians.

Recent expansion of the eligibility of low-income pregnant women for Medicaid-funded prenatal care may be jeopardized by undersupplies of obstetricians and gynecologists (OB/GYNs) in rural and urban low-income areas and by widely reported declines in the number of OB/GYNs willing to accept Medicaid patients. This paper examines the availability of office-based obstetric care to Medicaid patients in Illinois. We present and test a model of the determinants of Medicaid participation by private, office-based OB/GYNs that highlights the role of residential segregation and practice economics. We find that a large growth in demand for obstetrical care or the enhancement of Medicaid fees is unlikely to have a major effect on OB/GYN participation in Medicaid. We conclude that improving access will require expanding the supply of providers in underserved areas.

Medicaid in the inner city: the case of maternity care in Chicago.

The growing concentration of lower-income groups, including Medicaid patients, in homogeneous inner-city areas such as Chicago casts considerable doubt on the effectiveness of expanding Medicaid eligibility and raising physician reimbursement to improve access to maternity care. There are few private office-based physicians providing prenatal care in these areas, and most pregnant women and infants are treated by private-office-based physicians in very high-volume practices, prompting concern about the quality of care. Increasing the supply of providers is required to enhance access to maternity services in inner cities. Expanding eligibility and raising reimbursement rates are more apt to benefit "near-poor" women, who are more spatially dispersed, than clustered-poor female populations.

Physician supply and Medicaid participation. The causes of market failure.

This paper offers an explanation for the counterintuitive relationship between physician competition and Medicaid participation found by many investigators. Contrary to standard predictions, a number of studies have found strong negative relationships between the supply of physicians and Medicaid participation and equally strong positive relationships between supply and the concentration of Medicaid patients in small numbers of large Medicaid practices. The model advanced here argues that the residential segregation of Medicaid patients and differences in the minimum-efficient scale of practice for treatment of Medicaid and private patients create strong incentives for physicians in competitive urban areas to: 1) take either few Medicaid patients or 2) many and 3) make it costly to maintain a Medicaid practice share between these two extremes. In less competitive areas, these incentives are weaker, if not altogether absent.

Public sector primary care and Medicaid: trading accessibility for mainstreaming.

Facilities operated by public and nonprofit agencies have become increasingly important sources of primary care for Medicaid patients. These facilities are particularly important sources of care in segregated, competitive urban areas, where they are more geographically accessible than many private physicians and expand the availability of care to Medicaid patients rather than substituting for care provided by private physicians. In rural areas, in contrast, the availability of care from public facilities appears to reduce the level of care Medicaid patients receive from private physicians in the counties where these facilities are located. These findings suggest that policymakers can expand urban Medicaid patients' access to care by spending on public care, but at the cost of increasing the segregation of Medicaid patients into a two-tier system of care.