Press Releases

1998 Releases

Rapid Expansion of Medicaid Managed Care Forces States to Take More Active Role in Ensuring High Quality Care

For immediate release: January 20, 1998 

Boston, MA--In the last five years, the number of Medicaid beneficiaries enrolled in managed care programs has gone up five-fold and now comprises more than 40% of the Medicaid population. A new study in this week's Journal of the American Medical Association reports that this is a population with special features such as poor nutrition, problems with transportation and communication, and rapid cycling in and out of the program, that managed care is typically unprepared to address.

As a result, state Medicaid agencies have begun to revise their approach, say the authors, to oversight of access and quality for Medicaid enrollees. Formerly, states negotiated or set payments rates for health care providers and paid claims. Now states have assumed the role of purchasers of care. Like corporate purchasers, they must negotiate benefit packages, implement efforts to improve health plan performance, and assure minimal standards of care. The study reported in JAMA is a survey of all state Medicaid agencies with comprehensive managed care programs to determine how well Medicaid agencies are adapting to their new role.

The surveys completed by state agencies provide evidence that most states recognize the changing needs for quality management required by the transition to managed care and have begun to adapt to them or have at least made plans to do so. Two-thirds of the states already monitor enrollee's satisfaction with care and more than 80% plan to collect such information in coming years.

While fewer than half of the states collected performance data on measures quality and access last year, a substantial number plan to collect these data in the future. One-third or less of states provided comparative performance data to health plans and fewer than 10% of states provided such data to enrollees at the time they were selecting a health plan. A number of states are planning to do so in 1997. The study also found that the breadth of contracting requirements designed to assure quality varies substantially across states.

Comments Bruce Landon, MD, Instructor of Health Care Policy and Medicine at Harvard Medical School and lead author on the study, "The states have become the laboratory for health care reform in this country. And many states are using managed care programs as a platform on which to expand care for uninsured populations. While the transition to managed care requires state Medicaid agencies to develop new core competencies, they must take on an even more active role in measuring and improving access and quality for Medicaid beneficiaries. Our results suggest states are adapting to the new role but will need to develop and implement even better oversight tools as they begin to target higher risk Medicaid populations."

Comments Arnold Epstein, MD, Professor of Health Policy and Management at the Harvard School of Public Health and a co-author of the study, "These issues are critical because a large and growing number of people are dependent upon Medicaid for health care services. If we cannot safeguard the quality of care at the same time that we control costs, we will lose the potentially large advantages in moving the Medicaid system to managed care. Clearly, the challenge for Medicaid agencies will be to master a new role. It will be important to revisit this issue periodically and closely monitor progress."

For further information, please contact:

Robin Herman
Office of Communications
Harvard School of Public Health
677 Huntington Avenue
Boston, MA 02115
Phone: 617-432-4752
Email: rherman@hsph.harvard.edu