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How to Complete Sc Medicaid Program Annual Review

Medicaid Managed Care's Effects on Costs, Access, and Quality: An Update

Medicaid Managed Care's Effects on Costs, Access, and Quality: An Update

Annual Review of Public Health

Vol. 41:537-549 (Volume publication date April 2020)
https://doi.org/10.1146/annurev-publhealth-040119-094345

Daniela Franco Montoya, Puneet Kaur Chehal, and E. Kathleen Adams

Department of Health Policy and Management, the Rollins School of Public Health, Emory University, Atlanta, Georgia 30322, U.s.; electronic mail: [email protected], [electronic mail protected], [email protected]

Copyright © 2020 by Annual Reviews. This work is licensed under a Creative Commons Attribution iv.0 International License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. See credit lines of images or other third political party material in this article for license information.

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Abstract

Medicaid is integral to public wellness because it insures i in 5 Americans and half of the nation's births. Nigh two-thirds of all Medicaid recipients are currently enrolled in a wellness maintenance arrangement (HMO). Proponents of HMOs argue that they tin lower costs while maintaining access and quality. We critically reviewed 32 studies on Medicaid managed intendance (2011–2019). Authors reported state-specific cost savings and instances of increased access or quality with implementation or redesign of Medicaid managed-care programs. Studies on high-risk populations (east.g., disabled) found improvements in quality specific to a state or a high-gamble population. A unique model of managed care (i.e., the Oregon Health Plan) was associated with reduced costs and improved access and quality, but results varied past comparison state. New trends in the literature focused on analysis of auto-assignment algorithms, provider networks, and program quality. More analysis of costs jointly with access/quality is needed, as is research on managing long-term care among elderly and disabled Medicaid recipients.

INTRODUCTION

The Medicaid program now serves almost 1 in 5 Americans, costing the nation just over $600 billion in 2017 (23). This 2017 funding was shared by the federal government at $375 billion and country governments at $230 billion (6). Since the inception of Medicaid in 1965, states accept operated their programs subject to federal eligibility and benefits guidelines. In the 1980s, federal policies helped to promote a movement away from fee-for-service (FFS) and toward managed-care payment models (1). The financing and functioning of the Medicaid program are integral to public health as the program not only covers the poorest and most ill/disabled but besides pays for half of all births in the nation. It is also the chief source of financing for long-term care services in the U.s.a. (25).

Initially, states used managed care to target pregnant women, children, and families, all of which are low-cost populations. States' apply of comprehensive managed intendance increased with state-wide expansions, mandatory enrollment, and inclusion of long-term care in services covered. Consequently, a wider array of Medicaid recipients now receives a larger scope of their benefits through managed care. For the last ten years, half or more of the anile and disabled Medicaid recipients were enrolled in comprehensive managed care (vii, 24). This growth has coincided with a shift toward administering benefits using fully capitated health maintenance organizations (HMOs) (10). As of today, about two-thirds of all Medicaid recipients are enrolled in an HMO. The Affordable Intendance Act's (ACA'south) expansion was a major contributing factor in this growth; more than 80% of newly eligible adults were enrolled in a managed-care program, and a bulk of those programs apply HMOs to administrate Medicaid benefits (21).

Early proponents of managed intendance argued that private insurers would exist more effective at delivering higher-quality care and at reducing the cost of intendance. States also desired budget predictability (26). While there are incidences of success, enquiry evaluating managed-intendance programs bear witness that these initial hopes were largely unfounded. In his 2012 review, Sparer (46) summarized findings on the effect of Medicaid managed-care programs on costs, access, and quality of care. He concluded that there was evidence of small savings from Medicaid managed care at the national level and that there was some success at the state level. In terms of access, Sparer reported that Medicaid managed intendance could and sometimes did provide beneficiaries with improved access, but the scope and extent of such improvements varied across states. Although heterogeneity across state programs made generalizing findings a challenge, country programs oft served every bit laboratories for testing new methods of service commitment. Lastly, Sparer noted that few studies carefully examined the effectiveness of disease and care management programs, and even fewer used Healthcare Effectiveness Information and Information Set (HEDIS) measures to evaluate quality improvement.

The contempo growth in size and development in design of state managed-care programs make it an opportune time to again review the literature on Medicaid managed care. In this commodity, we adopt Sparer's toll, access, and quality framework but broaden our review in 3 critical ways. Commencement, we consider to what extent the literature analyzes costs in conjunction with quality and admission outcomes in guild to assess changes in efficiency. 2nd, nosotros admit that researchers are shifting their piece of work to focus on specific components of mandatory-enrollment, HMO managed-care programs that can offering insights on the inner workings of managed intendance rather than focusing solely on whether the programs evangelize on intended goals. This shift in the literature perhaps signals a recognition by researchers that Medicaid managed care is hither to stay and that there is a need for enquiry that can inform policy makers' efforts to design and manage their programs. While the work on understanding design elements is even so express, we believe that this is a trending and important area of enquiry and take included information technology in our review. 3rd, throughout the literature we notice a change in the populations studied that reflects the contempo inclusion of high-gamble enrollees in managed-intendance programs. To highlight this aspect of the literature, nosotros announce specific patient groups studied for papers included in our review.

Arroyo

We include only peer-reviewed studies found in the published literature (PubMed, EconLit, National Bureau of Economic Research working papers) since the Sparer review (2011 forward). Our search for literature was conducted betwixt January and May 2019 and yielded 32 articles. We discuss studies cleaved downward by results on (a) costs, (b) access, (c) quality, and (d) efficiency (see Tables 1 4 for summaries). We note that in some instances studies measured costs in per member per calendar month (PMPM) payments, others analyzed reductions in costly events such as emergency room visits (ER), and some others used standardized expenditures. For the purpose of our review, we categorize studies on access as those evaluating realized admission to care such as utilization of primary care, potential access to intendance such as usual source of care, and avoidable ER employ as cogitating of poor access. In contrast, we specify studies on quality of intendance as those measuring appropriateness of care, actual health outcomes, prove of coordinated care, and measures of utilization specific to high-risk populations or the management of chronic conditions. We categorized efficiency analysis as research combining cost-admission or price-quality questions. We defined an efficiency comeback nether 2 possible scenarios: (a) reduction in costs, with access or quality remaining unchanged or improved; or (b) no modify in costs, with an improvement in access or quality.

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Table i

Summary of studies analyzing the furnishings of Medicaid managed care on costs

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Table 2

Summary of studies analyzing the effects of Medicaid managed care on access

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Table 3

Summary of studies analyzing the effects of Medicaid managed care on quality

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Table 4

Summary of studies analyzing the effects of Medicaid managed care on efficiency

COSTS

In 2013, a national written report by Duggan & Hayford (11) reported, on average, no improvements in cost savings coming from Medicaid managed care beyond states, as previously discussed past Sparer. In response to this finding, Perez (42) explored whether Medicaid managed care offers governments a means to improve budget predictability rather than reducing full costs. Although she institute no testify that fully capitated programs improved budget predictability (42), she acknowledges that while her data covered the majority of Medicaid enrollees, information technology was concentrated on people with stable spending patterns. The exclusion of loftier-risk populations potentially reduced the extent of variation in the underlying costs that ultimately drive budgets. In contrast, Healy-Collier et al. (18) used more timely data and compared youths with a high-run a risk condition (type i diabetes) in FFS versus managed care. They found substantial price savings from managed-intendance enrollment (18).

To date, there are no other national cost studies on high-take chances populations and/or budget predictability. Rather, we see a growing body of research on state-specific implementations. Florida, for example, enforced mandatory statewide managed-care enrollment in 2014. This transition led to significant cost savings owing to a decrease in preventable ER visits. Researchers too found that these reductions were smaller for white recipients (20).

The increase in mandatory statewide managed-intendance initiatives has also generated questions about how different plans achieve price savings. An evaluation of Pennsylvania'south Geisinger health plan showed that the programme administrators' focus on proactive and data-driven case management processes generated inpatient savings, whereas their advanced medical home partnerships between managed-care organizations and clinical providers significantly reduced outpatient costs (29). This type of inquiry starts to provide clues to pathways to achieve cost reductions but may be specific to the health plans studied.

ACCESS

Many of the studies exploring access in managed-care plans compare different models and their effects on utilization. Much of this work is focused on Kentucky. The state initially experimented with unmarried-plan HMO programs in 1997 that were centered, respectively, around Louisville and Lexington. The Louisville plan used capitated payments and outsourced administrative responsibilities, whereas the Lexington programme used FFS reimbursements and handled administrative responsibilities internally. Both plans experienced reductions in outpatient utilization, just the Lexington HMO programme had more modest reductions accompanied past an increment in professional utilization (31, 40). Subgroup analysis of changes in utilization by race showed that reductions in professional person visits were smaller for nonwhites (30). The Lexington HMO using FFS eventually collapsed and returned to traditional FFS Medicaid. The capitated Louisville HMO remained unchanged until Kentucky transitioned to a statewide comprehensive plan in 2011 (31). The Louisville HMO then entered the new HMO marketplace and expanded coverage throughout the land. A recent comparison of Kentucky'due south HMO program with Arkansas's private option program ended that at that place were no significant differences in admission improvements (45).

In add-on to research on the Kentucky plans, enquiry on Oregon's innovative approach to managed care has also considered changes in admission. In 2012, Oregon transitioned to a global budgets model, in which coordinated care organizations (CCOs) accustomed full financial risk for their enrollees. This change was expected to improve access by increasing CCO incentives to provide timely preventive care. Indeed, in a prepost treatment analysis of significant women, Oregon's coordinated care model showed improved access to timely prenatal care (39).

On the other paw, between-state comparisons found mixed results on admission. When Oregon was compared with Colorado's model (which did not impose downside financial take a chance on providers or CCOs), there was an increase in access to wellness visits for children and adolescents every bit well equally improved adult access to preventive convalescent care (33). But when Oregon was compared with Washington's managed-care model, there were reductions in children's primary care and adults' access to preventive ambulatory care (34).

HMO-focused literature includes enquiry that offers new insights on access in these programs. HMOs reduce medical costs past requiring their enrollees to access care from in-network providers. Barriers to proprietary provider network data have until recently stymied efforts past researchers to evaluate whether HMO networks permit Medicaid recipients to fairly access care. Subsequently constructing an original, multistate data set using land-program information, Ndumele et al. (38) showed that some HMOs use narrow network plans. The researchers practice not explicitly test, however, whether narrow network plans are linked to reduced admission to care. Others accept criticized the quality of network information used past states to evaluate admission to care (3).

In an endeavor to control the possible negative effects of narrow networks, the Centers for Medicare and Medicaid Services (CMS) required all managed-care organizations to implement time and distance specialty access standards in 2018. Time standards require appointments with professionals to be scheduled within a specific time frame, while distance standards plant a maximum distance or time an enrollee must commute to receive specialty care. A contempo evaluation of country-specific regulations concluded that this policy solitary is unlikely to atomic number 82 to specialty access improvements. The authors note that efforts to continuously monitor or evaluate plan networks are farther hindered because non all states mandatorily require, or even request, HMOs to disembalm network data (36).

QUALITY

Much of the recent literature on quality of care focused on high-risk populations enrolled in managed-care programs. The populations studied include seniors, individuals with serious mental illnesses, diabetics, asthmatics, and individuals with disabilities. Like the previous literature, state-specific studies vary by target populations and findings. Some of the variation is due to state-specific policies. For example, South Carolina offers supplementary payments for individuals with some high-risk or chronic conditions, incentivizing HMOs to diagnose more individuals. Research on S Carolina's program constitute that the introduction of managed intendance increased asthma and attention-deficit hyperactivity disorder (ADHD) diagnoses only also the utilization of nonurgent ER services, indicating that follow-up admission to quality treat these conditions was defective (8).

Alternatively, multistate studies offer insight on average state-level effects of managed care on high-risk populations. Even here, results vary by high-risk populations and even within loftier-risk groups. One multistate study found improved quality with reductions in readmissions for children with blazon i diabetes (eighteen), whereas a national study found that self-reported quality varied by the severity of health gamble weather amidst seniors and disabled individuals (16). A report using land-level information reported some association betwixt prescription utilization for serious mental illnesses and managed-care penetration rates. Because near states carved out pharmaceutical benefits, the authors argued that the results reflect a failure to coordinate medication adherence by HMOs, leading to a decrease in necessary psychiatric medications (43). The authors did not account, however, for variation in admission to prescribing providers, which could besides explicate differences in medication utilization.

Care coordination's role in quality improvements is a topic frequently discussed in the contempo literature. A national-level comparison of primary intendance case management (PCCM) and HMO structures suggested that the latter was less effective at coordinating care (12). Challenges facing the coordination of medical and pharmaceutical benefits within HMOs were reflected in a recent report on barriers to timely initiation of progesterone in pregnant Medicaid-insured women. Progesterone therapy is acknowledged as an testify-based intervention that can reduce the chance of recurrent preterm births, an outcome that has long-term implications for population health. In survey responses, HMOs cited providers' lack of cognition of clinical indicators for prescribing progesterone therapy and uncertainty in plan coverage among drug brands as factors associated with low adherence to recommended guidelines (two). Medicaid recipients appreciate the difference coordinated care can make when it is done well. A survey of disabled individuals showed that positive experiences with care coordinators were associated with increased overall satisfaction and fewer unmet wellness needs (five).

The literature on quality also reflects evidence of experimental efforts to improve quality of care implemented by states, providers, and plans. In a 2016 study, Hu et al. (xix) found that managed-care plans adopting pay-for-operation (P4P) programs improved the 4:3:1:3:3:1 series vaccination rates among children. These standard vaccinations include DTaP, IPV, MMR, Hib, Hep B, and varicella. Given that financial incentives alone may non be sufficient in optimizing outcomes, program administrators are experimenting with technical innovations to improve quality of care. In 2011, the Johns Hopkins HealthCare programme improved early screening for diabetic retinopathy, which without timely intervention is a leading cause of incomprehension. The program introduced nonmydriatic cameras1, which allowed diabetic patients to become their annual screening when visiting their chief care physician rather than having to seek specialist care (17).

New trends in the literature besides considered quality variation within HMO managed-intendance programs. Researchers have shown that algorithms used to auto-assign Medicaid recipients to plans exercise not produce optimal matches (32, 35). Evidence also indicated that loftier-chance recipients were more probable to switch to higher-quality plans than were low-risk recipients. The latter potentially undermines marketplace viability over the long term.

To the all-time of our knowledge, no evidence has documented market failure due to adverse choice in Medicaid programs. But researchers have reported prove that failure to adequately risk-conform payments can misconstrue HMO behavior in means that undermine plan goals. For example, evidence from Texas suggests that HMOs may accept engaged in strategic efforts to disenroll significant African American women who are at higher take a chance of pregnancy complications. HMOs operating in areas with larger African American populations were also less likely to marketplace benefits for pregnant women, peradventure to avoid their enrollment (28). Evidence from California's program raises similar concerns. In California, individual HMOs (excluding Kaiser plans) consistently offered lower-quality service when compared with public wellness plans, which may have helped the private HMOs to avert high-risk enrollees (four).

Although researchers accept offered theoretical models that rationalize HMO efforts to avoid loftier-hazard patients by offering inferior quality (28), these models have still to be tested empirically. Fortunately, a study using country-level panel data shows that over time information technology is lower-quality plans that are more likely to leave state marketplaces (37); it is not known, however, if these exits are due to long-term marketplace forces or to tightening regulatory oversight. Whether such adjustments in the HMO market resolve the kind of racial disparities evidenced in the aforementioned Texas study is an expanse for future research. Because there was no testify of changes in quality amidst plans remaining in state markets (28), increases in Medicaid HMO market concentration may non necessarily damage Medicaid recipients. The merely other report on this topic reported a negative association between the number of HMOs operating in the local area and infirmary length of stay in Florida (41).

EFFICIENCY

Next, we discuss evidence of changes in program efficiency due to managed intendance by jointly assessing costs, access, and quality. Ii Oregon studies provided insight on efficiency but are based on newer models of managed intendance. Oregon's CCOs use accountable care organizations (ACOs) in conjunction with global budgets and more downside financial risk than does Colorado, but both incorporate elements of traditional (i.e., HMO) managed care with ACOs. When compared with Colorado, Oregon's CCOs appeared to better efficiency, as cost declines in Oregon were no different from Colorado's and several measures of access and appropriateness of care improved (33). When Oregon was compared with Washington (traditional HMOs), results indicated lower costs, every bit well every bit improvements in some measures of access (reductions in avoidable ER visits) and appropriateness of care (unnecessary cervical cancer screening). However, as in the Colorado comparison, these authors constitute reductions in the key access measures of master and preventive care (34). Thus, Oregon'south newer model of managed intendance may improve efficiency but only with the caveat that lower main/preventive intendance reflects strained provider capacity in Oregon, which experienced much larger increases in enrollment nether the ACA than did the comparing states (33, 34). Given the short pre and post fourth dimension periods used in these studies, longer follow-up data would be informative.

An interesting new pathway for improved efficiency is the incentive introduced nether the ACA that encourages states to cleave in drug benefits in their managed-care contracts. A multistate report by Dranove et al. (ix) offers empirical evidence of decreases in spending on drugs, with utilization remaining unchanged. The savings are related to lower indicate-of-auction prices at pharmacies for identical drugs and greater use of generic substitutes and therefore imply efficiency gains. Savings were larger in states in which HMOs were allowed to create their own formularies for Medicaid patients (9), which raises concerns near HMOs cherry-red-picking enrollees and merits further research.

CONCLUSIONS AND DISCUSSION

In the years since Sparer'due south review, the literature on Medicaid managed care has grown to reverberate the blueprint of modern managed-care programs. In detail, researchers accept made considerable gains in empirically evaluating managed-intendance programs administering benefits to high-chance patient groups. Studies from different states and on different high-risk populations suggested that quality of care tin can amend nether managed care, but substantial caveats remain. Transitioning high-risk enrollees to managed care in itself tin have implications for the quality of care (sixteen). As well, the variability in results beyond high-chance groups cannot be disentangled from differences in country-specific programs, also noted by Sparer. More work using national data or additional states is needed to generalize findings and additional assay exploring the efficiency furnishings of including loftier-risk populations.

We notice that several key gaps remain in the literature. In general, the literature should increase its focus on achieving efficiencies with Medicaid managed care. More recent studies did examine costs in conjunction with access and/or quality, but these were focused on one land'southward unique managed-care model. Obtaining greater value for the wellness care dollar is critical to the goal of insuring all individuals while slowing the ever-increasing rate of expenditures on health care. While achieving efficiency in the Medicaid program may be more hard owing to the nature of the populations it serves, states' innovations in the area of Medicaid managed care must be critically evaluated by researchers because at that place is the potential for research to identify best practices in managing the intendance of Medicaid beneficiaries.

Discerning the effects of using managed care to administer long-term care services is needed. Almost half of u.s. use managed care to provide some long-term services and supports (MLTSS) under Medicaid; the total number of MLTSS programs more than doubled from 2012 to 2017 (22). In trying to better coordinate care for the crumbling and disabled populations included in these programs, some states accept engaged in mandatory enrollment, while others have not; well-nigh states experimenting in this surface area have carved out institutional care at this fourth dimension. By developing MLTSS programs, Medicaid is seeking the same goals of improved access and quality at lower costs every bit they practise for other Medicaid recipients. While these are high-toll populations and much can be gained from coordinating care between the Medicaid and Medicare programs, price-based enquiry focusing on the incorporation of long-term services into some form of managed care is defective.

Another gap relates to understanding the furnishings of the 2016 CMS directive that encouraged Medicaid HMOs to offer recipients nonmedical benefits to address social factors that could better health outcomes and lower medical costs. Typically referred to equally social determinants of health (SDOH), these factors include access to healthy nutrient, income security, stable housing, and affordable transportation. HMOs may take some incentive to offer recipients nonmedical benefits, but information technology may be unrealistic to expect significant effects without boosted reforms. If payoffs from investing in SDOH occur primarily in the long term, HMOs may non realize sufficient benefits among agile enrollees to justify these costs (27). Even if Medicaid recipients remain continuously enrolled, tight budgets may not offer slack for investments that generate returns over fourth dimension (44). In surveys, HMOs report enthusiasm for SDOH benefits but stress the need for more organizational reforms and additional funding (15). In addition to Oregon, New York and Minnesota accept already embraced reforms to encourage SDOH benefits. Research on areas for SDOH investments, different state initiatives, and their effects on efficiency is certainly needed.

disclosure statement

The authors are non aware of whatsoever affiliations, memberships, funding, or financial holdings that might be perceived as affecting the objectivity of this review.

acknowledgments

We gratefully acknowledge the helpful comments from Dr. Brad Herring in the conceptualization and development phases of this review. We also note that this updated review would not have been possible without reliance on the earlier piece of work completed by Sparer.

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Source: https://www.annualreviews.org/doi/10.1146/annurev-publhealth-040119-094345

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