Medicaid Managed Care Plans Owned by For-Profits Have Higher Costs, Lower Quality

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<p>In many states, Medicaid programs have contracted out the delivery of health care services to publicly traded, for-profit health plans that are focused on managing the care of Medicaid beneficiaries. Under the Affordable Care Act, states will see expanding Medicaid enrollment, and publicly traded companies are expected to capitalize on this growing market. </p>
<p>A new Commonwealth Fund <a href="/publications/issue-briefs/2011/jun/assessing-financial-health-medicaid-managed-care-plans-and">issue brief</a> compares these plans with non-publicly traded plans owned by groups of health care providers, health systems, community health centers, or clinics. Researchers Michael J. McCue, D.B.A., and Michael H. Bailit, M.M., found that Medicaid managed care plans that are owned by publicly traded, for-profit companies spent an average of 14 percent of premiums on administrative costs, while the non-publicly traded plans spent about 10 percent. The publicly traded plans also received lower scores for quality-of-care measures related to preventive care, treatment of chronic conditions, members' access to care, and customer service. </p>
<p>The authors point out that "investment in information technology may also account for the higher administrative costs among plans with larger memberships, especially those owned by publicly traded companies." </p>
<p>To read the complete brief, go to <a href="/publications/issue-briefs/2011/jun/assessing-financial-health-medicaid-managed-care-plans-and">Assessing the Financial Health of Medicaid Managed Care Plans and the Quality of Patient Care They Provide</a>. <br /><br /></p>