Has the Shift to Managed Care Made Medicaid Less Costly?

No. They just shift costs to providers:

The findings suggest that shifting Medicaid recipients from fee-for-service into [Medicaid managed care] did not reduce Medicaid spending in the typical state. However, the effects of the shift varied significantly across states as a function of the generosity of the state’s baseline Medicaid provider reimbursement rates. These results are consistent with recent research on managed care among the privately insured, which finds that HMOs and other forms of managed care achieve their savings largely through reduced prices rather than lower quantities.

Full NBER study here.

Comments (4)

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  1. Joe Barnett says:

    The study shows that without changing the incentives of providers and patients, savings from the more efficient delivery of care through managed care are small.

  2. Josh says:

    Of course.

  3. Sydney says:

    Wow, you don’t hear that from the liberal-leaning sources of propaganda. Thanks for sharing.

  4. Buster says:

    I wonder how managed care affected access? Some of the fee-for-service Medicaid mills are abysmal, while other providers such as family docs provide the same care regardless of insurance because they feel it is important to care for the poor.