Even RWJ is Pessimistic About Medicaid Managed Care

The Medicaid managed care effort is more than a decade old. CMS and state Medicaid departments have long claimed that because fee-for-service medicine suffers from poor coordination and pays for volume not value, it causes unnecessarily high expenditures. Because Medicaid managed care supposedly controls payments and rewards coordinated systems, CMS has paid states millions of dollars to expand Medicaid managed care, and the states have happily extolled its supposed benefits.

In September, The Robert Wood Johnson Foundation published a synthesis report, finding that Medicaid managed care has not resulted in significant cost savings on the national level. The states that saved money were those that had relatively high Medicaid reimbursement rates in their fee-for-service programs. They saved money because they cut their reimbursement rates, not because managed care reduces the cost of providing medical care.

The synthesis report concludes that Medicaid managed care did not improve access to care and in some cases, access was worse. Also, managed care enrollees are no more likely to deliver a healthy baby than their fee-for-service counterparts.

Unlike managed care, Cash & Counseling programs have been shown to lower Medicaid expenditures and to increase quality. They give Medicaid patients a budget that they can use to purchase their own care. One wonders why CMS and the states are not more interested in them.

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