Does Medicaid managed care deliver savings?(Practice Trends)

WASHINGTON -- Medicaid managed care doesn't appear to be living up to its reputation for cost savings, at least not in South Carolina, Walter Jones, Ph.D., said at the annual meeting of the American Public Health Association.

Dr. Jones and his colleagues looked at 2 years' worth of data on 56,000 Medicaid HMO patients and 21,000 patients in the state's Physician Enhanced Payment (PEP) program, a Medicaid plan in which primary care physicians are paid an extra fee to "case manage" the patient's health care needs.

Both groups were matched with comparable fee-for-service patients.

South Carolina "is not a heavily managed care state. We have very little HMO penetration," said Dr. Jones, professor of health administration and policy at the Medical University of South Carolina, Charleston. "Unlike a lot of Medicaid programs, South Carolina does not have mandatory HMO assignment; physicians wouldn't stand for it. As a consequence ... there's been a lot of unstable provider participation. An HMO comes to the state, thinks it can make money, finds it can't, and leaves, and the merry-go-round goes on and on."

But the PEP program is a much different form of managed care, he said. The primary care physician provides a "medical home" for the patient for a flat fee but is not financially penalized for putting a patient into specialty care. Also, PEP physicians are expected to be "very available," reducing the need for costly emergency room care, Dr. Jones said at the meeting.

The researchers looked at several aspects of medical care utilization, including primary and specialty care, inpatient hospitalizations, and emergency room visits.

They also included a separate category for "total utilization," which included pharmacy use and other services as well as physician and hospital care.