Is reducing disparity enough?

A recent paper in by Martin et al. (2015) finds that Medicaid Managed Care programs in Kentucky reduced monthly professional visits. Further, the decrease in the number of professional visits was larger for whites than for non-whites. The authors conclude: We find evidence that MMC [Medicaid Managed Care] has the possibility to reduce racial/ethnic disparities…

ACA and narrow networks

One way for insurers to reduce health care costs is to restrict patient access to only lower cost providers.  This phenomenon is known as narrow networks.  On the one hand, narrow networks can promote efficiency by driving down provider price and directing patients to the highest value physicians.  Alternatively, if insurers use narrow networks to direct patients…

The Next Generation ACO

Medicare currently has two Accountable Care Organizations (ACOs)–the more popular Medicare Shared Savings Program (MSSP) and the Pioneer ACO program. However, these ACOs have generated only limited cost savings. Only 11 of 23 Pioneer ACOs and 58 of 220 MSSP participants generated cost savings. To address some provider concerns and due to the limited cost…

A Medicaid ACO?

Medicare’s Shared Savings Program (MSSP) contracts with accountable care organizations (ACOs) to provide care for Medicare beneficiaries.  Reimbursement levels for these ACOs depends on quality and their ability to generate cost savings relative to the non-ACO national trend.  The goal is to align provider and payer incentives in improving quality and reducing cost. Would such a…

Who uses out-of-network providers?

According to a recent paper by Kyanko, Curry and Busch (2003), 8 percent of insured individuals used an out-of-network physician. Why are people using out-of-network services? The authors give the following breakdown. Approximately 40 percent of individuals using out-of-network physicians experienced involuntary out-of-network care. Whereas fifteen percent of outpatient out-of-network contacts were involuntary, almost 60…

California: Mandatory Enrollment of Seniors and the Disabled into Managed Care

In 2010, CMS approved California’s “Bridge to Reform” waiver request that authorized the state to expand its mandatory managed care to seniors and people with disabilities covered by Medi-Cal.  Authorized under a Section 1115 waiver, the policy affected nearly 400,000 Medi-Cal enrollees, including 240,000 who were moved from fee-for-service into managed care between June 2011…

The Start of Rationing in Medicare?

Prior authorization is a common tool that managed care organizations use to reduce patient utilization of medical services.  Some physicians believe that prior authorization creates barriers to effective care, but other commentators believe that prior authorizations can be implemented in a more efficient manner.  Either way, prior authorizations are a form of rationing care. Although…

Early Medical Cooperatives

In the days before health reform’s pasage, many reform proponents argued for the advent of co-operative healthcare systems or “co-ops”.  Co-ops, however, have been around for a long time before that. “In the late forties, over a hundred small rural health cooperatives were founded.  Nearly all of these were in the Southwest, fifty in Texas…