Medicaid Managed Care Programs and Healthcare Markets

Abstract

My dissertation research offers insights about the effects of Medicaid managed care (MMC) programs from Kentucky’s statewide market-based program. Kentucky’s significant reforms to introduce a comprehensive MMC program just one year after the passage of the ACA can provide valuable lessons for other rural states with substantial poor populations. In the first study, I explore Kentucky’s 2011 introduction of MMC and the quality of hospitals used by Medicaid recipients. Kentucky’s MMC program is a post-Affordable Care Act (ACA) market-based program that uses a small set of competing managed-care organizations (MCOs) to administer Medicaid benefits. Using a quasi-experimental research design, I explore whether the introduction of MMC changes the hospitals used by pregnant Medicaid-insured mothers for their deliveries and whether the quality of these hospitals is different compared to the hospitals used before the policy change. I also test whether the changes in hospitals used by pregnant Medicaid-insured mothers for their deliveries differ in smaller counties with fewer hospitals and Medicaid recipients compared to those in larger counties with more hospitals and Medicaid recipients. My analysis uses hospital quality measures designed by the Agency for Healthcare Research and Quality to measure hospital quality. I find that Medicaid-insured pregnant women from nonmetropolitan counties have an increased probability of delivering in the highest quality local hospitals as opposed to the lowest quality local hospitals. In contrast, I find that Medicaid-insured pregnant women from metropolitan counties have a decreased probability of delivering in the highest quality local hospitals and increased probability of delivering in lower quality local hospitals. Since Kentucky’s metropolitan counties have high quality hospitals and its nonmetropolitan counties have some of the poorest quality hospitals in the state, these findings may be positive for patient outcomes and program costs. Additional research evaluating patient outcomes and identifying the causal mechanisms responsible for changes in the hospitals used by Medicaid recipients is needed.Motivated by my findings in the first chapter, in my second chapter I exploit Kentucky’s reforms to explore potential mechanisms that link MMC to changes in the hospitals used by Medicaid-insured pregnant women for their deliveries. I focus on hospital network status and physician-hospital arrangements, which are the terms by which physicians practice in hospitals. These arrangements can affect the hospital ultimately used by physicians’ patients and may be designed specifically for the purposes of joint contracting with insurers. After using reduced form hospital choice models to estimate the change in the hospitals used by pregnant women in Kentucky in response to the introduction of MMC, I introduce measures of hospital network status and physician-hospital arrangements to my analysis. The primary policy effects on the hospitals used by Medicaid-insured women for deliveries remain unchanged, including the two covariates that suggest that other mechanisms with opposing effects to hospital-network status and physician-hospital arrangements are responsible for the changes in hospitals used by Medicaid-insured women. Future research should consider the role of information in provider choice after the introduction of MMC.In the third chapter, I shift my focus to considering how well Kentucky’s MMC program navigated expanding Medicaid eligibility. Specifically, I explore the impact of the ACA on disparities in access to medical providers in MMC programs. In states expanding Medicaid eligibility, low-income communities with pre-existing elevated numbers of uninsured people experienced larger gains in coverage from the ACA than other communities. While researchers have reported that there is increased physician participation in states that expanded Medicaid, researchers have yet to explore whether increases in physician participation coincided with areas experiencing the greatest increases in Medicaid coverage or inadequate access to medical services. In these programs, Medicaid recipients access care from provider networks created by the health maintenance organizations (HMOs) selected by states to administer Medicaid benefits. Using an original dataset on Kentucky’s Medicaid HMO networks, I use a difference-in-differences framework to compare provider network participation before and after the implementation of the ACA across counties. Specifically, I compare counties with differing levels of pre-ACA uninsured rates, medically underserved populations and poverty. I find provider network participation is greater in counties experiencing smaller increases in Medicaid coverage but subtly larger participation in counties with medically underserved areas or high poverty.