Navigation Links
Medicaid managed care plans owned by public companies have higher administrative costs

New York, NY, June 15, 2011A new Commonwealth Fund report finds that Medicaid managed care plans that are owned by publicly traded for-profit companies whose primary line of business is managing Medicaid enrollees spent an average of 14 percent of premiums on administrative costs, compared with an average of only 10 percent spent by non-publicly traded plans owned by groups of health care providers, health systems, community health centers, or clinics. Sampling health plans with at least 5,000 enrollees resulted in an initial sample of 225 Medicaid managed care plans representing 23.8 million enrollees. The numbers of plans reporting quality of care measures was limited and varied by measure. Only 27 percent of the publicly traded Medicaid-only plans reported quality measures and scored lower on these measures compared to non-publicly traded plans; they scored 13 percentage points lower when it came to managing chronic illness, and 11 percentage points lower on a composite score measuring preventive care.

"Managed care plans represent a large piece of Medicaid's future, and plans owned by publicly traded companies will likely be a growing share of this market," said lead author Michael McCue, a professor at Virginia Commonwealth University. "In order to assure that Medicaid provides high quality, efficient health care, it will be crucial that state Medicaid directors responsible for managed care contracts take into account publicly traded plans' commitment to Medicaid and whether they are striking the right balance between providing high quality care to patients and increasing earnings."

According to the report, Assessing the Financial Health of Medicaid Managed Care Plans and the Quality of Patient Care They Provide, enrollment in Medicaid managed care is on the rise, and the authors anticipate that rise will continue as most people newly eligible for Medicaid under the Affordable Care Act will likely join managed care plans. In 2009, CMS reported 72 percent of Medicaid enrollees were fully or partially covered by a managed care plan, up from only 55 percent in 2000. From this study sample, the number of enrollees in managed care plans owned by publicly traded companies jumped significantlyfrom 5.6 million to 9.8 million between 2004 and 2009.

"This report shows us that it is possible for health plans to keep administrative costs down and quality high for Medicaid beneficiaries," said Commonwealth Fund President Karen Davis. "Millions of people are already covered by managed care plans and millions more will be added to their ranks when Medicaid is expanded in 2014 under the Affordable Care Act. Now is the time to ensure performance of private contractors to assure that scarce resources are used wisely and patients get the high quality health care they deserve."

Key Report Findings:

  • Quality of care data were reported by only one out of four publicly traded Medicaid-only plans. This limited number of plans performed significantly worse than non-publicly traded plans on clinical quality composite measures of preventive care (11 percentage points lower), including childhood immunization status, and adolescent and child well-care visits, and chronic illness care (13 percentage points lower), including diabetes care and appropriate use of medications for asthma for children and adults.

  • Provider-sponsored health plans had the lowest administrative cost ratio overall, 8%, compared to 12% for non-provider sponsored plans.

  • When looking at measures of patients' experience with their health care plan, non-publicly traded plans scored seven percent higher in overall patient satisfaction than the Medicaid-only publicly traded plans.

  • Health plans sponsored by health care providers reported higher quality than non-provider sponsored plansscoring eight percentage points higher when it comes to managing chronic illness and eight percentage points higher when it come to managing preventive care.

  • More than 50 percent of Medicaid enrollees in Delaware, Florida, Georgia, Illinois, Indiana, Maryland, Missouri, Nebraska, Nevada, Tennessee, Texas, Washington state, West Virginia, and Wisconsin are enrolled in health care plans managed by publicly traded companies.


Contact: Mary Mahon
Commonwealth Fund

Related medicine news :

1. Kaiser Analysis Finds Record Medicaid Enrollment Growth in 2009
2. NGA Focus on States Health Care Responsibilities Spotlights Need for Congress to Pass Federal Medicaid Relief
3. Congressional Staff Briefing, Wed., Feb. 24 on Mental Health, Medicaid & Block Grants
4. U.S. Senate Urgently Needs to Extend Medicaid Match in Economic Recovery Legislation
5. Patient Advocates From Across Virginia Visit the State Capitol to Address State Budget Cuts to Medicaid
6. Create new federal center to spur Medicare and Medicaid innovation
7. Proposed Medicaid Cuts Threatens Health Care Access for 400,000 Maryland Children
8. New York State Adopts Universal Provider Datasource to Reduce Administrative Costs for Medicaid
9. Experts support new federal center for Medicare and Medicaid innovation
10. SDI Reports: Emergency Room Visits Covered by Medicaid Increased 6% in 2009
11. ASTRO applauds nomination of Dr. Donald Berwick to head Centers for Medicare and Medicaid Services
Post Your Comments:
(Date:6/25/2016)... , ... June 25, 2016 , ... Conventional wisdom preaches ... success. In terms of the latter, setting the bar too high can result in ... than just slow progress toward their goal. , Research from ...
(Date:6/24/2016)... , ... June 24, 2016 , ... Those who have ... these feelings, many turn to unhealthy avenues, such as drug or alcohol abuse, as ... Michigan, has released tools for healthy coping following a traumatic event. , Trauma sufferers ...
(Date:6/24/2016)... ... ... was in a crisis. Her son James, eight, was out of control. Prone to extreme ... “When something upset him, he couldn’t control his emotions,” remembers Marcy. “If there was ... other children and say he was going to kill them. If we were driving ...
(Date:6/24/2016)... ... June 24, 2016 , ... Global law firm Greenberg Traurig, P.A. announced that ... chosen by their peers for this recognition are considered among the top 2 percent ... special honors as members of this year’s Legal Elite Hall of Fame: Miami ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... Comfort Keepers® ... American Cancer Society and the Road To Recovery® program to drive cancer patients to ... and other adults to ensure the highest quality of life and ongoing independence. ...
Breaking Medicine News(10 mins):
(Date:6/26/2016)... Jazz Pharmaceuticals plc (Nasdaq: JAZZ ) announced ... Act of 1976, as amended ("HSR"), with respect to ... CPXX ) expired effective June 24, 2016, ... previously announced on May 31, 2016, Jazz Pharmaceuticals and ... Jazz Pharmaceuticals has commenced a tender offer for all ...
(Date:6/24/2016)... June 24, 2016  Consumers have taken a ... have placed more emphasis on patient outcomes. ... programs in the pharmaceutical industry have evolved beyond ... pharmaceutical companies are focusing on becoming more patient-oriented ... products and services that improve health. ...
(Date:6/24/2016)... Mass. , June 24, 2016   ... Spaulding Rehabilitation Network,s Dean Center for Tick ... Physical Medicine and Rehabilitation, MIT Hacking Medicine, University ... for Innovation, today announced the five finalists of ... for Lyme disease.  More than 100 scientists, clinicians, ...
Breaking Medicine Technology: