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Health Care Costs and Financing

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Shifting to Medicaid managed care in New Mexico increased barriers for rural residents and burdened safety-net providers

Most States have implemented programs requiring some or all of their Medicaid recipients to enroll in managed care plans. The shift to Medicaid managed care in New Mexico created some barriers to care for rural residents and increased the workload and financial burdens of community health centers, emergency departments, and other safety-net institutions where the uninsured seek care. These are the findings of a study supported in part by the Agency for Healthcare Research and Quality (HS09703) and led by Howard Waitzkin, M.D., Ph.D., of the University of New Mexico.

Dr. Waitzkin and his colleagues conducted a long-term study of Medicaid managed care in New Mexico, which mandated managed care for most Medicaid recipients in July 1997, when 22 percent of the State's population were uninsured and 22 percent were living in poverty. The researchers conducted a telephone survey of low-income households in the summer of 1998 (670 responded) to assess the effects of Medicaid managed care on access to care, satisfaction, use, and costs, as well as perceived health status. The survey data did not demonstrate major effects of the transition to Medicaid managed care on access to care for Medicaid-eligible or non-Medicaid-eligible individuals.

On the other hand, ethnographic research suggested certain specific barriers for patients and problems for safety-net providers. Particularly in rural areas, transportation (and in some cases, language) became a barrier to care because some recipients were assigned to more distant primary care providers and pharmacies. Also, patients with mental health problems received less intensive care than they did prior to the shift to managed care. The administrative burdens and delays created by Medicaid managed care sufficiently strained the staff and finances of safety-net providers so that their future capacity to offer services for both Medicaid recipients and the low-income uninsured was threatened.

More details are in "Safety-net institutions buffer the impact of Medicaid managed care: A multi-method assessment in a rural state," by Dr. Waitzkin, Robert L. Williams, M.D., M.P.H., John A. Bock, Ph.D., M.S., and others, in the April 2002 American Journal of Public Health 92(4), pp. 598-610.

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