Evaluating Accountable Care Organizations is difﬁcult because there is a great deal of heterogeneity in terms of their reimbursement incentives and other programmatic features. We examine how variation in reimbursement incentives and administration among two Medicaid managed care plans impacts uti- lization and spending. We use a quasi-experimental approach exploiting the timing and county-speciﬁc implementation of Medicaid managed care mandates in two contiguous regions of Kentucky. We ﬁnd large differences in the relative success of each plan in reducing utilization and spending that are likely driven by important differences in plan design. The plan that capitated primary care physicians and contracted out many administrative responsibilities to an experienced managed care organization achieved signiﬁcant reductions in outpatient and professional utilization. The plan that opted for a fee-for-service reimbursement scheme with a group withhold and handled administration internally saw a much more modest reduction in outpatient utilization and an increase in professional utilization.
J. Marton, A. Yelowitz and J. C. Talbert. A Tale of Two Cities? The Heterogeneous Impact of Medicaid Managed Care. J Health Econ, 36 47-68 march, 2014. doi:http://dx.doi.org/10.1016/j.jhealeco.2014.03.001
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