Unhealthy competition: consequences of health plan choice in California Medicaid

Abstract

Objectives: We compared the quality of care received by managed care Medicaid beneficiaries in counties with a choice of health plans and counties with no choice.

Methods: This cross-sectional study among California Medicaid beneficiaries was conducted during 2002. We used a multivariate Poisson model to calculate adjusted rates of hospital admissions for ambulatory care-sensitive conditions by duration of plan enrollment.

Results: Among beneficiaries with continuous Medicaid coverage, the percentage with 12 months of continuous enrollment in a health plan was significantly lower in counties with a choice of plans than in counties with no choice (79.2% vs 95.2%; P < .001). Annual ambulatory care-sensitive admission rates adjusted for age, gender, and race/ethnicity were significantly higher among beneficiaries living in counties with a choice of plans (6.58 admissions per 1000 beneficiaries; 95% confidence interval [CI] = 6.57, 6.58) than among those in counties with no choice (6.27 per 1000; 95% CI = 6.27, 6.28).

Conclusions: Potential benefits of health plan choice may be undermined by transaction costs of delayed enrollment, which may increase the probability of hospitalization for ambulatory care-sensitive conditions.

FIGURE 1

Percentage of new Medicaid beneficiaries enrolled in a health plan, by month, in counties with a choice or no choice of health plans: California, 2002. Note. Data are based on a subsample of 239,821 beneficiaries newly enrolled in Medicaid in February, March, April, May, and June 2002.

FIGURE 2

Percentage of Medicaid beneficiaries with 12 months of continuous health plan enrollment and ambulatory care–sensitive admissions at the county level: California, 2002.