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Medicaid Health Maintenance Organizations: Can They Reduce Program Spending?


Original Article

A randomized trial to evaluate the Florida site of the Program for Prepaid Managed Care showed that the plan, a staff model health maintenance organization, was successful in attracting Medicaid enrollees. The evaluation established that the health maintenance organization was able to limit members' utilization. The savings were in the form of lower likelihood of using care. The amount of services received, once care was initiated, was the same in both fee-for service Medicaid and health maintenance organizations. The authors detected no differences in inpatient use or costs. Additionally, they found evidence that the plan attracted sicker than average enrollees, so this reduced utilization translates into Medicaid program savings.

From the RAND Corporation, Santa Monica, California.

This research was supported by a Cooperative Agreement with the Health Care Financing Administration and by a grant from the Robert Wood Johnson Foundation.

Address correspondence to: Joan L. Buchanan, PHD, RAND Corporation, 1700 Main Street, Santa Monica, CA 90406-2138.

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