Questions for States As They Turn to Medicaid Managed Care

in managed care has grown dramatically during the 1990s, as private and public purchasers of health care turn to managed care as a way of providing more costeffective delivery of health services. Managed care programs work toward these goals by changing how providers are paid, developing select provider networks, establishing protocols for appropriate care, and offering enrollees financial incentives to receive care from specific providers. The private sector has already achieved substantial savings through managed care. State Medicaid programs are increasing their use of managed care in the hope of achieving similar success. This brief reviews the questions state Medicaid programs must answer for themselves in order to maximize their chances of increasing savings while preserving or increasing access to care. To provide a context for this discussion, we begin by briefly reviewing recent Medicaid enrollment trends, state objectives in turning to managed care for their Medicaid programs, and federal rules constraining how states structure those programs.