Academic journal article Health and Social Work

Medicaid Managed Care and Urban Poor People: Implications for Social Work

Academic journal article Health and Social Work

Medicaid Managed Care and Urban Poor People: Implications for Social Work

Article excerpt

Managed care is rapidly becoming the predominant method of financing and delivering health care to Medicaid recipients. The shift from Medicaid fee-for-service arrangements to managed care has important implications for the health care available to low-income and uninsured people living in U.S. cities. It also presents significant new challenges to the financial viability of urban "safety-net" providers - that is, the public hospitals, academic medical centers, community health centers, local health department clinics, school-based clinics, and other community-based health care providers that traditionally serve residents of low-income urban communities.

Social workers in direct practice and management positions in urban hospitals, clinics, and managed care plans, as well as in policy development and advocacy positions, have many opportunities to influence the transition to Medicaid managed care in cities. This article aims to help equip social workers for broad-scale implementation of Medicaid managed care by describing its theoretical basis and development; presenting reasons for its apparent popularity; and analyzing its likely effects on access to care, the long-term viability of urban safety-net providers, and social workers with Medicaid clients. Steps are identified by which social workers can support clients in the transition to Medicaid managed care and work for the preservation of access to care for disadvantaged urban populations.


Theoretical Basis

Enrollment of Medicaid recipients in managed care reflects the widely held belief that managed care can improve health care access while also promoting cost containment and federal and state budget control (Edinburg & Cottler, 1995; Keigher, 1995). Medicaid managed care seeks to bring increasing numbers of recipients into health care delivery systems that are subject to "the new economics of managed care" (Shortell, Gillies, & Anderson, 1994, p. 48), which is based on the fact that care is provided to a defined number of enrollees at a fixed rate per member per month. Under capitation-based health care, all revenues are earned "up front" when contracts are negotiated. All system components - including hospitals, clinics, imaging centers, and primary care physicians' offices - are transformed from revenue centers to cost centers; these cost centers need to be managed within the capitation-based budget. In theory, these arrangements create incentives for keeping people well and, when they become sick, for treating them at the most cost-effective location on the continuum of care and in the most cost-effective manner. These arrangements also create incentives to underserve patients.


Medicaid managed care plans vary in the strength of their incentives for cost containment. Three major types of Medicaid managed care plans are (1) fee-for-service case management, under which the state pays a health care provider a monthly case management fee to perform gatekeeping and service coordination for each person enrolled; (2) fully capitated systems, under which the state pays a managed care plan, usually some form of health maintenance organization (HMO), a preset, or capitated, rate for each person enrolled, and the plan is then at risk for paying the costs of providing a comprehensive package of services to its enrollees, usually including inpatient, specialty, and primary care; and (3) partially capitated systems, under which the state pays a managed care plan a capitated rate for each person enrolled, but the plan assumes risk for the costs of providing a more limited package of services, usually excluding some specialty and inpatient care but including at least primary care services (Perkins & Rivera, 1995). Fully capitated systems contain the strongest incentives for cost containment; therefore, states are placing the greatest emphasis on developing and enrolling Medicaid recipients in fully capitated plans. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.