Does Managed Care Widen Infant Health Disparities? Evidence from Texas Medicaid

TitleDoes Managed Care Widen Infant Health Disparities? Evidence from Texas Medicaid
Publication TypeJournal Article
Year of Publication2018
AuthorsKuziemko I, Meckel K, Rossin-Slater M
JournalAmerican Economic Journal: Economic Policy
Volume10
Pagination255–283
Date Publishedaug
ISSN1945-7731
AbstractMedicaid programs increasingly finance competing, capitated managed care plans rather than administering fee-for-service (FFS) programs. We study how the transition from FFS to managed care affects high- and low-cost infants (blacks and Hispanics, respectively). We find that black-Hispanic disparities widen—e.g., black mortality and preterm birth rates increase by 15 percent and 7 percent, respectively, while Hispanic mortality and preterm birth rates decrease by 22 percent and 7 percent, respectively. Our results are consistent with a risk-selection model whereby capitation incentivizes competing plans to offer better (worse) care to low- (high-) cost clients to retain (avoid) them in the future. (JEL H75, I12, I18, I38, J13, J15)
URLhttps://www.aeaweb.org/articles?id=10.1257/pol.20150262 https://pubs.aeaweb.org/doi/10.1257/pol.20150262
DOI10.1257/pol.20150262