Using Managed Competition and Managed-Care Organizations to Deliver Medicaid Benefits

Provider networks are considered to be important determinants of demand for health plans; however, in the health economics literature researchers often infer networks from utilization data or explore natural experiments with limited scope because health plan network data are not readily available to researchers. Drawing upon unique, physician-level, network change data from private, Medicaid managed care organizations (MCOs) in Kentucky this study provides some novel insight to this literature. Specifically, I explore the effects of variation in MCO physician networks on consumer plan preferences using a quasi- experimental empirical design. Preliminary results suggest that demand for Medicaid MCOs is sensitive to changes in physician network size generally but the effect size differentiates across specialty and market size.