Medicaid Managed Care Market Places and Hospital Quality

In this study, I explore Kentucky’s 2011 introduction of Medicaid managed care (MMC) and the quality of hospitals used by Medicaid recipients. Kentucky’s MMC program is a post-ACA market-based program that uses a small set of competing managed-care organizations (MCOs) to administer Medicaid benefits. Using a quasi-experimental research design, I explore whether the introduction of MMC changes the hospitals used by pregnant Medicaid-insured mothers for their deliveries and whether the quality of these hospitals is different compared to the hospitals used before the policy change. I also test whether the changes in hospitals used by pregnant Medicaid-insured mothers for their deliveries differ in smaller counties with fewer hospitals and Medicaid recipients compared to those in larger counties with more hospitals and Medicaid recipients. I find that changes in the quality of hospitals used by Medicaid-insured pregnant women varies in magnitude and direction depending upon whether they live in a metropolitan or nonmetropolitan county. Accounting for variation in hospital network participation and physician-hospital contractual arrangements due to the policy do not explain for estimated changes in hospitals used for deliveries. Since Kentucky’s metropolitan counties have high quality hospitals and its nonmetropolitan counties have some of the poorest quality hospitals in the state, these findings may have implications for broader program patient outcomes and costs.