Unhealthy Competition: Consequences of Health Plan Choice in California Medicaid

Objectives. We compared the quality of care received by managed care Medicaid beneficiaries in counties with a choice of health plans and counties with no choice. Methods. This cross-sectional study among California Medicaid beneficiaries was conducted during 2002. We used a multivariate Poisson model to calculate adjusted rates of hospital admissions for ambulatory care sensitive conditions by duration of plan enrollment. Results. Among beneficiaries with continuous Medicaid coverage, the percentage with 12 months of continuous enrollment in a health plan was significantly lower in counties with a choice of plans than in counties with no choice (79.2% vs 95.2%; P<.001). Annual ambulatory care sensitive admission rates adjusted for age, gender, and race/ethnicity were significantly higher among beneficiaries living in counties with a choice of plans (6.58 admissions per 1000 beneficiaries; 95% confidence interval [CI]=6.57, 6.58) than among those in counties with no choice (6.27 per 1000; 95% CI=6.27, 6.28). Conclusions. Potential benefits of health plan choice may be undermined by transaction costs of delayed enrollment, which may increase the probability of hospitalization for ambulatory care sensitive conditions. (Am J Public Health. 2010;100:2235-2240. doi:10.2105/AJPH.2009.182451)