Medicaid’s Transition into Managed CareReal or Imaginary?

Medicaid provides health coverage for America’s poorest citizens. The number of persons enrolled in Medicaid represents 15% of America’s population. The percentage of the Medicaid population in managed-care organisations has risen from 8% in 1990 to 50% in 1996. However, only 8% of the Medicaid programme expenditures on pharmaceuticals is directed to the 50% of the Medicaid population in managed care. Furthermore, more than half of this 8% occurs in loosely organised managed-care organisations that do not have formularies or other significant restrictions on pharmaceutical utilisation generally found in health maintenance organisations. The reason that a larger proportion of Medicaid programme expenditures does not occur in managed-care organisations relates to the difficulty of enrolling the elderly and disabled in such organisations. Barring significant new Federal legislative changes, less than 24% of Medicaid programme expenditures will be in managed-care organisations by the year 2000. Medicaid’s transition into managed care is therefore more imaginary than real when one focuses on expenditures.