MEDI-CAL: Managed Care Plans Are Financially Successful
Managed care plans that cover the state's 2.6 million Medi-Cal participants are financially stable and "outperforming" both California health plans that do not serve Medi-Cal beneficiaries and other Medicaid and non-Medicaid plans nationwide, according to a new study. The issue brief was completed by the California HealthCare Foundation's Medi-Cal Policy Institute, a nonpartisan source of research on the Medi-Cal program. The study analyzes managed care financial data from 1996 to 1998 and reveals that the "unique design" of the county-sponsored health plans, which were established mainly to serve Medi-Cal patients, may be accountable for the successful performance. Data show that these plans outperform commercial plans and spend less on marketing, administration and medical costs. Although the operating margins are only about 0.4%, the California HealthCare Foundation maintains that "the positive financial picture is good news for beneficiaries and policy makers, especially in light of the recent exodus of managed care plans from Medicare." Yet the financial health of these plans must be monitored, Medi-Cal Policy Institute Director Crystal Hayling warns, adding, "Whether health plans will continue to participate in Medi-Cal will depend on many factors, including whether a plan receives enough enrollees to support the infrastructure necessary to meet Medi- Cal's administrative requirements." In addition, the effect of doctors' financial stresses and health plans' ability to deliver services and whether the financial success of plans comes at the "expense of needed investments in information technology and quality improvement," should be examined, the research concludes ( California HealthCare Foundation release, 9/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.