A Tale of Two Cities? The Heterogeneous Impact of Medicaid Managed Care in Kentucky
Does managed care produce lower health care utilization and costs through better aligned financial incentives and alternative delivery methods (the “pure” HMO effect) or by attracting more healthy enrollees (enrollee selection)? The purpose of this paper is to shed new light on this fundamental question using a quasi-experimental approach that exploits the timing and county specific implementation of Medicaid managed care plans in two distinct sub-sets of Kentucky counties in the late 1990s.