Topic:
Regarding The Case for Managed Care

Position Statement:
Missouri’s MC+ managed care health plans continue to provide savings to the state, excel in promoting quality, and have a proven track record in expanding access.

Key Facts:
• Comparing administrative cost in Fee-for-Service (FFS) to managed care is "apples to oranges" because administrative costs for managed care include a multitude of services unavailable through FFS, such as case management, utilization management, member education, claims administration and member services;

• According to the Lewin Group medical cost savings cannot occur without significant administrative investment;

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• The state pays managed care plans a fixed capitation to assume the risk for the state;in exchange for this assumption of risk is the potential for profit;the advantage to the state is predictability of cost;

• The profit is limited to 1-2% within the actuarial formula used by the state;

• Typically in the early stages of managed care, savings are extensive due to the lack of care coordination and a medical home in the system to be managed; once these initial savings are realized, as managed care matures, savings shift to costs avoided because of the coordination and intervention inherent in managed care; if that buffer were removed, then costs would begin to escalate again;

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• In the last five years 18 states have gone to managed care and only 1 has gone back to FFS; the one state that went back to FFS is Oklahoma and Oklahoma added several hundred FTE to their state agency in order to provide utilization and care management similar to those provided by managed care;

• Managed care plans must comply with state guidelines on distance, provider networks, and timeliness; the result of this compliance is expanded and enhanced access for Missourians;

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• Managed care plans must adhere to high standards and must meet benchmarks and report on outcomes (e.g. HEDIS);

• Managed care plans administer provider credentialing;

• Managed care plans routinely provide coordination of care, disease management, health improvement programs, care management and patient education.

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