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VOLUME 51 | NUMBER 3 | JUNE 2016

Does Medicaid Managed Care Help Equalize Racial and Ethnic Disparities in Utilization?

Objective: To estimate the impact of different forms of Medicaid managed care (MMC) delivery on racial and ethnic disparities in utilization.

Data Source: Longitudinal, administrative data on 101,649 children in Kentucky continuously enrolled in Medicaid between January 1997 and June 1999. Outcomes considered are monthly professional, outpatient, and inpatient utilization.

Study Design: We apply an intent-to-treat, instrumental variables analysis using the staggered geographic implementation of MMC to create treatment and control groups of children.

Principal Findings: The implementation of MMC reduced monthly professional visits by a smaller degree for non-whites than whites (3.8 percentage points vs. 6.2 percentage points), thereby helping to equalize the initial racial/ethnic disparity in utilization. The Passport MMC program in the Louisville-centered region statistically significantly reduced disparities for professional visits (closing the gap by 8.0 percentage points), while the Kentucky Health Select MMC program in the Lexington-centered region did not. No substantive impact on disparities was found for either outpatient or inpatient utilization in either program.

Conclusions: We find evidence that MMC has the possibility to reduce racial/ethnic disparities in professional utilization. More work is needed to determine which managed care program characteristics drive this result.

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