Geruso, Michael. <br/><br/>
Are All Managed Care Plans Created Equal? Evidence from Random Plan Assignment in Medicaid / 
Michael Geruso, Timothy J. Layton, Jacob Wallace. 
 - Cambridge, Mass.  National Bureau of Economic Research  2020. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w27762 .
 - Working Paper Series (National Bureau of Economic Research)  no. w27762. .
<br/><br/> August 2020. 
<br/><br/> Exploiting random assignment of Medicaid beneficiaries to managed care plans, we identify plan-specific effects on healthcare utilization. Auto-assignment to the lowest-spending plan generates 30% lower spending than if the same enrollee were assigned to the highest-spending plan, despite identical cost-sharing. Effects via quantities, rather than differences in negotiated prices, explain these patterns. Rather than reducing "wasteful" spending, low-spending plans cause broad reductions in the use of medical services--including low-cost, high-value care--and worsen beneficiary satisfaction and health. Supply side tools circumvent the classic trade-off between financial risk protection and moral hazard, but give rise instead to a cost/quality trade-off. 
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