The Commonwealth Fund has released a brief examining Medicaid managed care plans' financial situation and the quality of care they provide.  The authors compare publicly traded and non-publicly traded plans in the areas of administrative expenses, financial stability, and care quality, finding that publicly traded plans had lower care quality and higher administrative costs.  The brief also found that publicly traded plans paid out less in medical claims than non-publicly traded plans.  The authors note that Medicaid managed care plans stand to gain significant new business under health reform's Medicaid expansion and highlight the importance of ensuring beneficiaries receive high-quality care.

From the report: 

Financially, pure-play, publicly traded plans incurred lower medical costs in managing and delivering medical care to Medicaid beneficiaries compared with non–publicly traded plans. The reduced medical costs may be a function of more cost-effective care, the enrollment of healthier beneficiaries, restricted access to costly medical providers, and/or lower negotiated rates with contracted providers.  Medicaid-focused plans, which include pure-play, publicly traded plans, also appear to have achieved a lower medical cost ratio than plans with a non-Medicaid focus, perhaps for one or more of the same reasons.

Full report: Assessing the Financial Health of Medicaid Managed Care Plans and the Quality of Patient Care They Provide (PDF | 924.77 KB)

Commonwealth Fund.  (2011).  Assessing the financial health of Medicaid managed care plans and the quality of patient care they provide.   McCue, M. and Baillit, M.