Barbara Dickey

The services theseindividuals receive are funded by the Department of Mental Health orreimbursed by Medicaid. We hypothesized that regional differences in howcare is delivered would result in different patterns of care and costs. Our findings support that hypothesis. After the study was well underway, the Massachusetts Department of Public Welfare, in response to budgetarypressure, introduced a managed care initiative for Medicaid beneficiaries. The goal of the new managed care program is not only to reduceexpenditures but also to improve the care provided. The shift fromconventional fee-for-service reimbursement to a risk-sharing contractproviding mental health and substance abuse service is expected to affectthe frequency and intensity of services provided to beneficiaries. TheMassachusetts managed care program is unique among Medicaid waiverdemonstration projects because it is implemented statewide and has strongeconomic incentives for change. Given this managed care intervention, wenow have the opportunity to study the changes in patterns of care afterthe implementation of managed care, with special attention to the effectin the three regions already under study. This proposal focuses on threegeneral research questions: 1 Does the use of services change for Medicaid clients after theintroduction of managed care We are particularly interested in howpatterns of inpatient and ambulatory care change. 2 Do expenditures change for Medicaid clients after the introduction ofmanaged care We are interested in both the cause of change inexpenditure use of services, prices, and number of beneficiaries and theshares of the three payers Department of Public Welfare, Department ofMental Health, and the Health Care Finance Administration. 3 Do the differences in useof services and expenditures found inQuestions 1 and 2 differ by region We are interested in whetheradmissions to hospitals and the total annual beddays will be reducedproportionately across the three regions, or will the effect be specificto the rates of use we observe in FY91 and FY92, with much higherreductions in use in Boston than elsewhere This proposed continuation will use data from the same three secondarysources as in the already funded study: 1 Medicaid paid claims formedical and mental healthuse, 2 DMH inpatient admissions files, and 3DMH client tracking data that document the use, by client, of DMH servicesthat are funded directly not reimbursed by medicaid, such as residentialcare.