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Using data on Medi-Cal enrollees in seven counties along with a sample of privately insured California employees, this study analyzes and compares the resources used by Medi-Cal enrollees and a sample of privately insured employees. It also investigates Medi-Cal resource use by county, thereby allowing for regional comparisons. Although Medi-Cal clients as a whole have lower-than-expected costs, these costs vary significantly across counties. Also, low Medi-Cal payment rates to providers are likely to discourage some commercial plans and their physicians from participating more extensively in the Medi-Cal market. These and other factors suggest the need for risk-adjusted rates for short-term and high-risk Medi-Cal clients. Without such adjustments, commercial plans are likely to avoid areas with high concentrations of such clients, thereby hampering the continued success of the two-plan model.
This project was supported by PPIC through an Extramural Research Program contract.