Beyond managing Medicaid costs: restructuring care.

The apparent success of managed care plans in controlling medical costs has made the prospect of managed care for Medicaid recipients attractive for state health policy makers. However, because the principles upon which managed care was created do not apply to the most costly segments of the Medicaid population, efforts to address their needs through traditional managed care strategies are likely to be self-defeating. The Maryland Medicaid database was used to review and analyze the successes and failures of managed care Medicaid initiatives to date. This review led to the suggestion that the integration of specialized systems for specific subgroups of the Medicaid population into managed care, in conjunction with broader public policies, could lead to improved quality and lower costs.