Michigan Medicaid: Relative Cost Effectiveness of Alternative Service Delivery Models

In a Medicaid study required by Michigan’s legislature, the Center evaluated whether capitated managed care involving multiple managed care organizations (MCO) is cost effective, when compared to three alternative delivery systems: fee-for-service, primary care case management, and a capitated managed care program involving a single statewide MCO. The Center’s analysis concluded that the state of Michigan would save between $28 million and $129 million in state funds in FY 2006 when the current capitated program involving multiple MCOs is compared to all of the alternative delivery systems. The exact amount of savings that Michigan will achieve depends on the size of the managed care rate increase in FY 2006, and on which alternative delivery system is under consideration.

To review the report, click here.

April 1, 2005