As the state administration considers ways to reform Medi-Cal and reduce costs, one key element of the Governor’s budget proposal is to expand Medi-Cal managed care. A report released today by the California HealthCare Foundation (CHCF) suggests that managed care, which requires a usual source of care for Medi-Cal beneficiaries, is associated with improvements in these patients’ access to ambulatory care and their overall health.

One measure of Medi-Cal beneficiaries’ access to ambulatory care is preventable hospitalization rates. Preventable hospitalizations are admissions for ambulatory care sensitive conditions such as asthma, diabetes, and hypertension that can often be managed with timely and effective treatment in an outpatient setting, thereby preventing hospitalization. Hospital admissions for these conditions reflect a decline in health status, and higher rates of admission for these conditions are associated with worse access to care.

The report, Preventing Unnecessary Hospitalizations in Medi-Cal: Comparing Fee-for-Service with Managed Care, funded by CHCF and prepared by University of California San Francisco’s Primary Care Research Center, shows that from 1994 to 1999 the preventable hospitalization rate was significantly lower for Medi-Cal beneficiaries enrolled in managed care than those in fee-for-service.

The report’s lead author, Andrew Bindman of the University of California, San Francisco, notes, “We found that preventable hospitalization rates were lower for both CalWORKs-eligible beneficiaries and non-elderly SSI-eligible beneficiaries with disabilities enrolled in managed care.”

According to Chris Perrone, senior program officer at CHCF, “These findings contribute to a growing body of evidence that suggests that managed care not only costs the state less than traditional fee-for-service Medi-Cal, but that it is also a better option for the health of many Medi-Cal beneficiaries.”

A previous survey by CHCF notes that a little more than half of California’s physicians currently accept Medi-Cal patients, a level already lower than the recommended federal standard. As the state administration proposes deeper cuts to physician reimbursement rates, fewer physicians are expected to provide services to Medi-Cal patients. Says Perrone, “Unfortunately, Medi-Cal coverage doesn’t guarantee access to health care.”