Recently, my colleague Athena Mandros published our updated analysis of the Medicaid managed care market share across the U.S. in The 2017 OPEN MINDS Medicaid Managed Care Market Share Report. It provides an analysis of the health insurance organizations that dominate the Medicaid market and who gained (and lost) market share in the past year.
One number in particular struck me—the ten largest health insurance organizations have 54% of the Medicaid managed care market share.
In years past, I wasn’t concerned that this type of consolidation would have had much of an impact on provider organization strategy—other than making sure that the organization had working relationships with the specific Medicaid health plans in their state. But three trending developments of the past year have changed my outlook. In many markets our team is seeing:
- Medicaid health plans (and other health plans) are seeking “centers of excellence” for particular consumer types and embracing out-of-state clinical programs linked with telehealth to local professionals
- “Narrow networks” are increasingly common
- Health insuring organizations are moving, in many markets, to a single-provider network that can serve Medicaid, Medicare, and commercial populations
So what do these three trends have to do with Medicaid health plan market share? They mean more competition because we will have more Medicaid beneficiaries managed by a smaller number of organizations. Those health insuring organizations, in their search for “value”, are going to increasingly refer to provider organizations with excellent performance and outcomes as they narrow their provider networks across all of their books of business. The criteria for inclusion in exclusive networks are a combination of outcomes excellence, performance data, and alternate payment arrangements. (For more see my recent presentation, The Changing Health & Human Service Landscape – Issues & Opportunities).
For organizations with a top-line dependent on Medicaid revenue, these developments are a call to action. There is a direct competitive challenge for providing care for specific groups of consumers—such as addiction treatment, eating disorders, autism, and more. To protect referrals for specific high-cost consumers, understanding your service lines’ value equations and their respective competitive advantage is key.
For more on the top insurers in the Medicaid market, check out The 2017 OPEN MINDS Medicaid Managed Care Market Share Report, which includes information on the total Medicaid enrollment and managed care enrollment over time; the health insuring organizations with over 500,000 Medicaid members and their geographic operating areas; and year-to-year enrollment changes among the ten largest Medicaid insuring organizations.
And to learn even more, I hope you’ll join me to hear our lineup of executives from the organizations making these provider network policy decisions:
- James Schuster, M.D., MBA, Chief Medical Officer & Vice President, Behavioral Integration, Behavioral Health and Medicaid Services, UPMC Insurance Division, Community Care Behavioral Health Organization on November 8th in Philadelphia at The 2017 OPEN MINDS Technology and Innovation Institute
- Gus Giraldo, President, Commercial Markets, Magellan Healthcare on February 15th in Clearwater Beach, Florida at The 2017 OPEN MINDS Performance Management Institute
- Misty Tu, M.D. Medical Director of Psychiatry and Behavioral Health, Blue Cross Blue Shield of Minnesota on February 16th in Clearwater Beach, Florida at The 2017 OPEN MINDS Performance Management Institute