May 21, 2021

Medicaid Managed Care Maximizes Public Resources

As managed care plans enhance quality and access for Ohio’s Medicaid population, they also generate significant savings. Medicaid managed care plans have generated an average of more than 15% in savings to taxpayers. This frees up more than $4 billion for other state priorities every two years when Ohio undergoes its budget process.

Medicaid managed care plans are able to save money by promoting wellness to keep Ohioans healthy — and out of the ER. They also focus heavily on disease prevention that not only helps Ohioans protect their health, but also helps them avoid the costly medical expenses, which come with serious illness. And managed care plans encourage strong relationships with primary care physicians who can reinforce healthy habits and detect health challenges before they become emergencies.

Another way that managed care plans maximize public resources is by sharply reducing the amount spent on administrative fees. More than 86 cents of every Medicaid managed care dollar is directly invested in health care services for Medicaid members, including hospital and emergency room costs (38%), pharmacy costs (20%), professional physician services (8%), radiology and lab costs (6%), and other medical services. Only 5% goes to administrative costs, with another 9% spent on care management, state-directed payments, taxes and fees.

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