Managed Care: Contractual Arrangements with Physicians and Implications for Pediatric Health Care Use

How do financial arrangements between managed care organizations and physicians affect the primary and preventive care children actually receive? Researchers conducted a longitudinal study that assessed how different models of financial and contractual arrangements of managed care organizations (MCOs) influence pediatric health care use, the provision of primary and preventive care, and the charges for such care. The study analyzed five managed care organizations that use a variety of contractual provider arrangements: capitation, salary, negotiated fee-for-service for both primary care and specialists providers, financial penalty and bonus structures, risk sharing methods, and varying approaches to referral management. The organizations serve different groups of children, as well, notably low-income children enrolled in subsidized commercial plans (not Medicaid), those enrolled in Medicaid health maintenance organizations, and children enrolled in commercial plans. Data are available for more than 90,000 children living in urban and rural settings in the State of Florida. The objective of the study was to increase understanding of physician financial incentives, and their implications, as they relate to children's health care use.