MEDICAID AND MANAGED CARE - THE COST-EFFECTIVENESS OF ARIZONA APPROACH TO MANDATED ORGAN TRANSPLANTATIONS

For states, the budget burdens precipitated by Medicaid call for innov ative measures that result in true economic savings. Nearly all stales are engaged in reforming their Medicaid organizations to meet the cos ts of increased financial responsibility This article considers the is sue of health care reform through one stare organization's response to a particular mandate. The case shows hero a state Medicaid agency att empted to alleviate the financial burdens of that mandate by extending its philosophy of managed competition through the use of negotiated a nd competitive managed care contracts for organ transplantations. The agency expected to achieve significant cost savings. The results sugge st that managed competition and negotiation hold promise to states as a means for meeting the high costs of technology in the Medicaid envir onment.