A COMPARISON OF CAPITATED AND FEE-FOR-SERVICE MEDICAID REIMBURSEMENT METHODS ON PREGNANCY OUTCOMES

Objective. To determine if the payment method influenced the likelihoo d of selected obstetrical process measures and pregnancy outcome indic ators among Medicaid women. Data Source/Study Setting. Data from the l ive birth certificates computer file for 1993 from the State of Califo rnia. The computer files contain information about the demographic cha racteristics of the mother, her medical conditions prior to delivery, medical problems during labor and delivery, delivery method, newborn a nd maternal outcomes, and expected principal source of payment for pre natal care and for hospital delivery. Study Design. The study sample c onsisted of singleton live births to women in the California Medi-Cal program residing in one of two counties in which a mixed-model managed care plan was the method of reimbursement or in one of three counties in which fee-for-service was the payment method. The study and contro l counties were matched in terms of geographic proximity and sociodemo graphics. Principal Findings. Among Medi-Cal women, the likelihood of low birth weight (LBW) was lower in the capitated payment group than i n the fee-for-service payment soup even when controlling for maternal and newborn characteristics and adequacy of prenatal care. There was n o difference in either the adequacy of prenatal care, the cesarean bir th rate, or the likelihood of adverse pregnancy outcomes other than LB W between the two payer groups. Conclusions. Results of this ''natural experiment'' suggest that enrollment of pregnant Medi-Cal beneficiari es in capitated healthcare services through a primary care case manage ment system in a county-organized health system/health insuring organi zation can have a beneficial effect on low birth weight and provide ca re comparable to a fee-for-service system.