Analysis of selection effects in New York City's medicaid managed care population prior to mandatory enrollment

It is becoming increasingly apparent that over the next several years the m ajority of Medicaid patients in many states will become enrolled in managed care plans, some voluntarily, but most as the result of mandatory initiati ves. An important issue related to this development is the extent to which this movement to managed care is accompanied by serious selection effects, either across the board during the phase in or among individual plans or pl an types with full-scale implementation. This paper examines selection effe cts in New York City between 1993 and 1997 during the voluntary enrollment period prior to implementation of mandatory enrollment pursuant to a Sectio n 1115 waiver. No substantial selection bias was documented between patient s entering managed care and those remaining in the fee-for-service system a mong the largest rate groups, although some selection effect was found amon g plans and plan types (with investor-owned plans enrolling patients with l ower prior utilization and expenses).