| Research
Provider
Selection, Bargaining, and Utilization Management in Managed
Care
Lindrooth, R., Norton, E. and Barbara Dickey
Abstract:
Managed care controls cost through a combination of provider
selection, bargaining, and utilization management. Provider
Selection will reduce expenditures if patients are funneled
to efficient providers. Bargaining will reduce expenditures
through lower rates. Utilization management will reduce expenditures
if providers reduce treatment intensity due to monitoring.
We estimate that about 30% of the reduction in inpatient expenditures
in a mental health carve-out was due to provider selection,
5% was due to bargaining and the remaining 65% was due to
utilization management. We find that both the provider selection
and utilization management effects were likely to be welfare
improving.
Provider
Selection, Bargaining, and Utilization Management in Managed
Care (PDF:
480 KB)
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