Working Paper: NBER ID: w23983
Authors: Anna Chorniy; Janet Currie; Lyudmyla Sonchak
Abstract: In the U.S., nearly 11% of school-age children have been diagnosed with ADHD, and approximately 10% of children suffer from asthma. In the last decade, the number of children diagnosed with these conditions has inexplicably been on the rise. This increase has been concentrated in the Medicaid caseload nationwide. One of the most striking changes in Medicaid has been the transition from fee-for-service (FFS) reimbursement to Medicaid managed care (MMC), which had taken place in 80% of states by 2016. Using Medicaid claims from South Carolina, we show that this change contributed to the increase in asthma and ADHD caseloads. Empirically, we rely on variation in MMC enrollment due to a change in the “default” Medicaid plan from FFS to MMC, and on rich panel data that allow us to follow the same children before and after they were required to switch. We find that the transition from FFS to MMC explains about a third of the rise in the number of Medicaid children being treated for ADHD and asthma, along with increases in treatment for many other conditions. These are likely to be due to the incentives created by the risk adjustment and quality control systems in MMC.
Keywords: Medicaid; Managed Care; ADHD; Asthma; Healthcare Utilization
JEL Codes: I11; I13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| fee-for-service (FFS) (G20) | Medicaid managed care (MMC) (I18) |
| Medicaid managed care (MMC) (I18) | treatment for ADHD (C22) |
| Medicaid managed care (MMC) (I18) | treatment for asthma (C22) |
| Medicaid managed care (MMC) (I18) | ADHD diagnoses (I12) |
| Medicaid managed care (MMC) (I18) | asthma diagnoses (I11) |
| Medicaid managed care (MMC) (I18) | access to care (I14) |
| Medicaid managed care (MMC) (I18) | increased diagnoses of chronic conditions (I12) |
| Medicaid managed care (MMC) (I18) | increased ER visits for preventable conditions (I18) |
| increased treatment rates (C22) | health outcomes (I14) |