ABSTRACT
This chapter attempts to enroll Medicaid recipients in a managed care plan in New York City in 1980s as part of an effort to bail out Metropolitan Hospital, a municipal facility that had been slated for closing in a budget-cutting strategy of Mayor Ed Koch. The Health Insurance Plan (HIP), a large group model Health Maintenance Organizations (HMO) that had been in operation in New York since the mid-1940s, also began an experiment in which Medicaid recipients could enroll in the HMO rather than continue with fee-for-service Medicaid. It HIP program was successful and attracted over 40,000 Medicaid recipients with little fanfare. The Medicaid recipients of New York, particularly New York City, have sought care largely from hospital outpatient departments and emergency rooms, arguably the most expensive modalities of health care delivery. New York has used the Medicare and Medicaid programs to help subsidize the cost of increasing both the size and the wages of the health care workforce.
