ABSTRACT
The enthusiasm for Medicaid managed care began in the late 1980s. Medicaid costs at that time were increasing nearly 30 percent annually. Adding to its appeal, managed care advocates promised improved quality and reduced costs. After all, Medicaid beneficiaries receive health care, most often, in the emergency rooms of large safety-net hospitals. Medicaid clients also are affected by new managed care initiatives. Clients who are accustomed to a particular service pattern must join large managed care plans, with restricted lists of providers. With the mainstream managed care organizations reluctant to participate, the business community created, virtually overnight, dozens of new managed care plans that competed among themselves for the Medi-Cal clientele. The emphasis on managed care posed a serious threat to the county health system, drawing Medi-Cal clients away from county facilities and leaving the facilities to care for the increasing uninsured population.
