Medicaid payment mechanisms: impact on medication adherence and health care service utilization in type 2 diabetes enrollees.

The purpose of this retrospective cohort study was to examine the impact of the type of health plan (capitated vs. fee for service [FFS]) on outcomes (medication adherence and health care service utilization) in type 2 diabetes Medicaid enrollees. Subjects were 8581 Medicaid enrollees with type 2 diabetes who newly started oral pharmacotherapy and were followed for 6 months before and 12 months after the index antidiabetic medication to collect data on medication adherence and health care service utilization. Multiple log-linear regression analysis was used to predict medication adherence while negative binomial regressions were used to examine health care service utilization. Medication adherence was found to be significantly lower for patients in capitated plans (5%, P < 0.05). Moreover, patients in capitated plans were associated with 14% more hospitalizations and 16% increased odds of emergency room visits, but 27% fewer outpatient visits compared to those in FFS plans (all P < 0.05). Although Medicaid programs use capitated managed care plans primarily as a cost-containment strategy, these plans may not be cost-effective for the long-term management of chronic conditions such as diabetes.