Making Babies Healthier by Providing a Managed Care Option for California’s Poor

Tania Barham, University of Colorado at Boulder
Paul Gertler, University of California, Berkeley
Kristiana Raube, University of California, Berkeley

Offering high quality, low cost health care was a goal of managed health care. With the advent of health care reform, and the need to develop lower cost and effective health insurance plans, it is imperative to examine whether managed care plans meet these goals. We investigate the impact of California mandating Medicaid beneficiaries into managed care on their access to prenatal care and birth outcomes. We use a triple-difference model that takes advantage of the fact that California mandated that Medicaid recipients in 22 out of 58 counties between 1994 and 2000 to provide a managed care option. Unlike other papers on the topic, we test the validity of our counterfactual group and examine the external validity of our results. In contrast to other papers, we find managed care led to earlier initiation of prenatal care and reduced the number of low-birth weight and premature births.