A health maintenance organization design for long term care under Medicaid

The rapid increase in public expenditures for long term care under Medicaid is discussed. The major cause of this increase is identified as the high and often excessive utilization of nursing home care. Health maintenance organizations (HMOs) are considered in terms of their ability to reduce health care costs by curbing unnecessary hospitalization. The HMO structure is extended to long term care, where it is argued that unnecessary nursing home care can be reduced. A health maintenance organization targeted to the Medicaid long term care population is proposed and a detail flow analysis of the HMO is presented.