Race, managed care, and the quality of substance abuse treatment

The adoption of managed behavioral health care by state Medicaid agencies has the potential to increase the quality of treatment for racial minorities by promoting access to substance abuse treatment and creating more appropriate utilization patterns. This paper examines three indicators of quality for white, Black, and Hispanic Medicaid clients who received substance abuse treatment in Massachusetts between 1992 and 1996. It evaluates whether a managed behavioral health care carve-out in FY1993 had a positive or negative effect on access, continuity of care, and 30-day re-admissions. Prior to managed care, access and continuity were worse for minorities than for whites. For all clients under managed care, access and continuity improved between 1992 and 1996. Access improved more for Hispanic clients relative to other racial groups. Continuity improved more for Black clients relative to other racial groups. Although seven-day and 30-day re-admissions also increased following managed care, the rate of increase was not significantly greater for minorities. Although managed care had a beneficial impact on the quality of treatment for minority clients, the percent of minority Medicaid-eligible clients who accessed treatment and the percent who achieved continuity of care remained lower than for whites in every year of the study. Managed care reduced, but did not overcome, racial disparities in behavioral health care.