As the Medicaid system moves into a managed care model on a state-by-state basis, the entire medical structure in this country will change dramatically and the potential consequences "could be monumental," warns a Cornell University health economist.

"We're on a fast-moving train but have no idea where it's going; that much money going into a managed care model will drive the entire way we all get medical services," said John Kuder, associate professor of health economics and finance in Cornell's College of Human Ecology.

With two grants totalling $1.18 million from the Pew Charitable Trusts, Kuder and Robert Hurley of the Medical College of Virginia will study which policies work -- and which don't -- when it comes to mandated Medicaid managed care.

Specifically, the researchers will examine:

• the states' ability to manage enrollment processes to ensure access and fair treatment of all groups, especially at-risk groups such as women and children, in specific managed care programs;
• how beneficiaries negotiate the choices involved in selecting a plan or disenrolling from a plan;
• the influence of Medicaid managed care on services to the uninsured;
• the relationships between private managed care organizations and community health care providers;
• how health care providers are influenced by managed Medicaid managed care.

To achieve these goals, the researchers will conduct on-site interviews, develop case studies and collect relevant quantitative data in four metropolitan communities; to date, only Philadelphia has been identified. They will mail questionnaires to Medicaid recipients who disenroll and then enroll in different managed care programs to analyze the process as well as the reasons. In addition, they will survey state Medicaid agencies to find out whether, and how, states track patient changes from one plan to another.

Finally, Kuder, of Cornell's Sloan Graduate Program, and Hurley plan to develop and recommend policies and procedures that states could use to address problems related to patients switching plans, to evaluate and monitor performance and to purchase health services for women, children and other high risk groups under mandated Medicaid managed care.

The Pew grant is being supplemented with a $100,000 grant to Andrea Kabcenell, also of the Sloan Graduate Program. This award, from the Robert Wood Johnson Foundation, is to be used for the study of these issues among disabled people.

More than 10 million Medicaid beneficiaries are in managed care arrangements. This number will mushroom as states such as Pennsylvania, New York, California and Texas move toward statewide mandatory models.

"Various pending federal reform proposals to shift more risk and responsibility for Medicaid to the states will almost certainly intensify the dramatic transition to prepaid managed care -- everywhere," said Kuder, who teaches courses in health care finance, health economics and medical care organization.

"Mandated Medicaid managed care is bound to change the entire structure of the healthcare safety net and we want to ensure that high risk groups don't slip through or get entangled in the net. Rather, we want to make sure that the net acts more like a trampoline, if you will, so that beneficiaries get bounced back into the mainstream system."

"No one's been down this road before," Kuder added. "With each state evolving on its own, we want to figure out what works and what doesn't to provide early warning signs to prevent disasters while offering suggestions and recommendations about best practices."

The Pew Charitable Trusts, a national and international philanthropy with a special commitment to Philadelphia, support nonprofit activities in the areas of culture, education, the environment, health and human services, public policy and religion. Through their grant making, the Trusts seek to encourage individual development and personal achievement, cross-disciplinary problem solving and innovative approaches to meeting the changing needs of a global community.

The Sloan Program for Health Services Administration, one of the first graduate academic programs in health services management in the world, offers 15 to 20 students a year a master's degree in health administration. Of the 800 program graduates, more than one-third occupy chief executive positions in their organizations. Faculty members are a diverse group, including a policy scholar, a finance expert, a health economist, an ethicist, an epidemiologist and a former CEO.