TY - JOUR AU - Aizer,Anna AU - Currie,Janet AU - Moretti,Enrico TI - Competition in Imperfect Markets: Does it Help California's Medicaid Mothers? JF - National Bureau of Economic Research Working Paper Series VL - No. 10429 PY - 2004 Y2 - April 2004 UR - http://www.nber.org/papers/w10429 L1 - http://www.nber.org/papers/w10429.pdf N1 - Author contact info: Anna Aizer Brown University Department of Economics 64 Waterman Street Providence, RI 02912 Tel: 401/863-9529 Fax: 401/863-1970 E-Mail: anna_aizer@brown.edu Janet Currie Princeton University 316 Wallace Hall Princeton, NJ 08544 Tel: 609-258-7393 Fax: 609-258-5974 E-Mail: jcurrie@princeton.edu Enrico Moretti University of California, Berkeley Department of Economics 549 Evans Hall Berkeley, CA 94720-3880 Tel: 510/642 6649 Fax: 510/643 7042 E-Mail: moretti@econ.berkeley.edu AB - Poor and uneducated patients may not know what health care is desirable and, if fully insured, have little incentive to minimize the costs of their care. Partly in response to these concerns, most states have moved a substantial portion of their Medicaid caseloads out of traditional competitive fee-for-service (FFS) care, and into mandatory managed care (MMC) plans that severely restrict the choice of provider. We use a unique longitudinal data base of California births in order to examine the impact of this policy on pregnant women and infants. California phased in MMC creating variation in the timing of MMC. We identify the effects of MMC using changes in the regime faced by individual mothers between births. Some counties adopted single-carrier plans, while others adopted regimes with at least two carriers. Hence, we also ask whether competition between at least two carriers improved MMC outcomes. We find that MMC reduced the quality of prenatal care and increased low birth weight, prematurity, and neonatal death. Our results suggest that the competitive FFS system provided better care than the new MMC system, and that requiring the participation of at least two plans did not improve matters. ER -