Skip to main content

Health Care Final 11-16-11 -   8.1.e - Managed Care

Go Search
Health Care Final 11-16-11
Healthy State
Action Plan

8.1.e - Managed Care
Is the rate of growth in DSHS managed care per capita costs slowing?

Progress icon Operation in progress...
Data Notes

Data Source:


Measure Definition:





DSHS Managed Care Per Capita Costs Growth, Average Per Capita Costs, and Total Expenditures. Includes Healthy Options (HO) premiums paid by DSHS; managed care child birth delivery case rate paid by DSHS to managed care plans; the managed care HO enhanced payment rate for federally qualified health centers (FQHCs) and rural health centers (RHCs) paid by DSHS; premiums paid for Washington State Medicaid Integration Project (WMIP), Washington State Medicare-Medicaid Integration Project (MMIP), General Assistance-Unemployable (GA-U) managed care pilot program, and employer-sponsored insurance (ESI) enrollees; and premiums collected from those required to pay them in the State Children's Health Insurance Program (SCHIP), Children's Health Program (CHP), and Healthcare for Workers with Disabilities (HWD).
Target Rationale: The Governor's Blue Ribbon Commission on Health Care Cost and Access directed that the rate of growth in total health care spending will be no more than the rate of growth in personal income.
Link to Agency Strategic Plan: The HRSA 2009-13 strategic plan that sets forth as one of its goals that per capita costs growth for DSHS medical programs will be less than the state's per capita personal income growth rate. This service group contributes to the overall per capita costs.
Relevance: Tracking historical and forecasted expenditures by service group enables HRSA to identify trends and to anticipate, plan for, and better manage projected future costs.

Notes: (optional)


Also Available
Action Plan: Yes            
Extended Analysis: No

 Summary Analysis

Managed Care/Contracted Services per capita costs, at an approximate average of $143 per client per month for SFY 2009 through SFY 2011, constituted an average of 41% of DSHS Medical Programs total expenditures during the same time period. As of February 2010, 636,000 of 1,158,000 DSHS medical programs clients were enrolled in a DSHS managed care program.

The dramatic growth (15.8%) in per capita costs between SFY 2007 and SFY 2008 was due to substantial vendor rate increases mandated by the Washington State legislature, which were incorporated into the premiums paid by DSHS to its Healthy Options (HO) plans. After the per capita costs stabilized in SFY 2009, subsequent FFS cost control measures that were also implemented in managed care reduced the per client per month figure by 9.6%, resulting in an average reduction for the SFY 09-11 biennium of -1.4%.   

The average per capita Managed Care costs growth rate for the SFY 11-13 biennium is forecasted to increase on average by 2.1%.  This, along with a continued movement of clients to managed care is forecasted to increase the percent of Managed Care expenditures to 44%.  During the SFY 11-13 biennium, per capita costs will average $148

Changing caseload volumes and mix can also impact per capita costs. However, for Managed Care the data on premiums tracks well with the per capita costs. The Base Rate for the Healthy Options Managed Care program was adjusted downward in 2009, dropping from $155.62 per member per month (pmpm) in January, to $152.59 pmpm for the months February – July 2009.  The base rate was further adjusted to $141.13 pmpm for August 2009.  Following this, the rate was adjusted to $143.19 pmpm for the months September – December 2009.  January 2010 saw the base rate increased to $146.12, and July 2010 resulted in an increase to $148.62, which is the base rate still in effect today.