This finding assumes that states would not try to make up the federal cuts with their own revenues. To understand how states could achieve these savings, the researchers examined a wide array of program cutbacks and estimated the potential level of savings that were technically feasible. However, the potential for savings is more limited than generally assumed. Many states are only beginning to gain experience with managed care and may not be able to implement programs quickly. The available research on the savings potential is limited.
Some studies show cost savings, others show increased costs, and still others are mixed.
Where plausible evidence exists of savings having been achieved, the estimated amounts ranged from 5 to 10 percent. The limited impact of managed care is not surprising given that Medicaid programs already have very low provider payment rates. Much of the savings that managed care plans are achieving in the private sector, therefore, have already been secured by most Medicaid programs. Provider payment rates. As mentioned above, most state Medicaid programs pay hospitals and physicians significantly less than do private insurers and, in the case of physicians, less than does Medicare.