Which of the following best describes why for-profit managed care organizations (MCOs) have not begun to move into rural areas to increase the number of persons served? (Select all that apply.)

Question

a. High startup and administrative costs are needed.
b. A large number of elderly are on Medicare or Medicaid, which results in low reimbursement.
c. Managed care has not yet had time to go beyond major population centers.
d. MCOs are waiting until federal reimbursements for underserved rural health areas become higher.
e. The population is too small and too spread out.
f.
Rural health areas are too geographically unattractive and lack any recreational possibilities for managers to want to work there.

Answer 1

ANS: A, B, C, E
MCOs recognize the risks to expanding into rural areas. Risks are probable high startup and administrative costs. Managed care has yet to move into much of rural America because of small dispersed populations, few visits per individual, and large numbers of elderly on Medicare with low-level reimbursements that do not make the aggregate financially attractive to MCOs. It is not likely that federal reimbursements for underserved rural health areas will become higher. The lack of attractive living for managers has not been a reason why MCOs have not moved into rural areas.