Strategies other than raising Medicaid payment levels will be needed to achieve equitable access to office-based primary care for the poor residing in cities.

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In this article we examine how increasing the reimbursement of physicians and expanding Medicaid eligibility affect access to care for children in Cook County, Illinois, which overlies Chicago. Using Medicaid claims and other data at the zip-code level, we compare the places where Medicaid children live with the places where all the physicians who treat children and those who accept Medicaid patients have their practices. Our findings suggest that the recent changes in legislation are unlikely to benefit extremely poor children, who are more likely to live in depressed inner-city areas, where there are few physicians. "Near-poor" children whose homes are dispersed throughout the county, who are now eligible for Medicaid as a result of the recent changes, are likely to see improvements in their access to care. Further changes in policy, aimed at enhancing the capacity of institutions providing care, could improve access for the children of the inner city.

The growing concentration of lower-income groups, including Medicaid patients, in homogeneous inner-city areas such as Chicago casts considerable doubt on the effectiveness of expanding Medicaid eligibility and raising physician reimbursement to improve access to maternity care. There are few private office-based physicians providing prenatal care in these areas, and most pregnant women and infants are treated by private-office-based physicians in very high-volume practices, prompting concern about the quality of care. Increasing the supply of providers is required to enhance access to maternity services in inner cities. Expanding eligibility and raising reimbursement rates are more apt to benefit "near-poor" women, who are more spatially dispersed, than clustered-poor female populations.

PROLOGUE: After turning to managed care to hold down costs, states found that they needed to shed their regulatory mentality toward Medicaid services and learn to implement policy through the contracting process. Theoretically, contracting relieves both states and service providers of a trying, micromanagerial relationship and creates a conceptually satisfying single point of accountability.In practice, states must build new capabilities to monitor and assess health plan performance. Their new role as hard-nosed purchaser has to be balanced with the traditional responsibility to protect and serve the disadvantaged, and plans can walk away if states push too hard. Nor does the "prudent purchaser" model provide much guidance for