Chapter 13 Managed care

Research output: Contribution to journalReview article

Abstract

By 1993, over 70% of all Americans with health insurance were enrolled in some form of managed care plan. The term managed care encompasses a diverse array of institutional arrangements, which combine various sets of mechanisms, that, in turn, have changed over time. The chapter reviews these mechanisms, which, in addition to the methods employed by traditional insurance plans, include the selection and organization of providers, the choice of payment methods (including capitation and salary payment), and the monitoring of service utilization. Managed care has a long history. For an extended period, this form of organization was discouraged by a hostile regulatory environment. Since the early 1980s, however, managed care has grown dramatically. Neither theoretical nor empirical research has yet provided an explanation for this pattern of growth. The growth of managed care may be due to this organizational form's relative success in responding to underlying market failures in the health care system - asymmetric information about health risks, moral hazard, limited information on quality, and limited industry competitiveness. The chapter next explores managed care's response to each of these problems. The chapter then turns to empirical research on managed care. Managed care plans appear to attract a population that is somewhat lower cost than that enrolled in conventional insurance. This complicates analysis of the effect of managed care on utilization. Nonetheless, many studies suggest that managed care plans reduce the rate of health care utilization somewhat. Less evidence exists on their effect on overall health care costs and cost growth.

Original languageEnglish (US)
Pages (from-to)707-753
Number of pages47
JournalHandbook of Health Economics
Volume1
Issue numberPART A
DOIs
StatePublished - 2000

Fingerprint

Managed Care Programs
Empirical Research
Insurance
Growth
Patient Acceptance of Health Care
Managed care
Organizations
Costs and Cost Analysis
Salaries and Fringe Benefits
Health Insurance
Health Care Costs
Industry
History
Delivery of Health Care
Health

Keywords

  • adverse selection
  • any willing provider
  • capitation
  • competition
  • cost growth
  • cost-sharing
  • empirical research
  • fee-for-service
  • gatekeeper
  • growth of managed care
  • history
  • HMO - health maintenance organization
  • I11
  • L10
  • malpractice
  • Medicaid
  • Medicare
  • monitoring service utilization (see utilization review)
  • moral hazard
  • PPO - preferred provider organization
  • preventive services
  • quality information
  • RAND health insurance experiment
  • risk adjustment
  • search
  • selective contracting (selection of providers)
  • technological innovation
  • total cost of health care
  • UR - utilization review
  • utilization

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Health Policy

Cite this

Chapter 13 Managed care. / Glied, Sharon.

In: Handbook of Health Economics, Vol. 1, No. PART A, 2000, p. 707-753.

Research output: Contribution to journalReview article

Glied, Sharon. / Chapter 13 Managed care. In: Handbook of Health Economics. 2000 ; Vol. 1, No. PART A. pp. 707-753.
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