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 language | English (US) |
|---|---|
| Pages (from-to) | 707-753 |
| Number of pages | 47 |
| Journal | Handbook of Health Economics |
| Volume | 1 |
| Issue number | PART A |
| DOIs | |
| State | Published - 2000 |
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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 journal › Review article
}
TY - JOUR
T1 - Chapter 13 Managed care
AU - Glied, Sharon
PY - 2000
Y1 - 2000
N2 - 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.
AB - 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.
KW - adverse selection
KW - any willing provider
KW - capitation
KW - competition
KW - cost growth
KW - cost-sharing
KW - empirical research
KW - fee-for-service
KW - gatekeeper
KW - growth of managed care
KW - history
KW - HMO - health maintenance organization
KW - I11
KW - L10
KW - malpractice
KW - Medicaid
KW - Medicare
KW - monitoring service utilization (see utilization review)
KW - moral hazard
KW - PPO - preferred provider organization
KW - preventive services
KW - quality information
KW - RAND health insurance experiment
KW - risk adjustment
KW - search
KW - selective contracting (selection of providers)
KW - technological innovation
KW - total cost of health care
KW - UR - utilization review
KW - utilization
UR - http://www.scopus.com/inward/record.url?scp=77956735314&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=77956735314&partnerID=8YFLogxK
U2 - 10.1016/S1574-0064(00)80172-9
DO - 10.1016/S1574-0064(00)80172-9
M3 - Review article
VL - 1
SP - 707
EP - 753
JO - Handbook of Health Economics
JF - Handbook of Health Economics
SN - 1574-0064
IS - PART A
ER -