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Summary:While more Americans receive their medical care from managed care organizations, managed care's track record for restraining costs has not been impressive. Premiums for conventional coverage and managed care programs have increased in double-digit ranges, exceeding 20% over 1989-1990. Advocates of managed competition envision the development of mutually beneficial relationships between payers and providers, where providers reap the benefit of improving the quality of their practice. Unfortunately, managed care has not lived up to this promise. Instead, what has developed are marginally effective, follow-the-leader, regulatory interventions that are concerned more with restricting benefits and hassling providers than with developing cost-effective programs. The best hope for reformed managed care might be a national health program incorporating the Pepper Commission's "play or pay" concept.
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ISSN:0278-2715
1544-5208
DOI:10.1377/hlthaff.10.4.106