Extract

Proponents of managed care extol its potential to control costs and improve quality through an emphasis on prevention, screening, and treatment that is evidence based, coordinated, and prudent in the use of public and private dollars. The focus is on promoting wellness, a win–win situation from the standpoint of both health outcomes and costs.

Critics counter that managed care organizations—budget constrained and unable to fully capture the potential cost savings from aggressive prevention and screening because of inevitable fluctuations in plan enrollment—actually have substantial incentives to limit access to care. Specifically, managed care organizations seek to control costs by modulating the volume and mix of services through a combination of provider incentives and restraints, limits on investments in technology and infrastructure, and a maze of price and nonprice barriers imposed on enrollees.

The complex truth of the matter surely lies somewhere between these two stylized characterizations. This becomes quickly evident from any survey of the large, empirically rich health services research literature in this general area over the past three decades.

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