This paper examines managed competition as a solution to the inefficiencies, bureaucracy and sclerosis of national health care systems. Managed competition promises to overcome the many dangers and limitations of using competition in medicine that have been previously identified. However, the inner logic of managed competition has several contradictions and flaws that undermine its own goals and may even make equitable, efficient health care more difficult to attain. The paper concludes with recommendations for attaining the same goals more effectively.