Questions and Answers about Managed Competition

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Abstract
The Managed Competition strategy for health care financing reform would push most people into cut-rate versions of health maintenance organizations chosen for them by their employer and owned by an insurance company. Many of those who currently enjoy good coverage would be forced into bare bones plans, and would forfeit the right to choose their health care provider. There is little evidence that the rigidly multi-tiered system created by Managed Competition would be more efficient or less expensive than the current U.S. system, and administrative costs would likely rise. Promises to expand coverage for the uninsured are likely to fall by the wayside if cost containment fails, and no current Managed Competition proposals address long-term care. In rural areas including at least 30 percent of the U.S. population, price competition central to the Managed Competition strategy is untenable since a lone hospital or other provider cannot compete with itself. Managed Competition would empower vertically integrated corporate health care insurer/providers and disempower patients and the clinical work force.

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