Managed Care Market Penetration, Spillover Effects, and the Quality of Cancer Care

Abstract

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 fl uctuations in plan enrollment — actually have substantial incentives to limit access to care. Specifi cally, 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. At the moment, innovative research to better understand the structure, performance, and overall impact of managed health care is more pressing and more challenging than ever before. It is more pressing because, at least in the United States, private employers and governments at all levels will continue to rely on, and may accelerate the adoption of, managed care as a vehicle for controlling costs. It is more challenging because managed care has evolved over time from the comparatively monolithic, prepaid group practice – based health maintenance organization (HMO) model to a multiplicity of organizational forms, including several variants of the HMO, preferred provider organizations (PPOs), point-of-service (POS) plans, and various hybrid