Managed care, health care quality, and regulation

The growth of managed care has prompted numerous questions about its effect on the quality of health care. This paper reviews evidence on the effects of managed care on quality. Most comparisons of care for patients in different plans within similar markets suggest that there is little systematic difference in quality between HMOs and other managed care plans and non-managed-care plans. However, these studies may ignore important effects of managed care on the structure and functioning of the health care system that would be evident only across markets. We suggest that these effects could be important and provide evidence from an analysis of treatment patterns for cancer patients. We conclude by describing how more careful attention to the empirical evidence on the effects of managed care could improve current policy debates about managed care regulation.