Managed care: past evidence and potential trends.

Enrollment in network-based managed care plans has grown rapidly, raising important questions about the actual impact of different types of managed care plans on health care use, expenditure, and quality of care. In this article, we analyze the literature on the performance of managed care plans relative to fee-for-service plans. We find strong evidence that staff- and group-model HMOs have lowered utilization and expenditure relative to fee-for-service while maintaining quality of care. The relatively sparse evidence is more mixed on the performance of newer forms of managed care organizations (MCOs). We also speculate on future trends in network-based managed care. It is likely that employers will increase their economic leverage with managed care firms, accelerating processes that are leading to greater concentration of marketshare among managed care firms. In turn, newer forms of MCOs will increase their economic leverage with providers, which will help MCOs contain costs and monitor quality. Some of the newer MCOs will adapt important features of staff- and group-model HMOs, including increased emphasis on provider selection and reselection.