Implications of the development of managed health care in the South African private health care sector.

The South African private health care sector has been looking to managed health care (MHC) to control the unsustainable cost escalations of the last decade. This paper draws on experience of MHC in other countries, particularly the USA, to assess its potential for solving the private sector's difficulties. In addition, it looks at problems which may be associated with MHC in a South African setting. The conclusion reached is that MHC alone cannot be seen as a panacea for the private sector's financial problems, although it may produce a degree of saving and be part of a solution. It is argued that MHC per se seems unlikely to compromise equity, quality of care or the public health care sector, and that it may potentially promote national health policy objectives. However, if MHC's benefits are to be maximised and potential negative effects controlled, ongoing monitoring of MHC, coupled with an appropriate regulatory and incentive environment, will be required.