Partially Managed Competition: How Much is Enough?

Award Year: 1998	Investigator: Richard Kronick	Budget: $220,531	Categories: Healthcare Markets, Managed Care
Abstract: Public policy, at the federal and state levels, assumes that competition among health plans will produce increased value for consumers. But the managed competition theory on which much of this is based assumes that the market would, in fact, be managed. In reality, neither large employers nor government payers are fulfilling their roles as sponsors and fully managing competition as the theory suggested they should. This project measures the extent to which competition is being managed and analyzes why competition is only partially managed based on a review of the literature and interviews with sponsors, and consultants, regulators, and insurance underwriters. Dr. Kronick expects to increase awareness of the extent to which the theory of managed competition and the reality of sponsor behavior diverge. His work should contribute to our understanding of the prospects and limits for the partially managed marketplace to improve quality and efficiency in health care delivery.