Evolution, growth, and status of managed care in the United States

Public Health Rev. 1997;25(3-4):193-244.


While under attack in the United States, managed care/competition is being viewed by a number of European and other countries as a remedy in their struggle to control rising health care costs. While many fundamentals of American managed care have their roots in the British health system, significant differences exist between the two systems. While managed care, which can be loosely defined as any system of delivering health services in which care is delivered by a specified network of providers who agree to comply with the care approaches established through a case management process, has had a 100-year history in the United States, it wasn't until the mid-1970's that it began to gain national recognition. All health maintenance organizations (HMOs) are managed care organizations (MCOs) but not all MCOs are HMOs. The two other categories of MCOs are, preferred provider organizations (PPOs) and point of service plans (POS). Currently, three-quarters of Americans with health insurance are enrolled in managed care plans and there are 160 million Americans enrolled in such plans. A major on-going debate occurring in the United States is in regard to the comparative quality of care provided by MCOs and traditional fee-for-service plans. The study results to date have been equivocal. Another controversial managed care issue is the use of gag clauses in contracts between the MCOs and their providers. These clauses limit providers from being totally open and honest with patients about, for example, alternative treatment possibilities or the details of provider reimbursement. Since the failure of U.S. health care reform in 1994, there has been a more focused turn to the marketplace to provide the impetus for reducing costs. As a result, health care plans and providers have become more like traditional businesses which must focus on the bottom line to survive. In a marketplace where purchasers of care look for low bidders, it should be remembered that the level and quality of care a society receives is usually commensurate with the level of resources that it is willing to expend.

Publication types

  • Review

MeSH terms

  • Fee-for-Service Plans / organization & administration
  • Health Benefit Plans, Employee / organization & administration
  • Humans
  • Managed Care Programs / organization & administration*
  • Managed Care Programs / standards
  • Managed Care Programs / trends
  • Medicaid / organization & administration
  • Medicare / organization & administration
  • Quality of Health Care
  • United States