managed competition


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managed competition

n.
A theory of health care delivery services that holds that the quality and efficiency of such services would improve if, in a market controlled by the federal government, independent groups had to compete for health care consumers.

managed competition

A healthcare system of historic interest proposed by the Jackson Hole Group, in which insurance companies and providers (i.e., physicians and others) would create health plans to compete with each other for large blocks of consumers.

Under managed competition (MC), individual employees would have received a fixed sum from the employer and chosen a health plan; if the plan chosen cost more than the employer’s fixed sum, the employee would be responsible for the priced options because the employee would be able to deduct only the amount of the lowest cost option. The proposal’s proponents believed that this would encourage individual consumers of healthcare to be more price conscious; they also believed that this would have caused healthcare insurers to hold down the cost of their plans and make them more competitive. Because insurance under this proposed system was not tied to employer, employees would not lose coverage when they changed jobs, and under the proposed system, there was no provision to set premiums that appropriately cover the risk of an individual patient or a specific patient population.

MC was defined by its key architect, Alain Einthoven of Stanford University, as a purchasing strategy with empowered (consumer) demand designed to reward cost-efficient quality care. In MC, consumers would have been organised into large health-purchasing groups to buy insurance; healthcare providers would have been organised in a network that would vie for the health-purchasing group’s business, which would have sufficient clout to bargain with the network to obtain the best value (i.e., cost per individual).

managed competition

In health care practice, the requirement that health care organizations compete with each other in terms of price and quality of delivered services.
See: managed care; resource-based relative value scale
References in periodicals archive ?
His new book, Health Care, the Market and Consumer Choice, begins at this proposal and chronicles his trials through politics, academia, and international consulting to make managed competition a reality.
Massachusetts consumers saved over $270 million in insurance premiums in the first year of managed competition.
This brings us back to our key question: how did Ontario's managed competition reform affect the ability of home-care rehabilitation professionals to control the content and context of their professional work?
Proponents of managed competition Medicare reform proposals point to these results and the experiences of other large employers to explain how such reforms would work.
Differences in these systems are growing less, as countries adapt processes that appear successful from other health care systems, usually market-based reforms akin to the American concept of managed competition, but managed by the government.
These program descriptions, selected from the Examples of Programs for Cities' database, show how some cities are utilizing privatization and managed competition to help them run more efficiently and effectively.
Hillary Rodham Clinton's health care task force had two goals: (1) require everyone to join a managed care plan; (2) require health plans to compete in a system called managed competition.
Many of the health care reform bills that were considered during 1993 and 1994 relied on managed competition as a mechanism to insure quality while holding down costs.
Though reforms at the federal level have stalled out, there is far more agreement between Democrats and Republicans in support of managed competition than was evident in last year's debate.
Florida is developing the group purchasing program -- the CHPA's, we call them -- and they're slowly getting started, but that's the managed competition idea.
This fact, together with their recent investment in HMOs, led the large firms to push the HIAA to embrace key elements of the managed competition model, such as health alliances, the virtual elimination of underwriting, and significant government control of premiums.

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