Trends in Managed Care and Managed Competition, 1993-1997

According to the recent literature, we are experiencing a managed care revolution, and managed competition is increasingly being embraced by private- and public-sector policymakers. Using two large employer health insurance surveys, this paper presents new estimates that both confirm and add to our understanding of changes taking place in employment-based health plans. The dramatic shifts in enrollment from indemnity to managed care largely reflect employers' choices about the types of plans to offer. Employees are limited in the number and types of plans from which they can choose. When choice is available, it is generally not governed by managed competition principles.