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Health Affairs, Vol 16, Issue 5, 7-25
Copyright © 1997 by Project HOPE

Journal Article

Does managed care lead to better or worse quality of care?

We analyzed evidence on managed care plan (mostly health maintenance organization, or HMO) performance from thirty-seven recently published peer-reviewed studies. Quality-of-care evidence from fifteen studies showed an equal number of significantly better and worse HMO results, compared with non-HMO plans. However, in several instances, Medicare HMO enrollees with chronic conditions showed worse quality of care. Evidence comparing hospital and physician resource use showed no clear pattern, whereas evidence on enrollee satisfaction varied by measure and enrollee type. Although recent research provides useful findings, interpreting and generalizing from these relatively few studies is difficult. Fears that HMOs uniformly lead to worse quality of care are not supported by the evidence, although all quality data were collected prior to the recent round of cost cutting that started in 1992. Hopes that HMOs would improve overall quality also are not supported, in part because of slow clinical practice change, lack of risk-adjusted capitation rates, and inadequate quality measurement and reporting.

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