The Future of Children, Princeton - Brookings: Providing research and analysis to promote effective policies and programs for children.

Although a precise definition of what constitutes managed care remains elusive, the concept of managed care has been embraced by many as a vehicle to slow the rapid growth in health care spending while safeguarding the quality of health care and improving access. In the private sector, the growth in managed care for employee health care benefit plans has been explosive. The number of employees enrolled in managed care plans doubled (from 27% to 54% of all employees with employment-based health insurance) between 1987 and 1991.¹ Growth in managed care in the public sector has been equally impressive, particularly for Medicaid-eligible pregnant women and children. Enrollment in Medicaid managed care programs more than tripled between 1983 and 1991, and many states are moving to increase substantially the enrollment of their Medicaid beneficiaries in managed care plans.² Last and perhaps most important, it appears likely that managed care concepts will play a pivotal role in the health care reform plan being developed by the Clinton Administration.

Though the evidence suggests that managed care is here to stay, there is still disagreement about what, if any, impact managed care has had on health care costs and quality. Moreover, little of the deluge of propaganda and research on the effects of managed care has focused in a rigorous empirical and scientific manner on whether managed care is good for children and pregnant women. This article is aimed at filling this gap by reviewing what is known and not known about how managed care affects children and pregnant women. Our review suggests that available research does not support most claims of cost savings and improved quality of care for children and pregnant women as a result of managed care. Nor do we find much evidence of the potential dangers to the health of children and pregnant women which might arise from the strong cost-saving mechanisms in some managed care plans. But the reader should be warned in advance that, because of the rapid metamorphosis of managed care, past experience may not be adequate to support firm conclusions about the future. Our review, however, offers only limited encouragement to those who are looking to managed care to help solve many of the problems of cost and access faced by children and pregnant women in the United States today.

The next section provides a definition of and basic information about managed care and reviews the growth of managed care plans especially with respect to children. In the third section, we briefly discuss important aspects of research methodology (see Appendix Al) which bear on the credibility of available research concerning managed care and then review research regarding the impact of managed care on health care use, costs, access, and the health status of children and pregnant women. In the fourth section, we review a number of implementation issues that must be addressed in any managed care effort, whether on its own or as part of an overall health care reform plan. Without addressing these issues, the level of comfort regarding children enrolled in managed care may not be high. The last section contains a discussion of what is unknown and provides an agenda for future research.