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Journal Issue: Children and Managed Health Care Volume 8 Number 2 Spring 1998

Managed Care and Children: An Overview
Dana C. Hughes Harold S. Luft


This article lays the foundation for the other articles in this journal issue, which examine the effect of managed health care arrangements on a particular population: children. Although managed care has been used to finance and deliver health care services for decades, the meaning of this term often has been unclear to health care consumers and practitioners because new forms of managed care have evolved rapidly. The one consistent and unifying concept across all managed care arrangements is that enrollees obtain care from a network of participating health care providers who contract with the managed care organization and abide by the organization's rules. The uncertainty of what managed care is has made it difficult to measure the effect of these arrangements on health service delivery and health outcomes, especially in the pediatric population, where the development of outcome and quality measures lags behind that for adults. The incentives posed by managed care suggest both potential advantages and disadvantages to these arrangements for children. On the positive side, managed care enrollment may offer a "medical home" for primary care services to children who otherwise would obtain only episodic care; improve the coordination of health care services; and encourage more preventive health services. On the negative side, under capitated reimbursement, health plans have an incentive to enroll only healthy children with the lowest expected health care expenditures, and providers have an incentive to offer fewer services than may be appropriate. Managed care also may limit enrollees' choice of providers, particularly for specialty care. Despite the paucity of information about the effect of managed care on the delivery of pediatric health services and on child health outcomes, children are disproportionately being enrolled in managed care plans.