CAN MANAGED CARE PLANS CONTROL HEALTH-CARE COSTS

The health insurance sector has been transformed in the past fifteen y ears, with managed care replacing indemnity insurance as the norm. Thi s transformation was intended to change the nature of competition in t he health care system so that market forces could be used to control c osts. Empirical studies have shown that this objective has been met, a s areas with high managed care penetration have tended tb have much lo wer rates of increase in their costs. Creating a more efficient health care system will require additional efforts to produce useful measure s of quality and to maintain competitive markers.