Traditionally, US teaching hospitals have subsidised research by charg
ing higher costs for treatment; however, this approach is being challe
nged. The growth of managed-care organisations, concerned about maximi
sing profits, has led many to argue that clinical research will be dam
aged, whether by the loss of internal funds for research or by reducti
ons in the numbers of patients available for studies. This review exam
ines the evidence on which this argument is based. There is some evide
nce that managed-care organisations are refusing to cover patients who
are involved in clinical trials, although, in general, they are recep
tive towards research providing that it is explicit and seen as releva
nt. The indirect effects of competition are, arguably, more important.
Although many academic centres have established strategies to protect
research funds, those working in the most competitive healthcare envi
ronments are obtaining fewer externally funded research grants. They a
re also publishing fewer papers and are working in climates that are s
een as less supportive, with less ability to undertake research that i
s not externally funded. There is little evidence that managed care is
reducing access to patients for clinical research. The growth of mana
ged care is, together with certain other trends, also influencing the
nature of clinical research. The overall consequences of these differe
nt factors are difficult to predict, although there are grounds for co
ncern about recruitment and retention of junior researchers. The relat
ionship between the various actors involved in healthcare and research
is dynamic and, as pressure is excerpted in a particular direction, o
thers adapt. It may be some time before the consequences of policies b
eing enacted now are apparent.