THE HEALTH SYSTEM IN TRANSITION - CARE, COST, AND COVERAGE

The growth in market-based contracting and the ascendency of managed c are have generated substantial change in the health care delivery syst em. These reforms were spurred largely by private health care purchase rs seeking a means for controlling the relentless growth in medical ca re costs. Following the private sector's lead, the two large public pr ograms, Medicaid and Medicare, have also looked to managed care for so lving their mounting expenditure problems. Increased reliance on compe tition, and the growing rejection of rate regulation, have fundamental ly re-shaped the health care delivery system and raise several importa nt policy issues. Market-based contracting places a premium on the abi lity of health plans to control the growth in prices and use of servic es, resulting in continued merger and consolidation among health plans . At the same time, providers have recognized the competitive bargaini ng advantages in negotiating with health plans through their own conso lidation and mergers. Unanswered in the managed care revolution is the means for financing care for the 41 million uninsured Americans. More over, whether the private and public sector are willing, or need, to f inance the training of young physicians also hangs in the balance.