Competitive health plans and alternative payment arrangements for physicians in the United States: public sector...

The Medicaid program in the United States is moving to a competitive managed care system whereby patients no longer have freedom of choice of physicians and physicians are given incentives to provide care cost effectively. The wide variety of competitive managed care programs represents attempts to introduce rationality into the relationship between consumers and providers in a community. Early evidence, based largely on preliminary data analysis indicates that competing plans which place physicians at some financial risk and also employ administrative mechanisms, are more likely to show cost savings than health plans that do not employ these methods.