Managed care and market power: physician organizations in four markets

Physicians and other providers have responded to the spread of managed care by adapting structures and strategies to accommodate or resist the pressures exerted on them to reduce costs. In this paper we examine how physician organizations have evolved in four markets and whether their features represent attempts to improve efficiency or resist change. The strategies adopted by physicians in terms of alignment with other providers and development of independent medical management capabilities appear to be sensitive to opportunities to reap cost savings and the competitiveness of physician, hospital, and health plan markets.