Applying managed care techniques in traditional Medicare

Medicare has lagged behind the private sector in its reliance on managed care, which, properly done, has the potential to restrain budget growth and enhance quality. This paper addresses how the Medicare fee-for-service program--traditional Medicare--might apply managed care techniques. It first discusses the institutional constraints Medicare faces in implementing managed care techniques and then presents options for applying these techniques. I propose elements of an overall strategy to incorporate managed care in the fee-for-service program.