Abstract

Due to society's need to control health care costs and to the failure of legislated health care reform, managed care is expanding at a rapid rate and will soon be the predominate form of health care delivery. Plans by Congress to bring Medicare and Medicaid under managed care will further consolidate this trend. Barring some legislative fiat, managed care is here to stay. The term managed care describes a diverse set of organizational forms. Wide variations in approach, financing, physician involvement, and philosophy exist among the different types of managed care organizations. While many articles on the ethics of managed care acknowledge this variety, most analyses focus on the for-profit entities, paying less attention to the ethical distinctions among the different forms of managed care. This paper discusses the key distinctions among MCO types, in particular the difference between for-profit and non-profit plans; the relationship of the physician to the MCO; the incentives used to control costs; the incentives that improve patient care; and the organizational features that nurture the principled practice of medicine.