Markets at Risk— Current and Future Challenges in a Managed Care Marketplace. Public Sector Concerns


Though not examined extensively in this paper, it appears that public sector managed care has many of the same difficulties as private sector experience, with some added complications. Managed care in Medicare, and to a lesser extent in Medicaid, has witnessed considerable instability in terms of plan participation, raising serious doubts about its durability in these public programs. A number of risk factors seem to suggest that public buyers may not be able to adapt as effectively to market changes in managed care models and methods as private purchasers. These factors included procurement processes, regulatory requirements, payment methods and rates, and characteristics of beneficiaries. In addition, it may be that the adverse experience of many plans in these lines of business will convince them to continue to avoid participation, at least for the foreseeable future.