In health care systems based upon the principles of managed competition, health insurers are expected to act as prudent buyers of care. Consumers are expected to switch between insurers based upon the performance of insurers in this role. Yet, the Dutch experience shows that trust of consumers in health insurers is low and that switching consumers focus primarily on price. The question arises if consumers do in fact perceive and trust insurers as prudent buyers of care. We addressed this question by using a mixed-method approach. The results show that most people know that insurers buy health care and feel that the purchasing tasks suit their role. They even have reasonable, though fragile, trust in the purchasing competencies of the insurer. However, the results also revealed that consumers have insufficient information to cast a judgement about insurers as purchasers and incorrectly think that insurers are commercial organisations. Hence, improving the public information about insurers and their purchasing role seems to be crucial. Given the inherent complexity in the system, it remains to be seen if this objective can be reached in the (near) future. For that reason, policymakers should also consider additional measures to encourage that insurers will take integral purchasing responsibility.

Health systems’ insurance/funding can be organised in several ways. Some countries have adopted systems with a mixture of public–private involvement (e.g. Australia, Chile, Ireland, South Africa, New Zealand) which creates two-tier health systems, allowing consumers (groups) to have preferential access to the basic standard of care (e.g. skipping waiting times). The degree to which efficiency and equity are achieved in these types of systems is questioned. In this paper, we consider integration of the two tiers by means of a managed competition model, which underpins Social Health Insurance (SHI) systems. We elaborate a two-part conceptual framework, where, first, we review and update the existing pre-requisites for the model of managed competition to fit a broader definition of health systems, and second, we typologise possible roadmaps to achieve that model in terms of the insurance function, and focus on the consequences on providers and governance/stewardship.

This paper considers whether and how managed competition arrangements could be introduced into the Aotearoa health and disability system. The paper describes the key features of the system, including new organisational arrangements established from 1 July 2022. It discusses major reforms and managed competition plans that were developed in the 1990s, with the managed competition plans abandoned fairly early on, as a result of major issues with the reforms that had been implemented and with problems in designing a fair payment system for competing health plans. The paper goes on to argue that the development of capitated, risk-bearing and competing Primary Health Organisations set up in the 2000s should be considered in terms of managed competition, and the paper points to the issues that have arisen in Aotearoa due to a lack of regulations that would have better supported the better achievement of effectiveness, efficiency, and equity goals over the past 20 years. Finally, the paper also looks ahead to whether and how managed competition might again be considered in Aotearoa and the extent to which the system currently includes key pre-conditions to support such arrangements.

Managed competition frameworks aim to control healthcare costs and promote access to high-quality health insurance and services through a combination of public policies and market forces. In the United States, managed competition delivery systems are varied and diffused across a patchwork of divided markets and populations. This, coupled with extremely high national health spending per capita, makes a more unified managed competition strategy an appealing alternative to a currently struggling healthcare system. We examine the relative effectiveness of three existing programmes in the U.S. that each rely upon some principles of managed competition: health insurance exchanges instituted by the Affordable Care Act, Medicaid managed care organisations, and Medicare Advantage plans. Although each programme leverages some competitive features, each faces significant hurdles as a candidate for expansion. We highlight these challenges with a survey of academic health economists, and find that provider and insurer consolidation, highly segmented markets, and failing to incentivise competitive efficiencies all dampen the success of existing programmes. Although managed competition for all is a potentially desirable framework for future health reform in the U.S., successful expansion relies on addressing fundamental issues revealed by imperfect existing programmes.

Systems of managed competition naturally seek the middle ground between competition and regulation. This debate essay makes the case for adjusting the level of regulation according to the characteristics of the submarket in question. We first develop a theoretical framework that can be used to identify the services in which relatively free competition will be beneficial. The framework is grounded in the economic literature and consists of eight criteria. Targeted regulatory tools are then discussed that can be used to structure submarkets in which these criteria are not (fully) met. Applying this framework and targeted interventions, regulators gain the flexibility to react to potential market failures, without foregoing the benefits of managed competition where it works well. This analysis is highly relevant for countries in transition to managed competition. Regulators can identify potential failure in submarkets for medical services, and apply the necessary regulatory tools to prepare for a smooth transition.

Over the past decade, many health care systems across the Global North have implemented elements of market mechanisms while also dealing with the consequences of the financial crisis. Although effects of these two developments have been researched separately, their combined impact on the governance of health care organizations has received less attention. The aim of this study is to understand how health care reforms and the financial crisis together shaped new roles and interactions within health care. The Netherlands – where dynamics between health care organizations and their financial stakeholders (i.e., banks and health insurers) were particularly impacted – provides an illustrative case. Through semi-structured interviews, additional document analysis and insights from institutional change theory, we show how banks intensified relationship management, increased demands on loan applications and shifted financial risks onto health care organizations, while health insurers tightened up their monitoring and accountability practices towards health care organizations. In return, health care organizations were urged to rearrange their operations and become more risk-minded. They became increasingly dependent on banks and health insurers for their existence. Moreover, with this study, we show how institutional arenas come about through both the long-term efforts of institutional agents and unpredictable implications of economic and societal crises.

In the last decades, several European health systems have abandoned their vertically integrated health care in favour of some form of managed competition (MC), either in a centralised or decentralised format. However, during a pandemic, MC may put health systems under additional strain as they are designed to follow some form of ‘organisational self-interest’, and hence face reduced incentives for both provider coordination (e.g. temporary hospital close down, change in the case-mix), and information sharing. We illustrate our argument using evidence for the Covid-19 pandemic outbreak in Italy during March and April 2020, which calls for the development of ‘coordination mechanisms’ at times of a health emergency.

In health care systems based upon managed competition, insurers are expected to negotiate with providers about price and quality of care. The Dutch experience, however, shows that quality plays a limited role in insurer–provider negotiations. It has been suggested that this is partly due to a lack of cooperation among insurers. This raises the question whether cooperation amongst insurers is a precondition or a substitute for quality-based competition. To answer this question, we mapped insurers' cooperating activities to enhance quality of care using a six-stage continuum. The first three stages (defining, designing and measuring quality indicators) may enhance competition, whereas the next three stages (setting benchmarks, steering patients and selective contracting) may reduce it. We investigated which types of insurer cooperation currently take place in the Netherlands. Additionally, we organized focus groups among insurers, providers and other stakeholders to examine their perceptions on insurer cooperation. We find that all stakeholders see advantages of cooperation amongst insurers in the first stages of the continuum and sometimes cooperate in this domain. Cooperation in the next stages is almost absent and more controversial because without adequate quality information, it is difficult to assess whether the benefits outweigh the cost associated with reduced competition.

In the Dutch health care system, health insurers negotiate with hospitals about the pricing of hospital products in a managed competition framework. In this paper, we study these contract prices that became for the first time publicly available in 2016. The data show substantive price variation between hospitals for the same products, and within a hospital for the same product across insurers. About 27% of the contract prices for a hospital product are at least 20% higher or lower than the average contract price in the market. For about half of the products, the highest and the lowest contract prices across hospitals differ by a factor of three or more. Moreover, hospital product prices do not follow a consistent ranking across hospitals, suggesting substantial cross-subsidization between hospital products. Potential explanations for the large and seemingly random price variation are: (i) different cost pricing methods used by hospitals, (ii) uncertainty due to frequent changes in the hospital payment system, (iii) price adjustments related to negotiated lumpsum payments and (iv) differences in hospital and insurer market power. Several policy options are discussed to reduce variation and increase transparency of hospital prices.

A shift in emphasis from institutions to community poses important challenges for providers and policy makers, key among them being the challenge of providing asufficient volume of high quality community-based services to meet consumer needs. This challenge is particularly evident in community-based long-term care (LTC) due to the complexity and diversity of the field, the vulnerability of the population served, and the current wave of demand for services generated by hospital downsizing. The most recent reform of long-term care in Ontario is of particular interest in this context because, as suggested by the provincial government's maxim “highest quality, best price,” it promises cost-efficiency while maintaining or improving quality. To do this it employs a “managed competition” model in which for-profit and not-for-profit providers compete for service contracts under the auspices of local Community Care Access Centres (CCACs) run by volunteer boards. In this paper we draw on the comments of senior government officials and representatives of provider organizations, as well as published documents, to highlight issues and problems posed by the province's latest reform. We argue that, particularly under conditions of capped budgets and increasing demands, the managed competition process may result in the subordination of service quality and consumer choice to pressures for cost-containment.

The paper discusses two reforms in Ontario's long-term care. The first is the commercialization of home care as a result of the implementation of a “managed competition” delivery model. The second is the Ministry of Health and Long-Term Care's privileging of “health care” over “social care” through changes to which types of home care and home support services receive public funding. It addresses the effects of these reforms on the state–non-profit relationship, and the shifting balance between public funding of health and social care. At a program level, and with few exceptions, homemaking services have been cut from home care, and home support services are more medicalized. With these changes, growing numbers of people no longer eligible to receive publicly funded home care services look for other alternatives: they draw available resources from home support, they draw on family and friend networks, they hire privately and pay out of pocket, they leave home and enter an institution, or they do without.