For all the complaining of many citizens about managed care, it is important to remember why this change has occurred within American health care. For years, most doctors and hospitals have been paid on a 'fee-for-service' basis. Like piecework payment in the garment industry, such arrangements have the predictable effect of encouraging people to do more work - in order to make more money. The result has been that the United States has the highest health care costs in the world. Fully 60% to 100% higher than most other industrial countries. In recent years, as those costs first approached, and then exceeded, 14% of overall economic output, increasing pressure developed to control those costs. And managed care is a response to those pressures. Both companies purchasing health insurance for their employees and governments purchasing coverage for Medicare and Medicaid recipients have been increasingly interested in limiting what they spend. And managed care has succeeded in the marketplace by offering health insurance at lower cost than the 'unmanaged care' it has begun to replace.

How have managed care plans been so successful - at least in some parts of the country? Again, the situation varies with the plan. The best plans have lowered the cost of care by organizing the care process cost effectively. The worst have simply tried to bully doctors and hospitals into offering them price discounts, and have also tried to limit cost by making it more difficult for patients to receive care.