"Out of Our Crisis": The Lack of Long-Term Relationships in the Provision of Managed Care

During the thirty-year period between 1965 and 1995, national healthcare expenditures rose significantly to a point where it became an untenable situation for any payer class: patient, employer, or government. Although managed care was offered as a conceptual framework for providing an opportunity for improving the health of the population while limiting the growth in expenditures, significant concern remained regarding the perceived quality of care and the underlying incentive structures. The author examines current healthcare incentive structures and proposes a structural model associated with long-term contracting to allow managed care to attain its intended objectives of enhanced quality and cost containment.