Managed Care and Medical Technology: Implications for Cost Growth

Abstract

Managed care health plans, particularly health maintenance organizations (HMOs), have been shown to reduce the level of health care spending. Their ability to constrain the long-term rate of health care cost growth is less certain and will depend largely on their ability to constrain the use of emerging medical technologies. Evidence from experience with one important medical technology, laparoscopic cholecystectomy, suggests no systematic difference between HMOs and the general population in the rate of growth in utilization following the introduction of new medical technology.