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Integrated Delivery Systems In Managed Care

The Evolving Managed Care Marketplace

Can the Empire Strike Back?


Robert E. Hurley, Ph.D., Associate Professor, Department of Health Administration, Medical College of Virginia, Richmond, VA.

Dr. Hurley likened recent trends in the managed care marketplace to living through a "revolution" where employers and purchasers are in a position of ascendancy, and consumers are more empowered, engaged in the process and exerting pressure on providers to negotiate and deliver better value for the health care dollar.

Various managed care models are emerging in response to these forces, with integrated delivery systems (IDSs) either complementing health maintenance organizations (HMOs) (e.g., by contracting to serve as the delivery network), or competing with them by offering their own health plan. This raises questions for the policymaker regarding:

  • Licensing.
  • Quality assurance oversight.
  • Public purchasing issues.

The challenge is to formulate good public policy before fully understanding the consequences of the managed care revolution.


Brown M. Mergers, Networking, and Vertical Integration: Managed Care and Investor-Owned Hospitals. Health Care Management Review Winter 1996:29-37.

Conrad DA, and Shortell SM. Integrated Health Systems: Promise and Performance. Frontiers of Health Services Management 13(1):3-40.

Gold MR, Hurley R, et al. National Survey of the Arrangements Managed-Care Plans Make With Physicians. New England Journal of Medicine 1995;333:1678-83.

Goldsmith JC. The Illusive Logic of Integration. HealthCare Forum Journal September/October 1994:26-31.

Morrisey MA, Alexander J, Burns LR, and Johnson V. Managed Care and Physician/Hospital Integration. Health Affairs Winter 1996:62-73.

National Health Policy Forum. Trends in Health Network Development: Community and Provider Initiatives in a Managed Care Environment. Issue Brief 1996, No. 690.

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