Summary: Many employers believe that, in principle, managed care plans save money, but little empirical evidence exists to support this view; most cost studies do not adequately control for key factors affecting costs, such as employees' age or health status. Consequently, the cost savings suggested by many studies may be due to the fact that managed care plans tend to attract younger and healthier employees rather than to cost containment. In addition, plan comparisons often do not account for differences in benefits provided. Little research has been done on employer cost containment among the newer HMOs using doctors in independent practice associations, preferred provider networks, or the managed care hybrids. Some managed care plans have a potential for cost savings. Cost containment efforts in managed care largely involve controls on the use of expensive medical services. Restrictions on employees' choice of doctors is viewed as the main barrier to employee acceptance of network-based managed care plans. To improve their ability to assess plans, employers are increasingly asking managed care plans for more information on costs, outcomes, use rates, and enrollee satisfaction. Nearly all HMOs' report employer requests for these data, and local employer coalitions are working to enhance the development of this information.
