o manage health care costs by influencing patient care decision making through case-by-case assessments of the appropriateness of care prior to its provision" (Institute of Medicine 1989). The term "managed care," however, is commonly used more broadly to refer to programs designed to control access to care, types of care delivered, or the amount/costs of care. The purposes of managed care under this broader definition include cost containment and allocation of resources, as well as monitoring and improving quality and/or outcomes of care. To date, cost containment and resource allocation have been emphasized, but we will work within the broader definition. In the next section, we will briefly describe relevant forms of service delivery.
Preferred provider organizations (PPOs) are networks of providers that are usually organized by third-party carriers or managed care companies. PPOs reduce their fees to attract consumers; select panels of providers who are considered to be highly competent and efficient, with the aim of attracting patients and lowering costs; enter into contracts with large firms to help recruit providers who hope to expand their practice; and utilize review procedures to control costs and/or assure quality (Wells, Hosek, and Marquis 1992). Because their structure and activities are so variable, it is difficult to generalize about PPOs (Wells, Marquis, and Hosek 1991; Zwanziger and Auerbach 1991; Altman and Frisman 1987). These networks constitute one of the most rapidly growing, but least studied, forms of managed care.
Group-practice-style health maintenance organizations (HMOs) rely on capitation and other incentives to provider groups or to the whole plan to control costs, and they offer predictable premiums to attract consumers (Luft 1978). The group practice structure facilitates access to, and more selective use of, specialists, including mental health specialists, often through a primary care gatekeeper ...