Health Affairs December 8, 2017
Medicare Advantage and Medicare Part D are prime examples of managed competition markets, where the government provides services by contracting with private entities to serve program beneficiaries in a regulated market. Writing in Health Affairsin September, Richard G. Frank and Thomas G. McGuire, revisited the concept of managed competition, focusing on the potential for subsidized markets to exacerbate the impact of market power in government-run managed competition programs. While we do not take issue with the authors’ views, we do note a central tension in government-run managed competition markets that the authors do not discuss—the tension between protection—which we define as the desire to “protect” vulnerable beneficiaries from potential mistreatment from contracted private entities—and innovation—which we define as permitting those...
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