Ann. Re. PbcHeah. 1987. 8:137-3 Cygh  1987 by AnnalReve Inc. All rghs reseved MANAGED CARE IN MEDICAID: Selected Issues in Program Origins, Design, and Research Deborah A. Freun and Robert E. Hurley Department of Health Policy and Administration, School of Public Health, University of North Carolina-Chapel Hill, Chapel Hill, North Carolina 27514 The search for new methods to povide cost-effective medical care has become the principal conce o health service purchasers, providers, and researchers in the 1980s. This concer has led to bold and innovative strat egies inboth the private and public sectors. These strategies are represented by initiatives that run the gamut from highly regulatory to avowedly market oriented competitive ones. Despite hese wide variations, such strategies share a common goal of ontaining cost increases without reductions in service access and quality. In this paper we describe a set of the initiatives used currently in the Medicaidprogramanddiscusshowthesenewapproachesarebeingevaluated to assess whether they attain their specific goals. We begin by discussing the environmentthathasfosteredthesearch foralteativedeliverymethodsand thelegislativeandexecutive activitiesthathaveenabledexperimentation. We detail the theoreticalfoundationsforthese programs of prepaid and managed care and the characteristics of a selected set of them. With the programs broadly outlined, we then describe the evaluation design developed to assess them. Finally, we identiy areas for additional research. BACKGROUND The Medicaid program is a federal, state, and local progra to provide funding for health services to the poor. Each state sets its own criteria for eligibility by aidandincomecategory, andeachadministersitsownprogram 137 0163-7525/87/0510-0137$02.00 Annu. Rev. Public Health 1987.8:137-163. Downloaded from www.annualreviews.org Access provided by 54.161.69.107 on 06/03/20. For personal use only.