Managed care and traditional insurance: Comparing quality of care Daniel Simonet Nanyang Business School, Singapore The article compares quality of care under the traditional “fee-for-service” system with that given by “managed care” providers in the United States. Outcomes have been mixed, with most studies reporting on one hand a decline in the propensity of patients of health maintenance organizations (HMOs) to seek treatment and, on the other, lower patient satisfaction. The quality of care has not deteriorated, however, except in the case of that given to vulnerable patients. Historical background The earliest programmes of health insurance in the United States offering care to a specified population in return for a fixed premium paid in ad- vance by the individual 1 made their appearance at the beginning of the twentieth century. These, some of them still in existence today (Blue Shield and Blue Cross), include Dr. Michael Shadid’s cooperative health plan in Elk City, Oklahoma (1929), 2 the Ross-Loos Clinic which offered prepaid care for employees of the Los Angeles Bureau of Water and Power and their families, the Western Clinic in Tacoma (Washington state), 3 Dr. Sid- ney Garfield’s clinic (Los Angeles, 1933), 4 the Group Health Association (Washington, DC, 1937), the Group Health Cooperative (Seattle, 1937), and the Health Insurance Plan (HIP) of Greater New York (1947), set up with the backing of Mayor Fiorello La Guardia after a study revealed that the © International Social Security Association, 2003 International Social Security Review, Vol. 56, 1/2003 Published by Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 01248, USA 95 Acknowledgements: UnitedHealth Group, Center for Public Healthcare Policy and Evalua- tion (Minnetonka, MN). 1. Premiums are payable at fixed intervals, usually monthly, and irrespective of whether the parties insured actually use the services on offer. 2. Serving the rural farming communities. 3. Logging industries. 4. Construction industry.