Market Failures and the Evolution of State Regulation of Managed Care

Sloan and Hall reflect on whether the market defects identified explain why the managed care revolution has stalled and whether patient protection laws can help put managed care back on track. From a perspective of reliance on market forces to achieve socially desirable outcomes, the fundamental failure of managed care is the failure to produce competing systems of health care delivery that force competitive processes and consumer choice to focus on trade-offs between the cost and quality of care.