When do developing countries adopt managed care policies and technologies? Part I: Policies, experience, and a framework of preconditions

Abstract

Objective: For developing countries with constrained economic resources, managed care holds out the promise of being able to control healthcare costs and reduce unnecessary utilization. However, little empirical evidence has been gathered about when managed care techniques can be applied to these countries and no framework considers the macroeconomic context. We propose a straightforward method to evaluate the economic and policy environment of a developing country to assess when managed care might be introduced.

Study design and methods: Analysis of available developing country health system and healthcare spending data, review of the available literature, and authors' experience evaluating healthcare reforms in developing countries.

Results: Many countries have implemented managed care techniques, which are driven by policy efforts to increase quality or to control costs. Successful implementation of managed care, however, appears to depend on five major preconditions. One precondition is an adequately developed formal wage sector in which patients have a sufficient ability to pay for healthcare services. Another is an adequate labor supply of trained professionals to support managed care administration, foster competition, and use available information technology.

Conclusions: Although managed care encompasses a range of incentives and arrangements, implementation in developing countries appears to depend on attaining macroeconomic preconditions.