Systems of managed competition naturally seek the middle ground between competition and regulation. This debate essay makes the case for adjusting the level of regulation according to the characteristics of the submarket in question. We first develop a theoretical framework that can be used to identify the services in which relatively free competition will be beneficial. The framework is grounded in the economic literature and consists of eight criteria. Targeted regulatory tools are then discussed that can be used to structure submarkets in which these criteria are not (fully) met. Applying this framework and targeted interventions, regulators gain the flexibility to react to potential market failures, without foregoing the benefits of managed competition where it works well. This analysis is highly relevant for countries in transition to managed competition. Regulators can identify potential failure in submarkets for medical services, and apply the necessary regulatory tools to prepare for a smooth transition.

Health systems’ insurance/funding can be organised in several ways. Some countries have adopted systems with a mixture of public–private involvement (e.g. Australia, Chile, Ireland, South Africa, New Zealand) which creates two-tier health systems, allowing consumers (groups) to have preferential access to the basic standard of care (e.g. skipping waiting times). The degree to which efficiency and equity are achieved in these types of systems is questioned. In this paper, we consider integration of the two tiers by means of a managed competition model, which underpins Social Health Insurance (SHI) systems. We elaborate a two-part conceptual framework, where, first, we review and update the existing pre-requisites for the model of managed competition to fit a broader definition of health systems, and second, we typologise possible roadmaps to achieve that model in terms of the insurance function, and focus on the consequences on providers and governance/stewardship.

South Africa offers universal health coverage through large public and private systems. The private system is characterised by a regulated market for health insurance, referred to domestically as medical schemes. From 2000, the private system was undergoing a reform process consistent with theoretical approaches for regulated competition for health insurance. However, from 2008, the reform process was interrupted, leaving in place a partial framework which included open enrolment, community rating and regulated minimum benefits but excluded, inter alia, risk equalisation. The incomplete reform, however, provides an opportunity to examine the system outcomes that result from a partial approach. This paper therefore reviews the system outcomes of the partial reform using a descriptive data analysis. The findings then inform an evaluation of the extent to which the preconditions for regulated competition have been met as indicated by the theory of regulated competition in healthcare. The paper therefore highlights the areas where regulatory interventions need to be prioritised in South Africa to achieve the objectives of regulatory competition that are able to achieve access, fairness and efficiency. The analysis points to significant failures at the level of health insurance competition in South Africa with resulting outcomes consistent with the theory of regulated competition.

The Australian health system is characterised by high quality care by international standards, produced by a mix of public and private provision and funding of healthcare services. Despite good overall results, three issues are of concern. The first issue relates to the public procurement of healthcare, whose flaws have impacted individuals' access to care, and the high out-of-pocket spending. The second issue concerns the sustainability of the private health insurance market, given the government's goal of relieving cost and capacity from the public scheme, incentivising participation. Third, there are existing inefficiencies and inequities related to the duplication resulting from the interaction between public and private schemes. To ensure a sustainable, efficient and equitable health system, structural reforms are necessary to achieve long-term performance improvements. Using a framework for mixed public–private health systems, we assess the extent to which the Australian healthcare system achieves preconditions for efficiency and affordability in competitive healthcare markets.

Managed competition frameworks aim to control healthcare costs and promote access to high-quality health insurance and services through a combination of public policies and market forces. In the United States, managed competition delivery systems are varied and diffused across a patchwork of divided markets and populations. This, coupled with extremely high national health spending per capita, makes a more unified managed competition strategy an appealing alternative to a currently struggling healthcare system. We examine the relative effectiveness of three existing programmes in the U.S. that each rely upon some principles of managed competition: health insurance exchanges instituted by the Affordable Care Act, Medicaid managed care organisations, and Medicare Advantage plans. Although each programme leverages some competitive features, each faces significant hurdles as a candidate for expansion. We highlight these challenges with a survey of academic health economists, and find that provider and insurer consolidation, highly segmented markets, and failing to incentivise competitive efficiencies all dampen the success of existing programmes. Although managed competition for all is a potentially desirable framework for future health reform in the U.S., successful expansion relies on addressing fundamental issues revealed by imperfect existing programmes.

The Colombian health system has made a deep transition into managed competition since a major reform in 1993. A market for insurers was created, the consumer has free choice of insurer and a national-level equalisation fund distributes revenues via a per-capita payment. Fully subsidised insurance for the poor and informal, and a comprehensive standardised benefit package for subsidised and contributory schemes (both schemes covering 98 per cent of the population), has led to a low level of out-of-pocket expenses and high financial protection, as well as to reduced gaps in equity in access. The preconditions for managed competition are largely met, but improving health care providers' organisation towards integrated care, to enable them to deliver more value, is a necessary step to achieve the expected results of managed competition in terms of efficiency and quality. Although the current system is likely to be reformed in the coming months, the nature and extent of those reforms are not defined yet, so our analysis is based on the current system.

Ireland has a long-standing voluntary private health insurance market (PHI) which is regulated to meet the public policy objective of achieving risk solidarity to promote affordability of PHI. Under the regulations underpinning the market, many features are common to those of universal mandatory health insurance markets, that have wider equity objectives of ensuring universal equitable access to care for everyone. The market acts a complete/partial alternative to the public health system, and has been criticised for leading to a two-tier system with consequent implications for equity. To improve equity, these criticisms led to the adoption of a new public health reform plan, called Sláintecare, which seeks to build towards equal access to services based on patient need and not their ability to pay. Given this context, this paper re-examines how might the current voluntary health insurance system be adapted to meet the central Sláintecare objective of increasing health coverage on an equitable basis. It does so by considering to what extent does Ireland meet the preconditions for equity and efficiency under the Enthoven managed competition model. It provides a roadmap for the use of health insurance as a tool for bring this equity.

This paper considers whether and how managed competition arrangements could be introduced into the Aotearoa health and disability system. The paper describes the key features of the system, including new organisational arrangements established from 1 July 2022. It discusses major reforms and managed competition plans that were developed in the 1990s, with the managed competition plans abandoned fairly early on, as a result of major issues with the reforms that had been implemented and with problems in designing a fair payment system for competing health plans. The paper goes on to argue that the development of capitated, risk-bearing and competing Primary Health Organisations set up in the 2000s should be considered in terms of managed competition, and the paper points to the issues that have arisen in Aotearoa due to a lack of regulations that would have better supported the better achievement of effectiveness, efficiency, and equity goals over the past 20 years. Finally, the paper also looks ahead to whether and how managed competition might again be considered in Aotearoa and the extent to which the system currently includes key pre-conditions to support such arrangements.