The Changing Approach to Managed Care

The rise of managed care in the early 1970s coincided with the establishment of the Robert Wood Johnson Foundation as a national philanthropy. It is not surprising, therefore, that the Foundation has been involved, almost since its beginning, in trying to develop and shape this mechanism for financing and delivering health care services. This chapter traces the ways the Robert Wood Johnson Foundation has approached managed care over the past 29 years and illustrates how the Foundation's strategies have changed as the concept of managed care itself has evolved.

The Foundation was an early supporter of the idea that later became known as managed care. In the 1970s, it promoted the idea of prepaid group health plans by funding a number of pioneers who were experimenting with alternative systems for financing and delivering health services—the early forms of health maintenance organizations. Later, as new forms of managed care became dominant and as concerns surfaced about whether large for-profit managed care organizations were cutting costs by providing less than high-quality services and by avoiding people with chronic illness, the Foundation adjusted its strategies to address these issues. In keeping with its priorities, in the 1990s, the Foundation began to fund programs that would demonstrate how HMOs could prevent and treat alcohol, drug, and tobacco abuse among their members.