The strange career of managed competition: from military failure to medical success?

Abstract

Managed competition remains untested as the basis of a national health program. However, key principles of managed competition first emerged in the military. For this study, published works on systems analysis and the planning-programming-budgeting system (PPBS), developed by Alain Enthoven and colleagues at the US Department of Defense during the 1960s, were compared with published presentations of managed competition. The influence of PPBS waned after it generated controversy and opposition. PPBS and managed competition represent similar managerial strategies of policy reform. Although the origin of managed competition in failed military policy does not ensure failure in the medical arena, this history also does not augur success.