Managed competition in health care and the unfinished agenda.

A market made up of health care financing and delivery plans and individual consumers, without a carefully drawn set of rules to mitigate market failures, and without mediation by collective action on the demand side, cannot produce efficiency and equity. The concept of competition that can achieve these goals, at least to a satisfactory approximation, is managed competition, with intelligent active agents on the demand side, called sponsors, that contract with the competing health care plans and continuously structure and adjust the market to overcome its tendencies to failure. A great deal remains to be done to achieve the goals envisioned by the "procompetition reformers."