This paper introduces a theory of network incentives in managed health care. Participation in the plan's network confers an economic benefit on providers; in exchange, the plan expects compliance with its protocols. The network sets a target for the number of outpatient visits in an episode of...

This chapter reviews the theory and empirical literature on physician market power, behavior, and motives, referred to collectively as the issue of physician agency. The chapter is organized around an increasingly complex view of the demand conditions facing a physician, beginning with the most...