Perspectives

Reviving Managed Competition

Alan Enthoven’s Vision and the Emergence of Episode-Based Plans at Oxbridge Health

Executive Summary

When Alan Enthoven introduced the theory of managed competition in the 1970s and 1980s, his vision was simple but radical: create a competitive marketplace where health plans would vie for consumer trust not by denying care, but by delivering value—high- quality outcomes at the lowest possible cost. In Enthoven’s ideal world, consumers would choose from a menu of plans, each offering a different balance of access, quality,
and price, with transparent trade-offs and aligned incentives.

Decades later, managed competition remains more aspiration than reality in American healthcare. The dominant players—legacy insurers and large provider networks—have largely sidestepped competition through consolidation, opaque pricing, and rigid networks. Enthoven’s vision of consumer sovereignty through transparency has been diluted into actuarial games and narrow network design.

But a new model is emerging that revives Enthoven’s principles with modern tools: Oxbridge Health’s Episode Benefit Plans, powered by its Episode Advantage™ program.

Managed Competition: A Quick Refresher

At its core, Enthoven’s managed competition called for:

1. Structured choice: Employers or purchasing cooperatives would offer a curated set of health plans to individuals.
2. Price and performance transparency: Consumers could compare costs and outcomes before making choices.
3. Incentive alignment: Plans that managed cost and quality effectively would be rewarded by increased enrollment.
4. Standardized benefit design: Consumers wouldn’t be overwhelmed by complexity.

The employer—particularly the self-funded one—was the linchpin in this system: a rational buyer demanding value on behalf of its workforce.

Oxbridge: Managed Competition for the Real World

Oxbridge Health’s Episode Advantage™ program revives Enthoven’s ideals by reframing the unit of competition in healthcare: from the health plan to the care episode.

• Structured Choice, Redefined: Instead of choosing between undifferentiated networks, consumers within the Oxbridge plan choose between clearly defined, pre-priced episodes of care—for maternity, joint replacement, cardiac events, and more. Each episode comes with guaranteed pricing, known providers, and well-defined quality metrics.
• Transparent Pricing and Tradeoffs: Episode Advantage provides actionable price transparency before care begins—what Enthoven called the cornerstone of managed competition. Consumers know what they’re getting, at what price, with what outcome expectations.
• Aligned Incentives Through Bundles: Providers are paid for the entire episode, not each procedure or test, aligning them toward efficiency and outcomes. Consumers, in turn, benefit from shared savings when they select more cost-effective care bundles.
• Standardization That Drives Comparison: Each episode is standardized through proprietary tools like TIGERS (Trigger-Group-Episode-Rule-Set) and personalized through Quilt, Oxbridge’s psychographic communication engine, ensuring both clarity and engagement.

Why This Matters Now

Managed competition struggled historically because it relied on insurers to act as value- based curators of care—yet most insurers lacked either the will or the tools. They relied on discounts and utilization controls, not redesigning the way care was packaged, priced, and offered.

Oxbridge flips this: it packages care at the episode level, creates consumer-facing value through guaranteed pricing and savings incentives, and hands employers a new competitive benefit model that is simple to integrate.

For Enthoven, the promise of managed competition lay in the ability to reshape the supply side of healthcare through smarter consumer demand. Episode Advantage gives us that lever. It makes care shoppable, choice meaningful, and incentives transparent.

The New Managed Competition: Empowered Consumers, Empowered Employers

Oxbridge Health doesn’t just comply with managed competition ideals—it modernizes them.

• Employers gain a benefit model that is predictable, cost-contained, and engaging.
• Consumers become healthcare shoppers, with real financial stakes and clear information.
• Providers are rewarded for value, not volume.

Most importantly, Episode Advantage enables a competitive healthcare marketplace—not between monolithic insurers, but between episodes of care themselves. It unlocks what Enthoven envisioned but never fully saw realized: a rational healthcare marketplace driven by informed choice and aligned incentives.

Conclusion

Managed competition was never just about choosing a health plan. It was about structuring a system where every actor—from employer to provider to patient—was incentivized to pursue value.

With the rise of episode-based benefit models like those offered by Oxbridge Health, we’re finally operationalizing that vision—through technology, transparency, and smarter plan design. Alan Enthoven may have been ahead of his time. But perhaps that time is now.