This article examines the general problem of how health maintenance organizations (HMOs) manage service delivery, with specific application to mental health care. The empirical analysis consists of two parts. The first part explores relationships among HMO payment mechanisms and other approaches available to HMO managers to influence the delivery of care. This exploratory analysis identifies four distinct strategies for the management of mental health care delivery. The second part of the empirical analysis relates the adoption of a particular strategy to HMO and market characteristics. One finding from this analysis is that group model HMOs in more competitive markets are more likely to adopt mental health management strategies directed at providers.
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