Managed health care is used increasingly in the public and private sectors to control rising health-care costs and to assure quality of care. While current proposals for health-care reform promote even wider application of managed care as a component in cost control, the formal use of managed care by public hospitals has not been fully explored. This article identifies possible reasons for providing managed care within a public-hospital system, explores the implications of managed care for public hospitals and their patients, and addresses some of the barriers to implementing managed care in a traditional public-hospital setting.