In recent years, the costs of prison health care have risen faster than other correctional costs for a variety of reasons. During the last decade, a number of methods and organizational forms have been developed in the free community to deliver patient care more cost-effectively. Some prison conditions lend themselves to managed care strategies, including global budgeting, universal coverage, mandatory "enrollment," limited patient choice, and an ability to regulate the use of services that is greater than the one in the larger community. One means of containing spending is to reduce the costs of the components of prison health care, namely, goods and services. These include obtaining advantageous prices for pharmaceutical supplies and other durable equipment; negotiating lower prices for services purchased from physicians, hospital laboratories, pharmacies, and other ancillary providers; and making the service directly through prison employees and prison-owned facilities. One method of bringing prison health services under unified and focused management is to contract for comprehensive health care. This may create conditions supportive of cost-conscious management. Comprehensive management information systems are needed to monitor performance and make the changes required to achieve improved cost-effectiveness. 4 tables, 1 figure, and appended supplementary information