AbstractChanges to output-based funding for health care as occurred recently in Victoria, and the goal of continuous improvement in quality of care, have provoked a rationalization of resource utilization and a greater focus on the process and outcomes of care in acute hospitals. The use of clinical management plans (CMPs) to monitor the efficiency of processes and the achievement of outcomes (managed care systems) is one approach to these challenges. A pilot study undertaken in the cardiac surgical unit at the Royal Melbourne Hospital is used to highlight the major considerations that need to be addressed when administering CMPs. These were the multidisciplinary, patient-focused approach of the managed care system, integration of the plans into the patient documentation system and the opportunities offered to research by variance analysis.