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In response to rising cesarean rates, it is reasonable for health care organizations to look to a managed care model as a means of controlling further rate increases. However, little conclusive evidence exists to support this solution. We undertook a study of the Department of Defense health care beneficiary population to assess the impact of enrollment in TRICARE Prime, the Department's managed care health plan, on cesarean delivery rates.Pooled hospital discharge records from 1999–2002 for live, singleton births were analyzed to calculate primary and repeat cesarean rates for TRICARE Prime and non-Prime beneficiaries in the military and civilian hospitals that comprise the Department of Defense health care network. Stepwise logistic regression was used to calculate adjusted odds ratios for clinical indicators for each combination of health plan and hospital setting using the χ2 difference (p < 0.05) to eliminate nonsignificant variables from the model. Total primary and repeat cesarean rates were compared with primary and repeat cesarean rates for women with no reported clinical complications to account for differences in case mix across subgroups. Statistical significance of the differences calculated for subgroups was assessed using χ2.Primary cesarean rates were significantly lower for TRICARE Prime enrollees relative to non-Prime beneficiaries for all race subgroups and three of five age subgroups in military hospitals and four of five age subgroups in civilian hospitals. No significant differences in repeat cesarean rates were observed between Prime and non-Prime beneficiaries within any race or age subgroup. Breech presentation followed by dystocia, fetal distress, and other complications were significant predictors for primary cesarean. Previous cesarean delivery was the leading predictor for repeat cesarean delivery. Primary and repeat cesarean rates observed for military hospitals were consistently lower than rates observed for civilian hospitals within each health plan type and age group.Enrollment in the managed care health plan was significantly associated with lower risk of primary cesarean delivery relative to membership in other health plans offered to Department of Defense health care beneficiaries. Repeat cesarean rates in this population varied independently of health plan type. Primary cesarean delivery was generally associated with clinical complications, whereas previous cesarean delivery was the strongest indictor for a repeat cesarean delivery. A clear explanation of reduced cesarean rates for Prime enrollees remains elusive, but it is likely that factors beyond individual practitioner decision-making were at work.