A shift in emphasis from institutions to community poses important challenges for providers and policy makers, key among them being the challenge of providing asufficient volume of high quality community-based services to meet consumer needs. This challenge is particularly evident in community-based long-term care (LTC) due to the complexity and diversity of the field, the vulnerability of the population served, and the current wave of demand for services generated by hospital downsizing. The most recent reform of long-term care in Ontario is of particular interest in this context because, as suggested by the provincial government's maxim “highest quality, best price,” it promises cost-efficiency while maintaining or improving quality. To do this it employs a “managed competition” model in which for-profit and not-for-profit providers compete for service contracts under the auspices of local Community Care Access Centres (CCACs) run by volunteer boards. In this paper we draw on the comments of senior government officials and representatives of provider organizations, as well as published documents, to highlight issues and problems posed by the province's latest reform. We argue that, particularly under conditions of capped budgets and increasing demands, the managed competition process may result in the subordination of service quality and consumer choice to pressures for cost-containment.