Jury Still Out on Insurance Shift

A cautionary view about the rush to consumer-driven health care benefits appears in the February Journal of Health Politics, Policy, and Law.

“Large employers do not appear ready to move to managed competition or related consumer strategies,” author James Maxwell, senior researcher at JSI Research and Training Institute, said in a press release announcing the study. “Additionally, it is not clear whether consumers themselves support this approach or how much they will benefit from it. Managed competition has not produced increased savings for consumers or companies, and studies have shown that many employees value the role of employers as the benefits purchaser.”

In “Managed Competition Versus Industrial Purchasing of Health Care Among the Fortune 500,” Maxwell, along with Peter Temin of the Massachusetts Institute of Technology, wrote that although most employees are given a choice of health plans, the choices are typically very limited.

Also, less than 25 percent of Fortune 500 companies rely on a defined-contribution strategy, which is a core element of consumer-oriented approaches. And only one-third of the companies surveyed disseminate health care quality information on specific plans or providers.

Maxwell and Temin defined the managed competition model as one that requires employers to (1) provide employees with a choice of health insurance plans, (2) use a defined contribution strategy (in which the company allots the employee a fixed amount of money to purchase health coverage), and (3) provide employees with health care quality information on various plans or providers.