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The consumer-driven approach: can it pick up where managed care left off?
Benefits Quarterly
|June 28, 2003
Summary
Managed care has failed, leading to uncontrollable health care costs. Employers must now choose between a single-payer system or redesigning benefits to encourage consumer-driven health care choices.
Area of Science:
- Health Economics
- Public Health Policy
- Healthcare Management
Background:
- Managed care strategies have proven ineffective in controlling escalating healthcare expenditures.
- Current socio-political and economic conditions necessitate a re-evaluation of healthcare financing and delivery models.
Purpose of the Study:
- To analyze the shortcomings of managed care in the current healthcare landscape.
- To explore viable alternatives for employers to manage health benefits and control costs.
Main Methods:
- Review of managed care's historical performance and its impact on healthcare costs.
- Analysis of policy options, including single-payer systems and employer-led benefit redesign.
- Examination of existing employer tools and plan provisions to foster consumer-driven behavior.
Main Results:
- Managed care has demonstrably failed to contain rising healthcare costs.
- Two primary pathways emerge: a single-payer national health insurance system or significant employer health benefit redesign.
- Employers can leverage current plan provisions to promote greater consumer engagement and cost-consciousness.
Conclusions:
- The failure of managed care necessitates urgent action to address escalating healthcare costs.
- Employer-driven health benefit redesign offers a practical, immediate strategy to encourage consumerism.
- Implementing consumer-driven behaviors through plan design is a critical step in managing healthcare expenses.