Market forces and efficient health care systems

Health Affairs

Volumn 23, Issue 2, 2004, Pages 25-27

  Enthoven, Alain C ^a  

^a STANFORD UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

COST EFFECTIVENESS ANALYSIS; HEALTH CARE; HEALTH CARE SYSTEM; HEALTH INSURANCE; HUMAN; MARKET; MEDICARE; REVIEW;

EID: 1842729410     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.23.2.25     Document Type: Review

References (9)

1. A.C. Enthoven, "Employment-Based Health Insurance Is Failing: Now What?" Health Affairs, 28 May 2003, content.healthaffairs.org/cgi/content/ abstract/hlthaff.w3.237 (18 December 2003).
2. M.S. Marquis and S.H. Long, "Trends in Managed Care and Managed Competition, 1993-1997," Health Affairs (Nov/Dec 1999): 75-88. Also see J. Maxwell and P. Temin, "Managed Competition versus Industrial Purchasing of Health Care among the Fortune 500," Journal of Health Politics, Policy and Law 27, no. 1 (2002): 5-30.
3. M.S. Marquis and S.H. Long, "Trends in Managed Care and Managed Competition, 1993-1997," Health Affairs (Nov/Dec 1999): 75-88. Also see J. Maxwell and P. Temin, "Managed Competition versus Industrial Purchasing of Health Care among the Fortune 500," Journal of Health Politics, Policy and Law 27, no. 1 (2002): 5-30.
4. Henry J. Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits: 2002 Annual Survey (Menlo Park, Calif.: Kaiser/HRET, September 2002).
5. A.C. Enthoven, "The History and Principles of Managed Competition," Health Affairs (Supplement 1993): 24-48.
6. The FEHBP has a provision that if a health plan offers a premium below the government's contribution level, the employee gets to keep only one-quarter of the savings. This is a strong disincentive to offering a premium below the contribution, a 75 percent tax on efficiency. This should be replaced by a pure fixed-dollar contribution, allowing the employee who chooses a less costly plan to keep all of the savings. In addition, the FEHBP needs regional pricing, diagnosis-based risk adjustment, and a minimum standard for benefit packages. CalPERS also needs regional pricing, a diagnosis-based risk adjustment, and a true fixed-dollar contribution policy among the participating local government agencies. In addition, CalPERS needs a way of designing and offering less costly benefit packages as market conditions change. And because CalPERS is a voluntary exchange, it probably needs to use risk-adjusted employer contributions to the pool as well as risk-adjusted payments to health plans. These government agencies have been models of managed competition, but the rigidities of the political process have prevented them from adapting to current market conditions and technology.
7. See the CaliforniaChoice home page, www .calchoice.com/default.asp.
8. A.C. Enthoven, "Open the Markets and Level the Playing Field," in Toward a Twenty-first Century Health System: The Contributions and Promise of Prepaid Group Practice, ed. A.C. Enthoven and L.A. Tollen (San Francisco: Jossey-Bass, March 2004), 227-245.
9. J.E. Wennberg, E.S. Fisher, and J.S. Skinner, "Geography and the Debate over Medicare," Health Affairs, 13 February 2002, content.healthaffairs .org/cgi/content/abstract/hlthaff.w2.96 (18 December 2003).