The U.S. Health Care Financing Administration (HCFA) reports the costs of Health Maintenance Organisations (HMOs) are rising at a double-digit annual pace. The last time employers faced such inflation in health costs, it ignited a revolution in health care delivery, one that saw 60 percent of patients switch from traditional insurance to HMOs in the decade after 1988.
Or, as critics put it, goodbye doctor-patient relationships, hello HMO second-guessing.
Now, new changes could be coming from employers that would make patients painfully aware of the cost of modern medicine. Among them:
The defined benefit option has at least two potential pluses, analysts believe. First, it would force the health care industry to answer to individuals, rather than corporations that pay the bills. Second, properly designed defined contribution plans would force health plans to compete on price and quality, and unhappy customers could simply take their business elsewhere.
A Booz-Allen & Hamilton survey found all but a handful of companies queried, expected a switch to defined benefit plans in the future.
Source/: Editorial, HMOs’ Failures to Tame Costs Spurs Quick-Fix Replacements, USA Today, March 14, 2001
For text http://www.usatoday.com/usatonline/20010314/3137144s.htm
For Managed Care Economics and Cost http://www.ncpa.org/pi/health/hedex2a.html
