EMPLOYER-BASED INSURANCE: Are We At the End of the Road?
Employers, increasingly put off by the rising cost of employee health insurance, are searching for ways to "shift the burden to workers," NPR's Frank Browning reports in the second installment of a four-part series this week on the future of health care in America (see story No. 10 for yesterday's segment). Browning says that the current "health care morass" began during World War II, when employers started offering fringe benefits to attract workers. But the cost of such benefits, notes Princeton University economist Uwe Reinhardt, ultimately came out of the workers' pay. Today's workers, insulated from cost controls under employer plans, demand costly patient protections and the time is ripe once again for employers to shift the cost burden to workers, says Reinhardt.
Empower the Patient
The problem, notes Browning, is how to give individual consumers "choice over both the cost and the quality of their plans." Peter Jun, director of the Managed Care Institute at Kaiser Permanente, says consumers should shop around for the best balance of cost and care. But Sara Rosenbaum, health policy analyst at the George Washington University Medical Center, said individuals cannot be expected to negotiate with health care behemoths such as Kaiser. "The average employee could not make heads or tails out of a contract," she said. AMA President Nancy Dickey, however, said consumers could make positive choices if given correct, simple information. "The American people ought to know what's covered when they sign up, not when they sign in at the emergency room," Dickey said.
End of an Era
Many experts believe most employers will simply stop negotiating health contracts for their workers. Lee Newcomer, medical director of United Health, said, "I think it's very likely that consumers will be buying their own health plans within the next five to ten years." A likely scenario is that workers will pay into a health purchasing alliance, in which they will negotiate a contract directly with the insurer. Workers will have greater choice, because they will have the option to pay for enhanced services. The key, Browning says, is striking a balance between allowing consumers to "customize" their own plans, while maintaining the "protection and bargaining clout" of large groups ("Morning Edition," 3/2).