EMPLOYER-SPONSORED COVERAGE: The Way Of The Dinosaur?
The "current method of job-based health insurance [is] untenable," write Roger Battistella, PhD, and David Burchfield, PhD, of Cornell University's Sloan Graduate Program in Health Services Administration in the current issue of Business & Health. They contend that the "paternalistic relationship between business and employee health insurance is on its last legs," undermined by the "new economy" with its "older and more transient workforce" and competition from foreign firms, coupled with the rising costs of health insurance, the "prospect of the removal of ERISA protection, and shareholders demands for larger returns on investment." They noted that "[g]iven the financial and regulatory pressures on businesses, the central question is not whether but how employer-sponsored health insurance will change -- and what the structure of the new system will be." They see three possible outcomes -- the adoption of a new national health insurance system, "the sudden and complete discontinuation of employee health benefits," or "a shift from defined benefits to a defined contribution strategy." Of these possibilities, they see the third as the only realistic outcome. They conclude that "future change predictably will center on medical savings accounts, vouchers or combination of both" (Battistella/Burchfield, 11/98 issue).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.