Health Care Market Needs ‘Honda’-Like Competition, Enthoven Writes in Opinion Piece
Increasing health care costs and "inefficiencies that plague the market won't change until competition forces old models to be redesigned," Stanford University business professor emeritus and director of eBenX Inc. Alain Enthoven writes in a Wall Street Journal opinion piece. Enthoven compares the current employer-sponsored health care market to the U.S. automobile market during the "decline of the American car when [they] were best known for being expensive and unreliable," before "cost-effective" imports, like the Honda, entered the market. Enthoven asks, "Why can't we have Hondas ... in health care?" Noting that the current health care options seem "unappealing," Enthoven says employers need competition among "alternative delivery systems, each with a carrier partner that shares their commitment to passing on its lower costs to customers." To reduce administrative costs, Enthoven suggests that employers "create shared health insurance exchanges that bring together several or many risk-bearing health insurers, and several or many employment groups for the purpose of arranging multiple choice of carrier on the part of individual employees." If private employers fail to create such exchanges, Enthoven says that the federal government should "create incentives for [employers] to do so." Enthoven concludes, "What the 'Hondas' [of health care] need is for most employers to offer multiple choice and expose employees to full responsibility for premium differences so that the 'Hondas' can enter the market, grow and achieve economies of scale. Employers must create health insurance exchanges to promote competition on value. Then maybe we'll finally have a normal market where the 'Hondas' can compete for customers" (Enthoven, Wall Street Journal, 10/24).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.