Purchasing Medicare prescription drug benefits: a new proposal.
Medicare policymakers are considering using private-sector firms to offer and manage a prescription drug benefit. In such arrangements Medicare and its potential contractors will need to consider four major areas of risk: selection risk, cost management risk, risks of government as a business partner, and risks that new Medicare benefits will change competitive advantages. This paper considers these risk factors and suggests a model for Medicare prescription drug coverage. By adapting private-sector purchasing practices and using competitive markets, Medicare could offer prescription drug benefits--at affordable premiums for beneficiaries--without resorting to national price controls for pharmaceutical products. (+info)
Pooled purchasing: who are the players?
Data from the 1997 Robert Wood Johnson Foundation Employer Health Insurance Survey provide the first national estimates of the prevalence of pooled purchasing under all major arrangements. About one-quarter of all businesses participate in a pool; smaller businesses are more likely to participate, and there is substantial geographic variation in the prevalence of pool participation. Pooling appears to have modest positive effects on the availability of employee choice among plans (especially health maintenance organizations) and on the availability of information about plan quality. On the other hand, pooling as now construed does not seem to have enhanced the accessibility or affordability of insurance to employers. (+info)
Early experience with a new model of employer group purchasing in Minnesota.
The Buyers Health Care Action Group (BHCAG) in the Twin Cities has implemented a new purchasing initiative that offers employees a choice among care systems with nonoverlapping networks of primary care providers. These systems offer a standardized benefit package, submit annual bids, and are paid on a risk-adjusted basis. Employees are provided with information on quality and other differences among systems, and most have financial incentives to choose lower-cost systems. Generally, providers have responded favorably to direct contracting and to risk-adjusted payments but have concerns about the risk-adjustment mechanism used and, more importantly, the strength of employers' commitment to the purchasing model. (+info)
The pursuit of quality by business coalitions: a national survey.
The extent to which business coalitions and their employer members are catalysts for improving quality of care is of interest to policymakers, who need to know where and under what circumstances the marketplace succeeds on its own in assuring quality. Using data from the 1998 National Business Coalition on Health annual survey, this paper indicates that most coalitions have an infrastructure in place that could be tapped to advance quality goals. Although the survey data cannot tell us the extent to which coalitions are exercising their enhanced market influence specifically to improve quality, interviews with coalition leaders provide insights about how quality considerations can factor into coalition strategies. (+info)
Beyond cost: 'responsible purchasing' of managed care by employers.
We explore the extent of "responsible purchasing" by employers--the degree to which employers collect and use nonfinancial information in selecting and managing employee health plans. Most firms believe that they have some responsibility for assessing the quality of the health plans they offer. Some pay attention to plan characteristics such as the ability to provide adequate access to providers and services and scores on enrollee satisfaction surveys. A more limited but still notable number of firms take specific actions based on responsible purchasing information. Because of countervailing pressures, however, it is not clear whether or not the firms most involved in responsible purchasing are signaling a developing trend. (+info)
Managing Medicaid managed care: are states becoming prudent purchasers?
This paper examines the extent to which five states are becoming "prudent purchasers" in their oversight of Medicaid managed care. Our conclusions are mixed. These states are making more sustained efforts along these lines than most private purchasers are and have improved the amount and quality of the data they collect on the experiences of Medicaid clients when compared with the traditional fee-for-service program. They have been less successful in ensuring data quality that is adequate to support contracting decisions and in developing the analytical or political capacity to use data to "manage" the managed care system. Becoming a prudent purchaser appears to be a complex task for states that may prove difficult to achieve. (+info)
Purchasing cooperatives for small employers: performance and prospects.
Health insurance purchasing cooperatives were established in the early to mid-1990s for the purpose of making health insurance more affordable and accessible for small employers. Extensive interviews at six cooperatives reveal that while some cooperatives enrolled large numbers of small employers, most have won only small market shares and a number have struggled for survival, not always successfully. They have allowed small employers to offer individual employees choice of health plans, but none has been able to sustain lower prices than are available in the conventional market. Among the important impediments to their success are limited support from health plans and conflicts over the role of insurance agents. (+info)
HealthMarts, HIPCs (health insurance purchasing cooperatives), MEWAs (multiple employee welfare arrangements), and AHPs (association health plans): a guide for the perplexed.
This paper considers how pending proposals to authorize new forms of group purchasing arrangements for health insurance would fit and function within the existing, highly complex market and regulatory landscape and whether these proposals are likely to meet their stated objectives and avoid unintended consequences. Cost savings are more likely to result from increased risk segmentation than through true market efficiencies. Thus, these proposals could erode previous market reforms whose goal is increased risk pooling. On the other hand, these proposals contain important enhancements, clarifications, and simplification of state and federal regulatory oversight of group purchasing vehicles. Also, they address some of the problems that have hampered the performance of purchasing cooperatives. On balance, although these proposals should receive cautious and careful consideration, they are not likely to produce a significant overall reduction in premiums or increase in coverage. (+info)