Abstract
Since the 1980s, numerous large U.S. companies have restructured their employee health care benefit programs. This paper examines strategies used by these companies inreforming health care benefit programs in the context of managed care. Since the late 1980s, the cost of employee, retiree and dependents health care benefits has undergone double-digit increases. To control these costs, employers have not only introduced managed care plans, but have also implemented health insurance purchasing strategies that pass higher costs on to their employees. Many large U.S. employers have begun applying the principle of managed competition to their health care benefit purchases. This strategy is called "value-based purchasing". Unlike the traditional purchasing of health benefits, in which an employer's Human Resources department managed the employees' health care benefit programs, the new value-based purchasing systems are managed by specialized health benefits departments. Some companies have established their own managed care companies or health provider groups. Many have converted fully insured health plans into self-insured health plans. These actions suggest that large companies are working to cope on their own with the cost of health benefits. Large companies also rely on competitive bidding to negotiate health insurance premiums and benefits packages to their advantage. Most of the Fortune 500 companies use bidding in their health care benefits purchasing. To implement value-based purchasing strategies, many large U.S. companies have formed healthcare coalitions. A number of coalitions encourage their members to ask plans for information on access, quality, member satisfaction, and plan stability. Many companies have also established purchasing alliances that negotiate health care benefits on behalf of member companies, achieving lower premiums as a result of their purchasing power. These strategies suggest that large companies actively seek to control the cost and quality of their employee and retiree health care benefits, and these efforts influence U.S. private health insurance markets. This paper reviews U.S. managed health care from the perspective of these companies.
