The Future of Medical Benefits

EBRI Policy Forum Proceedings, 1998
ISBN 0-86643-091-1
Paperback, 113 pp.
PDF, 7.4 mg
Employee Benefit Research Institute, © 1998


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Executive Summary

The rate of change in the health care industry has been confusing for both casual observers of the industry and those directly involved in it. While the last few years have seen modest health care cost increases and subsequent increases in employment-based health insurance coverage, the re-emergence of cost pressures is resulting in both higher health care cost inflation and benefit package redesigns. With most insured workers now enrolled in managed care plans, a natural question to ask is how managed care will continue to control health care costs. Is the move to managed care a one-time savings? How will managed care continue to control rising health care costs? Are rising health care costs inevitable? What are the implications for improving health care quality? What are the implications if ERISA preemption continues to be narrowed?

The growth of managed care has also placed considerable pressure on providers of health care services and has stimulated responses by both providers and third-party payers. One of the most important responses has been consolidation both within sectors and across sectors. Hospitals have merged, physician groups have merged, and hospital and physicians have formed organizations. Employer groups have also formed coalitions. At the same time, the medical industry is undergoing a slow but steady transformation from not-for-profit dominance to for-profit dominance.

The papers contained in The Future of Medical Benefits explore these questions and issues. They reflect multiple perspectives, including employer, health insurer, health care provider, policymaker, employee benefit consultant, and academic. The authors review the current status of the health care system and explore the issues of managed care and accountability. The ever-continuing cycle of consolidation in the health care industry is discussed not only from the health care provider point of view but also from the point of view of the employer and the health insurer. The authors make many points that will be controversial, but they agree on one point overall: managed care and employment-based health benefits will look different in the future than they do today.