Managed competition versus industrial purchasing of health care among the Fortune 500.
The theory of managed competition has found favor with many health policy analysts and academic economists alike. Three characteristics--consumer choice, defined contribution, and dissemination of information--signal managed competition strategy. By requiring private employers to provide their employees with a choice of health carriers, a fixed-dollar strategy (defined contribution), and quality information to make appropriate choices among carriers, managed competition offers to remedy imperfections in both the consumer and provider sides of the market for health insurance. In an extensive survey of health care purchasing practices among Fortune 500 companies we found that major companies are not using the managed competition approach to health care purchasing. Instead, most of the companies surveyed are purchasing health care in the same way as they do other inputs to production--a pattern we call industrial purchasing.
Maxwell
James
J
JSI Research and Training Institute, Boston, USA.
Temin
Peter
P
D003256:Community Participation / Q000191:economics / Q000706:statistics & numerical data*; D003164:Competitive Bidding / Q000191:economics / Q000706:statistics & numerical data*; D003657:Decision Making; D017754:Group Purchasing / Q000191:economics / Q000706:statistics & numerical data*; D006264:Health Benefit Plans, Employee / Q000191:economics / Q000458:organization & administration*; D019538:Health Care Surveys; D007221:Industry / Q000191:economics / Q000706:statistics & numerical data*; D007255:Information Services; D018854:Managed Competition / Q000191:economics / Q000706:statistics & numerical data*; D019984:Quality Indicators, Health Care; D014481:United States