How can employers and consumers leverage competition to lower cost and improve quality?
Typically, costs and inefficiencies are linked to high amounts of unnecessary back-office re-work. According to the Cato Institute 40% (or $96-120 billion) of total healthcare spending goes to administrative cost. So, if unnecessary work can be reduced on the administrative side quality will go up. And the cost of health insurance plans will go down. Shifting business to higher quality, effective insurers will pressure the others to improve. What are an employers rights and role in service delivery participation? As an employer, you buy health care insurance as a benefit for employees. Your relationship with a healthcare insurer is like any vendor under contract. Standard contract documentation specifies how services are defined, measured, and how execution is verified. The agreement will typically clarify pricing assumptions tied to specific services. As purchasers, you have a right to expect fair, predictable service quality equal to what was promised when you bought the health plan.
