In response to employers’ cries for innovative products that shift more of the costs and responsibilities of health insurance to their employees, two companies are partnering to unveil a defined contribution health insurance plan to Oregon employers by July 1, 2002.
The new insurance product—which has yet to be named—is a joint venture of PacificSource Health Plans, an insurer located in Eugene, Oregon, and Patient Choice Healthcare, a Minneapolis-based company that creates and manages health care provider networks.
The product won’t be an HMO, PPO, or POS health insurance plan. Its progenitors are calling it a “consumer-driven health care delivery model” that contains elements of a defined contribution health insurance plan.
While employers will pre-select the plan’s basic benefit design, their employees will be able to shop around for the providers that best suit their individual health care needs. It will work like this:
- PacificSource Health will fund the insurance risk for fully insured employers or act as an administrator for self-insured employers.
- Patient Choice will create and manage a variety of health care provider networks, made up of different doctors and hospitals.
- Employers will define their employees’ benefits structure.
- Employees will then shop the available provider networks for one that best fits their needs. Employees will have to choose a primary care physician (PCP) within their network and will pay premiums according to whether their PCP belongs to a low-, medium-, or high-priced network.
According to PacificSource, employers will typically pay the premiums for the lowest-priced provider networks, but members will be able to “buy up” to more expensive networks by paying the extra premium expenses.
Patient Choice encourages provider networks to compete with one another for patients based on cost, quality, and patient satisfaction, PacificSource says. Instead of negotiating fees, Patient Choice invites provider networks to bid on health care services. Health plan members are then able to review data collected by Patient Choice to compare cost, quality, and patient satisfaction, and then select the provider network that best matches their needs.
PacificSource says employers who choose the new plan will select a PacificSource health benefit plan, then each enrolling member will use the comparative data compiled by Patient Choice to select a personal provider network.
Vicki Lankarge writes for insure.com, the Consumer Insurance Guide.