Managed Competition Gains Admirers
Stanford University says its health care costs would have been almost twice as much last year were it not for managed competition. The school (below) pays for a basic plan, then lets employees pay for extra coverage. Meanwhile, providers compete to offer workers souped-up coverage at low cost. The benefits: Rates drop, and workers better understand costs.
The program's success is vindication for Stanford professor Alain Enthoven. Last decade, he advised Hillary Clinton (below) on her health plan, though he parted ways with her over certain Hillarycare features, like price controls.
So far, small companies can access managed competition through two exchanges: CaliforniaChoice (only in California, but it's expanding) and BENU (in Oregon, Washington, and the D.C. area). Both streamline several plans (employers get one monthly bill no matter what plans their employees choose) and allow employers to contribute a defined amount, meaning health care costs can stay fixed from year to year.