Options for small employers.

Although offering health benefits is very expensive, many employers (small, medium, and large) make health care purchasing decisions based on very little information. This is largely because employers have not taken the time to learn how to be knowledgeable health care purchasers. Higher health care costs result when employers: purchase programs and services that employees and their dependents do not need and seldom use; pay (unknowingly) for services not offered in their benefit plan; accept and pay for ineffective cost containment programs that increase (not decrease) health care costs (remember that cost containment is a business in itself); make standard recommended changes (e.g., increased copays or deductibles) to their benefit plans, hoping to reduce costs (the result has been higher costs for too many employees); fail to assess whether health plans and insurance companies have effective internal quality and cost management programs; use financial incentives to encourage employees and dependents to enroll in managed care plans without examining whether the health plan or insurer used quality criteria, high standards, and capable processes in developing provider networks. (Capable processes consistently deliver quality products or services.) Most health plans and insurance companies have chosen providers based on their willingness to discount their charges, which places all parties (health plans or insurance companies, employers, and patients) at risk. Most of the problems listed above could be avoided if small employers based their health care purchasing decisions on information obtained from a careful analysis of needs and expectations.(ABSTRACT TRUNCATED AT 250 WORDS)