ITHACA, N.Y. -- In less than 10 years, many employers will no longer offer regular health insurance but, instead, will offer employees medical allowances. Whatever is not spent on health care will be saved by employees for retirement, predict two Cornell University heath-care experts.
These so-called medical savings accounts (MSAs), they claim, not only would save employees, employers and society billions of dollars each year but also would provide employees with more freedom and control over health-care choices, as well as incentives to stay healthy and keep medical expenses down. At the same time, they would give employers a way to offer a benefit plan in which they no longer bear most of the risk of rising premium costs, providing better budget control and a relief from fast-growing administrative and legal burdens.
MSAs, the Cornell researchers say, also would replace the current system of managed care, which is widely criticized for focusing on profits at the expense of quality.
"Today's employment-based health insurance is an historical artifact that is outdated, impractical and too expensive to maintain," says Roger Battistella, professor of health policy and management at Cornell, writing in the next issue of the journal "Compensation and Benefits Management" (Vol. 15, No. 3, Winter 1999).
"It just doesn't fit in today's society with its aging work force, skyrocketing health insurance premiums, global competition and employers' legal exposure to medical malpractice because of injuries and complications workers and their families may experience when managed care firms deny access to cost-ineffective but potentially beneficial health services."
With colleague David Burchfield, assistant professor of health care financial
management at Cornell, Battistella compared regular employment-based insurance
with MSAs and vouchers and concluded that MSAs are, by far, more practical and
cost-effective not only for employers and workers but f
Contact: Susan S. Lang
Cornell University News Service