Stanford's Experience with Managed Competition

Stanford's Experience with Managed Competition

By
Alain C. Enthoven, Brian Talbott
Health Affairs.
2004, Vol. 23, Issue 6, Pages 136-140

Stanford University has a “managed competition” model of health insurance. Stanford contributes the cost of the low-cost plan, and employees are responsible for premium differences between this plan and other offerings. Each employee gets what he or she wants and is willing to pay for, and everyone has low-cost access to health insurance. Stanford risk-adjusts the premiums based on age and sex and plans soon to adjust including prescription drug data. In the past five years, premiums have risen rapidly, in line with the rest of the market. For competition to transform the delivery system, most employers in the region must adopt managed competition.