Multiple choice health insurance: the lessons and challenge to employers.

This paper offers a second opinion on the issues discussed by Stanley B. Jones in his paper, "Multiple Choice Health Insurance: The Lessons and Challenge to Private Insurers" in the Summer 1990 issue of Inquiry. Multiple choice of health plans is not containing costs of health care or insurance premiums because employers have not yet tried price competition with cost-conscious consumer choice. HMOs in multiple choice arrangements have not saved employers money because of the way employers manage competition. Effective management of competition must be an active process employing an array of tools to create incentives that reward production of high quality economical care.