For insurance companies and employers, the Internet also offers new opportunities to cut costs and confusion. According to Forrester, one third of U.S. companies already use the Internet to help administer health benefits for their employees, and that figure should triple by 2005. Many would like to get out of the health insurance game altogether. Theyre good at making optical switches, soft drinks or widgets, but theyre not good at dealing with the red-tape nightmare of deductibles, exclusions and pre-existing conditions.
Employer share of health premiums has already fallen — from 80 percent in 1977 to 67 percent today. One trend that analysts predicted is the use of vouchers that give employees access to perhaps $2,000 or $3,000 in medical expenses per year. There would be provisions for catastrophic illnesses, but generally anything above the voucher limit would come out of the employees pocket.
Employers will experiment with vouchers, or "defined contributions," the next time the economy turns down, and leverage seesaws back to management, said Michael J. Barrett, senior analyst at Forrester. In other words, any time now.
Other companies offer new ways for companies to save. For example, IE-Engine has software that allows several insurers to bid for the contract to cover a companys employees. At a demonstration recently, a Fortune 500 company got about $40 per month per employee knocked off its insurance costs, as several insurers vied to underbid each other — all within a two-hour window set aside for the real-time auction.
A new breed of e-business is also emerging to help wean consumers off the employer model of health care and make them more active participants in their own medical choices.
For instance, an employee can take the $150 or $300 per month now paid by the boss and apply it to a dozen basic to premium choices offered through Web sites run by companies such as Sageo, which sets up portals so consumers can compare health plans on service, cost and quality.
Insurers are also expected to form Web sites that fashion new group risk pools, offering customized plans for consumers wielding company vouchers, said Eric Brown, research director at Forrester, who led the Transforming Health Care in the Internet Era conference in Atlanta.
Finance companies, which consumers trust with their money, may jump into the battle, combining advice about mutual funds with advice about kidney stones. The traditional health insurer or new-generation hybrid that can cobble together partnerships with trusted hospitals and doctor groups will have the advantage in bringing health-care consumers aboard the Internet.
"The engine that powers people up the staircase is trust," Medscapes Leavitt said. "If you can take your trust online, you win."
Most people dont like to see anyone make money in health care, eBenXs Tierney said. But if theyre competing feverishly for business on quality, reputation and price, they deserve to make a lot of money. "We need an environment with continuous new aggressive competition entering the marketplace to stimulate innovation and drive quality," Tierney said.
Plans today dont vary much on choices or cost. Consumers would pay more money for a plan that allows them to buy riders for specific drug types that they need, Sageos Beauregard said. For example, he said, consumers used to be afraid of 401(k) plans, until they saw how they could personalize their investments. The same will happen in health care, he said.
Inertia on the part of consumers, doctors and insurers will slow the shift to e-medicine, but nothing can stop it, Brown said.
Half of the ideas out there today are pipe dreams, but half will make it. "There will be a period of disappointment. But this is the year that people will start putting money on the table. There will be a toning down of the rhetoric and a toning up of the activity — of actually getting things done," Brown said.