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Question:
"Why do we need a new term "Defined Care" when the terms "defined contribution" and "defined benefit" already are in use?
MCOL Response
Defined Contribution and Defined Benefit are both widely used in the benefit arena to describe pension related terminology, and it is preferable to have a term that is specific to the medical and related benefits arena. In fact, Defined contribution and defined benefits have very separate separate meaning in regard to retirement benefit, and should not be used interchangeably. Their mixed usage in articles relating to health benefits further indicates why a separate term specific to medical benefits is needed. Lastly, Defined Care further describes the changes in roles and behavior that coincide with the introduction of defined contributions, and also provide a specific model for administration of defined contributions.
Question:
"Thank you for the information about 'defined care'. I agree with the concept from a global perspective, but I am unclear about one thing..., when a company like Xerox implements defined contributions, do they weight the contributions by age and sex, or do all employees get the same amount regardless? If defined contributions are weighted, can you supply information about how that decision is arrived at? "
MCOL Response:
Without commenting about Xerox specifically, in general the answer to your question depends upon 1) if the employer is still arranging the menu of benefit options, 2) if the premium costs are age-rated, and 3) the employer's benefit philosophy. In the Defined Care model we advocate, there is still guaranteed issue of benefit plans to the employee population through a wide menu of benefit options arranged by the employer or a purchasing administrator. In such settings, the premiums would typically be non-age rated, thus the contributions would not need to be age rated. Many employers philosophically want there to be an equal contribution for all employees within an applicable class. The need for weighted contributions becomes an issue if the employer is turning the employees loose to purchase individual insurance on their own (which we do not advocate) or if the employer arranges age-rated premiums in the benefit menu.
Question:
What do you think could be the contribution of defined care in European socialised healthcare scenario - for both socialised healthcare systems: United Kingdom National Health Service and Germany Healthcare Social Security System?
MCOL Response:
While the model has significant potential inside or outside the U.S., the model has the highest chances of success in countries where benefit options are privatized, there are wide choices in benefit options, the covered consumer population has reasonable access t o applicable information, and there is already some precedence that consumers understand for how the model works (such as U.S. 401(k) retirement plans.) In countries lacking a wide menu of benefit options, significant reform and market development would have to first occur.
Comment:
"This seems to be very interesting and absolutely in sync with the wishes & needs of the Healthcare market place in both views: patients and healthcare professionals."
Comment:
"It is a very interesting concept. I feel we should go to a scheduled healthcare plan similar to scheduled dental plans I sell where the health insurance company states the dollar amount they will pay for each condition so the employee and doctor know in advanced what everything will cost. The consumer and healthcare provider can negotiate the price in advance instead of plan games and going back an forth with the insurance company. If the healthcare provider does not agree to the schedule the consumer can decide to go else where or buy a richer plan or pay the difference. With the Internet all costs could be easily spelled out and as knew procedures are proven to work they can be added to the plan and out-dated methods of care can be eliminated thus helping the healthcare providers keep up with acceptable methods of treating an illness and also helping the consumer receive the appropriate care. The most effective way to deliver this might be on an individual basis instead of a group basis. I have not thought that through. This is just an idea I have. "
Comments:
Opinions on Defined Care posted at HealthBond.com
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