MODESTO, CA, February 19, 2002 ---- MCOL™, the business-to-business health management & managed care resource company, just released analysis entitled “Dawn of the Benefits Cycle” that details how the decades-old health plan premium cycle (which explains periodic upturns and downturns in health plan premium increase trends) may give way to new phenomenon, the “Benefits Cycle,” which will involve periodic upward and downward shifts in the general level of health plan benefits provided to consumers in this new era of consumerism.
Clive Riddle, MCOL President and author of this thought-provoking analysis, says, “Very positive Fourth Quarter 2001 results from numerous publicly held health plans, combined with evidence of substantial increases in aggregate health plan profits during 2001, would make one think that double-digit health plan premium increases should have already hit the high-water mark, but they haven’t.”
Riddle explains that new market behaviors may be altering the premium cycle. “Instead, large health plans are evidencing different behaviors, sacrificing market share for profit and continuing to consolidate, which reduces price competition. These behaviors place obstacles in the path of the usually reliable premium cycle that dictates after plans reach a certain level of profitability, they will undergo widespread premium competition to gain market share, which in turn, drives premium rate trends back down until such time as the plans are no longer profitable, and the cycle begins anew. ”
The article, “Dawn of the Benefits Cycle,” advances the theory that the employer and consumer marketplace will still work to drive premium prices down, by increasing demand for lower costing benefit plans that increase employee cost sharing. Ultimately in this new age of health care consumerism, a cycle would emerge where the general benefit levels and cost sharing requirements eventually come back up, and then go down again based on economic competitive forces.
The article first appeared in a just released issue of MCOL Week-End, one of many health management and managed care features including publications, articles, news, data files and knowledge resource tools available for paid MCOL members. Information about becoming a MCOL member is available at http://www.mcol.com/online.htm
A free public copy of the article is now also available at http://www.mcol.com/artdawn.pdf
MCOL, established in 1995, is a leading provider of
business-to-business health management and managed care knowledge resources via
the Internet as well as more traditional means. MCOL provides membership
services, e-commerce and business e-solutions to professionals. MCOL is based in
Modesto, California, with additional offices in Portland, Oregon. For more
information, please visit www.mcol.com/about.htm.
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