Managed Care

Employees' tolerance of change underestimated?

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Health care prognosticators have lately been predicting the coming of a defined-contribution payment system in which an employer would give an employee a voucher (or other stipend) and tell him to go find and purchase his own health care benefits. In this tight labor market, however, employers are not likely to switch to such a system unless they are sure that their employees would back the move. In the fall of 1999, two independent market research companies under the auspices of KPMG surveyed 103 senior executives at Fortune 1000 companies, and 14,626 employees who work for them, to test receptiveness to the concept. The survey seems to indicate that employers may be off the mark in gauging the receptiveness of employees to defined contribution.

How employers predict employees would react to defined-contribution system

Degree of interest employees expressed about defined contributions

SOURCE: A NEW DIRECTION FOR EMPLOYER-BASED HEALTH BENEFITS, KPMG, 2000

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