First, the model allows greater flexibility and choice on the part of the participating employee. Each one is fundamentally responsible for selecting the health plan that best meets individual or family needs. With that responsibility comes greater awareness of, and appreciation for, the dollars expended on health care. In essence, employees are more engaged in the process and should become more efficient purchasers, which is also good for the system. Additionally, because the plans are not determined by the employer, employees could take their health care plans with them when they change jobs, allowing for greater portability and continuity of care.
Some skeptics say the concept is too radical to ever come to fruition.
A parallel precedent is already established, however, with employees' increasing involvement in their pension fund management. Some experts argue health care benefits represent the next wave in the move toward a retail-model benefit selection. Admittedly, the shift to defined contribution is still very much in its embryonic stage. Defined contribution wouldn't be possible without the proliferation of personal computers, the explosive world of e-commerce and the rise of consumerism within the health care industry. Many companies are looking at creative ways, however, to offer some form of defined-contribution option that will satisfy both employers and workers.