Policy Documents

How the Kansas Business Partnership Can Learn from Other HIPS

Richard Teske –
October 1, 2000

In this report, the authors examine on how to best establish a defined contribution consumer choice program. This will be done by analyzing the lessons learned by other state health purchasing cooperatives (HPC). More than any orgauizational or administrative element, setting realistic expectations from the start seems to be the key to success. The use of state HIT’s to provide coverage for small employers and individuals has cooled since the early 1990’s. There are four reasons:

1) the failure of President Clinton’s health reform in 1994;

2) other federal laws passed since 1994 that address some of the same problems that HPCs seek to address;

3) the success ofany Health Purchasing change from the 15-20% yearly price increases in the 80’s and early 90’s to as little as 2-3% within the last few years; and,

4) the inability of almost any state HPC to attain its initial goals because of changing market and political conditions. If Kansas ignores the established track record of other HPCs it will guarantee the failure of the Business Health Partnership. Even if it avoids the many pitfalls of other programs, it will still be problematic for the Partnership to meet expectations.