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November 15, 2001
Managed care auctioned on the Internet
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lth plans compete online for corporate clients

You've probably seen a web-style auction by now on the web, maybe on eBay. Well now there is an auction-style Web site where, for the first time, health plans compete directly online for corporate clients.

Health plans participating in the pilot by Hewitt Associates reduced their rates anywhere from 2 percent to 8 percent for next year, saving participating companies a total of $1.1 million. On average, the Hewitt HMO auction process yielded 2 percent greater savings for companies participating in the pilot than the traditional renewal process. More than 50 health plans and three employers in 14 U.S. markets participated in the online auction.

"Our pilot clearly demonstrated how companies can link their Internet strategy to more cost-effective managed care for their employees," said Tom Beauregard, the consultant who developed the concept for the Hewitt HMO Internet Auction. "The idea is to stimulate more direct competition among plans, thereby improving HMO negotiation results for companies."

According to Hewitt, the auction was limited to high-quality plans. "Only those health plans that meet specific quality parameters are asked to participate in the auction," says Beauregard, "the site highlights HMO performance scores for clinical quality, administrative effectiveness and employee satisfaction as part of the auction process." The company plans to roll out the auction next year.

For more details and a Fact Sheet about the auction click Here.

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