There is also a fiduciary risk associated with HRAs that should not be overlooked, says Chip Kerby, a partner with McDermott Will & Emery, especially since such accounts are not covered by ERISA. And ultimately the question must be asked: Could all this segmentation lead employers to hire only younger, healthier workers? It's an idea D'Andrea discounts. "To the extent that's a problem, it's a problem that already exists today," he explains. "A self-insured employer would have that incentive today, and I don't think it's a pervasive problem."

Perhaps not. But the jury is still out on whether consumerism is the answer to all that ails health-care economics.

Randy Myers is a contributing editor of CFO.

Just Say No

Could employers be partly responsible for the runaway health-care costs of the past few decades? Many consultants say yes, by virtue of having endorsed insurance schemes indifferent to quality of care. "Most existing health plans have incentives that reward providers for providing more care and high-intensity care, not high-quality care," observes Guy D'Andrea, president of Discern Consulting.

One employer — the federal government — plans to change the paradigm. Beginning October 1, Medicare will stop paying for some preventable medical conditions that patients acquire in hospitals, including certain infections and pressure ulcers. The dual goal is to push hospitals to provide better care and lower costs.

Private plan administrators are watching the model closely — and some providers are also taking action. The Leapfrog Group, a not-for-profit organization of employers and other health-care purchasers, recently announced that 658 hospitals will adhere to its "Leapfrog Never Events" policy, meaning they'll waive costs related to rare medical errors, such as operating on the wrong body part. They represent just over half the hospitals that responded to the 2007 Leapfrog hospital survey. — R.M.

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