Health Purchasing Coalitions Struggle to Gain Bargaining Clout: Small Size and Lack of Support from Health Plans are Factors

This 1998–1999 project, conducted by researchers at the Economic and Social Research Institute in Washington, led by Elliot K. Wicks, PhD, gathered information to help employers, employees, consumer groups and policy-makers better understand the barriers to small-group health insurance purchasing coalitions.

They also formulated policy recommendations that might enable greater achievement of the benefits predicted to arise from coalition purchasing of health care coverage.

The project is part of the Robert Wood Johnson Foundation's (RWJF) national program Changes in Health Care Financing and Organization (HCFO).

Key Findings

  • Researchers reported the following in a Findings Brief:

    • Health purchasing coalitions have enabled small employers to offer a choice of health plans to their employees.
    • Health purchasing coalitions have not reduced insurance costs nor have they improved access to health coverage for uninsured workers.
    • Market share for health purchasing coalitions continues to be low.
    • Low coalition market share results from increased competition, lack of cost savings and resistance from health plans and insurance agents.
    • Health plans are concerned that they may attract only the highest-risk employees as part of a health purchasing coalition.