Benefits: Stitch Up An HMO

Workers may soon design, and pay more for, their health plans

Bob Stevens knew something drastic had to be done. His company's health-insurance costs were soaring, up about 15% a year. At the same time, his employees were becoming increasingly frustrated by the lack of alternatives to the restrictive managed-care coverage he was buying.

And Stevens runs a hospital.

So last fall Stevens, the CEO of Ridgeview Medical Center, a $110 million-a-year hospital and network of clinics in suburban Minneapolis, opted for an experimental course of treatment. He offered his 800 full-time doctors, nurses, administrators and other personnel the choice of a new scheme called a "defined contribution" health plan, courtesy...

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