PROLOGUE:Health plan purchasers play a pivotal role in ensuring that health plans deliver high-quality, cost-effective care to consumers. As the source of potential enrollees for health plans, they are ideally situated to bargain for the best benefits at the lowest cost, and thus to set a standard for health plan quality and efficiency. But how do they go about selecting plans for their enrollees, and how do they know what benefits to require? If purchasers enlist consumers in the selection process by offering them a range of plans to choose from, what information should they provide to guide consumer decision making? This paper by Elizabeth Hoy, Elliot Wicks, and Rolfe Forland examines how purchasers can structure consumer choice to promote competition based on quality and cost-effectiveness. The authors compare six purchasing organizations that use a consumer-choice model and provide some insight into what strategies work best.Elizabeth Hoy is director of health systems management and a founder of the Institute for Health Policy Solutions (IHPS) in Washington, D.C. She works with organizations to design and implement health purchasing cooperatives, focusing in particular on health plan contracting and the development of information to support consumer choice. Elliot Wicks, a senior fellow with the Economic and Social Research Institute, also works as a senior consutant with the Michigan-based consulting firm Health Management Associates. He coauthored this paper while at the IHPS. Rolfe Forland, a senior analyst at the IHPS, assists public and private employers in the design and implementation of all aspects of health purchasing cooperatives. He also researches and analyzes issues regarding state and federal insurance reforms, provider-organized delivery systems, and multiple-employer welfare arrangements.