What if the consumer can't hack it?

Many people --not just proponents of consumer directed health care-- liken the shift toward employee responsibility for health care costs to the shift from defined benefit to defined contribution retirement plans. I heard several times this week at the World Health Care Congress that if they're given the tools to do so, consumers will take responsibility for their health care as they've taken responsibility for their retirement savings. We were reminded of how companies like Fidelity and Vanguard have prospered by offering compelling products, information and customer service.But how well have employees actually done on the retirement front? Not too well, according to today's Wall Street Journal (Employers Grab Reins of Workers' 401(k)s). What's happening?

...20-30% of eligible Americans don't participate in their company's 401(k) plan. Those that do often jeopardize their retirement security, such as stashing all their savings in a low-return money-market fund.

They also tend to invest too little (often missing out on their employer's match), invest heavily in the stock of their own company (remember Enron?), and do other foolish things. So what are employers doing about it?

• Automatic enrollment, even making people opt out again and again if they insist on not participating
• Setting the contribution amounts and increasing them over time
• Picking employees' investments or narrowing the number of available choices

Who knows, maybe someone will suggest companies look at how they administer health insurance as a model for retirement benefits!In my view, 401(k)s are a lot simpler for employees to understand than health care. In a 401(k) you can make one or two decisions and then be on auto-pilot. For example, just contributing the maximum amount and picking a target-date retirement fund is about all that's really needed. Results can be easily and objectively measured over time and compared with benchmarks. We'll never be able to do that in health care.I don't totally discount the 401(K) analogy but when we it we should at least acknowledge that the 401(k) experience has been far from perfect and that health care is going to be a harder nut to crack.