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America's 'other' health-care revolution

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But unlike their public cousins, whose primary purpose is to offer affordable insurance to the 47 million Americans who are uninsured, private exchanges promise to bring the individual tailoring of the Digital Age to the place where the majority of Americans now get their health care – the workplace. For businesses, private exchanges are a way to improve efficiency and contain runaway costs in a competitive environment.

"Whenever you have competition on a retail basis, prices go down," says Ken Sperling, national health exchange strategy leader at Aon Hewitt, and one of the architects of the private health exchange concept. "And an exchange is a very efficient way to bring buyers and sellers together to drive competition."

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The basic idea of the exchange is to create an online mall, or a retail-like experience akin to Expedia or Amazon, and make insurance companies compete head-to-head for a new wave of individual customers. The state exchanges set up by "Obamacare" do the same thing.

But private exchanges could also drive a consumer-driven revolution in health care, bringing the razor-sharp metrics of the Google era to an industry better known for one-size-fits-all employee health plans. Online technology may have revolutionized how Americans shop, bringing with it a brave new era of profiling and individually targeted advertising (as well as the stuff of government surveillance by the National Security Agency). But when it comes to paying for health care, few people, up to now, have given much thought to those incomprehensible itemizations of fees, printed out on multiple pages, each reassuringly stamped, "This is not a bill." Now they will increasingly have to track everything – and make their own choices.

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