the commonwealth fund choice: when does it lead to higher customer satisfaction? karen davis...

THE COMMONWEALTH

FUND

Choice: When Does It Lead to Choice: When Does It Lead to Higher Customer Satisfaction?Higher Customer Satisfaction?

Karen DavisPresident, The Commonwealth FundWorld Congress Leadership Summit

March 7, [email protected]

2

THE COMMONWEALTH

FUND

Choice and Choice and Satisfying the CustomerSatisfying the Customer

• Choice of physician is most important to patients

• Choice of insurance plan is also important to enrollees

• Enrollees in high deductible health plans are less satisfied with coverage – but often have no other choice

• Selling a product customers dislike is not a long-term strategy for success

3

THE COMMONWEALTH

FUND

Those with Less Choice of Where Medical Care Is Received Those with Less Choice of Where Medical Care Is Received Are Less Likely to Be Satisfied with Their Health CareAre Less Likely to Be Satisfied with Their Health Care

410

24 26

0

25

50

Great deal of

c hoic e

Fair amount of

c hoic e

Not too muc h

c hoic e

No c hoic e

Percent of adults 19–64 with employer-sponsored insurance who are “somewhat” or “very dissatisfied” with their health care

Source: Jeanne Lambrew, “’Choice’ in Health Care: What Do People Really Want?” The Commonwealth Fund, September 2005.

4

THE COMMONWEALTH

FUND

Enrollees’ Dissatisfaction with Health Plan, by Enrollees’ Dissatisfaction with Health Plan, by Degree of Choice of PlanDegree of Choice of Plan

56

14 1216

22

31

22

33

0

20

40

60

P lan Overall Quality of Servic es P hysic ian Choic e

FFSManaged Care w ith Choic e of P lanManaged Care w ithout Choic e of P lan

Source: K. Davis, K.S. Collins, C. Schoen, and C. Morris, “Choice matters: enrollees' views of their health plans,” Health Affairs 14(2): 99-112, 1995.

Percent rating plan “fair” or “poor”

5

THE COMMONWEALTH

FUND

Few Insured People Are Currently Covered by High Few Insured People Are Currently Covered by High Deductible Health Plans (HDHP) or Consumer Directed Deductible Health Plans (HDHP) or Consumer Directed

Health Plans (CDHP) with a Health Plans (CDHP) with a Savings AccountSavings Account

HDHP

9%

CDHP

1%

Comprehensive

89%

Note: Comprehensive = plan w/ no deductible or <$1000 (ind), <$2000 (fam); HDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), no account; CDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), w/ account.

Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

6

THE COMMONWEALTH

FUND

Less than Half of Those Enrolled in Employer-based Less than Half of Those Enrolled in Employer-based High Deductible Health Plans Had a ChoiceHigh Deductible Health Plans Had a Choice

58

47 45

0

25

50

75

Traditional(n=1016)

CDHP HDHP

Percent of adults with employer-based coverage who were offered a choice of health plans

• CDHP and HDHP owners are less likely to have a choice of plans from their employer

• When they have a choice, the savings account is the leading reason for choosing CDHP, while premium cost is the most frequent reason for choosing HDHP. Traditional plans are chosen for low out-of-pocket costs.(n=134) (n=334)

Source: EBRI/Commonwealth Fund Consumerism in Health Care Survey, 2005.

7

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Are Less Satisfied Enrollees of HDHP/CDHPs Are Less Satisfied with Their Coveragewith Their Coverage

8

28

63

29

3933 32

26

42

0

25

50

75

Extremely or very

satisfied

Somew hat

satisfied

Not satisfied

Comprehens ive HDHP CDHPPercent

*

**

**

*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.


8

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Are Less Satisfied Enrollees of HDHP/CDHPs Are Less Satisfied with Out-of-Pocket Costswith Out-of-Pocket Costs

21

3642

31

12

57

1828

54

0

25

50

75

Extremely or very

satisfied

Somew hat

satisfied

Not satisfied

Comprehens ive HDHP CDHP



Percent

* *

**

*

9

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Are Less Satisfied Enrollees of HDHP/CDHPs Are Less Satisfied with Choice of Doctorswith Choice of Doctors



6

21

73

11

29

6069

10

21

0

20

40

60

80

Extremely or very

satisfied

Somew hat satisfied Not Satisfied

Comprehens ive HDHP CDHPPercent

*

*

*

10

THE COMMONWEALTH

FUND

Workers are Less Satisfied when Their Costs Go Workers are Less Satisfied when Their Costs Go Up – Employer Costs Go Down but at the Risk Up – Employer Costs Go Down but at the Risk

of Alienating Workersof Alienating Workers

431 610

2270

3413

1348323

553

0

1000

2000

3000

4000Deduc tible c ontributionP remium c ontribution

^ “All plans” refers to all conventional HMOs, PPOs, and POS plans in the survey, not just HDHP/HRA or HSA-qualified HDHPs. Source: Calculated based on: G. Claxton et al., “What High Deductible Health Plans Look Like: Findings from a National Survey of Employers, 2005,” Health Affairs Web Exclusive, September, 14, 2005; J. Gabel et al., “Health Benefits in 2005: Premium Increases Slow Down, Coverage Continues to Erode,” Health Affairs, September/October 2004.

All plans^

All plans^

$1,779

$933

$2,823

Dollars

$3,413

Worker contribution Employer contribution

HSA-qualified

HDHP

HSA-qualified

HDHP

11

THE COMMONWEALTH

FUND

• How many are joining HDHP/HSAs?

• What is financial impact on employees?

• What is risk experience?

– Age distribution

– Income distribution

Choice Within Federal Employees Health Choice Within Federal Employees Health Benefit PlanBenefit Plan

12

THE COMMONWEALTH

FUND

FEHBP HDHP/HSAs Plans Enroll 7,500 out FEHBP HDHP/HSAs Plans Enroll 7,500 out of 9 Million Covered Livesof 9 Million Covered Lives

6.4

0.10

5

10

15

20

25

Perc ent of FEHBP plans that

are HDHP /HSAs

Perc ent of FEHBP enrollees

that are in HDHP /HSAs

Note: As of March 2005.Source: Government Accountability Office, Federal Employees Health Benefits Program First-Year Experience with High-Deductible Health Plans and Health Savings Accounts, Washington, DC: GAO, January 2006; OPM, http://www.opm.gov/insure/handbook/FEHBhandbook.pdf

Percent

13

THE COMMONWEALTH

FUND

Cost to Federal Employees Under PPOs versus Cost to Federal Employees Under PPOs versus High Deductible Health PlansHigh Deductible Health Plans

1092 11882496 2916

1900

3900

680

320

0

1000

2000

3000

4000

5000

6000

7000

HDHP/HSA PPO HDHP/HSA PPO

In-network deductibleAnnual employee premium

$2,992

$1,508

$6,396

Dollars

$3,596

Individual Family

Source: Government Accountability Office, Federal Employees Health Benefits Program First-Year Experience with High-Deductible Health Plans and Health Savings Accounts, Washington, DC: GAO, January 2006.

14

THE COMMONWEALTH

FUND

Age Distribution of HDHP and Other FEHBP Age Distribution of HDHP and Other FEHBP EnrolleesEnrollees

0

5

10

15

20

25

30

35

<23 23-34 35-44 45-54 55-64 65-74 75-99 >99

HDHP enrollees A ll FEHBP enrollees


Percent FEHBP enrollees

15

THE COMMONWEALTH

FUND

Enrollees Who Chose HDHPs from the Federal Enrollees Who Chose HDHPs from the Federal Employees Health Benefits Program Are More Likely to Employees Health Benefits Program Are More Likely to

Earn Higher IncomesEarn Higher Incomes

43

23

0

25

50

75

HDHP A ll FEHBP plans


Percent of FEHBP enrollees with incomes ≥ $75,000

16

THE COMMONWEALTH

FUND

• Costs aren’t high because patients don’t pay enough – they are high because of the way we organize care and pay physicians, hospitals, and other providers

• Americans already pay a lot out-of-pocket for care

• High deductibles have an adverse effect on access to care for vulnerable populations

• High deductibles add to financial burdens on vulnerable populations and consume savings needed for retirement

• The information on which to make cost-conscious choices is a long way from being available

HDHP/HSAs – Wrong RxHDHP/HSAs – Wrong Rxfor American Health Carefor American Health Care

17

THE COMMONWEALTH

FUND

0

1000

2000

3000

4000

5000

6000

0 100 200 300 400 500 600 700 800 900

a

* Allan Hubbard, Director of the National Economic Council, February 14, 2006.Note: Adjusted for Differences in the Cost of Living, 2003.Source: Bianca K. Frogner and Gerard F. Anderson, “Multinational Comparisons of Health Systems Data, 2005,” The Commonwealth Fund, Forthcoming.

a 2002Out-of-Pocket Health Care Spending per Capita, US$Out-of-Pocket Health Care Spending per Capita, US$

National Health Expenditures per Capita, US$National Health Expenditures per Capita, US$

United States

Australia

OECD Median

Canada

Japana

New Zealand

GermanyFranceNetherlands

““Perception that Health Care Is Free”*Perception that Health Care Is Free”*Is Not the ProblemIs Not the Problem

18

THE COMMONWEALTH

FUND

Consumers Spending More Consumers Spending More Out-of-Pocket for Health CareOut-of-Pocket for Health Care

0

100

200

300

400

500

600

700

800

900

Source: C. Smith et al., “National Health Spending in 2004: Recent Slowdown Led by Prescription Drug Spending,” Health Affairs 25, no. 1 (January/February 2006); Centers for Medicare and Medicaid Services, National Health Expenditures Data; http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf

Dollars spent per capita (in 2004 dollars)

$577 $583

$774

$667

$788

19

THE COMMONWEALTH

FUND

5

1813

4

0

25

50

A ll families A ll family members under

age 65

Spent 10% or more of inc omeSpent 5% to less than 10% of inc ome if low -inc ome*

OOP = out-of-pocket.* Low-income includes families with incomes <200% of the federal poverty level.Source: M. Merlis, D. Gould, and B. Mahato, Rising Out-of-Pocket Spending for Medical Care: A Growing Strain on Family Budgets, The Commonwealth Fund, February 2006.

Percent of families with high out-of-pocket medical costsand premiums relative to income

Including Premiums, One of Four FamiliesIncluding Premiums, One of Four FamiliesHad High Costs Relative to Income, 2001–02Had High Costs Relative to Income, 2001–02

23

17

20

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Spend Higher Percent Enrollees of HDHP/CDHPs Spend Higher Percent of Income on Out-of-Pocket Medical Expenses of Income on Out-of-Pocket Medical Expenses

and Premiumsand Premiums

9 132529

35

58

23 26

44

0

20

40

60

80

100 10%+ of inc ome 5-9% of inc ome

Percent of adults 21-64 spending > 5% of income

Total Health Problem<$50,000

Annual Income

12

4231

17

3834

92

66

53

13 918 12 10

33 21

(n = 61)

(n = 90)



**

*

*

*

**

**

*

*

*

**

*

*

21

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Are More Likely to Enrollees of HDHP/CDHPs Are More Likely to Delay or Avoid Getting Health Care Due to Delay or Avoid Getting Health Care Due to

CostCost

2621

17

42

313135

48

40

0

25

50

75

Total Health P roblem <$50,000 Annual

Inc ome


Percent of adults 21-64

(n = 61)

(n = 90)



*

*

*

**

*

22

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Are More Likely to Enrollees of HDHP/CDHPs Are More Likely to Not Fill a Prescription Due to CostNot Fill a Prescription Due to Cost

2027

2116

323326

2526

0

25

50

75

Total Health P roblem <$50,000 Annual

Inc ome


Percent of adults 21-64

(n = 61)(n = 90)

**



23

THE COMMONWEALTH

FUND

Cost-Sharing Reduces Use of Both Essential Cost-Sharing Reduces Use of Both Essential and Less Essential Drugs and Increases Risk and Less Essential Drugs and Increases Risk

of Adverse Eventsof Adverse Events

9

1514

22

0

5

10

15

20

25

Essential Less Essential

E lderly Low Inc ome

Source: R. Tamblyn et al., “Adverse Events Associated With Prescription Drug Cost-Sharing Among Poor and Elderly Person,” JAMA 285, no. 4 (2001): 421–429.

Percent reduction in drugs per day

117

43

9778

0

20

40

60

80

100

120

140

Adverse Events ED V is its

E lderly Low Inc ome

Percent increase in incidence per 10,000

24

THE COMMONWEALTH

FUND

Increased Health Care Costs Have Reduced Increased Health Care Costs Have Reduced SavingsSavings

Has increased spending on health care expenses in the past year caused you to do any of the following? Among those with health insurance coverage who had increases in health care costs in the last year (n=731) (percentage saying yes)

45%

34%

29%

26%

24%

18%

Decrease your contributions to a retirement plan, such as a 401(k),

403(b) or 457 plan, or an IRA

Have difficulty paying for other bills

Decrease your contributions to other savings

Use up all or most of your savings

Borrow money

Have difficulty paying for basic necessities, like food, heat, and housing

Source: EBRI Health Confidence Survey, 2005.

25

THE COMMONWEALTH

FUND

Most Insured Don’t Have Quality and Cost Most Insured Don’t Have Quality and Cost Information to Make Informed ChoicesInformation to Make Informed Choices

Comprehensive HDHP/CDHPHealth plan provides information on quality of care provided by:

Doctors 14% 16%

Hospitals 14 15

Health plan provides information on cost of care provided by:

Doctors 16 12

Hospitals 15 12

Of those whose plans provide info on quality, how many tried to use it for:

Doctors 42 54

Hospitals 25 45

Of those whose plans provide info on cost, how many tried to use it for:

Doctors 15 36 (n = 76)

Hospitals 14 32 (n = 76)


26

THE COMMONWEALTH

FUND

Customers Are Attracted to More Choices, but Customers Are Attracted to More Choices, but Too Many Choices Leads to IndecisionToo Many Choices Leads to Indecision

40

60

30

3

0

25

50

75

Booth w ith 6 types of jam Booth w ith 24 types of jam

Attrac ted to display booth Bought produc t

Source: S.S. Iyengar and M. R. Lepper, “When Choice Is Demotivating: Can One Desire Too Much of a Good Thing?” Journal of Personality and Social Psychology 76: 995-1006.

Percent

27

THE COMMONWEALTH

FUND

HSAs Won’t Solve the Uninsured Problem: HSAs Won’t Solve the Uninsured Problem: Income Tax Distribution of UninsuredIncome Tax Distribution of Uninsured

55% (0% tax bracket)




1% (30%-39%

tax bracket)

Source: S.A. Glied, The Effect of Health Savings Accounts on Health Insurance Coverage, The Commonwealth Fund, April 2005.

28

THE COMMONWEALTH

FUND

HDHPs Won’t Solve the Cost Problem:HDHPs Won’t Solve the Cost Problem:Most Costs Are Concentrated in the Very SickMost Costs Are Concentrated in the Very Sick

0%

10%

20%30%

40%

50%

60%

70%80%

90%

100%

U.S. Population Health Expenditures

1%5%

10%

55%

69%

27%

Source: A.C. Monheit, “Persistence in Health Expenditures in the Short Run: Prevalence and Consequences,” Medical Care 41, supplement 7 (2003): III53–III64.

Distribution of Health Expenditures for the U.S. Population, By Magnitude of Expenditure, 1997

50%

97%

$27,914

$7,995

$4,115

$351

Expenditure Threshold (1997

Dollars)

29

THE COMMONWEALTH

FUND

Modifications to HDHP/HSAsModifications to HDHP/HSAsto Reduce Potentially Harmful Effectsto Reduce Potentially Harmful Effects

• Permit employers to lower deductibles for lower-wage workers and qualify for HSAs

• Exempt primary care as well as preventive services from the deductible; exempt prescription drugs essential for management of chronic conditions

• Guarantee choice of a comprehensive health plan to workers covered under employer plans

• Permit greater flexibility in benefit design (e.g. actuarially equivalent benefits)

• Set an income ceiling on eligibility for HSAs to reduce the tax subsidy for high income individuals

30

THE COMMONWEALTH

FUND

Promising Strategies for Improving Affordability Promising Strategies for Improving Affordability and Achieving Savingsand Achieving Savings

• Better information on provider quality and total costs of care

• Pay-for-performance provider payment rewarding high quality and high efficiency

• Development of value networks of “high performing providers” under Medicare, Medicaid, and private insurance

• High cost care management and disease management

• Improved access to primary care and preventive services

• Investment in health information technology

• National Institute of Clinical Excellence – evidence-based medicine

• Ensuring affordability for families by placing limits on family premium and out-of-pocket costs as percent of income (e.g., 5% of income for low-income)

• Expanded group coverage and reinsurance

31

THE COMMONWEALTH

FUND

Take Away MessagesTake Away Messages

• Closing gaps in insurance coverage is the number one priority

• A regular source of care improves access to primary and preventive care

• Invest in quality improvement in chronic care, transitional care post-hospitalization

• Information technology and shared decision-making

• Reward high quality and efficient care• Forge public private partnerships to achieve

improved health system performance

32

THE COMMONWEALTH

FUND

AcknowledgementsAcknowledgements

Stephen C. Schoenbaum, M.D., Executive Vice President and Executive Director, Commonwealth Fund Commission on a High Performance Health System

Anne Gauthier, Senior Policy Director, Commonwealth Fund Commission on a High Performance Health System

Sara R. Collins, Senior Program Officer, The Commonwealth Fund and lead author, The Affordability Crisis in U.S. Health Care: Findings from the Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund, March 2004; Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

Research assistance – Alyssa L. Holmgren, Research Associate, Commonwealth Fund

Visit the Fund at: www.cmwf.org

the commonwealth fund choice: when does it lead to higher customer satisfaction? karen davis...

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