Going Boldly Where Others Have Gone Before: We CAN Make Health - - PowerPoint PPT Presentation

Lynn Quincy, Director Seminar May 30, 2017 @LynnQuincy @HealthValueHub

Going Boldly Where Others Have Gone Before:

We CAN Make Health Insurance Easier for Consumers

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Yes, THAT Consumer Reports

@HealthValueHub …part of Consumer Reports

Consumer Healthcare Engagement Points

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We know A LOT about what Consumers Want and Need Across Health Engagement Points:

• Self-care
• Choose coverage
• Choose provider
• Choose treatment options
• Manage Bills and Costs
• Consumers at decision-maker tables

Must use both stated and revealed preferences to be truly consumer centric.

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Choosing a Health Plan

Three “Legs” of Health Insurance

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Coverage

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Source: Loewenstein et al., JHE, 32(5):850-862, 2013 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Deductible Copay Coinsurance Max Out-of-Pocket

Claim to understand Actually understand

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Example: co-insurance

Three distinct things are difficult:

• Who is paying the indicated percentage?
• How to calculate a percent?
• What is the percentage applied to?

(the allowed amount)

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Source: Consumers Union and People Talk Research, Early Consumer Testing of New Health Insurance Disclosure Forms, December 2010

Sobering data…

Knowledge of plan types % correct What is generally true of health maintenance

• rganizations (HMOs)?

49 What is generally true of preferred provider

• rganizations (PPOs)?

23 In general, what type of health plan tends to give fewer choices of doctors? 51

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Source: data extract from AIR’s health insurance literacy measurement tool. See: http://aircpce.org/health-insurance-literacy-measure-hilm-publications

When presented with descriptions of possible provider network features, 50%

• r fewer could correctly describe HMO and PPO network characteristics.

Important: this survey also found that consumers are overconfident in their

• wn knowledge so self-reports of confidence using health plans must be

weighed appropriately.

Provider Directories

While important, directory information is insufficient and is likely to suffer from:

• Inaccuracies;
• Difficult to find;
• Hard to ensure that the directory info goes with

the plan under consideration, and

• Not validated by independent third parties.

Multiple studies finding inaccuracy rates of 50% and

• greater. These directories form the basis for

network adequacy assessments.

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http://www.healthcarevaluehub.org/advocate-resources/provider-directories/

Bottom Line: Consumers Struggle To Compare Networks Across Plans

Current measures of network adequacy are weak and rely heavily on self-reported data by health plans. There are NO consumer-tested, validated summary measures to tell the shopper:

• Is network narrow or broad?
• Is network high quality or just low cost? Or neither?
• What is the level of financial protection if out-of-network

providers are used (for PPO and POS products)?

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How to Improve Health Insurance Shopping for Consumers

How do we make things better for consumers?

• 1. Get robust, nuanced information about the

challenges consumers face

• 2. Use this information to FIRST improve the

underlying products and the system in which they are purchased/used

• 3. THEN educate and activate consumers

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Health insurance shopping has gotten better….

• No pre-existing condition exclusions
• No exceptions to OOPM
• No dollar-denominated annual and lifetime limits
• Standard set of preventive services covered at no cost

And in non-group market:

• Covered services standardized
• Plans grouped into actuarial value tiers

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But consumer testing in Massachusetts found that additional simplification is needed….

See: http://bluecrossmafoundation.org/Health- Reform/Lessons/~/media/Files/Health%20Reform/Lessons%20for%20National%20Reform%20from%20the%20M assachusetts%20Experience%20Benefit%20Designs%20Toolkit%20v2.pdf

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Health Plan Choices Many choices – bad ~6-10 choices - good Meaningful difference standards – good No “bad” choices…

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Source: The Evidence Is Clear: Too Many Health Insurance Choices Can Impair, Not Help, Consumer Decision Making, Consumers Union, 2012

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What are cognitive short-cuts and why important?

It isn’t possible to look all available data before making a coverage decision. Instead people rely

• n rules of thumb or mental shortcuts.

Consumers WILL use cognitive short-cuts to “get through” the task of shopping for coverage. Let’s provide reliable ones for their use. Examples:

• “Total Estimated Cost”
• Actuarial Value Tiers
• Measures of Network Adequacy
• Coverage Examples

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A cognitive short-cut: Total Estimated Cost Total Estimated Cost Premium cost + expected out-of-pocket costs

=

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Big Shortcomings in Health Plan Comparison Materials

Inaccuracies in Provider Directories and non- integrated directories Lack of Standardized Provider Network Summary Measures:

• Broad, narrow or ultra narrow?
• Quality of providers?
• Relative strength of OON financial coverage under

POS/PPO plans? Drug Formularies need similar summary measures

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Using a Health Plan

Midyear changes to Drug Formulary

In Florida, of those with chronic conditions :

• 68 percent: insurer made formulary changes that

reduced coverage of their prescribed drugs.

• Nearly three in four: couldn’t afford the increased

costs.

• 58 percent: the new medication was less effective

than the previous one.

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Source: Global Healthy Living Foundation Survey

Provider network design is an important cost control tool

Providers direct most of our nation’s health care spending and network design is potentially a key tool for identifying high value providers.

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Theoretically, consumers embrace narrow networks in order to keep costs down

In controlled experiments, given accurate information, a variety of

• ptions, and a valid structure for weighing the pros and cons, consumers

report they prefer to narrow their provider choices in order to preserve or increase medical benefits.

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Source: http://healthaffairs.org/blog/2014/11/13/reforming-medicare-what-does-the-public-want/ and

• ther work by Marge Ginsburg

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Back to the real world….

Consumers lack a basic understanding of role of provider networks in plan design, leaving them ill-prepared to make informed health care decisions. This poor understanding is likely compounded by narrow and tiered network structures.

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More sobering data…

Consumer experience with tiered physician networks in Massachusetts found relatively low awareness and use of the network design among plan enrollees and low rates of trust in their health plan as a source of information for identifying “better” physicians.

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Source: Sinaiko AD, Rosenthal MB. “Early Evidence of Consumer Experience with a Tiered Provider Network,” American Journal of Managed Care, 6(2):123-30, 2010

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What is a Surprise Medical Bill?

A surprise medical bill is any bill for which a health insurer paid less than a consumer expected. Not every out-of-network bill is a surprise bill. Many surprise bills are the result of enrollees not understanding their in-network coverage but far too many are the result of patients inadvertently using an

• ut-of-network provider.

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Examples

• Patient arranges for in-network hospital and

in-network surgeon but gets a surprise bill from out-of-network assistant surgeon – a person they never met.

• Patient goes to an in-network ER but there

are no in-network ER docs available to treat the patient.

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Balance Billing

Charges from Out-of-Network Providers

In-network providers are capped on what they can bill you. Out-of-network doctors can bill as much as they want.

Example:

Provider Charge Plan Allowed Amount Total $500 $300 Plan Pays $150 (50%) Patient Pays $150

Balance $200 $0 $200

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Facts About Surprise Bills

• In a two year period, 30% of privately insured

Americans received a surprise bill.

• Only 28% of this group was happy with how the issue

was resolved. Regulators aren’t hearing about these issues:

• 87% don’t know the state agency tasked with handling

health insurance complaints.

• 72% don’t realize they have a right of appeal for

coverage denials.

Source: Surprise Medical Bills Survey, Consumer Reports National Research Center, May 2015.

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What Causes Surprise Bills?

• Inaccurate provider directories
• Insufficient consumer disclosure:
• When health plan shopping
• When getting services
• Inadequate provider networks
• Absence of consumer remedies when surprise

bills occur

• Insufficient consumer awareness of their rights

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What does the evidence say about High Deductible Health Plans (HDHPs)?

Compared to more generous coverage, premiums are lower BUT:

• Patients reduce both necessary and

unnecessary care

• Patients don’t price shop
• Patients don’t shop based on quality

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Other evidence suggests WHY consumers don’t price shop:

• Care is rarely labeled as high-value or low-value
• Patients rarely know the price of a service and

providers are often unable to help

• Patients rarely know quality or likely outcomes

between two treatments.

• Consumers don’t view healthcare as a commodity.

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@HealthValueHub #RethinkConsumerism

Health Insurance Bottom line:

Less Complex

Standard, consumer-friendly cost-sharing designs Standard scope of covered services Manageable Number of Options/Meaningful difference standards Stronger Network Adequacy Rules Prohibit mid-year changes in formulary Surprise Medical Bill protections

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Easier to Understand

All the “less complex” ideas! Cognitive Shortcuts: Total Cost Network Breadth/Quality More…. Integrated Provider Directories Integrated drug formularies

Consumers should not have to bear the brunt of poorly functioning health care markets that don’t deliver value.

• Rethinking Consumerism In Benefit Design,

Consumer Reports, 2016

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Thank you! lquincy@consumer.org

Attributes of good consumer-facing materials

• Appropriate reading, graphical and numeracy

levels

• Consumer tested and found to be appealing,

understandable and actionable

• From a trusted source
• Provided “just in time” – at the point consumer

needs the information

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