choice: when does it lead to higher customer satisfaction?
DESCRIPTION
Choice: When Does It Lead to Higher Customer Satisfaction?. Karen Davis President, The Commonwealth Fund World Congress Leadership Summit March 7, 2006 [email protected] www.cmwf.org. Choice and Satisfying the Customer. Choice of physician is most important to patients - PowerPoint PPT PresentationTRANSCRIPT
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.
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.
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
*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.
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.
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
*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.
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
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
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.
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
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.
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)
*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.
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.
**
*
*
*
**
**
*
*
*
**
*
*
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
Comprehens ive HDHP CDHP
Percent of adults 21-64
(n = 61)
(n = 90)
*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.
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.
*
*
*
**
*
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
Comprehens ive HDHP CDHP
Percent of adults 21-64
(n = 61)(n = 90)
**
*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.
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.
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)
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.
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)
16% (10% tax bracket)
23% (15% tax bracket)
5% (27% 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