Development of Health Care Consumerism in CTS Communities

1
Development of Health Care Consumerism in CTS
Communities

• AcademyHealth Annual Research Meeting
• June 8, 2008
• Paul B. Ginsburg, Ph.D.
• Jon B. Christianson, Ph.D.
• Ann Tynan, M.P.H.
• Debra Draper, Ph.D.

2
Background on CTS Site Visits

• Periodic visits to 12 representative metropolitan
  areas since 1996
• Funded by the Robert Wood Johnson Foundation
• Round 6 conducted throughout 2007 into early 2008
• Phase I tracking during first half of 2007
• Phase II interviews for in-depth studies
• Total of approximately 600 interviews

3
Methods

• Mix of in-person and telephone interviews
• Matrix of research teams and site teams
• HSC staff and consulting researchers
• Triangulation
• Atlas database

4
Todays ARM Panel on Consumerism

• Tracking these developments over many rounds of
  site visits
• Papers presented reflect
• Developments emerging very recently
• Developments that have been evolving over a
  number of rounds of site visits
• Perspective on entire history of consumerism

5
Todays ARM Panel on Consumerism

• Update on consumer-directed health plans (Jon
  Christianson)
• Health plans provision of price and quality
  information (Ann Tynan)
• Health promotion and wellness (Debra Draper)
• Transition from managed care to consumerism (Jon
  Christianson)

6
Consumer-directed Health Plans Mixed Employer
Signals, Complex Market Dynamics

• Jon B. Christianson
• Senior Consulting Researcher
• Center for Studying Health System Change
• James A. Hamilton Chair in
• Health Policy and Management
• University of Minnesota

7
Key Findings

• Over the past two years, health plans have
  expanded their CDHP offerings-- high-deductible
  plans with either a health reimbursement
  arrangement (HRA) or health savings account
  (HSA).
• Employers see CDHPs as part of a broader
  consumerism strategy, encouraging employee
  responsibility for health care costs, lifestyle
  choices, and treatment decisions.
• Employer strategies when offering CDHPs vary by
  size and type of workforce.

8
Complementary Offerings

• Health plans typically offer consumer-support
  tools, such as online provider quality and
  efficiency information, as part of CDHPs this
  information is available to PPO enrollees as
  well.
• Health plans believe they need to have CDHP
  products in their portfolios when marketing to
  large employers that want just one company to
  manage all of their benefit offerings.

9
Complexity of Products

• Some employers remain concerned that CDHPs are
  difficult for employees to understand when making
  their health benefit choices.
• Some large employers spent 12 to 18 months on
  employee education before rollout.
• Employees education focuses on
• Contribution caps.
• Eligible medical expenses.
• Federal tax treatment for HSAs.

10
Trends Among Large Employers

• Large employers are hesitant to structure their
  contributions to encourage enrollment in CDHPs.
• Large employers with young, highly educated
  workforces are not as concerned about pushback
  and are more confident workers will be able to
  use the online consumer information support tools
  to make informed choices.

11
Trends Among Small Employers

• Small employers, regardless of workforce, often
  offer HSAs as total-replacement products.
• Among high-wage workforces
• Employers typically offer HSAs and contribute to
  accounts because employees value the tax
  advantages.

12
Trends Among Small Employers Contd

• Among low-wage workforces
• Employers offer HSAs but often do not contribute
  to the account.
• CDHPs are seen by some small employers as the
  last option before discontinuing health benefits
  altogether.
• Less pushback because employees are already
  accustomed to higher deductible plans.

13
Other Observations

• Employers with high workforce turnover are more
  likely to offer and fund HRAs than HSAs.

14
Other Observations

• Public employers have low rates of CDHP
  offerings. Employees are accustomed to
  comprehensive benefits, often negotiated through
  union contracts.
• Employers rely on incremental cost shifting in
  existing products through higher deductibles,
  coinsurance and co-payments.
• Some intend to introduce HSAs and HRAs in the
  future, after employees become accustomed to
  higher deductibles
• Exceptions some state governments (e.g. Indiana)
  

15
Growing Optimism for HSAs and HRAs

• Plan respondents and benefit consultants
  generally expect CDHPs to play an increasingly
  prominent role in large employer health benefit
  offerings.
• For now, many large employers are engaged in
  watchful waiting, hoping employees will become
  more comfortable with the product designs over
  time they are especially interested in the
  experience of employers who are replacing all
  options with CDHP(s).

16
Growing Optimism for HSAs and HRAs

• For small employers, the future of CDHPs varies
  by workforce low wage firms struggle to offer
  health benefits while the future for HSAs in
  higher-wage firms looks brighter due to HSA tax
  benefits.

17
Implications

• For the rate of enrollment in CDHPs to increase,
  health plans and employers may need to take
  further steps to make HRAs and HSAs more
  appealing
• Refining consumer support tools.
• Increasing employer contributions.
• Some employers are creating a competitive
  advantage for CDHPs by making contributions to
  health savings accounts that reward employee
  participation in health promotion and wellness
  programs.

18
Acknowledgements

• Co-author Ann Tynan, M.P.H.
• Paper is available for viewing and download on
  the HSC website, www.hschange.org Issue Brief
  119

19
Health Plans Provider Price and Quality
Information Work in Progress

• Ann Tynan, M.P.H.
• Center for Studying Health System Change

20
Key Findings

• Health plans are motivated to provide price and
  quality information to their enrollees because
  they perceive competitive advantage in having a
  consumerism strategy.
• Some plans provide facility-specific price
  information for inpatient and outpatient hospital
  procedures and services.
• Price information for physician office visits is
  less frequently available.
• Plans generally rely on nationally accepted
  measures for hospital and physician quality.

21
Health Plans Motivations

• Must offer these tools to remain competitive.
• Responding to demands of large employers.
• Vital component of consumerism.
• Initially developed to support members enrolled
  in consumer-directed health care products.
• Seen as a way to engage all consumers in health
  care decisions, regardless of product type.

22
Price Information Overview

• Potential to reflect rates that health plans
  actually pay to providers.
• Some plans have achieved this.
• Potential to reflect consumers likely
  out-of-pocket costs based on own benefit
  structures.
• Only one plan reports this ability.
• National plans have more developed price
  information than local plans.

23
Hospital Price Information

• Most common inpatient procedures and services,
  such as knee replacement surgery.
• Generally presented as average cost or range of
  costs for a group of services by all providers
  involved in an episode of care.
• Prices sometimes based on plans contracted
  rates.
• If provided through a vendor, prices are based on
  publicly available data such as Medicare claims
  or all-payer health insurance data from state
  governments.

24
Physician Price Information

• Fewer health plans provide price information for
  physician services.
• If offered, generally average cost of physician
  office visits in a city, zip code or state.
• More often, it is the physician fee schedule,
  less helpful to consumers.
• Little variation in prices among network
  physicians in a market.

25
Quality Information Overview

• More quality information available for hospitals
  than physicians.
• Proceeding more cautiously for fear of provider
  pushback.
• Rely more on nationally accepted quality measures
  from third party sources than on plans own data.
• Many plans use vendors like Subimo/WebMD and
  Health Grades that aggregate publicly available
  data.

26
Hospital Quality Information

• Facility-specific quality metrics like morbidity,
  mortality, average length of stay, procedure
  volume, complications, and patient safety.
• Data from The Leapfrog Group and its Hospital
  Quality and Safety Survey.
• CMS data including measures from the Hospital
  Compare Web site.

27
Physician Quality Information

• Quality information for physicians generally
  limited to
• designations of board certification.
• NCQA physician recognition programs.
• HEDIS measures.
• Lack of quality information attributed to
• Insufficient numbers of cases for a physician in
  any single insurers claims, which limits what
  quality information plans can derive from their
  own data.
• Lack of consensus on how to measure physician
  quality.

28
Risks and Unintended Consequences

• Misinterpretation of price information by
  consumers.
• Some may interpret high price as high quality.
• Consumers difficulty evaluating or understanding
  what quality information means.
• Plans provide additional information or links to
  other Web sites to further explain the
  information.

29
Risks and Unintended Consequences

• Alienating hospitals and physicians
• Hospitals and physicians may disagree with the
  plans methodology and measurement of quality
• Legal Risks
• Some contracts prevent disclosure
• Wariness of providing inaccurate data, putting
  consumers and providers at risk

30
Implications

• Choosing providers on the basis of price and
  quality information is a critical component of
  consumerism
• Yet, price and quality information currently
  available is of limited usefulness to consumers
• Achieving vision of consumerism may depend on
  whether plans can advance these tools to the
  point where many consumers rely upon the
  information for health care decisions.

31
Funding Acknowledgement

• Coauthors
• Allison Liebhaber, B.A.
• Paul B. Ginsburg, Ph.D.
• Paper will be available for viewing and download
  on the HSC website after July 2008,
  www.hschange.org

32
Health and Wellness Initiatives The Shift from
Managing Illness to Promoting Health
Debra A. Draper Associate Director Center for
Studying Health System Change
33
Part of Broader Consumerism Strategy

• Initiatives to promote health and wellness now
  commonplace across the country
• Much of the momentum has come from employers,
  particularly large employers
• Address rising health care costs
• Reduce absenteeism and improve productivity
• Support broader consumer-based strategy of giving
  employees more responsibility for health care
  decisions and costs

34
Helps Plans Reposition Themselves

• Indianapolis plan executive
• Our value proposition has to be built around
  how we are going to help you manage health care
  costs. This involves not just managing illness,
  but where health care companies have been
  deficient in the past is in how often they talk
  to healthy members. They only talked to members
  when they had a claims issue. We are trying to
  build an organization that is interactive with
  all members, not just the ones who are sick

35
Plans Build Capacity

• Plans are building, acquiring or enhancing
  capabilities to deliver health and wellness
  services
• Emphasizing value of integrating health and
  wellness activities with other care management
  efforts dependent on plans claims data
• Plans using health and wellness activities as a
  way of differentiating themselves in the market

36
Premise of Health and Wellness Activities

• Healthier people use fewer medical resources
• Encourage the pursuit of healthy behaviors
• Provides support to people interested in making
  lifestyle changes
• Distinct from other care management activities
  focused on detecting or treating disease

37
Range of Activities

• Worksite activities
• Health fairs
• Educational seminars
• Screenings
• Behavior modification programs
• Weight management
• Smoking cessation
• Fitness
• Health coaches
• Health risk assessments

38
Health Risk Assessments

• Growing interest and use
• Questionnaire, often available online, that
  collects information provided by the enrollee
• Personal and family medical history
• Current diagnoses and symptoms
• Use of preventive and screening services
• Lifestyle behaviors diet, physical activity,
  tobacco and alcohol use
• Predicts health risk
• Identifies enrollees needing more intensive
  intervention

39
Enrollee Engagement

• Participation in health and wellness activities
  is typically voluntary
• Incentives often used to encourage participation

40
Incentives

• Vary and generally small
• Cash
• Gift cards
• Gym membership discounts
• Reimbursement for programs such as Weight
  Watchers
• Consumer-directed health plans often offer larger
  incentives to participate
• Greenville plan medical director At this point,
  we dont see anybody creating sticks or any type
  of negative processes if they dont participate.
  Its more like a reward if they do

41
Privacy Concerns

• Phoenix employer Some people are worried about
  privacy, how the data they report on the health
  risk assessment will be used
• Some question the validity of employee-provided
  information on health risk assessments,
  especially if employees believe employers will
  use the information to reduce benefits

42
Employers Offering Wellness Programs Are
Intruding On Worker Privacy
Employees Views
Source Employee Benefit Research Institute and
Mathew Greenwald Associates, Inc., 2007 Health
Confidence Survey
43
Funding

• Fully insured products
• Typically included in the premium
• Self-insured products
• Typically additional cost

44
Investment Payoff

• Investment payoff difficult to demonstrate
• Current evidence largely anecdotal
• Many health and wellness activities only recently
  introduced, often on a limited basis
• Northern New Jersey benefits consultant There
  is recognition that a healthier workforce leads
  to less spending and more productivity, but its
  hard to prove.

45
Plans and Employers Willing to Invest

• At least in the near term
• It is the right thing to do
• Important to more effectively engage consumers
• Small employers or those with more transient
  workforces are more reluctant to invest
• Increasing pressures for plans to demonstrate
  effectiveness clinical and financial

46
Implications

• Health and wellness initiatives offer promise for
  engaging consumers more effectively
• Challenges
• Engaging larger numbers of consumers
• Demonstrating clinical and financial
  effectiveness
• Success dependent on
• Developing credible evidence on effectiveness
• Gaining consumers acceptance and validation of
  the legitimacy of these activities

47
Acknowledgements/other

• Co-authors
• Ann Tynan, M.P.H.
• Jon B. Christianson, Ph.D.
• Paper available for viewing and download on the
  HSC website, www.hschange.org Issue Brief 121

48
Transition From Managed Care to Consumerism? A
Community-level Status Report

• Jon B. Christianson, Ph.D.
• Senior Consulting Researcher
• Center for Studying Health System Change
• James A. Hamilton Chair in
• Health Policy and Management
• University of Minnesota

49
Transition Away from Managed Care

• It has been more than a decade since some
  analysts and benefits consultants declared that
  managed care was dead
• Robinson (2001) Information and incentives will
  replace paternalism and control as the primary
  instruments of corporate health benefits policy

50
Facilitated Consumerism

• What is the status of managed consumerism in
  local communities?
• Discussion focused on
• Health benefits designs
• Quality and price transparency
• Health and wellness programs
• Care management (disease management, intensive
  care management, utilization management)

51
Health Benefit Designs

• Significant increases in cost sharing, but not
  clear if they are substantial enough to cause
  consumers to seek out and use lower cost, higher
  quality providers
• Large employers have grown more receptive to
  offering CDHPs, but enrollment has been
  relatively low, with some exceptions
• Widespread perception that enrollment will
  increase, with large employers viewing CDHPs as
  important components of their consumerism
  strategies

52
Price and Quality Transparency

• Some progress has been made regarding price and
  (especially) quality transparency, but very
  uneven across CTS sites.
• Large national plans, pushed by large employers,
  have implemented major initiatives to share
  information with enrollees.
• Collaboration among employers and health plans to
  develop community level quality reports is
  progressing at some CTS sites.
• In summary, very significant progress has been
  made on quality transparency and important first
  efforts are underway with respect to price
  transparency.

53
Health and Wellness Programs

• Health and wellness programs, sponsored by large
  employers, are proliferating.
• Creative use of financial incentives is common.
• At this point, the challenge is in securing and
  sustaining program participation and designing
  programs that yield cost savings for employers.

54
Care Management

• Some targeted utilization management programs,
  positioned by health plans as supporting
  consumers as well as containing costs
• For more information, see HSC Issue Brief No.
  118, Health Plans Target Advanced Imaging
  Services

55
Care Management

• Disease management and intensive care management
  programs have become more sophisticated at
  engaging enrollees who are likely to benefit the
  most from them
• But increased cost sharing potentially can
  discourage participation
• Participation rates are difficult to ascertain

56
Future Prospects

• Large employers have made a credible starting in
  implementing their consumerism strategies
• Health plans are developing a role for themselves
  beyond paying claims and managing provider
  contracts health companies that support
  enrollees with the information and programs that
  they need to manage their health throughout their
  life course

57
Future Prospects

• Future challenges to facilitated consumerism
• Provider consolidation will competition or
  collusion dominate in communities where
  provider consolidation is the norm?
• Nature of local employment base large national
  employers are not necessarily large in any
  single community
• Uncertainty about national policy agenda will
  CDHPs and price and quality transparency be
  cornerstones of federal health policy in the
  new administration?

58
Acknowledgements/Other

• Co-authors
• Paul B. Ginsburg, Ph.D.
• Debra A. Draper, Ph.D.
• Article forthcoming in Health Affairs,
  September/October 2008 issue

59
Closing Remarks

• Consumerism has morphed substantially from the
  original vision
• Important role for employers
• Increasing blending of elements of managed care
  with consumer incentives
• Insurers cautiously assuming role as provider of
  support for consumers
• Consumerism still way down on list of factors
  with most impact on delivery of health care