The role of product design in consumers' choices in the individual insurance market

OBJECTIVE

To evaluate the role of health plan benefit design and price on consumers' decisions to purchase health insurance in the nongroup market and their choice of plan.

DATA SOURCES AND STUDY SETTING

Administrative data from the three largest nongroup insurers in California and survey data about those insured in the nongroup market and the uninsured in California.

STUDY DESIGN

We fit a nested logit model to examine the effects of plan characteristics on consumer choice while accounting for substitutability among certain groups of products.

PRINCIPAL FINDINGS

Product choice is quite sensitive to price. A 10 percent decrease in the price of a product would increase its market share by about 20 percent. However, a 10 percent decrease in prices of all products would only increase overall market participation by about 4 percent. Changes in the generosity of coverage will also affect product choice, but have only small effects on overall participation. A 20 percent decrease in the deductible or maximum out-of-pocket payment of all plans would increase participation by about 0.3-0.5 percent. Perceived information search costs and other nonprice barriers have substantial effects on purchase of nongroup coverage.

CONCLUSIONS

Modest subsidies will have small effects on purchase in the nongroup market. New product designs with higher deductibles are likely to be more attractive to healthy purchasers, but the new benefit designs are likely to have only small effects on market participation. In contrast, consumer education efforts have a role to play in helping to expand coverage.

Individual health insurance within the family: can subsidies promote family coverage?

This paper examines the role of price in health insurance coverage decisions within the family to guide policy in promoting whole family coverage. We analyze the factors that affect individual health insurance coverage among families, and explore family decisions about whom to cover and whom to leave uninsured. The analysis uses household data from California combined with abstracted individual health plan benefit and premium data. We find that premium subsidies for individual insurance would increase family coverage; however, their effect likely would be small relative to their implementation cost.

Consumer-directed health care: early evidence about effects on cost and quality

Demand for consumer-directed health care (CDHC) is growing among purchasers of care, and early evidence about its effects is beginning to emerge. Studies to date are consistent with effects predicted by earlier literature: There is evidence of modest favorable health selection and early reports that consumer-directed plans are associated with both lower costs and lower cost increases. The early effects of CDHC on quality are mixed, with evidence of both appropriate and inappropriate changes in care use. Greater information about prices, quality, and treatment choices will be critical if CDHC is to achieve its goals.

Medical Abortion-An Alternative to Surgical Abortion

BACKGROUND

Termination of early pregnancy has traditionally been done surgically, but agents are now available which can terminate pregnancy if taken orally, vaginally or parenterally. We have used a combination of mifepristone and misoprostol for termination of early pregnancy.

MATERIAL AND METHOD

Fifty patients having amenorrhoea of upto 56 days with confirmed intrauterine pregnancy, were selected for medical termination of pregnancy. The patients were given tablet mifepristone (200mg) on day 1 and tablet misoprostol (400mcg) on day 3. On day 14, an ultrasound was done to confirm complete abortion.

RESULT

Majority 35 (70%) patients had amenorrhoea between 40 - 50 days. The duration of bleeding was less than 5 days in 12%, between 5 -10 days in 56%, 10 -13 days in 16% and greater than 14 days in 16%. In all patients with bleeding of more than 14 days ultrasonography confirmed intrauterine products & a suction evacuation was done. In this series there were no failures.

CONCLUSION

The combination of mifepristone and misoprostol is an effective method for termination of early pregnancy up to 56 days of amenorrhoea.

Consumer Decision Making In The Individual Health Insurance Market

This paper summarizes the results from a study of consumer decision making in California's individual health insurance market. We conclude that price subsidies will have only modest effects on participation and that efforts to reduce nonprice barriers might be just as effective. We also find that there is substantial pooling in the individual market and that it increases over time because people who become sick can continue coverage without new underwriting. Finally, we show that people prefer more-generous benefits and that it is difficult to induce people in poor health to enroll in high-deductible health plans.

Socioeconomic Status and Medical Care Expenditures in Medicare Managed Care

This study examined the effects of education, income, and wealth on medical care expenditures in two Medicare managed care plans. The study also sought to elucidate the pathways through which socioeconomic status (SES) affects expenditures, including preferences for health and medical care and ability to navigate the managed care system. We found that education, income, and wealth all affected medical care expenditures, although the effects of these variables differed across expenditure categories. Moreover, the effects of these SES variables were much smaller than the effects found in earlier studies of fee-for-service Medicare. The pathway variables also were associated with expenditures. Accounting for the pathways through which SES affects expenditures narrowed the effect of SES on expenditures; however, the change in the estimates was very small.

Comparing the urinary pancreolauryl ratio and faecal elastase-1 as indicators of pancreatic insufficiency in clinical practice

BACKGROUND

The urine pancreolauryl ratio (uPLR) and, more recently, the faecal pancreatic elastase-1, are widely used for the noninvasive diagnosis of exocrine pancreatic insufficiency. Both tests have previously been validated against 'gold standard' tests of pancreatic function, but their use in a clinical setting has never been directly compared.

METHODS

We performed a comparative study of the pancreolauryl ratio (PLR) and the faecal elastase-1 (FE-1) test in patients with a clinical suspicion for pancreatic insufficiency. The results were compared with the clinical response to pancreatic enzyme supplementation using pre-defined criteria.

RESULTS

Forty-five patients were enrolled in the study and 33 were given a trial of pancreatic enzyme supplementation. Twenty-four out of these 33 showed a positive clinical response to enzyme supplements. Of the 24 responders, 19 had positive FE-1 (<200 microg/g faeces), but only 12 had a positive uPLR (<20). There was a significant correlation between the FE-1 result and clinical response to enzyme supplements (p = 0.01), but not between the PLR and clinical response (p = 0.15).

CONCLUSIONS

FE-1 is a simpler test for the patient to perform and more accurately predicts the response to pancreatic enzyme supplementation in patients with chronic, unexplained diarrhoea with a clinical suspicion of pancreatic insufficiency than the PLR. This makes the FE-1 of greater use in clinical practice than the PLR.

Using contingent choice methods to assess consumer preferences about health plan design

INTRODUCTION

American insurers are designing products to contain health care costs by making consumers financially responsible for their choices. Little is known about how consumers will view these new designs. Our objective is to examine consumer preferences for selected benefit designs.

METHODS

We used the contingent choice method to assess willingness to pay for six health plan attributes. Our sample included subscribers to individual health insurance products in California, US. We used fitted logistic regression models to explore how preferences for the more generous attributes varied with the additional premium and with the characteristics of the subscriber.

RESULTS

High quality was the most highly valued attribute based on the amounts consumers report they are willing to pay. They were also willing to pay substantial monthly premiums to reduce their overall financial risk. Individuals in lower health were willing to pay more to reduce their financial risk than individuals in better health.

DISCUSSION/CONCLUSION

Consumers may prefer tiered-benefit designs to those that involve overall increases in cost sharing. More consumer information is needed to help consumers better evaluate the costs and benefits of their insurance choices.

Subsidies and the demand for individual health insurance in California

OBJECTIVE

To estimate the effect of changes in premiums for individual insurance on decisions to purchase individual insurance and how this price response varies among subgroups of the population.

DATA SOURCE

Survey responses from the Current Population Survey (http://www.bls.census.gov/cps/cpsmain.htm), the Survey of Income and Program Participation (http://www.sipp.census.gov/sipp), the National Health Interview Survey (http://www.cdc.gov/nchs/nhis.htm), and data about premiums and plans offered in the individual insurance market in California, 1996-2001.

STUDY DESIGN

A logit model was used to estimate the decisions to purchase individual insurance by families without access to group insurance. This was modeled as a function of premiums, controlling for family characteristics and other characteristics of the market. A multinomial model was used to estimate the choice between group coverage, individual coverage, and remaining uninsured for workers offered group coverage as a function of premiums for individual insurance and out-of-pocket costs of group coverage.

PRINCIPAL FINDINGS

The elasticity of demand for individual insurance by those without access to group insurance is about -.2 to -.4, as has been found in earlier studies. However, there are substantial differences in price responses among subgroups with low-income, young, and self-employed families showing the greatest response. Among workers offered group insurance, a decrease in individual premiums has very small effects on the choice to purchase individual coverage versus group coverage.

CONCLUSIONS

Subsidy programs may make insurance more affordable for some families, but even sizeable subsidies are unlikely to solve the problem of the uninsured. We do not find evidence that subsidies to individual insurance will produce an unraveling of the employer-based health insurance system.

Managing care: utilization review in action at two capitated medical groups

Despite widespread concern about denials of coverage by managed care organizations, little empirical information exists on the profile and outcomes of utilization review decisions. This study examines the outcomes of nearly a half-million coverage requests in two large medical groups that contract with health plans to deliver care and conduct utilization review. We found much higher denial rates than those previously reported. Denials were particularly common for emergency care and durable medical equipment. Retrospective requests were nearly four times more likely than prospective requests were to be denied, and when prospective requests were denied, it was more likely because the service fell outside the scope of covered benefits than because it was not medically necessary.

Employment Transitions And Continuity of Health Insurance: Implications For Premium Assistance Programs

We use data from two nationwide panel surveys to explore whether premium assistance programs can provide stable insurance for low-income children. We estimate that low-income children who are newly enrolled in an employer-group plan would keep that coverage longer than similar children keep newly acquired public insurance. We conclude that group coverage could provide a source of insurance for eligible low-income children that is more stable than public insurance. However, only one-third of low-income uninsured children have access to group insurance, and most low-income children with access to a group plan are enrolled in it. Thus, premium assistance programs are difficult to target effectively, and other programs are necessary to reach the majority of uninsured children.

Practice characteristics and HMO enrollee satisfaction with specialty care: an analysis of patients with glaucoma and diabetic retinopathy

BACKGROUND

The specialist's role in caring for managed care patients is likely to grow. Thus, assessing the correlates of patient satisfaction with specialty care is essential.

OBJECTIVE

To examine the association between characteristics of eye care practices and satisfaction with eye care among working age patients with open-angle glaucoma (OAG) or diabetic retinopathy (DR). SUBJECTS/STUDY SETTING: A total of 913 working age patients with OAG or DR enrolled in six commercial managed care health plans. The patients were treated in 144 different eye care practices.

STUDY DESIGN

We used a patient survey to obtain information on patient characteristics and satisfaction with eye care, measured by scores on satisfaction subscales of the 18-item Patient Satisfaction Questionnaire. We used a survey of eye care practices to obtain information on practice characteristics, including provider specialties, practice organization, financial features, and utilization and quality management systems. We estimated logistic regression models to assess the association of patient and practice characteristics with high levels of patient satisfaction.

PRINCIPAL FINDINGS

Treatment in a practice with a glaucoma specialist (for OAG patients) or a retina specialist (for DR patients) was associated with higher satisfaction, whereas treatment in a practice that obtained a high proportion of its revenues from capitation payments or in a group practice where providers obtained a high proportion of their incomes from bonuses was associated with lower satisfaction.

CONCLUSIONS

Many eye care patients prefer to be treated by specialists with expertise in their conditions. Financial arrangement features of eye care practices also are associated with patient satisfaction with care. The most likely mechanisms underlying these associations are effects on provider behavior and satisfaction, which in turn influence patient satisfaction. Managed care plans and provider groups should aim to minimize the negative impact of managed care features on patient satisfaction.

Patterns of care for open-angle glaucoma in managed care

OBJECTIVES

To describe patterns of care for primary open-angle glaucoma (POAG) and assess conformance with the American Academy of Ophthalmology's Preferred Practice Pattern (PPP).

METHODS

We obtained administrative, survey, and eye care records data on 395 working-age patients with POAG enrolled in 6 managed care plans between 1997 and 1999. We assessed processes of care at the initial and follow-up visits, control of intraocular pressure (IOP), intervals between visits and visual field tests, and adjustments in therapy.

RESULTS

We found high rates of performance on most recommended processes during initial evaluations, although only 53% of patients received an optic nerve head photograph or drawing and only 1% had a target IOP level documented. Recommended processes were performed at 80% to 97% of follow-up visits. Using loose criteria for control, IOP was controlled in 66% of follow-up visits for patients with mild glaucoma and 52% of visits for patients with moderate to severe glaucoma. Intervals between visits and visual field tests were generally consistent with PPP recommendations. Adjustments in therapy were more likely with worse control of IOP, although adjustments occurred in only half of visits where the IOP was 30 mm Hg or higher.

CONCLUSIONS

Our study suggests that, in many respects, patients with POAG are receiving care that is consistent with the PPP. However, care is falling short on several key aspects, and POAG may be undertreated relative to standards for IOP control established in recent clinical trials.

Health insurance for workers who lose jobs: implications for various subsidy schemes

A number of proposals have been made to help laid-off workers purchase health insurance. We use data from the 1996 Medical Expenditure Panel Survey to profile the insurance status of workers who left a job. Our descriptive analysis suggests that it might be difficult to design policies that target those who would otherwise be uninsured and that large subsidies might be needed to help laid-off workers.

Does an exercise and incontinence intervention save healthcare costs in a nursing home population?

OBJECTIVES

To determine whether an intervention that combines low-intensity exercise and incontinence care offsets some of its costs by reducing the incidence of selected health conditions in nursing home residents.

DESIGN

Randomized, controlled trial with the incidence and costs of selected, acute conditions compared between a 6-month baseline and an 8-month intervention phase.

SETTING

Four nursing homes.

PARTICIPANTS

One hundred ninety incontinent, long-stay nursing home residents.

INTERVENTION

Low-intensity, functionally oriented exercise and incontinence care were provided every 2 hours from 8:00 a.m. to 4:00 p.m. for 5 days a week for 8 months.

MEASUREMENTS

Predefined acute conditions hypothesized to be related to physical inactivity, incontinence, or immobility were abstracted from residents' medical records by blinded observers during a 6-month baseline period and throughout the 8-month intervention. Conditions included those in the dermatological, genitourinary, gastrointestinal, respiratory and cardiovascular systems; falls; pain; and psychiatric and nutritional disturbances. Costs were determined using Current Procedural Terminology Center and Medicare allowable cost reimbursement at a rate of 80%.

RESULTS

The intervention group had significantly better functional outcomes than the control group (strength, mobility endurance, urinary and fecal incontinence) and a reduction of 10% in the incidence of the acute conditions, which was not significant. There were no significant differences between groups in the cost of assessing and treating these acute conditions between baseline and intervention.

CONCLUSION

The intervention, which is consistent with federal and clinical practice guidelines, significantly improved functional outcomes but did not reduce the incidence and costs of selected acute health conditions. The cost of implementing these labor-intensive interventions for frail nursing home residents will have to be justified based on functional and quality-of-life outcomes and are unlikely to be offset by savings in medical care costs in this population.

Trends And Variability In Individual Insurance Products In California

This paper examines recent trends in benefits and premiums for individual health insurance products purchased by Californians. There is much variability in the coverage available in the individual insurance market, with correspondingly wide variability in premiums. Despite concerns about increased consumer cost sharing, the average share of health spending covered by these products has remained constant between 1997 and 2002. Whether this trend can continue in the face of higher health costs is unclear.

Racial and ethnic differences in public and private medical care expenditures among aged Medicare beneficiaries

This study examines the current allocation of medical care expenditures among non-Hispanic white, non-Hispanic black, and Hispanic seniors who are Medicare beneficiaries. Analyses of both "need-based" and "demand-based" perspectives found that white, black, and Hispanic seniors in similar health had similar total annual expenditures for medical care. The groups did, however, differ substantially in the distribution of expenditures between public and private sources of payment. Notably, racial and ethnic differences in public and private expenditures all but vanished when socioeconomic variables and health insurance coverage were included in the analyses. The findings suggest that public sources of payment for medical care services, especially public supplementary coverage have helped to eliminate racial and ethnic gaps in expenditures.

Medicare calibration of the clinically detailed risk information system for cost

The clinically detailed risk information system for cost (CD-RISC) contains definitions for several hundred severity-adjusted conditions that can be used to predict future health care costs. We develop a prospective Medicare CD-RISC model using a 5-percent sample of Medicare beneficiaries and data that contain 1996 diagnostic information and 1997 annualized costs. The CD-RISC model has a hierarchical structure that implies that only the most expensive condition-severity variable within a body system affects payments. This minimizes incentives to game the system by entering multiple related codes for the same condition. The R2 for the CD-RISC model is 11 percent.