Consumers spend 16 times as long choosing a computer as they do selecting a health plan for themselves and their family. And it should not be a big surprise.
For decades, nearly all insurance companies offered similar choices of in-network physicians and hospitals. And as a result, plans differed only minimally in clinical quality, access and service. And even when clinical outcomes varied, consumers had no easy way to access comparative data.
So if the options available are largely the same, except for minor variations in the size of co-pays and deductibles, and the information on outcomes is difficult to obtain, then why invest time comparison-shopping?
Just select the same plan this year as last after briefly making sure the price difference isn’t too great to ignore. Why not?
What’s forcing insurers to change
But that is changing. Downward pressures on price, the introduction of the Affordable Care Act (ACA) and increased data transparency are forcing insurance companies to pursue new strategies. Some plans are responding to these changes by focusing on opportunities to negotiate for the lowest unit prices, while others are looking to create increasingly integrated systems of medical care. But both have proven more difficult to accomplish than expected.
Plans in the first category have narrowed their networks by eliminating as many as a third of the doctors and hospitals offered. But they are running into resistance from consumers who can’t be sure when they sign up which physicians and hospitals will be available. The result has been a series of lawsuits, increased requirements from several state-run exchanges and a call for new regulations by Medicare.
Plans pursuing the second option are learning that it is easier to create accountable care organizations than to get them to perform at the highest level. And because patients are becoming more sophisticated, they can now obtain information on clinical outcomes by payor through five-star public ratings from independent organizations like Medicare and the National Committee for Quality Assurance (NCQA), and increasingly are able to separate advertising hype from objective data.
In the future, comparison shopping will grow easier as the public exchanges expand. Plans that want to be offered through these exchanges must offer the same coverage, and in many states will provide information on price, quality and enrollee satisfaction. Through transparency of data, consumers can differentiate the best from the rest. And as a consequence, consumers are increasingly willing to shift from one insurance company to another. Recently, United Health has threatened to pull out of the exchanges, citing this consumer behavior as a reason for its inability to compete successfully.
In the past, consumers had little control, but as insurance becomes increasingly easy to understand and as people have more choices, they will be able to figure out and select the medical care best for themselves and their families.
Why the delivery system will become even more important in the future
Until recently, insurance companies could be profitable through “slicing and dicing” the risk pool. By offering products with low price and minimal coverage, they could attract the healthy, and by rejecting applicants with pre-existing diseases, they could eliminate the sick. The ACA made both of these practices illegal.
And data on performance is becoming easier to obtain. Recently, the NCQA rated 1,300 plans across the country, using a five-star rating system similar to that utilized by the Centers for Medicare and Medicaid Services for Medicare Advantage Plans.
And with rather few exceptions, the five-star programs were those that included high performing multi-specialty medical groups with an affiliated, integrated hospital system.
And the gap between those programs that were rated five-star and those with lower scores is likely to increase in the future.
Five factors account for this emerging trend.
Health care is more complex today than in the past
As the problems patients experience become more complex, the best outcomes reflect the excellence of multi-specialty teams of physicians and other health professionals, rather than the reputation of a single doctor. Dr. Atul Gawande described this shift in a New Yorker article as the power of the “pit crew” versus that of the “cowboy.” Choosing a personal physician or specialist who is well trained and highly regarded by peers and patients continues to be important, of course. But advances in medical science and modern diagnostic and therapeutic technologies have narrowed the aforementioned gap between the best and the rest. And even for patients needing sophisticated operative procedures, improvements in anesthesia and surgical technique have enabled most surgeons to perform operations with minimal and infrequent complications.
The opportunities to maximize health and increase longevity for people through prevention are increasing.
The greatest opportunities today are not heroic mid-crisis emergency interventions, but, rather, through prevention and avoidance of complications. And integrated delivery systems are best structured for success. They have comprehensive information available at every visit, and coordinate care through a shared Electronic Health Record (EHR). As a result, they achieve better results in areas ranging from control of hypertension to patient safety to the management of cardiovascular disease and diabetes. Compared to patients receiving community care, some multi-specialty medical groups have lowered the chances of their patients dying from heart attacks by 30%, reduced the likelihood of their patients dying from systemic infection by 40%, and controlled hypertension 40% better than the national average, significantly lowering the incidence of strokes and kidney failure for the people they treat.
Convenient access and personalized service will become even more important in the future
Individuals who rarely need health care often assume they will be able to obtain timely and convenient access when they become sick. But they are mistaken. According to rankings of health plans by J.D. Powers and Associates, patient satisfaction varies hugely, even within the same geography. As people evolve from “passive patient” to “engaged consumer,” they will rely on independent third-party evaluations to make choices in health care, just as they do today in booking a hotel room or an airline flight – or, for that matter, when they are buying a computer. And as people become increasingly stressed for time, getting care when and how they want it will grow in importance.
Without comprehensive medical information, the best quality outcomes can’t be achieved
When most Americans show up in an Emergency Room on a Saturday night, their medical information is simply unavailable. And as a result, the physicians caring for them waste valuable time tracking down important information and prior test results. And when they contact one doctor’s office after another, they risk medical error since the treating physician can’t be sure he knows all of the diagnoses that have been made and medications prescribed. And of course, when primary care and specialty physicians don’t share an EHR, patients are forced to undergo redundant testing with increased out-of- pocket expenses.
Mobile technology is becoming increasingly important in health care
As a recent Nielson survey showed, most patients are unaware of the possibilities today. They don’t realize that others use 21st-century technology today to send secure e-mail directly to their physicians, and interact with them through digital photography and video. They are unaware they can receive treatment faster through technology and avoid having to miss work and school. As the Millennial generation ages, the pace of change will accelerate as they demand the same convenience in their health care as the rest of their lives. And the growing incidence of chronic disease will increase the number of people needing care multiple times a month who will search out physicians that offer these conveniences.
Why people are slow to switch insurers
If the advantages of integrated, technologically enabled care are so great, why do most people make the same health insurance choices year after year? And if the data on outcomes are so clear, why don’t they make logical choices? The answers can be found in the superb book, Thinking, Fast and Slow, by the Nobel Prize-winning researcher Daniel Kahneman:
1. Once people make a choice, they are inclined to defend it as correct, even in the face of contradictory data. Having already selected a carrier, they are biased to repeat the same choice (unless they had a terrible experience). After all, changing would imply they had chosen inferior health care for themselves and their families.
2. People overrate their ability to choose intelligently. Asked how they stack up in problem-solving and analytic skills, 90% rate themselves in the top half – obviously a mathematical impossibility. Often they value their own intuition above independent third-party ratings.
3. People rely on recommendations from friends and colleagues when they first select a plan. When they consider changing, they once again look at the choices of the same people around them, and in spite of the circular logic, go along with “the herd.” It is psychologically safer to be wrong along with others, than to stand out as the only one making a different choice.
How to get the best medical care for yourself and your family
1. Use the objective data about health care outcomes that exist, including the ratings available through the NCQA, Medicare and some of the state exchanges.
2. Recognize that the difference in nationally reported results is significant. It translates into a lower chance of dying and a higher probability of obtaining care in the most convenient way for you and your family.
3. Remember that the best clinical outcomes come from how medical care is structured and the availability of medical information at every point of contact.
4. Choose an insurance plan that provides access to a high-performing multi-specialty medical group and integrated hospital system, and select one as your health care option.
5. Don’t settle for less convenience in your health care than you would in your travel, financial and retail activities. Be sure you can make appointments on-line, send a secure e-mail to your physicians and access your personal health information 24/7.
The choices you make annually about health insurance are more important than the brand of computer you purchase. Invest, at least, the same amount of time in selecting the insurance plan that will cover you and the delivery system that will provide your medical care. Remember that your life could depend on what you decide.
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