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

Going Boldly Where Others Have Gone Before: We CAN Make Health Insurance Easier for Consumers Lynn Quincy, Director Seminar May 30, 2017 @LynnQuincy @HealthValueHub

Yes, THAT Consumer Reports …part of Consumer Reports @HealthValueHub 2

Consumer Healthcare Engagement Points

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. @HealthValueHub 4

Choosing a Health Plan

Three “Legs” of Health Insurance Coverage @HealthValueHub Better insurance Shopping 6

Claim to understand Actually understand 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Deductible Copay Coinsurance Max Out-of-Pocket Source: Loewenstein et al., JHE, 32(5):850-862, 2013 7 @HealthValueHub Better insurance Shopping

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) Source: Consumers Union and People Talk Research, Early Consumer Testing of New Health Insurance Disclosure Forms, December 2010 8 @HealthValueHub Better insurance Shopping

Sobering data… When presented with descriptions of possible provider network features, 50% or fewer could correctly describe HMO and PPO network characteristics. Knowledge of plan types % correct What is generally true of health maintenance 49 organizations (HMOs)? What is generally true of preferred provider 23 organizations (PPOs)? In general, what type of health plan tends to give fewer 51 choices of doctors? Important: this survey also found that consumers are overconfident in their own knowledge so self-reports of confidence using health plans must be weighed appropriately. Source: data extract from AIR’s health insurance literacy measurement tool. See: 9 http://aircpce.org/health-insurance-literacy-measure-hilm-publications

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. 10 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)? @HealthValueHub Better insurance Shopping 11

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 @HealthValueHub Better insurance Shopping 13

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 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 14 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… Source: The Evidence Is Clear: Too Many Health Insurance Choices Can Impair, Not 16 Help, Consumer Decision Making , Consumers Union, 2012

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 on 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 @HealthValueHub Better insurance Shopping 17

A cognitive short-cut: Total Estimated Cost Total Premium cost + = Estimated expected out-of-pocket Cost costs 18 @HealthValueHub Better insurance Shopping

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 @HealthValueHub Better insurance Shopping 19

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. 21 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. @HealthValueHub Better insurance Shopping 22

Theoretically, consumers embrace narrow networks in order to keep costs down In controlled experiments, given accurate information, a variety of options, 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. Source: http://healthaffairs.org/blog/2014/11/13/reforming-medicare-what-does-the-public-want/ and other work by Marge Ginsburg @HealthValueHub Better insurance Shopping 23

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. @HealthValueHub Better insurance Shopping 24

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. 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 @HealthValueHub Better insurance Shopping 25

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 out-of-network provider. 26 @HealthValueHub Better insurance Shopping

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. 27 @HealthValueHub Better insurance Shopping

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 Plan Allowed Balance Charge Amount $200 Total $500 $300 Plan Pays $150 (50%) $0 Patient Pays $150 $200 28 @HealthValueHub Better insurance Shopping

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. 29 @HealthValueHub Better insurance Shopping

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 30 @HealthValueHub Better insurance Shopping