Health-Care Plans' Uncertain Prognosis

Unless companies find a better way to distribute information about treatment and costs, consumer-driven medical plans are no panacea

By Howard Gleckman

With many of us in the midst of signing up for next year's health insurance, an important new study warns that buying medical care is still too much like the bad old days of buying a car, when customers knew next-to-nothing about repair histories, safety records, or price. All you knew was what the dealer told you. That wasn't much, and few buyers believed it anyway.

Despite many promises that things would be different for health-care consumers, a new joint survey reports that they're not. They still can't find good information on doctors and hospitals. As a result, wary patients have little confidence in insurance companies as sources of information. Of those responding to a survey conducted by the Employee Benefit Research Institute (EBRI) and the Commonwealth Fund -- two independent policy shops -- fewer than 10% said that their plan was their most trusted source of info on docs and hospitals.

Optimists had been hoping for a different outcome from the new "consumerism" fad in health insurance. How does it work? Well, although it means higher deductibles and co-payments when you visit the doctor, it also can mean lower up-front premiums. This type of coverage encourages patients to shop more carefully. The idea was that it might help patients participate in getting a handle on exploding medical costs.


  But the grand plan isn't working, at least not yet. According to the EBRI/Commonwealth survey, only 42% of those with such consumer-driven health plans are satisfied with their insurance, far below the 63% who are pleased with traditional coverage. More troubling, those with the newer plans are less satisfied with both their choice of doctors and the quality of care than those with old-style coverage -- and that was where consumer-type plans were supposed to show their greatest benefits.

Most troubling of all is that -- so far -- all the talk of empowered consumers has been little more than gab. It turns out that hardly any of us checks the price or quality of medical care. Most patients still do little to find effective, lower-cost alternatives. "We are a long way from where we need to be," says Commonwealth senior program officer Sara R. Collins, a co-author of the study.

The high-deductible plans are driving some patients to delay or even avoid getting care. Is that good or bad? It's good if they're making well-informed and careful decisions. It's quite bad if they're simply trying to save money, without fully understanding the health consequences of their choices. While we know little about how much of each is happening, the EBRI/Commonwealth survey suggests that many consumers are flying blind into the health-care maze.


  To make people better shoppers, the insurance companies that sell these consumer-driven policies, and the corporate human-resource staffers who promote them, have promised to make available an extensive menu of Web-driven tools to help patients learn more about the most cost-effective care.

The idea: Your insurance company's Web site would report the latest about the cost and quality of local health-care providers. At the same time, you could get detailed information about a specific disease and treatment options. All this easily accessible information would be available to all members of a plan. Those with consumer-type coverage would be expected to find it most valuable, since they have more out-of-pocket expenses.

The trouble is that the marketing of consumer-driven plans is way ahead of the Web sites. Compared to almost any other consumer product, medical care remains a black box. Quality information is confusing and limited mostly to a few hospital procedures, such as heart surgery. It remains largely impossible to get Web-based info about individual physicians.

And prices? For the most part, doctors, hospitals, and insurance companies guard real, negotiated prices like the crown jewels. "We have a long way to go with actually providing information to people," says Robert M. Crane, director of the Kaiser Permanente Institute for Health Policy.


  So where do people get their information? Same place they always have: their doctor. For the most part, if your doc says you need that extra MRI, you get it -- even if you are paying. And even if you don't really need it.

There's a bit of good news in the survey. Patients in consumer-driven plans were twice as likely as those with traditional coverage to ask their doctor about less-costly drugs, and they were one-third more likely to ask about the cost of care. Still, only 44% looked to save on drug costs, and only 32% inquired about the price of procedures.

High-deductible health plans are growing rapidly, though they still cover only about 10% of individuals. They can be good news for employers, who can save premium dollars and limit other costs. Perhaps they can work for individuals as well. But until insurance plans do a better job of distributing information about price and quality, these new plans will do little more than shift costs to already hard-pressed workers.

Gleckman is a senior correspondent in BusinessWeek's Washington bureau

Edited by Beth Belton

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