Consumers in the Dark on Health Care Prices and Quality

By: Amit Rao

A reason the Clear Choices Campaign came together is because we believe it is wrong that consumers often lack basic information about costs and quality when making health care decisions. The latest Kaiser Family Foundation (KFF) Health Tracking Poll paints a scary picture of just how widespread this information disconnect really is, and stresses the need for reforms that improve transparency on health care prices, quality, and safety. KFF surveyed consumers’ personal health care experiences and perceptions among a nationally representative sample of 1,506 adults from April 8-14, 2015. The highlights of the survey are outlined below and point to the pressing need to enact policy changes that leverage existing data and technologies to improve health care transparency.

Limited Comparative Information

Consumers have very little information to help them compare different health care options. Overall, KFF found that 31 percent of consumers report seeing information comparing doctors, hospitals, and health insurance plans in the past 12 months. However, when asked specifically about information comparing prices or quality across plans and providers, fewer than 1 in 5 report seeing such information.

When more than 80 percent of consumers lack comparative information on prices and quality, it is not surprising that consumers often make poor decisions that increase health costs.

Finding Information on Costs Even More Difficult

Unfortunately, the problem is even worse for consumers seeking upfront information about the costs for their particular care. KFF reports that nearly two-thirds (64 percent) of consumers report difficulties in finding out how much medical treatments and procedures provided by different doctors or hospitals would cost them. These difficulties are exacerbated for the uninsured, of which three-quarters (76 percent) say it is difficult to find out how much medical treatments would cost.

The pressure of rising health costs and the trend towards more consumer out-of-pocket spending creates an unprecedented need for greater health care transparency. Increased cost sharing, including ACA’s propagation of high deductibles, means consumers need shopping tools now more than ever. For example, the average deductible for a 2015 ACA exchange silver plan is $5,800 for a family, or about 10 percent of a typical family’s income. Just meeting obligations under such a deductible forces families to shop for value. Yet consumers cannot be expected to make better quality- and cost-sensitive decisions about their care if they remain in the dark about the value offered by potential health providers and insurance plans.

This problem is a driving force behind the Clear Choices Campaign. Americans need better policies that help shed light on prices, quality, and safety in our health care system.

Clear Choices Blog: J.D. Power Survey Highlights Choice and Cost Sensitivity of Consumers Seeking Coverage through ACA's Insurance Exchanges

By: Amit Rao, Clear Choices, 5/4/15

On April 23, 2015, J.D. Power released the 2015 HIX Study, emphasizing the importance of health plan information, choice, and costs for the satisfaction of Affordable Care Act (ACA) exchange plan enrollees. The survey collected responses from approximately 3,000 consumers on the insurance exchanges, including both new enrollees and re-enrollees, from December 9, 2014, through February 24, 2015.

The key points of interest from the survey are outlined below.

More Information Improves the Enrollment Process

J.D. Power reports that new enrollee satisfaction with the exchange enrollment process increased substantially in 2015 from 2014, with exchange plans generating equal or higher levels of member satisfaction than non-exchange health coverage.

  • Specifically, enrollment satisfaction among new enrollees grew by 55 points from 615 in 2014 to 670 in 2015 (on a 1,000-point scale).
  • Among re-enrollees, satisfaction levels were even higher, at 731 points.

Why did satisfaction with the enrollment process improve? J.D. Power found that satisfaction with enrollment was driven primarily by the “variety of information available about health insurance plan choices.” In fact, the survey found that re-enrollees who did not auto re-enroll primarily used online research while shopping—particularly health plan websites (58 percent), general online searches (51 percent) and online consumer reviews (29 percent).

These findings show yet again that when health plans provide more information, consumers respond positively, underscoring the importance of health plan accessibility.

Choice and Cost Drive Exchange Plan Satisfaction

What about ACA enrollee satisfaction with their actual health plans? How does satisfaction with exchange plans compare to other coverage? J.D. Power reports that consumer satisfaction with the marketplace plans is 696. Interestingly, that number is 17 points higher than the satisfaction level reported (679) in J.D. Power’s Member Health Plan Study (MHPS) survey of consumers in non-exchange, mostly employer-based plans.

There are two key insights from this difference in consumer satisfaction among exchange and traditional health plan enrollees.

  1. The availability of health plan choice matters for consumers. J.D. Power found that when comparing satisfaction among marketplace plan members with just those in traditional, employer coverage who were offered multiple plan options, the 17-point gap disappeared and both groups of enrollees reported an overall satisfaction level of 696.
  2. J.D. Power also underlined that health plan cost is, “the most influential attribute driving satisfaction among marketplace plan members.”

The survey quoted Rick Johnson, senior director of the healthcare practice at J.D. Power, who explained:

“Marketplace shoppers are very cost-sensitive. Unlike many traditional health plan members, who are often tied to a single employer benefit offering, Marketplace members have an option to switch plans annually, allowing them to shop for either the most affordable or the most valuable plan. Plan providers need to demonstrate the value of their plan by clearly communicating coverage and benefits.

As health industry stakeholders and policymakers continue to seek reforms to improve the health care system, they should pay attention to how consumers are already responding positively when given more information about health plan choices and costs.

Washington Times: Health care coalition demands better data from Obamacare

By: Tom Howell Jr., 4/9/15

Insurers, a tech company and advocacy groups banded together Thursday to demand that Obamacare provide better data to consumers on price and quality, saying it’s easier to compare hotel rooms than it is to choose between health care plans.

With the U.S. poised to spend roughly $40 trillion on health care over the next decade, the “Clear Choices” initiative said it wants consumers to have more control over that spending so that they know if they’ve chosen the best doctor for their needs, or how much a major procedure will cost.

“Consumers have the right to know what they’re buying. It’s pretty simple,” said Joel White, president of the Council for Affordable Coverage.

The group, which counts major insurer Aetna and seniors advocacy group AARP among its members, said it hopes to join a growing effort on Capitol Hill to make claims data widely accessible, particularly to the analysts who crunch the data and drive changes in the marketplace.

Read more>>

Clear Choices Officially Launches- April 9th

The Clear Choices Campaign officially launched the afternoon of Thursday, April 9th, with a briefing on Capitol Hill. Speakers included:

  • Andrew Scholnick, Senior Legislative Representative at AARP;
  • Christine Riedl, Executive Director of National Accounts Product Strategy & Management at Aetna;
  • Sally Greenberg, Executive Director of the National Consumers League;
  • Steve Noyes, Vice President of Public Affairs at Novo Nordisk;
  • Heather Ashby, Deputy Director of Advocacy at the Ambulatory Surgery Center Association; and
  • Joel White, President of Clear Choices and the Council for Affordable Health Coverage.

The Campaign is comprised of 15 employer, insurer, consumer, life science and provider organizations to promote transparency in health care by changing the laws and regulations that inhibit the use of information in health care.

Congress should act quickly to implement reforms designed to make healthcare markets more competitive and consumer-friendly before soaring health costs do irreparable harm. Rest assured, we will be working to do our part. If you'd like more information on how to join the Campaign, click here.