What health plans do people prefer? The trade-off between premium and provider choice.

Within a healthcare system with managed competition, health insurers are expected to act as prudent buyers of care on behalf of their customers. To fulfil this role adequately, understanding consumer preferences for health plan characteristics is of vital importance. Little is known, however, about these preferences and how they vary across consumers. Using a discrete choice experiment (DCE) we quantified trade-offs between basic health plan characteristics and analysed whether there are differences in preferences according to age, health status and income. We selected four health plan characteristics to be included in the DCE: (i) the level of provider choice and associated level of reimbursement, (ii) the primary focus of provider contracting (price, quality, social responsibility), (iii) the level of service benefits, and (iv) the monthly premium. This selection was based on a literature study, expert interviews and focus group discussions. The DCE consisted of 17 choice sets, each comprising two hypothetical health plan alternatives. A representative sample (n = 533) of the Dutch adult population, based on age, gender and educational level, completed the online questionnaire during the annual open enrolment period for 2015. The final model with four latent classes showed that being able to choose a care provider freely was by far the most decisive characteristic for respondents aged over 45, those with chronic conditions, and those with a gross income over €3000/month. Monthly premium was the most important choice determinant for young, healthy, and lower income respondents. We conclude that it would be very unlikely for half of the sample to opt for health plans with restricted provider choice. However, a premium discount up to €15/month by restricted health plans might motivate especially younger, healthier, and less wealthy consumers to choose these plans.

Any qualified provider: a qualitative case study of one community NHS Trust's response.

OBJECTIVE: To examine how those managing and providing community-based musculoskeletal (MSK) services have experienced recent policy allowing patients to choose any provider that meets certain quality standards from the National Health Service (NHS), private or voluntary sector. DESIGN: Intrinsic case study combining qualitative analysis of interviews and field notes. SETTING: An NHS Community Trust (the main providers of community health services in the NHS) in England, 2013-2014. PARTICIPANTS: NHS Community Trust employees involved in delivering MSK services, including clinical staff and managerial staff in senior and mid-range positions. FINDINGS: Managers (n=4) and clinicians (n=4) working within MSK services understood and experienced the Any Qualified Provider (AQP) policy as involving: (1) a perceived trade-off between quality and cost in its implementation; (2) deskilling of MSK clinicians and erosion of professional values; and (3) a shift away from interprofessional collaboration and dialogue. These ways of making sense of AQP policy were associated with dissatisfaction with market-based health reforms. CONCLUSIONS: AQP policy is poorly understood. Clinicians and managers perceive AQP as synonymous with competition and privatisation. From the perspective of clinicians providing MSK services, AQP, and related health policy reforms, tend, paradoxically, to drive down quality standards, supporting reconfiguration of services in which the complex, holistic nature of specialised MSK care may become marginalised by policy concerns about efficiency and cost. Our analysis indicates that the potential of AQP policy to increase quality of care is, at best, equivocal, and that any consideration of how AQP impacts on practice can only be understood by reference to a wider range of health policy reforms.

[Market Concentration in the Statutory Health Insurance of Germany since the Introduction of Free Choice of Sickness Funds]. / Marktkonzentration in der Gesetzlichen Krankenversicherung seit Einführung der freien Kassenwahl.

Background: The expansion of trust law to the German statutory health insurance (SHI) and the declining numbers of sickness funds suggest a strong concentration process in the German SHI market. The paper examines the level and development of market concentration since the introduction of the free choice of sickness funds in 1996. Data: The study is based on a dataset containing information on membership, contribution rate, openness, area of activity and legal successor for all sickness funds in the period from 1996 to 2013. Methods: Market concentration is measured by the concentration rate (cumulative market share of the largest market participants) and the Herfindahl-Hirschman index (HHI). In addition, the change in the HHI is also disaggregated into 3 factors: opening, switching and fusion of sickness funds. Results: Concentration rate and HHI decreased significantly between 1996 and 2008 due to opening of former closed sickness funds and a switching behaviour from large to small funds. The SHI Competition Enhancement Act of 2007 led to a turnaround. The reform permitted cross-type mergers and introduced a completely new system of budget allocation with the central health fund. The latter put an end to the growing membership of small funds due to adverse selection processes. As a result, market concentration in the German SHI rises. Although recent mega-mergers were uncritical for nationwide competition, the study already indicates the risk of market dominance on the regional level.

Payment policy and inefficient benefits in the Medicare+Choice program.

We investigated whether constraints on premium rebates by health plans in the Medicare+Choice program result in inefficient benefits. Since relationships between revenue and benefits could be confounded by unobserved variation in the cost of coverage, we took advantage of natural experiment that occurred following passage of the Benefits Improvement and Protection Act of 2000. Our findings indicate that benefits in zero premium plans were more sensitive to changes in payment rates than were benefits in plans that charged nonzero premiums. These results strongly suggest that current Medicare policy induces plans to offer benefits that are not valued by enrollees at or above their cost.

Finance issue brief: point of service: year end report-2003.

A point-of-service (POS) option is a type of plan offered by managed care organizations (MCOs), including health maintenance organizations (HMOs), that allows people who are willing to pay higher out-of-pocket costs to see out-of-plan providers. Mandating a point-of-service option essentially eliminates the use of closed-panel HMOs. This issue brief addresses only bills that mandate managed care plans to offer a point-of-service option.

Finance issue brief: any willing provider: year end report-2003.

Today, almost half the states have laws obligating managed care organizations (MCOs) such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs) to contract with any willing health care provider. Although most provisions are limited to pharmacies or pharmacists, several states have adopted broad provisions applying to hospitals, physicians, chiropractors, pharmacists, podiatrists, therapists and nurses.

Finance issue brief: point of service: year end report-2002.

A point-of-service (POS) option is a type of plan offered by managed care organizations (MCOs), including health maintenance organizations (HMOs), that allows people who are willing to pay higher out-of-pocket costs to see out-of-plan providers. Mandating a point-of-service option essentially eliminates the use of closed-panel HMOs. This issue brief addresses only bills that mandate managed care plans to offer a point-of-service option.

Any-Willing-Provider laws: their financial effect on HMOs.

Any-Willing-Provider (AWP) legislation requires that health plans accept any health care provider who agrees to conform to the plan's conditions, terms, and reimbursement rates. Many states have adopted such legislation, raising questions about its effect on the managed care market. Those favoring this legislation argue that it will reduce restrictions on choice of provider, while opponents argue that it will reduce competition by increasing administrative and medical costs for managed care plans. Using cross-sectional time-series data for the period 1992-1995 (the period during which many of these laws were enacted), this study investigates the effect that these laws have on HMO financial performance. Our results show that "all-provider" AWP laws have a very limited effect on the financial performance measures we examine. "Pharmacy" AWP laws have a more significant effect, but neither type of law appears to affect the overall profitability of HMOs.

Medical care expenditures under gatekeeper and point-of-service arrangements.

OBJECTIVE: To compare expenditures for medical care in a closed-panel gatekeeper HMO and an open-panel point-of-service (POS) plan that share the same provider network. DATA SOURCE/STUDY SETTING: The two study HMOs are distinct product lines of a single managed care organization; both plans are commercial products. We used administrative data files from the study plans for 1994-95 to assess differences in total medical care expenditures and spending for five categories of services: physician services, inpatient hospital services, outpatient hospital services, prescription drugs, and other services. STUDY DESIGN: Multivariate analyses were based on the two-part model of the demand for medical care. The dependent variables in these models were expenditures in each of the five categories of services, and the independent variables were indicator variables for plan type and visit copayments, prescription drug copayment, distance to the nearest primary care physician (PCP), demographic characteristics, chronic conditions, area characteristics, and entry/exit indicator variables. PRINCIPAL FINDINGS: Total expenditures for medical care ranged from equal in both plans to 7 percent higher in the gatekeeper HMO (p < .10), depending on the copayments for physician visits. Expenditures were not higher in the POS plan for any of the five categories of services. These findings were robust to a wide range of sensitivity analyses. CONCLUSIONS: Direct patient access to specialists in POS plans does not necessarily result in higher medical care expenditures. When POS enrollees are required to choose PCPs, patient cost sharing, physician financial incentives, and utilization review may control expenditures without constraining direct patient access to providers.

A case study of point-of-service medical use in a managed care plan.

This study examines the extent of point-of-service use in a managed care plan using 1990 and 1991 proprietary claims data (excluding pharmacy claims) from a large, well-established individual practice association with a point-of-service option. Results show that approximately 12 percent of all claims were made by out-of-network providers, representing about 9 percent of the dollar value of all claims. This is about $131 per enrollee per year. While younger enrollees (i.e., 6-24 years of age) use fewer medical resources than do older enrollees, they tend to receive a greater share of their medical services from out-of-network providers. There is little difference between point-of-service use by males and females. Mental illness is the most common diagnosis for out-of-network claims, accounting for about 25 percent of the dollar value of out-of-network claims. Ninety-six percent of the out-of-network claims for this diagnosis category were made by providers with a specialty in psychiatry.