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Role of Consumers

Role of Consumers. U.S. Health Care System. Perfect competition assumes consumers and producers have perfect information. What’s so good about perfect competition anyway?. No standardization in measures No business case for quality. Provider Universe Tomorrow. Better Quality Can Cost Less.

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Role of Consumers

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  1. Role of Consumers U.S. Health Care System

  2. Perfect competition assumes consumers and producers have perfect information. What’s so good about perfect competition anyway?

  3. No standardization in measures No business case for quality Provider Universe Tomorrow Better Quality Can Cost Less LOW Provider Universe Today Efficiency HIGH LOW HIGH Effectiveness of Care You can’t have competition without an adequate supply of high performing providers…and that won’t happen if we don’t realign incentives.

  4. The Consumer • The word consumer has only recently come into use in discussing health care. • Why is the term patient more commonly used and what does it tell us about the health care system?

  5. Patients • Dual Roles of Consumer and Patient • Focus on the Patient • Assuming Illness • Possibly Distress or Discomfort • Uncertainty

  6. The Patient • Characteristics of the Sick Person • Impaired Functioning --Role Limitation • Needs help--dependent--passivity • Fearful • May not exercise usual judgment • Lacks information to make “good” choices

  7. Consumers and the Economic Perspective • Health Insurance and Many Health Care Services are Bought and Sold in Markets. • Thus the term consumer is relevant with many of its commercial connotations. • Economics’ two basic questions: (marginal analysis) • What is it worth to me? • What do I have to give up to get it?

  8. The Economic Perspective • A very smart, quick thinking calculator will • Choose whatever is worth more than it costs • Reject what is not • Consider the overall budget • Implication: When the cost of a service rises one will buy less. Supporting evidence: RAND Health Insurance Experiment (RHIE).

  9. Economic Perspective Continued • This requires knowing a lot about what a product can do for you and understanding what it will cost you. • We are pretty well positioned to make these judgments about many goods and services • Fruit • Hair styling • Computers • But health care services?

  10. Questions to Consider • If you are sick, how clearly are you thinking, are you likely to shop around, how do you perceive professionals and family? • If you are healthy and are choosing a health plan or a doctor • What do you look for? • How do you find out about plans and physicians? • What about price?

  11. Consumer-Patient Decision Making • Key Choices • What Health Plan • Whether to use services • Provider Choice • Components of Consumer Decision Making • What does a consumer want? • What does a consumer know? • What does a consumer want to know? And need to know?

  12. Health Plan Choices • What are key factors in choosing among plans? • Technical Quality of Care • Covered Benefits • Satisfaction of Enrollees • Price • Convenience (short waits, few hassles) • MD/ Hospital Choice

  13. What Do Consumers Know About Health Plans? • National Survey in 1995 (Health Affairs, Winter,1996) • 36% of respondents say they have a good understanding of plan differences overall. • 63% claim not to have a good understanding. • HMO enrollees respond that they have a good understanding more often, 40% of the time. • Most people (65% to 77%) know which types of plans tend to be more restrictive.

  14. What Sources of Information are Most Important • Most Trusted Sources of Information: Doctors, Friends and Family, Employee Benefits Staff • Least Trusted Sources: Insurance Companies/MCOs, Media • 52% of respondents said they would choose a plan suggested by friends/family over one rated higher by experts

  15. Provider Choice • Consumers Typically Want • A provider with a good reputation • A provider who is accessible and available • A provider who treats them with respect and dignity • A provider that has the appearance of a well run practice • A provider who is technically excellent

  16. Sources of Information on Providers • Most people have not seen any information on the quality of providers • 76% would choose a surgeon they are familiar with over one more highly rated • 72% would choose a familiar hospital over a more highly rated hospital

  17. Policy Questions • What are the prospects of relying on consumer choice to promote/maintain quality? • What measures might be adopted to expand use of reliable information on quality? • What institutions in other areas offer a model?

  18. Engaging Consumers With Information Gives the consumer a high-level roll-up of the physician’s overall performance, appropriate levels of drill-down, and gives the consumer the ability to compare objective and subjective measures.

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