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Only One-Third of Consumers Correctly Identify Basic Managed Care Plan Features

Education Needed to Help Consumers Evaluate Access, Cost and Quality Tradeoffs

News Releases
March 12, 2001

Alwyn Cassil: (202) 264-3484

ASHINGTON, DC - Highlighting how little consumers understand about managed care, only 30 percent of consumers could correctly identify four basic health plan features regarding provider choice and access to specialists, according to a study by the Center for Studying Health System Change (HSC) published in the March/April edition of the journal Health Affairs.

The study, Do Consumers Know How Their Health Plan Works?, also underscores that many people believe their own health plan is more restrictive than is the case, especially regarding access to specialists.

The results suggest many consumers lack a basic understanding of how managed care plans operate, leaving them ill-prepared to make informed health care decisions, according to Peter J. Cunningham, Ph.D., an HSC senior researcher and lead study author.

"As employers and other purchasers urge consumers to take more responsibility for health care decisions, we have a lot of work to do to help people understand Managed Care 101, let alone more complex information about cost and quality," Cunningham said. "We have to get consumers into the game, and this study shows they need help navigating the choices available to them."

Noting the tremendous changes in health care over the last decade, HSC President Paul B. Ginsburg, Ph.D., said, "It’s not surprising that people are behind the curve. But if employers and other purchasers want consumers to shoulder more of the cost and responsibility for health care, there will need to be a lot more work done to educate and engage them."

While previous research indicates consumers generally don’t understand many of the key concepts of managed care, the results of this study indicate that this lack of understanding also applies to consumers’ own health plans. Failure to understand how their health plans work can affect people’s satisfaction and ability to access care.

The study, based on interviews with almost 11,000 privately insured people as part of the 1996-97 Community Tracking Study, compared consumers’ answers to questions about plan requirements with information obtained directly from their health plans. Researchers examined how accurately consumers report on basic plan features related to choice of providers and access to specialists, including 1) whether they must choose from a provider network; 2) whether the plan pays any of the cost of out-of-network care; 3) whether they must sign up with a primary care provider; and 4) whether they must get a referral for specialty care.

Overall, consumers were most accurate in reporting on whether their plan had a provider network and least accurate in reporting about whether referrals were required to see specialists. Only about 30 percent of consumers correctly identified all four basic plan features. About 56 percent correctly identified both network features - whether the plan has a provider network and pays any of the cost of out-of-network care - while about 49 percent correctly reported both gatekeeping features - whether the plan requires sign up with a primary care provider and referrals for specialty care.

A breakdown by percentage of consumers who correctly identified individual plan features follows:

  • Plan has a provider network - 80 percent.
  • Plan pays any cost of out-of-network care - 69 percent.
  • Plan requires sign up with a primary care provider - 73 percent.
  • Plan requires a referral for specialty care - 58 percent.

The study also shows that many people believe their plans are more restrictive than they actually are, especially regarding access to specialists.

"Consumers may delay getting care because they mistakenly believe their plan requires them to get authorization to visit a certain doctor or receive certain services," Cunningham said.

Other HSC research - Issue Brief No.35, Health Care Perceptions and Experiences, has shown that consumers’ perceptions of what kind of health plan they are enrolled in can color how they rate their health care.

A considerable body of evidence indicates that early efforts to educate consumers about health plans and quality have not been very effective. And simply giving consumers more information about plans will not necessarily improve the quality of consumer decisions. Education efforts focused on helping consumers understand the mechanics of how managed care plans operate might be more effective.

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