As the Exchanges are being designed, we have a great opportunity to rethink how to help people choose a physician for their care, but our current mindset may get in the way of developing innovative approaches.
Under the Affordable Care Act, each state is expected to establish “health benefit exchanges” for individuals and small employers in order to “facilitate the purchase of qualified health plans.” This is consistent with the concept of health insurance exchanges that has been developed over many decades. In this model – used by many large employers as well as existing exchanges such as CBIA’s Health Connections and the Massachusetts Health Connector – the individual consumer or employee is given a choice among several health insurers.
The consumers are given information about the quality, patient satisfaction, and provider networks of each insurer to help them choose the one that best meets their needs, and healthy competition among the health insurers is expected to drive improved value for consumers. The consumer makes this choice upon initial enrollment and annually thereafter. Once the consumer has chosen an insurer, the second step is to choose a provider from the list of providers with which the insurers has contracts. It is seen as a two-step process: (1) choose an insurer, and (2) choose a provider.
There are two major problems with this approach. First, it assumes that insurers will be differentiated and will compete based on quality, patient satisfaction and price, i.e., value to the consumers. In reality, however, in most markets there appear to be only modest differences between insurers in the value offered to consumers. The levels of quality, patient satisfaction and price offered by insurers are often very similar. One reason for this is that most insurers offer a wide choice of providers, and there is a high degree of overlap in the networks with which the insurers have contracts. When this occurs, it’s not surprising that the insurers’ ratings are very similar. A second problem is the fact that most consumers consider the choice of provider to be more important than the choice of insurer. They view the ratings of insurers to be irrelevant, since the insurer ratings reflect an aggregation of provider ratings. To the extent they are concerned about quality and patient satisfaction, they want to know about specific providers, not a broad average for all the providers in an insurers’ network. We know that many consumers first look to see if their current provider is on an insurer’s panel when making a choice of health insurer; this factor often trumps price and other considerations.
What if we took a different approach? One that was based on what most consumers consider to be critically important when getting health care? We would give consumers the opportunity to first choose the provider that best meets their needs, then choose an insurer that includes that provider in its network. In other words, we would be reversing the traditional two-step choice process.
We would allow people to make a choice based on their health care needs, not just their health insurance needs. We would give consumers information about the clinical quality outcomes and patient satisfaction for each provider to help them choose the one that meets their health care needs. We would also give them information about which insurers include the chosen provider in their networks as well as information about the costs to the consumer – premiums as well as out of pocket expenses – for using those insurers to get access to the chosen provider. As a result, there would be healthy competition among providers to provide good value to patients.
This isn’t easy to do, and there may be some pitfalls to this approach, but it may open the door to better health care by helping consumers choose the best providers. It will require new and improved measurement systems to assess the clinical quality and patient experience of individual providers. It will also require the Exchanges to develop multiple paths for consumers to choose: one for those who prefer the traditional path of first choosing an insurer, and a second path for those who want to start by choosing a provider. The Exchanges will also need to display the provider information in a way that helps consumers to make informed decisions without overwhelming them with complicated clinical information. If we can address these challenges, however, it may unleash the power of consumer choice in ways that will drive real improvement in health care.
Bill Kramer is Executive Director for National Health Policy at the Pacific Business Group on Health.