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Price-Sensitive Consumers' Preferences on Value-Based Insurance Designs

Posted By Louise Probst, Wednesday, July 10, 2019

Amid rapidly expanding health care spending, the financial burden on patients has grown. With consensus holding that 30% of health care costs go to services of little to no clinical value, even slight reductions in such services could have meaningful financial benefits for patients and employers. However, achieving this requires an engaged patient population.

 

Health policy and consumer researchers from two California academic institutions conducted 15 focus groups with 125 price-sensitive (low-mid income) health plan enrollees to assess their understanding and preferences toward three potential waste-minimizing solutions: narrow networks, reference pricing, and value-based insurance designs (lower copayments for higher value services). The full article can be found in the March 2019 Health Affairs Journal, Consumers’ Perceptions and Choices Related to Three Value-Based Insurance Design Approaches.

 

Researchers learned that price-sensitive consumers: 

  • Highly value choice; however, when they are given information on cost, they are willing to trade choice for lower spending.
  • Do not understand that health care costs can vary widely from hospital to hospital. 
  • Believe there is a correlation between cost and quality and are unaware that equal or better quality could be had at a lower price. 
  • Are skeptical and mistrusting of plan designs that require them to rely on their health plan to define “high-value health care."
  • Take little meaning from existing quality measures and are generally unwilling to consider quality measures that conflict with their personal experience with their physicians.

The different interventions were explained to the group, and participants were asked to rate their preference for each strategy. The results are below: 

 

Focus Group Participants' Attitudes Toward 
Cost Containment Strategies

Approaches

Negative

Neutral

Positive

Didn’t
Understand

Narrow Network

23%

39%

21%

17%

Reference Pricing

12%

30%

28%

30%

Value-Based Benefit Design

8%

28%

41%

24%

 

To encourage openness to these common strategies, researchers recommend supplying consumers with consistent support through educational tools regarding plan options, providers, and health care spending. Consumers value information on clinic location, office hours, patient experience, etc. Therefore, it can be helpful to juxtapose these items next to quality measures.

 

These findings underscore what BHC members have consistently identified as a top challenge: engaging their workforce to take an active role in managing their own health and using their consumer power to drive safer and higher value health care. The findings also provide direction to BHC’s goal of developing effective communication strategies for the working public.

Warm regards,

 

Louise Probst

BHC Executive Director
 

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