Empowered patients buy more efficient care

A roundtable of experts from business, government and academia reveals that the health care needs of employers and employees are more closely aligned than many people think.

Many observers of the health care scene think the delivery system is poised for its next leap forward. The first stage of reform aimed at the supply side, but managing cost by restricting access is a short-term solution that newer research suggests could be damaging. A more sophisticated strategy promises a healthier population and more cost-effective delivery by aiming at the demand side. Changing behavior, however, takes more than turning employers into smart shoppers and shrewd negotiators. Consumers must become full partners in the process. Indeed, "the future of health care reform depends on enhancing the power and ability of consumers to make choices based on quality," argues health care sage Paul Ellwood, MD, of the Jackson Hole Group.

How will this come about? Business & Health and the National Patient Empowerment Council convened a roundtable of business, government and academic experts to explore obstacles and opportunities in empowering patients. The panelists outlined some surprising alignments in the interests of employers and employees.

"We've learned over the past 25 years that if consumers are put in a position where they have to make cost-conscious choices, they will do so for relatively small differences in premiums," says Ellwood. But Robert Moffit of the Heritage Foundation thinks health reform still has a long way to go. "It is absurd to say we are witnessing the triumph of a free market in health care when the consumer of this commodity cannot, for all practical purposes, buy it or have any property rights to the commodity once it is purchased, or when the seller does not compete with other sellers for the consumer's dollars."

"The real customer in managed care is not the patient," explains Dan Perry of the Alliance for Aging Research. "The real customer is the employer, the purchaser. That's who gets the provider's courtesy and attention"--and the financial reward for being a smart shopper as well. "I don't think there are many instances where corporate benefits managers give workers the cash equivalent of the difference between the cost of last year's indemnity plan and next year's managed care plan," says Moffit, "so let's frame at least one fundamental law: You cannot empower patients unless patients have economic power."

Ellwood thinks they need knowledge as well: "You can't make a market work, particularly a critical one like this, unless people are able to ascertain whether the thing is valuable." But the educational gap is huge. "Paul Ellwood may have invented it 25 years ago and California may have a mature managed care industry," laments Dan Perry, "but for the vast majority of us it's like trying to buy a new kind of automobile without even knowing how to kick the tires."

Shoshanna Sofaer of George Washington University sees a more fundamental problem: "We've got a delivery system that emphasizes high-tech tertiary care, that spends a huge amount of money once people get very sick but does very little to keep people well. And we've got a traditional patient who responds very well to that system, which we're now trying to totally transform.

"Patients still think that if an HMO saves money it must be cutting corners somewhere, hiring doctors who couldn't get patients any other way and denying services people need," Sofaer continues. "Now this is not consumer experience talking. This is their assumption that more is better."

"We've got to do better education," counsels attorney Barry Scheur of The Scheur Management Group, beginning when a consumer signs on with a plan: "If you belong to a managed care organization, you don't understand how the system works from reading the brochure. You use that to light your fireplace."

John Burke of the National Patient Empowerment Council (NPEC) agrees: "Employers spend enormous amounts of money on educational material, but there are great numbers of people out there who just can't get through it. We scanned materials for 25 plans and found readability at the 12th to 16th grade levels. Any newspaper editor will tell you that's over the heads of most Americans."

It doesn't help, says Sofaer, "that managed care is a moving target. What's a POS? An EPO? Consumers get annoyed because nobody bothers to tell them--in language they can understand--what in the name of heaven this organization is about." But the problem goes deeper than obscure acronyms. "There are a lot of myths out there that really get in the way of consumer decision-making," says Sofaer. "The worst one is that all managed care organizations are alike." Scheur elaborates: "There is no 'managed care industry' or one managed care philosophy. Kaiser, Aetna, United Health Care, CIGNA and QuailCare are not all part of one fabric. You have for-profit and non-profit. You have those that care about access and those that don't."

Burke uncovered some consequences of confusion in NPEC focus groups: "We were surprised at the amount of times people told us they were willing to relinquish the relationship they had with physicians for many years to save a few dollars. They were able to focus on the cost of Plan A versus Plan B. But when we asked, 'How do your plans save money?' they didn't know. Clearly, people don't understand what they're relinquishing when they choose a less expensive plan. It's not clear in the material and it's not clear until they bump up against a restriction."

Ellwood says history points to real danger in this lack of consumer understanding. "In the fee-for-service system, consumers couldn't determine whether the suggested care would actually help them and providers lacked the epidemiological data they needed to make reasonable recommendations. Add the perverse incentives of getting paid more for doing more, and volume kept climbing to the point where quality was deteriorating.

"Now compare the system that tended to do too much with one that tends to do too little. Financial incentives for providers can be equally perverse, and aggressively high deductibles and co-pays can deter patients from seeking medical care they really need. If patients and purchasers aren't given information about quality as well as price, managed care will undershoot in the same way fee for service overshot."

Other panelists share Ellwood's concern. "Health care is no longer about patient care," says Scheur. "'The business of health care' says it all. You rarely hear 'patient' in a corporate board room except with respect to costs. And patients know this." In short, they feel as though they've lost an advocate. "In indemnity plans, consumers had their doctor as a quality assurance mechanism," says attorney John Jacobi of Seton Hall University School of Law, "but the structure of managed care ends that fiduciary relationship. Most patients know that if physicians provide less treatment under many plans they will get more money, and that makes them nervous. It is a crisis of confidence in the health care system."

That crisis shouldn't be happening, says Burke: "The new payment arrangement--who hires the doctor--is so fundamental to managed care that we should be ashamed that we don't spend more time making that clear to patients." Moffit is blunt about the new order: "It's insane to set up a system that says to a professional, 'Look, we're going to pay you more and more and more if you do less and less and less.'"

Who should be looking out for patients' interests? "Most people we've asked think it's the government's role to make sure their rights are protected in HMOs," says Burke. "They're very concerned about mandating disclosure of cost-containment practices that might affect quality of care, and they give more credibility to the government or some ombudsman than to their employers or health plans." Louann Cash of American Express sees more emphasis on employer responsibility: "People don't care what the HMOs say, and they don't really care that much about NCQA accreditation. They ask 'What does American Express do to make sure the options we have are of high quality?'"

Attorney Marc Rodwin of Indiana University worries about potential consequences of that trend: "What will change as we move away from the idea of public authority (which rations with regulations) and toward the private sector, where you can have only management and contract compliance and allocation of resources? Be careful, because if business does a better job than government, it will inherit all the frustrations we have with regulations and bureaucracy. To really protect consumers, we must preserve roles for both the public and private forces."

Consumer advocate Jacobi also favors a cooperative approach: "I'm increasingly convinced that assuring quality in managed care is not a problem for the government or the courts. It's a marketplace problem and consumers, payers and providers will have to work together to solve it."

Still, 8cheur cautions, "advocacy has not been a primary issue, nor has the business community been willing to pay for it." As a remedial strategy, he suggests "managed care needs to be honest about the balancing act of patient, provider and payment. We need to be truthful about what we sell and honest about how it works." Burke warns of trouble if that advice is not heeded: "There is a potential well-spring of hostility when people find that there are aspects of the plan that they weren't informed of when they made their choice."

American Express has an aggressive program to make sure managed care enrollees know what they're getting into. "We rate all the plan options on the basis of what our employees have told us they consider important and reasonable," says Louann Cash. "We've surveyed all 50,000 of our people annually for the past three years. Ninety-two percent say the information we provide allows them to make informed health care choices."

The workforce at large is not so fortunate. "There is no Consumer Reports that patients can use to compare plans," says Perry, and the plans themselves are often not ready to reveal information they cannot tightly control. He recalls a magazine's recent telephone survey of about 50 HMOs: "They were asked questions that any of our family members might ask if they were trying to decide how this plan would serve them. Among the HMOs' responses were: 'Our company considers this information to be proprietary.' 'We are not able to track this' 'We don't have much to gain by answering.'"

Health plans also voice major concerns about the fairness of measurements, but Ellwood wonders whether this is simply a delaying tactic. "It's inevitable that competitors want to look good," he says, "but we're not going to spend the money perfecting risk adjustors until competitors find they'll be at a disadvantage if those risk adjustors aren't very, very good. My contention is that the premature release of quality information [i.e. before risk adjustors are fully developed] is what will be required to perfect the systems that gather and disseminate information to the public." Sofaer is equally willing to let the chips fall where they may: "I think we have to recognize that plans are going to be screaming and yelling about risk and severity and case adjustment even after it really isn't a problem. Because it's a wonderful way to kind of get off the hook for being able to report things."

One result, says Ellwood, is "an almost total lack of standardization for quality information. "We have NCQA, JCAHO and NAHDO and NAIC and at least 90 employer coalitions. Employers have in many ways aggravated the problem. It's easy to get them to agree on a standard benefits package, but everybody knows about quality and wants to throw in their couple of special items."

Even if standardized, however, some popular quality indicators have serious flaws. Ford, for instance, considers global satisfaction ratings a waste of time. "They don't give you even a hint of what will lead to better clinical outcomes." What's more, says Sofaer, "the oldest game in the book is to use consumer satisfaction surveys for marketing purposes, setting them up to find the good news. But when every plan is telling you that 95 percent of its enrollees are very satisfied, I don't think we've done anything that would be called informing the consumer."

Sometimes consumers themselves are a:potential source of misinformation. Recalling NPEC's focus groups, Burke says: "When we ask, 'Why is an HMO good?' everyone says 'preventive health.' They cite smoking cessation, blood pressure screening; wellness programs. But when we ask them if they take advantage of these programs, they say 'No, but it's really wonderful to know they're there. And that's One reason we really love our HMOs.' We have to ask the pollsters how valid that satisfaction data is if it's based on programs that no one uses."

That's not the only potential validity problem. Paul Ellwood describes a situation in Texas in which individual plans calculated their success in meeting various HEDIS measures. "NCQA came in to confirm whether they were hitting the targets they claimed," Ellwood reports; "and in every single instance where there was a difference, the NCQA calculation of quality Was lower than the health plan's."

"Even if you want the private sector to do the work, you need some regulation," Rodwin suggests, citing his favorite example. "The securities market is the essence of American capitalism. No one would say it isn't competitive, yet it relies on extraordinary regulatory oversight by the Securities and Exchange Commission, And where did that come from? The crash of 1929. I hope we don't have a crash of 2029 in the health care market, but if the private sector doesn't get serious then the government will be more involved."

Ellwood agrees on the need for "an independent body like the Foundation for Accountability to develop measures and put them in the public domain, much as FASB does for the accounting profession. The problem now is the verification process. Virtually everyone selling auditing or accrediting services in health care is also setting their own standards. And that sets up a conflict of interest." Scheur heartily concurs: "I'm not sure NCQA should be in the licensing business. We need to have an auditor and we need to have a standard developer, and those two functions should not be rolled into one."

Once these issues are sorted out, standardization could yield other significant benefits. According to Sofaer, "If you tell people what the test is, they'll teach to it, and we want to see this happen. Putting pressure on the providers and the plans is part of internal quality improvement." Jacobi thinks that standards will become "self executing." He explains: "If, for example, the standards call for a primary care physician within five minutes travel time of every member in an urban area, HMOs will not wait to be rated on that. They will simply conform."

In time, they will face much more exacting measurement than is currently demanded. "A great deal of what's in the data banks of the HMOs has to do with dates of treatment and payments," according to Perry, "but very little to do with whether the patients lived or died, whether they got better or worse as a result of the care they were given."

"Isolating individual HEDIS measures does not provide enough information on which to base purchasing decisions, nor does a subset of HEDIS data offer complete understanding of health care performance," Ellwood argues, adding that "HEDIS is state of the art and it's not good enough."

Perry offers an example: "Age-adjusted mammography rates is the one HEDIS measure of quality of treatment for breast cancer, What does that tell a women who's trying to choose a health plan? What if she could find out the average size of tumor upon diagnosis? The ratio of mastectomy to more conservative treatment like lumpectomy? The survival rate of women diagnosed with breast cancer?" Sofaer gets down to practicalities: "Suppose a woman has just had breast cancer surgery. What's she going to worry about? 'Can I carry those grocery bags? Can I lift the stuff up and put it in my car?' Very basic kinds of things that ordinary people care about. That's what we need to be taking cognizance of when we talk about value."

Ordinary people also pay close attention to managed care horror stories they see in the local news. The reason, says Jacobi, "is that they're not concerned about getting their teeth cleaned when they talk about health insurance. They worry about what will happen if they suffer a Catastrophic illness, and they identify with people who are apparently being denied care by their health plans."

American Express is one company that works hard to counter those fears. "We know people are concerned about care being withheld, and so we rely heavily on our medical consultant, a practicing cardiologist," explains Louann Cash. "He looks at the medical records for every bad outcome. Now, we know that every death is not a matter of someone making an error, but we want to walk through the process and find out if appropriate care was provided at the appropriate time. Sometimes we take an even broader look. In areas where we have large enrollments in a single plan, we ask for a random sample of 250 medical records and send them to a panel of 30 specialists in Manhattan to assess performance and outcomes."

Scheur suggests that plans may not be using an important quality indicator that is readily at hand: "If somebody goes outside the system and doesn't get authorization, rather than not pay the bill, we need to ask why they didn't use the providers we selected."

Providers, of course, are the keystone of any health care system. "We expected that the choice of physicians would be a major factor in plan selection," says NPEC's Burke, "but it appears that the ongoing physician-patient relationship is a major factor in determining satisfaction. Many people base their opinion of a plan's performance and quality almost exclusively on whether or not they get respect and attention from that physician."

This phenomenon has deep roots. "The traditional patient gives up a lot of power in order to be acted upon by the medical profession," Sofaer explains. "You get to walk around in this paper gown that's open all the way down the back. You get to meet people for the first time when you're not wearing clothes and they are. You become a case. Well, one woman put it to me this way, 'I am not a case and I don't want to be managed.' That's how consumers feel about the concept of case management."

They find other common aspects of managed care to be equally disturbing, but potentially mitigated by a human touch. "They feel constrained by the gatekeeper concept," says Burke, "and they hate the bureaucratic treatment when they seek a specialist, the voice mail, the electronic switchboards. But many express profound appreciation for a human being at the other end of the phone line--the nurses that many plans use as a kind of first response to reduce unnecessary care."

Some employers might be surprised at how their own workers define what's unnecessary. "Do patients really want every test and every procedure, no matter how invasive?" asks Perry. "No. They want results. They want outcomes that get them back to the job, to school, to their lives. And employers want care that gets their workers back on the job and allays the fears that would otherwise detract from their productivity. These two forces are making common cause."

The practical implications are diverse. For instance, says Scheur, "this selection of plans by employers every year doesn't make a lot of sense. Companies can't plan for the long term and consumers get screwed, because they're the ones that have to opt for new physicians and new benefits that they didn't understand in the first place." In the case of American Express, management was surprised by fiscal benefit in seeking the best care. "Across the board," says Cash, "our highest rated plans were on a per capita basis, $200 a year cheaper than the plans that did not do as well."

Perry sums up the case for empowering patients: "The employer, as purchaser, has the real clout in the marketplace. The employee, as patient, has the moral high ground, The ultimate return to normal, healthy life is the essential concern of both. Together, they can put into play a combination of powers that, I believe, has the greatest potential to raise standards and monitor performance through the marketplace."

COPYRIGHT 1996 A Thomson Healthcare Company
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