New decision-support tools are helping participants in consumer-driven health plans make better use of their dollars. However, there's still plenty of room for improvement.
In the ideal world of health-care consumerism, Internet-savvy patients access customized information to compare the quality and cost of doctors and hospitals. But in today's world, they get what they get: decision support tools that range from barely useful to cutting edge.
Things are getting better as health insurance companies and other tool developers focus on making consumer-oriented information more precise and user-friendly, experts say. For all its current shortcomings, a field that's barely a decade old has seen great advances.
"This piece of health care is in its early infancy. It will continue to evolve," says Don Whitford, director of product development at Blue Cross Blue Shield of Michigan in Detroit.
Long available to health-industry insiders, data on hospital quality, drug prices and other aspects of medical care is filtering down to the patient level. "How you make that actionable from a consumer standpoint is the trick," says Ann Mond Johnson, president of Chicago-based Subimo, which has developed health-care decision-support software called Healthcare Advisor.
Web-based tools that let users compare health plans, hospital quality and the cost of medical services and drugs are increasingly common as employers strive to control health-care costs by encouraging employees to become more informed consumers. The software is proliferating, too, in the wake of criticism that workers have been thrown into consumer-driven health plans without enough information to help them make critical and money-saving decisions.
The new decision-support applications help patients navigate the complex world of health care as they've never done before, consumerism advocates say. At the same time, they acknowledge, not everyone is an early adopter, and there's room for improvement.
Early Signs of Hope
Whether the software will revolutionize health care remains to be seen, but there are early promising signs. A Watson Wyatt Worldwide/National Business Group on Health survey of 585 companies earlier this year revealed that 76 percent of the "best performers," defined as those with the lowest two-year median medical-cost increases, gave employees information on provider and/or hospital quality, compared with only 54 percent of poor performers.
Other research shows that hospitals improve their quality when data about them is publicly reported. The fact that prospective patients could eyeball the data -- regardless of whether or not they actually did -- was apparently enough to goad hospitals into strengthening obstetric and cardiac care, according to a study by the University of Oregon for the Employer Health Care Alliance Cooperative in Madison, Wis. Hospitals that received quality feedback privately or not at all did not improve as much. (See "Does Publicizing Hospital Performance Stimulate Quality Improvement Efforts?" in Health Affairs, March/April 2003, for more details.)
The EHCAC, comprised of 144 self-funded employers in south-central Wisconsin, regularly updates its "QualityCounts" report on hospital quality and encourages hospitals in its service area to complete the Leapfrog Group's annual survey, says alliance CEO Cheryl A. DeMars. "Our hope was that hospitals would look at the data and use it as an opportunity for improvement," she says.
The employer-supported Leapfrog Group, based in Washington, annually surveys hospitals on their outcomes on seven high-risk procedures and asks whether they follow 20-plus safety practices. Its ratings on hospitals' patient-safety practices are available on its Web site (www.leapfroggroup.org) and are incorporated into many health plans' data on hospital quality.
As of July, 19 of 35 hospitals in the alliance's provider network had completed the Leapfrog survey. Hospitals that make progress in computerized ordering of tests and medicines, and intensive-care-unit staffing, get favorable reimbursement rates from alliance employers and publicity as high-quality facilities in the group's provider directory, DeMars says.
The pressure of public accountability has also worked for the state of Maine, which recently published an online list of "preferred" hospitals for the nearly 40,000 people covered by its self-insured employee health plan. As of July, 14 of the 36 hospitals in the plan's network were on the list, having completed the Leapfrog survey and met other safety criteria.
"We have found that many (members) are using the list for elective procedures. The reaction has been extremely favorable. The reaction from the medical community has been favorable as well," says Frank A. Johnson, executive director of employee health and benefits for the state of Maine. As an incentive for employees, any hospital services (except for emergency care) billed by preferred hospitals are exempt from the annual deductible.
These apparent successes in the use of health-care tools mask the issue of participation. Many employers don't know who is and isn't using the tools they offer, partly because many insurers and vendors don't measure usage beyond Web "hits." Watson Wyatt has found that high users include members of CDHPs and other high-deductible plans, which provide the greatest financial incentives to spend health-care dollars wisely, says Justine Goode, a health-care consultant in the consulting firm's Minneapolis office.
Colleen M. Murphy, president of Asparity Decision Solutions Inc. in Durham, N.C., says the heaviest users of its health-plan comparison tool, Comparison Module, are age 45 or younger, have family coverage or have annual incomes of $50,000 or more.
"That's unfortunate, because those making less than $50,000 could benefit from making a wiser health [plan] choice," she says. "It's a more difficult population to reach."
Enter human resource professionals, who can educate employees about the usefulness of whatever software is on the market. This benefit communication and support is needed all year long, not just during open enrollment, Goode says.
"It's important to have these tools available across multiple channels" because different employees learn differently, adds Meredith Baratz, vice president of market solutions at Definity Health in Dulles, Va. Definity Health, a CDHP provider owned by UnitedHeath Group, supplements its online content with written materials and live telephonic help from specially trained nurses.
A little cash never hurts, either. Some employers offer modest sums of $25 to $50 to employees who use a health-plan comparison tool, though it's not a common practice, experts say. The most common method is good old-fashioned communication.
"We spent a considerable amount of time from April through June doing approximately 50 employee orientation programs explaining the [preferred hospital] list and how it was developed," says Johnson of the state of Maine. In addition, the state's benefits Web site (www.maine.gov/beh) lists the preferred hospitals, explains the selection criteria and includes "points to remember" in seeking quality care.
State of the Art
Health-care decision-support software includes products that allow users to find and compare the quality and prices of drugs, hospitals, outpatient procedures and, to a lesser extent, doctors. As with the medical providers they rate, quality varies.
The oldest, most robust tools let employees compare health-plan options at open enrollment time. "This is one of the most expensive and important decisions an employee makes each year," Murphy says.
Users input their age, gender, health status and expected medical usage for the coming year (number of office visits, prescriptions, lab tests and so on), then see a side-by-side comparison of up to three plans, with information on each plan's expected employee premiums, out-of-pocket costs and total costs. Some products also let users figure out how much to contribute to flexible spending accounts and health savings accounts.
Asparity's tool ranks health plans in order of "best fit" by allowing employees to first rate the importance of various plan features. Most enrollees focus on a mix of 11 attributes, including cost, care access and customer satisfaction, Murphy says.
Prudential Financial Inc. introduced Asparity's tool at the same time it added consumer-driven and high-deductible health plans last fall, bringing its number of plan offerings to four. "Prudential had never used anything like this before," says Paul Virtell, director of employee benefits for the Newark, N.J.-based financial services company. "We wanted to make sure [employees] were well-armed with information so they would be better consumers."
About 6,300 of 18,000 covered employees used the tool to compare health plans and, for the most part, chose the recommended plan, according to Virtell. "The tool was very successful," he says, thanks in part to an educational campaign that included announcements about it in internal newsletters, a home mailing and "road shows" at 13 company locations.
On the quality side, hospitals-comparison tools are rapidly improving -- a boon for people planning elective procedures. The best of these applications massage complex data into easy-to-understand numbers and charts showing hospital- and procedure-specific patient volume, mortality and complication rates and other information. A simple graphic -- a pie chart or number of stars -- indicates overall quality, adjusted for risk and severity. Examples of these tools include the federal government's Hospital Compare, Subimo's Healthcare Advisor and Cigna HealthCare's Hospital Value Tool.
The fact that one hospital may be better than another comes as a surprise to many people, consumerism experts say. "For a lot of [members], this was their first exposure to the fact that [hospital] quality varies significantly," says Johnson, referring to the Maine state government's experience rolling out its preferred-hospital list.
Yet there are limits. Data is available only for some hospitals and the most common surgeries and procedures. In addition, "the requirement is that the information be very objective, but care can be very subjective," says Jeffery Lanzet, executive vice president of consumer-driven benefit solutions at SHPS, a health-benefits management company based in Louisville, Ky.
Finally, tools that provide once-secret prices have hit the market big time. "Many health plans are announcing plans to publish prices in one form or another on their Web sites," says Goode. "That's the direction consumers have to go."
The best tools today compare prescription drug prices. Cigna HealthCare's Hospital Value Tool shows real-time, out-of-pocket prices for prescription and generic drugs at its mail-order pharmacy and more than 54,000 retail pharmacies by zip code. Many other tools show only price ranges.
Meanwhile, tools for estimating out-of-pocket costs for common inpatient and outpatient procedures have recently become available. Because treatment varies among patients, costs are stated as ranges or averages rather than exact prices. The differences can be big. For example, the cost of a hip replacement at three Los Angeles hospitals ranged from $6,432 to $33,822, according to Cigna's Hospital Value Tool.
In general, price estimates for outpatient procedures are narrower than those for hospital procedures because there's not as much variability in services, says Jim Nastri, Cigna's vice president of product development. Cigna's cost-comparison tool for 15 outpatient procedures and three radiology tests, introduced last April in Wichita, Kan., and New Hampshire, was rolled out nationally in September.
Even the most progressive employers don't use pricing tools much yet. In the Watson Wyatt survey, 19 percent of the best-performing employers and 9 percent of the poor performers provided online pricing tools.
The Future of Decision Support
Predictions about health-care information applications vary as much as the tools themselves. Some experts see a need to better integrate cost and quality information -- and to make both more precise -- while recognizing that employees with different needs will use the tools in different ways.
"The challenge is to pair price information with quality information so consumers can judge value," says Suzanne Delbanco, CEO of the Leapfrog Group.
Asparity's Murphy says the future includes HR's ability to use the data generated by tools to offer health plans and premium levels that best suit the workforce. Asparity's SimHR product analyzes employee preferences after enrollment as a guide for next year's plan offerings. "It's about using the information from the tools to become a better health-care supplier," Murphy says.
Lanzet of SHPS predicts more high-touch services, such as live telephonic help from nurses, to steer people through the maze of choosing providers and paying medical bills. At the same time, "push technology" and health-care statements akin to 401(k) statements will give information to people who haven't reached out for help.
In the long run, software may be used to model "health and wealth" scenarios to help people calculate how much to save for medical care during retirement, health-care consultants say. The idea is to budget for future health-care needs through health savings accounts or other means, a little-practiced skill that's likely to become more important.
For now, consumerism advocates will settle for people taking a crack at the tools.
"The ultimate goal . . . is for individuals to take ownership of their care," says Lanzet. "This will take great behavioral change. It's a shift from entitlement to empowerment. There will come a day when people shop for care based on cost and quality."