Economic Disruption in Healthcare Symposium - Part II H. Stuart Elway, PhD Will Consumers Shop For Health Care?

Health Care Moving to Consumer Choice Models Will health care consumers price shop? Do consumers exercise choice now? Do consumers want more choice? Is it even possible for consumers to shop?

Health Care System Through the Eyes of the Consumer Public Agenda Foundation Most unaware of how HCS really works Concerned about personal HC spending –Only 30% confident they can afford care they need Concerned about national spending trends Support cost-saving concepts, but no consensus

Our Research Focus Groups Survey of WA residents –500 heads of household –March 13-18

Respondent Profile 42% over age 50 16% under 35 68% Couple 41% Children at Home 60% Employed Full Time 14% Employed Part Time 53% College Degree

System Usage 82% have regular physician 37% did own research 20% visited Doctor 0-1 times last year 21% visited 12+ times last year 52% saw specialist in last year

Health Insurance Coverage 60% Chose from among plans offered by employer

Reason for Choosing Insurance Plan 53% Do not know their Maximum Out-of-Pocket Limit

Why is Health Care So Expensive?

Potential Impact of Comparison Shopping on The Health Care System

Advantages / Disadvantages of Shopping for Medical Treatments Advantages 48% Lower Cost 37% Choice 14% Better Quality 2% No Advantages Disadvantages 33% Quality Concerns 27% Consumer Burden 6% Higher Costs 2% Less Choice 18% No Disadvantages

Consumers Able / Want to Price Shop?

Why Shopping Would be Personally Desirable / Undesirable Desirable 30% Choice/Control 30% Lower cost 18% Better value 14% Better quality Undesirable 40% Not Needed 26% Consumer burden 18% Lower quality 9% Higher cost

Potential Impact of Consumer Shopping on Health Care

Would You Price Shop for Treatment HESITATION: 30% Quality of Care 21% Happy w/ current Dr 13% Price Not Everything 13% Specific situation 9% Consumer burden 8% Use recommendations

Likely to Price Shop for Specified Procedures

Past “Shopping” Behavior

Hypothetical: Choose Provider 69% aware that different providers charge different fees for same treatment PROVIDER A: $10,000 PROVIDER B: $7,500

Hypothetical: Choose Provider PROVIDER A 56% Better Care 16% Not Sure PROVIDER B 90% Cost savings 22% If Quality Equal

Hypothetical: Choose Provider “ DEPENDS ” 71% Quality of Care 17% Cost not only concern 12% the Procedure

Additional $$ Factors

Potential Impact of Rebates on Health Care System

Impact of price shopping on overall cost of health care Impact on personal decisions of lowering overall cost

So, Will Consumers Shop? Foreign concept –Difficult to relate to the question –Seen in familiar insurance context Indicate willingness on surface –Have not thought it through –Reluctant when given time to consider Seen as shifting cost to consumers –Personal costs rising as it is –Concern that result in avoidance of care

So, Will Consumers Shop? Care Situation –Emergency –Costs of Component treatments –Reluctance to second guess Doctor Information –Lack of expertise, confidence –Learning curve (time burden) –Lack of information (comparative data) Significance of choice

So, Will Consumers Shop? Quality is the trump card Door is open to discussion

Economic Disruption in Healthcare Symposium - Part II H. Stuart Elway, PhD Will Consumers Shop For Health Care?