Harvard (Press Release)

Study Finds that Medicare Patients Give Higher Overall Marks To Nonprofit
than For-Profit Health Plans

Boston--March 12, 2001--When it comes to their overall experience with their
health plan, Medicare patients rate for-profit and nationally affiliated
managed health care plans much lower than not-for-profit or local plans,
according to a recent study by Harvard researchers. This is the first large
scale national study that examines the relationship between health plan
characteristics and patient ratings of their plan rather than the technical
quality of their medical care.

Patients in for-profit and nationally affiliated health plans, for example,
report more problems in their dealings with the health plan and in their
ability to obtain needed services and equipment. There were few differences,
however, in patient ratings of their physician, suggesting that patients were
able to distinguish between the care they receive from their physician and
the services they receive from their plan. The study appears in the
March/April Health Affairs.

"On the whole, for-profit health plans were rated significantly worse, though
some individual for-profit health plans still performed well," said lead
author and Harvard Medical School instructor in health care policy, Bruce
Landon, MD. These results are consistent with the growing number of other
studies that have shown poorer performance in some aspects of care by
for-profit health care. "These types of assessments of patient experiences
with health care that distinguish between different health plans or health
plan types could become increasingly important for contracting and enrollment
decisions, counterbalancing the focus on costs that traditionally has driven
most enrollment and purchasing decisions."

Accreditation by the National Committee on Quality Assurance (NCQA), a
private, nonprofit organization that accredits managed care organizations,
was not associated with patient ratings. Landon says this indicates that what
NCQA accreditation measures, such as structural characteristics and financial
stability of the health plan, is not associated with consumers' experiences.
Accreditation must therefore be justified on other grounds.

The results of this study were generated by linking data from the federally
funded Medicare implementation of the Consumer Assessments of Health Plans
Survey (CAHPS), a standardized survey administered nationwide to Medicare
patients, with data from the InterStudy Competitive Edge database, which
catalogues health plan characteristics. In total, the researchers based their
conclusions on CAHPS survey responses from more than 82,000 Medicare patients
from 182 health plans nationwide.

The study focused on responses to CAHPS questions asking patients about their
overall rating of their health plan, a composite of responses about their
direct dealings with the plan, such as experiences on the telephone with
health plan representatives, and a composite of responses to questions about
care access, such as ability to obtain needed medical services, equipment, or
pharmaceuticals.

The size of the plan or the plan type, such as independent physician
association model or staff/group model, did not affect performance. But
geographic region, independent of the profit status of the health plan, did
significantly shape patients' perception of their health plan. Consistent
with previous studies of other aspects of health plan quality, average scores
were lowest in the Pacific region and highest in the Northeast and North
Mid-Atlantic regions.

Landon says that in the future it will be important to look at more detailed
characteristics of health plans to determine how characteristics such as tax
status and national affiliation translate into managerial practices that
affect patient perceptions of care quality.

The other authors of the report, titled "Health Plan Characteristics and
Consumers' Assessments of Quality," are Alan Zaslavsky, PhD, associate
professor of statistics; Nancy Dean Beaulieu, PhD, now an assistant professor
at Harvard Business School; James Shaul, MHA, project director for the
development of the CAHPS Behavioral Health Survey at Harvard Medical School;
and Paul Cleary, PhD, professor of health care policy at the Medical School
and the Harvard School of Public Health. The study was supported by the
Commonwealth Fund and the Health Care Financing Administration.