Can high quality overcome consumer resistance to restricted provider access? Evidence from a health plan choice experiment.

Consumer preferences for health plan provider network features and the impact of information on these preferences have important implications for the ability of managed care to generate cost savings and quality improvements. Research and anecdotal evidence suggest that consumers place great importance on their ability to choose physicians and to maintain existing relationships with them (Davis and Schoen 1997; Scanlon et al. 1997). Managed-care plans have responded by expanding the size of physician networks, loosening restrictions on referrals to network specialists, and offering coinsurance for out-of-network care. However, there is concern that plans with large networks of unaffiliated physicians will not be able to match the cost savings and quality of care achieved by smaller health plans with more highly integrated delivery systems (Miller and Luft 1997; CBO 1995; Staines 1993). The impact of quality information on consumers' willingness to enroll in plans with restrictive provider networks is not well understood. If high quality reduces the value of unrestricted provider access, then the availability of quality information may improve the competitive position of plans that demonstrate high quality regardless of their organizational structure. To date, however, there is little empirical information about this relationship to guide health plan managers' network design decisions. The idea that quality information can improve quality of care motivates substantial public and private sector investment in the collection and dissemination of plan performance measures designed to support consumers' plan choices. These efforts have focused heavily on enrollee assessments of nontechnical aspects of care processes and outcomes. There have also been efforts to provide consumers with HEDIS (Health Plan Employer Data and Information System)-based information about plan compliance with technical care processes known to be associated with better health outcomes. The prominence of consumer-assessed quality information is based in part on research suggesting that consumers understand and, thus, value this form of information more than they do process-based performance measures (Scanlon and Chernew 2000; Hibbard and Jewett 1997; McCormack et al. 1996; Jewett and Hibbard 1996; Walker 1990). To date, however, quality measures based on medical experts' judgments have received little attention, despite their potential to expand consideration given to technical quality in plan choices without requiring consumers to obtain clinical expertise. This study addresses two research questions: (1) How does information about the quality of network physicians affect consumer willingness to enroll in health plans with restrictive provider networks? (2) What is the relative impact of consumer- and expert-assessed quality information on willingness to enroll in restrictive plans? This study employs an experimental approach to measure the effect of network features and quality information on hypothetical plan choices. The experiment is administered in the form of a survey that asks respondents to make choices among hypothetical sets of plan alternatives. The results are used to predict how the market share of a plan that restricts access to network physicians is affected by the availability of quality information and changes in the quality of its network physicians or other network features, such as out-of-network coinsurance and referral to specialists.