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JULY 2007 HOT TOPICSHow Does Benefit Design Affect Consumer Decisions in the Individual Insurance Market?
Nearly 45 million Americans lack health insurance. For those who lack coverage through an employer or do not qualify for publicly funded programs, individual insurance remains the only alternative. However, relatively few people buy such insurance. Prior RAND research found that only 7 percent of non-elderly individuals nationwide hold individual health insurance. Congress continues to address the issues surrounding the uninsured, including which method is the best to increase rates of coverage. Would changes in benefit design make individual insurance more attractive to consumers? A team of RAND researchers led by M. Susan Marquis examined this question. The analysis focused on the impact of prices, other plan characteristics, and other factors on consumer decisions to buy individual insurance. The study used data from the three largest nongroup insurers in California, as well as survey data from people with individual insurance and with no insurance. The study found that reducing prices (for example, through a tax subsidy or credit) would have only a modest effect on reducing the number of uninsured. For example, a 50-percent decrease in price would increase market participation by about 10 percent, which would amount to a reduction in the number of uninsured of only about 3 percent. Increasing the generosity of benefits (reducing copayments or out-of-pocket maximums) would have an even smaller effect. A 20-percent decrease in the deductible or maximum out-of-pocket payment for all plans would increase market participation by about 0.3–0.5 percent. The introduction of lower-cost, high-deductible plans would have a similarly small effect. The analysis also found that factors other than price could have a large effect on expanding the market for individual health insurance. For example, surveys showed that consumers perceive that finding information about insurance is burdensome and time-consuming. The analysis suggested that reducing consumers' perceptions of the difficulty of obtaining information would increase participation in the market. In particular, if new policy could reduce the perceived search costs from their mean value to the lowest 25 percent of perceived costs, that would produce a gain in market participation equivalent to a 50-percent tax subsidy. The best intervention for accomplishing this reduction is not yet known. However, this result suggests that testing new interventions to reduce barriers other than price may pay off by reducing the number of uninsured individuals. Read More »Patients with Multiple Chronic Conditions Receive a Higher Quality of Care
Chronically ill people commonly have more than one medical condition. For example, about 65 percent of Medicare recipients have more than one medical condition and nearly 32 percent have four or more conditions. It has been widely assumed that chronically ill people with multiple conditions receive lower-quality care simply because they require busy clinicians to provide more complex treatment. However, findings from a recent RAND study challenge this view. Researchers analyzed information from approximately 7,680 patients who participated in three separate studies from 1997 to 2000 to determine whether patients received recommended medical care for a variety of common chronic conditions, including diabetes, heart failure, depression, high blood pressure, and heart disease. Results showed that patients with multiple chronic conditions actually received a higher quality of care than those with a single condition. Researchers found that the likelihood that patients received recommended care increased by about 2 percent with each additional chronic condition. Few patients in the study had more than five chronic conditions, so the researchers could not confirm that this trend would continue beyond that number. The researchers say that their findings may be partly explained by the fact that most people with multiple health problems visit the doctor more often, increasing the chance that they will be offered recommended medical care. In addition, some patients made more visits to medical specialists, who may do a better job of providing appropriate care for chronic conditions in their specialty. But the study also found that patients with multiple conditions who visited only primary-care doctors received higher-quality care than did patients with fewer conditions. This finding shows that primary-care doctors can provide higher-quality care to patients with complex medical conditions as well as to those with more limited health conditions. The overall findings are particularly striking given that results came from three different patient groups using two different sets of quality indicators. Read More » |
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RAND Health conducts objective research on health, health behavior, and health policy. Access to all RAND Health research is available at www.rand.org/health/. The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. Learn More »Copyright © 2007 RAND Corporation. 1776 Main Street, Santa Monica, CA 90401-3208. RAND® is a registered trademark. The RAND Health Congressional Newsletter is distributed on an opt-in basis only by visiting us at www.rand.org. We respect your privacy. If you do not wish to receive this periodic newsletter, please email ocr@rand.org or call (703) 413-1100 x5395. This newsletter is also available on the RAND Congressional web site » |
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