Survey Finds Many Health Care Consumers Willing to Accept Limits on Service Use in Exchange for Lower Costs

Managed care backlash appears to be waning. though most consumers remain skeptical of plans’ ability to control costs

Despite an overall lack of confidence in managed care, many Americans say that they are open to specific cost containment practices linked to managed care, including gatekeeper referral for specialist services, substitution of less costly drugs, and prior authorization for new or expensive procedures, according to a new survey published today as a Health Affairs Web Exclusive.

The California HealthCare Foundation supported the survey, which was conducted by NORC at the University of Chicago.

Only 30 percent of survey respondents said they believe that managed care can keep health care costs down without hurting patients’ health. However, many consumers indicated a willingness to make trade-offs, depending on the state of their health and their ability to pay for care. Wealthier consumers in bad health were most resistant to restrictions on their care, while low-income people in bad health were much more likely to accept such restrictions, presumably because of their limited ability to pay.

Overall, only 27% and 35% of respondents, respectively, said they would be willing to accept a higher deductible or a higher premium in exchange for fewer restrictions on their use of health care services. More than two-thirds of survey respondents expressed concerns about how much their families must pay for health care.

“The managed care backlash is easing up, probably because consumers are feeling the pinch of rising costs themselves,” said Claudia Schur, a principal research scientist with NORC at the University of Chicago. “However, support for managed care practices is quite segmented, depending on each consumer’s health care experience and needs. As a result, we may see more plan offerings where consumers who want choice can pay for it, while those willing to accept limits on their care can pay less.”

The survey, conducted by phone in August 2004, includes responses from more than 2,000 adults across the United States who were asked about their views on managed care restrictions. Other findings from the survey include the following:

  • Slightly more than half of respondents reported that, as a family, they spent less than $500 out of pocket on medical expenses (excluding insurance premiums) during the previous year. However, 12% said that they spent between $2,000 and $5,000, and 4% spent more than $5,000.
  • Overall, 54% of respondents said they thought requiring substitution of less costly drugs was a good or very good idea, 52% felt that way about referral for specialist care, and 43% expressed support for prior approval.
  • Paying bonuses to doctors who keep costs down was the least popular measure: Only 30% reacted positively to this strategy, while 66% rated this practice a bad or very bad idea.
  • The uninsured, who are least able to get health care on their own terms, were most open to restrictive practices that contain costs. In addition, relatively young and healthy people, who tend to have less experience with health care and more experience with managed care, were less concerned about and more supportive of common cost containment practices, such as specialist referral.

Schur’s coauthors were Marc Berk, vice president and senior fellow at NORC, and Jill Yegian, director of the Health Insurance Program at the California HealthCare Foundation.

In addition to the Web Exclusive, the November/December issue of Health Affairs offers several articles on health insurance. James Robinson, a professor of health economics at the University of California, Berkeley, School of Public Health, presents new data on the consolidation of the insurance industry across the United States. His paper is accompanied by papers by David Hyman and William Kovacic, U.S. Federal Trade Commission; William Kopit, Epstein, Becker, and Green; and Arnold Milstein, Pacific Business Group on Health.

The study article on the survey findings is available through the External Link below.

About Health Affairs

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research.

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About the California Health Care Foundation

The California Health Care Foundation is dedicated to advancing meaningful, measurable improvements in the way the health care delivery system provides care to the people of California, particularly those with low incomes and those whose needs are not well served by the status quo. We work to ensure that people have access to the care they need, when they need it, at a price they can afford.