Study finds that medicare patients give higher overall marks to nonprofit than for-profit health plans

Boston, MA—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.