THE EFFECT OF COST CONTAINMENT STRATEGIES ON PARENTAL RANKINGS OF HEALTH PLAN PERFORMANCE


A Fact Sheet on Findings
What is the relationship between health plans' cost containment strategies and the performance of primary health insurance plans as ranked by parents of children with special health care needs?

Methods: Parents were asked whether their child with special health care needs was enrolled in a managed care plan. They also were asked to identify the type of health plan and whether there were specific cost containment strategies within their main plan. Finally, parents rated how well their plan performed regarding key coverage, service and informational domains.

Measures: First, an index of cost containment was created based on:

  • a requirement in the plan for a primary care physician (PCP)

  • a requirement that prior referral be made by a PCP for specialty care

  • a provider network in effect within the main health plan, and

  • a limitation on the plan's coverage of services outside a provider network

    "Tightly managed" plans were those with most or all of the above features, "medium-managed" plans had some of these features and "loosely managed" plans had few or none of these features. 

    Plan performance was measured on the basis of twelve separately rated items covering such areas as providing adequate benefits, charging reasonable out-of-pocket costs, approving needed care, making available skilled and experienced primary, specialty and ancillary providers, ease of paperwork and provision of clear information. For each item, the respondent indicated the plan was excellent, good, okay, or poor. These items were then combined
    into a summary scale of plan performance ratings.

Findings:

  • The language surrounding managed care was not known by many of the respondents. Almost one-third (33%) did not know whether their child's primary plan was "a managed care plan" and over one-quarter (26%) could not classify the type of plan in which their child was enrolled.

  • Of those respondents who could classify the type of plan, the majority said their child's main plan was a managed care plan. Over half (53%) of those who responded indicated their child was enrolled in an HMO (health maintenance organization) or IPA (independent practitioner association), while one-quarter (28%) indicated coverage under a PPO (preferred provider organization) plan and 6% indicated coverage under a POS (point of service) plan. Only one in ten (12%) indicated that their child was covered under a fee for service plan.

  • Parents were more likely to know the specific cost containment features in their child's main plan than they were to know whether the plan was "managed" or not or the specific type of plan. Based on the study's index of cost containment, over half (57%) of the children are in tightly managed plans, a third (32%) are in medium-managed plans, and only 10% are in loosely managed plans.

  • Parents whose children were enrolled in loose or medium managed plans had higher pre-tax incomes and were more likely to be married than parents of children in tightly managed plans. There were no significant differences among the cost containment groups related to the parents' health or employment status, or their level of education.

  • Children enrolled in loosely managed plans had more severe conditions and were significantly more likely to be technology dependent than children in medium and tightly managed plans. However, no differences among the cost containment groups were detected with respect to the stability of the child's condition or the child's overall health status.

  • There was a persistent and statistically significant pattern between the level of cost containment of the child's plan and parental performance ratings of the plan. Parents of children in loosely managed plans ranked the plan's performance more favorably than parents in medium managed plans, who in turn ranked their child's plan's performance more favorably than parents whose children are enrolled in tightly managed plans. The only exception to this pattern regards out of pocket costs incurred by the family, where tightly managed and loosely managed plans perform equivalently and better than medium managed plans.

  • Tighter cost containment features were a significant and negative correlate of parental rankings of health plan performance even after statistically controlling for secondary coverage, Medicaid status, parental demographics (income, education, health, employment and marital status), child health variables (overall health, stability of health conditions and severity of condition) as well as the child's race.

Additional information about the survey and its results can be obtained from: www.familyvoices.org

or by contacting:

Nora Wells, Family Voices nwells@fcsn.org 1/888-835-5669

Marty Wyngaarden Krauss, Ph.D., Brandeis University krauss@brandeis.edu