Does Type of Health Insurance Affect Health Care Use and Assessments of Care Among the Privately Insured?

Health Services Research, April, 2000 by James D. Reschovsky, Peter Kemper, Ha Tu

Consistent with the small differences in service use found across product types, few differences are evident in the likelihood of reported unmet or delayed care needs across product types. Consumers do face trade-offs, however, in the types of access to care problems they might face. These tradeoffs have been found in previous research (e.g., Mark and Mueller 1996). Compared with closed model HMOs, persons in indemnity and less heavily managed products are less likely to give problems with access to providers and organizational hassles as reasons for unmet or delayed care needs. At the same time, HMOs result in fewer reports of financial barriers to care.

The results suggest that consumers face a trade-off in choosing the type of health insurance product they use. On the one hand, consumers in HMOs, particularly closed model HMOs, appear to receive more ambulatory care and generally do not report differences in overall unmet need, surgery, or hospital use. Only specialist use is significantly lower in open- and closed model HMOs. On the other hand, consumer assessments of care are often significantly lower in HMOs, particularly closed model HMOs.

Despite generally small differences in health care use, persons in HMOs, particularly closed model HMOs, give lower assessments of care than those in non-HMOs. There are several possible explanations for this discrepancy. First, it is possible that consumers are reacting to differences in quality of care (although many question consumers' ability to judge clinical quality). Our measures of health care use, which do not measure the content of visits or the clinical dimensions of care received, do not capture important aspects of care delivery that may affect clinical quality. Second, it is certainly possible that access to specialist care (for which the largest health care use difference was observed) and control over the choice of providers weigh very heavily in people's minds, even if these factors may have little effect on quality of care. Third, it may be that consumers are reacting to the managed care tools themselves--requirements for referrals, prior authorization of care, and so forth--rather than the effect of such tools on the actual delivery of patient care. Finally, it is always possible that people have been influenced by their physicians, who may be unhappy about managed care (Hillman 1998; Kao, Green, Zaslavsky et al. 1998), or by the generally adverse publicity that managed care, and HMOs in particular, have received in the press (Blendon, Benson, Brodie, et al. 1999; Brodie, Brady, and Altman 1998).

Better understanding of the reasons for lower consumer assessments of closed model HMOs is important because consumers have the potential to influence the future of managed care. They can exercise their influence through their support of efforts to regulate managed care and by expressing their preferences through their enrollment decisions (mostly through product offerings of their employers).

Whatever the cause of the lower assessments, consumers and policymakers should be reminded that managed care encompasses a variety of types of insurance. This research has shown that the type of insurance people have--not just whether it is managed care but the type of managed care--affects their use of services and their assessments of the care they receive. Consumers and regulators should recognize that different types of managed care have different effects.