Impacts of managed care patient protection laws on health services utilization and patient satisfaction with care

Health Services Research, June, 2005 by Frank A. Sloan, John R. Rattliff, Mark A. Hall

During the 1990s, both patients and health care providers voiced increasing dissatisfaction with managed care. Such dissatisfaction has been documented empirically (Blendon et al. 1998; Lake 1999/2000; Kemper et al. 1999/2000; Dudley and Luft 2001; Mechanic 2001; Kemper et al. 2002), but more importantly, became a general consensus and provided an impetus for regulation. Since 1995, most states have enacted some form of managed care patient protection legislation (Marsteller and Bovbjerg 1999; Noble and Brennan 1999; Sloan and Hall 2002).

Patient protection laws include (in various combinations): (1) liability provisions (right to bring a tort suit against a health plan), (2) provisions governing the process and standards for making and reviewing coverage decisions (criteria for medical necessity, "prudent layperson" standard for emergency care, and external review), (3) provisions affecting choice or access to providers (e.g., point-of-service options, direct access to specialists, and due process for providers terminated from a plan), (4) financial incentive and disclosure requirements (e.g., limiting physician incentives, banning "gag clauses," and disclosing how plans reward physicians for cost savings); and (5) specific coverage mandates (e.g., for minimum maternity stays). Similar patient protection proposals have been considered by Congress.

There is widespread public debate about the need for these laws (Miller 1997; Altman et al. 1999; Symposium 1999; Agrawal and Billi 2001). Proponents insist they are needed to protect vulnerable patients and consumers from market-dominated forces that do not serve consumers' best interests, resulting in denial of needed care, inferior service, or profiteering (Rodwin 1996a, b; Families USA 1997). Opponents insist these protections are unnecessary because the alleged abuses are not widespread, or the industry is correcting problems on its own, in response to market pressures. Others, from a more neutral perspective, have observed that, in theory, these laws may help correct certain market defects, but may also result in less competitive or efficient markets (Korobkin 1999; Encinosa 2001; Sloan and Hall 2002).

This national debate has been hampered by a lack of empirical evidence, especially on the managed care patient protection laws taken as a package. Specific laws, such as those placing lower limits on length of stay for obstetrical delivery have been analyzed, showing some increase in length of stay and charges attributable to the statutory change (Dato et al. 1996; Udom and Betley 1998; Raube and Merrell 1999; Liu et al. 2004). One reason effects of these packages of laws have not been assessed previously is that they have been enacted only recently. Patient protection laws vary appreciably among states, and these laws were enacted at different times since 1995. This inter-temporal and cross-sectional variation creates a natural experiment suitable for empirical analysis. This study reports on the effects of patient protection laws on the public's satisfaction and trust relating to health care, and on key utilization measures, as measured in three rounds of the Community Tracking Survey.

METHODS

The Community Tracking Study (CTS)

Measures of individuals' health care utilization and satisfaction, and control variables, come from three waves of the CTS Household Surveys. These surveys were conducted in 60 randomly selected communities, including both metropolitan and nonmetropolitan areas, well-distributed throughout the U.S., with a good representation of demographic and market conditions. In addition to the main community sample, a supplemental national sample of households was also included, resulting in a combined sample with cases from 48 states and the District of Columbia. Three rounds were conducted, in 1996-1997, 1998-1999, and 2000-2001, with each including approximately 60,000 individuals in 32,000 families.

The Household Survey instrument, which has maintained the same core content over all three rounds, included questions on health insurance, health services use, access to care, satisfaction with care, physician trust, and health status. A family informant provided information on health insurance and health services utilization for all family members as well as family income and demographic information. Each adult was asked about health status, access to care, last physician visit, satisfaction with care, and trust in the person's physician.

We pooled observations from the three rounds to create a data set of 147,977 adults (persons aged 18 ). The state laws apply to privately insured persons who do not obtain such insurance from self-insured employment-based (ERISA) plans. The CTS Household Survey did not ascertain whether the person obtained employment-based insurance through an ERISA or non-ERISA plan; thus, we had to approximate this. Since self-insured plans are more prevalent in large enterprises, we excluded families with private coverage from employment at an establishment with 1,000 or more employees. Also, because these laws do not consistently apply to health plans sponsored by government employees, government workers and their families were also excluded. Applying these restrictions resulted in an analysis sample of 49,668 adults.