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

Fourth, the states' enactment of AWP laws, which had the stated purpose of improving patient choice, preceded our observational period. Eight states (among states in our sample) had AWP laws covering physicians. No AWP statute with physician coverage was enacted after 1994. Since we used fixed effects, we could not assess the role of AWP per se. But we did test the hypothesis that patient protection laws had a greater impact on patient satisfaction in those states without AWP laws covering physicians. The test involved interacting a binary variable for no-physician AWP with the patient protection law variables. The vast majority of interaction terms were statistically insignificant. The single exception implied that patient satisfaction improved more in states with physician AWP. We do not attach importance to this isolated result.

In sum, our sensitivity analysis showed our findings to be robust, both to changes in equation specification and to changes in the sample. This gives greater confidence to the conclusion that patient protection laws did not substantially affect patient satisfaction with care or utilization of services. These nonfindings are reassuring to the extent that some commentators had expressed concern that managed care protection regulation is subject to the risk of capture by those who are regulated (Epstein 1999) and that the cure might be worse than any problems the laws attempt to address (Hyman 2000). While we find almost no evidence that patient protection legislation has directly improved patients' attitudes relating to managed care, the laws also do not seem to have substantially increased the cost of acute health care services either, at least directly. These nonfindings are somewhat puzzling, however, in view of reports elsewhere that managed care practices such as utilization review and gatekeeping restrictions have diminished substantially over the time period these laws were adopted (Mays et al. 2003). However, a qualitative study, reported elsewhere (Hall 2004b), suggests these changes were driven more by market forces than by legal mandates.

Several possibilities might explain our failure to find more significant results. First, these outcome measures might not have been precise enough, or the effects were too small to detect, using this analytical design. Yet, we had a very large sample, and these measures are state-of-the-art, especially the legal variables. Also, these measures were sufficient to detect a range of other effects not related to these laws. Thus, it appears likely that legal effects truly were mostly nonexistent.

A second reason these laws may have had no effect is that health plans may not be complying with them. However, elsewhere, reports indicate that compliance with these laws is high (Hall 2004a, b).

Third, we treated patient protection laws as exogenous variables. More realistically, adoption of patient protection laws may be endogenous to satisfaction and utilization. However, unlike many if not most state policies, virtually every state adopted patient protection laws. Thus, any approach that accounted explicitly for endogeneity would have to explain the precise timing of adoption rather than variation between adoption and nonadoption. The state of the art in predicting legislative enactments does not offer any clear way for us to explain why state X adopted patient protection in 1996 versus 1998. Thus, we relied on state fixed effects to account for any relevant differences among states at the start of our study period.