Understanding employee awareness of health care quality information: how can employers benefit?

Health Services Research, Dec, 2004 by Jean Abraham, Roger Feldman, Caroline Carlin

According to a recent survey sponsored by the U.S. Chamber of Commerce, approximately 11 percent of every payroll dollar of U.S. businesses was spent on health care benefits in 2002 (U.S. Chamber of Commerce 2003). While price remains the dominant factor driving employers' health plan contracting decisions, there is growing interest among employers to evaluate the quality of health plans and providers. In the 1997 Robert Wood Johnson Foundation Employer Health Insurance Survey, nearly 39 percent of large firms considered health plan accreditation and 52 percent considered the board certification of physicians when making contracting decisions (Marquis and Long 2001).

Some employers have begun to collect and distribute health plan and provider quality information to their employees, with the hope that this information will result in better clinical outcomes if individuals seek treatment from higher quality providers. (1) As a second objective, employers hope to improve market efficiency, whereby employees who are offered a choice of plans and providers use information on quality, price, and other attributes when making decisions about their health care. (2)

Economic theory often assumes that consumers are fully informed about the attributes of the goods and services that they purchase. When information is not known, consumers may search for and utilize both informal and formal sources of information. Characterizing medical care as a "reputation good," Satterthwaite (1979) suggests that since physicians' services are differentiated, an evaluation of their attributes can be achieved only through experience. As such, consumers may rely on informal sources such as spouses, relatives, and friends to learn about providers (Pauly and Satterthwaite 1981). (3) Recent studies by Hoerger and Howard (1995); Feldman, Christianson, and Schultz (2000); and Harris (2003) find empirical support for this claim.

During the past decade, there has been significant investment to develop standardized systems of quality measurement based on the aggregate experiences of multiple consumers that can be used by employers, government purchasers, and other consumer groups. (4) Several studies have investigated consumers' use of these formal sources of quality information (e.g., health plan report cards) and have found that demographic characteristics, health status, and an individual's likelihood of switching plans affect use (Short et al. 2002; Braun et al. 2002; Schultz et al. 2001; Fowles et al. 9000). Our study most closely resembles Schultz et al. (2001), who examined health plan report card use in 1998 by employees in 19 firms that were members of the Buyers Health Care Action Group (BHCAG). Their analysis revealed that gender, education, and stated preferences about the importance of quality had a positive influence on report card use, while firm size was inversely related to report card use.

One factor that has not received much attention in earlier work is the role that employers can have in educating employees about their health benefits and quality. Employer communication methods, including distributing booklets, brochures, and newsletters, holding education sessions, and using web-based strategies, may significantly impact employees' awareness and use of quality information. (5)

Two empirical studies have focused on employer communication and employee awareness of benefits. Driver (1980) compared the use of traditional benefits communication methods (e.g., booklets, brochures, and bulletin boards) with more interactive communication between employees and human resources staff members, and found that two-way communication was superior with respect to knowledge retained. More recently, Feldman and Schultz (2001) examined the factors associated with employee use of flexible spending accounts (FSAs). They found that more active employer communication strategies, such as holding special meetings with employees to explain FSAs, were positively associated with employee use of these accounts.

In 2002, we conducted a survey of 1,365 employees in 16 large firms in the Minneapolis-St. Paul metropolitan area to gain a better understanding of their awareness and use of provider quality information. We develop a framework to analyze the factors that are associated with employee awareness of employer-disseminated quality information on providers, focusing particular attention on the impact of employer communication strategies.

STUDY SETTING

The study setting is the Buyers Health Care Action Group (BHCAG), a health insurance purchasing and reform coalition comprising 30 employers in the Minneapolis, Minnesota, region. (6) These self-insured employers have approximately 250,000 employees and dependents eligible for health insurance. In 2002, 24 BHCAG employers offered "Choice Plus," a point-of-service health plan with out-of-network coverage. Employers may offer other managed care and indemnity plans, but some have selected Choice Plus as their sole health insurance plan. About 100,000 employees and dependents were enrolled in Choice Plus in 2002.