Attributes Important to Medicare Beneficiaries Making Health Plan

Choices: A Conjoint Analysis Decision-Making Experiment

Sunyna S. Williams, PhD, CMS Jack H. Fyock, PhD, MSI

Acknowledgments & Disclaimer

• Thanks to Chris Smith Ritter, Kelly Dougherty, Catherine Jo, and Sara Bentley for their contributions to this research.

• The statements expressed here are those of the authors and do not necessarily reflect the views or policies of the Centers for Medicare & Medicaid Services or Market Strategies, Inc.

• In anticipation of MMA, we were interested in learning about how Medicare beneficiaries make trade-offs among various attributes when making health plan choices.

• Recent studies, primarily looking at employees, found that people do make trade-offs, and willingness to make different kinds of trade-offs varies by demographics and health status.

• A couple of studies that looked at Medicare beneficiaries found that premiums and drug benefits were most important, and many chose more tightly managed care to obtain other benefits.

Introduction

Introduction

• To examine health care decision-making among Medicare beneficiaries, we conducted a conjoint exercise, in which participants made a series of choices among hypothetical plans that varied in terms of several attributes.

• We also looked at how attribute preferences and trade-offs varied across subgroups, such as those who have Medigap vs. Managed Care, those who are lower-income, and those who have high drug costs.

• And, we looked changes over time in plan choices with the introduction of the MMA Preventive Services and Drug Benefit provisions.

Method

• Dates—July-September 2003• Locations—Philadelphia, PA; Los

Angeles, CA; Atlanta, GA; Chicago, IL• Participants—Nearly 300 Medicare

senior beneficiaries• ~65% under 75 years• ~65% female• ~85% white

Method

• Participant Subgroups• ~60% Original Medicare with Medigap

(vs. Managed Care)• ~35% Lower-Income (Single <$18,500 or

Married <$22,233)• ~40% Medigap with High Rx Spending

(>$250 per month)

Method

• The study method was a conjoint analysis within-subjects decision-making experiment, for which each participant made a series of choices among hypothetical plans that varied in terms of several attributes.

• There were 17 trials.• Each trial involved making a choice among

three hypothetical plan options.• Plan attributes included prescription drug

coverage, preventive services, doctor choice, plan premium, etc., with 2-3 levels per attribute.

Analytic Plan

1. Average Importance—Analysis of conjoint data to assess how beneficiaries weight different attributes when making a choice

2. Market Simulation—Analysis of conjoint data to classify beneficiaries into product shares of preference based on their choices

Average Importance

Attributes Overall MedigapManaged Care

Physician Choice 10.71 16.89 2.78

Preventive Services 13.32 13.38 14.23

Out-of-Area Coverage 2.65 3.37 1.68

Plan Premium 29.24 24.83 33.09

Rx Coverage 20.96 19.57 23.93

Vision and Dental Coverage

15.87 14.13 17.18

Quality / Customer Satisfaction

7.25 7.82 7.11

Average Importance

Attributes OverallMedigapLow Rx Spend

Medigap High Rx Spend

Physician Choice 16.89 17.06 16.58

Preventive Services 13.38 13.10 14.94

Out-of-Area Coverage 3.37 5.40 1.50

Plan Premium 24.83 28.25 18.72

Rx Coverage 19.57 15.46 24.69

Vision and Dental Coverage

14.13 12.91 15.63

Quality / Customer Satisfaction

7.82 7.83 7.93

Average Importance

Attributes Overall Lower IncomeHigher Income

Physician Choice 10.71 9.65 11.47

Preventive Services 13.32 11.51 14.19

Out-of-Area Coverage 2.65 2.79 2.58

Plan Premium 29.24 35.22 26.49

Rx Coverage 20.96 17.33 22.23

Vision and Dental Coverage

15.87 15.59 16.01

Quality / Customer Satisfaction

7.25 7.91 7.03

Market Simulation—Current

Current – FFS+Supp.• Any Doctor• “No” Preventive

Services • Out of Area

Coverage • Monthly Premium

$120 • No Rx coverage • No Vision and

Dental • Satisfaction Good

Current – Medicare Advan.• Network of Doctors• Preventive Services • No Out of Area

Coverage • Monthly Premium $60 • Rx coverage $1200• No Vision and Dental • Satisfaction Good

Vs.

Market Simulation—2005

2005 – FFS+Supp.• Any Doctor• Preventive

Services • Yes Out of Area

Coverage • Monthly Premium

$120 • No Rx coverage • No Vision and Dental • Satisfaction Good

Current – Medicare Advan.• Network of Doctors• Preventive Services • No Out of Area

Coverage • Monthly Premium $60 • Rx coverage $1200• No Vision and Dental • Satisfaction Good

Vs.

Market Simulation—2006

2006 – FFS+Supp.• Any Doctor• Preventive Services • Yes Out of Area

Coverage • Monthly Premium

$120 • Rx coverage $1200• No Vision and Dental • Satisfaction Good

Current – Medicare Advan.• Network of Doctors• Preventive Services • No Out of Area

Coverage • Monthly Premium $60 • Rx coverage $1200• No Vision and Dental • Satisfaction Good

Vs.

Market SimulationOverall

Overall

Model FFS+Supplement Medicare Advantage

Current 20.33 79.67

2005 30.31 69.69

2006 50.27 49.73

Market SimulationMedigap vs. Managed Care

Medigap Managed Care

Model FFS+Supp. Medicare Advan. FFS+Supp. Medicare Advan.

Current 27.76 72.24 11.00 89.00

2005 40.10 59.90 18.72 81.28

2006 60.63 39.37 38.87 61.13

Market SimulationMedigap High vs. Low Rx Spending

Low Spenders High spenders

Model FFS+Supp. Medicare Advan. FFS+Supp. Medicare Advan.

Current 32.83 67.17 22.66 78.34

2005 45.72 54.28 34.16 65.84

2006 62.32 37.68 59.79 40.21

Market SimulationLower vs. Higher Income

Lower Income Higher Income

Model FFS+Supp. Medicare Advan. FFS+Supp. Medicare Advan.

Current 24.38 75.62 18.24 81.76

2005 31.75 68.25 29.88 70.12

2006 45.07 54.93 53.89 46.11

Conclusions

• Overall, we found that after plan premium, drug coverage was the most important attribute, and that preventive services was moderately important.

• Not surprisingly, therefore, with the addition of the MMA provisions, the very strong preference for managed care decreases and then seems to disappear.

• Interestingly, although the strength of the preference decreases over time, those currently in managed care consistently prefer managed care.

Conclusions

• Future research should also look at variables other than attributes that could affect health care choices, such as preference for one-stop shopping or motivation and skill to be an active consumer.

• These findings have implications both for beneficiary education and decision-support initiatives by Medicare and other stakeholders and for plan marketing activities.