اثر کارت های گزارش در انتخاب مصرف کننده در بازار بیمه سلامت

We test the effect of report cards on consumer choice in the HMO market. Federal employees were provided with report cards on a limited basis in 1995 and then on a widespread basis in 1996. Exploiting this natural experiment, we find that subjective measures of quality and coverage influence plan choices, after controlling for plan premiums, expected out of pocket expenses and service coverages. The effect is stronger within a small sample of new hires compared to a larger sample of existing federal employees. We also find evidence that report cards increase the price elasticity of demand for health insurance.

Report cards help consumers make better-informed choices among the products and services they consume. In the case of health insurance, report cards seek to translate complex data about plan benefits and treatments into a small number of dimensions that are understandable and useful to consumers.1 Effective report cards expand the consumer’s information set and enable them to select plans that offer the best tradeoff between quality and cost. The effect of report cards on consumer decision-making depends on the information consumers have about health insurance plans in the absence of report cards and on report cards conveying meaningful additional information to consumers. The purpose of this paper is to test the hypothesis that consumer report cards influence the consumer’s choice of health plan. In this paper we provide an empirical test of the joint hypothesis that report cards provide relevant information to consumers and that consumers are less than fully informed in their absence. Our evidence is based on the plan selections of a sample of new and existing US federal employees in the years 1995 and 1996. Federal employees select their health insurance under a program called the federal employees health benefits plan (FEHBP),2 which provides them with multiple plan choices. Starting in 1995, the FEHBP’s administrative arm, the Office of Personnel Management (OPM), began to compile report cards on each included plan, although these were not widely distributed. The following year, 1996, the report cards were also widely distributed. We are able to use the natural experiment created by OPM to test the joint hypothesis. Our tests are based on analyses of plan choice in 1995 and 1996. The 1995 choice regressions establish a baseline of consumer information with respect to financial and quality dimensions, prior to the widespread introduction of report cards. Re-estimation of the choice regressions using 1996 data is used to assess the net impact of report cards on consumer choice. We focus on the differences in key coefficients for plan quality and coverage between 1995 and 1996 in order to measure the impact of report cards on consumer-decision making. Our results contribute to the emerging literature that considers the role of health plan report cards in consumer-decision making (Edgman-Levitan and Cleary, 1996; Hibbard and Jewett, 1996 and Hibbard and Jewett, 1997; Sainfort and Booske, 1996; Tumlinson et al., 1997; Chernew and Scanlon, 1998; Spranca et al., 2000; Beaulieu, 2002; Farley et al., 2002; Harris et al., 2002; Scanlon et al., 2002). Early work in this area concentrated on hypothetical questions about the kinds on information consumers would find useful. More recent work has focused on the effect that distributing health plan report cards to consumers has on plan choice. Our work provides additional evidence on this important question. Our results also bear on the more widely researched price elasticity of demand for health insurance. It is possible that in the absence of report cards consumers will use prices to partially infer plan quality, thus reducing the price elasticity of demand. This is consistent with an argument made by Royalty and Solomon (1999), who argue that vigorous price competition between plans can only occur where consumers are confident that plans have comparable quality and coverage. Our results test the proposition that report cards makes choices more responsive to price. The paper is organized as follows. In Section 2, we review the prior work in the area of health plan choice and health plan report cards. In Section 3, we discuss the natural experiment that resulted from OPM’s policies. Data and methods are given in Section 4 with results reported in Section 5. The paper concludes in Section 6 with a discussion of its implications.

There have been few efforts to assess the effects of subjective report card measures. Feldman et al. (1989) found that subjectively reported waiting times influenced plan choice in the Twin Cities. On the other hand, Chernew and Scanlon (1998) did not find that subjective plan measures influenced plan choice in any regular, sensible way. Our work differs from that of Chernew and Scanlon in that we significantly reduce the number of report card measures in our regressions. In the process, we obtain significant results. Our results suggest that making report cards available influences consumer choice. However, it doesn’t necessarily follow that report cards improve market outcomes unless it can also be verified that report cards provide valid measures of quality of care. Significantly, we also find that many report card measures are highly correlated.17 This may be an asset from the consumer perspective. Consumers can apparently get a complete picture of most subjective dimensions of quality by focusing on just a few report care measures (two in our case). Providing that these few measures are valid indicators of quality, reporting them may have a significant impact on market efficiency. Our data and results are subject to some limitations. Our data are for a selected set of counties where the number of plan choices is reasonably small. Thus, our results cannot be generalized to the entire FEHBP. Still, the limited number of choices may be a good representation of what may occur in large firms in the private sector. Future work may be aimed at validating our findings on a larger sample of new hires. One difficulty in doing so will be replicating the natural experiment exploited in this work. Most importantly, it would be useful to test the validity of report card measures. One way to do this would be through a study of plan level quit rates in relation to lagged report card measures.