Consumers Join The Fray

Electoral politics, the Internet, and much more sophisticated patients have all helped to redistribute power among managed care players.

Freud was wrong. The great question isn’t “What does a woman want?” The great question, as we tumble toward the final presidential election of the millennium, is “What does the consumer want?” The great answer is everything, including car, house, meaningful work, personal computer, compact disc player, high-definition TV, and — you knew this was coming — a health care system that’s much more responsive to his wants and needs than what he is used to under managed care.

Patience isn’t a mark of the consumer, and there’s evidence to suggest that he’s not waiting anymore to be asked about his health needs, preferring to take part in the tug of war that managed care so often resembles.

This is an inevitable and healthy development, says Regina Herzlinger, Ph.D., professor of business administration at Harvard Business School. She has long argued that health care delivery in America is ripe for consumer-driven transformation.

Herzlinger takes the voting analogy — the fact that most citizens in this democracy do not exercise their privilege — and turns it around.

“Some people think that to have a market work, everybody must be a willing participant,” says Herzlinger. “If everybody who bought stocks had to really know what was going on, there’s no way the market could function as well as it does. All markets depend on the marginal consumer.”

By her estimate, to have a vital movement, only about 15 percent of health care consumers would need to be “as tough as nails.”

Carol Molinari, assistant professor in the graduate program in health policy and administration at Washington State University at Spokane, says health care has reached a point where that 15 percent may decide to step up.

“Consumer participation is a way to ensure the HMO’s delivery of effective health care,” says Molinari. “If people believe that their input will be used in the management and delivery of health services, then many more are likely to participate.”

Such participation is not only expected, it’s welcomed, says Neil Schlackman, M.D., medical director for member health management for Aetna U.S. Healthcare.

“We want to tell consumers what’s available for them,” says Schlackman. “There’s a tremendous amount of care that patients don’t take advantage of. One of the things I think is exciting is the opportunity to empower a consumer, telling him, ‘We have it; here’s how you can get it.'”

An opportunity

An informed consumer will help separate the good plans from the pack, Schlackman believes.

“The thing that will differentiate health care systems is what a system does with individual members, not just with doctors, government agencies, or employers,” says Schlackman. “I think that’s the big opportunity. They will be more satisfied with the care they get because they will be more knowledgeable about what they need, rather than what they want.”

Molinari says the benefits of such interaction flow both ways.

“As a consumer board member for Group Health Northwest, a regional HMO, I can attest to the direct and positive influence consumers can exert on the organization, management, and governance of a managed care organization,” says Molinari. “The benefits of consumer participation are two-sided. The HMO gains information about client preferences and problems associated with the delivery of health services. The consumer gains knowledge of the HMO’s operations and goals that will enhance his understanding of the delivery system.”

HMOs needn’t view consumer participation as a threat. They should see it as a way to become more customer-focused and competitive. “An educated consumer is a desired customer for an HMO,” says Molinari. “By providing opportunities to inform consumers about health and health care, an HMO encourages the value of good health and well-being among its clients.”

William Styring, Ph.D., a senior fellow at the Hudson Institute, a think tank in Indianapolis, says rising health care costs may make consumers appreciate any information that’s offered.

“As recently as 1996, we had the overall rate of medical inflation down to 2.6 percent,” says Styring. “Now, there’s no question that medical costs are expanding to at least 9.6 percent. That’s going to have huge implications for managed care: More employers may just get out of health insurance altogether. True, they’re less likely to do it in a thriving economy, but we haven’t repealed the business cycle yet.” Without a benefits manager behind them, consumers will have little choice but to become more active.

That’s somewhat in line with Herzlinger’s vision as well. While she doesn’t think industry will pull out — at least for the time being — she does see a less hands-on approach in the offing. Herzlinger says employers will switch to a defined-contribution system in which they’ll give employees the money to go out and shop for their own health insurance. That alone almost guarantees a more-engaged consumer.

Aetna’s Schlackman, too, likes the defined-contribution idea.”When people make the choice,” he says, “they’re happier with the choice they make than with choices that are made for them.”

Savvy patients

It could be argued that what’s being discussed — market influences, payment systems, information availability — are things consumers react to, rather than cause.

Just what is the consumer movement today? Where is it? What drives it?

Perhaps some perspective will help. Quentin Young, M.D., the national coordinator of Physicians for a National Health Program, has been practicing medicine for 52 years.

“There’s a growing sophistication on the part of patients,” says Young. “Part of it is the media picking up on health matters. How many times do stories in medical journals become fodder for news? Patients will often come to the office armed with articles from journals you subscribe to, but haven’t yet had the chance to read, and ask you questions.”

Increasingly, those questions are not being asked only of physicians. Heidi Frey, J.D., is president of the Patient Advocacy Coalition, a three-member office dedicated to helping consumers appeal denial-of-care decisions. Thanks to grants, primarily one from Colorado’s Medicaid agency, which contracts with the coalition to be an advocate for Medicaid recipients, Frey is paid a living wage, but nowhere near what she could make in private practice. Why does she do it? The impression one takes away from a conversation with her is the satisfaction of helping David against Goliath.

“I absolutely love what I do because so often the patients don’t know where to turn,” says Frey. The group’s primary function is guiding consumers through the appeals process. Consumer defiance is something that Frey’s seen a lot more of in the four years since the coalition’s creation.

To give patients greater access to free advice, the coalition is busy trying to increase the capacity of its health-rights hot line. “Call volume has been increasing steadily,” says Frey. “I think that consumers who are encountering obstacles are less inclined to back down from those obstacles.” She adds that people seem more willing to switch plans if they’ve had a bad experience. “We empower patients because our message is: ‘You can, and should, challenge any denials.'”

That’s just what Liz Helms did. Helms, a 50-year-old grandmother, is a steering committee member for the California-based Citizens for the Right To Know. In 1993 she injured her jaw and, on the advice of her physician, sought her health plan’s approval for surgery .

“It wouldn’t pay,” says Helms, who litigated and eventually received coverage for all medical bills related to the injury. But while the HMO might have thought that the battle ended with the bang of a gavel, Helms did not.

“Their treatment of me was so inhumane that I told myself that I’ve got to get involved,” says Helms, who — as part of the settlement — cannot identify the HMO. “I didn’t want people to experience what I’d experienced.”

She became a volunteer with the advocacy group and now the former hair stylist jets about the state championing consumer rights. “I’m actually in a good spot because my child is grown and I have the ability to travel and speak.”

When asked if she’s still angry at HMOs, Helms demurs: “They’re more angry at us right now because we’re forcing changes and it affects their bottom lines,” she observes, admitting that things are less adversarial than they were in 1993, but seeing much still to be done. “They need to get us into their offices and sit down with us and discuss these issues face to face,” says Helms.

This anger — no matter who actually owns it — is the unpredictable variable in the consumer wars. The cause could be managed care’s structure, says Schlackman.

“The anger comes from the fact that, for too long, managed care organizations have been the agents of employers,” says Schlackman. “The plans were hired to decrease the cost of health care. There wasn’t a lot of education of employees coming from employers. Patients get angry because certain things are not provided in the benefits structure, but that’s often determined and supported by the employer.”

The employer needs to be more open about his role in health care, he believes.

“There needs to be greater employee education by employers,” says Schlackman. “It may need to be stated as boldly as ‘Do we pay more to keep the same benefits or do you get a raise this year?'”

Four groups

Hal Hunter, Ph.D., director of the Healthcare Administration Program at California State University, Long Beach, divides the backlash into four groups: the elderly, who’ve always been organized and effective; a group consisting of those who work for large companies that are largely self-insured and come under ERISA regulation; the uninsured, Medicaid recipients, and public employees; and, not least, private contractors and employees in small companies — the beneficiaries of the economic boom.

“They don’t have employee benefits managers going to bat for them,” says Hunter. These consumers carry a promise of clout that has yet to be fulfilled. Helms, the hair-stylist-turned-advocate, falls into this category. Consider her story an anecdote pointing to this tier’s potential.

“This group really needs to be organized more” before it can emerge as a force in health care, says Hunter. It’s comprised of a diverse population: from those who scrub floors to those who troubleshoot for computer companies in Silicon Valley.

“They don’t have enough mutual interests to hang together,” says Hunter. And those consumers who do “hang together” may not be representative of the whole.

David Lansky, Ph.D., who is president of the Foundation for Accountability (FACCT), a not-for-profit organization that examines health care quality, warns that you shouldn’t mistake consumer organizations for consumers.

“The organizations are an important vehicle for testing the value of programs for consumers, but they’re not the same thing as listening to the people out there,” says Lansky. “While the consumer and patient organizations represent important, specific concerns, there are other emerging issues that surface consistently when you talk with people directly.”

Indifferent employers

Of two groups seeking satisfaction — employers and consumers — Lansky says that it’s consumers who have the momentum. “A small number of major employers are connected to a quality strategy and that number is shrinking,” says Lansky. “I see that movement stalling.”

Lansky predicts big changes in the next 10 years because millions of people think the system isn’t working. Consumers are finding new ways to maintain and improve their health — including medical savings accounts and private payment.

“The major Internet sites are contemplating a radically new way to organize care, with most routine care and information delivered through digital media, the medical record under the patient’s — not the doctor’s — control in cyberspace, and then very selective use of providers based on the patient’s judgment of quality and convenience,” says Lansky. “Changes in our health needs coupled with disaffection for the traditional — and antiquated — way of delivering care could mean profound changes for the major health institutions.”

As they become more aware of rating systems like HEDIS and, therefore, more cognizant of differences among HMOs, consumers will be more likely to either vote with their feet or pressure employers to do so.

“That’s definitely happening and I think direct-to-consumer advertising has been one of the keys,” says Lansky. “It has given consumers both new information and a new recognition that they can ask for help in treating persistent problems. It is one of the most visible symbols of a new era of consumer power in health care.”

Herzlinger says it’s only a matter of time before the consumer — fully engaged, or not — takes the reins.

Bill of rights

She points to continuing debate over a Patients Bill of Rights as evidence that the consumer backlash is well under way. The exact dimensions of what’s eventually passed may be up for grabs, but not what propels the discussion.

“Something is going to be passed,” says Herzlinger. “It’s going to happen.”

Talk of a pending Patients Bill of Rights leaves Schlackman, the HMO executive, cold. “I think that may be harmful in the long run,” he says, echoing the recent industry call for external review, rather than broader access to legal action. “We need to be willing to subject ourselves to review for decisions that are made. The external review process is another thing that empowers patients.”

Hunter, of California State University, thinks this is one issue the Democrats and Republicans could, together, help speed along.

“The only thing that separates them now is the question of ERISA protection and I think they’ll come to an agreement,” says Hunter. “We’ve held up ERISA as the Holy Grail for too many years.”

Removal of ERISA protection for HMOs would allow patients to sue for punitive damages over denial-of-care decisions. But does giving more people the opportunity to sue mean that the consumer gains power and authority? Using the courts does not guarantee justice, fairness, or efficiency.

“Everybody is focused on the consumer, but I think the consumer will ultimately get bored with it,” says Hunter. ” The exposure will lead to some improvement in the industry. When things become less egregious in terms of negligence, and when denials of care go down, the public’s attention will shift.”

Still, the recent uproar in Congress and state legislatures is not part of the usual flow of things, in Hunter’s opinion.

“There’s never been this kind of backlash in my memory,” he says. “We’re going to probably end up with some kind of consumer-protection legislation.”

Styring, of the Hudson Institute, says that will be a great day — for the American Bar Association. “Then, consumers are definitely going to have a bigger voice because they’re going to have trial lawyers on their sides,” he says.

If Congress, for whatever reason, doesn’t act, the private sector just might, says Molinari.

“Employers have an opportunity to bargain for increased consumer participation in employer health plans,” she says.

Internet influence

“A person with any kind of intelligence willing to spend a couple of hours looking up something — and you’d have to assume he would, because that something is affecting him — can get a lot of information these days,” says Young.

A recent national survey seems to bear this out. The Louis Harris Poll found that the number of Americans who use the Internet to look for health care information has risen to around 70 million — a 16 percent increase since January. (The survey of 1,006 U.S. adults was conducted between July 15 and 20.) According to the poll, 55 percent of those who use the Internet to seek health information do so for themselves, while 57 percent look for information for family members. Most search for information about specific medical conditions.

Schlackman, too, is aware of the Internet’s increasing potential.

“Of course, there are lots of caveats because it has good information and bad information,” he says. “But it does offer an opportunity for the MCO to say to a woman, ‘It’s time for your mammography.’ Theoretically, every time she opens her computer, she gets that message until she gets the test.”

Last year Aetna U.S. Healthcare sent out 1.2 million of those messages by normal mail, according to Schlackman. An E-mail reminder could be done faster, more cheaply, and maybe more effectively, offering a mountain of information at the click of a mouse.

“Consumers will use their better knowledge to make better health care choices,” says Schlackman. “That may be a little threatening to physicians at first. The medical schools have to begin to teach students that the health care consumer is not going to be passive.”

That’s a lesson all of us are learning.

Herzlinger recounts speaking not too long ago at a Washington, D.C., function, telling the audience that the consumer’s time is coming. “I discussed how the consumer changed retail shopping. The stores wanted to give us theater. We wanted to get in and get out. I discussed how consumer demand led to the creation of many more mutual funds. Then I said, ‘The consumer is going to do the same thing in health care.'”

West Virginia Sen. John D. Rockefeller came next.

“‘She’s so right,'” Herzlinger recalls him saying. “‘I can’t tell you how many calls I get from people complaining about managed care.’ He said it in a sort of stunned tone.”