A Sachs Group consumer survey conducted in 1996 reveals that a market's managed-care maturity is a prime determinant of consumer satisfaction.
Ironically, the more mature the market, the less satisfied consumers tend to be with their HMOs' medical services.
HMOs that rise above the dissatisfaction in mature markets are those that exercise more control over medical delivery and those that are provider-sponsored or grew out of integrated systems, the survey shows.
In those same markets, however, consumers' satisfaction with their HMOs' plan services-such as claims handling and information-increases.
Sachs, a healthcare information company based in Evanston, Ill., surveyed about 90,000 consumers in 30 markets nationwide and rated more than 200 health plans. The markets were grouped into one of three market stages. The most mature stage has more than 60% of consumers enrolled in commercial HMOs. In the middle-stage markets, plans are becoming more competitive, with penetration averaging about 42%. In the early-stage markets, penetration is relatively low-averaging about 36%-but growing (See chart, p. 50).
"When we examine the managed-care delivery system, consumers are less satisfied in a (mature-stage) market than they are in an (early-stage) market with the delivery of medical care. That includes satisfaction with receiving care that you and your doctor feel are necessary, including ability to get referrals to specialists," says Michael A. Sachs, the firm's chairman.
That spells trouble for HMOs, he says, because as markets matured survey respondents showed less likelihood of renewing their health plan enrollment. "Any business that has a product with growing consumer dissatisfaction runs the risk of defection and long-term problems," he says.
In early-stage markets, utilization controls are not as tight as they are in mature markets, Sachs explains.
In mature markets, as a result of price competition, "the plans have had to be more concerned about access and the cost of care, so they've tried to reduce access, referrals and payments to physicians," Sachs says.
That leads to consumer dissatisfaction.
As markets mature, consumers become more satisfied with plan services. "That's what you'd expect" because "the plans themselves tend to be more experienced, larger and they've made the investments in member services," Sachs says.
"People in the latter-stage markets are happy with the networks available to them, with choice of physicians and location of hospitals. But they are concerned about access to care and the time spent with their physicians," Sachs says.
Nevertheless, Sachs says research shows people are still more satisfied with HMOs vs. other types of insurance, such as PPOs and traditional insurance.
In Sachs' survey, four scores were calculated for each market: value and loyalty, medical-care satisfaction, plan services satisfaction and network efficiency satisfaction. A total score was then calculated.
Each HMO was then rated against its local market average in the four areas. HMOs with scores significantly higher than the market average in all four areas were included in the Sachs HMO Honor Roll. Those high-scoring plans are ChoiceCare Health Plans, Cincinnati; Harris Methodist Health Plan, Dallas; Independence Blue Cross, Philadelphia; Kaiser Permanente, Atlanta; Kaiser Permanente, California; Kaiser Permanente, District of Columbia; M-Plan, Indianapolis; Oxford Health Plans, New York; Physicians Health Services, New York; Prudential Healthcare, Orlando, Fla.; Tufts Health Plan, Boston; United HealthCare of Texas, Houston; and United HealthCare of the Midwest, St. Louis.
Only two plans on 1995's honor roll reappeared on the latest list: ChoiceCare in Cincinnati and Kaiser's California region. But because the 1996 survey differed significantly from the previous one, no direct comparisons can be made, Sachs says. One change was the categories in which the plans were judged. In 1995, those categories were general perception, access, convenience and quality.
Because of their organizational structure as group models, several health plans Sachs cites "have more control than most" over medical delivery, such as Kaiser plans and Harvard Pilgrim Health Care, says Bob Mayo, senior vice president at Sachs. Others are "provider-sponsored or grew out of an integrated delivery system," he says.
Warning about the changes Kaiser is making to help the company compete with more flexible plans, Sachs says, "I think opening up their networks will be a real problem because that will dilute brand and what Kaiser stands for."
Says Mayo: "Medical delivery is truly what the consumer defines the healthcare experience around." The challenge is for plans to find ways to partner with physicians to deliver the superior care that savvy consumers have come to expect, Mayo says.
In 11 markets, no health plan's performance was statistically significantly above the market average for any category. Those markets are Baltimore; Charlotte, N.C.; Chicago; Cleveland; Detroit; Kansas City; Miami; Milwaukee; Phoenix; San Antonio and Tampa, Fla.
They are "very competitive markets in which plans haven't differentiated themselves yet. The markets are up for grabs," Sachs says.
It's also of interest that only one Blue Cross and Blue Shield plan made Sachs' honor roll, although collectively the Blues plans make up the nation's largest managed-care organization. The plans had 36.4 million managed-care enrollees at the end of 1996, including 10.9 million in HMOs. According to InterStudy, a Minneapolis-based managed-care research firm, nationwide enrollment in all HMOs totaled 63.3 million as of July 1, 1996.