Do Consumer Reports of Health Plan Quality Affect Health Plan Selection?

Published in: Health Services Research, v. 35, no. 5, pt. 1, Dec. 2000, p. 933-947

Posted on RAND.org on January 01, 2000

by Mark Spranca, David E. Kanouse, Marc N. Elliott, Pamela Farley Short, Donna O. Farley, Ron D. Hays

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OBJECTIVE: To learn whether consumer reports of health plan quality can affect health plan selection. DATA SOURCES: A sample of 311 privately insured adults from Los Angeles County. STUDY DESIGN: The design was a fractional factorial experiment. Consumers reviewed materials on four hypothetical health plans and selected one. The health plans varied as to cost, coverage, type of plan, ability to keep one's doctor, and quality, as measured by the Consumer Assessment of Health Plans Study (CAHPS(TM)) survey. DATA ANALYSIS: The authors used multinomial logistic regression to model each consumer's choice among health plans. Principal Findings: In the absence of CAHPS(TM) information, 86 percent of consumers preferred plans that covered more services, even though they cost more. When CAHPS(TM) information was provided, consumers shifted to less expensive plans covering fewer services if CAHPS(TM) ratings identified those plans as higher quality (59 percent of consumers preferred plans covering more services). Consumer choices were unaffected when CAHPS(TM) ratings identified the more expensive plans covering more services as higher quality (89 percent of consumers preferred plans covering more services). CONCLUSIONS: This study establishes that, under certain realistic conditions, CAHPS(TM) ratings could affect consumer selection of health plans and ultimately contain costs. Other studies are needed to learn how to enhance exposure and use of CAHPS(TM) information in the real world as well as to identify other conditions in which CAHPS(TM) ratings could make a difference.

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