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Public Opinion About Costs And Transparency: Learning From Massachusetts



December 28th, 2012

Americans tend to blame rising health care costs on various “bad actors” — insurance companies, drugmakers, and others who overcharge their customers. But two polls conducted earlier this year suggest that, if views about health care costs in Massachusetts predict trends in national public opinion, policymakers may find the public increasingly receptive to using price transparency to control health care costs.

Price transparency is increasingly being discussed as an important mechanism to reduce health care costs. The recent Massachusetts cost containment bill had a number of provisions related to transparency, and there have recently been calls for national cost containment measures which would also address price transparency issues.

Massachusetts has long been an outlier in the area of health policy, as the state most notably enacted comprehensive health reform in 2006, and recently passed an ambitious package of cost containment measures. The residents of Massachusetts have had a unique experience with health reform, which has included an expanded role of government in the health care sector as well as a greater level of public discourse about cost containment.

Although Massachusetts differs from the rest of the nation in many ways, these experiences may have shaped public opinion about health costs. (See Oakman TS, Blendon R, & Buhr T, “The Massachusetts health reform law: A case study”, in Blendon R, Brodie M, Benson JM, Altman DE, eds., American Public Opinion and Health Care, Washington DC: CQ Press, 2011, p.128.) Massachusetts residents may well be more knowledgeable about health costs as compared with the rest of the country. To the extent to which Massachusetts is a national leader in the area of health policy, public opinion and party positions in the state may anticipate those of the nation as a whole.

Data And Methods

This post relies on two public opinion polls. The first was the national NPR/RWJF/HSPH “Sick in America” poll, which was conducted March 5-25, 2012. The same poll was administered to a sample of Massachusetts residents between late April and early May, 2012. A number of items were presented to respondents, who were asked whether each was “a reason or not a reason for rising health costs today”.  Acceptable choices were “Major reason” “Minor reason” “Not a reason”, “Don’t know” or “Refuse”.  The poll questions are below, and further details on the poll’s construction and results are available from the author at KHempstead@RWJF.org.

The categories were as follows:

Personal Responsibility

  1. “People not taking good care of their health, so many need more medical treatment.”

Self-Interested Behavior

  1. “Insurance companies charging too much money”
  2. “Doctors charging too much money”
  3. “Hospitals charging too much money”
  4. “Drug companies charging too much money”
  5. “Some well-known or large hospitals or doctor groups using their influence to get higher payments from insurance companies”
  6. “The number of medical malpractice lawsuits”
  7. “Fraud and abuse by some hospitals, doctors and nursing homes “

Medical Care

  1. “Too much spending on expensive medical treatment for patients who have virtually no    hope of recovery.”
  2. “People not getting the right diagnosis or treatment.”
  3. “People getting more expensive tests and services than they really need.”
  4. “Patients’ medical care not being well-coordinated, leading to duplication of tests and treatments or necessary tests or treatments not being ordered at all.”

Government

  1. Medicare and Medicaid not doing enough to keep their costs down”
  2. People having to pay for free care for people who don’t have health insurance”
  3. Too little government regulation of prices charged in health care”
  4. Too much government regulation”

Price Transparency

  1. It is too hard for patients to find out the cost of a recommended treatment.”
  2. Most people with health insurance having little incentive to look for lower-priced doctors and services.”
  3. Patients are afraid to discuss cost when doctors outline treatment options.”
  4. Doctors do not share cost information when outlining treatment options.”

Results

Major cost drivers. As mentioned above, in both Massachusetts and the nation as a whole, respondents were most likely to believe that self-interested behavior by various parties, along with failure to take personal responsibility, were major reasons for rising health care costs. In general, respondents of both political parties were more likely to agree that these factors were major problems than they were to agree that the role of government or problems with medical care or with the price system were major problems.

Exhibit 1 (click to enlarge) shows these items ranked by the overall proportion of the national sample who responded that they were major reasons for rising health care costs.  As can be seen, for the top five listed reasons, the national and Massachusetts rankings are extremely similar. Items which relate to “self-interested behavior” – namely various participants in the health care system over-charging or otherwise engaging in rent-seeking activity led the list for both samples.


For both the nation and Massachusetts, over-charging by insurance, pharmaceutical companies and hospitals were the top three selected “major” reasons for rising health care costs. The “personal responsibility” item about people taking care of their own health was the fourth ranked reason for both samples. Nationally, the fifth most highly ranked major reason was the statement that doctors charged too much, whereas for Massachusetts, the fifth most highly ranked major reason was the statement that people received medical treatment that they didn’t really need.

These views are consistent with prior polling data, which has shown that Americans believe that various kinds of “bad actors” in the health care delivery system are largely responsible for the upward trend in costs. (See Brodie M, Deane C, Hamel EC, Gutierrez, CS. “Attitudes about Health Care Costs”, in Blendon R, Brodie M, Benson JM, Altman DE, eds., American Public Opinion and Health Care, Washington DC: CQ Press, 2011, p.82.)  In this sense public opinion in both samples and in both political parties appears to place more emphasis on symptoms as compared with underlying causes of rising health care costs.

Partisan Differences. There is a fair amount of agreement between Republicans and Democrats about the most selected major reasons for health care costs. Self-interested behavior by providers and personal responsibility are leading reasons for members of both parties. However, Democrats both nationally and in Massachusetts are more likely to say that overcharging by pharmaceutical and insurance companies are major reasons for rising health care costs, while party differences are smaller about whether hospitals charge too much.  Both nationally and in Massachusetts, Republicans are more likely to respond that medical malpractice is a major reason for rising health care costs. The issue of personal responsibility is nationally a greater concern for Democrats, but in Massachusetts, Republicans are more likely to cite this as a major reason for rising health care costs. See exhibit 2 (click to enlarge).

Items related to the role of government generate the greatest differences along party lines. See exhibit 3 (click to enlarge). In Massachusetts there is some moderation in anti-government sentiment among Republicans, compared to the nation as a whole, but there is still a great difference between the parties on these questions.  These differences are most pronounced when it comes to questions about whether the government does too much or too little. Nationally, Republicans are much more likely than Democrats to cite government doing too much as a major reason for rising health care costs (69 percent vs. 35 percent), while only 25 percent of Republicans believe it is a major reason for rising health care costs that government does too little to regulate prices, as compared with 50 percent of Democrats.

In the case of items related to medical care, such as poor coordination of care, wrong diagnoses, or excessive end of life care, the overall percent agreeing that these items are major reasons for rising health care costs does not differ greatly in Massachusetts versus the United States. But while nationally there are considerable party differences on these questions, in Massachusetts there is very little difference between the views of Republicans and Democrats. The one exception is the item about overtreatment, where Republicans and Democrats have similar views both nationally and in Massachusetts. See exhibit 4 (click to enlarge).

Price Transparency. There is a big difference between Massachusetts and the nation as whole in the importance placed on price transparency as a factor in rising health care costs.  For instance, almost half (44 percent) of Massachusetts respondents characterized a lack of incentive for insured patients to seek out the best price as a “major reason” for rising health care costs. By comparison, only 27 percent nationally characterized this as a major reason for rising costs.

Both in Massachusetts and in the nation as a whole, there are few significant partisan differences in public opinion with regard to the items about price transparency. For example 53 percent of Republicans and 44 percent of Democrats in Massachusetts agreed that a lack of incentive for insured patients to save money was a major reason for rising health care costs, while nationally the comparative figures were 22 percent and 33 percent, respectively. Massachusetts Republicans are also more likely than Republicans nationally to think that doctors’ unwillingness to share cost information and difficulties in learning the costs of treatments are major reasons for rising costs (42 percent versus 33 percent, and 40 percent versus 32 percent, respectively).  There are generally similar but smaller differences between Democrats in Massachusetts and nationally. See exhibit 5 (click to enlarge.) This finding suggests that price transparency may be a fruitful approach to framing health reform issues so as to maximize bipartisan support.

There is a growing interest on the part of carriers, purchasers and government to increase consumers’ exposure to information about health care prices.  These initiatives have taken many forms.  A number of states have presented information on variation in prices for common procedures on consumer friendly websites using data from the All Payer Claims Databases. More commonly, carriers and purchasers are working to make information about provider prices available to employees, particularly those with high deductible plans. Recently, Catalyst for Payment Reform, which represents large employers, released a brief on price transparency.

Among its many other provisions, the Massachusetts Cost Containment bill calls for the development of an enhanced consumer transparency website that will provide price information and online decision making tools. Additionally there are new requirements for carriers to improve their disclosure of information about out of pocket costs.

Despite the multiplication of price transparency initiatives, there is thus far relatively little information about how such strategies are perceived by consumers. These poll results suggest that this may be a growing and fruitful area for bipartisan progress on health care costs, with once again, Massachusetts leading the way.

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1 Response to “Public Opinion About Costs And Transparency: Learning From Massachusetts”

  1. josh.archambault Says:

    Katherine,
    What do you make of the fact that almost all insurers in the Commonwealth are non-profit? And most of the hospitals for that matter? Did the survey ask if that made a difference for individuals?

    I would guess it would impact the results in Mass if it was included in the question. Most residents in Mass are more forgiving of large reserves for a non-profit when compared to profits for a private company.

    I also find it interesting that we know that large teaching hospitals demanding higher rates is one of the primary drivers of health care costs in Mass (thanks to work done by our AG), yet less than 50% of the population see it as an issue.

    It makes me question your underlying assumption that Mass folks are more engaged. If we matched the research for the reasons for increasing costs to the polls results, I think we would end up flipping many of the rankings. For example, the data doesn’t support drug and insurance company profits as the main drivers of increasing costs.

    Finally, while it is encouraging that more Mass residents say they want data when compared to a national group, the incentives under the new Chapter 224 law are still not right for cost containment. For example, roughly 60% of residents in the state face no deductible versus 25% nationally, and only 3% of the plans have a consumer tool like an HSA. In other words, even if they have the cost information before them, more than half of our residents will pay the same co-pay/ co-insurance regardless of the price difference between two care settings. In fact, they may end up selecting the more expensive one assuming it means higher quality. A culture change is needed.

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