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Skill, comprehension, and making an informed choice among health plans:

An experimental study

Ellen Peters,

C.K. Mertz, and

Judith H. Hibbard

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Policy Challenge:

As the CDHP/ HSA high deductible plan designs are offered to a broader range of enrollees, will consumers with limited numeracy and literacy skills be able to comprehend their options and make an informed choice?

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Literacy: The Scope of the Challenge

90 million Americans (47 percent) have limited literacy skills (Source: The National Adult Literacy Survey)

Even those with adequate literacy skills may be challenged by the complex literacy demands of the healthcare environment

– selecting a health plan– adopting a healthy lifestyle– choosing providers– managing one's care

It’s a potential driver of healthcare costs (IOM, 1994)

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Health Literacy: What Is It?

Health Literacy is the ability to read, Health Literacy is the ability to read, understand and effectively use basic understand and effectively use basic health-related information to make health-related information to make appropriate health care decisionsappropriate health care decisions..

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But health literacy should also be about HOW information is provided

Information can be easier or harder to evaluate

If it’s easier to evaluate, consumers and patients can comprehend and use that information more effectively in health choices

(Hibbard & Peters, 2003; Hibbard, Slovic, Peters, & Finucane, 2002; Peters, Dieckmann, Dixon, Hibbard, & Mertz, in review; Peters, Lipkus, & Diefenbach, in press)

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Our study: Community sample (N=303)

48% female 76% white Average age = 37; range = 18 to 64 years Stratified on education in order to get range of ability

– 49% <= high school degree or some trade school; – 51% some college or more

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Our study: Reading Literacy

Measured with a short version of the Test of Functional Health Literacy (TOFHL) We used only Passage B (Gazmararian et al., 1999)

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Our study: Numeracy

The ability to understand and use basic probability and mathematical concepts

Measured using scale from Lipkus, Samsa, & Rimer, 2001

Plus additional items

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Experimental manipulations

Subjects see information about two health plans. – Plan A is a new HSA plan– Plan B is a more traditional plan

Six conditions– Long framework, information side-by-side– Short framework, information side-by-side– No framework, information side-by-side– Long framework, common and unique information– Short framework, common and unique information– No framework, common and unique information

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Benefits Summary, Usual format = Side-By-Side Comparison

Plan A Plan BWaiting period for pre-existing conditions 11 months 11 months

Lifetime benefits maximum $2,000,000 $2,000,000

Annual deductible $2,400 single; $4,800 family

$400 single; $800 family

Out-of-pocket max per year $4,000; $8,000 $2,000; $4,000

Monthly premium you pay $35;$165 $50; $250

Cost you pay for office visits 20% after deductible $15 copay / visit

Cost you pay for preventive care visit No cost $15 copayment

Cost you pay for outpatient services 20% 20%

Emergency services 20% 20%

Urgent care in an urgent care facility 20% $35 copay

Cost you pay for prescription drugs 20% 20%

Include a Health Savings Account (HSA)? Yes No

Amt employer contributes to HSA / year $1,400; $2,800 Not applicable

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Benefits Summary, Common and Unique Comparisons

How the plans are the same: Plan A Plan B

Waiting period for pre-existing conditions 11 months after the contract takes effect

Lifetime benefits maximum $2,000,000

Cost you pay for outpatient services 20% of cost after deductible

Cost you pay for emergency services 20% of cost after deductible

Cost you pay for prescription drugs 20% of cost after deductible

How the plans are different: Plan A Plan B

Annual deductible $2,400; $4,800 $400; $800

Out-of-pocket max per year $4,000; $8,000 $2,000; $4,000

Monthly premium you pay $35; $165 $50; $250

Cost you pay for office visits 20% after deductible $15 copay

Cost you pay for preventive care visit No cost $15 copayment

Cost you pay for urgent care 20% after deductible $35 copay

Include a Health Savings Account (HSA)? Yes No

Amt employer contributes to HSA / year $1,400; $2,800 Not applicable

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Benefits Summary, Short Framework

Advantages of a new type of health plan, Plan A, as compared to the more traditional Plan B:

• Lower monthly premiums• More control over how you use your health care dollars

Disadvantages of Plan A compared to Plan B:

• Potentially higher costs for heavy users of health care• More effort required to manage your health insurance benefits

What the plans might cost you: Plan A Plan B

You will have to spend at least this much per year in premiums:

$420 ($1,980)

$600 ($3,000)

But you might have to spend as much as this in premiums and out-of-pocket maximum (minus HSA contribution for Plan A only):

$3,020 ($7,180)

$2,600 ($7,000)

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What we want to explain

Choice– Which health plan would you choose?

(Plan A includes an HSA; Plan B is a more traditional plan)

Comprehension (Index = number correct of 6 items below)1. Which plan is better for a person who needs a lot of health care? 2. Which plan is better for a person who needs very little health

care?3. Which plan has lower monthly premiums?4. How much would it cost with Plan B to go to an Urgent Care

Facility?5. What would be the out-of-pocket maximum cost per year for a

single person with individual coverage under Plan A?6. What would be the out-of-pocket maximum cost per year for a

single person with individual coverage under Plan B?

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Hypotheses

1. Comprehension will be lower for consumers with fewer literacy and numeracy skills

2. The framework will help consumers better comprehend the health plans

3. Providing common and unique information will help consumers better comprehend the health plans

4. This will be particularly true for individuals with lower skill levels

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Independent and strong impact of numeracy and literacy on comprehension

Comprehension

= .35** Numeracy + .25** Literacy

(R2=.28, F(2,295)=57.1, p<.0001)

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Less numerate comprehend less

3.1

4.5

0.0

6.0

Less numerate Morenumerate

Comprehension Index (out of 6)

t(296)=7.6, p<.0001

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Despite understanding less, the less numerate chose HSA Plan A more often

57%41%

0%

100%

Lessnumerate

Morenumerate

% choices of HSA Plan A

Chi-square (1, N=298)=6.8, p<.01

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With the usual format, most can identify lowest premiums.

82%91%

0%

Lessnumerate

Morenumerate

% correct

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Low numerate cannot identify the best plan if you need a lot of health care

35%

65%

0%Less numerate More numerate

% correct

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Lack of comprehension is related to choices

65%

32%

0%Did not know which

plan was betterKnew which plan

was better

% choices of HSA Plan A

Chi-square (1, 51) = 5.5, p=.02

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Having information Side-by-side helped comprehension for both groups.

3.33.0

4.64.3

0.0

6.0

Side-by-Side

Common-Unique

Side-by-Side

Common-Unique

Comprehension Index (out of 6)

Low Numerate

High Numerate

F(1,286)=4.7, p<.05

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Having a framework improved comprehension of the high numerate only

3.43.0

4.1

4.7

0.0

6.0

None Framework None Framework

Comprehension Index (out of 6)

Low Numerate

High Numerate

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Conclusions

How information is presented influences comprehension– Side-by-Side presentations helped both groups– Providing a framework helps the high numerate

This is a difficult task for those with less skills– They choose the HSA plan more often– But understand less of the information– Deciding based on factors that they can

understand – lower monthly premiums