Unbiased Analysis of Today's Healthcare Issues

HMO quality: Separating perception from reality

Written By: Jason Shafrin - Oct• 31•06

It has been shown in various studies and opinion polls that consumers generally believe that HMOs provide an inferior level of care than non-HMO plans. This is true even when more objective measures of medical service quality are taken into account. Why is HMO satisfaction so low?

A study by Reschovsky, et al. (2002) claims that people who are dissatisfied with their medical care are more likely to report that they have an HMO. The authors use the Community Tracking Study. The CTS asks survey respondents what type of insurance they have. Later, they contact the individual’s insurance company in order to glean the details (copayment and coinsurance rates, deductibles, referral requirements, insurance type, etc.) of the person’s true insurance coverage.

As an outcome variable, the authors looked at various patient satisfaction measures (e.g.: the level of trust they have with their current physician, their satisfaction with their last doctor’s visit). When they compare people who have an HMO and correctly report this, with those who have an HMO but report they have non-HMO coverage, the authors find that those with the correct reporting have lower satisfaction scores. On the other hand, comparing people with a non-HMO insurance who correctly report this with those who have a non-HMO but report having an HMO, they find the people incorrectly reporting that they have an HMO had lower satisfaction scores. Below is the results for the dependent variable of “percent dissatisfied with their health care in general.”

  HMO-Actual Non-HMO Actual
HMO Reported
9.6% 10.1%
non-HMO Reported
6.3% 7.3%

Thus, they conclude that reporting of HMO coverage may be negatively correlated with actual satisfaction and may not accurately reflect the survey respondant’s true coverage. As the title indicates: “It’s not whether you are in an HMO but whether you think you are”

Reschovsky; Hargraves; Smith (2002) “Consumer Beliefs and Health Plan Performance: It’s Not Whether You Are in an HMO But Whether You Think You Are” Journal of Health Politics, Policy and Law, Vol 27, No. 3 pp.353-377.

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