News

Costs, Not Physician Choice, Most Important Factor In Individual Health Coverage Plan Selection

A report released today by the Center for Healthcare Research & Transformation (CHRT) shows that individuals selecting health coverage in Michigan are making their buying decision based on costs more than choice of physicians and network size.

The report, “Health Plan Selection: Factors Influencing Michiganders’ Choice of Health Insurance,” shows that consumers purchasing individual health insurance coverage were more than twice as likely to report that premium cost was very important in selecting a health plan as they were to report that the number of in-network physicians was a very important factor in their decision.

“We have known from consumer behavior that cost is very important, particularly when consumers are choosing and paying for health plans themselves. But, this study tells us more clearly just how much more important cost is in today’s marketplace than network size,” says Marianne Udow-Phillips, director of CHRT.

Highlights of report include:

  • 92 percent of respondents with individually purchased insurance reported that at least one cost measure (premium, deductible, co-pay or co-insurance) had been a very important factor in their selection of a health plan.
  • 41 percent of those with individually purchased health insurance—less than those with employer-sponsored insurance (50 percent)—noted that the physician network was a very important factor in their decision-making.
  • Nearly 20 percent of those with individual coverage changed primary care physicians as a result of their choice of plans.

In 2014, the first open enrollment for individual coverage, more than 272,000 Michigan residents enrolled in individual health coverage, choosing from 60 non-catastrophic plans. In most cases, consumers had a wide choice of plans representing different provider networks and levels of cost sharing.

“The fact that consumers in the individual marketplace are willing to change their primary care physician relationship based on price and select a health plan with a narrow provider network with lower costs is significant,” says Udow-Phillips. “Providers of care will want to pay close attention to these results as they think about which health plan products to participate in.”

In a separate CHRT survey, Michigan’s primary care physicians reported having capacity to see new patients, making them more willing to accept Medicaid patients and more likely to consider joining networks with lower negotiated payments in order to gain access to more patients.

The CHRT analysis has important insights for providers, payers and employers alike, says Udow-Phillips, who is a member of the U-M Institute for Healthcare Policy and Innovation and holds a faculty appointment in the U-M School of Public Health.

“For providers, consumer loyalty may not be as strong a factor in keeping patients as it once was, as they are more willing to shift providers for lower price. For employers, they may be able to offer more narrow-network plans, as consumers are more accepting of less choice in exchange for lower premiums, deductibles and out of pocket costs. For insurers, plan design and the ability to develop narrow quality networks are essential.”

CHRT’s analysis is based on results from a series of questions CHRT added to the Michigan State University Institute for Public Policy and Social Research (IPPSR) quarterly State of the State Survey conducted via landline and cell phones between September and November 2014. The margin of error for the sample of 1,002 Michigan adults was ±3.9 percent. The IPPSR State of the State Survey methodology can be found at: http//ippsr.msu.edu/soss/.

This survey brief is a part of the Cover Michigan Survey 2014 series. Future briefs will cover other aspects of health care in Michigan using the 2014 survey data. Read the full report, “Health Plan Selection: Factors Influencing Michiganders’ Choice of Health Insurance,” at chrt.test.

Hospital Costs Lower in Michigan than in Indiana, Wisconsin; Michigan’s Certificate of Need Laws, Dominant Insurer Likely Contributed to Differences

A report released today by the Center for Healthcare Research & Transformation (CHRT) shows substantial variation in hospital costs between Indiana, Michigan and Wisconsin, with Michigan as the lowest cost among the three states. Many complex factors contributed to these differences, and likely included state regulations such as Certificate of Need laws and health insurance market conditions that varied by state.

Major findings are that in fiscal year (FY) 2013, Wisconsin had per capita hospital costs of $3,107, higher than Indiana ($2,975) and Michigan ($2,624). This is consistent with earlier trends in total health care spending per capita. From 2001 to 2009, Wisconsin had the highest per capita health care costs among the three states, while Michigan had the lowest.

These three states were chosen for study as Midwestern states with diverse health care policies and market conditions. The report analyzed hospital costs at the state level and hospital profit margins in the largest city in each state—Detroit, Indianapolis and Milwaukee.

“Differences in the states’ health insurance markets, and Certificate of Need laws that regulate hospital construction and investment in technology are likely two factors contributing to the variation we see between hospital costs in these cities,” says Marianne Udow-Phillips, director of CHRT.

“Wisconsin has the most fragmented health insurance market in the nation, likely reducing the bargaining power of any one insurer. Wisconsin and Indiana have no Certificate of Need laws, while Michigan is one of 36 states that does,” says Udow-Phillips.

Other highlights of CHRT’s issue brief, A Tale of Three Cities: Hospital and Health System Costs in the Midwest, show that:

  • In FY2013, there was substantial variation in hospital and health system profit margins among the three cities. The Milwaukee health systems had the highest operating margins in the study, ranging from 4.1 to 12.2 percent, far above the national benchmark of 2.2 percent. Total margins ranged from 6.6 to 15.2 percent, compared to a benchmark of 4.2 percent.
  • The Indianapolis health systems generally had operating and total margins above the benchmarks as well. Operating margins ranged from -0.2 percent to 10.6 percent, and total margins ranged from 15.6 to 17.4 percent.
  • In contrast, most of the Detroit hospitals and health systems had margins below the national benchmarks. Operating margins ranged from -9.4 percent to 4.1 percent, and total margins ranged from -0.8 percent to 5.8 percent.

“This study illuminates the cost trend differences of communities in neighboring states with varying market and regulatory structures. Policy makers can further analyze these cost trend differences to inform future health care spending and regulatory policies,” says Udow-Phillips, who is a member of the U-M Institute for Healthcare Policy and Innovation and holds a faculty appointment in the U-M School of Public Health.

The CHRT analysis is based on financial data from FY2013 Medicare Cost Reports accessed through the American Hospital Directory to calculate operating and total profit margins, as well as per capita hospital spending by state. Medicare Cost Reports are the only national data source available for all types of hospitals, regardless of whether they are for-profit, not-for-profit, or government facilities.

For a comparison of health care costs in Indiana, Michigan and Wisconsin, please read “A Tale of Three Cities: Hospital and Health System Costs in the Midwest,” available at chrt.test.

Center for Healthcare Research & Transformation Survey Shows Dramatic Improvement in Health Insurance Coverage and Access since 2012

A survey brief released today by the Center for Healthcare Research & Transformation (CHRT) shows that in 2014, fewer Michiganders reported being uninsured and struggling to pay medical costs or delaying needed medical care, and more residents had access to primary care than in 2012, before the Affordable Care Act’s coverage expansions went into effect.

The survey, conducted in late 2014, asked 1,000 Michigan adults—including the uninsured and those with all types of insurance—about their experiences accessing primary and specialty care. The insured answered additional questions about their experience and satisfaction with their health insurance.

“The 2014 Cover Michigan Survey is the first detailed look at changes that have occurred in Michigan since the implementation of the major coverage provisions under the Affordable Care Act went into effect,” says Marianne Udow-Phillips, director of CHRT. “The fact that we saw a 50 percent decrease in those reporting that they were uninsured compared to our survey in 2012 is very significant and likely reflects both Michigan’s improved economy and the Affordable Care Act’s insurance expansion provisions.”

In 2014, 21 percent of respondents said that cost was a major reason for not seeking needed medical care, half as many as in 2012. In addition, there was a 26 percent decrease in respondents who reported that they struggled to pay their medical bills.

“Overall, the state of health care coverage and access to care in Michigan is much improved,” says Udow-Phillips. “It appears from this survey that our predictions that the ACA would lead to better coverage and access to care have been affirmed.”

Access to primary care remains easy, although the survey did reveal a challenge among all insurance types in obtaining appointments with specialists. Overall, there was an 8 percent increase in respondents seeking specialty care compared to 2012. This increase in demand might be a factor in the increased difficulty in getting an appointment with a specialist. Those with Medicaid or individually purchased plans reported the most difficulty in obtaining a specialist appointment.

Before the coverage expansions occurred, there was concern that people would not be able to find care and turn to the emergency room for services.

“The fact that respondents reported easy access to primary while at the same time more of them reported being insured is an important finding that indicates that there should be the opportunity for people to get care earlier, preventing ER visits and hospital stays,” says Udow-Phillips.

This 2014 Cover Michigan Survey is the first in-depth consumer survey of its kind examining coverage trends in Michigan. The survey provides a picture of insurance coverage starting from five months after the first Health Insurance Marketplace open enrollment period under the ACA ended and enrollment in the Healthy Michigan Plan, Michigan’s expanded Medicaid program, had begun.

This survey brief is the first in the Cover Michigan Survey 2014 series. Future briefs will cover other aspects of health care in Michigan using the 2014 survey data.

Details of this survey and the results will be discussed at CHRT’s March 26 symposium, “Alpena to Zilwaukee: A Symposium on the Affordable Care Act’s Coverage Expansions in Michigan.” The free event will be held from 1 to 5 p.m. at the University of Michigan, Michigan League Ballroom. For more information or to register, visit: chrt.test/events/aca-coverage-expansions-mi/.

Affordable Care Act Brings Nearly a Half Billion Dollars to Michigan over Five Years, Built Infrastructure, Access to Health Care

A report released today by the Center for Healthcare Research & Transformation (CHRT) shows that since 2010, the state of Michigan has received close to a half billion dollars in grant funding to develop and implement programs and services as part of the Affordable Care Act (ACA).

Michigan received $489.4 million from March 2010, when the ACA became law, through the most recent fiscal year ending in September 2014, ranking 14th nationally in awarded ACA grant funds. In fiscal year 2014, Michigan received $183.9 million and placed ninth.

“ACA grant funding has contributed to a range of services and programs to improve access to care,” says Marianne Udow-Phillips, CHRT’s director. “In particular, there are new and expanded sites for Federally Qualified Health Centers, expanded training programs to enhance health care workforce capacity, and considerable funding to the state of Michigan to test new models of financing and delivering health care.”
 
Nearly $21.4 billion in grants was awarded across all 50 states and the District of Columbia from March 2010 through fiscal year 2014.

CHRT’s issue brief, “Affordable Care Act Funding: An Analysis of Grant Programs under Health Care Reform – FY2010-FY2014,” reviews grant programs funded by the ACA and shows how funding in different categories has changed over the years.

For example, funding to help states reform their private insurance markets and establish state-based health insurance marketplaces declined, while funding for Federally Qualified Health Centers and disease prevention programs increased.

“This brief aims to help leaders understand the scope of the ACA’s impact in Michigan and nationally. The impact of the law goes far beyond the coverage changes that have received the most public notice,” says Udow-Phillips.
 
In Michigan, the bulk of the grant and demonstration project funding went to the state of Michigan, including the Department of Community Health, to support new health care delivery models and various community health programs. The next largest funding category in Michigan was for health centers.
 
Here are some examples of ACA-funded efforts across Michigan:

  • Cherry Health, a federally qualified health care center in West Michigan, received $7 million in FY2014 to create a new facility in Barry County that offers medical, dental and behavioral health services and to renovate and expand access at three existing health centers in the Grand Rapids area. Cherry Health also received ACA funds to increase its education and community assistance to help individuals understand their health insurance options.
  • The Detroit Wayne County Health Authority received nearly $5 million in FY2014—its second year of ACA grant funding—to support Authority Health, its community-based teaching health center. Authority Health provides training in five primary care residencies and offers one fellowship in Wayne County. The program offers post-graduate rotations at federally qualified health centers, physician practice sites, community mental health agencies, and other provider sites. The three-year grant will allow Authority Health to train 85 primary care residents, 53 of whom are currently in training.
  • The University of Michigan, in partnership with the Michigan Surgical Quality Collaborative, received $1.8 million in FY2014. The funds are the first installment of a three-year grant, totaling $6.9 million, to implement the Michigan Surgical and Health Optimization Program (MSHOP) in 40 hospitals across the state. MSHOP seeks to improve surgical outcomes and reduce health care costs by using data to inform surgical decisions and help high-risk patients better prepare for major abdominal surgeries (such as cardiovascular and cancer surgeries).

For a comparison of ACA funding levels, please read “Affordable Care Act Funding: An Analysis of Grant Programs under Health Care Reform – FY2010-FY2014,” available at chrt.test.

Survey reveals 87 percent of Michigan primary care doctors have capacity to take new patients; 64 percent taking new Medicaid patients

A 2014 Center for Healthcare Research & Transformation (CHRT) survey of Michigan primary care doctors shows that the great majority – close to 9 out of 10 physicians – have capacity to accept more patients, quieting concerns about meeting increased demand as more people continue to get coverage under the Affordable Care Act.

In particular, the survey reveals that considerably more primary care physicians in Michigan are accepting Medicaid patients in 2014 compared to 2012. Specifically, 64 percent of primary care doctors accepted new Medicaid patients in 2014, compared to 54 percent in 2012.

“The survey shows that physicians across the state can take on more patients, enabling greater access to health care,” says Marianne Udow-Phillips, director, CHRT. “This is great news for Michigan residents with the Healthy Michigan coverage as well as those with private coverage.

The survey also shows that physicians practicing less than 10 years had more capacity (98 percent) than those who have been in practice more than 10 years. Though even most of those (84 percent) who have been in practice for 10 years or more have capacity for more patients. This could be an indication that the ACA is positively affecting newer physicians’ practices.

“We know that Michigan’s Medicaid expansion has enabled many residents to afford care. The enrollment of more than 470,000 residents in Healthy Michigan in 2014 exceeded all expectations,” says Udow-Phillips. “And more than 270,000 residents enrolled in coverage through the ACA’s Individual Marketplace, also exceeding expectations.”

“Now, the survey results show that our predictions prior to implementation of the ACA coverage expansion were correct: most Michigan residents should be able to access primary care,” says Udow-Phillips.

The survey data presented in this brief were produced from a mail survey of 1,000 primary care physicians practicing in Michigan, conducted between December 2013 and April 2014. The full survey brief can be found at http://chrt.sites.uofmhosting.net/primary-care-capacity-in-michigan-2014/.

Report reveals alternative tactics to Medicaid expansion in Republican-led Michigan is model for other states

A report released today by the Center for Healthcare Research & Transformation (CHRT) shows that the alternative approach to passing and implementing Medicaid expansion in Michigan – a state led by a Republican governor—can be a model for other states with bi-partisan or Republican-led governments seeking Medicaid expansion.

“The number of Republican governorships retained—and gained—during the midterm elections makes Michigan’s experience in securing the Medicaid program’s expansion through the Healthy Michigan Plan particularly important,” says Marianne Udow-Phillips, director of CHRT, one of the organizations that prepared the report.

Michigan’s approach has led to success. As of November 1, 2014, nearly 450,000 people had enrolled in the Healthy Michigan Plan—Michigan’s expanded Medicaid program—and another 272,000 selected coverage through the federally-facilitated marketplace. The coverage expansions in Michigan have exceeded all projections at the state and federal levels.

This is the direct result of the coming together of key leaders representing a breadth of sectors in Michigan. In particular, the report outlines three key components to Michigan’s passage of Medicaid expansion: the governor’s interest in pursuing the expansion, the support of a strong and vocal multi-sector coalition, and the inclusion of two federal waiver requirements.

Governor Rick Snyder led the efforts of both the Medicaid expansion and marketplace enrollment by establishing a strong leadership team that worked directly with legislative leadership to create an effective environment for change. The governor’s leadership team also provided oversight of the administrative components to prepare Michigan for the coverage changes.

“Michigan’s alternative to a traditional Medicaid expansion was led by the governor and garnered just enough support from the Michigan Legislature to move forward with expanding Medicaid coverage,” says Udow-Phillips.

The Governor’s efforts on the Medicaid expansion were supported by a strong bipartisan coalition that represented the business community, providers and consumers. In particular, this coalition included the Michigan Chamber of Commerce and Small Business Association of Michigan, groups that are typically conservative but saw value in the Medicaid expansions because of projected economic growth and reduced uncompensated care.

Waivers included in the legislation were key to securing the legislature’s approval because they included features such as beneficiary cost sharing and health savings account requirements. The waivers also included health risk appraisal and wellness programs.

The report is the most recent in a series of state and regional studies examining the rollout of the ACA. The national network, with 37 states and 61 researchers, is an effort of the Rockefeller Institute of Government at the State University of New York, the Brookings Institution, and the Fels Institute of Government at the University of Pennsylvania. The Michigan report was prepared by the Center for Healthcare Research and Transformation and David K. Jones, assistant professor of Health Policy & Management at Boston University and a graduate of the University of Michigan School of Public Health.

“Michigan’s experience shows that creative, bipartisan political leadership can cut the Gordian Knot of Medicaid expansion, an issue at the cutting edge in many states for health reform,” says Richard Nathan, a senior fellow at the Rockefeller Institute and the creator of the national network.

CHRT’s report on ACA implementation in Michigan and other state reports published to date are available on the Rockefeller Institute of Government’s ACA Implementation Research Network: http://www.rockinst.org/ACA/.

CHRT Report: New laws covering Autism treatment creating opportunities for care, challenges in access, supply

A report examining current implementation of new autism laws in Michigan, released today by the Center for Healthcare Research & Transformation, reveals a changing environment for autism care.

Under these laws, state-regulated insurance plans must cover diagnosis and medically necessary treatment for children with autism spectrum disorder (ASD) from birth through 18 years and Medicaid and MIChild must now cover a specific evidence-based behavioral therapy, known as applied behavior analysis (ABA), for children with ASD from 18 months through age 5.

Read moreCHRT Report: New laws covering Autism treatment creating opportunities for care, challenges in access, supply

CHRT Report: Sharp rise in hospitalization for sepsis in Michigan and U.S.

The Center for Healthcare Research & Transformation at the University of Michigan today releases a new report that shows a dramatic increase in hospitalizations for septicemia from 2007 to 2011. The hospitalization rate for orthopedic procedures that improve mobility and alleviate chronic pain also increased. The issue brief, The Cost Burden of Disease: United States and Michigan, is an analysis of hospitalization rates and charges from 2007–2011.

Read moreCHRT Report: Sharp rise in hospitalization for sepsis in Michigan and U.S.

CHRT Report Shows Health Care Costs of Obesity Surge For Severely Obese

The Center for Healthcare Research & Transformation (CHRT) today released a cost analysis showing that those who are severely obese(1)Severely obese defined as BMI of 35 kg/m2 or greater. have a significantly higher health burden and health costs than those who are moderately obese(2)Moderately obese defined as BMI of 30 – 34.9 kg/m2., an indication that intervention efforts focused on the severely obese are particularly important.

The issue brief, titled “Obesity in Michigan: Impact and Opportunity,” reviewed rates of moderate and severe obesity among 29,691 adults covered by Blue Cross Blue Shield of Michigan and found that the severely obese, compared to the moderately obese:

Read moreCHRT Report Shows Health Care Costs of Obesity Surge For Severely Obese

References   [ + ]

1. Severely obese defined as BMI of 35 kg/m2 or greater.
2. Moderately obese defined as BMI of 30 – 34.9 kg/m2.

Michigan Awarded $305 Million in Federal Funds under the Affordable Care Act

The Center for Healthcare Research & Transformation (CHRT) today released a report tracking trends in the Patient Protection and Affordable Care Act (ACA) funding. From March 2010 when the ACA became law through the most recent fiscal year ending in September 2013, nearly $15.1 billion in grants was awarded in the United States and District of Columbia. Michigan received $305.4 million in awards, ranking 16th in the U.S. behind the lower population states of Colorado, Kentucky, and Oregon, states that established their own health insurance exchanges.

The issue brief, “Affordable Care Act Funding: An Analysis of Grant Programs under Health Care Reform — FY2010–FY2013,” examines grant programs funded by the ACA, shows how funds have been distributed to states and local organizations, and notes the effects of budget sequestration on future ACA funding.

Read moreMichigan Awarded $305 Million in Federal Funds under the Affordable Care Act