Freedom of choice: More information required

 

young girl searching health insurance
(Pete Pahham/Shutterstock)

Despite the fact that the vast majority of children are consumers of health care (the CDC notes that 93 percent of children saw a health professional in 2011), it’s a sad fact that our health care system is not really designed with children in mind.

Statistically speaking, sick children need more of everything than the average sick adult: more nursing care and support services, a wider range of smaller sizes in specialized equipment (because they grow) and “customized” medication dosages to adjust for their size. Children also respond differently than adults in a medical crisis and need experts trained to help them.

All these needs increase exponentially when we’re talking about children with special health care challenges.

Despite these distinctions, children and their families are often forced to make do with hospitals, systems and products not principally designed with their needs in mind—and health plans are no different. Stripped-down, “high-deductible” plans that are designed for adults (nearly all of them)—and plans with limited networks—are simply not created for children.

A big issue we face is that parents aren’t well informed and don’t understand why health insurance looks different when considered from the perspective of their children. There’s a lack of information explaining why children (who, of course, implicitly rely on their parents to make these smart choices) may need different networks than their parents, or what these needs could be.

There are three primary reasons why parents might not choose an insurance plan suited for children’s needs:

Number 1

There’s only a modest portfolio of plans available

Even the best-informed consumers can only choose from the options available. Most children are still covered by private insurance, so their parents’ employer’s decisions about what will be offered becomes critical. Not all employers offer a robust selection of insurance plans. Smaller companies often don’t have enough employees to negotiate for the kind of plans that serve children.

And not all are willing, either. Self-insured employers (about half of this market) are not subject to many regulations and are generally free to design their own insurance products. In addition, the use of high-deductible and limited network plans is growing.

Number 2

A lack of transparency

Insurance companies need to provide navigable, transparent information to their consumers and support informed choices on the part of the people whose health they intend to manage.

But their regulators somehow won’t—or can’t—demand this from them. Rules regarding network adequacy are still being hammered out; the last set was developed before the recent wave of reform and consolidation. Market regulation is divided between insurance regulators across states, Medicaid agencies (representing roughly 40 percent of U.S. children), newly formed exchanges and so on. The existing rules are not consistent, and—although we do see small signs of progress—regulators may be not paying as much attention as we’d like.

A more opaque point in the transparency conversation is that it’s not clear who’s making the decisions about when children can go out of network. This “transparency” issue tends to come up on a case-by-case basis as a question of medical necessity. Parents and referring physicians don’t always have clear access to the rules being used to make these decisions. And I worry whether parents are equipped to fight to get out-of-network authorization, especially when they’re dealing with a very sick child.

Another factor is the availability of data on quality of care. There is increasing literature showing that volume—how often physicians and nurses do certain procedures at a hospital—directly correlates with results. Payers should make it clear to consumers where the high-volume hospitals are. For example, parents would probably appreciate knowing that Boston Children’s has more ICU beds than the next five or six largest pediatric hospitals combined. Which hospitals in an area truly have the capability to care for the sickest children? We owe parents these answers.

Number 3

Clear communications—and simple math

The third piece of this puzzle hinges on awareness. The ability of consumers to understand their health insurance options is a widely recognized concern. Confusion can stem from insurance companies selling similar products that cover different networks, without clear ways for the customer to compare.

And even the most well-informed parents don’t have a crystal ball; who knows when—if ever—a child may need specialized care? What looks fine on paper when a child is healthy changes dramatically if that child suddenly needs sophisticated care at a children’s hospital. Adults can research networks based on their own needs, but how many consider the possibility that their network might someday—and urgently—need to include specialists for their children?

Options to consider

One solution to this conundrum might be the creation of pediatric “upgrade” options. When we rent a car or book a flight, we’re given step-up options. Insurers could get creative about their product design and offer basic packages, with “add-ons” for pediatric care. Then, parents could see what comes with a basic package and what’s included with a “book together” option that gives their children a different range of providers.

Of course, networks themselves are constantly changing. Policies can be developed to protect consumers against these changes. If a network drops a major provider, a grandfathering process, like COBRA coverage, could buy parents time. Or there could be a window in which families can simply switch to another plan.

If we can’t have consistency, let’s at least have clarity, and until we resolve some of these issues, payers need to meet their customers halfway. They can use “where children go now” as a starting point for predicting—and telling parents—where they might go in the future.

It couldn’t hurt to consider drawing on retail models to address this, as Harvard Business School has noted. I can imagine a straightforward “Who are you shopping for?” tool to help parents comparison shop for children’s insurance products. It could be as simple as: “X percent of children in Y community who need specialty care for Z are treated at hospital A.” This tool could indicate whether or not hospital A is in plan B’s network.

Despite all those variables, this isn’t advanced algebra—it’s pretty simple, commonsense stuff.

Joshua Greenberg, JD, is Boston Children’s Hospital’s vice president of government relations.

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