Markets at Risk— Current and Future Challenges in a Managed Care Marketplace. B. Consumers.


The attitudes of consumers toward the industry as a whole appear to continue to be in free fall (see Figure 11), with disdain for HMOs lying between tobacco and oil companies. The reasons for and legitimacy of this unfavorable image are beyond the scope of this paper, though it merits mention that individuals hold markedly more positive impressions of their HMO than the HMO industry as a whole53—a phenomenon reminiscent of the schizoid view held toward Congress and one’s own congressman or congresswoman. The dramatically higher esteem in which hospitals and doctors are held, underscores how influential they have been in fueling some of the negativism and backlash toward HMOs as noted in additional KFF survey results.

Figure 11. Percent of Groups with "Unfavorable" Rating (Kaiser Family Foundation, National Survey of Prescription Drugs, Sept. 2000)

Figure 11. Percent of Groups with "Unfavorable" Rating (Kaiser Family Foundation, National Survey of Prescription Drugs, Sept. 2000)

Another interesting feature of consumer attitudes toward HMOs is that, despite extensive efforts to promote more consumer information flow in the era of managed care and the sizable investments plans have made in generating and sharing performance data (e.g. HEDIS, report cards, etc), such efforts seem not to have succeeded in improving consumer comfort levels with health plans. A variety of reasons have been suggested to explain this on technical and more general bases. The measures being used are not the most appropriate ones; the data are not timely enough; they are not formatted to be consumer friendly; or they are not sufficiently customized for individuals to relate to them personally. More general criticisms revolve around whether members will ever trust these indicators over their own intuition or personal experience; whether there is a lack of sophistication and understanding of probabilities and statistics to ever fully digest these sorts of data; and whether even the most artfully packaged materials can avoid exceeding the appetite for data among consumers54.

Models of care with expanded choice of provider have been seen as a psychological safety valve for health plans. They allow members to at least feel less claustrophobic than in traditional managed care products, a fact borne out by evidence that out of network use in POS products remains very limited. Larger networks achieve a similar degree of increased comfort and a lessened sense of restrictiveness, as does the dropping of primary care gatekeeper requirements. Gestures directed toward reducing the intrusiveness of managed care for physicians have indirect effects on consumer attitudes, whose hostility toward plans has been influenced by the manner in which plans have treated their providers55. There is a price for this product loosening, in terms of the potential for more out-of-pocket expense, increased use of co-payments in such areas a drug benefits, and, of course, rising premiums.

  1. W. Todd and D. Nash, Disease Management : A Systems Approach to Improving Patient Outcomes Chicago : American Hospital Pub., 1997.
  2. Kleinke, J. “Just What the HMO Ordered: The Paradox of Increasing Drug Costs,” Health Affairs, 19(2):78-91, 2000.
  3. Employee Benefit Research Institute, Employment-BasedHealth Care Benefits and Self-Funded Employment-Based Plans: An Overview, Washington, DC: EBRI, April 2000.