Want fair and affordable health insurance for the uninsured? Ask the public to design it

Grassroots approach using health plan 'game' leads to equitable decisions about minimum insurance package, at lower-than-average cost

ANN ARBOR, Mich. -- From Massachusetts to Hawaii, many states, counties and cities are working on ways to provide new health insurance options to the 45 million Americans who lack health coverage.

But the devil's in the details: Which treatments and preventive measures will the new plans cover? How much will they charge for doctor's visits and trips to the emergency room? Which doctors and hospitals will accept them? How much will they cost?

A new study published in the November issue of the journal Health Affairs reveals a promising way to deal with this thorny problem: Let the public decide.

In fact, the study suggests, grassroots decisions about what's fair, and what's affordable, may lead to coverage that will be acceptable to participants even though they are less costly than average health plans.

The study involved nearly 800 California residents from diverse backgrounds who took part in a project that asked them to design the best possible health plan for the uninsured, using a limited amount of dollars. The project, funded by the California HealthCare Foundation and organized by the nonprofit Sacramento Healthcare Decisions, used a game-like computer program called CHAT (Choosing Healthplans All Together) developed by University of Michigan and National Institutes of Health researchers.

Individually, and in small and large groups, the 798 participants picked from a range of options including different coverage levels for preventive, chronic and last-hope care; different options for access to doctors; a variety of co-pays for appointments, hospital stays and ER visits; options for dental and vision care, different premium levels, and more.

Each of the options "cost" them a certain number of points, which were calculated based on actuarial estimates of the real-world costs of those coverage options. Just like in the real world, the amount of points (dollars) available to spend was limited.

In the end, the participants came to agreement on what to cover, what kinds of tradeoffs to make, and how much would be reasonable for participants to pay out of their own pockets. The result was a package that, for example, would pay for the least-expensive medicines first for chronic diseases like diabetes; give basic care for pregnancy, mental health, and rehabilitation; and cover only proven preventive tests and exams. But it wouldn't cover last-ditch catastrophic care, extraordinary end-of-life care, and conditions that interfere with quality of life but aren't seriously disabling.

In all, the authors calculate, the plan would cost two-thirds of the average cost for insurance plans in California. But still, the study participants didn't elect to make participants pay the maximum out-of-pocket costs.

"They made many trade-offs to avoid saddling individuals with high co-pays and deductibles," says lead author Marge Ginsburg, executive director of SHD. "They also chose comprehensiveness of coverage over choice of doctor, and made a clear distinction between health care needs that are vital to basic living, and those that are less essential to productivity and longevity."

Ginsburg's organization conducted the project, called Just Coverage, to solicit public input on the elements of basic health insurance coverage in other words, if everyone had health insurance, what would be the minimum they would need?

The CHAT game is designed so that individuals progress from designing a plan on their own, to working in small groups, and then to a larger group. A number of sessions lasting two and a half hours, and each involving 10 to 12 people, were held in 2005 and 2006. Half of participants were from Sacramento County. The participants varied in age, economic and educational background, and insurance status, though they were not fully representative of the California population.

Although the researchers report the general consensus achieved by most participants, there were some major differences in the insurance choices made by people of different backgrounds. For instance, people with lower incomes and lower levels of education were more likely to include a category of coverage called "quality of life care" which included coverage for infertility, impotence coverage, and coverage for injuries that only affected athletic performance, not daily ability to function. The authors note that more research needs to be done on this kind of difference in viewpoints about the "necessity" of coverage for this kind of care.

Another aspect of the findings is that people seemed largely willing to forego coverage for "last hope" long-shot types of treatment. However, this kind of limit would represent a major change, because doctors and patients currently have a lot of discretion in choosing such options.

"We anticipate that by making basic coverage more affordable, it will be more possible to expand coverage to the uninsured." says co-author Marion Danis, co-inventor of CHAT and head of the Section on Health Ethics and Policy at the National Institutes of Health.

"When the public participates in designing basic benefit plans for the uninsured, they make well-reasoned tradeoffs," says co-author Susan Dorr Goold, M.D., MHSA, MA, an associate professor of internal medicine and health management and policy, director of the Bioethics Program at the U-M Medical School and co-inventor of CHAT. "This kind of participation may be key to developing plans that prospective participants will choose and will accept, especially when coverage is mandated as in Massachusetts' recently enacted health reform. A publicly-designed plan that limits coverage may be more acceptable to them than one designed from the top down."

The Massachusetts reform will require all state residents to have health insurance, and will offer a variety of public and private plans and subsidies depending on age, health status and income. The individual mandate is subject to the availability of affordable, credible coverage, but the details of affordability and what counts as credible coverage have not yet been decided.

In fact, Goold and a graduate student, Nancy Baum, address that very issue in a new essay in the Hastings Center Report, a leading medical ethics journal. The essay examines the potential impact on individuals depending on how "affordable" is defined -- and how insurance premiums, deductibles and co-pays are set -- by the Massachusetts board called the Connector. Although the Connector board includes representatives from "stakeholder" groups, it may benefit from seeking further public input into the plans it designs before finalizing them, the authors say.

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The Sacramento project is the latest use of CHAT, which also has been used as far afield as Texas, Oregon, New Zealand and India to gather people's thoughts on how best to use limited health care resources. The options, and the number of points each one costs, can be changed depending on their circumstances and can be based on actuarial calculations of real-world costs. A separate version, called REACH, has been developed in which low-income employees choose among various benefit options (not just health insurance). For more information, interested organizations may e-mail chat-info@umich.edu.

For a full copy of the Just Coverage report, email ginsburg@sacdecisions.org. References: Health Affairs, Vol 25, No. 6, November/December 2006 Hastings Center Report, September/October 2006


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