Valuable Information

Employees More Willing to Accept Limited Provider Choice to Save Money

The percentage of Americans willing to trade provider choice for lower out-of-pocket costs has increased in the past few years.  This is due in part to the higher health care costs employees have experienced as employers passed on a portion of the cost increases associated with more expensive, open access plans. This finding, from a national study by the Center for Studying Health System Change, was consistent across varied income groups, and held even for those with chronic health care conditions.

In a recent survey, 59 percent of Americans who were covered by an employer-sponsored health plan agreed with the statement: “I would be willing to accept a limited choice of physicians and hospitals if I could save money on my out-of-pocket costs for health care.” This is up from 55 percent in 2001, an increase that is more notable when considering that the choice versus cost preference had held steady from 1997 through 2001.

The study indicates that more people at all income levels are seriously considering the choice versus cost trade-off. Sixty-seven percent of those with incomes at twice the poverty level ($36,800) or less were willing to limit provider choice in exchange for lower out-of-pocket costs (66 percent in 2001). This compares with 62 percent of those at two to four times the poverty level ($36,800 to $73,600), up from 59% in 2001; and 54 percent of those at more than four times the poverty level, up from 50 percent in 2001.

Even those with chronic health conditions showed greater willingness to limit provider choice in favor of cost savings—56 percent of chronically ill individuals with employer-sponsored health insurance said they would make this trade-off (51 percent in 2001), which is almost as many as the surveyed group overall.

Despite the increase in the percentage of individuals willing to limit choice in order to save on costs, a significant number—21 percent—were strongly unwilling to make this trade-off, and 19 percent were somewhat unwilling.

According to the study analysis, the finding that more individuals with employer-sponsored insurance are willing to trade provider choice for lower costs raises the question of whether there will be renewed interest in plans with restrictive provider networks. The study notes that over the past decade, the backlash against managed care resulted in plans broadening provider choice. For example, the study cites data from a Kaiser Family Foundation survey that found only 47 percent of workers in 2003 had access to an HMO—typically a plan with the most restrictive provider network—down from 64 percent in 1996. With individuals more inclined to accept limitations on provider choice in exchange for lower out-of-pocket costs, the time may be right to re-examine the plan options offered to workers, and whether those willing to accept more restrictive provider networks have a plan choice that meets their needs.