Medicare beneficiaries consider ability to keep their physicians as most important factor in deciding to join an HMO.

WASHINGTON--(BUSINESS WIRE)--May 2, 1995--The most significant obstacle toward wider acceptance of managed care among Medicare beneficiaries is the prospect of losing one's own doctor, according to a new report that summarizes the findings of focus groups held in eight cities around the nation for the Kaiser Family Foundation.

Attitudes of Medicare beneficiaries toward managed care ranged from friendly, to hostile, to uninformed. The greatest concerns of those not in managed care plans focused on restrictions on choice of physicians and perceived lower quality of care in health maintenance organizations (HMOs).

Medicare beneficiaries currently in managed care plans are generally satisfied with their HMOs and say they would recommend their plans to friends. Both Medicare beneficiaries currently covered by managed care plans as well as those in the traditional fee-for-service program cite lower out-of-pocket costs, prescription drug coverage, and freedom from paperwork as important advantages of managed care.

The Kaiser Family Foundation commissioned Frederick/Schneiders Inc. to conduct 14 focus groups, which were held between Jan. 30 and March 14, 1995. They were designed to explore the attitudes and experiences of Medicare beneficiaries in managed care programs -- particularly HMOs -- and those with coverage in the traditional fee-for-service program, as well as pre-Medicare beneficiaries, aged 60-65. Focus groups were conducted in Boston, Miami, St. Louis, Minneapolis, Baltimore, Columbus, Santa Monica and Irvine, Calif.

Views of Medicare Beneficiaries in the Traditional Fee-For-Service Program Toward Managed Care

Attitudes of beneficiaries in the traditional fee-for-service Medicare program toward managed care varied considerably depending on how common and well established HMOs were in the area where the beneficiary lived. Non-HMO Medicare beneficiaries who held the most favorable opinions toward managed care tended to live in areas where HMOs are common and have established reputations -- such as, Minneapolis and Orange County, Calif. These seniors often cited friends' and family members' positive experiences with managed care. In areas where managed care is wide spread but performance is more often perceived as questionable or poor -- such as Florida -- non-HMO member beneficiaries held much more negative attitudes toward managed care and had greater concerns about the quality of care.

"The report suggests that seniors' perceptions of managed care are based largely on their personal and local experiences with HMOs. As a result, reaction to Medicare-managed care will vary significantly around the country," said Drew E. Altman, president, Kaiser Family Foundation.

Overall, the focus groups revealed a general lack of information about Medicare managed care among seniors currently covered under the traditional Medicare fee-for-service programs, particularly in areas where HMOs are less common -- such as Columbus and St. Louis. When presented with basic information about HMO coverage under Medicare, many of these seniors expressed disbelief that managed care could provide full, quality coverage for nominal co-payments. Most believed the HMO provided coverage for the premium they paid without understanding that the Medicare program also pays HMOs a monthly capitation payment:

"In other words, we wouldn't have to buy our supplemental insurance? Well, how could they afford to do that? -- female, traditional coverage, Columbus.

"I don't think you're going to be able to get it for $46, all that" -- male, traditional coverage, Columbus.

Views of Medicare Beneficiaries Currently in HMOs Toward Managed Care

Although Medicare beneficiaries currently in managed care plans say they joined an HMO for reasons having to do with their circumstances -- such as continuing with prior coverage, following their doctor to an HMO or seeking lower costs -- most are satisfied with their coverage:

"We had to have some kind of insurance when (my husband) retired, and so we converted to this HMO, and I was so apprehensive of it -- I thought, oh, boy, here I'm going into socialized medicine ...it wasn't like that at all...the doctors have been wonderful" -- female, HMO coverage, Irvine.

"Before I went with (an HMO), my feeling was I heard all the negative. I never heard the positives. So, unless you really go there yourself, find out through your own experience, you really don't know" -- male, HMO coverage, Irvine

Among the benefits they cite of belonging to HMO: lower out-of-pocket costs, quality of care (although, none asserted that the quality was necessarily better than in traditional plans), and the convenience. The most common complaint among HMO-member beneficiaries was the length of time between calling for an appointment and getting care:

"I have to see an ear doctor periodically and every time I have to go through the primary care physician. I know when I have to see him and I wish I could just go and make the appointment, but I can't -- female, HMO-coverage, Minneapolis.

The Potential for Managed Care to Make Inroads In the Medicare Population

When asked what factors are most important to Medicare beneficiaries currently in the traditional fee-for-service programs in deciding whether or not to join an HMO, the report concludes: "By far, the most persuasive information offered in favor of joining an HMO was the prospect of keeping one's current doctor." Lower out-of-pocket costs -- specifically, no longer needing supplemental insurance and nominal co-pays -- were also named as important factors. Other frequently named factors included: being able to change HMOs if dissatisfied, ease of getting an appointment, and convenient location of doctors' offices.

However, a positive predisposition toward managed care did not necessarily translate into a willingness of Medicare beneficiaries with traditional coverage to join a managed care plan. Although many non-HMO Medicare beneficiaries were able to name or recognize benefits of managed care coverage -- including lower out-of-pocket costs -- most did not find the reasons compelling enough to change their coverage, particularly if it meant having to change their doctors:

"I'd had my internist for about 30 years; I didn't want to change" -- female, traditional coverage, Minneapolis.

"My particular doctor that I was going to for the last 25 years was not included in (the HMO), so I immediately just x-ed out" -- male, traditional coverage, Minneapolis.

Even in two focus groups that brought together beneficiaries that included HMO members with highly favorable attitudes toward managed care and those with traditional coverage, non-HMO members, while often interested, were generally not persuaded to consider changing to an HMO. Non-HMO members from parts of the country where there are strong preconceptions about the poor quality of managed care remained particularly unmoved by satisfied HMO members:

"I find that very hard to believe from the experiences that I see...my daughter (belongs to an HMO) and, when my granddaughter went...they refused to refer her to anyone..." -- female, traditional coverage, Miami.

Positive experiences with managed care in the community will help to foster greater willingness of Medicare beneficiaries to switch from fee-for-service to HMO coverage. The report concludes that "the presence of non-HMO consumers who view the system positively is an indication that, when managed care systems are run well, they may continue to make inroads," noting, however, that "the key...is the maintenance of quality as perceived by consumers, and ability to offer choice of doctors."

In communicating with seniors about HMOs, the focus groups suggest policymakers and practitioners should focus on the details and avoid use of the phrase "managed care," which has a negative connotation for many seniors:

"Is that what they call managed care: In other words, you're sixty-five...if you're over a certain age, die" -- male, traditional coverage, Miami.

"(`Managed Care') gives me a negative feeling, because it seems to me like they would be telling you who you had to go to. You couldn't pick your doctor, even if you wanted to." -- male, pre-Medicare, traditional coverage, St. Louis.

By contrast, the seniors were attracted by the benefits: prescription drug coverage and no longer needing supplemental coverage, for example. The emphasis placed on prevention in managed care is also appealing to Medicare beneficiaries, as is the idea of having a primary care physician to coordinate care, yet some raised concerns about the economics of prevention and the feasibility of a referral process in practice:

"By the time we're in this general age we're beyond preventive medicine..." -- male, traditional coverage, Columbus.

Methodology

Between January and March 1995, Frederick/Schneiders, Inc. conducted fourteen focus groups for the Kaiser Family Foundation on the topic of managed care and Medicare. Participants belonged to three groups: 1) Medicare beneficiaries in managed care programs, primarily HMOs; 2) beneficiaries with traditional "fee-for-service" coverage; and 3) consumers age 60 to 65 who are about to become Medicare beneficiaries. The fourteen groups were conducted in Boston, Miami, St. Louis, Minneapolis, Baltimore, Columbus, Santa Monica (CA), and Irvine (CA).

Focus group research is qualitative. It is not intended to yield statistically generalizable findings. The small size of the focus group participant pool, and the fact that they are generally not a random sample of the population, mean that the findings reported in this release should not be assumed to mirror perfectly the attitudes of all members of the population from which they are drawn. Focus groups can reveal feelings and attitudes which would not easily come to light through survey research.

The Kaiser Family Foundation, based in Menlo Park, Calif., is an independent national health care philanthropy and not associated with Kaiser Permanente or Kaiser Industries. The Foundation's work is focused on four main areas: health policy, reproductive health, HIV and health and development in South Africa. -0-

Note to Editors: Copies of the full report are available by calling the Kaiser Family Foundation's publication request line at 1-800/656-4533.

CONTACT: The Henry Kaiser Family Foundation

Matt James or Tina Hoff, 415/854-9400

Barbara Lyons, 202/347-5270