Study aims for wise choices from a wealth of health plans

Living in a free-market economy, Americans may believe that the more choices consumers have, the better.

Not necessarily so, suggest early findings of a government-funded study of health-care choices led by a Vanderbilt University economist.

Consider the experiences of many seniors on Medicare since the federal government launched a prescription drug benefit that on average requires patients to choose from among 80 private plans.

"What we find so far is that when people are given additional options, they make worse decisions," said Mike Shor, who has studied 250 people grouped by age, sex and education.

The study, funded with a two-year, $360,000 grant from the National Institutes of Health, aims to devise new ways to present complex choices to consumers to give them a better chance of making a wise decision.

At this point, Medicare beneficiaries have been able to use various methods to compare drug coverage options, including going online at www.medicare.gov to check out the costs, benefits and drug co-payments of competing private plans.

But do consumers understand what they see there or take the time to analyze it fully?

The Vanderbilt study has found that most people pick the plan that covers the most listed drugs.But just because an insurer covers an extra 100 drugs doesn't mean those particular medications are the right ones for that individual, Shor said. It depends on which medications each person needs.

Right choice is rewarded

In Vanderbilt's study, participants are presented with a variety of hypothetical choices, and they can earn up to $43 if they pick a plan that provides them with the drugs they're most likely to need.

The cash payment is designed as an incentive to encourage people to make the best choice.

Vanderbilt is also studying how people respond if they're given a "default" option selected as the best one for them based on a personal health profile. Or they are given a simplified list of four or five possible choices (rather than 80 plans) to guide them to a better decision, Shor said.

Mary Beth Best, who helps seniors select drug benefit plans through her nonprofit group Voice Inc., said having to decide whether to keep traditional Medicare or seek more benefits in a private plan overwhelms many seniors. She welcomes Vanderbilt's study but said it remains to be seen how much more effective the university's final recommendations might be.

Shor said the study, with co-investigators at the University of Arkansas, Georgia Tech and Louisiana State University, has broader implications since better choices would help to reduce medical costs and save taxpayers money.

"Many decisions that we face such as picking a dinner at a restaurant, if we make a mistake, we personally suffer for it," he said. "In (making) health-care choices, if a senior selects an inappropriate plan, we as a society pay the price."

Getahn Ward covers the business of health care for The Tennessean. Reach Getahn Ward at gward@tennessean.com or 615-726-5968 and on Twitter @getahn.