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Does Satisfaction Cost Patients Extra?

by Rick Blizzard

There are more types of health insurance than there are colors in a rainbow. Some hospital patients are members of HMOs or PPOs. Others have Medicare or Medicaid. Still others have no health insurance at all. Because a hospital's financial success depends on being sufficiently compensated for the services it provides, one might deduce that some patients are likely to receive better quality care than others do, depending on their payor type.

With that hypothesis in mind, Gallup broke out the inpatient satisfaction scores in its 2003 healthcare database according to payor type categories (HMO, PPO, Medicare, etc.), to see how patient satisfaction scores within each category differ from the overall mean patient satisfaction score.

Of the seven payor categories analyzed, three -- Medicaid, HMOs, and PPOs -- varied significantly from the overall mean satisfaction score. Patients using Medicaid -- who tend to be skewed toward the low-income groups -- have significantly higher levels of satisfaction, while HMO and PPO patients have significantly lower satisfaction. Satisfaction among Medicare, commercial, and self-pay patients does not differ significantly from the mean.

Inpatient satisfaction does differ significantly by payor category. But the idea that patients in less financially desirable payor categories receive lower-quality care doesn't hold up, according to these numbers. In most, if not all, U.S. states, Medicaid could be viewed as an undesirable payor category for hospitals because of the level of reimbursement for services. Yet patients in this category exhibit the highest levels of satisfaction. Self-pay patients (patients with no insurance, who are often not able to pay for medical services at all) do not differ significantly from the mean in their level of satisfaction.

Satisfaction Depends on Expectations

It's unlikely that Medicaid patients receive better care than HMO or PPO patients. The difference is probably rooted in their expectations. Low-income patients may have experienced many forms of discrimination and poor treatment in their lives, and therefore may be more likely than other patients to appreciate good care when they get it.

HMO and PPO patients all have lower-than-average patient satisfaction scores, even though they are in a financially attractive payor group. One likely interpretation is that people in these groups have higher expectations when entering the hospital for treatment. Also, HMO and PPO patients routinely have to deal with restrictions on physician and hospital choice, co-pays, and high deductibles -- issues that are guaranteed to elicit negative responses from many patients. There's a reason why HMOs rank 15th out of the 15 institutions measured in Gallup's 2004 Confidence in Institutions poll.

Bottom Line

Similar to differences in patient satisfaction by age group (see "Do Patient Expectations Mellow With Age?" in Related Items), satisfaction differences by payor category seem to be more a function of variation in patient expectations than variation in the quality of care provided to different groups.

I have personally observed instances in which a hospital has had to implement mandated changes in the way it cares for patients with one particular type of health insurance. Inevitably, the hospital staff winds up changing the way it treats all patients, not just the mandated group. In many cases, hospital staff members aren't even aware of what type of insurance a patient has. When it comes to inpatient care, from a practical standpoint it is simply too difficult to treat some patients differently from others -- so equality of treatment is in most cases the norm.

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