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April 2008

CHAT – A Structured Method to Think about Benefit Design

As states consider health care reform, many state officials are committed to the idea of gathering consumer input on health care priorities as an important first step. States have often engaged their residents through Town Hall meetings and other forums. Among the most challenging exercises facing state officials today is determining what is essential or basic coverage and what cost-sharing requirements are appropriate, taking into account fiscal implications for both individuals and the state, as well as potential unintended consequences of benefit changes.[i]

Various stakeholders in the health care system are concerned not just strictly about the cost of the coverage, but also with the value of that plan – that is, what set of services are being purchased for a specific amount of money. The design of a benefit plan is a lever that is constantly being considered to reduce premiums, encourage efficient and appropriate consumer behavior, and even change insurance plan and provider behavior.[ii]

In an effort to inform the policymaking process and help stakeholders consider the priorities and trade-offs inherent in benefit design, a computer simulation game called CHAT (Choosing Healthplans All Together) was developed by physician ethicists at the National Institutes of Health and the University of Michigan. In the game, participants must make decisions about health benefits packages when there are more choices than resources.

This process generally takes place in a two- to three-hour discussion group where participants design a health coverage package, individually and as a group. The CHAT game is conducted using individual computers combined with group discussion that involves negotiation, compromise, and consensus-building.

Sacramento Healthcare Decisions (SHD), with its six years of experience in developing and conducting CHAT projects, works with states to design models of CHAT consistent with their needs. SHD has recently worked with Montana, Ohio, and Oklahoma (and previously with Hawaii) to develop state-specific CHAT processes. Many states are now initiating efforts to use CHAT with state policymakers and other stakeholders, employees, Medicaid beneficiaries, and the uninsured.

California’s most recent experience using the CHAT tool is summarized in a brief Designing Coverage: Uninsured Californians Weigh the Options by the California HealthCare Foundation.

Also, SHD conducts CHAT leadership sessions with health care, business and community organizations seeking to engage their members in one of the toughest questions in health policy today: What should be the minimum health care coverage for the uninsured?

With a wealth of experience in the arena of citizen participation through CHAT, Marge Ginsburg, the executive director of SHD, prepared a detailed look at strategies for developing a sustainable healthcare benefits package. Balancing Act: Creating a Sustainable Health Care Benefits Package examines the types of trade-offs that policymakers and the public must consider.

To some extent, states’ efforts to redesign benefit packages have yielded as many questions as answers. The current budgetary environment has prompted states to adopt creative and resourceful approaches to expanding coverage. Nonetheless, as states continue to restructure their programs in the years to come, their experiences will broaden, and they will continually learn from one another’s successes and failures.[iii]

For information on bringing CHAT to your state, contact SHD.

[i] Friedenzohn, I. States Experience with Benefit Design, State Coverage Initiatives, April 2003.

[ii] Trinity, M. et al. 2008 State of the States: Rising to the Challenge, State Coverage Initiatives, January 2008.

[iii] Friedenzohn, I. op.cit.