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Imagine There’s a World—Part 2

Health and Human Services announced the final rule on the Summary of Benefits and Coverage. As we had written before, we were concerned that industry wanted to delay implementation by 18 months and wanted to eliminate two of the three scenarios. But the avalanche of letters generated by consumers and health related consumer advocacy groups worked. Here’s the really good news:

  • The new explanations will be available beginning by September 23, 2012, not delayed as industry requested.
  • The Summary of Benefits and Coverage will include two scenarios: having a baby and managing Type II diabetes AND there is a provision for up to six scenarios.

You can read the report on consumer testing that we conducted in collaboration with Consumers Union and see how helpful consumers found the scenarios: http://prescriptionforchange.org/wordpress/wp-content/uploads/2011/08/A_New_Way_of_Comparing_Health_Insurance.pdf

You can see what the template looks like at this link. http://cciio.cms.gov/resources/files/Files2/02102012/blank-sbc-template-finalpdf.pdf

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“This is what a mortgage form should look like” –President Obama

President Barack Obama shows a proposed mortgage form as he speaks at the James Lee Community Center in Falls Church, Va., Wednesday, Feb. 1, 2012. (Credit: AP Photo/Cliff Owen)

When you make one of the biggest purchases of your life, wouldn’t it be nice if the forms you signed were simple, clear, and transparent?  President Obama, the Consumer Financial Protection Bureau, and we think so.

The Consumer Financial Protection Bureau’s (CFPB) “Know Before You Owe” project is working to accomplish this goal. They are combining several of the disclosures you receive when you apply for and close on a home loan into two , easy-to-use forms. CFPB is collecting input on these forms from consumers and industry people online and in person in usability tests across the country.

On Wednesday, February 1, 2012, President Obama outlined a “Homeowners Bill of Rights,” designed to help protect borrowers. One aspect of that plan includes a “new, simple, clear form for new buyers of a home.” Obama said:

So this is what a mortgage form should look like. This is it. Now that our new consumer watchdog agency is finally running at full steam, now that Richard Cordray is in as the Director of the CFPB, they’re moving forward on important protections like this new, shorter mortgage form. Simple, not complicated. Informative, not confusing. Terms are clear. Fees are transparent…

I prefer actions that are taken to make things simpler and easier to understand for consumers so that they can get the best deal possible – especially on the single biggest investment that most people will ever make.

We too prefer positive actions that benefit and protect consumers.

Source: http://www.whitehouse.gov/the-press-office/2012/02/01/remarks-president-housing

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Imagine there’s a world where you could understand your health plan information

Imagine this: It’s time to choose a health plan. You get a clear 4 page summary of costs from each plan. Each identical summary lays out the costs and benefits in a standardized format so you can compare across the plans. You also get two additional pages that list what the plan will pay and what you will pay for three real life possibilities: having a baby, treating breast cancer, managing diabetes. Oh and all of this is written in plain language and laid out in a way that has been tested with consumers.
Do you think that this might be easier than the piles of incomprehensible information health plans throw at you now?
We do too, but now this important aspect of the Affordable Care Act is in jeopardy. Insurance companies have been lobbying the White House that this requirement is just too hard to do and too expensive. They want to delay it for 18 months; they don’t want to do this for large employers; and they want to include information only about having a baby. They estimate that it will cost them $382 million dollars to get this ready for the September open enrollment period. They omit to say that two of the 1300 health plans made over $1.6 billion in profits during the last 3 months of 2011.
The cash is there, but the spirit may not be willing. Why? Maybe, just maybe it is because this requirement would give you the information you need BEFORE you choose a health plan. It means that you would have fewer surprises about what treatments would costs. Not everyone will have babies, cancer, or diabetes. But these three events give us an idea of the costs for something common, catastrophic, and chronic.
What can you do? Write the White House now. Here’s the link. http://www.whitehouse.gov/contact/submit-questions-and-comments

Tell the President that you want him to approve the coverage facts label, to include all three examples, and to have health plans implement it by September 2012. Tell the President that this is a change we can believe in.

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Leading Practices for Developing Clear, Concise, Financial Privacy Notices

What do Bank of America, BB&T, CapitalOne, the Department of Treasury Credit Union, and many other financial institutions have in common? They are all using the standardized Financial Privacy Model Notice that was developed and tested by Kleimann Communication Group and released January 1, 2010.

Here we share the six leading practice design themes that led to the development of the model notice with the hope that these practices will be helpful to those developing financial notices or disclosures. It is also our hope that these leading practices will help to advance or assist those working within the fields of plain language, information design, consumer research, and others concerned with creating information that people can both understand and use.

Financial institutions can read briefly about the research project and download the form builder to customize the model privacy notice to fit its practices at the FTC project website. Other institutions who may still plan to use or develop their own financial privacy notices can use these leading practices to inform the development of their notices.

Background

The tendency in the design development of any complex information product is to say too much, to let design decorate, to attract attention at the expense of balance, to provide the specifics without a context, and to standardize without discrimination.

The Model Notice is comprised of four key components: Title, Frame (key and secondary),  Disclosure Table, Opt-Out Form. Each component contributes in multiple ways to the overall effectiveness.

Title- “Facts” captures the consumer’s attention and makes it relevant to the consumer. Instead of “privacy notice” the notice lets the consumer know it is about “YOUR personal information.”

Key Frame-Provides context, key details about personal information, sharing practices, and laws relating to sharing practices (Why?, What?, How? section). This section helps ensure comprehension.

Disclosure Table- Provides the seven basic reasons an institution can share information and how this particular institution shares information. It identifies whether a consumer can opt out and shows both what ANY institution can do and what this particular institution does. It also allows consumers to compare across institutions. It is the heart of the disclosure.

Opt out form-Identifies how this financial institution allows consumers to opt out of particular kinds of sharing if the institution’s sharing triggers an opt out.

Secondary frame- Displays a series of FAQ’s, legally required information and more definitions of terms from page 1. Together with the information on page 1 and the opt out form, the notice addresses all legally required elements.

Communication leading practices incorporated by the Model Notice include:

1. Keep it simple. Our research shows that consumers are overwhelmed by too many words, complex information, and vague verbiage. In fact, when faced with complex information, they often won’t even bother to read. The development of the model notice focused on minimizing burden on the consumer by continually simplifying the notice. We stripped away redundancies, reduced words, used simpler words, clarified meaning, and provided key context information up front. At the same time, we did not oversimplify. A notice that strips away all contextual information will be short, but uninformative. The challenge is to find the balance between as few words as possible and relevant and sufficient information so consumers understand what is being conveyed.

2. Good design matters. Good design delivers important information in a format that reinforces the content. Our research shows that consumers responded positively to the table design, headings, white space, bold text, bulleted lists, a larger font size, and full-sizepaper. These design techniques, combined with the simplified content, help consumers better understand the information. They recognized that it looked different from other privacy notices, commenting that it was easier to read and looked more inviting. The easy-to-read design creates the impression that financial institutions want the information to be read and understood.

3. Careful design decisions ensure neutrality. The point of privacy notices is to provide information to consumers without directing their decisions. These notices need to deliver information about financial sharing practices in a way that reports the information truthfully and objectively. We therefore focused on using factual language, objective presentation, and non-inflammatory words. In each round of testing, we listened for comments, reactions, and perceptions from consumers that indicated areas of potential bias in the notice. The iterative testing process allowed us to make design decisions that led to a final notice that is intended to be clear, neutral, and unbiased.

4. A “whole-to-part” design is critical to comprehension. Our research showed that consumers needed a context for understanding the information in the notice. Most consumers do not have an operational understanding of financial information sharing. Therefore, the notice needed to provide enough context that consumers could understand the detail both at the general level and at the table level.  The key frame component provides a context about financial sharing laws and personal information so consumers can understand the disclosure table. The disclosure table frames the bank’s sharing practices by giving reasons financial institutions can share information. Consumers can then distinguish and understand the specific sharing practices of their bank and compare it to other institutions. Consumers need the context of both the whole and part to understand the critical details. Without context, they understand virtually nothing.

5. Standardization is highly effective. Standardization of form and content helped consumers recognize the notice and the information in it. As they became familiar with the model notice format, consumers learned where to look for the differences between financial institutions and their sharing practices. Standardization reduces cognitive burden because consumers recognize the information without having to continually re-read notices word for word.

6. The disclosure table is critical. The disclosure table is the heart of the model notice. It shows consumers how their personal information might be shared, how their particular institution shares it, and what sharing consumers can limit. Simple, concise, and highly visual, the standardized disclosure table simplifies highly complex and mandatory information into a design that consumers can understand without undue burden. Our research shows that consumers preferred the standardized disclosure table, could understand the disclosure information with greater ease than with a full prose design, and could compare accurately sharing practices across financial institutions. The disclosure table, with its whole-to-part structure, is critical to consumer understanding and comparing financial sharing practices.

Ultimately, more research will inform the field of effective notice design and development to make these documents truly consumer-centered. If you have comments or additional research to share, we look forward to hearing from you.

To view the final report, Evolution of a Prototype Financial Privacy Notice: http://www.ftc.gov/privacy/privacyinitiatives/ftcfinalreport060228.pdf

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Ask Us: How does a rigorous “think aloud” protocol work in qualitative testing?

Recently, we received a question asking us about how a rigorous “think-aloud” protocol works in qualitative one-on-one testing. Here is our answer:

In qualitative, one-on-one testing, we often use a “think aloud” protocol to gain more insight into how the user thinks when using a document or website. In a think aloud, the participant is given a scenario and then reads through the document talking out loud about his or her reactions. Think alouds allow us to hear the consumers’ inner dialogue as they interact with the document for the first time. To ensure that they are comfortable with this task, we have them practice on a neutral document, such as a restaurant menu. As the participant thinks aloud with the neutral document, we can give positive reinforcement about the comments. In addition, the scenario the participant works with frames a task, such as “After reading this, we’ll ask you what action you would take, if any.” This last addition to the scenario ensures that the participant reads with more focus, rather than merely providing a commentary on whatever comes to mind.

Once the session begins, the participant provides feedback based on what he or she notices, but without structured questions on the part of the moderator. Instead, we ask the participant to think aloud – telling us everything she is noticing, thinking, or reacting to. We want to capture participant’s immediate thoughts and reactions before the participant can “learn” from the testing situation and from the moderator asking questions. The think aloud provides us with a good sense of what the participant notices, where information is misinterpreted, and what the participant has trouble understanding. In addition, we learn what next steps the participant would take.

We couple the dialogue to an intense observation of the behaviors as the participant reads. We watch for subtle changes of expression that allow us to probe on whether something was confusing or problematic to the participant so that we can follow up with questions. It is often during this part of an interview that we learn things we never expected and that we might not have asked about. Throughout the think aloud, our note-takers create a visual map of the order in which the participant looks at (or ignores) the information in the document to inform our data collection.

In the analysis, we look at what the participant said, what he didn’t say, our observations, and the visual map to determine what is working within the document and what needs revision.

If you have other questions, please let us know!

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One Year Since the Release of the New Good Faith Estimate: What’s the Verdict?

It has been a year since the Department of Housing and Urban Development released the new Good Faith Estimate. HUD’s stated goals for the new GFE were to: 1) help consumers understand costs before settlement; and 2) enable consumers to compare and shop the best loan.  As plain language practitioners, who want consumers to understand information, we’re always interested in how major initiatives really work.

So, what’s the verdict on this new form? An article from the Wall Street Journal discusses ways that the GFE can help consumers shop for loans. But to be fair, not everyone is happy about the changes. Real estate professionals report that the new GFE is cumbersome and costly. A recent survey by Broker Banker notes that 95% inflate their GFEs to avoid tolerance violations, and some lenders have developed “worksheets” to avoid being held to the GFE tolerances, thus subverting the consumers’ ability to shop for a loan and a lender. Although there are software packages  to estimate GFE figures, many lenders choose not to use them.

Ultimately the proof of how well the GFE “works” will be demonstrated over time as we see how well it protects consumers and streamlines the homebuying process.  Already, some evidence shows that the GFE is meeting its intended purposes. A new study shows that settlement costs have gone up, at least partially because lenders can now be penalized for not accurately disclosing fees on the GFE. Some mortgage lenders are speaking out about how the form benefits consumers.

Any major change such as the new standardized GFE is bound to encounter growing pains. Future research must focus on assessing the real costs and benefits of the form – both to consumers and industry. At the same time, industry feedback must be considered while also balanced with a “tough stand” towards lenders who consciously inflate tolerances or otherwise subvert the honest use of the GFE. Even with a new GFE, the work of improving the homebuying process is just beginning. Listening to consumers and industry with an eye towards greater system improvement will be a win/win for everyone involved.

Kleimann worked with HUD to develop the Good Faith Estimate and to test it qualitatively and quantitatively with over 1600 homebuyers and potential homebuyers. The new GFE was released in January 2010.

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Helping Consumers Navigate the Homebuying Process

The U.S. Department of Housing and Urban Development (HUD) and the National Association of Realtors® (NAR) recently unveiled three how-to videos to help prospective homeowners shop for a home, shop for a loan, and know what to expect in the closing process.

Two of the videos cover the Good Faith Estimate, a form Kleimann developed, that is a required form. The form was developed in part as a consumer tool to help explain the terms of a potential home loan as well as to encourage comparison shopping for the best loan for the consumer.

From the HUD website:
“HUD’s videos are easily accessible from both HUD and NAR’s websites as well as from HUD’s YouTube channel. They include:

Shopping for your Home – The homebuying process obviously starts with finding a place you’ll want to call home. This short video will instruct viewers on assessing how much of a home you can afford, working with a real estate agent and what happens once you find the home you want to buy. Housing counselors can assist home buyers and home owners on issues such as home buying, fair housing, credit issues, and foreclosure prevention.

Shopping for your Loan – Once you’ve found the home of your dreams, the next step is to shop for a mortgage loan. This video will help consumers use the good faith estimate (GFE), which is a form that spells out the terms of a loan offer, to shop for the best loan for them. Consumers will learn how to use the GFE to determine how long an interest rate is available for a particular loan and how to identify key loan terms and costs of a particular loan offer. HUD suggests consumers shop and compare GFEs from multiple mortgage brokers and/or lenders in order to get the best loan for their situation.

Closing the Deal – Finally, this video walks consumers through the actual closing process including how to make sure the loan they were offered closely matches what they encounter at the settlement table. In particular, HUD will walk the viewer through the HUD-1 Settlement Statement and demonstrate ways consumers can compare their actual costs with those reflected on their Good Faith Estimate.

Stevens added, “These videos go a long way in identifying key aspects of the homebuying process that a consumer should be aware of. Our goal is help make the process more transparent through educating consumers who in turn can make informed choices about their home purchase. We partnered with NAR because a real estate agent is often the primary point of contact for homebuyers and we believe real estate agents are in a great position to provide these videos to their clients as they move through key areas in the homebuying process.”

To view HUD’s new homebuyer education videos, visit HUD’s YouTube channel at www.youtube.com/HUDchannel.”

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