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Quality Programs: How Effective?

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Group health insurers are hoping they can make employers and workers better health care buyers by offering detailed, comprehensive quality information as well as detailed price information.

So far, evidence that existing quality reporting programs are affecting purchasing decisions is sparse.

A study published earlier this year in Inquiry, a health finance journal, found Medicare beneficiaries seem to be ignoring quality report cards when picking Medicare health maintenance organizations.

Preliminary study results released in 2000 by Dennis Scanlon, a researcher at Pennsylvania State University, and Michael Chernew, a researcher at the University of Michigan, found vague signs employees at General Motors Corp. might be avoiding GM health plans with negative ratings in many areas. The researchers found few signs the employees were choosing plans with good ratings.

But a program at PacifiCare Health Systems Inc., Cypress, Calif., that reports on the performance of group medical practices is having a noticeable effect on PacifiCare member behavior, says Dr. Sam Ho, the companys chief medical officer.

Since PacifiCare began publishing group practice performance data for California, Oregon and Washington in 1998, “consumers have, in fact, responded enthusiastically,” Ho says.

The performance reporting seems to have caused 3% to 5% of PacifiCare members to move to better performing practices, Ho says.

A 3% shift sounds small, but even a small shift toward better, more efficient practices could make a difference in an industry with thin profit margins, quality program advocates say.

Besides, Ho says, “weve found the doctors have responded by improving quality.”

The results suggest that the mere existence of public performance reporting can improve the health care system, according to Ho.

Now PacifiCare is publishing hospital quality ratings based on government data and offering members financial incentives to use what appear to be lower cost, higher quality hospitals. If patients respond, “well have a network of providers that will be higher quality and lower cost at the same time,” Ho says.

Aline Roberts, president of the California Association of Health Underwriters and president of Insurance Dimensions, Thousand Oaks, Calif., says she is glad the plan and provider quality rating programs exist, even if measuring the programs direct effect on plan sales and member decisions is difficult.

Employers shopping for group coverage want to see all the information about quality and financial stability they can get, Roberts says.

“I think all the ratings are valuable,” Roberts says. “Theyre not the end all be all, but theyre an aid.”

Reproduced from National Underwriter Life & Health/Financial Services Edition, June 30, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.