Does Your Health Plan Measure Up? How Can You Tell?

Shopping for health plans is complicated. The continued increase in health plan premiums, combined with concern over a perceived fluctuation in managed care's service quality, has school district benefits managers redoubling their efforts to review plan selections. Benefit managers are finding they need more than a cursory review of brochures to ensure they are securing not only the best value, but also the best quality of care. Here are some guidelines for benefit managers to consider when evaluating health plans. Based on the premise that the review of quality data is critical before making a decision, this article offers pointers on how managers might enhance their current healthcare plan purchasing process.

Does Anyone Review Quality?

Employers in every industry are struggling to select the best plan offerings available in the marketplace. Unfortunately, healthcare purchasing decisions have usually been based on cost first, and anecdotal information regarding quality second. To most employers and employees, "quality" generally is defined on the basis of factors such as provider network adequacy and access, provider reputation, referral ease, overall customer service, and recommendations from other employees. While these factors are definitely important, and should not be overlooked in the health plan evaluation process, they are not sufficient to ensure that employees and their dependents are receiving quality health care and appropriate treatment outcomes.

Over the past few years, a number of organizations have developed criteria with which to measure the performance of a health plan. Incorporation of these findings can provide a solid basis to make informed decisions. There are several organizations that participate in quality review; a few are recognized as credible resources on quality assurance.

The most widely accepted and prominent of these review organizations is the National Committee for Quality Assurance (NCQA). The NCQA is a private, non-profit organization dedicated to assessing and reporting on the quality of managed care plans. Its governing board comprises employers, consumers, and labor representatives, as well as health plan officials, quality experts, policy makers, and representatives from organized medicine. The NCQA's efforts are organized around two activities: accreditation and performance measurement of managed care organizations.

The NCQA accreditation process is a rigorous and comprehensive evaluation process to assess how well a health plan manages all parts of its delivery system, including quality improvement, physician credentialing, member rights and responsibilities, preventive health services, utilization management, and medical recordkeeping. There are nine levels of accreditation, and most plans strive for Full Accreditation (the managed care equivalent of the Good Housekeeping Seal of Approval).

Moving beyond the accreditation status, one should also review a wide variety of indicators about which current, reliable data have been collected. The areas for review and critique include:

Overall health plan satisfaction

Effectiveness of care

Access and availability of care

Interaction with physician

Referral process

Health plan stability

Member services

Health plan descriptive information

To help measure performance in these areas, the NCQA developed the Health Plan and Employer Data Information Set (HEDIS), which is a set of standardized performance measures designed to ensure that purchasers have the information they need reliably to compare the performance of managed care health plans. The performance measures in HEDIS are related to many significant health issues such as cancer, heart disease, smoking cessation, asthma, and diabetes. HEDIS also includes a standardized member satisfaction survey designed to measure the non-clinical aspects of a plan.

By October of this year, a new version of HEDIS will be published with data for 1998. Although compliance with NCQA accreditation and HEDIS reporting are voluntary, most health plans in California recognize the importance of quality outcomes and cooperate fully in reporting the health plan data. To date, most quality data have been reported only for Health Maintenance Organizations (HMOs), but the NCQA is developing quality criteria that will apply to Preferred Provider Organizations (PPOs) in the next year or two.

The Joint Commission on Accred-itation of Healthcare Organizations (JCAHO) is another source for quality assessment. The JCAHO is a private, nonprofit organization that evaluates and accredits more than 18,000 healthcare organizations in the United States, including hospitals, health plans, long-term care, managed care, laboratories, and ambulatory care services.

Other sources of quality data will no doubt emerge in the near future, but the NCQA, HEDIS, and JCAHO programs are solid and respected ones to use as a basis for comparison. Benefit managers can access these resources through their benefit consultant or directly via the Internet. The NCQA Website at is an excellent starting point to learn about quality measurement.

Do I Need a Second Opinion?

While some organizations question the need to have more than one quality assurance report, compiling data from multiple sources is advisable, since quality can vary by indicator and by health plan. What consumers look for in healthcare quality isn't much different from what they look for from other service providers. They want healthcare providers to see them as soon as possible. They want providers to give high-quality care, be timely in their delivery, offer cutting-edge treatments and options, and provide the service in an atmosphere of politeness and respect. Identifying how well a health plan fares with its competitors in NCQA, JCAHO, and HEDIS reports is just the first step in a quality review process. Further research can be obtained about health plans from state government or private regional healthcare associations. In California, for example, the California Cooperative Healthcare Reporting Initiative (CCHRI) was developed by the Pacific Business Group on Health. The CCHRI is a collaborative effort of healthcare purchasers, plans, and providers which provides an annual review of how well health plans in the state are providing certain services.

Currently, most healthcare quality data are reported at the overall health plan level. While this is certainly important, data that focus down to the provider group or individual physician level will have more value to the members. This is the direction that future evaluation methodologies are taking. Keenan & Associates, an independent benefits consulting firm in California, has developed a Quality Scorecard that incorporates quality data at both the overall health plan and individual provider group levels. The Scorecard also includes a customized client satisfaction survey that can be used to evaluate any health plan, including HMO, Point-of-Service (POS), PPO, and indemnity plans.

What Do I Do With the Data?

The improved reporting of quality indicators is creating a paradigm shift in the health plan evaluation process that will create additional work for employers (and employees). Quality measurement adds a new dimension to the already time-consuming task of health plan evaluation. The coming flood of data has the potential to create confusion as new and often conflicting information is introduced to the healthcare scene.

Employers, labor organizations, and healthcare consultants will need to sort through the data, determine which measurement standards are credible, and determine a long-term strategy for quality measurement and what it means to the employer's health programs. In many cases, the quality movement will force employers to replace inefficient or poorly performing health plans with those demonstrating a dedication to improving care. Ultimately, the effort will pay off for employers and their employees. The emphasis on quality measurement and provider performance will result in significant improvement in the most critical component of health care delivery Ñ patient outcomes and satisfaction. Since the typical school district offers several health plans, the first step in the process is to create a listing of health plans including a grid for data comparing each plan.

The pressure benefits managers often feel in their efforts to make sure district employees are receiving quality care can be significant. However, setting up a review system or employing a benefit consultant can help districts provide a fair and accurate framework for judging their health plans' services.   

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