Insurers using publicly reported quality data

Payers offer top hospitals public, financial benefits

A growing number of health insurers is using publicly reported quality data to reward the best-performing hospitals, both publicly and financially. Horizon Blue Cross Blue Shield of New Jersey and the Leapfrog Group have launched a program offering hospitals financial and public recognition for high-quality hospital care, tied to the JCAHO and CMS measures.

"Quality managers need to be prepared to incorporate the growing set of standardized measures for health care performance into their internal benchmarking as well as in public reporting programs," says Suzanne Delbanco, PhD, CEO of the Leapfrog Group.

Horizon Blue Cross Blue Shield of New Jersey is the only plan with which Leapfrog is offering its Horizon Recognition to all its contracted hospitals, but the program is at work in various smaller formats in Memphis, TN; Seattle; southeast Michigan; and Raleigh-Durham, NC.

The Horizon Recognition program can be customized for local markets, and many markets beyond New Jersey are considering implementation of this program, as part of a growing trend to award financial and public recognition for high-quality hospital care, says Delbanco.

Determining reimbursement based on quality, best practices, and positive outcomes is a growing trend, says Thomas W. Rubino, director of public affairs for Horizon Blue Cross Blue Shield of New Jersey. "Most likely, other states will soon have similar programs," he says.

This is a positive development for hospital-based quality professionals, who often are viewed as "expendable, expensive" resources, says Rubino. "When cuts to administrative overhead expenses are under consideration, this program demonstrates in a very real way — more revenue — the value these professionals and their programs and initiatives can and do add to the hospital's bottom line," he says.

The best performers will be rewarded with public recognition, which can increase a hospital's market share of patients, as well as financial awards. The performance measures for which it is appropriate to adjust for the severity of the patient's condition have been severity adjusted.

"For each clinical area, length-of-stay averages are standardized for disease severity, weighted and inflated by the rate of readmission following discharges," says Rubino. "An overall composite resource efficiency score for the clinical area is calculated."

Methodist Le Bonheur Healthcare, a seven-hospital system based in Memphis, is participating in both CMS and Leapfrog. "We are a big proponent of transparency and share our data with a variety of organizations," says Donna Abney, the organization's executive vice president. "With the CMS demonstration project, we wanted to run with the fastest players and knew some of the best hospitals in the country would be entering."

With Leapfrog, the organization's goal is to bring skilled professionals from other industries in order to apply quality improvement lessons to health care. The Memphis Business Group on Health is organizing several health plans in that market to use the Leapfrog measures as the foundation of their hospital recognition and reward efforts. The group was an early adopter of the Leapfrog program and now serves as an intermediary between the business community and local hospitals.

"They serve as a forum, where we as a hospital provider and Federal Express as a purchaser can sit at the same table and talk about process design or business problems," says Abney. "We are very fortunate to have a broker that creates an environment for us to have that kind of dialogue on a regular basis."

The organization is still in the beginning stages of its first data exchange with Leapfrog but has already met with executives from Federal Express. "They in particular have been very amenable to come in and work with us on specific problems, not necessarily tied to pay for performance," says Abney. "What we hope to get out of it is improvement. We are interested in anything that helps us do a better job."

The organization takes full advantage of knowing where it stands in comparison to its competitors, says Abney. "When we get a blueprint or map that says, Methodist Healthcare, here's where you are, and here's where someone else is, we immediately go to those benchmark hospitals and try to deconstruct what they do differently," says Abney.

Quality leaders ask: Do they use the same tools? Are they training people the same way? Are their underlying clinical processes the same or different?

"Then we do a gap analysis and try to understand what things they do that deliver better results," says Abney. "For the CMS initiative, we have profiled and modeled and stolen from some of the best hospitals on any number of fronts, and I expect we will do the very same thing with Leapfrog."

Here are some of the changes that have been made as a result of the process:

  • Intensive care units were redesigned using multidisciplinary rounds and care bundles.
  • A variety of automated tools were implemented to prompt clinicians to deliver certain procedures or tests.
  • The medical staff bylaws were changed so that flu vaccinations are given automatically without the need for a physician order.

The organization has no specific plans to use the quality data for marketing or public relations campaigns. In fact, it's much more effective to have a third party do the "bragging" for you, says Abney.

"We have not purposely been going out and giving statistics to the public saying our quality is better. But as others measure us and do report cards on us, we find that we fare well on them, and they go to the public on our behalf. We don't have to toot our own horn — they do it for us," says Abney.

Several area insurance companies are including publicly reported data on their web sites to share with consumers. "What they are doing now is considerably more sophisticated than what they may have started out with," says Abney.

In the Memphis area, United Healthcare, Cigna HealthCare, and Blue Cross of Tennessee are among the insurers who are in the process of launching web sites posting quality data on local hospitals. "It's a growing trend, and they are all aggregating around pretty much the same information, using the CMS and JCAHO measures, and reporting to their respective customer bases how hospitals they use are faring against those measures," says Abney.

Cigna HealthCare has made a grant of $125,000 to help Methodist create more resources to collect data related to obstetrics for a Leapfrog patient safety initiative. "They have been very active with us in the Leapfrog program and have helped us fund and launch a lot of initiatives in QI with their resources," says Abney. "They have given us grants to beef up our data collection capabilities."

For both CMS and Leapfrog, all data are exported to Premier prior to submission. "They are an accredited intermediary, and they scrub the data and export it either to CMS or to Medstat, which is the information vendor for Leapfrog," she says.

Even data collected electronically are first sent to an electronic clearinghouse to be sure the format is correct.

"There has been some cost associated with this, including cost to pay vendors to act as data scrubbers, and cost to beef up the quality assurance we do internally before the data is exported," Abney says. "There is a cost to provide data to the external world, but we think it's well worth the investment."

The organization's clinical informatics department has grown from a tiny department to eight full-time staff members. "We are about halfway through a five-year journey to a complete electronic medical record," she says. Nursing, pharmacy, radiology, and laboratory results are in the electronic record, so data from those areas can be exported electronically.

"However, sometimes the documentation of measures that an external body wants, such as antibiotics within four hours of arrival, may not easily transfer electronically," Abney says. "So we might have to put manual processes in place in addition to the electronic processes, to create a complete picture for the external world."

Even after the hospital is 100% electronic, there probably will always have to be some manual oversight to ensure that data are collected and arranged properly, she says.

The financial implications of improving quality aren't the main issue, Abney says. "There are theories about whether quality improves the financial status of an institution or adds to the cost. We haven't spent time getting lost in those arguments," she says. "We have gone down this road with some level of financial analysis, but with more of a commitment that it's the right thing to do."

[For more information, contact:

Donna Abney, Executive Vice President, Methodist Le Bonheur Healthcare, 1211 Union Avenue, Suite 700, Memphis, TN 38104. Telephone: (901) 516-0549. Fax: (901) 516-0558. E-mail:

Thomas W. Rubino, Director of Public Affairs, Horizon Blue Cross Blue Shield of New Jersey, Three Penn Plaza East, Newark, NJ 07105-2200. Telephone: (973) 466-8755. E-mail:]