MCOs get mixed reviews on efforts to emphasize quality over cost

Pressure from employers and competitors may help hasten changes

Most managed care organization (MCO) executives you talk to today will assure you that the word "cheap" no longer applies to their industry. "Quality," they insist, is the new watchword of managed care. Meanwhile, the mass media provides us with just enough "horror stories" of treatment denials and subsequent medical disasters to help perpetuate the myth that MCOs still worship at the shrine of the bottom line.

Who’s right? Expert observers give some MCOs an "A" for effort but note that even those who use the latest quality measurement tools, such as the National Committee for Quality Assurance (NCQA) accreditation, and the Health Plan Employer Information Set (HEDIS,) are using "works in progress." However, competitive marketplace pressures and increasingly forceful employer demands for greater quality are hastening the day when a managed care industry fully dedicated to quality care is a reality. If you’re charged with selecting a health plan for your company or just operating your health promotions program within the confines of your company’s HMO, you need to know that all health plans are not created equal when it comes to quality.

When asked if MCOs are more dedicated to quality today than they were just a few years ago, Jeffrey P. Koplan, MD, MPH, president of The Prudential Center for Health Care Research in Atlanta, responded, "Absolutely." (The center, a research and development arm of Prudential Health Care, researches major health care issues. Prudential’s managed health plans later adjust their practices based on results of the center’s studies.)

"In the old system [of health care], no one took a population-based look at health care except public health officials. Today, in major qualified health plans, in order to improve quality, you have got to do that," Koplan explains.

Brian Schilling, an NCQA spokesman, says his organization’s numbers paint a fairly bright quality picture. "Approximately 90% of managed health plans use HEDIS, either internally or externally," he says. "And, of the 630 HMOs, 333 are NCQA-accredited programs. To put it another way, about three out of four Americans covered by an HMO are in plans we’ve approved. That’s a good sign for the industry."

(Editor’s note: HEDIS, a software tool designed by the NCQA, allows HMOs to enter a variety of information that will enable prospective clients to evaluate their performance in areas such as preventive health, access to care, employee satisfaction, and targeting high-risk populations.)

Schilling cites one key contributing factor: "If you can’t demonstrate quality is getting better, you won’t get full accreditation," he notes.

Not so fast

While the overall numbers may look good, "We’re still in the early stages of that [quality] transition," says Peter Kongstvedt, MD, partner in the Washington, DC, office of Ernst & Young LLP.

"There are still plenty of places where price remains king," says Kongstvedt, who spearheads the strategy of his firm’s managed care group. "While HMOs in some parts of the country are striving to be high-quality providers, price remains a major driver."

Kongstvedt says he sees an interesting phenomenon developing in major markets such as Chicago, Southern California, Northern California, Minnesota, and Wisconsin, "where the purchasing community is getting its act together." In those areas, high quality is a requirement now to be in business, he says. "What the purchasers [well-organized businesses] there are demanding are higher levels of quality, that it be demonstrated, that patients have better outcomes, and rather than paying you extra for it, if you don’t do it, you lose the business." (One place where the purchasing community has definitely gotten its act together is California. See story, p. 123, for details.)

Kongstvedt says this is a natural evolution of the market. "Frankly, it’s the way every other industry does it," he observes.

Not an ‘either-or’ issue

Just because your plan emphasizes quality, that doesn’t mean it will be more expensive, notes Pam Kalen, executive director of the Employers Managed Health Care Association in Washington, DC, which she describes as "The only national membership organization comprised of corporations and public employers dedicated to developing a better, more cost-effective health care system via managed health care."

Employers, she notes, are not just looking for the cheapest plans, but for value — which means addressing cost and quality. "I have seen it over and over again — companies who’ve gone through the exercise of collecting and evaluating data are finding that those plans that are doing the best job in the quality area are the least expensive, or at least not the most expensive," she says.

Besides, she notes, just because you can provide health care for less money, it doesn’t necessarily mean you are skimping. "It may mean you’re doing the right things early, which will save costs down the road. So, quality can be less costly both in terms of dollars and in terms human suffering."

Kalen says she sees employers and plans working together to improve quality. "Most of our 100 members have chosen some way of measuring quality — HEDIS, NCQA, member satisfaction. More and more plans are collecting and reporting data, too, and once it’s collected, employers within those plans give the marching orders."

And as these tools become more sophisticated, employers will be armed with increasingly important information. "What we’re moving toward are better ways to measure actual outcomes of care — without a long lag time," Kalen predicts.

The employers who are giving the MCOs their "marching orders" are usually ones with a sufficient employee base to command such clout. But what about employers who aren’t quite so large? Are they being left on the sidelines?

For employers who don’t have sufficient power themselves, there are only a couple of things they can do, says Kongstvedt. "One, they can find a way to get together with other employers to become a genuinely cohesive group. Many of these groups tend to fall apart, however, says Kongstvedt, because those companies with lower-risk employees may be able to get better quotes by themselves.

"So, you can join up with giant purchasers, or you just have to be a smart shopper," he says. "You need to decide what’s important, what data you need to get, and if you can’t get it from a particular plan, don’t offer that plan to your employees." Kongstvedt says you can look for basic indicators of quality, such as NCQA certification, or stay abreast of major national publications such as Newsweek or Business Week, which come out with report cards on HMOs.

Another source, adds Kalen, is the NCQA’s "Quality Compass," a single database that reports most satisfaction data from participating plans. Its latest release is imminent, says Kalen. "I think the satisfaction information will be important because what people seem to like to know is how ‘someone like me’ feels about this particular plan," she observes. "In addition, if someone is ‘satisfied’ because they are get- ting preventive screenings, then quality would be improved as well; I believe the two are related."

Other indicators of satisfaction include speed of access, satisfaction with health care professionals, and the type of interface the patient has with non-clinical personnel.

Another potentially powerful tool would be a plan participant’s "Bill of Rights." "The American Association of Health Science in Washington, DC, is working on just such a document at the present time," says Kongstvedt.

Finally, he asserts, even "average" companies will benefit from what the leading companies are requiring in terms of quality. "Managed care organizations are not going to put on special enhanced programs just for one large employer who may have a worksite wellness program," he says. "Other companies will benefit from the ‘halo effect.’"