Large Employers Seek Quality In Health Plans

December 14, 1998

University Park, Pa. -- Large health care plan purchasers, such as corporate employers and government programs, rely on accreditation decisions when choosing which plans to offer their members, according to a study by Penn State researchers.

"Managed care remains a hotly debated public issue, and the health care industry is seeking ways to clearly measure quality as a way to assist the public and to answer criticisms," says Dr. Dennis Scanlon, assistant professor of health policy and administration and lead author of the study.

"While not required, health plan accreditation is considered critical for obtaining contracts from larger purchasers such as corporations or government programs," said the Penn State researcher. "Two major accrediting organizations compete in this market, but should there be competition in the monitoring of health care quality?"

Scanlon and Thomas Hendrix, R.N. and Penn State doctoral student in health policy and administration, conducted two surveys of large public and private health plan purchasers, including corporations and government programs, representing 4.5 million employees and 2.4 million retirees. Their findings are published in the current issue of the journal Managed Care Quarterly.

Results show that all the purchasers require health plan accreditation, and 94 percent use the accreditation information as a factor in their purchasing decisions. Approximately 90 percent required and used Health Plan Employer Data and Information Set (HEDIS), a standardized system of performance measures, in their plan selection decisions.

In ranking the most important quality indicator of a plan, purchasers rated the technical skill of the health care providers first, followed by case outcomes, patient access, patient satisfaction, preventative services, continuity of care and HEDIS reporting. Only 11 percent reported that plan premiums were a critical measure of plan quality.

Performance measurement is a major issue facing the entire health care industry. Three leading health care accrediting organizations --- American Medical Accreditation Program, Joint Commission on Accreditation of Health Organizations (JCAHO) and National Committee for Quality Assurance (NCQA) -- formed a council this year to coordinate performance measurement activities across the entire U.S. health care system.

Currently, NCQA and JCAHO are the two major accrediting bodies of managed care organizations. Critics have argued that competition in the accreditation market will result in inefficiencies and fragmented standards; supporters say that competition will improve the quality of health care and increase accountability to the public.

The study notes when comparing the NCQA and JCAHO processes, 59 percent of the purchasers said they exclusively used NCQA accreditation in selecting a health care plan, compared to 24 percent who used both NCQA and JCAHO accreditation, 12 percent which used NCQA, JCAHO and a body with a smaller market share: Utilization Review Assessment Commission; and 6 percent who used only JCAHO accreditation.

NCQA is considered to have the most standardized accreditation process that emphasizes quality improvement in a plan and is linked to the HEDIS data set, the survey says. However, participants also responded positively to JCAHO's perceived flexibility and adaptability of its survey process to the different types of managed care organizations. JCAHO also is considered to be more patient care focused, the survey says.

When asked if having more than one accrediting body was valuable, the participants were nearly split with 56 percent saying "yes" and 44 percent saying "no."

The Penn State health policy researcher notes the results of the survey should be interpreted cautiously as they may not reflect the attitudes of smaller purchasers. Recent evidence suggests that smaller purchasers do not use accreditation and performance measures to the same extent, probably because larger purchasers have more resources for health plan evaluation, he notes.

In addition, the purchaser comparisons of NCAQ and JCAHO were based on the experiences of one health plan with both accrediting bodies. The plan administrators presented their information to survey respondents at a program in April 1997. Other health plans may describe their experience with NCQA and JCAHO differently, Scanlon says.

Will the accrediting organizations continue to compete based on the "quality" of their accreditation label, or just on price and service? Will the Performance Measurement Coordinating Council be able to come up with standardized guidelines and measurement tools for the public?

"Preparing and complying with accreditation standards is time-consuming and costly for a managed care organization," Scanlon says. "Its decision to collaborate with one or several accrediting agencies can affect not only its patient share, but also its bottom line.

"It is important to set standards and monitor health care plans, but without enormous burden in time and money," he says. "Everyone wants quality, but no one wants to foot the extra bill so we need to reach some consensus in the near future."

"Our findings suggest that using quality measures will be influenced by two issues: how well the accrediting groups incorporate performance measurement and improvement into their final decisions, and how well each survey process can adapt to the growing number of complex managed care partnerships," Scanlon says.

The article is "Health Plan Accreditation: NCQA, JCAHO, or Both?" Managed Care Quarterly, Autumn Issue, Vol. 6, no. 4, pp. 52-61.

EDITORS: Dr. Scanlon is at 814-865-1925 or at dpscanlon@psu.edu by email.
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Penn State

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