Notes on Schoenbaum and Coltin (1998)

A reader asked why I’m blogging so much lately. The answer is, sometimes I need to read a lot of papers in a subject area in a short time span (e.g., in preparation for writing a paper or proposal). I can’t keep more than a few things in my head at once, so I blog on the papers as I read them. I keep a list of the posts as I do so. Then, when it comes time to write the paper or proposal or whatever, I pull up the posts and the document almost writes itself. Expect a lot of blogging from me over the next few weeks.

With that, below are some notes on “Competition on quality in managed care,” by Stephen Schoenbaum and Kathryn Coltin (International Journal for Quality in Health Care, 1998). Yes, the paper is old, but I think some of the content is still applicable.

From the abstract: “It seems more likely that true competition on quality will occur between groups of providers, organized or integrated delivery systems, than between MCOs.” Already, I am thinking ACOs.

Most consumers act as if they believe that the health care they receive, especially if they are unfettered in the choice of health care insurance products , will be assuredly excellent. Consumers define quality directly in relation to attributes such as their ability to choose their health care providers, their ease in getting an appointment to see the provider of their choice, and whether the relationships they establish with those providers are satisfactory or not.

This is a hallmark of a credence good, namely that consumers don’t even know the quality of the product even after they have experienced it.

The authors note that staff/group MCOs have higher quality scores than a network MCO. Reasons given are:

  • “It is relatively easy to implement quality management programs within these group practices.”
  • “The more physicians the MCO has to deal with, the more difficult it is to implement an intervention designed to improve quality. In part, this is due to the sheer numbers of physicians who must be kept informed or actually participate in the quality improvement effort. In part, it is due to the low penetration of practices in large networks, the inability to attract the attention of the physician to a particular MCO’s effort to improve quality, and the lack of consistency in the messages and methods used by the MCOs.”

Moving on,

Although quality indicator measurements such as the HEDIS results usually favor staff/group model MCOs, surveys of members and employers usually show that they rate network model MCOs higher on ‘quality of care’.

So, why don’t MCOs compete on quality?

  • “There is also reluctance on the part of MCOs to undertake quality improvement efforts which do have long-term, but not short-term, returns on investment.”
  • “Another deterrent to competition for improvement of quality of care is the fear of adverse selection.”
  • “The marketplace seems perverse, because the public has driven it towards the overlapping networks which are the most difficult environment in which to improve quality.”

All in all, fairly distressing to anyone interested in quality in the sense of health improving (not in the sense of consumer demanded).


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