What plan executives say about quality

In response to a prior post about a quantitative study of health plan quality, commenter Jonathan found it odd that the authors of the paper I discussed seemed not to have bothered to talk to health plan executives. Of course he is correct that there is value in gathering qualitative information from leaders in the endeavor one is studying.

However, in this instance, there is a very good reason why the authors of the paper seemed not to have done what Jonathan suggested. One of the authors had already done the qualitative study Jonathan had in mind. In fact, they cited the study. In fact, I referenced it in my post. Moments ago, I read it. I thought Jonathan and others might be interested in the findings.

The findings of “Are Managed Care Plans Organizing for Quality?” by Dennis Scanlon, Elizabeth Rolph, Charles Darby, and Hilary Doty (MCRR, 2000) are based on interviews with medical directors, quality improvement (QI) directors, and chief executive officers if 24 health plans. In summary, those findings are:

Plans are facing real pressure to focus on and engage in QI activities. Although private purchasers are not always the expected direct impetus for QI activities, the requirements of accreditation organizations (such as the NCQA) and public purchasers (such as the Medicare and Medicaid programs) are having a dramatic effect.

Plans are restructuring themselves in a manner consistent with giving serious and long-term attention to the goal of QI. Boards now have institutionalized QI oversight responsibilities, and high-level managers dedicated to QI are assuming responsibility for clinical and service quality. Practicing physicians are involved, in varying degrees, in setting medical policy.

Plans are slowly, and in some cases tentatively, developing the necessary technical capabilities to implement QI activities. Data collection, analysis, performance measurement, and the implementation of appropriate change are all components of a strong QI program. Plans exhibit considerable variation in their respective capabilities, but most appear to be making efforts, as resources permit, in one or more of these areas. […]

Interestingly, however, the authors

encountered little evidence that today’s MCOs believe quality plays a significant role in attracting customers; the overwhelming consensus is that price drives most purchasing decisions.

This is consistent with what I wrote last night and explains why plans don’t compete on quality, even when quality is of marginal interest to consumers, second (or third or forth …) to price. If quality is welfare improving (in the economic or non-economic sense) and we can’t rely on competition to deliver improvement in that dimension, it would seem a little regulation is in order.

An ungated scanned PDF of the paper is here.


Hidden information below


Email Address*