Newsletter >
Employers and Healthcare Quality

November 25, 2007

A new survey indicates that among large employers, many 
have not examined data on physician quality or shared 
health plan or physician data with employees that could 
help improve the value and quality of health benefits, 
according to a study in the November 21 issue of JAMA.  
 
“Value-based purchasing has often been portrayed as the 
lynchpin to quality improvement in a market-based health 
care system. Under this paradigm as it was originally 
conceived, employers and other large purchasers of health 
care are expected to contract with health plans according 
to quality and cost.  
 
Other key elements of value-based purchasing include the 
promotion of quality improvement in negotiations with 
health plans and facilitating informed choice of health 
plan through dissemination of comparative cost and quality 
information to employees,” the authors write.  
 
Although a small group of the largest national employers 
have been active in improving health care quality through 
the promotion of quality measurement, reporting, and pay 
for performance, it is unknown whether these ideas have 
significantly effected employer-sponsored health benefit 
purchasing. 
 
Meredith B. Rosenthal, Ph.D., of the Harvard School of 
Public Health, Boston, and colleagues conducted a national 
survey of large employers regarding value-based purchasing 
of health care and related efforts to improve the quality 
of health care and employee health.  
 
The researchers interviewed by telephone executives at 609 
of the largest employers across 41 U.S. markets between 
July 2005 and March 2006. The 41 randomly selected markets 
have at least 100,000 persons enrolled in health 
maintenance organizations, include approximately 91 percent 
of individuals enrolled in health maintenance organizations 
nationally, and represent roughly 78 percent of the U.S. 
metropolitan population.  
 
The 26 largest employers were identified in each market, 
with firms ranging in size from 60 to 250,000 employees.  
A large percentage of surveyed executives reported that 
they examine health plan quality data (269 respondents; 65 
percent), but few reported using it for performance rewards 
(49 respondents; 17 percent) or to influence employees (71 
respondents; 23 percent).  
 
Physician quality information is less commonly examined (71 
respondents; 16 percent) or used by employers to reward 
performance (8 respondents; 2 percent) or influence 
employee choice of providers (34 respondents; 8 percent). 
 
“Our study suggests that skepticism about the benefits of 
value-based purchasing may be important because only about 
one-third of employers viewed each value-based purchasing 
strategy we asked about as ‘very useful.’ This perception 
may be due to the lack of a ‘business case’ for the 
intended outcomes of value-based purchasing in terms of the 
effects on workforce productivity, benefit cost savings, or 
the ability to attract and retain employees.  
 
Alternatively, some employers may (correctly) perceive that 
the evidence to support the effectiveness of strategies 
such as pay for performance and report cards is mixed at 
best,” the authors write. 
 
“During the last decade, a number of high-profile employers 
have become involved in delivery system reform and quality 
improvement in national and local spheres. Nonetheless, our 
findings suggest that employers as a whole do not appear to 
be directly implementing contracting strategies and 
programs to improve the quality and value of health 
benefits, except as they relate to supporting improved 
employee health behavior.  
 
Efforts to alter the dynamics of health plan and provider 
competition will likely have to come from other sources, 
including private employer coalitions, multistakeholder 
collaborative organizations, and the public sector.” 
 
JAMA. 2007; 298(19):2281-2288.