Employers and Healthcare Quality

Nov 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

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.