Quality Monitoring and Management in Commercial Health Plans

Volume 14: 377-386 June 2008 Number 6

Quality Monitoring and Management in Commercial Health Plans

Bruce E. Landon, MD, MBA; Meredith B. Rosenthal, PhD; Sharon-Lise T. Normand, PhD; Richard G. Frank, PhD; and Arnold M. Epstein, MD, MA

Objective: To examine the current state of quality monitoring and management activities of US health plans.

Study Design: Cross-sectional survey.

Methods: We surveyed medical directors of 252 commercial HMOs (96% response rate) drawn from 41 nationally representative markets in the United States. We randomly sampled healthcare markets with at least 100,000 HMO enrollees. The markets in our sampling frame include an estimated 91% of US HMO enrollees and represent 78% of the metropolitan population.

Results: There was near-universal collection of data at the health plan level for each of the 7 outpatient measures we examined (ranging from 92.1% of health plans that collect data on hypertension control and cholesterol management (see p. 379) to 99.2% that collect data on patient satisfaction). There also was substantial data collection at the level of the individual provider or physician group (ranging from 50.4% for hypertension control to 81.4% for diabetes care); this was more common in health plans that primarily use capitation to reimburse primary care physicians. Health plans that collected data typically fed these data back to physician groups, but public reporting to enrollees was infrequent.

Conclusions: Almost all health plans measured their performance on multiple indicators of quality. The majority of health plans also collected data at the level of the individual physician or group and used these data in quality improvement activities, but not in public reporting. Thus, adoption of physicianlevel performance measurement and reporting by the Centers for Medicare & Medicaid Services will likely entail a major change for individual physicians.

(Am J Manag Care. 2008;14(6):377-386)

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The spread of capitation within the managed care sector during the early 1990s intensified concerns about quality of care as a major potential problem for the US healthcare system.^1-3 Until that point, the vast majority of US physicians had been compensated using fee-for-service (FFS) payments, which, if anything, were believed to lead to overprovision of services.⁴ Under capitation, however, physicians and other providers of care had financial incentives to provide fewer services, leading to fears that physicians would skimp on care.⁵ These concerns contributed to the development and promulgation of the multiple quality measures and measurement activities that are common today.

Over the past 15 years, quality monitoring has become commonplace, and there has been increased interest in harnessing the organizational capabilities of health plans and hospitals to improve the quality of care.^6-8 Most organizational efforts have included systematic collection and examination of clinical data, and use a variety of strategies such as physician and/or patient education, physician- and patient-specific feedback, public release of data, and financial incentives designed to improve adherence with accepted standards of care. Managed care plans occupy a unique place within the healthcare system, affording them the opportunity to access a variety of clinical and financial data that can be used in quality improvement activities.

Despite the importance of organizational efforts to monitor and improve quality of care, few data exist that describe the actual quality management practices of health plans.^9-13The data that do exist are a decade old. In the interim, there have been tremendous advances in information systems and other electronic capabilities that can enhance the capacity of health plans to engage in medical management activities. In this study we examined the current state of quality management activities of a nationally representative sample of commercial HMOs, particularly those activities related to the collection and use of clinical data. We hypothesized that health plans that primarily use capitation rather than FFS to compensate primary care physicians (PCPs) would have more highly developed quality management programs.

METHODS
Overview
We conducted a survey of a national sample of HMOs about their quality management activities (hereafter, we interchangeably use the terms “health plan” and HMO). We chose to focus on HMOs because among all types of health plans, they have the most advanced quality management infrastructure. There are currently more than 70 million enrollees in HMOs nationally.¹⁴ We estimated the prevalence of specific quality management activities using a set of representative quality indicators related to chronic disease management and prevention selected from the Health Plan Employers Data and Information Set (HEDIS). We previously reported on a subset of these data that focus on pay for performance (P4P).¹⁵

Survey Sample and Data Collection
We surveyed representatives of HMOs in 40 randomly selected markets (metropolitan statistical areas [MSAs]) in the United States with at least 100,000 HMO enrollees. The markets in our sampling frame include an estimated 91% of US HMO enrollees and represent 78% of the metropolitan population. Population data were obtained from the 2000 Census,¹⁶ and market-level HMO penetration was determined from the 2004 InterStudy Competitive Edge database.¹⁷ To ensure that the sample would be distributed proportionally across the 4 census regions, we stratified our sampling by region according to its proportion of the total population. The probability of selection for markets within each region was in turn equal to its population share. We allowed only 1 primary MSA (PMSA) per consolidated MSA (CMSA) to be selected for the final sample. PMSAs are the individual, contiguous metropolitan areas that make up a CMSA.¹⁶ This choice was made to limit sampling of contiguous markets. Because New Orleans was in our original sample and Hurricane Katrina occurred before we had completed all the interviews for that MSA, we added a 41^st metropolitan area from the same census region (San Antonio). The analysis includes the responses of medical directors at 3 health plans from New Orleans who had been interviewed prior to Hurricane Katrina.

We identified all health plans with an HMO product in the 41 selected markets using the InterStudy database, which was supplemented with information from state insurance commissioners. Information from InterStudy also was used to identify potential respondents in each plan (generally medical directors or directors of quality management). When sampled health plans were part of a regional or national plan, the survey was sent to the part of the organization that made the quality management policy decisions. Letters and information sheets were mailed to potential respondents and were followed with phone calls requesting participation. The survey was conducted between July 2005 and January 2006 and was administered by phone, except in one case where a large national plan elected to complete a subset of the questions in writing, which was supplemented with phone interviews.

Survey Design
The survey instrument elicited information related to the organizational characteristics of the health plan, its products and purchaser contracts, provider contracting, quality improvement activities, and “member-centric” health improvement efforts. Unless otherwise noted below, the frame of reference for the survey was 2005. Cognitive testing of a draft instrument was conducted with 5 health plans that were not in our sample prior to finalizing the questionnaire.

We first elicited information about the numbers of enrollees in the sampled market, the use of primary care gatekeeping, accreditation by the National Committee for Quality Assurance (NCQA), and ownership (for profit, not for profit). Next, we asked about the degree to which the plan relied on salary, capitation, and FFS payment for compensating PCP services. We were not able to distinguish between primary care payment arrangements with organizational entities such as large medical groups versus those with individual physicians, so individual physicians belonging to large medical groups might not be paid directly by capitation payments themselves in instances when the health plan used capitation payments for PCP services.

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