Advancing Quality in a Consumer-directed World: "May You Live in Interesting Times"

The American Journal of Managed Care, May 2005, Volume 11, Issue 5

Five years into the new millennium, the role ofhealth plans and insurers in advancing healthcarequality is changing. Three fundamentals are drivingthis change: the evolution of the health insurancemarketplace, the affordability crisis faced by businessand consumers, and plan and provider experience.

The health insurance marketplace has undergonesignificant evolution away from the traditional, noweven quaint health maintenance organization (HMO)model. The original vision of HMOs, arising from prepaidgroup practices, was that of non-overlappingprovider systems or networks, typically primary carebased, applying clinical guidelines and appropriatenesscriteria, and striving for the highest levels of accreditationand performance reporting as identified by externalnational organizations. Yet in the aftermath of the failedClinton Health Plan effort, the market in the 1990s sawthe rise of a large number of local, regional, and nationalcarriers, often hard-edged micromanagement of careby carriers, and the resultant "managed care backlash"among physicians and hospitals.1 Consequently, the UShealth system now has (a) significant consolidationamong both carriers and providers (particularly hospitals);(b) strong preference for the preferred providerorganization (PPO) model, which offers the benefits ofbroad choice for consumers and access to covered consumersacross plans for physicians; and (c) care and diseasemanagement programs that rely on data andinfluence, rather than on insurance denials to promotequality and efficiency.2

This evolution has attenuated the ability of healthplans to use the traditional tools developed in the HMOworld to improve quality and promote effective use ofresources. Unlike group-and staff-model HMOs, PPOshave no defined primary care physician "gatekeeper,"no defined denominator against which to measurerates, and less well developed quality measurementand accreditation infrastructure, when compared tothe HMO model. Furthermore, choice is a double-edgedsword: consumers are now free to seek care andcare providers that offer a broader range of qualitycharacteristics. Lastly, a legal climate that carries arisk of "vicarious liability" (holding the health planliable for quality of care) places further limits on healthplan activism.

Yet some of the basic strategies that have been usedsuccessfully to influence care patterns still hold power:data analysis, measurement of absolute and comparativeperformance, and positive and negative incentives.What is most striking about the current situation is therapid evolution of these strategies toward a consumer-directed,rather than a plan-or even physician-directed,world. Having faced year-over-year double-digit or highsingle-digit cost increases, employers have grownincreasingly frustrated with the pace of improvement.Five years after the Institute of Medicine reports "To ErrIs Human" and "Crossing the Quality Chasm," employerssee healthcare improving at glacial speed. Businessleaders have accumulated significant experience aboutthe quality and efficiency gains available in other businessarenas through the use of process innovations suchas Lean Production and Six Sigma continuous qualityimprovement. These leaders see no reason theseapproaches cannot be deployed, rapidly and at scale, inhealthcare.

Large employers are now driving the next revolution:a consumer-directed and consumer-focusedhealthcare system, facilitated by transparent depictionof quality and efficiency information. While this nexttransition in the healthcare marketplace is still in itsearly stages, the combination of rising healthcare costs,greater consumer cost-sharing, and the lack of alternativepublic or private solutions to persistent quality andcost challenges will likely lead to continued growth ofconsumer-directed initiatives.3 This aggressive drive topromote true transparency in the marketplace aroundclinical quality, efficiency, and the consumer experienceof care may be an even greater challenge to physiciansand hospitals than was the growth of managedcare itself.

In this new era, the historical role of health planaccreditation and focus on structural assessment willbecome less useful as mechanisms to depict quality.Traditional reliance on Health Employer Data andInformation Set (HEDIS) measures as indicators of clinicalperformance will be augmented by comparativeperformance of quality and efficiency, using advancedanalytic methods. For example, the authors' company,UnitedHealthcare, uses methodologies based onEpisode Treatment Groupers and All Patient RefinedDiagnosis-Related Groups to profile physicians across asingle national network, identify performance most consistentwith defined evidence-based medicine rules, andestablish superior efficiency of care by examining specialty-specific episodes of care on a comparative basis.These measures form the basis of a designation programthat can be used by employers to support tiered benefitsand create information for consumers to make optimalhealthcare purchasing decisions. These same dataare used to help physicians improve their own qualityand efficiency performance and are the supportingframework for physician incentive programs.


These tools, however, are different than the now-traditionalHEDIS measures. HEDIS measures are fairlystraightforward exercises in counting, relatively easyfor consumers and physicians to understand; even so,there are methodologic challenges, as noted byFuhlbrigge et al in this issue of the 4 The new,episode-based tools incorporate sophisticated approachesto data mining, episode construction, and riskand case-mix adjustment. It will be challenging toexplain these methodologies to physicians and to clearlyindicate the actions physicians need to take to driveimprovement.

As in the early years of HEDIS indicators, the marketplacewill be characterized by a number of methodologies,data aggregation approaches, and feedback andimprovement initiatives. This era of experimentation,while necessary, needs to move rapidly toward common,uniform standards and processes. Moreover, thesemore sophisticated methods to highlight quality andefficiency opportunities, the "new tools" for advancingquality, will be coupled with a variety of "pay for performance"approaches. Bridges to Excellence, whichoffers physicians' per-patient bonuses based on recognitionfrom the National Commission for QualityAssurance in 1 of 3 arenas, is a promising model, as arethe new pilot projects being conducted by the Centersfor Medicare and Medicaid Services.5

Lastly, information technology infrastructure willplay an instrumental role in facilitating the compilation,analysis, and dissemination of timely, relevant, and usefulinformation for improvement. The Derose et al studyof the use of technology and clinical decision supporttools to improve population management and performancein alignment with evidence-based guidelines helpsbuild an evidence base for technology applications.6 TheAgency for Healthcare Research and Quality, The RobertWood Johnson Foundation, and others have initiativesin this area that will enhance our understanding of whatworks and what does not. Promoting the diffusion ofeffective tools such as patient registries, formularydownloads for personal digital assistants, e-prescribing,chronic disease biomonitors, and other incremental, butdoable advances, holds significant promise for advancingquality. Ultimately, a national interoperable technologyplatform will clearly be required.

In a consumer-directed world, access to easilyunderstood, comparative quality data is critical to facilitatedecision making. Ideally, national consensusaround standard measures, methods for use of aggregatedata, and common approaches to performancedepiction will emerge quickly (if only to relieve thereporting burden and codify an approach to comparativemeasurement and reporting.) We are in a phase ofexperimentation around methods, engagementapproaches, and use of incentives to change consumerand physician behavior.

While physicians and carriers may experience thenext few years as a complex, even chaotic swirl of innovationand system change, we are optimistic that theresulting changes in our healthcare system will, at theend of the day, be better for patients. If we focus onresults, move toward transparency and improvedaccountability for use of healthcare resources, stratifyprovider performance, and accumulate knowledge andexperience through careful research during this phaseof experimentation, we will ultimately move closer to asafe, effective, patient-centered, timely, efficient, andequitable health system. Although working under theancient curse "may you live in interesting times" maybe painful at times, the challenge of change is far outweighedby the opportunity.

From UnitedHealthcare, Edina, Minn.

Address correspondence to: Dawn Bazarko, senior vice president of ClinicalOperations, UnitedHealthcare, 5901 Lincoln Drive, Edina, MN 55436.

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4. Fuhlbrigge AL, Carey VJ, Finkelstein JA, et al. Validity of the HEDIS criteria toidentify children with persistent asthma and sustained high utilization. 2005;11:325-330.

5. Centers for Medicare and Medicaid Services. Medicare begins performance-basedpayments for physician groups [press release January 31, 2005]. Available at: Accessed April 1,2005.

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6. Derose SF, Dudl JR, Benson VM, et al. Point-of-service reminders for prescribingcardiovascular medications. 2005;11:298-304.