Private purchasing coalitions around the country are putting pressure on providers to add more value to their performance. But if they can get the local public sector to jump on their bandwagon, the potential for change is enormous.
In Kansas a small group of interested parties is trying to tie together private employers with the state in its role as healthcare purchaser to develop uniform performance objectives and outcomes measures. In so doing, it hopes to simplify the reporting process for providers. The plan would give providers one set of standards to meet that would be accepted by all major purchasers.
A working group, set up with the blessing of Gov. Bill Graves, a Republican, has been meeting in Topeka to carve out the details. It includes the state insurance commissioner, budget director, health director, state employee benefits director, chair of the Senate public health committee and employee benefits executives from some of the largest private employers.
If the state can persuade private companies to participate in this joint ambition, it will have leveraged its huge buying power in the public sector to move the multitude of small private employers in the same direction.
Such an attempt isn't unique; numerous states-including Maryland, New York, Oregon and Pennsylvania-are working on various styles of report cards for providers.
Key to the Kansas strategy is the wish to eschew mandatory reporting and make the program voluntary. "We can only regulate the companies that are not self-insured," said Republican state Sen. Sandy Praeger. The Employee Retirement Income Security Act pre-empts state oversight of big self-insured companies, such as Hallmark Cards and Boeing, which have a lot of employees in Kansas. Further, the working group feels that health plans and large employers will resist mandated data-gathering exercises.
The Kansas effort has attracted the interest of the national Centers for Disease Control and Prevention. The CDC is not in a position to endorse or comment on any individual state effort, said Paul Stange, of the CDC Office of Managed Care, and there are a lot of public-private coalitions emerging. But it wants to build on its traditional relationship with state health departments, hospitals, physicians and clinics to realize the public health potential of managed care.
"All of a sudden there's a good fit between a state agency that's trying to maximize the health of the population, and an agency that's trying to buy services for a group that has lots of healthcare needs," Stange said.
As Medicaid turns over to a managed-care model, it's becoming possible to measure the health status of the beneficiaries, something that couldn't be done before. When Medicaid was simply a bill payer, it could count how many procedures or immunizations or doctor visits took place, but it didn't measure health status of the poor.
True cost savings, Praeger pointed out, come from having healthy employees, not in reducing healthcare expenditures. This group wants to push the focus to prevention.
By getting Medicaid, the state employees plan and major private purchasers on the same wavelength for performance objectives and outcomes, the reasoning goes, the state can effectively create a health-status matrix that covers almost the entire population.
"If somebody is diagnosed with tuberculosis and treated, obviously they got the TB from somewhere," Stange said. "You have to identify potentially infected individuals. That's not something managed care is going to do. That has to be done by a public agency." The CDC wants to make sure links between public health authorities and Medicaid providers are maintained, and that data interchange is improved.
The Kansas working group has three items on its agenda: develop health plan performance objectives and a uniform data set to measure outcomes; construct a customer satisfaction program; and look at state regulation of healthcare.
In the first endeavor, the group is being assisted by the Mid-America Coalition on Health Care. Its president, Robert L. Brown, thinks it makes no sense "for everyone to try to impose his own data sets requirements on the commercial HMO in a given market. There needs to be some agreement on what is needed and on uniformity. Otherwise, the infrastructure cost becomes prohibitive, everyone's health costs go up, and no one will really get what he needs."
But, as in any such group, there are differing opinions. Ron Parton, M.D., the only health plan representative at the table, thinks physician offices lack the sophistication at this point to deliver the reams of data the working group has in mind. His plan, Mid-America HealthNet, has 19 hospitals, 1,500 physicians and around 180,000 beneficiaries in Kansas. It would make more sense, HealthNet believes, to concentrate on improving specific health problems, such as prenatal care or decreasing asthmatics' visits to the emergency room.
Likewise, some businesses would rather concentrate on satisfaction surveys. "Unless employees are satisfied with the healthcare and insurance they receive, other measures of quality probably don't mean very much," said James Schwartz, director of the Kansas Employer Coalition on Health.