Healthcare delivery and a typical 10-year-old have a lot in common.
Both have progressed in their development but still have a lot of growing to do. Both are graded on report cards showing their overall success and their effectiveness in performing specific activities such as working and playing with others. And just as Johnny's test scores sometimes generate controversy, so do ratings of healthcare delivery.
Because of that controversy, some groups that produce reports have dropped out. The Cleveland Health Quality Choice Program, for example, stopped issuing its report cards after a lengthy, fractious debate about the accuracy of the grades.
Nevertheless, some of the nation's healthcare delivery systems, such as those in California, are scrutinized on several report cards. And others can expect such scrutiny.
The learning curve. Arnold Milstein, M.D., chief physician at the San Francisco office of benefits consulting firm William M. Mercer and medical director of the Pacific Business Group on Health, a San Francisco-based employer coalition representing more than 1 million workers and their covered dependents, says there are three levels of healthcare quality report cards. The first and most basic is the dissemination of general information in a "relatively undigested form." The second level provides more- specific information that has been gleaned from the health plans. The third offers incentives to health plans-and their hospitals and medical groups-to perform well.
Report cards have been widely used since the early 1990s. They were spurred primarily by skepticism about whether managed-care plans were providing the same level of healthcare as the old-line indemnity insurers. Many believe report cards are a democratic way to pressure payers to preserve a certain level of care.
On the face of it, many report cards might appear to be in the first phase. But the measurement of healthcare delivery is moving along in leaps and bounds, with some report cards further ahead than others. A few have become quite sophisticated, enhancing their value for employers, health plans and providers.
Earlier this month, representatives from a half-dozen healthcare purchasing coalitions participated in a videoconference presentation by the Employers Health Coalition, which represents 120 employers and 350,000 employees, dependents and retirees in the Tampa Bay, Fla., area.
The subject was the EHC's Healthy People/Productive Community Survey. Although it's only halfway through a three-year process, the survey is among the most creatively constructed of the report cards and greatly exceeds the bounds of many more-traditional cards, say observers. Such reports paint customer satisfaction levels in broad strokes. Instead, the EHC's survey determines satisfaction based on disease-specific measures linked to employee productivity.
"In the coalition world, (the EHC) is way out in front," says Sean Sullivan, former president of the Washington-based National Business Coalition on Health and now president of the Health Care Information Institute, an Irving, Texas-based coalition of health plans, employers and pharmaceutical companies working to counter criticisms of managed care.
"One of our responsibilities is to take our membership to the next level, and in healthcare that means moving away from managing costs to moving to productivity management, and moving employers away from the current (cost-only) mind-set," says Butch Passman, chief executive officer of the Louisiana Business Group on Health, Baton Rouge, and a participant in the videoconference.
"We're interested in how one may approach understanding the burden and impact of illness," says J. Sean Kenney, CEO of the Greater Detroit Area Health Council and another participant in the teleconference. For the past four years the council has surveyed its 1.3 million members about the quality of participating health plans in areas such as preventive care, effectiveness in helping patients overcome their illnesses, consumer satisfaction and access to service, but the reporting has been presented in a general format. Kenney says he wants to break data into more specifics for consumers.
According to EHC President Frank Brocato, his coalition has gathered enormous amounts of information from area hospitals regarding mortality, severity of illness and lengths of stay since the mid-1990s. The coalition wanted to issue a definitive report on those findings in 1998 but did not want to create yet another report card.
"We wanted to take a little bit of a different position, to take a look at the health and well-being of the family," Brocato says. The group also wanted to tie the results to worker productivity, giving employers a general idea of the costs of employee illness.
Productivity pays the price. The EHC enlisted eight large employers in the Tampa Bay area as participants, representing about 30,000 people. It mailed dual surveys to 20,000 health plan enrollees. One survey asked about the respondents' general health and well-being; the other addressed medical conditions they had experienced in the past year, confirmed through physician diagnoses. The second survey focused on 10 common diseases or conditions: allergies, asthma, breast cancer, depression, diabetes, heart disease, hepatitis, high-risk pregnancy/Caesarean-section, hypertension and nonspecific respiratory illnesses. Brocato estimates about $300,000 has been spent on gathering and analyzing the data.
Altogether, 6,200 households responded, reporting an average of 2.1 diseases/conditions in the past year. That didn't catch as much attention as other findings, which suggested that medically complicated, potentially life-threatening conditions aren't necessarily the most costly for employers. For example, high-risk pregnancies cost employers less in productivity than did employees suffering from depression: 6.2 days lost for every four weeks during the course of the condition vs. 6.7 days lost for depression.
Heart disease and breast cancer, two of the most physically debilitating ailments, were among the conditions that cost the least in productivity: 2.8 days and 2.7 days lost, respectively, per four weeks. By comparison, allergies cost 3.3 days of productivity every four weeks.
The disparity can be explained by how widespread the conditions were: One of 11 employees suffered from depression, an ailment that often prompts workers to call in sick. But only one of 43 experienced a high-risk pregnancy, which often requires extensive hospitalization or bed rest.
Only one of 167 employees experienced breast cancer during the year, and one of 29 employees experienced heart disease. But one of four employees suffered from allergies, making it the most common of the ailments surveyed.
"We were astounded . . . the way our claims data came back," Brocato says. "Allergies and depression were not at the top of claims (in treatment costs), but they were clearly at the top in terms of impairing employers on the job." Moreover, employees who reported to work but were still impaired cost employers five to 30 times more in lost productivity than those who simply stayed home to regain their health. Brocato also says he thinks some cases of depression in the study may have been linked to patients' battles with other diseases.
Brocato says he believes the employers were so closely focused on the cost of their healthcare benefits that they paid little attention to employees' lost productivity. "The employers focus on the cost of providing the benefits because that's where they have been trained to look," he says.
Adding it up. The EHC did not stop there. It tied the findings to lost dollars and cents. Surveying employers and using federal data to figure an average hourly wage in the Tampa area-about $15-the EHC determined employers were losing more than $1.4 million per year to allergies for every 1,000 employees, and more than $880,000 to depression. Multiply that by all the EHC lives, and allergies cost coalition members nearly $500 million in lost productivity in one year alone; depression cost nearly $300 million. But breast cancer cost only $25,300 per 1,000 employees, or more than $8 million per year among all EHC lives.
The findings raised some eyebrows among employers in the area.
"The problems with depression are kind of a warning flag, because we have an (early intervention program), and I thought we were doing a good job handling it," says Frances Hereford, human resources manager at Cargill Fertilizer, a Minneapolis-based company with extensive operations in Tampa. Hereford says addressing depression may be a challenge, because health plans often limit mental health benefits, but it could also be a starting point for a benefits redesign.
Allergies proved another surprise, Hereford says. "You're always looking at heart disease and hypertension, and that sort of took attention away from the allergy and respiratory-ailment problems."
For employers, the treatment of allergies might be worse than the allergies themselves, and that treatment is one reason that impaired employees on the job cost more than absenteeism, Brocato believes. "Several health plans prescribe allergy medications that do a very good job, but they're also highly sedative," he says. Switching to nonsedative allergy medications could make a big difference and provide another talking point with health plans and providers in modifying the design of benefits and treatments.
The EHC survey also focuses on patient satisfaction. The participating employers work with 12 health plans, although Brocato declined to name them. Survey participants gave their health plans an average score of 74.9 from a top score of 100 on the overall care they received, 71.3 for plan satisfaction, 68.9 for overall communication, 60.1 on outcomes and 58.9 for access to care.
Brocato believes the scores will be another issue for discussions between health plans and employers.
"They will both continue some level of interaction. This study wasn't a threat. It's one of 'let's work together,' " Brocato says.
The power of incentives. Other coalitions are giving incentives to providers to improve their performance, rather than making the grades just talking points for employers, payers and providers. The PBGH's Milstein says his organization is ready to jump into this third level of report cards.
The PBGH is implementing a program called the Quality-based Provider Payment Initiative this year and in 2000. Under the program, participating health plans will vary payments to hospitals and medical groups by up to 10% depending on how well the providers score on quality indexes: The better the grade, the higher the payment. The goal is to eventually have more patients treated by providers with better outcomes. PBGH officials say such a system is expected to be self-perpetuating, since good outcomes for particular procedures tend to be linked to higher patient volumes.
Meanwhile, the EHC will take its report card one step further next year: The survey it's preparing will not only query participants about seven additional diseases or conditions but calculate an employer's diminished rate of return on investment based on lost employee productivity. Brocato says the step will be one more component in a plan designed to refocus employers on the value of the healthcare their employees receive rather than on how much they're paying for it.
"I have heard this issue from all over the country. If all you get back is data on how much your healthcare costs, that's all you will focus on," he says. "From my perspective, we're looking at value-a combination of cost, quality and customer satisfaction. And when it comes to purchasing their healthcare benefits, we're hoping to get our participants to make value decisions."