2001: NCQA Introduces its Quality Dividend Calculator

August 20, 2015 · NCQA

25 for 25: A series of 25 blog posts marking NCQA’s 25th anniversary. As part of our anniversary celebrations, NCQA will post a series of 25 blog posts highlighting milestones in our 25 years of improving health care quality.


At NCQA, we like to think employers have always understood that providing high-quality health care to employees is a good thing. But for a long time, employers were probably confused about whether providing good care could save their company money. Did higher-quality care really translate into more productive workers, fewer sick days and lower claims? If so… then by how much?

Throughout the 1990s, a growing body of “productivity offset” research addressing these questions began to take shape. Study after study showed that when patients with diabetes, asthma, heart disease and other medical conditions got the right care, they were more productive and took fewer sick days. Other studies showed that better health care often resulted in lower treatment costs overall.

But employers still needed an answer, in aggregate, to the question: Does it pay to provide quality care?

In 2001, with the help of the consulting firm HSM, NCQA developed the Quality Dividend Calculator (QDC), an online tool that offered an answer. QDC let users quickly and easily model how their organization’s productivity and medical costs might be affected in a given year, using NCQA-Accredited plans to provide care vs. using nonaccredited plans.

It had become well known that there was a significant difference in performance between accredited and nonaccredited plans. QDC used performance gaps, epidemiological data and company-specific information to model the expected impact of each type of plan on absenteeism, productivity and medical costs. For larger companies, the differences amounted to many millions of dollars. But even smaller firms could use the tool to see how using accredited plans could translate into fewer sick days, lower claims, more productive workers and a reduced need to hire replacement staff.

QDC remained a fixture on NCQA’s Web site until 2013, when it was retired—consultants and others had developed tools that made the same point. But the fact remains, as NCQA President Margret O’Kane noted during the launch of QDC, “Poor quality care costs a bundle.”

A cornerstone of NCQA’s 25th anniversary year will include a look ahead through the eyes of tomorrow’s leaders. This November 9, NCQA will convene Quality Talks: Inspiring the Future of American Health Care, a “TED-style” symposium held at the Knight Conference Center at the Newseum in Washington, DC. bringing together hundreds of health care and public policy professionals, including government regulators, thought leaders and Congressional staff.

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