Quality’s Quarter-Century

March 14, 2015 · Margaret E. O'Kane

NCQA celebrates a milestone anniversary this year.

In 1990 we began our mission to improve health care quality and value through measurement, transparency and accountability. Today, we are proud that measurement and accountability are now part of the DNA of our entire health care system, and cost and quality are both improving.

Rather than rest on this success, quality advocates must turn to what our experience allows us—and requires us—to do next.

Steady Gains and New Highs

The accomplishments of the last quarter-century are real and significant. In 1990, measuring quality was just an idea. Today, it is an everyday reality. Most Americans—more than 171 million—are enrolled in health plans that report NCQA’s HEDIS (Healthcare Effectiveness Data and Information Set) clinical quality measures.

Medicare, most state Medicaid programs and many private insurers use HEDIS to rate the value (rather than the volume) of health care. Plans and providers use HEDIS to gauge their performance and determine where they must improve.

Measurement will help even more people this year when the new Marketplace plans begin reporting quality results for more than 10 million enrollees.

Good Business and Going Retail

More often now, pay is based on performance. The result is a powerful business case for health plans and providers to make quality improvement a priority.

Quality’s connection to the bottom line is clear in Medicare Advantage, where plans focus on improving results. Enrollees often choose top performers: 60 percent of enrollees are in plans with four stars or more, a 31 percentage point increase since pay-for-performance began in 2012.

Until now, commercial insurance was largely a business-to-business transaction, where insurers sold policies to employers. Now, however, as millions of people shop for coverage in the retail environment of public Marketplaces or private Exchanges, coverage often comes with significant cost sharing, such as large deductibles.

The problem with cost-sharing is that it undercuts delivery system reforms that improve cost, quality and patient experience—such as patient-centered medical homes (PCMH). That is, high deductibles and high quality can be at cross purposes. People go without needed care when they are enrolled in high-deductible plans. For this reason, quality advocates are skeptical of cost-sharing’s overall effect.

Beyond Quality Measurement

Though cost-sharing can be counterproductive to quality, more measurement is not a panacea.

Quality measures alone will not change the market. Particularly as we evolve to a more “retail” buying environment, it is important that product choices make it easy for the average consumer to choose quality.

Three tools are particularly useful:

  1. Network design. Narrow networks can be good for patients, if providers are selected for the network because they provide high quality care. Today, information on hospital safety allows the design of value networks. Better information can result in gains in quality if patients have an incentive to choose high-quality practices. Reference pricing can also drive patients to practices that offer the best outcomes at affordable cost.
  2. Benefit design. The high deductible is a blunt instrument. A better approach is Value-Based Insurance Design (VBID)—low copays for high-value services and medications, higher copays for those that don’t improve heath. VBID gives a financial incentive to members with chronic conditions to choose a PCMH or ACO with active care management.
  3. Payment reform for providers—Network design can help steer patients to high-quality providers, but the payment system should also reward providers for providing high quality care.

Payment reform took a giant leap forward in January, when government and private sector leaders committed to goals for value-based payment. Health & Human Services Secretary, Sylvia Burwell, announced Medicare’s intent for 30 percent of fees to be paid in alternative payment models by 2016, and 50 percent by 2018. The Health Care Transformation Task Force, a coalition of health care systems and organizations (insurers, purchasers and consumer advocates), set a goal that by 2020, 75 percent of payments will be value based. These goals are specific, measurable, achievable, results based and time-bound.

These are no small tasks. Over the past 25 years, consumers have become accustomed to the paradigm of choice. Providers have been rewarded for doing more and for giving more complex care. These deeply embedded cultural norms must change.

Now, payers look at what is being purchased, they can act as market makers who drive volume and rewards to the delivery systems that have accepted the challenge of delivering affordable, quality, patient-centered care.

A version of this article first appeared in the American Journal of Managed Care.

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