Health reform rediscovers the patient - includes related information

Business & Health, Annual, 1997 by Susan Carleton

Last December, the nation's largest managed care trade group held a Washington, D.C., press conference to launch "Patients First," an initiative that encourages health care plans to lay their cards on the table and reveal their inner workings -- provider payment mechanisms, utilization review, formulary decision making -- to all interested parties. The program, says American Association of Health Plans (AAHP) president Karen Ignagni, aims to "respond to patient and physician needs by putting more information in their hands about the policies and practices of health plans."

"We want people to see how we function," adds Michael Herbert, chair of AAHP's board of directors and president and CO-CEO of Physicians Health Services, an HMO in the New York metropolitan area. "We believe there is very little objectionable about what we do."

It's unclear whether AAHP will compel member plans to abide by this newly articulated policy. Although the organization anticipates that members will take heed -- "We expect full compliance with the policy by the end of 1997," says Herbert -- an executive committee was considering possible sanctions for noncompliance.

The AAHP's new open-information policy, which is of a piece with the patient-centered "Philosophy of Care" it adopted earlier last year, is just one sign of what many observers see as a return to basic principles of managed care -- principles that have, up to now, taken a backseat to purchasers' overriding concern about costs. Chief among these neglected fundamentals is the notion of quality, which comprises everything from the soundness of the doctor-patient relationship to more quantifiable matters, such as the percentage of breast cancer patients still living five years after diagnosis.

Another factor keeping the quality of HMO care high on the public agenda is an undiminished flood of sensational media reports of managed care missteps that cast the quality/cost dichotomy in the stark terms of good vs. evil. Last year's cause celebre -- strict limits on hospital stays for new mothers-triggered a spate of state and federal legislation forcing insurers to pay for longer stays. Another version of the drama, this one featuring outpatient mastectomies, is likely to be staged in legislatures across the country this year.

Public perceptions,

purchaser realities

Experts say the implication that managed care inevitably compromises quality is seriously inaccurate. In an editorial last October in the Journal of the American Medical Association (JAMA), Paul M. Ellwood, Jr., MD, president of the Jackson Hole Group, and JAMA editor George D. Lundberg, MD, wrote that "despite anecdotes (some lurid), we have no objective evidence of overall decline in the quality of care in the new system." But even Ellwood admits that the quality factor has gotten short shrift in the drive to control costs.

Presumably, the frightening anecdotes about substandard care are more compelling to tabloid editors and politicians than to the business community. After all, employers fueled the cost-cutting drive in the first decade of serious health care reform. Even now, they are at least as concerned about the cost of care as they are about its quality, according to Business & Health's seventh annual executive opinion poll.

Employers rated rising premium costs for employees and dependents as their top two concerns. Assuring quality of care came in fourth, after increasing government regulation. Still, the poll found a greater level of employer concern about quality than in past years; 60 percent of respondents said they were "very concerned" about assuring quality of care.

Business leaders concur that employers and other buyers are growing restive with the status quo, demanding that health plans deliver more value for every premium dollar -- and insisting they demonstrate that value with hard numbers adding up to quality. It's a vision that goes beyond the health care setting to the core of the business enterprise itself. "Companies are reaching for a human resources metric," explains Robert F. Cole, a director at the Washington Business Group on Health (WBGH). "They want to be able to demonstrate that quality health care has an effect on the company's bottom line -- that products can be priced more competitively if employees have less disability and absenteeism and better morale and productivity as a result of their health care."

FAcct: A powerful alliance

Additional evidence that employers are ready to shift their focus to quality comes from the formation of the Foundation for Accountability (Facct), a consumer-purchaser group that is developing objective quality measurement tools to guide individuals and employers in choosing health plans. "The hope," says WBGH's Cole, "is that Facct measures will become the industry standard." Unfortunately, competing ambitions of setting national standards present an entirely different problem for the health care industry. (See "Can consumers capture the essence of quality?" on page 12.)