Employers link to grade health care providers.

Coalitions join forces to create 'report cards'

The managed care industry is being subjected to heightened scrutiny by employers who have banded together to issue report cards on the quality of care providers are administering to employees.

Two organizations, the National Committee for Quality Assurance and the Pacific Business Group on Health, are coalitions of national companies working to institute a uniform system of rating the quality of managed care plans.

For the last five years, the NCQA has been leading national efforts on behalf of purchasers - employers and employee groups - to develop systems and strategies that create accountability in managed care.

At NCQA, a board of Fortune 500 companies such as Xerox, IBM, GE, Chrysler and Ford work alongside regulators and representatives from consumer and labor groups, and medical associations in developing standards that measure the performance of HMOs.

"Standardization is key," stated NCQA spokesman Barry Scholl. "Before (NCQA), none of the quality performance reports were audited. Every company used different criteria in their reviews. No one could judge the validity of the reports."

NCQA has developed an accreditation program that is widely regarded throughout the health care industry for rating the performance of HMOs. Employers use these accreditations to evaluate which HMOs will best meet their employees' needs. However, a failure to obtain the NCQA's "seal of approval" does not legally preclude an HMO from doing business. NCQA bases its accreditation on six standards: quality improvement, physician credentials, members' rights and responsibilities, preventive health services, utilization management and medical records.

The NCQA evaluation procedure starts with a team of doctors and managed care experts conducting on- and off-site evaluations. A national oversight committee of physicians then analyzes the team's findings and assigns one of four "grades:" a full three-year accreditation, one-year accreditation, a provisional one-year accreditation citing concerns that need to be corrected, or outright denial of accreditation.

Pervasive reviews

So far, NCQA has reviewed 65 percent of the nation's 574 HMOs, including nine plans in Southern California. Twenty-five HMOs were denied accreditation, including CaliforniaCare of Woodland Hills and Inglewood-based United Health Plan. Both Los Angeles and San Diego Aetna Health Plans failed to meet NCQA requirements, although Aetna's northern division was given full accreditation. Aetna/San Diego has another review scheduled for November.

MetLife Healthcare Network in Long Beach recently underwent its second review in two years and was granted provisional accreditation in October. Another Woodland Hills-based HMO, PruCare of Southern California, is scheduled to have its third review this month to retain its full accreditation.

Woodland Hills-based CareAmerica Health Plans is one HMO recognizing the weight NCQA accreditation has in the managed care industry. "We chose to go after accreditation," stressed Lisa Rubino, senior vice president of health services at CareAmerica. "Rating systems are an excellent tool. These reviews are forcing HMOs to tell a good story about all the good things we do."

CareAmerica's first on-site visit from NCQA evaluators is scheduled for March.

NCQA releases a new version of its Accreditation Status List every month. A free copy of the list can be obtained by calling [phone], or is available at http://www.ncqa.org on the Internet.

Report cards or other such rating systems are popular with employers because they put pressure on managed care providers to improve quality of service while taming costs.

After years of double-digit inflation in health care costs, two executives from Wells Fargo & Co. and BankAmerica Corp. founded the Pacific Business Group on Health in 1989. The nonprofit coalition includes 30 private- and public-sector purchasers, representing approximately 2.3 million employees, dependents and retirees from California and other states where California-based companies have operations.

Quantity/quality queries

PBGH has issued report cards on local HMOs for the past seven years. Grades ranging from A+ to D are awarded based on the responses of 20,000 employees surveyed. Employees are asked questions about the quantity and quality of preventive care they have received and their overall satisfaction with the plan. Some examples of questions posed to survey participants are: How long do you have to wait for a doctor's appointment? Are claims processed quickly? Do you feel the doctor listens to you?

Kaiser Permanente Southern California earned the highest grades, receiving "A"s in overall customer satisfaction with doctors and with the plan. An "A" rating, which means that 80 to 89 percent of respondents expressed satisfaction, was also given to Kaiser for counseling in preventive care, and a "B" grade was given for Kaiser's preventive care screening. Under the PBGH report cards, an "A" rating means above average and "B" means average.

Aetna fell short again in Southern California, earning "C"s (below average) in preventive care screening and counseling, while it earned "B"s in overall customer satisfaction with doctors and with the plan.

"We wanted a process that would monitor HMO performance across plans and from several employee groups," explained Tracy Rodriguez, director of quality for PBGH. "Companies tried to get quality data from hospitals and physicians for years. It's been a long haul, but we're finally succeeding."

In the past, companies conducted on-site visits and followed the lead of other companies in deciding which HMOs to contract with. But that system of evaluation did not allow employers to easily compare HMOs because the evaluations were not based on standardized criteria and tests. Now PBGH members have consistent, standardized information they can use to help them decide which HMOs to add or delete from their medical coverage.

Employees, many of whom used to rely on recommendations from co-workers or friends about which health plan to choose, also seem to be benefiting from the more-standardized report cards. "Employees were thirsty for information," said Rodriguez. As a result, PBGH members such as Lockheed Martin Corp., Chevron Corp. and Fireman's Fund are distributing report cards to their employees during open enrollment. Said one employee in a PBGH focus group: "18,000 employees can't be wrong."

Another PBGH member, the California Public Employees Retirement System, better known as CalPERS, has combined methods used by PBGH and NCQA to develop its own Health Plan Quality/Performance Report. CalPERS issued its first report last May to its 1 million subscribers, and its second report is due to be released in time for employees to consult it during the next open enrollment period in September.

CalPERS rates each plan's ability to provide care in a broad range of services, such as childhood immunizations, prenatal care, breast and cervical cancer screening and cholesterol testing.

"There's more to choosing a health plan than price," pointed out Nancy Quinlan, a spokeswoman for CalPERS. "A higher-costing plan doesn't necessarily equal better care.

"CalPERS is taking a partnership stance with the HMOs we are providing our employees. We want to work with the HMOs to develop ways they can improve quality while maintaining costs," Quinlan said.

Rodriguez of the PBGH said she has already seen positive changes in the managed care industry as a result of the PBGH ratings. She noted that Kaiser was a "B" plan for six years, but received "A" grades this year thanks to a program rewarding doctors for patient satisfaction and other efforts to educate the staff on customer service. "In the future, we hope to establish a similar rating system for doctors," added Rodriguez.

Rubino of CareAmerica added, "This is just the first stage. The next step is developing studies that measure outcomes."