HMOs to be graded on quality of service provided.

Clinton reforms call for issuing HMO 'report cards'

Health maintenance organizations, which for years have competed primarily on the bases of price and access, will soon have to compete on quality, as well.

The Clinton administration has indicated that a key component of its health care reform package, scheduled to be unveiled this week, may be the establishement of "report cards" for health care providers. Also, savvy employers may increasingly insist that their HMOs the graded on quality of care provided.

To cope with the growing cost of health care, most employers in Los Angeles County now contract with an HMO, which offers prepaid health care for a monthly fee. But due to the lack of qualitative information on HMOs, employers have largely been in the dark about which HMO is best for their employees.

Now, however, a standardized system for grading health plans is being hammered out by employers, health care professionals and consumers.

The first nationwide system to provide standardized evaluations of the performance of health plans, called HEDIS 1.0, is currently being upgraded to a new version, called HEDIS 2.0, according to the National Committee for Quality Assurance (NCQA), a nonprofit organization based in Washington, D.C.

NCQA is the lead entity developing HEDIS, which stands for Health Plan Employer Data and Information Set.

The upgraded version of HEDIS is actually being developed to define the set of performance measures that will be used in the health plan report cards.

The prelimianry 1.0 version of HEDIS, sent out in May to 1,500 people for critique, contained more than 60 performance measures, according to the National Committee for Quality Assurance.

The measures covered everything from access, finances, patient satisfaction and quality-of-care considerations -- such as the number of mammography and cholesterol screenings, prenatal care in the first trimester, eye exams, readmission rates for mental health and substance abuse patients and medical outcomes after surgery.

The final draft of HEDIS is expected to be ready in October, said Margaret E. O'Kane, president of NCQA. She added, however, that these measures will be constantly refined and expanded.

A one-year pilot project to refine the report card is scheduled to begin next month. Scheduled to participate in the pilot project are the health plans, companies and union representatives that helped develop the report card standards. About 15 health plans will take part, including Kaiser Permanente and Blue Cross, which both have headquarters in L.A. County. A prototype report card is expected to be ready by the end of 1994, O'Kane said.

She warned that employers and consumers shouldn't expect the report card to provide a simple grade upon which the relative quality of care can be determined.

"Managed care organizations are very complex and will be evaluated on various measures," she said. "For instance, one plan might be good in preventive services, but not good on chronic illnesses."

So far, HMOs do not appear to be resisting the impending report card. In fact, representatives of 30 health plans recently joined a coalition of business leaders and consumers in writing a joint letter to President Clinton in support of standardized performance standards.

Joining the coalition were a number of representatives from HMOs that serve L.A. County, including: Blue Cross and Blue Shield Association, CIGNA Employee Benefits Division, Health Net, Kaiser Permanente and Pacificare Health Systems.

O'Kane said the establishment of standardized measures would probably be a "relief" for HMOs, because HMOs have already had to provide these types of information to a number of organizations, with each organization requesting slightly different versions.

Although HMO evaluations are currently voluntary, many HMOs may be pressured by employers to submit to being graded. Also, mandatory report cards may be established as a component of Clinton's health care reform.

L.A. County health care consultants, however, said few employers, if any, would have the initiative or knowledge to ask for a HEDIS 2.0 evaluation of their health care providers.

"There's just not that level of sophistication yet among employers," said John Edelston, president of HealthPro Associates Inc., a managed care consulting company in Woodland Hills.

Most employers, he said, are more interested in controlling costs and having a health plan accessible to their employees. In short, employers still use cost can access, rather than quality, as the criteria upon which they select and evaluate their health care providers.

The primary qualitative measure used by employers, Edelston said, is the number of physicians in the health plan.

"If one health plan has more physicians, they assume that one must be better," he said.

Employers are probably four to five years away from relying on more sophisticated qualitative measures to choose a health plan.

Today, most companies retain an outside benefits consultant to choose a health plan for them. And most companies assume following that course of action will result in quality care, and area consultants.

What many companies don't realize is that "there are good HMOs and bad HMOs," said Bob Pollock, a principal in the L.A. office of William M. Mercer Inc., a health care consulting firm. "It's a terrible mistake for employers to presume quality."

In lieu of a standardized report card, benefits consultants Pollock and Edelston and others and they base their recommendations on their past experiences with HMOs and the HMOs' records of grievances and disenrollments.

Now, one of the standards in the industry is getting accredited by NCQA or meeting another stringent set of standards, said health care experts.

In the next two years, however, consultants and others will likely have more standardized criteria upon which to gauge HMOs, as virtually every HMO will likely get a "stamp of approval," said HealthPro's Edelston.

What will be especially enlightening, he added, is discovering where the various HMOs fall on that stamp-of-approval spectrum.

The NCQA has been accrediting HMOs since 1991 and, by the end of 1993, one-third of all HMOs in the country will have gone through the accreditation process, said an NCQA spokeswoman. Although the accreditation is voluntary, more and more health plans are signing up to be reviewed, said O'kane.

Of the major HMOs serving L.A. County, however, only Pacificare of California in Cypress has received a full accreditation, she said. Health Net of California was recently reviewed, and NCQA's decision on whether or not to accredit that HMO is pending. CIGNA Healthplans of California is scheduled to be reviewed in May 1994. Blue Cross CaliforniaCare has applied for accreditation but hasn't received a date for review yet. And Kaiser Permanente plans to be reviewed in 1995.