What's ahead on quality: the managed care perspective.

Until recently there was no formal accreditation process for health maintenance organizations (HMOs). This is changing. One organization, the National Committee for Quality Assurance (NCQA), now offers accreditation to HMOs on a voluntary basis, and the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) is preparing to begin offering accreditation to HMOs, much as it accredits hospitals and other health care organizations. In addition, some organizations now accredit group practices, and some HMOs that consist of group practices are seeking accreditation by this route.

Even though accreditaion of hospitals by JCAHO is vuluntary, most hospitals began to seek it when it become a requirement for Medicare reimbursement. Similarly, HMO accrediation is begin driven by two external forces. One is the position of the Zerox Corporation and other national employers who deal with HMO networks that, in the future, they will only deal with accredited HMOs. A second is that four states now require HMOs or their group practice components to be reviewed by an accrediting body as a condition of licensure.

The accreditation process is designed to look at the structures and systems of HMOs and at their effectiveness for supporting the delivery of reliable care to a population. The process typically examines the organization's financial status and stability. It examines the mechanics of the delivery system and the relationship of the delivery system or systems to the overall administration of the health plan. It scrutinizes the systems in place for assessing and improving quality of care--e.g., the methods of measuring quality and developing and implementing guidelines--and it determines the degree to which these systems are effective.

A typical accreditation process includes collation of existing documents and preparation of new documentary information by the HMO. After the accreditation team has reviewed introductory materials, there is a site visit in which large numbers of staff are interviewed, and there is a direct review of documents (e.g., committee minutes, quality reports) and medical records.

Once deficiencies are addressed and accreditation is granted to an HMO, it, as in the case of hospitals, will be valid for a few years. Overall, the process is designed to ascertain that a robust infrastructure is in place within an HMO and that the HMO can provide good care and improve its care over time.

Report Cards

In January 1993, a group of 30 HMOs and large corporations announced its intention to develop a national report card containing comparative data from the health care organizations. This was only the latest step in an effort that dates back at least to 1989. In that year, Daniel Wolfson, President of the HMO Group, working with Howard Veit, a health care consultant from Towers Perrin, called together representatives from staff-and group-model HMOs comprising the membership of The HMO Group and representatives of several large employers who are members both of the Managed Health Care Association, an organization comprising 125 Fortune 500 companies interested in promoting managed care, and the Washington Business Group on Health (WBGH). Out of this working group, to which Kaiser-Permanente subsequently sent participants, came a draft document now called HEDIS 1.0. The original motivation for creating HEDIS (the Health Plan Employer Data and Information Set) was that HMOs, such as the members of The HMO Group, were receiving increasing numbers of Requests for Proposals (RFPs) from employers and their health care consultants. Each seemed to ask for a different type of information, often poorly specified and often with unclear intent for use. Preparation of responses to these RFPs is time-consuming, and, from the perspective of HMOs, the data seemed to provide benefit to either HMOs or employers. HEDIS 1.0 could be thought of as a standardized RFP, or at least a core of information that appeared to make sense both for employers to have and for HMOs to provide. For the HEDIS 1.0 draft document to be useful to HMOs, it was necessary for it to be used by employers.

The draft was considered by the Managed Health Care Association and the Washington Business Group on Health and ultimately made its way to NCQA. In turn, in the fall of 1992, NCQA named a Performance Assessment Task Force comprising representatives of managed care organizations and employers to revise the HEDIS 1.0 document and increase its usefulness. Although many of the same employers worked on HEDIS 2.0, representatives of managed care organizations came from a much broader group, not just staff- and group-model HMOs but also IPAs and networks. Others sitting in with the task force represented the interests of Medicaid and Medicare.

The HEDIS 2.0 document specifies a large number of measures of managed care organization performance, including financial indicators, utilization data, and quality indicators. Satisfaction information is requested, but no single satisfaction instrument was specified as a standard for all organizations.

The quality section of HEDIS 2.0 includes subjects such as pediatric immunization, mammography, cholesterol screening, eye examinations for diabetics, etc. For each subject area, a method is specified for obtaining a measurement either from administrative databases (e.g., a claims or encounter system) or from medical record review. Similarly, the utilization area includes measures of hospital discharges, encounters, readmissions of patients with prior hospitalization for affective disorders, etc., and each measure is defined so that the data obtained across health care organizations will be comparable.

There are likely to be many spinoffs of the HEDIS process that will have implications for quality of care in managed care organizations. First, while virtually all measures in HEDIS 2.0 have been used by some health care organization in the past, it is unlikely that many health care organizations will be able to supply all of them or to perform the measurements easily. By specifying areas of measurement that are important to managed care organizations, employers, and others, HEDIS 2.0 should lead managed care organizations to improve the systems by which they perform the measurements.

Second, NCQA is in the process of putting together its first report card, which is estimated to be released to the public by the end of 1994. For this effort, a group of about 15 managed care organizations will agree to submit their data to NCQA for compilation and publication and will agree to have the processes by which they obtained the data audited. This is an extremely important step in obtaining uniform data.

Third, it is likely, if uniform, comparable data begin to be available to large employers and to the public via the report card process, they will not only provide benchmarks of current performance but also serve as baseline information for quality improvement efforts. Technically, a purchaser, armed with comparative quality indicators, could simply make a purchasing decision and exclude a former managed care supplier. It is much more likely, however, given the large number of measures and the probability that no managed care organization is going to be "perfect" on all of them, that purchasers will enter into productive negotiations with managed care organizations about improving their performance in selected areas. The entire process is compatible with a managed competition model of health care reform.

Finally, although it was difficult to come up with universally accepted quality indicators for the HEDIS 2.0 process, it is likely that, as experience is gained with quality indicators, processes will be developed for outlining, pilot testing, and then implementing new indicators that give a better picture of the care being delivered in managed care organizations. Undoubtedly, as evidence-based guidelines are developed on a national scale, either by the federal government or by specialty societies, they will form the basis for specification of measurements.

Stephen C. Schoenbaum, MD, PMH, is Deputy Medical Director, Harvard Community Health Plan, Brookline, Mass.