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Buying managed health care services.

In this new column, the President of the National Association of Employers on Health Care Action discusses the viewpoints of health care purchasers and some of the techniques that they are using to reduce their health care costs. Employers are beginning to buy for value and not on price alone in their quest for higher quality health care services at lower cost. As health care costs continue to increase (many employers are facing increases of 20 to 60 percent again in 1989), employers are seeking providers that will deliver high-quality care for a reasonable price. Rather than buying "off the shelf" packages of services--the contents of which are defined by the vendors--employers are tailoring plans to meet the needs of their employees and then purchasing the plans that meet their criteria.* XEROX Corp. is an example of a company that has begun this process. It recently surveyed its employees as to their health needs. Patricia M. Nazemetz, manager of benefits at XEROX, is now developing criteria and performance goals based on the needs identified in that survey. This information will be translated into requirements for providers. The steps to purchasing a high-quality plan based on employee needs include: Establishment of a company health philosophy. The company's top management is involved in establishing a health philosophy that reflects the corporation's culture and the company's beliefs about its responsibilities in the area of health.

Assessment of health care needs of employees and their dependents. The assessment includes a survey of employees as to their health needs as well as a review of health risk data, demographics, evaluation of health and environmental risks, actuarial data, previous utilization experience, and workers' compensation data. Development of health policies or goals that support the company's health philosophy and address the health and environmental risks of employees and their dependents. Development of a health benefit design that will support the company's goals and help it achieve its objectives. Development of a Request for Proposal (RFP) that includes specifications describing the health services the company wants to buy and the requirements for managing those services. Some of the elements to include in a comprehensive RFP are scope of services, responsibilities, access, quality assurance, grievance/dispute resolution, case management, provider evaluation/ selection, contracting, utilization management, claims processing, monitoring/reporting, audits, and communication. Development of criteria for evaluating plans and proposals. Selection of the plan that best meets the company's requirements. Negotiation with the plan for a reasonable price--the plan should be at financial risk for meeting objectives. The process of purchasing high-quality health care services that are tailor-made for a company's employees is a lengthy process. It can easily encompass two or three years or more. Many employers are involving providers early in the process so the provider group can begin planning its response to the employer. Providers may discover they do not have the capability to provide the data and the reports required by employers. The longer time frame win be an opportunity to develop management information systems that will provide utilization, cost, and quality data. For employers purchasing health care services tailored to meet their employees' health care needs, there is the opportunity to improve the quality of preventive and health care service, improve the health of their employees, and reduce health care costs. For the provider or plan willing to be held accountable and to be at financial risk, there is the opportunity to develop a long-term contract and relationship with an employer and its employees. 11 * Miller, L., and Miller, J. An Employer's Guide to Purchasing Managed Health Care Services, Key Biscayne, Fla.: National Association of Employers on Health Care Action, Blue Book, Inc., 1988.
COPYRIGHT 1989 American College of Physician Executives
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Article Details
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Author:Stack, Ruth H.
Publication:Physician Executive
Article Type:column
Date:Mar 1, 1989
Previous Article:Physician referral practices under attack.
Next Article:Premium will continue to be on performance.

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