HMO Report Cards: Part of Plan Puzzle for Employers
By VITA REED
It’s “report card” season for health maintenance organizations.
The ratings aim to make it easier to pick a healthcare plan by boiling down key measures of quality and user satisfaction. Last week, the state released its second yearly report card on HMOs and added medical groups to the mix.
But the report cards alone aren’t likely to sway employers seeking health plans for their workers, according to executives, brokers and benefits consultants.
The report cards usually rate plans on how they adhere to medical practice standards. The Washington, D.C.-based National Committee for Quality Assurance’s influential report card, released earlier this month, looks at treatment for heart attacks, yearly mammograms, immunizations and other areas.
Employers’ criteria focuses on the cost of the plan, the benefit design, networks and service,(employees’) experience and the reputation of the service, said Michael Wilson, healthcare practice leader at Mercer Human Resource Consulting in Orange. “By far, those are the four primary factors.”
Quality: Subjective
As for quality,the main gauge of report cards,Wilson said he’s found that to be secondary in picking a health plan because quality can be subjective.
“In the current market and environment, quality ratings aren’t at the forefront of decision making,” said Brian Bezdek, chief financial officer of Raining Data Corp., an Irvine software company with 100 local workers. “It’s really more price-sensitive, breadth of services. We’re a pretty typical Orange County public company,we’re sensitive to the economics.”
Smaller companies such as Raining Data don’t have the bargaining power of bigger employers, Bezdek said.
“The only leverage we have is to shift providers, but the same issues are there,” he said. “Because there are so few carriers, there’s not a lot of leverage there.”
Raining Data has two carriers: Oakland-based Kaiser Permanente, with more than 300,000 HMO enrollees in OC, and Woodland Hills-based WellPoint Health Networks Inc.’s Blue Cross of California, which has some 200,000 HMO members in OC.
Quality does factor into plan selection at PennySaver, a unit of San Antonio, Texas-based Harte-Hanks Inc. with 1,200 people in OC and across the Southland.
“Cost is always a factor, but quality rates right up there,” said Jenny Richenburg, the advertising publication’s human resource director. “As a purchaser, I don’t want to give up quality (just for) a lower cost.”
Report cards such as the ones put out by the National Committee for Quality Assurance are taken into account by larger companies, according to Cheryl Randolph, a spokeswoman for Santa Ana-based PacifiCare Health Systems Inc.
The California Public Employees Retirement System, along with, Lockheed Martin Corp., Bank of America Corp. and Wells Fargo & Co.,all members of San Francisco-based Pacific Business Group on Health,are sticklers when it comes to HMO accreditation and related issues such as report cards, Randolph said.
But “once the plans pass the threshold,” cost and design come into play, said Ron Mason, health and welfare practice leader at management consultant Towers Perrin’s Irvine office.
“If they’re not accredited, they may have great rates, but my clients say that’s unsafe at any speed,” he said.
Low rates don’t matter to an employer if its workers have problems getting access to the healthcare they paid for, Mason said.
Many of the employers Towers Perrin deals with are interested in report cards on medical groups, “not so much HMOs,” Mason said.
He cited PacifiCare’s report-card style evaluation of physician groups.
Rating Medical Groups
PacifiCare started doing medical group report cards four years ago, Randolph said, and will launch a similar report card for hospitals this month.
The physician group report cards cover some 50 measures, including cervical cancer screening, asthma screening and heart attack treatment, she said.
The National Committee for Quality Assurance’s report card showed that local units of some of the country’s largest managed healthcare plans received low marks for certain gauges, such as blood pressure controls and breast cancer detection.
The committee uses Health Plan Employer Data and Information Set measures, which fall under the federal Centers for Medicare and Medicaid Services, to measure HMOs.
The report showed that the overall quality of medical care seemed to improve during the past three years.
Report cards have generated controversy. HMOs such as PacifiCare that are accredited by the committee are required to submit data for grading, and have been required to allow grades to be publicized for three years.
If a plan isn’t accredited and voluntarily submits data, the committee doesn’t require such plans to publicize their scores.
The National Committee for Quality Assurance’s rating system recently drew fire in a recently released Harvard Medical School report, which suggested the system may be misleading because health plans with poor scores are more likely than those with good scores to withhold data.
Meanwhile, Walgreen Corp., the Chicago-based drugstore chain with 30 OC locations, is starting a joint venture with the California Office of the Patient Advocate to distribute a medical report card to customers.
The data rates the state’s 10 largest HMOs, including PacifiCare, Health Net and Aetna, along with 81 large medical groups, including Bristol Park Medical Group of Santa Ana, Greater Newport Physicians, which is affiliated with Hoag Memorial Hospital Presbyterian in Newport Beach, and Costa Mesa-based Talbert Medical Group.
