Consumerism in Health Care: State Report Shows Promise, More Must Follow

In October, the state government released a new and important resource for bewildered health-care consumers. The Maryland health maintenance organization (HMO) report card, developed by the Maryland Health Care Access and Cost Commission (HCACC), is a critical step in consumer education and the development of the market for health-care services.1 While the report card is a quantum leap from what consumers could learn about health plans, physicians and hospitals previously (which is to say, virtually nothing), there is considerable room for improvement. The Maryland HMO report card is the first stage of improved information for health-care consumers, and part of the transition from what some see as an incomprehensible fee-for-service medical care system that has arguably pushed us into the arms of managed care.

There is certainly enough consumer demand for this kind of information. If you have any doubt, wander through any bookstore’s health section or browse the World Wide Web. Consumers increasingly want greater control of the clinical aspects of their health care. They also are hungry for greater understanding of the financial underpinnings of the health-care system, partly because they are awakening to the fact that money motivates plan and provider behavior in health care, just as it does everywhere else in economy.2

The Maryland report cards provide baseline information on the performance of 15 HMOs licensed to operate in the state.3 HCACC completed its report card with the cooperation of the National Committee for Quality Assurance (NCQA), the most sophisticated of the three major managed-care accreditation organizations4 The report card is a user-friendly summary of selected performance data (such as how well plans do at immunizing children or providing women with mammograms), as well as consumer perceptions of plans (such as satisfaction with the treatment they received). The consumer report card is supplemented by more sophisticated data for employers. Combined, the report card and employer data represent a significant advance in consumer information on health services and an essential step toward creating a buyer-driven health-care market. While Maryland is not the only state to have developed a report card on HMO performance, it was the first. Other states taking this path include New Jersey and Connecticut, which also have markets heavily dominated by managed care. In California, which is the nation’s largest managed-care market, there are both public and private entities in the report-card game.

In Demand

Maryland consumers have apparently validated the legislature’s and HCACC’s faith that the report cards would be a necessary addition to the health-care marketplace. Since their release in September, over 60,000 have been distributed, and many public libraries have had trouble keeping enough in stock to satisfy demand. In addition, HCACC has sent out over 200 copies of its more detailed summary for employers and purchasers.5 The investment in the project by the state was $900,000, of which $450,000 was to establish the infrastructure necessary to collect data and produce the reports in out years.6

HCACC gathered and reported the information by analyzing clinical performance data reported by plans and devising a survey of HMO enrollees. For the clinical data, each plan submitted information on clinical processes such as the proportion of enrollees who saw a physician, and the rates of immunizations for children and mammograms for women. These are among the data points that plans submit to the NCQA as part of its Health Plan Employer Data and Information Set (or HEDIS), which seeks to gather a wide range of information on HMO performance. HCACC supplemented the data-collection strategy by using auditors to validate plan submissions of clinical performance measures.7 The use of independent auditors helps assure consumers of the honesty and accuracy of the data and reduces the likelihood that plans will be able to manipulate data to improve their performance compared to their peers.

For consumer satisfaction, each HMO submitted to HCACC a randomly selected list of its enrollees, 27,000 in all. Each enrollee received a notification letter, informing him to look out for an HMO consumer satisfaction survey. Then the survey was mailed, as were two follow-up post cards. About 30 percent of the HMO enrollees surveyed responded. HCACC’s analytic methodology involved calculating confidence intervals of the differences between the plan-specific rate and statewide averages for each measure. HCACC’s methodology also took into account a sampling error rate for each plan in the report card, as well as around the statewide averages. A more detailed explanation of the methodology for comparing plans is available elsewhere.8

Because most of the enrollees of any given health plan are healthy, the report naturally shows that enrollees are generally pleased with their plans. There are, however, some interesting variations:

Overall satisfaction: This ranged from a low of 36 percent of enrollees of Principal Health Care of the Mid-Atlantic to a high of 69 percent of enrollees of Delmarva Health Plan.
Number of doctors to choose from: Forty-four percent of U.S. Health Care enrollees rated their plan as poor or fair in this category, compared to just 17 percent of enrollees of Preferred Health Network.
Immunizations for children: Only 45 percent of children enrolled in CIGNA received all their recommended immunizations by age two, while Columbia Medical Plan achieved a 91 percent rate.9

More Must Follow

HCACC next plans to report how satisfaction and access to care are affected by self-reported health status. This report will compare the performance of the Maryland HMOs as a group to regional and national benchmarks.

The HMO consumer report card reflects an important part of the shift to managed care. It will present an opportunity, if done well in the future, systematically to gather and analyze clinical and cost data that are essential to shaping health-care organization and delivery. After all, we cannot manage what we cannot measure. HCACC’s role as the sponsor of the report cards also is important, because it is independent of the HMO industry and has no vested interest in the ratings. HCACC has, in fact, stepped into an important breach. Ideally, employers – managed-care plans’ customers – should be driving this part of the market by demanding that their contracted plans produce quality data in order to compete for their business. But employers often lack the sophistication and leverage necessary to require plans to produce performance data. HCACC’s effort finally gives employers a basis upon which to select plans that goes beyond premium increases.

Despite the report card, Maryland consumers can still learn much more about the car or computer they wish to buy, or mechanic they wish to use, than about the health plan, doctor or hospital they will choose. Consequently, the report card must be seen as a first step, with more intensive attention to be paid to quality of care in subsequent versions. As John Colmers, HCACC’s executive director says, we will one day look back on these report cards and regard them as “quaint.”

Maryland health-care consumers should anticipate that subsequent steps for providing consumers with information will come in two parts. First, we must enhance the quality data provided to consumers about managed-care plans. This first report card lacks adequate quality data, partly because the science of measuring the quality of health care is still developing. It is simply not enough, for example, to tell women how plans rank in terms of mammography. HMOs also need to report what proportion of women are correctly diagnosed with breast cancer and how well plans care for them. If the organizations are unwilling to gather and report these data voluntarily, then it is essential that the state require it. HCACC also should be empowered and funded independently to audit more sophisticated quality data to assure that the information is as honest and objective as the data in the HMO report card. (Never let the fox alone report on how well the chickens in the hen house are doing. This, after all, is only common sense.)

Second, consumers need to know much more about the quality of the actual health-care providers available to care for them. Information on providers should be succinct and meaningful, including not just the professionals’ education, malpractice records and adjudicated disciplinary histories, but also consumer ratings in key areas – such as the ability to communicate effectively, to provide compassionate support and education, and to document that consumers are satisfied with the treatment provided. This sets the stage for eventually rating individual health-care professionals and institutions using selected outcomes criteria for specific diagnoses or procedures.

The Maryland HMO report card and the developments in other states represent clear evidence that the famed red and black dots of Consumer Reports magazine are coming to health care. Once they do, we will start to see the true benefits of a functioning market.10 Useful information will, of course, cause top performers (plans and providers) to be most rewarded. The laggards will be shown the door, as they should be.

The market shift to an information-driven, consumer-centered health-care industry makes many health-care dinosaurs justifiably nervous. It is, however, too late to revert to the information ice age. In a recent editorial, Jerome Kassirer, editor of the respected New England Journal of Medicine, noted that the “era of physicians’ monopoly of medical facts and practices is over, and well it should be. Medical imperialism is obsolete…open discussion of medical issues is appropriate for all interested parties, and even promises to improve medical care.”11 To this, we in Maryland can add, so too has the era of information imperialism come to an end, and not a moment too soon.

Mr. Khanna is the principal of State Health Policy Solutions, L.L.C. He is also the author of Managed Care Made Easy: Survival in the HMO Era, a consumer guide to managed care. Additionally, he is a member of the steering committee at the Health Care Access and Cost Commission that helped create the HMO report cards.

End Notes

[Top] 1. State of Maryland, Health Care Access and Cost Commission (HCACC), Comparing the Quality of Maryland HMOs: A Guide for Consumers (Baltimore, Md.: HCACC, 1997).

[Top] 2. Regina Herzlinger, Market Driven Health Care: Who Wins, Who Loses in the Transformation of America’s Largest Service Industry (Reading, Mass.: Addison-Wesley Publishing Co., 1997).

[Top] 3. By law, all HMOs serving the commercially insured market and earning more than $1 million annually in Maryland premium dollars are required to participate in this process. (See Annotated Code of Maryland, Health General Article,

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