PURCHASING COALITIONS: Promote Managed Care Quality
A new study by the U.S. Agency for Health Care Policy and Research (AHCPR) and the National Business Coalition for Health (NBCH) finds that most business coalitions -- regional, state and local groups of employers offering coverage for their workers -- can improve quality and encourage growth of managed care plans. The study suggests that business coalitions have tremendous power in the health care marketplace, largely because they can collect or analyze comparative data about health plans and providers. The study finds that coalitions' ability to negotiate terms with providers has a major impact. The analysis is based on data from a 1998 NBCH survey of business coalitions and on interviews with nine coalition leaders. Of the 75 coalitions that participated in the survey, 90% said they compile or study statistical data on health plans or providers and nearly two-thirds of those surveyed said their research was extensive. Four out of five coalitions negotiate terms of one or more health benefits with health plans, providers or others.
Thirty-five percent bypass managed care plans and negotiate comprehensive coverage directly with providers. Almost six out of 10 coalitions that negotiate coverage -- with health plans, providers or carve-out services such as prescription drug benefits, vision care and psychiatric services -- include performance incentives such as bonuses and premium rebates. Irene Fraser of AHCPR, who led the study, said, "These incentives can be used to foster cost reduction and improve customer service, but they can also be used to encourage and reward good clinical care if the coalition chooses to use them that way." AHCPR Administrator Dr. John Eisenberg said that the "study clearly demonstrates that business coalitions have potential for holding health plans and providers accountable for quality of care. The real challenge, especially in the face of what appears to be an impending resurgence of rising health care costs, will be to use this market power for improving quality as well as containing costs" (AHCPR, 11/8).