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Beyond Health Plans' Glossy Brochures

Let's say you have the good fortune to have health insurance. Now let's stretch the imagination a bit further and say you have a choice of health plans. Maybe (you lucky dog) you work for a big employer who offers a range of health benefits. Or maybe you're on your own, picking an individual plan from the sea of insurers. How best to understand your options?

Most Americans with the privilege of selecting their insurer (only 17 percent of the private employers who offer insurance provide a choice of plans) usually just pick whatever's cheapest. And employers— who have the biggest say in what benefits workers end up with— also let price drive their decisions, according to a recent Business & Health survey. But the cost of a health plan says nothing about what it offers. Even though the marketplace now treats health care as a commodity no more sacred than Beanie Babies or pork bellies, the standard shopping rules do not apply. Cheaper plans aren't necessarily worse. Instead, chaos prevails in the world of managed care acronyms. And there is little out there besides mind-numbingly upbeat brochures to help you distinguish one company from another.

There are some efforts to illuminate differences among plans. But what little substantive information there is is mired in politics and lost in the frenzied market. The best quality-watcher— the National Committee for Quality Assurance— rates HMOs and other health plans with grades ranging from excellent on down. The DC-based group accredits plans— or doesn't— based on their grievance systems, medical record-keeping, and the care with which they screen doctors' credentials. It also keeps track of some telling clinical details, including how many mammograms plans provide, whether they schedule follow-up appointments with patients who have been hospitalized for mental illness, and how often they conduct eye exams on diabetic patients.

But NCQA— which bills itself as a "watchdog group"— is suspiciously cozy with the industry it's meant to police. The organization was originally formed as an offshoot of a managed-care trade association partly as an attempt at staving off potentially more serious regulators. This history, and the fact that the NCQA evaluations (and, therefore, much of NCQA employees' salaries) are still paid for by the companies themselves, contribute to a sense that the agency can only pack the gentlest of regulatory wallops. As Gordon Schiff, director of clinical quality research at Chicago's Cook County Hospital, sees it: "[NCQA's] purpose is to fend off the accountability that consumers would really want from state legislatures. This is for the employers to hold down costs and at the same time say they care about quality."

NCQA spokesman Barry Scholl insists there is no evidence that NCQA is soft on health plans because of its funding situation. Scholl also points to steps that underscore its independence from the industry, including setting up advisory panels of disease experts and patients. But one built-in limitation NCQA can't overcome is its inability to force companies to submit to its scrutiny. Because participation is voluntary in all but a handful of states— and because plans themselves pay for their review— about 40 percent of companies just opt out. Why shell out and risk looking bad if you don't have to?

Disturbing as the opt-out rate may be, it is perhaps the best evidence that NCQA evaluations do at least intimidate some companies. Indeed, most HMOs that participate seem to take the process seriously. Some managed-care companies may even go overboard preparing for what is essentially an open-book exam. Because health plans know exactly what they're going to be judged on, they can put special emphasis on those specific services to beef up their grade. Steffie Woolhandler, a physician who works for several Boston area HMOs, reports that she is frequently reminded to perform tasks that are tracked by NCQA, such as testing patients' cholesterol levels: "[The plans] send me little notices about why didn't you check Mrs. Jones's cholesterol," says Woolhandler, "but often I don't think it's indicated to check Mrs. Jones's cholesterol and they're not paying any attention to whether I've done any counseling about how to keep cholesterol down."

If the system is easy to cheat, the irony is that relatively few people pay attention to the ratings anyway. Though several dozen big companies require the HMOs they contract with to report to NCQA, a mere 35 percent of employers even know what the agency is. And a teeny 5 percent rated its information "very important" in picking a health plan, according to a recent study put out by The Commonwealth Fund in New York. That same study reports that only 1 percent of the firms surveyed actually passed on the NCQA information to their employees.

Apparently even the insured with choices are making decisions about their health care in the dark. And, since the NCQA ratings database costs upward of $2500, most of them are unlikely to get their hands on this information that, while flawed, is pretty much all we have.


Watchdogs

The patient-to-be need not be totally without guidance in the murky medical market.

  • You can find some of the dirt about HMOs for free on NCQA's website (www.ncqa.org)— taking it all with a grain of salt, of course.
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