by Sarah Thomas, Research Director, Deloitte Center for Health Solutions, Deloitte Services LP
When Medicare started covering prescription drugs, I helped my mother work through the website to choose a plan. I entered all of her prescriptions into the tool, reviewed the total premium and cost-sharing amounts and talked with her about whether she could switch to mail order or ask her doctor for a generic prescription. I then helped her best friend (who had a lot more prescriptions) go through the same process. Even though the early version of the tool was criticized, I actually found it pretty helpful as long as I was sitting with the prospective enrollee.
Now, more than 7 million Americans have had the experience of enrolling in plans through the health insurance exchanges (HIX), whether they were run by the federal government or states. Holding the challenges of some of the websites aside for the moment, all of these websites have had information on premiums, benefit design and cost sharing. But this first year, very few have had calculator programs to figure out the premium/cost-sharing tradeoffs or a lot of information about quality—either at the plan level or about providers in the network.
The ACA requires the secretary of the U.S. Department of Health and Human Services (HHS) to develop a rating system, the Quality Rating System (QRS), which will measure the quality of plans offered through the exchanges. Since the ACA was passed, two draft regulations have been released that provide additional information:
- November 19, 2013, draft regulation:1 The Centers for Medicare and Medicaid Services (CMS) released a draft regulation on what quality measures will go into the QRS. Although states can propose alternatives to this system, the federal regulation will probably have a strong influence—not only in the federally-facilitated HIX, but also in states that are developing their own systems. The draft identifies 42 measures (25 for plans that only serve children) for which the results will be combined and displayed to consumers. All of these measures are already in use and defined for health plans; many are endorsed by the National Quality Forum, which is the national arbiter on what makes a good measure. The final rule has not yet been released.
- March 14, 2014, draft regulation:2 In this release, CMS gave more specific information on how and when it will implement the QRS for the federally-facilitated HIX. It calls for phased-in reporting based on when plans started in HIXs. For plans operating in exchanges this year (that were approved in 2013), they would submit the required validated data for a QRS beta testing period beginning in mid-2015 (the second coverage year) and for public reporting during the 2016 open enrollment period for the 2017 coverage year (the fourth coverage year). CMS is still accepting comments on this regulation.
CMS is giving health plans some warning so they can prepare. Many of these measures are ones that health plans have been aware of. Even if they have not actually been reporting on these to Medicare, Medicaid or employers, most of the measures can be reported from administrative data, following detailed and careful specifications that allow for “apples-to-apples” comparisons among plans.
Will consumers use the information? Many policy wonks like me have hoped that consumers would actively use quality information to help them choose a health plan, stimulating competition among plans on quality and value. But, researchers like Naomi Bardach, Judy Hibbard and R. Adams Dudley have found that many consumers just don’t use this type of information—even if it’s been available through many report-card projects over the years.3
What has been the problem then?
Part of the problem is that report card websites (before the design of today’s HIXs) containing the information have not been well-designed. They included complex technical information and were hard to navigate.
Maybe the problem is that the measures don’t resonate with consumers. That said, the measures include consumer experience, which is something familiar to those of us who use apps like Angie’s List, TripAdvisor or Urbanspoon and measures of preventive care, which many people think is good for them.
Or maybe the problem is that people don’t think health plans have anything to do with clinical quality (in contrast to the physicians). Often times, when people think about a high-quality health plan, they mean a plan that offers a lot of choices and as many services as possible without hassling them or their doctor over claims denials and cost sharing. Perhaps many people with employer coverage don’t have that much choice anyway—they might only have one carrier with a couple of benefit designs.
Even if quality information hasn’t been that important to consumers, it still matters. Health plans’ boards of directors see the information, as do reporters. And those that do well on quality can advertise to consumers in broad terms to create a competitive advantage. The Medicare program is using quality information much more actively than before—paying higher rates based on quality ratings and requiring plans to use bonus payments to offer enhanced benefits to enrollees. Medicare also flags plans that do poorly prominently for consumers and asks the worst performers to leave the program.
Exchanges could well follow this lead. Paying more for better performance is probably not in the scope of the law, but exchanges could exclude plans with low-quality scores.
By all means, the health care industry shouldn’t give up on getting consumers to choose based on quality in addition to cost. Consumers could benefit from more quality information on CMS and state websites. More information around ratings could nudge people toward higher quality plans and could make investment in quality a business case for plans in the exchanges in the same way it has for Medicare.
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Sources: 1http://www.gpo.gov/fdsys/pkg/FR-2013-11-19/pdf/2013-27649.pdf 2http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/CMS-9949-P.pdf 3 http://www.ahrq.gov/professionals/quality-patient-safety/quality-resources/value/pubreportusers/pubreportusers.pdf
Sarah Thomas is a director with Deloitte Services LP and the director of research for Deloitte's Center for Health Solutions. Sarah has experience in public policy, ranging from reimbursement to addressing issues such as quality in Medicare, Medicaid and the private health insurance market, including health insurance exchanges and marketplaces.She has more than 13 years of government experience.