Markets at Risk— Current and Future Challenges in a Managed Care Marketplace. B. Outcome improvement.


Delivering more value entails improving the ratio of outcomes over costs. Plans may be expected to continue to invest in systems and processes with which they can demonstrate that they do, or have the capacity to, improve quality of care being rendered by network providers. As NCQA has recently reported, plans that participate in accreditation and reporting appear to perform at higher levels than those that do not, and sustained efforts at reporting is associated with quality improvement71. However, one may expect plans to continue to pursue of accreditation and collection and reporting of HEDIS data as long as plans believe that such activities are important to purchasers. This is an important qualification because plans appear to believe that quality differentiation is both very difficult given overlapping networks, and is not currently a major factor among purchasers and/or consumers. Some of the activities that plans have pursued in the disease state management realm illustrate an additional dilemma for them. Major improvements in quality may only be detectable over a longer term horizon—a horizon that may exceed the period of enrollment in and thus field of vision of most health plans. The commitment to quality improvement will also be tested by the shift to looser products with which plans have less ability to influence provider and member behavior. As suggested earlier, an increase in legal liability for plans may mean that many companies may chose to evade liability by diminishing the degree of assertiveness with which they try to shape care seeking and care delivery. For example, when a health plan substitutes notification for pre-authorization for hospital admissions it no longer has to comply with external appeal requirements because it is not rendering a decision72.

  1. Booz-Allen & Hamilton, “The Real Consumer Revolution in Healthcare: Defined-Contribution Health Plans, “ Booz-Allen website, March 3, 2000.
  2. Healthmarket, Inc., website.