Report of the Working Group on Disclosure of Health Plan Quality Information

November 13, 1998

The Working Group Report, submitted to the ERISA Advisory Council on Nov. 13, 1998, was approved by the full body and subsequently forwarded to the Secretary of Labor. The ERISA Advisory Council was established by Section 512(a)(1) of the Employee Retirement Income Security Act to advise the Secretary with respect to carrying out his/her functions under ERISA.

Working Group Members

Judith F. Mazo, Chair (11/97-98)
The Segal Company, Inc.

Neil S. Grossman, Vice-Chair (11/96-99)
William M. Mercer Co. Inc.

Dr. Thomas J. Mackell, Jr., Chairman (11/96-99)
Simms Capital Management, Inc.

Marilee P. Lau, (11/95-98)
KPMG Peat Marwick, LLP

J. Kenneth Blackwell, (11/96-99)
Treasurer, State of Ohio

Kenneth S. Cohen (11/95-98)
Massachusetts Mutual Life Insurance

Barbara Ann Uberti (11/96-99)
Wilmington Trust Company

Judith Ann Calder (11/97-00)
Abacus Financial Group, Inc.

Rose Mary Abelson (11/97-00)
The Northrup-Grumman Corp.

Michael R. Fanning (11/96-99)
Central Pension Fund, International Union
of Operating Engineers and Participating Employers

Michael Gulotta (11/97-00)
Actuarial Sciences Associates

James O. Wood (11/95-98)
Louisiana State Employees Retirement System (LASERS)

Executive Summary

When the Working Group on the Disclosure of Health Care Quality (the Working Group) began its study in May 1998, this issue already had received significant attention within and outside Washington, D.C. For example:

• In connection with changes in the Medicare program, the 1997 Balanced Budget Act contains a list of information disclosure requirements for plans participating in Medicare. These include explanations of benefits, premiums, plan service areas, quality and performance indicators, and supplemental benefits. The Health Care Financing Administration has undertaken a massive campaign to educate Medicare beneficiaries about their options.

• In late 1997, the President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry (the Commission) published its Consumer Bill of Rights and Responsibilities.1 2 The document recommends that participants be given a “right” to accurate, easily understood information about the policies, performance, and characteristics of their health plans and the plans’ providers and facilities. The President directed relevant federal agencies to conform their programs and plans to the Bill of Rights and to consider ways its recommendations could be implemented through agency actions, such as regulations.

• To facilitate purchasing decisions, health plans and large employers developed the so-called “HEDIS” standardized measures of plan performance, which allow for comparative analysis of managed care plans. Some employers provide this information to their employees. In addition, many plans are accredited by private organizations, such as the National Committee for Quality Assurance (the “NCQA) and the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO). Their assessments are available to employers and the public.

• A number of “patient protection” bills were introduced in the 105th Congress by members of both political parties. Disclosure of health plan information to participants was a critical element of each of the bills, although they differed on specifics. In general, the bills identified (i) information to be furnished to participants automatically, ranging from basic descriptions of benefits to summaries of a plan’s financial payment incentives, and (ii) information to be made available to participants on request, including network characteristics, claims denial criteria and statistics, enrollee satisfaction data, and providers’ experience and compensation arrangements.

Against this backdrop, the Working Group heard testimony from individuals associated with business, organized labor, and private consultancies, as well as representatives of federal regulatory agencies and the Commission. These witnesses presented diverse opinions and perspectives. The Working Group quickly recognized that there are numerous indices of health care quality, many constituencies for information about the quality of care, and that this information is in various stages of development. In other words, useful information is not always available and available information differs in its validity and reliability. No witness disputed the basic proposition that information on health care quality (as well as the quality of health care information) was a key to an efficient marketplace. Not surprisingly, however, stakeholders did not always agree on the means for assuring that health plan participants make informed choices.

A brief overview of the Working Group’s recommendations follows. They are discussed in more detail in the full report.

• The Working Group recommends that consumers be furnished certain basic information, currently available in the marketplace, about (i) all service providers and (ii) commercial health plans. These disclosures should be timely, accurate, and up to date. Information about providers should include addresses, office hours, languages spoken, academic credentials and licences, areas of specialty, and the hospitals where the doctors have admission privileges. Information about plans should include participant costs, such as premiums, deductibles, co- payments, and annual, lifetime, and out-of-pocket maximums, and (to the extent not proprietary) the plans’ criteria for selecting network providers and internal quality control procedures.

• Today, information on patient satisfaction is not widely available. The Working Group believes this information is an important measure of quality, which should be developed, accessible to consumers, and used to rate network plans and providers. Thus, the Working Group recommends that service providers collect patient satisfaction data for each encounter.

• The Working Group believes there is no better gauge of plans’ and providers’ performance than the impact of care and treatment on patients’ health. Common sense indicates that this information would be given significant weight by consumers in choosing plans and providers, especially where an individual has a known condition. However, benchmarking results against established norms is, at best, a nascent science. Thus, the Working Group recommends increased support for “outcomes” research.

• These categories of quality information are at a different stages of development. Thus, the Working Group recommends that Congress phase in the obligation to furnish this information to consumers — requiring basic provider and plan information first, patient satisfaction information next, and outcomes information last.

• The Working Group recommends that employers sponsoring health plans and commercial health plans shoulder the burden of disseminating quality information.

• To realize these goals, the Working Group recommends that Congress establish an independent federal agency (the Quality Board). The Quality Board will (i) finance research on health quality measurement, (ii) set standards for developing uniform, valid, and reliable patient satisfaction and outcomes information, (iii) facilitate the communication of quality information to consumers, (iv) underwrite public education about the quality information, and (v) help train individuals to counsel and advocate for consumers on health care matters.

• Pending establishment of the Quality Board, the Department of Labor should launch a public education program to promote awareness of quality issues among health care consumers. At the same time, it should take steps to educate fiduciaries of ERISA health plans about their responsibility to take quality into account when selecting managed care organizations and other entities to provide services under the plans. The Department should also consider modifying its pending proposed amendments to the Summary Plan Description regulation, to call for disclosure of certain quality information, or to explain its absence if it is not available.

• In our judgment, the Quality Board is necessary at this time to establish uniform quality measures, provide impetus for further research on measures of quality and roll out an implementation plan on a national basis. The Quality Board would build on the efforts of commercial health plans, employer and union groups and public bodies to provide quality information to consumers. The requirements for information to provided at the individual provider level are, necessarily, bold and will involve a significant implementation effort. At least initially, we do not recommend that the mandate include penalties.

Working Group Report

Introduction and Background

1.Purpose of Study

Our charge, as we have understood it: identify and evaluate the issues regarding disclosure of health care quality information to the ultimate consumers of health care. Our prime concern has been to consider what an individual or family would want and need to know to make intelligent decisions concerning their health coverage. We have generally addressed the questions from the perspective of those who are or may be eligible for coverage by employment-based health plans (not just those covered by ERISA), but much of our analysis and our main recommendations relate to all end users of the health care system.

The current focus on the need for disclosure to health care consumers of a wide variety of information concerning quality is, we believe, a logical development from this decade’s national debate over managed care, “managed competition” and the role of the health care industry in the United States. This Working Group agrees with the proposition that not only would well- informed consumers be better equipped to handle their own health care needs, but also that, through the operation of the market, more knowledgeable purchasers would raise the health care quality bar generally. In short, as more people have usable information about quality, health care and health coverage providers will be prompted to compete for their business on the basis of quality.

This Report is an impressionistic response to what we have been privileged to learn over our six months of deliberation from an exceptional array of experts who have graciously summarized for us a broad area of study. We have, we hope, scratched the surface at some points where deeper excavation would be most productive.

2.ERISA Context

a.Labor Department Authority

i. Summary Plan Descriptions. A major premise of ERISA is the determination that a powerful way to protect people’s interests is to give them the information they need to act for themselves. The principal vehicle under ERISA for providing needed information to benefit-plan participants is the Summary Plan Description (SPD), supplemented during the intervals between republication by the Summary of Material Modifications (SMM).3

In response to the President’s directive that the Executive Branch agencies implement the Bill of Rights to the extent feasible under existing law, the Labor Department has proposed amendments to the regulation prescribing the content of SPDs, to require more specificity in the description of plan benefits, procedures for requesting benefits, and limitations or other factors that could prevent a participant from receiving benefits. The Department has concluded that it does not have the authority to require plan sponsors to gather information on health care quality and disseminate it to employees and participants through the SPD.4

ii. Fiduciary Implications. In February, 1998 the Department issued an Advisory Opinion stating that an ERISA fiduciary must take into account the quality of the care provided by an insurance company or HMO, when selecting a vendor to provide health coverage or benefits, and should not base the decision solely on cost.5 This does not, by itself, imply an obligation on the fiduciaries’ part to communicate to the participants about the quality issues that the fiduciaries consider in connection with choosing health coverage, or about quality issues that the individual participants could or should take into account when choosing among available coverage formats or among individual providers.

On the other hand, plan sponsors are concerned that if they do give participants qualitative information concerning health coverage options and available individual providers, the plan sponsors will be held accountable — as fiduciaries or otherwise — for the outcome of choices that families make based on that information.

3.Disclosure to Whom?

a.Employers/Plan Sponsors. Measurable progress has already been made in developing quality measures to be used by employee benefit plan sponsors to evaluate competing insurance companies and HMOs. Substantial work is underway to hone those tools, and to come up with mechanisms to set performance standards to which commercial plans can be held accountable. These include generalized resources such as the HEDIS data on HMOs, assembled by the National Commission on Quality Assurance (NCQA) and proprietary measurement and evaluation services offered by consulting firms, as well as information developed by and for certain major employers and employer coalitions, such as the Big Three US automakers and the UAW, the Pacific Business Group on Health and CALPERS.

This information varies in format, content and reliability. It is expensive to develop and only appropriate for sophisticated users, who themselves typically seek expert help to interpret the information. A major limitation is that it is only available from and with regard to managed care institutions. An open-panel fee-for-service or Preferred Provider Organization (PPO) coverage program by definition cannot be measured for the quality of care it produces, because the party providing the coverage is not taking responsibility for selection or monitoring of the performance of the providers whose services are paid for.

Plan sponsors have a crucial need for useful, understandable information that enables them to make some judgments about the quality of the health coverage and services that they are providing for their plan participants. Quite simply, employers do not want to spend the large sums that it takes to provide health coverage for below-par care. In fact, this has been one of the motivations for moving to managed care, where there is some opportunity for quality control. The fact that, in the ERISA universe, there is a fiduciary duty to consider quality is a secondary consideration in most cases.

Not only do benefit plan sponsors need quality information, as bulk purchasers of health coverage and health care they are in the best position to call for its creation and to give it meaning by using it for marketplace decisions. They are also perfectly placed to demand, collect, repackage and disseminate relevant health care quality data to employees and their families.

Note, all of the above is equally or even more true of the sponsors of public health benefit plans that are not linked directly to employment, such as Medicaid and Medicare.

b.Plan Participants. There is very little information available on a systematic basis to plan participants and their families, the end-users of the health care system, to enable them to make judgments and choices based on quality. What is available is of unproven reliability: mass-market magazine surveys, Web sites, anecdotal reports from friends and co-workers, their own doctor’s personal view. Some unions, consumer organizations and retiree groups prepare guidelines to help their members focus on the relevant factors in making health plan coverage choices, but nothing that ventures much beyond descriptive elements to focus on qualitative considerations has come to our attention.

Some major employers and groups within organized labor are moving to fill some of the gaps for their constituencies, as evidenced by the presentations to the Working Group by the Employer Quality Partnership (EQP) and the Service Employees International Union (SEIU). However, the lack of quality-measurement data at the individual provider level limits what they can do to help people make the decisions that they tend to consider the most important: where should I take my family for care?

c.Prospective Participants. In the ERISA community we focus on plan participants because they are the people who are entitled to disclosure under ERISA, and the group whose interests must be legally paramount in the course of fiduciary decision making. Health quality information at some level is also relevant for potential plan participants, both new employees and people evaluating potential employment opportunities.

d.The Government. As the country’s largest purchasers of health care and health coverage, both for their own employees and for people covered by public programs such as Medicare and Medicaid, government agencies have a correspondingly large need for health care quality information. By exercising their own health care purchasing power, governmental entities can promote the development of usable quality measures, test out formats and approaches for effective delivery of the information at the consumer level, collect data on their own program participants’ experiences and the impact on their health care choices, and make this quality information available to private sector plan sponsors and to the public. For example, JCAHO accreditation has been a requirement for hospitals’ eligibility for Medicare and Medicaid participation, which has promoted its criteria to something close to a general standard.

Government agencies, primarily at the state level, can also contribute in their regulatory roles, as licensing authorities for managed care plans and health care providers. This would include not only collecting and making appropriate use of information concerning enforcement actions against specific players in the health care market, but also setting standards for and policing the accuracy of what commercial plans and providers say about themselves. If and when any of the federal managed-care reform proposals is enacted, this last function will become a federal government responsibility as well.

4.Quality of What?

a.Commercial Health Plans

In the area of health quality measurement and disclosure, the most progress has been made in measuring and reporting on the quality of the health coverage programs offered to employees and plan participants. In particular, the development of quality measurement tools has accompanied the spread of managed care. Among other things, this may be due to the facts that:

i. Enhanced overall quality, through the integrated management of individuals’ care and an emphasis on preventive services, is a key element of what managed care organizations offer,

ii. Employers are uncomfortable with limiting participants’ choice of providers without some assurance that the limits are based on informed, quality-based judgments made at the level of the managed care plan,

iii. Because they are organized systems, managed care companies have the kind of relationship with the providers, who are either employees or contractors, which enables them to collect the information, and the systems to assemble and process it, and

iv. In a competitive market increasingly dominated by overtly for-profit players, measurable claims to “quality” can provide a sales advantage.

Quality information about commercial health plans is evidently relevant for employers and plan sponsors, as purchasers of health coverage programs for employees and their families. Employees who may have a choice among commercial plans have a similar need for usable comparative quality information. Employees have choices among plans if their employer offers a choice, either among managed care plans or between a managed care and a PPO or other type of plan. And many dual-career families can choose between the plans offered by both spouses’ employers.

b.Providers

There is very little reliable information available to the public in general or to health plan participants in particular concerning the relative quality of individual providers — physicians, hospitals, laboratories, etc. — although this is what plan participants need the most.

There have been isolated efforts to gather and publish specific data on health care results, by provider. For example, Pennsylvania and New York provide comparative information about heart-bypass surgeons online, through their web sites, and HCFA has published data on hospitals’ mortality rates. However, the information often does not reach the consumers who would most benefit from it, at the point when they most need it.

c.Care and Treatments

What works, what doesn’t? When is surgery preferable to more conservative treatment? Are all FDA-approved cholesterol-lowering drugs functionally equivalent? What individual sensitivities and other factors indicate that a patient would not benefit from the standard treatment for his or her condition? What serious conditions can be handled effectively on an outpatient basis? Is a physician always better equipped than a nurse or nurse-practitioner to deal with individuals’ health problems? What is the best way to administer chemotherapy for a specific cancer? What questions should the doctor ask and what tests should she order in response to a particular set of reported symptoms?

In the past people looked to and relied on their personal doctors for guidance on these kinds of issues. With the explosion of medical knowledge and options, individuals today have even more need of expert assistance. Yet it has become correspondingly more difficult for primary care physicians to keep up on the literature well enough to give sophisticated advice in more than a few areas.

A great deal of information on these matters is available to the public, through health newsletters, Internet websites, the popular press and wellness and health-education programs from some employers and plan sponsors. The challenge is to wade through all of it, to find the segments that are reliable, relevant and comprehensible.

5.What Is “Quality” In Health Care and Coverage?

a.Clinical Quality

i. Outcomes. The ideal would be to find and measure out what people, treatments and institutions consistently produce better outcomes for their patients: less illness, more and quicker cures, healthier populations. Right now we either do not know what that would be or we cannot measure it accurately, in part because of limits to our science and in part because of the huge variety of circumstances in which the medical arts need to be applied.

Efforts have been made to track and compare certain institutional outcomes, for instance, by measuring mortality rates at different hospitals for patients with an identified category of illness. However, these statistics can mask a multitude of causes, such as the severity of the patients’ illnesses, their general state of health otherwise, etc., which can account for the differences among institutions without regard to the excellence of the professional services provided. Analyzing caseloads to correct for those elements is, at present, too expensive to implement broadly enough to make the information useful and available to the population at large. Without that type of correction and reinterpretation, however, resistance from within the provider community is likely to breed enough skepticism about those reports to inhibit their general use as common consumer tools.

On the other hand, some factors, such as the frequency with which specific procedures are performed, have been identified as likely predictors of successful outcomes. This has led to the Centers of Excellence concept, which, despite some backlash, appears to offer a promising precedent for the market’s use of information about quality results to produce purchasing and delivery mechanisms designed to capitalize on it.

ii. Inputs. More readily measurable is the extent to which a health plan or a provider takes the effort to assure that patients receive the screening and care that they need. Current standards for evaluating managed care organizations, for example, look at such items as the percentage of age-eligible women receiving mammograms, blood pressure testing, etc. These could be adapted for application to institutional and individual providers as well. The results, though, provide only indirect information about the quality of the organization’s or individual’s performance as a care giver, and therefore translating them into data usable at the individual consumer level is a delicate challenge.

b.Service

i. Objective Standards. Another dimension to “quality” in health care and coverage is the level of service customers receive from a plan or provider. A trusting, respectful relationship between the individual and the provider/organization can contribute in a major way to the effectiveness of the care that is provided, just as the absence of trust on the patient’s part can undermine even the best science. Factors like waiting time to make appointments, promptness in keeping appointments, convenience of facilities and office hours, responsiveness to questions, ethnic sensitivity, etc. are vital to establishing that trust. To some extent they are part of the current standard evaluations of managed care organizations but, again, have not penetrated much below that level (just as quality evaluations in general have not penetrated much below the plan level).

ii. Customer Satisfaction Surveys. The best way to find out how well an organization or institution is getting through to its customers is to ask those customers. A number of large employee benefit plans, including the behemoth Federal Employees Health Benefit Plan, as well as commercial health plans, do survey their memberships. With the spread of Total Quality Management (TQM) concepts, some hospitals probably do so as well. Whether these surveys get to the level of detail about individual providers that could produce useful guidance for plan participants is a question.

The survey results are used by the employee benefit plans and the health plan organizations to fine-tune performance, identify areas of weakness and address substandard performers. The FEHBP discloses the survey data to participants and, through its Web site, to the public, and other plans sponsors probably do so also. The managed care organizations only disclose that type of information selectively, to support their marketing campaigns. Indeed, their agreements with individual providers may preclude their disclosing evaluative information about those providers.

6.Why Disclose?

a.Informed Choices by Individuals

This seems self-evident: individuals should know something about the quality of care they are likely to receive from the institutions and professionals to whom they turn. This is not a new need, but it is a newly urgent one.

i. For one thing, managed care combines health coverage with the provision of care in new ways, even when the program is loosely managed, as in a PPO. In making decisions about health coverage, individuals are also deciding where and from whom they will receive care, as the coverage decision will narrow the field of available providers. The quality of the providers that are in a coverage program’s network, then, becomes key information in deciding on the coverage program.

ii. Once enrolled in a managed-care plan, many individuals have to choose a Primary Care Physician (PCP).6 This could be the most important decision they will make, as the PCP controls access to all other aspects of the health care system. Whether participants or plan sponsors appreciate it or not, individuals need all of the information they can get when choosing and dealing with a PCP. Information on the quality of the physicians available as PCPs should help inform that choice, and information on the quality of the group’s other providers should enable them to hold their PCP accountable for the quality of the referrals made on their behalf.

iii. The coupling of coverage and care through a managed care organization means that when the employer changes carriers at least some people will need to change physicians. And, since relationships between managed care organizations and the providers whose services they cover are also fluid, a family may need to choose a new PCP even if its health coverage does not change. In sum, managed care is likely to present people with more occasions on which they must select doctors than has been customary in the past, and thus a greater need for relevant, reliable and accessible information on which to base those selections.

iv. Although issues of quality are typically raised in the context of managed care, by definition indemnity-type plans give participants virtually unfettered choice among providers, restricted only by the providers’ availability and the patients’ ability to pay whatever the provider may seek above the plans’ allowable charges. This is true for the indemnity branch of a Point of Service (POS) plan, as well as for the increasingly rare full-indemnity coverage. The need for organized, reliable information about the quality of competing vendors’ services is even greater when the choice is among so many competitors. But this type of information has not been forthcoming in the past, and experience suggests that individuals acting on their own, without the organization and support of an employee benefit plan, are not likely to be much more successful in obtaining it now.

b.Informed Choices by Group Purchasers

i. As noted above, ERISA plan fiduciaries generally have a legal duty to take quality into account when choosing organizations to help run their health benefit plans, including administrators, insurance companies, managed care organizations, utilization review services, etc. This includes not only the quality of their direct service to the plan sponsor and participants (prompt and accurate claims processing, helpful and polite responses to inquiries, etc.) but also the quality of their judgments about care and the provider networks they assemble to provide it.

ii. Apart from any question of legal responsibility, employers and other plan sponsors provide health coverage for a myriad of business reasons, all of which relate one way or another to pleasing the employees and having confidence that they and their families are being well taken care of. From a business point of view, quality and employee satisfaction should be at least as important a consideration in choosing a health plan service provider as cost. And, since the people making the decisions on behalf of the plan sponsor are typically covered by the same program themselves, they have a direct personal interest in making sure the coverage works well.

c.Public Benefit

i. Sentinel effect. Disclosure is a consistent theme of business regulation in the United States, spurred by the hope that most affected entities will prefer to correct problems rather than publicize them. To the extent this judgment is accurate for the health care industry, our society should benefit generally from increased disclosure on quality, to the individuals and families who use health services as well as to the group purchasers who can exercise their economic muscle in response to the information.

ii. Market invigoration. Few would deny that the resounding defeat of the Clinton Administration’s 1993-94 health care proposals, followed by electing of a Republican Congressional majority, was a strong political endorsement of a market-based approach to health coverage, rather than a universal mandate or government-provided coverage (single payer). For the market for health care to work effectively, purchasers must be adequately informed. This means they must understand and be prepared to take into account quality issues, along with or even above price. A health care market defined by price competition alone would be a national disaster.

iii. Self reliance. Health care decision-making has become too sophisticated to leave to the experts. With limitations on the time that physicians can spend with patients and cost-driven pressures on provider institutions to strip staff down to the lowest supportable level, individuals and families must be equipped to inform and make decisions for themselves. To consult effectively with professionals, they need to know what to ask, where to focus and how to evaluate the answers they receive. Usable quality information that is readily available to people who are getting or considering getting care has become an essential component of the health care delivery system in the United States.

7.Costs of Disclosure

a.Identifying quality factors and measurements. Determining what “quality” is, in health care, and settling on effective ways to measure it are not simple challenges. On the clinical side, certainly, we will only reach final answers when we are satisfied that medical science has resolved all of the mysteries that human and electronic brains can handle. Given the value assigned to medical research in our society, it is fair to assume that its pace will continue or accelerate, so that our notions of “quality health care” will be under constant revision. Given the immensity of our likely investment in medical research, the incremental cost of identifying useful ways to measure what we consider to be “quality”, while substantial, is likely to be a very small percentage of the total.

b.Collecting and analyzing the data. Under current conditions this might be the most expensive aspect of a universal quality-measurement campaign. Providers are widely dispersed, with the majority still functioning as small businesses; the issues that need exploring are vaguely defined; health care information systems are still in a relatively rudimentary state; and, outside of certain major health plans and the federal Medicare and Medicaid programs, there is little focused public pressure for more and better information. In the face these and other cost-generating factors, such as the need to work with experts to interpret the information that is available, it is no wonder that so far the impetus to measure and report on quality has not spread much past the level of hospitals and commercial health plans.

c.Making quality information available to consumers. The cost of disseminating benefit-related information to employees and their families is dropping, as more and more of it is handled electronically. For example, it is much less expensive to post data on a company’s or health plan’s website than to print and mail booklets to all who would want to see it7. However, the ability to publish and to receive information electronically is still far from universal, and the cost of acquiring those capabilities is still substantial.

Another expense associated with informing people about health care quality is the need to tailor the presentation to the needs, interests and context of each target audience. This starts with but goes far beyond making the information available in languages other than English. To make sure the information is usable, it must be prepared with awareness of such considerations as communicating in ways that are compatible with the group’s cultural norms, using media that the target group is likely to consult and trust, recognizing and accommodating literacy limitations, etc. For example, in some communities the local church might offer the most constructive means of getting out the message. Or it may be more effective to get the information to those to whom the target audience is likely to look for advice, such as the adult children of Medicare beneficiaries, than directly to the group itself. This is a challenge common to all employee communications efforts, made more daunting by the complexity and sensitivity of the subject matter.

II. Recommendations

The Working Group on Health Care Quality Disclosure unanimously recommends the following:

1. Quality information on providers. Employees and their families start their quest for health care with one question: ?What doctor should I go to?8 This question becomes especially urgent when the individual is faced with a serious health problem. Specialist choices in a managed care plan may be limited and an employee needs assurance that he or she is going to receive experienced, competent, compassionate care. Coming up with effective ways for them to get the information they need to answer these questions intelligently should be a top national priority. The witnesses and the Working Group members kept returning to the Consumer Reports analogy: we have access to substantial, reliable information, arrayed in easily usable formats, to help us buy a car or a refrigerator. Yet most of us get virtually no serious guidance on choosing the people and institutions to which we entrust our family’s health. That gap needs to be filled.

2. Quality information on all providers. Appropriate quality information should be elicited, and made available to the public, on all providers, not just those associated with managed care organizations or institutions. This includes individual practitioners (including licensed health professionals other than physicians), group practices, clinics, hospitals, urgent care centers, laboratories, etc.

3. Quality information on commercial health plans. Without endorsing any particular legislative proposal, we support expanded quality measurement and reporting with respect to commercial health coverage programs and plans. Since, as indicated above, significant progress has already been made in this area and substantial further efforts are under way, these recommendations are addressed primarily to the area of greater need, which is quality information about providers. Without addressing it much further in this Report, we nevertheless believe that a public campaign similar to what we are suggesting with regard to providers should be launched to assure that adequate, reliable and usable information concerning commercial health plans is made available to employees, benefit-plan participants and other consumers.

Among other things, this would include quality information on network providers, including an explanation of the health plans’ selection and de-selection criteria, and the plans’ internal quality control mechanisms. The extent of the health plans’ obligation would, of course, vary based on the nature of the plan’s relationship with the providers and its reasonable access to information about them. In calling for disclosure of network eligibility criteria, the Working Group wants to make clear that no company should be compelled to disclose proprietary information about its internal business operations. However, the hope is that the market will reward more complete disclosure.

1. Phase-in to full measurement and disclosure. The universal quality measurement and disclosure effort should proceed in steps along a legislated time line. The time line should include explicit deadlines, with a mechanism for periodic Congressional review if a deadline turns out to be impractical or unrealistic. The stages should include:

2. Phase 1: Disclosure and dissemination of relevant information that is readily available to the provider, such as (in the case of physicians, e.g.): board certification, AMAP certification, 9 languages other than English, educational and training credentials, year of admission to practice, office hours and any formal discipline approved against the provider by licensing authorities in any State.

3. Phase 2: Collection, disclosure and dissemination of consumer satisfaction data, including the consumer satisfaction survey results. We recommend that every patient should be given a basic consumer satisfaction survey form to complete in connection with every provider visit, with more in-depth surveys and other consumer testing administered selectively. Electronic completion and submission of the surveys should be encouraged.

4. Phase 3: Collection, disclosure and dissemination of clinical quality data, based on evolving standards as indicated by medical research. This would include confirmation and measurement of level of performance of recommended procedures and, where possible, outcomes measures.

5. Federal agency leadership. A new federal entity should be created to spearhead and help finance the development of health quality measures, communications vehicles, formats, etc. As this must bring together expertise in the medical area and in public and employee communications with an understanding of the operations, dynamics and economics of employee benefit plans and of the health care industry, it might be a joint effort of the Departments of Labor and HHS, like the Commission, with appropriately representative private-sector participation on its board. (For ease of reference, this agency is called the Quality Board in this paper.)

A principal purpose for making this a federal government activity is to socialize the development costs described in item 7, above, including the development of efficient means of collecting, analyzing and disseminating the needed information. The Quality Board should operate both through its own experts’ original research and by funding and evaluating research and development efforts of private sector organizations. It should be required to coordinate its agenda and priorities, to the extent reasonably possible, with those of private sector foundations that are active in this field in order to leverage the available resources to the best advantage.

The Quality Board that we are recommending is similar to the Advisory Council on Health Care Quality called for by the Commission, although the Quality Board would have a more substantive standard-setting role. The Labor Department should work with the private sector Forum for Health Care Quality Measurement and Reporting, another Commission recommendation that is in the organizational stages, to develop the concept of the Quality Board more fully and to propose legislation to create it.

1. Uniform standards and data collection formats. One assignment for the Quality Board will be to develop uniform quality measurement and reporting criteria. First and foremost, this would make it possible to comparison-shop. But having uniform measurement standards should yield significant other benefits:

a.The cost of compliance for providers could be dramatically reduced if a single, streamlined format were used, and it would be easier to make specific allowances for the incremental costs in reimbursement formulas.

b.It would be much easier to promote public education on understanding and using the information.

c.The validity of the information could be readily confirmed, perhaps through periodic Quality Board audits.

d.Upgrades, based on research and experience, would be easier to design and install if everyone were working from a common base.10

The Quality Board would work with HCFA to integrate its data collection requirements into the new uniform electronic data interchange (EDI) standards that HCFA is developing for health plan transactions, as mandated by the Administrative Simplification provisions of the 1996 Health Insurance Portability and Accountability Act (HIPAA). Once all providers, health plan sponsors, insurance companies, managed care organizations and other third-party administrators are communicating through common electronic formats as HIPAA requires — which means once all of them have purchased and installed the means for that kind of electronic communication — adding the data elements needed for quality measurement should be a much simpler task.

1. Mandate universal quality measurement and reporting requirements.

2. Federal minimum standards. With uniform sets of standards, developed by a disinterested public body with substantial private sector input (and based, in all likelihood, on insights and experience gleaned from private sector initiatives), it would be feasible to require all providers to comply.11These mandatory quality measurements would set the floor. Ideally, groups in the private sector would design additional measures or approaches, either for competitive purposes or in collaboration with one another or in response to particular group purchasers. This type of private sector experimentation and innovation might be encouraged and supported by grants from the Quality Board. The Quality Board would also be authorized to review and comment on the methodology of, and conclusions drawn by, quality measurement and reporting tools used by private sector groups, at the request of consumers, benefit plan sponsors, or state or federal agencies.

3. Enforcement. We are not prepared to recommend the imposition of fines or other penalties for failure to comply with the quality reporting standards, at the outset. Rather, we hope compliance would be spurred by market considerations: if most providers have quality ratings, consumers should be wary of those who do not. Compliance, along with high scores, could be honored publicly, and the Quality Board could attempt to stimulate press coverage of high and low performers, or non-performers. However, once the minimum disclosure standards have been established and following a suitable transition period that gives all parties a reasonable opportunity to comply, we believe that failure to respond to a consumer’s specific requests for required quality information should be subject to the same type of moderate civil penalties that reinforce ERISA’s participant- disclosure rules, see ERISA section 502(c)(1)(B).

4. Managed care organizations might set a minimum quality rating as a criterion for participation in their networks and, ultimately, a provider’s or a health care organization’s participation in public programs might be contingent both on compliance and on scoring at or above a set level.12 States might decide to include compliance with the quality standards at a minimum level in their professional licensing requirements, but that would not be part of the federal mandate.

5. Support for consumer satisfaction surveys. The Quality Board should work with specialists in the measurement of consumer satisfaction to design survey forms that are appropriate for different types of providers and, if possible without sacrificing consistency, for different target populations. These would be established as the baseline measuring tools. The Quality Board should also design and install efficient, economical means of collating and analyzing the data, perhaps by contracting with private firms to perform that function for all providers in a region, or all providers of a given type, etc.13 Individual providers should not be compelled to undertake that part of the task, and centralized processing could serve as a quality-control check on the consumer satisfaction measurement procedure.

6. Guidance and support on communicating quality information.

7. Communications help and encouragement. The Quality Board’s mission would also include funding research into effective ways of communicating quality information to employees, their families and the public. Those insights would then be promoted heavily to employers and other benefit-plan sponsors, as well as insurance companies and managed care organizations. In addition, the Board would develop models, templates and standardized publications in a range of languages, which plan sponsors and commercial health plans could adapt and distribute, both to explain the process and to communicate results.

8. Creating communications media. The Quality Board would also install and/or help finance the installation and maintenance of websites, dedicated computer kiosks in libraries, post offices and other public buildings, and generally promote the development of electronic channels through which the quality information can be made widely available. It could also create and distribute quality-communication software. These same efforts could also make electronic submission of consumer satisfaction surveys easier, and therefore more likely.

9. Assistance rather than mandate. On the information-dissemination side, the role of the Quality Board would be to help and encourage, as well as to finance the developmental work. Although plan sponsors and commercial health plans would be required to provide the basic quality information to employees, their families and the public, the Quality Board would not prescribe uniform formats and media for doing so.

10. Health plan and employer disclosure obligation. The quality information extracted from providers must be conveyed to the ultimate consumers of health care services efficiently and in ways that make it most likely to receive appropriate attention. We recommend that benefit-plan sponsors and commercial health plans be required to report basic health quality information as identified by the Quality Board to employees, plan participants and their families and to the public. It is important that, within reasonable limits (e.g., mailing to the employee’s address), plan sponsors take the effort to bring information about health coverage and benefits to the attention of employees’ families, as spouses or other family members are often the ones who make the actual decisions.

As all employees with employment-based health coverage, and their families, should receive this information, the obligation should not be limited to any given class of employer. Following the design of HIPAA, this might be achieved through the adoption of parallel amendments to ERISA, the Public Health Service Act (administered by HHS) and the Internal Revenue Code, with due provision made for State-level jurisdiction over and regulation of commercial health programs.14

1. Public education. The Quality Board, working with the Labor Department and other agencies with relevant expertise or constituencies as well as interested private sector groups, should underwrite an ongoing campaign to educate the public about the quality information that they will be receiving. This would cover the role of quality considerations in selecting health plans and health care providers, the need for individuals to take responsibility for safeguarding their health and obtaining care when needed, the value and limits of the quality indicators available. It might also create and distribute guides for choosing plans and providers, which would give illustrations for people in differing circumstances (e.g., two- earner couple with young children, empty-nesters nearing retirement, single person with a health problem, etc.).

2. The Labor Department need not await the creation of the Quality Board or other enabling legislation before launching this public education campaign.

3. The public will also need an explanation of the consumer satisfaction survey process in which they will be asked to participate. The Quality Board should publicize the fact of the customer-satisfaction information gathering campaign and explain how to fill out the survey forms, where the data will go and how it will be used. This might be accompanied by some health-education basics to remind people doctors may deliver high-quality health care without necessarily ordering a lot of tests or prescribing medication, and directing them to other resources (e.g., reliable Internet sites) that will help them judge whether their treatment was appropriate.

4. A separate public education program, for employers and benefit-plan sponsors, should also be promoted by the Quality Board. This would include advice to make it easier for them to meet their quality-reporting obligations, dealing with such items as how to deal with employees’ questions, customizing the quality material for specific groups, etc. It should also market the process to employers, by underscoring the value to them of having quality as part of the health care purchasing equation and of making sure their employees in fact appreciate the coverage they are providing. Coming from the other direction, the Labor Department should provide more concrete guidance, perhaps in the form of an Interpretive Bulletin, on the obligations of ERISA health plan fiduciaries with respect to quality considerations.

5. Health care guides. Written information will only go so far, in bringing the public’s knowledge concerning these matters to a comfortable level. Most of us will also have questions we want to address with people who know more about it. We suggest that people interested in becoming skilled at providing this kind of assistance should be recognized as health care guides. The Quality Board should develop training materials and templates to help people gain this expertise. The kinds of people who might become health care guides would include volunteers in community centers and service organizations, hospital employees assisting patients and their families with health care planning, someone on an employer’s benefits staff or anyone who is likely to be in a position of advising others about making their health care and health coverage choices.

Ideally, consulting, administrative-services and other private might market these services to benefit-plan sponsors and others, having given their staff more intensive training to deepen both their analytical and communications skills. In addition, the Quality Board should make grants to community organizations and others working with low-income and other special-needs populations, to support the engagement of health care guides, who might also serve as advocates for their constituencies within the health care system.

1. Protection for giving information in good faith. Employers, plan fiduciaries and commercial health plans acting in good faith should not be exposed to liability for compliance with these new disclosure requirements. The statutory amendments creating the duty should also include a privilege for those providing the quality information, which would protect them from liability for the consequences of the actions that people take in reliance on that information.

This would provide protection from any vicarious malpractice liability to someone claiming to have been injured because the provider did not live up to its quality score and from defamation liability to a provider who received a low quality rating. They would also have ERISA fiduciary protection, comparable to that provided under ERISA section 404(c) to plan sponsors and fiduciaries that offer participants a choice among investments for their defined contribution plan accounts, if they act prudently and in the participants’ best interest in developing and distributing the information or in engaging others to do so.

The Quality Board and the Department of Labor would issue binding guidance explaining the extent to which these protections apply not only for information given to satisfy the minimum legal requirements, but also for the additional educational and informational efforts that the Board would be trying to stimulate plan sponsors to undertake.

1. Interim Steps

The Working Group believes that action on quality-disclosure should not be put on hold waiting for the passage of legislation establishing the Quality Board. We believe the Labor Department could and should take the initiative under ERISA to encourage employers’ and employees’ understanding of health care quality indicators, and to demand information from providers. Since ERISA focuses on the management of employee benefit plans and they deal with managed care plans, utilization review agencies and other vendors, at this stage it is probably necessary to address quality at the commercial plan level rather than directly with individual providers. However, a government-prompted interest in quality on the part of group purchasers could have value, if it stimulates further efforts by the commercial plans to explain and capitalize on their quality assurance standards.

1. The Labor Department should undertake a promotional campaign, based on the theme set out in the SEIU letter, emphasizing fiduciaries’ duty to take quality into account when selecting health plan vendors. This would include identifying the primary factors that they should consider, and explaining the existing quality measures. It would also identify the information and materials related to the decision-making that, in the Department’s judgment, would have to be disclosed to plan participants upon request. This might take the form of an Interpretive Bulletin, comparable to the guidance issued on the selection of annuities that established the “safest available” standard.15

2. As part of this plan sponsor educational effort and the consumer education campaign recommended above, the Department should encourage plan participants to request quality information from their employers and to urge their employers to press the commercial plans for information about individual providers. Although it would be attenuated, this pressure from the ultimate consumers could have some market impact.

3. We recommend that the Department reconsider its apparent conclusion that it cannot require the inclusion in the SPD of whatever quality information is available to the plan sponsor. We believe plan sponsors should be called upon, for example, to include in the SPD an explanation of how any managed care plans used by the ERISA plan select the providers offered through their networks. If the vendors will not give that information to the ERISA plan sponsors, that lack of quality data should be disclosed in the SPD. For commercial plans that do not have limited provider networks, the SPD should note the fact that any screening of providers for quality is the sole responsibility of the participant.

Witness Summaries

May 4, 1998

Janet Corrigan, Executive Director of the President’s Advisory Commission on Quality and Consumer Protection in the Health Care Industry. She led the Commission as it developed, by consensus, the Consumer Bill of Rights and Responsibilities and the Final Report, published in 1998.

Corrigan revealed the Commission’s opinions behind parts of the Consumer Bill of Rights and Responsibilities and the Final Report.

Corrigan began by discussing the right to information (1) as a consumer protection issue and (2) as a critical quality of care issue. She noted that quality of care is very uneven so information and comparative information on quality of care is viewed as essential for consumer protection and also for the industry to understand its current state of quality and whether it is improving over time. Yet, there is little evidence of comparative data being available to individual consumers at the marketplace level with regard to the plan.

Corrigan explained that we are beginning to see some data coming from consumers with regard to comparative quality and comparative satisfaction at the health plan level. Some information is also being compiled through the work of NCQA and HEDIS, but this is limited to technical quality measures. (Ex.: PAP smear rates, mammography rates) This information is not sufficient to aid the consumer in his or her decision. Furthermore, there is no type of comparative information on quality or satisfaction levels that applies to physicians or hospitals or nursing homes or home health agencies, yet that is the area where consumers have most of their choices. Corrigan said the Joint Commission on Accreditation of Health Care Organizations and AMAP are trying to define some quality measures and encourage providers to produce this type of data.

Despite these efforts, Corrigan stated we need more standardized descriptive information on health insurance plans and how they operate and the network of providers available to consumers in the public domain. She does not believe that consumers, if put together, or workers are somehow going to come up with the magic list of things they want to know. Although, in many cases, Corrigan believes the information you want to provide to a purchaser is very similar to the information a consumer would be interested in. Ultimately, Corrigan concluded that the first step is to reach agreement on the set of measures that you are going to use and then the health plans and the providers and the institutions have to use those measurements to produce the data. The data then needs to go into a central data base.

She testified that the private sector will not be able to grow into providing standardized information without some regulatory intervention because (1) the purchaser organizations lack purchasing power to encourage the industry to make the kind of investments in clinical information systems that are needed and (2) the measurement organizations are competing with each other instead of coordinating and complementing each other.

To meet this goal, Corrigan suggested that we need to be explicit about recognizing the value that we get from health care quality data so that there is a willingness for health plans, provider groups, group purchasers, public and private foundations, and others to make the investment in the underlying automated data systems, share the costs, demand these types of data, and take initiative to evaluate them and make the results available on the community level. She concluded that public policy is guiding the industry into a leap from the purchaser level to the individual consumer level and we are struggling with how to move from health plan data down to individual provider and provider group data, which is the important data because that is where we see differences in quality. To succeed, Corrigan advocated biting the bullet and making the jump to collecting other types of data. She noted that the jump will have to be achieved incrementally because of the cost.

Accordingly, she recommended front-end loading the system so health care providers, hospitals, and plans pay a fee to put their data into a central data base whether it is in a private accrediting entity or in a public organization. Alternatively, the industry could create a coalition of group purchasers, public and private, that put up the money to support the process and then put it in the public domain.

Even if comparative data becomes available to the consumer at the plan level, Corrigan listed the next step as making the data available to the consumer in a meaningful way. She noted that the complexity of health care data makes measuring quality complex. So, it is hard to get the desired data. Choosing the proper format to provide the information to the consumer in a manner in which they have the proper support and access to interpret and use it thereby presents another hurdle.

Ultimately, Corrigan described a more organized coordinated approach to information gathering and dissemination. This would include a form of quality measurement which would be a coordinating entity in the private sector (the forum for quality management) that attempts to get these groups to work together under the guidance of a comprehensive framework (which it would design).

Meredith Miller, Deputy Assistant Secretary for Policy, Pension and Welfare Benefits Administration, Department of Labor:

Miller discussed the Department’s expectations and concerns in response to the Advisory Commission’s recommendations.

Miller reported that only 19% of private establishments offering health insurance offer two or more plans, with the choices being greater among larger employers.

She noted that both the number of plan choices offered to an employee and the size of the employer affect the determination of what information is relevant for distribution and gathered for distribution. For example, there is a question as to what data workers need who have a choice of one plan and how they navigate and understand their own plan versus the comparative data necessary for workers who have more than one choice. She also expressed the opinion that a major challenge to collecting and distributing information will be the cost, because it creates different capabilities and the need for different strategies with small versus large employers.

Miller queried as to what information employers should get from institutions and also, what information employers should report to plan participants. She asked whether the provided information would be the same when the consumer is in a self-insured plan, an HMO, or a PPO.

Miller described how many data experts are looking to experts from the plan sponsor community to provide input on the data question.

Robert Doyle, Director of the Office of Regulatory Interpretation, Office for Pension and Welfare Benefits, Department of Labor:

Doyle discussed some of the Department’s concerns in response to the Advisory Commission’s recommendations.

Doyle began by listing items a fiduciary might consider when looking at quality: the scope of choices and qualifications of medical providers and specialists available to participants, the ease of access to providers, the ease of access to information concerning the operations of the health care providers, the extent to which internal procedures provide for timely consideration and resolution to patient questions and compliance, the extent to which internal procedures provide for confidentiality of patient information, and the satisfaction statistics.

However, Doyle noted that, where a participant has the opportunity to choose between health care providers, there is no affirmative obligation on the part of the sponsor to pass through quality information. There is nothing precluding a plan sponsor from providing information they may have taken into consideration in making their selection of a provider, but there is no obligation to share that information either.

Doyle suggested an employer may hesitate to make certain disclosures, particularly when such disclosures reveal the process behind the exercise of their fiduciary responsibility in selecting health care providers. He suggested sponsors may be reluctant to share information depending on the source on which they relied.

Doyle expressed his opinion that the summary plan descriptions currently contain much of the information on benefits and coverage limits for the individual plans.

June 8, 1998

Deborah Gage, President and Chief Executive Officer, Solution Point, Inc.:

Gage described how her company, Solution Point, solely focuses on measuring and providing information systems to health care organizations, providers, managed care plans, and others to help them measure and predict consumer demand behavior and satisfaction for improving the process and outcomes of care.

Gage testified that we are where we are today in the health field because: (1) a historical lack of competition and a very diverse risk and economic structure in health care has resulted in health care essentially not being managed or treated as a business either by consumers or those who offer health care services; (2) health care is highly under-managed; (3) our culture and attitude toward medicine; and (4) a lack of consumerism in that we don’t expect the same level of information, service, and quality that we expect from far less important decisions that we make—such as buying products for our home.)

She noted that most information gathering has been looking at the quality of health care from a clinical process perspective and clinical outcome perspective, including most of the federal dollars and industry money which are focused on highly technical clinical process. Little has been done to measure the health care system from the viewpoint of the consumer. Gage reported that this trend must change because health care is now a substantial portion of the GNP, a huge portion of corporate profits. Corporate America is now looking at the purchase of health care as an investment in their human capital. Accordingly, health care is a consumer business in the midst of changing to become more responsive to the consumer’s needs. So the focus for information gathering must shift to human capital asset management—i.e. consumer concerns.

Gage testified that consumer needs begin with the need for basic, easily accessible information addressing: what is available, how do I access it, what is the coverage, what will be my experience with this product or service, price information, performance information, risks, successes, understanding outcomes, comparative reports from other consumers, benefit levels, and features of the network such as spent waiting for treatment. She remarked that most of the time consumers purchase these products blind.

Gage stated that the increasing number of report cards of consumer comparisons are very rudimentary measuring at a very basic level, and not very accessible to consumers. There is virtually no pricing information and very limited information about the features and functions of the plan. The available information does not include any monitoring of participating physicians. (Gage noted that the AMAP is taking steps toward that end and she knows of a company in DC that is gathering information through an annual, self-reported audit regarding legal malpractice and other physician-related issues.)

Gage explained that employers ought to be providing (or asking their suppliers to provide as a service) to their own employees performance reports on how they are doing, and ask their employees if they are satisfied with the benefits they are receiving. They need to develop, measure, and continue to report on the quality matrix that they can produce from the consumer’s perspectives. They should have supplier quality assurance programs using standardized, continuous quality improvement initiatives. Managed care companies, like providers, should also have a role in ensuring that their suppliers report their performance to consumers, using standardized, continuous, quality-improvement initiatives.

Gage reported that there is no current standardized consumer-based measure of quality, but she recommended that the measurement should be made at a product level. Measurements should be those important to consumers such as baseline consumer satisfaction with the outcome and processes of health care. Gage predicted that those who score below the mean will object and then go improve their systems and processes.

Gage explained that there is a lot of geographic diversity, which makes it difficult to measure quality across volume and diversity of products and services. Lack of product and consumer segmentation and public policy issues around quality and access also inhibit the information- gathering process. She noted that segmentation is very important so the consumer can really understand what is driving these differences by product, employer and plan. Thus, the more specific the question, the better the answer. With a general question you are going to get a lot of variation with the answer but over large populations it becomes useful to have that information.

Gage recognized that the issue is what level of information should be publicly available and who should provide it. To have the greatest credibility, Gage thinks the initiative must come from the Joint Commission, NCQA and AMAP because those are the doctors, hospitals, and managed care plans. Yet, she believes they will only put a spotlight on the problem, this is an issue the industry must address. She further believes the research should be conducted by a part of Government that has more expertise with consumer reporting.

Gage suggested that employers could play a large role in facilitating the availability of the information because of their purchasing power. Gage recommended the employers publish consumer information in the same way that other public industries provide information for those who want to consume these services. She noted that small employers have no leverage whatsoever to make any decision other than price, which is presented to them by some broker.

Gage concluded that these new human capital measures are the outcomes that employers are seeking, and to the extent that employers will aggressively begin to measure these and hold the health system accountable for quality outcomes from their perspective, Gage thinks they will see a step forward in health quality.

Henry Miller, President, Center for Health Policy Studies:

Miller addressed the trend in his research and consulting organization to focus on the development of data and the use of data to measure performance within the health care industry.

Miller opened by stating that the health care system is under-managed, having just recently turned from a cottage industry to an industry requiring industrialization and needing to deal with issues such as measurement of its quality and the quality of its services.

Miller focused his testimony around four questions: (1) what data do participants really need; (2) how can that data be assured to be accurate and uniform; (3) how concerned do you need to be about patient confidentiality and provider confidentiality; and (4) who is responsible for the release of the information.

Miller testified that employees first decide which plan best meets their needs, usually based on cost of the plan to them, the provider network that the plan offers, and their perceptions about the reputation of the plan. He stated that data on costs and network competition are readily available, and generally offered to everyone. HEDIS, for example, addresses quality, cost, satisfaction, and effectiveness issues.

Looking first at data on consumer satisfaction, Miller noted there is a wide variety of data that can be collected but it is difficult to deal with. It is not gathered uniformly and requires a great deal of effort to interpret because “satisfaction” can be an ambiguous term. He recommended that including satisfaction data in any kind of requirement will require choosing information that is most easily made available and does not require a massive new information infrastructure.

Miller then discussed information on physician performance. He emphasized the importance of the consumer’s ability to obtain data on physicians who actually provide their care, including patient satisfaction rate, satisfaction compared to other physicians, difficulty in scheduling an appointment, and specialized capabilities that could be useful to the consumer. He suggested that selecting a primary care physician is easy because consumers don’t worry too much about the outcomes. Consumers worry about the quality of the physician but the kinds of procedures he will be performing probably are not life-threatening. Most managed care plans can make this basic information available, and some do. For specialists, however, participants need much more, such as patient satisfaction rates, the number of times he has performed the procedure, and familiarity with the problem.

Miller reported that despite the explosion in health care data over the past ten years, there is very little data available on physician performance, and little of that is available to plan participants. Most of the physician data currently being collected is mandatory to the managed care plan, such as patient satisfaction surveys and claims forms information. A great deal of that information is available to managed care plans. Whether the plan will turn this information over to a consumer or employer is questionable. For example, the idea behind distributing physician information is to show that some are better than others, and if you have a large network of physicians, it is not necessarily in your best interest to indicate that some of them are better than others.

Miller also testified that while there is some outcome data available, it will take several steps to make sure that it is valid, quality information. He mentioned that he doesn’t put a lot of worth in the current surveys, for example, because the measures that are used—a magazine survey where just the physicians are surveyed—are useful but won’t show really unlikely results.

As for patient confidentiality concerns, Miller pointed out that the data used is the aggregate of each individual’s experience with that physician.

Miller stated that responsibility for the release of information to plan participants should be limited to either the employer or the managed care plan. The managed care plan has the data and the employer can usually get the data, but neither are currently providing the information to consumers.

July 7-8, 1998

Frank Titus, Assistant Director of the Office of Insurance Programs, Office of Personnel Management:

Titus explained what the OPM expectations were for carriers with request to the Advisory Commission’s recommendations and how to meet them.

Titus began by discussing the Federal Employee Health Benefits Program (FEHBP).

He then focused on the letter his office, the Office of Insurance Programs, sent carriers outlining the Patient Bill of Rights and their expectations with respect to the carriers for 1999 and 2000 in regard to that proposal. OPM told the President that they would place those items in the FEHBP necessary to implement the Bill of Rights within a two-year time frame, meaning their contractual provisions for 1999 and 2000 and the brochures would be in compliance.

Titus described how they set out to work with the carriers in a collaborative way, allowing the carriers to tell them how they wanted to go about implementing some of these things. The carriers were instructed that the Bill of Rights was not law, so they did not have to be concerned with strict compliance but should approach the bill using common sense. Carriers did not have to create new frameworks or draw boxes around items that had Patient Bill of Rights labels. The complying information did not have to be labeled or all in one place. Instead, the carriers should look at their current practice because many areas probably exist where the carriers are already in compliance, even if it is in a different place from that listed in the bill. Ultimately, carriers were advised that FEHBP would be feeling its way on these things and need to be ready to deal with problems on an exception basis.

Titus revealed that some carriers expressed concerns about information on protocols and confidential information. They were told that as a general rule, general information about formularies and about investigational experimental would be sufficient. The carriers do not need to disclose anything that is confidential or of a trade secret kind of nature.

Titus interpreted the Patient Bill of Rights as identifying information about plans and providers. He explained that as a government entity, they need to be sure that the information they are relying on is accurate and consistent across plans, and HEDIS meets that need. They are also interested in the Foundation for Accountability because those outcome measures seem to work and in fact are being generated by some of their fee for service plans on a pilot basis.

Although he did not know if it would happen, Titus said it would be great if carriers got together and picked a common provider (1) so customers could not only get the information but find out what carriers a provider participated with and (2) so that each carrier did not have to maintain a directory. Instead, he expressed the belief that web sites have much of the sought-after information and he assumes carriers will use those as the primary medium for meeting their responsibilities. Titus suggested they connect through their web site to other germane sites that they believe are reliable. The desired information can then be downloaded and printed on demand. Titus noted that once you have done this for one purchaser, you could make it available to all purchasers.

Titus concluded by emphasizing how important it is that flexibility be built into the law to allow for adaptability in dealing with carriers and local circumstances. He described the need to be able to work with the spirit of the bill if they are to move the program closer to its goals, noting there is the potential for a program that just could not be implemented. Even so, Titus stated he did not see beyond board certification and things like that by 2000.

Beth Kosiak, Center for Beneficiary Services, Health Care Financing Administration:

Kosiak explained HCFA’s experiences in gathering and disseminating plan information .

Kosiak suggested that the average consumers interest is not at the plan level—consumers think much less in institutional terms than they do in personal terms. From the consumer point of view, the most important information is down at the single provider level. Accordingly, CAHPS (Consumer Assessments of Health Plan Studies), which was designed to produce a set of questionnaires that would give consumers information from the patient’s perspective, expanded the number of questions on the questionnaire that addressed doctor/patient interaction.

Kosiak explained that HCFA is currently required to provide a large amount of data to the public. Under general information, they must list the benefits under Medicare, including cost sharing and balanced billing liability, and information about Medicare supplemental insurance and Medicare select. They must also provide information about election procedures, how to get into a plan, and appeal and grievance rights. For comparative information, they must provide information on comparing the benefits of plans, cost sharing and choice of providers, whether a referral is required to see a specialist, service areas, continuation options, satisfaction information, and quality performance measures. With respect to all Medicare Plus Choice eligible beneficiaries, legislation mandates that HCFA specifically provide understandable information, hold health fairs, report and explain disenrollment rates, provide information on appeals and grievances, and have an 800 number available to beneficiaries only to answer Medicare Plus Choice questions.

Kosiak discussed that upon enrollment and annually thereafter, plans have to report any evidence of coverage in clear and accurate standardized form, including service area, benefits, emergency coverage, what constitutes an emergency, hospice, out-of-network, grievance and appeals, disenrollment rights, and any changes to the plan. Plans are required to provide all and any of this information if the beneficiary asks.

Kosiak noted there are currently many plans that do not have the resources for sophisticated data consolidation or they have the resources but they just do not do it right. Furthermore, the way the plans describe their benefits and procedures to beneficiaries are not standardized. She explained that small plans are going to have a real problem with standardization and consolidation because of the sophisticated data systems, that take lots of money and personnel and resource they may not have, but there has been no resistance from large providers.

Kosiak testified that financial resources are not the only hurdle in the way of standardization. She described how there are many issues to address in order to provide understandable information that beneficiaries can actually use. These issues include the problem of diverse population with respect to ethnicity, different levels of education and literacy, physiological and psychological changes as people age, cognitive deficits, vision impairments, and attitudes of plan members opposing changes to their current plan. As an example, Kosiak reported that research and experience show that retirees are the people most likely to want one-on-one contact where they can ask questions about the plan.

Kosiak reported that every state has some form of third-party advisors that act as counselors. They function as grantees to HCFA and are usually based in either the Department of Insurance or the State Department of Aging, and are coordinated with either the aging and insurance programs existing in the state.

Kosiak touched on the problem of accountability in the area of group practices, asking when is a beneficiary truly the patient of a group of physicians or a single physician, so that a group or single physician can be held accountable for the care of that person or that group.

August 11, 1998

Gail McDonald, Chair of the Business Roundtable Health and Retirement Coordinating Committee:

McDonald spoke about the Employer Quality Partnership (EQP) program sponsored the Business Roundtable.

McDonald stated that the purpose of the EQP is to accelerate the actions of the marketplace in health care quality and to promote information to the employees and the public about health care. She outlined that the reason for this new focus is that healthy employees are more productive and high quality health care plans become less expensive because they are more cost-effective.

McDonald testified that the Roundtable companies are initiating a wide variety of innovations to enhance health care. These innovations drive the market place through a “spillover” effect that benefits people who work in other companies, small companies, and individuals who access the health care system. McDonald described “spillover” as the positive benefit that accrues to subscribers when providers improve some aspect of their plans in response to negotiations with large companies. She also suggested that the level of quality increases for other plans if one plan adopts a change.

McDonald emphasized there is no one-size-fits-all approach. ERISA provided a foundation that allowed innovation because it created a framework that allowed for flexibility for companies to meet the specific needs of their employees. What may work for one group of employees or one industry or one geography or health plan will not be right for everyone. Quite simply, if companies had to follow 50 different sets of regulations instead of one federal framework, all money and time would be spent complying with the 50 different frameworks instead of innovating and improving health care.

McDonald reported that the vast majority of companies are conducting some kind of employee satisfaction survey. McDonald remarked that the value of this and other data, in part, depends on the level of consistency and uniformity because, fundamentally, there are going to be comparisons on some data system. Currently, there is a lack of uniformity. She revealed that the companies are cautiously optimistic about the quality forum recommended by the President’s Advisory Commission, headed by the Vice President.

McDonald distinguished the collection of data from the dissemination, which needs a lot of flexibility because it is going to various audiences whose needs will vary. She reported that more and more companies are using their own networks to communicate health plan information to employees or using kiosks where employees can access computers to gain this information. Videos and work-site meetings have also been successful because employees respond to one-on- one interplay where they can ask questions.

Carol Regan, Health Police Director, Service Employees International Union:

Regan discussed the importance of providing plan information to consumers and the SEIU’s efforts to increase the availability of information.

Regan stated that several issues surrounding consumers’ rights must be considered. One is public accountability. Regan emphasized the importance in disclosing information to the public through many avenues. She noted that people get information in many different ways, including from web sites, their church, their community health center, and their doctor's office. A second significant issue is choice: the ability to select from types of providers and access certain kinds of providers to ensure medical or other health care issues are covered. Regan emphasized that choice is much broader than data limited to clinical outcomes. It includes issues of affordability, comprehensive coverage, and a network of doctors with choice.

Regan testified that a whole set of issues and principles exist regarding consumer protections. Currently, good information is available on dated procedures, delivery of services, preventive care, financial stability, and solvency issues. Regan suggested that this available information may better reflect the interest of some HMO’s. What is lacking is information from the perspective of the consumer. For example, information is needed on protection from gag clauses and the numbers of grievances and enrollment rates. Regan also noted the need to provide consumer-friendly information in other languages.

Regan listed the efforts of the Service Employees International Union to increase the availability of information:

(1) SEIU is asking health plans or purchasers that contract with the plans to require collection of additional kinds of data. They are asking accrediting organizations to broaden their database and include different information than currently available.

(2) SEIU are educating members about how to take control over their own health care decisions and demand individual as well as group evidence of high quality care.

(3) SEIU is creating booklets which provide information on quality that tells our members what they have a right to expect from the health care system.

(4) SEIU is joining union-based health care purchasing coalitions to be able to do things in markets to work together with other unions so that purchase quality in a more economical and fair way.

(5) SEIU is advocating for legally enforceable standards in this industry so we can have the kind of quality that is measurable and information that is accessible to people across the nation.

Regan advocated the need for an internal and external third-party representative. She proposed having an internal representative within the plan and within the union to field questions, talk about the plan and what it does and doesn’t cover, interpret issues and advocate for necessary changes. There would also be an individual/office to handle the same inquiries as a public service—i.e. externally.

September 8, 1998

Marilyn Park, Office of Policy and Research, Pension Benefits Welfare Administration, Department of Labor:

Park provided an overview of the President’s actions following the Advisory Commission’s final report.

Park began by noting that there is some mission overlap among the dictates of the Patients’ Bill of Rights and the Commission’s final report with regard to providing consumers with health plan information.

She noted that when the President received the Commission’s final report, recommending providing consumers with additional information, he put the Vice President in charge of making the Forum move forward. This private advisory group was formed (1) to examine how quality is currently being measured by various entities in a coordinated fashion and (2) to think about how to do this in a more rational and comprehensive way. The Forum’s long term goal was defined as developing a core set of measurements that everyone needs in order to purchase health care based on quality, whether they are the individual consumer or the employer. Park also described QUICK (Quality Interagency Coordinating Task Force), the other group established by the President, by executive order, as the public body parallel to the Forum.

Park then testified to the presence of quality web sites that need to be linked together and then made accessible to consumers. She suggested the possibility of creating a generic web site that everyone can access.

1998 Index

Advisory Council on Employee Benefit and Pension Plans

(Actual Transcripts/Executive Summaries for the Council’s full meetings and working group sessions are available — at a cost — through the Department of Labor’s contracted court reporting service, which is Executive Court Reporters at 301-565-0064/301-589-4280FAX.)
For the Advisory Council’s 1998 Term:

May 4, 1998: Working Group Studying Disclosure of the Quality of Health Plans

a) Agenda
b) Official Transcript
c) Executive Summary of Transcript
d) Consumer Bill of Rights and Responsibilities - Report to the President of the United States, prepared by the Advisory Commission on Consumer Protection and Quality in the Health Care Industry, with accompanying February 19, 1998 memo to the Vice President from Alexis M. Herman, and its attached report, “Implementing the Consumer Bill of Rights and Responsibilities through ERISA” and “Quality First: Better Health Care for All Americans, “ the Commission’s final report to the President of the United States.
e) An Essay: “The Doctor Is Not In - on the Managed Failure of Managed Health Care” by Ronald J. Glasser, M.D. Harper’s Magazine, March 1998.
f) A news article “Catching the Financial Flu” appearing in Bloomberg News, April 1998.
g) “Simple Retirement Solutions for Small Business,” a brochure currently being distributed by the U.S. Department of Labor.

June 8, 1998: Working Group on the Quality of Health Care Plans

a) Agenda
b) Official Transcript
c) Executive Summary of Transcript
d) Proposed Agenda of Issues by Ms. Mazo for her committee to discuss
e) “Issues of Quality and Consumer Rights in the Health Care Market” by Craig Copeland, Employee Benefits Research Institute (EBRI), dated April 98. (EBRI Issue Brief Number 196)
f) A media kit from the and two brochures from the Employer Quality Partnership 1. Navigating the Health Care System,” A Guide for Employees and Their Families and 2. Looking for Value: An Employer’s Guide to Evaluating Quality Health Plans.
g) New York Times articles, “Risky Business - a Set Fee for Each Patient Gives Doctors More Control and More of a Financial Stake” by Milt Freudenheim and “In Health Care, Be Careful What You Wish For” by Michael M. Weinstein, May 30, 1998.
h) Written Testimony of the National Association of Health Underwriters, prepared by Dr. Nancy Trenti, assistant director of federal regulatory affairs.
i) Statement of the National Coalition of Health Care, mailed to members and to be included in handouts 6/8/98
j) “Consumer Health Care Information: Many Quality Commission Disclosure Recommendations Are Not Current Practice” a study prepared by the U.S. General Accounting Office, April 1998.

July 7, 1998:

a) Agenda
b) Official Transcript
c) Executive Summary of Transcript
d) Ms. Mazo’s suggested issues and points of analysis prepared for the meeting.
e) “Quality Health Care Is Good Business” (A Survey of Health Care Quality Initiatives by Members of the Business Roundtable, an association of chief executive officers committed to improving public policy), dated September 1997
f) 1998 Guide to Federal Employees Health Benefits Plans, prepared by the U.S. Office of Personnel Management’s Retirement and Insurance Service Division revised November 1997, RI 70-1

August 11, 1998:

a) Agenda
b) Official Transcript
c) Executive Summary of Transcript
d) Ms. Mazo’s suggested issues and points of analysis provided at the July meeting and re-sent to all members for their consideration.
e) “Union Guide to Quality Managed Care” provided by the AFL-CIO via Carol Regan, health policy director of the Service Employee International Union (SEIU)
f) The Business Roundtable, and more especially the Employer Quality Partnership, also provided a total kit of its health package, including a report date June 1998 on The Spillover Effect: How Quality Improvement Efforts by Large Employers Benefit Health Care in the Community,” and a September 1997 Health and Retirement Task Force Report on Quality Health Care Is Good Business: A Survey of Health Care Quality Initiatives by Members of the Business Roundtable. (Also included were advertising slicks for its employer-sponsored campaign and three brochures previously furnished and catalogued in this index. And a CD “Help us solve one big problem with today’s health coverage. CONFUSION.”

September 8, 1998:

a) Agenda
b) Official Transcript
c) Executive Summary of Transcript
d) A Summary and Suggested Plan for Report, Provided by Judith Mazo, Chair

October 5, 1998:

a) Agenda
b) Official Transcript
c) Executive Summary of Transcript
d) “What to Look for When Picking a Provider,” San Francisco Chronicle special on September 21, 1998. Included are individual articles and charts on:

California’s Biggest Health Plans

Frustrated With Health Insurer? New Firms Can Help Sort Out Problems

How the Internet Could Change Patient Care

Preventive Care Report Card (Chart)

Patient Satisfaction Report Card (Chart)

Kaiser Clinics Eliminating Language Barriers

Northern California Health Plan (Chart)

e) “Your Guide to Managed Care” from Health Pages (from the website - http://www.denver-rmn.com/health/ar-manag.html) Included are:

What Is It?

How Does It Save?

Role of the PCP?

Picking a Plan

Quality Check

Traditional vs. Managed Care

Compare Plans

Rating Doctors

Healthspeak

State Control

Report Cards

f) October 1, 1998 letter from Dean Rosen, Senior Vice President for Policy and Information and Association Counsel, the Health Insurance Association of America (HIAA)
g) Selected Recommendations from ERISA Advisory Council Meetings, prepared by Judith Mazo’s office for purposes of discussion on what kinds of recommendations the Working Group may make in its final report.
h) A kit from the American Medical Association concerned with its accreditation program. (Copy of full kit available in Advisory Council archival file, EBSA Disclosure Office and with committee chair only.)

October 5, 1998:

a) Agenda
b) Official Transcript
c) Executive Summary of Transcript
d) First Draft of the Working Group’s Report
e) Wall Street Journal Supplement on Health and Medicine, October 19, 1998, entitled “Patient, Teach Thyself”including the following articles:

1) Business Plan: big employers are starting to design their own report cards on competing HMOs. By Joseph B. White;
2) Who’s On First? To find out which HMOs are best, you just have to look at their ratings, right? Wrong. By Nancy Ann Jeffrey;
3) Making the Grade: Improvements in quality of care suggest hospitals are taking report cards to heart by Ron Winslow;
4) Do Your Homework: How to learn about your doctor — before you pick one by Robert Langreth;
5) Click Here: Venture onto the Web, and you immediately understand the meaning of ?information overload’. A guide to finding what you need by Rebecca Quick;
6) Dealing with Data: Companies have lots or high-tech ideas for improving how doctors and hospitals handle medical information by George Anders;
7) A Little Knowledge..Doctors are suddenly swamped with patients who think they know a lot more than they actually do by Nancy Ann Jeffrey;
8) The Way We Were: For at least one patient and one doctor, the practice of medicine hasn’t changed all that much. But they know it’s only a matter of time. By Lucette Lagnado.

November 12, 1998

1) November 9, 1998 letter from Douglas R. Guerdat, Director, Administration and Regulatory Relations, Blue Cross/Blue Shield Association of Washington, DC., regarding the association’s comments on the upcoming Working Group Report.

1. On September 5, 1996, the President established the Commission to advise him on how to promote consumer protection and health care quality. Co-chaired by the Secretaries of Labor and Health and Human Services, the Commission had 34 members, representing consumers, business, labor, health care providers, health plans, state and local governments, and health care quality experts.

2. President’s Directive to Federal Agencies, dated February 20, 1998, to Implement the Consumer Bill of Rights and Responsibilities.

3. Other notices, such as the COBRA health-care continuation election, are required in specific instances as prescribed in the law.

4. DOL Proposed Regulations on SPD Content, 63 Fed. Reg. 48376 (9/9/98).

5. DOL Information Letter, dated February 19, 1998, to Diana Orantes Ceresi. This principle is derived from the fiduciaries’ responsibility to manage plan assets prudently, in the interests of plan participants. This comes into play for almost all ERISA health funds even if they do not hold employer contributions in a trust to pay benefits, because even those that operate essentially on a pay-as-you-go basis have “assets” in the ERISA sense, in the form of employees’ post-tax or pre-tax contributions. And an ERISA fiduciary includes anyone with discretion over the management or administration of a plan. So, selection of providers, arguably, is a fiduciary responsibility, even if health benefits are paid entirely from the employer’s general assets.

6. For some the choice may have been made before they enrolled, if their current physician is in the organization’s network.

7. Although some of the cost is externalized to the users in the form of as computer, ISP and phone charges, whereas using the old media all of it was borne by the producer and distributor of the disclosure information, the aggregate savings are still very dramatic. For example, a recent survey of transaction costs in the banking industry revealed the following unit costs per transaction: branch bank teller - $1.80; phone representative - $1.00; ATM - $0.40; PC banking - $0.02, and Internet - $0.01.

8. The next questions generally go to the doctor: ?What’s wrong with me?’ ?What pill should I take?’ ?What hospital should I go to?’ ?Will it work?’ ?Will it hurt?’ ?Is it covered by my insurance?’ ?How long until I’m better?’

9. This is the AMA’s new voluntary accreditation service.

10. An analogy familiar to benefits practitioners is prototype pension documents. If, for example, the definition of “compensation” is always in Article II, section 5, all plans that use the model can be updated with a simple Search-and-Replace operation when a statutory change causes a change in the definition.

11. The mandates would be set out in regulations adopted in accordance with the Administrative Procedure Act, which calls for publication of a proposed regulation and the opportunity for public comment before any final rules are established. Given the potentially far reaching impact these rules could have, the public-comment phase is likely to be a serious, substantive undertaking, for the Quality Board and for the affected members of the public.

12. These criteria could be set, possibly at different levels, not only for Medicare and Medicaid but for contractors providing health care services to the Defense Department, the Department of Veterans Affairs and, of course, the FEHBP.

13. This would draw on the sophisticated tools used by market analysts to correct for possible biases created by, for example, the fact that those completing the surveys are not necessarily a representative sample of those receiving the services.

14. Traditionally, the Public Health Service Act is amended to impose obligations on state and local health plans, such as COBRA and HIPAA, that parallel those imposed on the private sector through ERISA. In HIPAA it was also the vehicle for reaching the commercial health plans. Including the Internal Revenue Code assures that the business and economic expertise of the Treasury Department and the IRS are taken into account in the development of regulations, and it has been a means of applying the employment-based requirements to church plans. Other legislation may be needed to be certain to bring the federal employees’ programs into the mix.

15. Interpretive Bulletin No. 95-1, 60 Federal Register 12328, March 6, 1995.

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