Back in the 1980s, Malcolm Baldrige made the argument that quality goes hand in hand with improved productivity, lower costs, and increased profitability. In the years that followed, systematic quality control became the norm for US business. Today, companies expect their customers to hold them accountable for the quality of their goods and services, and few would award a contract to a major supplier that could not demonstrate superior quality.
Employers and health plans are now working aggressively to bring the same principles to bear in purchasing health care. "The US health care system has an unacceptable error rate and inconsistent outcomes," said Bob Ihrie, Vice President of Compensation and Benefits, Lowe´s Companies Inc. "And the health care cost trend is jeopardizing the ability of employers to offer affordable coverage."
Mr. Ihrie is on the board of Care Focused Purchasing (CFP), a group of employers that began meeting in 2003 and formally incorporated as a 501(c) in mid-2005. These large employers, many of them Fortune 100 companies, are united in the belief that the solution to America´s health care cost crisis lies in higher quality and more efficient medical care. Some experts maintain that poor quality or inappropriate treatment adds 30% or more to total health care spending in the US each year.
CFP is distinguished by its focus on "transparency" as a means of building a consumer-driven market that identifies better physicians, better hospitals, and better treatment options. Transparency means that health care purchasers and consumers can easily access all the information on cost and quality they need to compare and select doctors, hospitals, and treatment options.
"You can´t overstate the power of information in driving change," said Sheila Sweeney, Vice President of Employee Benefits at Assurant. "Once consumers can find and use the better doctors who treat their condition, they´ll start seeking the higher-performing doctors for all of their health care needs. The poor performers will either improve or struggle to maintain their patients. A Consumer Reports for health care is long overdue."
CFP approves common performance standards
The group´s first priority was to promote adoption of standardized performance measures of quality and efficiency. CFP convened an expert panel of researchers and health plan medical directors to agree on a set of measures, drawing on work done by such groups as the National Quality Forum, Leapfrog, and NCQA. Designed to measure physician and hospital performance, the first set of CFP measures was approved by the panel late in 2004.
"This is welcome news" said Shelly Greenfield, MD, Professor of Medicine and Executive Director of the Center for Health Policy Research at the University of California, Irvine, and member of the CFP expert panel. "CFP´s use of solid quality and cost measures against such an extensive data set will not only advance our national learning, but will clearly benefit consumers, purchasers, and providers alike."
Major carriers partner with CFP
CFP has forged agreements with several major health plans, including Aetna and CIGNA, that will provide claims data on more than 20 million members. This will be combined with the CFP employers´ claims data in a "data warehouse" - a repository of the results on which provider performance will be measured. "Data aggregation at the national and local levels is an important first step in addressing the focus on quality of care for which all of us are striving," said James Foreman, Executive Vice President of National Businesses at Aetna.
As part of their agreement, the health plan partners will make provider performance information available to individual consumers. But while a key CFP goal is to achieve consistent measurement standards across the US, how the measures are deployed will vary. The health plans will decide how to use the information to develop new health plan products, networks, services, and provider performance enhancement programs. CFP employers believe that competition among plans will drive the most effective solutions for purchasers and consumers.
"The response from carriers has exceeded our expectations," said Ron Griffith, Director, Global Total Rewards at Ashland Inc. "With such a significant chunk of the market on board right from the start, and the recent announcement of WellPoint, Inc. joining, we think we´ll see a powerful ripple effect."
CIGNA believes that using aggregated claims data and standard quality measures will give it a marketplace advantage. "We're featuring CFP in our marketing materials and consumer decision support tools," said Noel Obourn, President, CIGNA National Accounts. "Employers and consumers have been demanding transparency for a long time, and the collaborative partnership CFP has established will enable robust and credible provider quality information. Partnering with CFP has kept CIGNA out in front on this issue. At CIGNA, we believe that the information enabled through CFP will allow us to continue to lead in our primary focus: improving the health of our members."
CFP is also urging the Centers for Medicare & Medicaid Services (CMS) for the release of Medicare claims data, which would make the data warehouse even more robust.
Catalyst for change
Another emerging principle of CFP is that positive change is possible in the short term and will grow over time. In fact, the CFP employers expect to see improved quality and reduced cost trend in the next 18 to 24 months. This "results now" approach may be helping to speed up other initiatives around data release and provider performance transparency.
Public awareness of transparency is growing as well. "There´s been a lot of buzz about consumerism over the past couple of years, but as employers move to implement consumerist strategies it becomes clear that transparency is the key to making them work," said Dave Rahill, a consultant with Mercer Health & Benefits LLC and an advisor to CFP. "Part of the CFP mission is to get the word out."
About Care Focused Purchasing
CFP was created after an initial meeting of interested employers facilitated by Mercer Health & Benefits LLC in May 2003. The group was legally incorporated as a nonprofit 501(c) corporation in July 2005. A list of employer members is attached.
CFP is supported by contributions from employer members and carrier partners. For more information, contactthe Governance Committee at CFPGovernanceCommittee@mercer.com.
List of Selected CFP Employers:
Analog Devices, Inc.
Ashland Inc.
Assurant
BellSouth Corporation
The Boeing Company
Capital One Financial
Corning Incorporated
Freightliner LLC
Hannaford Bros. Co.
Honeywell International
The Kroger Company
Lowe's Companies Inc.
Marsh & McLennan Companies, Inc.
Northrop Grumman
The Pepsi Bottling Group, Inc.
The Procter & Gamble Company
Sears, Roebuck and Co.
Sprint Corporation
Texas Instruments Incorporated
Vanguard
VNU, Inc.
Xerox Corporation
