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In 2002, a research team surveyed state Medicaid officials on state efforts to measure and improve the quality of care delivered to beneficiaries in Medicaid managed care programs.
Specifically, the team sought to assess the states' use of value-based health care purchasing the term for a broad array of efforts aimed at taking quality as well as cost into account when procuring health care services.
The team, led by Arnold M. Epstein, M.D., M.A., a professor at the Harvard University School of Public Health, compared the 2002 survey data with data from two similar surveys conducted in 1996 and 1999.
In 2004, the team reported its findings in two articles in Health Affairs. One article focused on state oversight of health maintenance organizations (HMOs), the other on primary care case management programs in Medicaid.
The Robert Wood Johnson Foundation (RWJF) supported this project from March 2001 through November 2005 with three solicited grants totaling $820,243.
In the 1990s, the states increasingly converted their Medicaid fee-for-service coverage to managed care as a means of controlling health care costs.
By 1998, 90 percent of the states had Medicaid managed care programs in place, and more than half of the nation's Medicaid beneficiaries were enrolled in managed care programs, according to the federal Centers for Medicare & Medicaid Services (CMS).
With managed care, the role of state Medicaid agencies changed from primarily handling and paying claims to selecting and negotiating with health plans.
Managed care health plans receive a fixed amount of money per enrollee to cover a defined set of services over a specified period regardless of actual services provided. This arrangement, termed capitation, can be an incentive to minimize the amount spent on care.
As a result, the growth in Medicaid managed care spurred concerns about the quality of care provided to Medicaid beneficiaries.
To determine how state Medicaid agencies were adapting to managed care especially in implementing quality management practices researchers led by Arnold M. Epstein, M.D., M.A., at the Harvard University School of Public Health surveyed state Medicaid officials across the nation in 1996 and again in 1999. Epstein is a professor and chair of the school's health policy and management department.
The two surveys sought to assess the agencies' progress toward value-based health care purchasing, the term for a broad array of efforts to take quality as well as cost into account when procuring health care services. Value-based health care purchasing strategies include:
The 1996 survey, which was supported by the Commonwealth Fund, found that state Medicaid agencies were beginning to mandate quality measurement and reporting but were providing little comparative feedback to health plans or to plan enrollees for use in selecting a health plan.
By 1999, most states were measuring the quality of care and sharing the information with the health plans. However, the researchers reported that "few if any states" could show evidence of actual quality improvement by a health plan.
This survey was also supported by the Commonwealth Fund. In addition, one of the researchers, Haiden A. Huskamp, Ph.D., received support from the Center for Health Care Strategies, under its Medicaid Managed Care Program, funded by RWJF (ID# 027327).
Findings from both surveys appeared in the February 2002 issue (volume 28, issue 2) of the Journal of the Joint Commission on Accreditation of Healthcare Organizations. The article is titled "The Evolution of Quality Management in State Medicaid Agencies: A National Survey of States With Comprehensive Managed Care Programs," by B.E. Landon, H.A. Huskamp, C. Tobias and A.M Epstein.
In 2001, Epstein and his colleagues again wanted to survey state Medicaid agencies on their quality management practices. This time, in addition to health plans, the team was interested in learning about the states' quality management of primary care case management programs.
Primary care case management programs are a form of managed care but distinct from capitated health plans. In these programs, the Medicaid agency itself acts like a health plan, contracting directly with physicians to provide and coordinate patient care.
The use of primary care case management programs was growing, especially in states where commercial health plans were abandoning Medicaid participation, according to the researchers. However, little was known about how Medicaid agencies were monitoring the quality of these programs.
In addition to the Medicaid market, Epstein and his colleagues wanted to study the role of value-based purchasing practices in the private sector, which also had experienced significant growth in managed care.
By 2000, more than 70 million Americans with employer-sponsored health insurance were enrolled in health maintenance organizations (HMOs) and even more were enrolled in preferred provider organizations (PPOs) and other forms of managed care, according to the research team.
RWJF staff believed the results of surveys of purchasing practices might be useful in promoting the value-based approach and informing the work of two RWJF national programs:
In conjunction with this strategy, in 2001 RWJF supported a survey of members of the National Association of Manufacturers on their experience with value-based health care purchasing. (See the Grant Results on ID# 042103.)
The research team led by Epstein surveyed state Medicaid officials in 2002 on state efforts to measure and improve the quality of care delivered to beneficiaries in Medicaid managed care programs. Specifically, the team sought to assess the states' use of value-based health care purchasing.
The team compared the 2002 survey data with data from the 1996 and 1999 Medicaid surveys and reported its findings in Health Affairs in 2004.
RWJF supported the work from March 2001 through November 2005 with three solicited grants totaling $820,243 awarded to the Harvard University School of Public Health (ID#s 040657, 043137 and 043782).
Under the first two grants (ID#s 040657 and 043137), the researchers developed the survey questionnaire, tested it in four states and made revisions. To assist in that process as well as to conduct the survey, the team hired the Health and Disability Working Group, a research, technical assistance and training collaborative at the Boston University School of Public Health.
Staff members from RWJF's Medicaid Managed Care Program and National Health Care Purchasing Institute provided input as well.
The survey included a core set of questions on managed care health plans adapted from the 1999 questionnaire. These questions sought information on:
In addition to questions from the previous survey, the 2002 questionnaire included two entirely new sets of questions. One focused on quality oversight of primary care case management programs. The other, titled "viewpoints," sought to assess the importance that agency officials placed on various value-based purchasing strategies.
The 2002 survey as did the 1999 and 1996 surveys asked for information from the previous year. Thus the three surveys provided comparison data for 2001, 1998 and 1995.
Under the third grant (ID# 043782), staff of the Health and Disability Working Group, a subcontractor, conducted structured telephone interviews April through September 2002 with directors and quality managers of 47 Medicaid agencies (46 states plus the District of Columbia) that had Medicaid managed care programs in place as of July 1, 2001.
The four non-participating states were Alaska and Wyoming, which did not have Medicaid managed care programs, and Nebraska and South Dakota, which did not respond to the survey.
Of the 47 participating agencies:
As part of their analysis of the survey results, the researchers examined the association between Medicaid agency value-based purchasing and health plan quality of care. The team used two tools in this analysis:
The research team had planned also to develop and implement surveys to assess value-based health care purchasing by private sector employers and health plans. The researchers developed the private purchaser survey and began work on the health plan survey.
However, RWJF was unable to fund further work on these two surveys because it cut back new grantmaking. At this time (20022003), RWJF's corpus had stopped growing due to a downturn in the stock market, and commitments to existing programs and projects used up available funds.
The research team published two articles on the Medicaid survey in the journal Health Affairs:
See the Bibliography for the full citations.
The research team reported the following in the Health Affairs article "The Evolution of Quality Management in Medicaid Managed Care":
The research team reported the following in the Health Affairs article "Quality Oversight in Medicaid Primary Care Case Management Programs":
In a January 9, 2006 report to RWJF, the researchers said:
In the Health Affairs articles, the research team acknowledged several limitations on the survey findings, including:
Researchers reported the following conclusions in Health Affairs:
The researchers wrote in Health Affairs that to their knowledge, the 2002 survey was the "first systematic assessment of quality measurement and management activities" nationally among primary care case management programs.
In a July 2006 interview for this report, Epstein suggested that the results showed the quality management of primary care case management programs was less robust than generally had been believed.
Staff of RWJF's Medicaid Managed Care Program used the survey findings to guide the program's work with states to improve Medicaid managed care quality and access. The data "showed us that there were trends in the right direction, but that we had a lot more work to do," said Nikki Highsmith, the program's deputy director.
As a result of the findings, the program staff:
The National Health Care Purchasing Institute closed before the research team reported its findings.
With funding from the federal Agency for Healthcare Research and Quality, Epstein and his colleagues finalized and conducted the private purchaser and health plan surveys begun under this project.
In 2005, they surveyed more than 600 private purchasers and, separately, 252 HMOs. The team reported on the HMO survey in the November 2, 2006 issue of the New England Journal of Medicine (355: 18951902).
The article, "Pay for Performance in Commercial HMOs," said that 126 health plans just over half of the respondents included incentives in their provider contracts. Of the 126, 90 percent had incentive programs for physicians, and 38 percent had incentive programs for hospitals.
The Washington Post covered the findings in a piece, "U.S. Lags in Several Areas of Health Care, Study Finds" on November 3, 2006.
Studying Value-Based Health Care Purchasing
Harvard University School of Public Health (Boston, MA)
Arnold M. Epstein, M.D., M.A.
Consumer Assessment of Healthcare Providers and Systems (CAHPS): A repository of survey data on patients' experiences with health care products and services maintained by the federal Agency for Healthcare Research and Quality.
Health and Disability Working Group: A research, technical assistance and training collaborative at the Boston University School of Public Health.
Health Plan Employer Data and Information Set (HEDIS): A set of standardized measures of health plan performance compiled by the National Committee for Quality Assurance.
Managed care: A general term for organizing doctors, hospitals and other providers into groups in order to enhance the quality and cost-effectiveness of health care. Managed care organizations include health maintenance organizations (HMOs) and preferred provider organizations (PPOs).
Medicaid Managed Care Program: An RWJF national program that works with state Medicaid agencies, health plans and consumer groups to improve the quality of-and access to-Medicaid managed care, especially for beneficiaries with chronic illnesses or disabilities.
National Health Care Purchasing Institute: An RWJF initiative to train health care purchasing executives from the public and private sectors to use their buying power to improve the quality and cost-effectiveness of care. The institute operated from 1999 to 2003.
Preferred provider organization (PPO): An arrangement designed to supply health care services at a discounted cost by providing incentives for members to use designated providers, who contract with the preferred provider organization at a discount.
Performance measures: A measure of how well a health plan does in providing health services to its enrolled population. A performance measure can be used as a measure of quality. Examples of measures include the percentage of diabetics receiving annual referrals for eye care, and the percentage of enrollees indicating satisfaction with their care.
Quality measurement: Quality measurements typically focus on structures or processes of care that have a demonstrated relationship to positive health outcomes and are under the control of the health care system. The number of nurses per patient is an example. Another is the percentage of female patients of a specified age receiving mammography.
(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)
Landon BE, Schneider EC, Tobias C and Epstein AM. "The Evolution of Quality Management in Medicaid Managed Care." Health Affairs, 23(4): 245254, 2004. (Abstract available at RWJF; full text available online.)
Schneider EC, Landon BE, Tobias C and Epstein AM. "Quality Oversight in Medicaid Primary Care Case Management Programs." Health Affairs, 23(6): 235242, 2004. (Abstract available at RWJF; full text available online.)
"The Changing Patterns and Impact of Value-Based Purchasing: Survey of Medicaid Agencies." Boston University, fielded April to September 2002.
Report prepared by: Lori De Milto
Reviewed by: Michael H. Brown
Reviewed by: Molly McKaughan
Program Officer: Laura C. Leviton, Ph.D.
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