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Press Release Date: February 12, 1998
Employer market power can be a major force for promoting
quality and value of health care for Americans, according to a
new report by the federal government's Agency for Health Care
Policy and Research (AHCPR).
Theory and Reality of Value-Based Purchasing: Lessons from
the Pioneers—prepared as part of the agency's research
initiative on employers and health care—describes how a number
of major corporations, as well as business and health coalitions,
are using their market power to promote quality by collecting
data on quality as well as cost, using the data to select health
plans and providers, and offering employees financial incentives
to enroll in plans with good performance records. Some of the
organizations are even working directly with providers to
identify and implement best practices.
"Employers have been and will continue to be the major
drivers of change in the health care marketplace," said John M.
Eisenberg, M.D., AHCPR's administrator. "The information in this
report will help employers follow the lead of these pioneers and
use their purchasing power to promote quality as well as contain
costs. It's a smart investment."
Irene Fraser, Ph.D., whose Center for Organization and
Delivery Studies oversees research on the impact of the
structure, organization and delivery of health care, said the
report also challenges health services researchers.
"It's important that researchers find ways to evaluate and
disseminate the efforts of pioneers such as these, so that
America's business community can examine proven value-based
purchasing strategies and adapt them to fit their individual
circumstances," said Dr. Fraser.
Dr. Fraser also said AHCPR-funded research shows that
employers in some parts of the country are teaming up with
government purchasers, such as state Medicaid programs and local
health departments, to develop common strategies for encouraging
quality care in their communities.
The pioneering groups whose activities are described in the
report are the Dallas-Fort Worth Business Group on Health,
Chicago Business Group on Health, Gateway Purchasing Association,
General Motors, Digital Equipment Corporation, GTE Corporation,
Pacific Business Group on Health, Iowa's Community Health
Purchasing Corporation and Pacific Bell.
The report also says that most employers continue to focus
exclusively on the cost of health plans and are doing little or
nothing to integrate quality with health care contracting.
Authors Jack Meyer, Ph.D., Lise Rybowski, M.B.A., and Rena
Eichler, Ph.D., also found that a middle group, whom they call
"dabblers," are taking the first steps toward value-based
purchasing by beginning to collect some quality information from
plans and providers.
Dr. Meyer, the lead author, is president of New Directions
for Policy, a Washington, D.C.-based health care consulting firm;
Lise S. Rybowski, M.B.A., is founder and principal of Severyn
Healthcare Consulting, a health care research and communications
firm in Fairfax, Va.; and Rena Eichler, Ph.D., is a health
economist with AHCPR's Center for Organization and Delivery
Free, single copies of the printed report (AHCPR 98-0004), are
are available from the AHCPR Publications Clearinghouse, P.O. Box
8547, Silver Spring, Md. 20907; tel: 1-800-358-9295. Select for online version the report.
A related report, Public-Private Healthcare Purchasing
Partnerships, which resulted from an AHCPR-sponsored conference,
is available from the Midwest Business Group on Health, 8765 West
Higgins Road, Suite 280, Chicago, IL 60631; tel: (773) 380-9090.
For additional information, please contact AHCPR Public Affairs: Karen Migdail, (301) 427-1855 (KMigdail@ahrq.gov), Salina V. Prasad, (301) 427-1864 (SPrasad@ahrq.gov).