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Letting Employees Keep Their Doctors and Low Cost Drive Choice of Health Plans, Say Small Businesses

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Press Release Date: May 8, 2000

Obtaining lower-cost insurance and satisfying employees who want to keep their current doctors may be more important to small businesses when negotiating health care coverage than the plans' quality of care or accreditation status, according to a new study sponsored by the U.S. Agency for Healthcare Research and Quality (AHRQ).

When small firm owners and business managers participating in focus groups held in Baltimore, Maryland and San Jose, California were asked to rate the importance of six features of health plans, they gave no points to accreditation status and rated clinical quality next to last. Even when shown State-wide data indicating that the plans they were using were consistently low performers, some of the participants said they would be reluctant to change if their employees were happy with the plan. Plan price physician availability, benefits and employee satisfaction scored first, second, third, and fourth, respectively.

"This study helps us to understand how health care purchasing decisions are made in the small employer market," said AHRQ's director, John M. Eisenberg, M.D. The Agency for Healthcare Research and Quality is working to help the small business community improve the quality of the health care of their employees and families by helping develop tools to help them more easily use quality information in their purchasing decisions."

According to the study, the business owners and managers also said that neither they nor their insurance agents compare the performance data of plans because they feel purchasing insurance has become too complex and they cannot afford the time it would take to fully understand the data.

Moreover, they said they are skeptical of performance measurement data, especially when it contradicts their own experience or opinions. They also treat with skepticism claims of important differences among health plans and providers, and they said they don't trust data from unfamiliar sources on Web sites to provide unbiased information because of the commercialization of the Internet.

"Currently, information about health plan performance does not compete successfully for attention with other activities necessary for running a successful business," said Mark W. Legnini, Dr. P.H., senior vice president of the Washington-based Economic and Social Research Institute which, with the help of the public opinion research firm, Lake, Snell, Perry and Associates, conducted the study under a small business innovation research contract with AHRQ.

Dr. Legnini and his co-authors recommend that lists of quality performance measures be shortened to help them compete for business owners' attention. They also recommend that measures focus on the types of care that can make a real difference when the patient's life is actually at risk, as opposed to focusing on care that has no immediate impact, such as preventive services. Furthermore, report cards should deal with the performance of doctors and hospitals, and not with that of health plans, which the authors say most patients view as insurance companies and not as actual providers of health care. The authors would also like to see a nationwide campaign to call attention to performance measures and educate the public about their importance.

They also call for regulatory and professional organization to play a stronger role in ensuring a higher level of the quality of services provided by physicians and hospitals. This last recommendation is based on the belief expressed by the business owners and managers that state health departments, state insurance commissioners, state medical boards, medical specialty societies and other such organizations help the public's welfare by ensuring a consistent and high level of quality from providers.

For further details, see "Where Does Performance Measurement Go From Here? Lessons from Small Employers," published in the May-June 2000 issue of the journal, Health Affairs.

Note to Editors: For interviews of Dr. Legnini, call (202) 833-8877, ext. 15.

For additional information, contact AHRQ Public Division, (301) 427-1364: Bob Isquith (301) 427-1539 (

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