Skip Navigation U.S. Department of Health and Human Services
Agency for Healthcare Research Quality
Archive print banner

Health Care Costs and Financing

This information is for reference purposes only. It was current when produced and may now be outdated. Archive material is no longer maintained, and some links may not work. Persons with disabilities having difficulty accessing this information should contact us at: Let us know the nature of the problem, the Web address of what you want, and your contact information.

Please go to for current information.

Letting employees keep their doctors and low cost drive small business' choice of health plans

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 are the plans' quality of care or accreditation status, according to a new study sponsored by the Agency for Healthcare Research and Quality.

When small firm owners and business managers who participated in focus groups held in Baltimore, MD, and San Jose, CA, were asked to rate the importance of six features of health plans, they gave no points to accreditation status and rated clinical quality as next to last. Even when shown State-wide data indicating that the plans they were using were consistently low-performing, some of the participants said they would be reluctant to change if their employees were happy with the plan. The employers cited plan price, physician availability, plan benefits, and employee satisfaction, respectively, as the four most important characteristics used to make a purchase decision.

According to the study, led by Mark W. Legnini, Dr.P.H., Senior Vice President of the Washington, DC-based Economic and Social Research Institute, 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, the business owners were skeptical of performance measurement data, especially when it contradicted their own experience or opinions. They also treated with skepticism claims of important differences among health plans and providers, and—because of the commercialization of the Internet—they said they didn't trust data from unfamiliar sources on Web sites to provide unbiased information.

Information about health plan performance does not compete successfully for attention with other activities necessary for running a successful business, notes Dr. Legnini, whose organization conducted the study with the help of the public opinion research firm of Lake, Snell, Perry, and Associates under a Small Business Innovation Research (SBIR) contract (AHRQ contract 290-98-0024).

Dr. Legnini and his colleagues 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, health care 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 also make recommendations concerning public education and regulatory programs to ensure a consistent and high level of quality from providers.

For further details, see "Where does performance measurement go from here?" by Dr. Legnini, Laurie E. Rosenberg, Michael J. Perry, and Neil J. Robertson, in the May-June 2000 Health Affairs 19(1), pp. 173-178.

Return to Contents
Proceed to Next Article

The information on this page is archived and provided for reference purposes only.


AHRQ Advancing Excellence in Health Care