The Role of Employers in Ensuring Healthcare Quality

Staff
By Staff 6 Min Read

The American employer-sponsored health insurance market, responsible for covering nearly half the nation’s population and commanding a trillion dollars in annual spending, faces a persistent challenge: scaling innovation and negotiating better rates for employees. This stagnation arises from several key factors. Unlike Medicare and Medicaid, the employer-sponsored insurance landscape lacks the centralized structure necessary for widespread, transformative change. Even large corporations, despite their significant employee base, wield insufficient individual influence to drive systemic improvements in affordability or care innovation. Further hindering progress is a prevailing reimbursement model that prioritizes volume over value. This emphasis on the quantity of services rather than the quality of care fuels cost growth without commensurate improvements in population health. Employer-sponsored plans significantly lag behind government programs in tying payments to outcomes, with a mere 21% of commercial insurance payments linked to performance-based metrics, compared to 43% in Medicare Advantage and 33% in traditional Medicare.

The substantial financial leverage of employers, collectively directing a trillion dollars annually to health care, presents a potent, yet underutilized, opportunity for driving positive change. By strategically wielding their purchasing power and setting higher expectations for care quality, employers can reshape the health care landscape. A crucial step in this transformation involves shifting away from fee-for-service models and embracing value-based care, where payments are explicitly linked to improvements in clinical outcomes or subject to performance-based adjustments. This approach fosters accountability among health plans, providers, and technology vendors, compelling them to prioritize quality improvement and demonstrate value for the resources invested.

A key barrier to implementing these value-based models is the lack of readily available guidance and transparency. Employers often lack the necessary information and best practices to effectively integrate outcome-based metrics into their contracting processes. Peer learning and open access to data on successful (and unsuccessful) implementation strategies are critical for accelerating adoption.

To address this knowledge gap and facilitate the transition to value-based care, Morgan Health, in collaboration with JPMorgan Chase benefits, has developed a practical roadmap for employers. This framework outlines five actionable steps for enhancing the measurement and management of health care quality. The roadmap provides a structured approach, empowering employers to take concrete steps toward achieving their quality goals and maximizing the value of their health care investments.

The first step emphasizes the importance of a thorough assessment of the current health status of the employee population. This analysis serves as a foundation for identifying gaps in care quality, pinpointing areas for intervention, and establishing specific, measurable quality goals. For instance, if a significant portion of the employee population exhibits elevated A1c levels, indicating poor diabetes control, a corresponding quality goal could be reducing the prevalence of diabetes and improving related health outcomes.

Once quality goals are defined, the next step involves selecting appropriate metrics to track progress and evaluate the effectiveness of interventions. These metrics should align with the specific health needs of the employee population and the overall quality objectives. Examples include reducing hospital readmission rates, increasing access to preventive screenings, and improving provider performance scores. These measures offer insights into patient engagement and provide leading indicators of potential cost savings.

Establishing baselines and targets for these chosen metrics is crucial for measuring performance and demonstrating improvement over time. While accessing historical patient data can be challenging due to factors like employee turnover and changes in benefit plans, national benchmarks offer a valuable alternative. Resources like the NCQA Quality Compass provide access to HEDIS benchmarks and evidence-based research, enabling employers to set realistic and achievable performance targets.

The fourth step focuses on integrating performance-based payments into contracts with health plans and providers. This incentivizes quality improvement by tying financial rewards or penalties to achieving pre-defined outcomes. Open communication and collaboration between employers and vendors are essential during this process. A shared understanding of the long-term goals and the approach for the initial implementation year fosters trust and encourages continuous improvement.

Finally, establishing a clear timeline and a robust process for calculating quality measures is critical for ensuring transparency and accountability. Documenting the methodologies used to establish baselines and calculate results ensures alignment among all parties involved in the contract. This detailed documentation is particularly important for audit purposes, especially when financial incentives are linked to quality performance.

The health care landscape continues to evolve rapidly, with innovations in care delivery emerging at an accelerating pace. Payment models must adapt to reflect this dynamic environment and prioritize value over volume. By collaborating and leveraging their collective purchasing power, employers can drive this necessary shift toward value-based care, ultimately improving quality, affordability, and outcomes for their employees and the broader health care system.

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