Value-based formulas for purchasing. Employers shift to quality to evaluate and manage their health plans

Employers have traditionally focused on cost and plan design in the management of their employees' health care programs. This cost focus has led most large employers to enroll employees in managed care programs and resulted in a new focus on the quality of care delivered by these plans. By evaluating cost and quality, employers attempt to understand the total value these health plans deliver. Hewitt Associates' Health Value Initiative, a health plan analysis based on employers' increased need for cost and quality information, is an example of a tool used by some employers to evaluate and strategically manage their health plans. A case study shows how one large employer used this information to shift to a more comprehensive cost and quality analysis, resulting ultimately in better health care costs and quality for its employees.