Employers' use of value-based purchasing strategies

Value-based purchasing by employers has often been portrayed as the lynchpin to quality improvement in a market-based health care system. Although a small group of the largest national employers has been actively engaged in promoting quality measurement, reporting, and pay for performance, it is unknown whether these ideas have significantly permeated employer-sponsored health benefit purchasing.

To provide systematic descriptions and analyses of value-based purchasing and related efforts to improve quality of care by health care purchasers.

We conducted telephone interviews with executives at 609 of the largest employers across 41 US markets between July 2005 and March 2006. The 41 randomly selected markets have at least 100,000 persons enrolled in health maintenance organizations, include approximately 91% of individuals enrolled in health maintenance organizations nationally, and represent roughly 78% of the US metropolitan population. Using the Dun & Bradstreet database of US employers, we identified the 26 largest firms in each market. Firms ranged in size from 60 to 250,000 employees.

The degree to which value-based purchasing and related strategies are reported being used by employers. Percentages were weighted by number of employees.

Of 1041 companies contacted, 609 employer representatives completed the survey (response rate, 64%). A large percentage of surveyed executives reported that they examine health plan quality data (269 respondents; 65% [95% confidence interval {CI}, 57%-74%]; P<.001), but few reported using it for performance rewards (49 respondents; 17% [95% CI, 7%-27%]; P=.008) or to influence employees (71 respondents; 23% [95% CI, 13%-33%]). Physician quality information is even less commonly examined (71 respondents; 16% [95% CI, 9%-23%]) or used by employers to reward performance (8 respondents; 2% [95% CI, 0%-3%]) or influence employee choice of providers (34 respondents; 8% [95% CI, 3%-12%]).

Surveyed employers as a whole do not appear to be individually implementing incentives and programs in line with value-based purchasing ideals.