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Related Experiment Videos

Competition on quality in managed care

S C Schoenbaum1, K L Coltin

  • 1Harvard Pilgrim Health Care of New England, Providence, RI 02903, USA. sschoenbaum@compuserve.com

International Journal for Quality in Health Care : Journal of the International Society for Quality in Health Care
|November 25, 1998
PubMed
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Managed care organizations (MCOs) compete on cost, not quality. Overlapping provider networks in MCOs often show lower quality, making individual provider assessment difficult but essential for improving healthcare quality.

Area of Science:

  • Health Services Research
  • Healthcare Management
  • Quality Improvement

Background:

  • Managed care organizations (MCOs) in the USA primarily compete on cost and benefit coverage, neglecting quality differences.
  • Consumer demand for choice has led to overlapping provider networks across competing MCOs.
  • These overlapping networks often exhibit poorer performance on quality indicators compared to staff model MCOs.

Purpose of the Study:

  • To explore the challenges and potential strategies for measuring and improving healthcare quality within managed care settings.
  • To analyze the impact of provider network structures on quality of care.
  • To identify mechanisms for fostering competition based on quality among healthcare providers and MCOs.

Main Methods:

  • Analysis of the structural characteristics of managed care organization networks.

Related Experiment Videos

  • Evaluation of quality indicators in relation to different MCO network models (overlapping vs. staff model).
  • Discussion of potential collaborative approaches for provider performance measurement.

    • Main Results:

    • Overlapping provider networks in MCOs tend to underperform on quality metrics.
    • Measuring individual provider performance is challenging due to network fragmentation.
    • Collaboration among MCOs could facilitate provider-specific quality measurement.

    Conclusions:

    • True competition on quality is more likely to emerge from organized provider groups or integrated delivery systems than from MCOs alone.
    • MCOs can stimulate quality competition by collaborating on provider-specific measurements.
    • MCOs may directly implement quality-improvement programs for their members.