Overview

Against a backdrop of dwindling tax revenues and rising health-related costs, states are struggling to make ends meet. Some are trying to squeeze out new funds to cover a portion of the uninsured, while others are trying to hold the line or minimize cutbacks in Medicaid coverage. A less prevalent, but potentially promising strategy for states involves trying to improve the quality of care. Rhode Island is a leader in incorporating quality improvement into its public insurance programs. By making quality improvement a central feature of RIte Care—the state's managed care program for Medicaid, the State Children's Health Insurance Program (CHIP), and certain uninsured populations—Rhode Island officials are seeking to achieve better health for residents as well as lower health costs in the long run. Initial results have been promising. Over six years of implementing performance goals, Rhode Island has found steady, significant improvements in administration and access measures among its RIte Care health plans. The three health plans that cover RIte Care members receive additional payments, above the negotiated capitation rates, if they meet specified targets. The program now covers six areas:

• member services;
• medical home/preventive care;
• women's health;
• chronic care;
• behavioral health; and
• cost management.

A total of $1.25 per member per month, or a little less than 1% of the capitation rate, is potentially available to each of the health plans if they meet performance goals. An additional reward is given to the health plan with the highest score in member services, which includes timely provision of identification cards, distribution of handbooks, welcome calls to new members, and grievance procedures. Though this supplemental reward is modest, it is a way to emphasize the need for improvement in a particular area.

The targets are based on the Health Plan Employer Data and Information Set (HEDIS), Consumer Assessment of Health Plans Study (CAHPS), and other measures.[1] In 2004, the three plans were awarded from 82% to 85% (a total of about $1.4 million) of their potential maximum reward amounts. Though a direct causal relationship is hard to document, administrator Murray Brown believes that the financial incentives "have been an important factor in quality improvements over recent years." For example, there have been continuous improvements in the proportion of children, adults, and pregnant women receiving timely preventive and primary care.[2] The performance incentives "have a high profile among the health plans; the program is a way of emphasizing important quality issues," Brown says.

References
[1] HEDIS is a set of standardized performance measures intended to help purchasers and patients compare health plans in terms of quality. CAHPS is a survey that attempts to assess enrollees' satisfaction with their health care services.

[2] The program measures the portion of children and adults receiving their first primary care visit within 90 days of entering a RIte Care managed care plan.

For More Information: See RIte Care Research and Evaluation Web site Building Quality into RIte Care: How Rhode Island Is Improving Health Care for Its Low-Income Populations, Sharon Silow-Carroll, The Commonwealth Fund, January 2003 Sharon Silow-Carroll, The Commonwealth Fund, January 2003Sharon Silow-Carroll, The Commonwealth Fund, January 2003 Contact: Murray E. Brown, Rhode Island Department of Human Services, 401-462-1585, murrayb@dhs.ri.gov.