The Next Frontier: Insurance Marketplaces That Promote Quality Improvement
In 2014, most state-run health insurance marketplaces focused on the technical challenges of enrolling millions of people in new coverage. While this will continue to be a challenge this year, ongoing operational improvements will allow marketplaces to better focus on encouraging the delivery of better, more cost-effective care.
In a recent Commonwealth Fund issue brief, we assessed efforts among the state-based health insurance marketplaces to implement the Affordable Care Act’s (ACA’s) quality improvement initiatives. Although federal officials allowed the marketplaces to delay implementing key quality provisions of the law, we found that 13 of the 17 states* operating their own marketplace moved forward with at least one of the quality-related provisions of the ACA, such as collecting quality data or making quality information public. However, we also learned that using health insurance marketplaces as a vehicle for achieving better, more affordable care is easier said than done.
To be successful, marketplaces need to set common standards and expectations across health plans, and overcome other barriers such as the lack of effective IT systems, the complexity of selecting effective quality measures and evidence-based delivery system reforms, the need for sufficient enrollment to make quality measurement statistically meaningful, and other complexities. In the first year of implementation, these challenges were compounded by the marketplaces’ technological and other operational difficulties. As the federally facilitated and state-based marketplaces look to more widespread implementation of the ACA’s quality improvement goals, they would do well to keep the following in mind:
Consumers need more support to make quality-driven plan choices
Health insurance marketplaces were created, at least in part, to allow consumers to compare plans side by side. And the ACA envisions that consumers will make comparisons based not just on premium costs and benefits but also on relative plan quality, such as how well plans manage care for people with chronic conditions. To date, this vision has not yet been realized. Consumers shopping on both the state-based and federally facilitated marketplaces in 2013 and 2014 lacked the tools they needed to make plan choices based on quality data. Over time, however, states can help consumers better understand quality data by providing web-based decision-support software and clear explanations of how to interpret performance data, and also by training call center staff, navigators, assisters, and brokers to answer consumers’ questions about plan quality. States can be guided by research on how consumers use information when shopping for health insurance to structure their resources.
Greater standardization across the marketplaces and other purchasers can improve efficiency and drive greater adoption
A health insurance marketplace is just one of many purchasers and payers operating in an environment crowded with diverse quality measure sets and initiatives. Although many states shared quality information with consumers in 2014, they did not do so in a standard way. While diversity allows for innovation, the lack of standardization can burden providers and insurers and make comparisons more challenging. Final regulations require states to display a federally developed quality rating system in 2016, while also allowing them to display their own quality metrics.
State health insurance marketplaces will need to weigh the value of adding state-specific metrics to the federally required quality rating system, particularly if they have limited resources or other operational challenges. They also should consider the feasibility of aligning goals and metrics with other state purchasers, such as the state employee benefits program or large private purchasing coalitions.
We’re a long way from plan competition based on quality performance
Only a few states have moved beyond quality reporting to set requirements for insurers’ quality improvement efforts. It’s possible some insurers may want to improve their performance simply because quality data are made public. But until consumers are actively comparing and choosing plans based on quality (or the marketplace is allowing only the highest-quality plans for sale), quality reporting alone is unlikely to have much of an effect. Currently most marketplaces lack the infrastructure needed to conduct quality improvement activities. In addition to inadequate IT systems, they also lack the capacity to analyze plans’ quality improvement efforts and their effects on patient outcomes and costs. Ultimately, if marketplaces are going to be a player at the quality improvement table, they will need to build the necessary IT and staff capacity.
The marketplaces can be a mechanism for promoting quality improvement and delivery system reform, and a few of the state-based marketplaces, such as in California and Massachusetts, are working toward that vision. But we still have a long way to go.
* Our count of 17 state-based marketplaces includes the District of Columbia.