The Market Level Effects of Health Plan Quality Measurement and Reporting

Although significant resources have been devoted to the development of reports comparing health plan quality, little evidence documents any impact of these efforts on quality of care. In this paper, we examine whether the prevalence of the collection of health plan quality data in an area affects the utilization of measured services. We combine data identifying HMOs participating in HEDIS performance measurement with survey data from the Behavioral Risk Factor Surveillance System (BRFSS) from 1996-1999 on utilization rates for four performance indicators and two control indicators. Using linear probability models, we examine the relationship between the share of HMO enrollees in an MSA enrolled in a plan participating in HEDIS and the probability that an individual with employer-sponsored health insurance received the measured service. We find that areas with higher prevalence of health plans collecting quality information had higher rates of utilization for two of the performance indicators studied, cervical cancer screening and eye exams for diabetics. On the other hand, no association existed between the prevalence of quality data collection for the other two performance indicators, mammography and annual physical exam. In contrast to reports suggesting that patients often make little use of quality reports in selecting providers, our results suggest that health plan quality measurement and reporting may contribute to improving quality of care. However, utilization rates of some services may be more sensitive to performance measurement than others.