When health plans share physicians, they may have less incentive to improve care quality

Research Activities, March 2011, No. 367

Measuring a health plan's performance is one way to promote competition in the marketplace and give consumers the information they need to select a plan. Such measurements, however, may not adequately reflect the quality of care received by patients. This is particularly true when hospitals and physicians contract with multiple health plans, creating a degree of overlap that makes performance comparisons difficult. Recently, researchers looked at the relationship between this degree of overlap in physician networks and health plan performance. When there is a high degree of provider network overlap, plan performance measures tend to reflect a lower level of quality.

Four databases were selected to gather data for the study. One database included information on physicians and their health plan affiliations for 214 health maintenance organizations. The other three databases included information on health plan characteristics, their performance measures, and outcomes. The researchers constructed two measures of network overlap to determine the effect of a plan's overlap with other plans on quality performance.

The analysis found that plan performance converges as physician network overlap broadens. As a result, the performance for a single, individual plan declined as its network physicians started to contract with other health plans. This was particularly true when it came to specific clinical performance measures. For example, these measures declined by 11 to 13 percentage points as physicians moved away from contracting exclusively with one plan to contracting with up to 10 plans. According to the researchers, when plans share physicians, they face a reduced incentive to improve care quality.

The researchers recommend that end-users interpret health plan measures with caution and call for measures of care quality that focus on the health care provider level. The study was supported in part by the Agency for Healthcare Research and Quality (HS10771).

See "The relationship between health plan performance measures and physician network overlap: Implications for measuring plan quality," by Daniel D. Maeng, Ph.D., Dennis P. Scanlon, Ph.D., Michael E. Chernew, Ph.D., and others in the August 2010 HSR: Health Services Research 45(4), pp. 1005-1023.

Current as of March 2011
Internet Citation: When health plans share physicians, they may have less incentive to improve care quality: Research Activities, March 2011, No. 367. March 2011. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/newsletters/research-activities/mar11/0311RA7.html