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November 27, 2006
Gov't Asks Employers to Commit to 4 Goals on Health Care

The head of the U.S. Department of Health and Human Services (HHS) is calling on employers to commit to four goals for providing more information on healthcare quality and costs of services.

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HHS Secretary Mike Leavitt says fundamental information about healthcare quality and costs of services is largely unavailable today to consumers, to payers, and to providers alike. Without this information, it is difficult to make informed choices and seek out the best quality at the most affordable price, which contributes to higher healthcare costs overall, he says.

"If we are going to get a handle on health care costs--and we must--we first need to know what our costs are and what we are getting for our money," Leavitt says. "Our nation's private employers are the major source of health insurance for Americans, and they can help us provide the information consumers need to achieve better value for their health care dollars."

In August, President Bush signed an executive order committing federal healthcare programs to four cornerstone goals. Leavitt is now encouraging private employers to commit to the four goals and to ask health insurance plans, third party administrators, providers, and others with which they contract to take consistent actions to achieve the goals as well.

Leavitt emphasized that the initiative is voluntary. Employers that agree to the four goals will be encouraged to sign a support statement as part of a package of materials that is being made available to employers and other healthcare stakeholders. The four cornerstones are:

  1. Encourage Adoption Health Information Technology Standards by supporting interoperable health information systems and products in order to enable the availability and secure exchange of healthcare information.
  2. Increase Transparency in Quality by implementing, or asking those with which supporters contract to implement, programs to measure the quality of services provided by doctors, hospitals, and other healthcare providers and making this information available to health-plan enrollees.
  3. Increase Transparency in Pricing by implementing, or asking those with which supporters contract to implement, programs to make available to health-plan enrollees the overall cost or price of their care.
  4. Promote Quality and Efficiency of Care by offering incentives that encourage and facilitate high-quality and cost-effective health care.

Leavitt says his goal is to have, by spring of next year, more than 60 percent of the marketplace include these cornerstones as a significant part of their purchasing criteria.

Standards to measure quality and cost are to be developed through consensus processes involving stakeholders from throughout the healthcare sector. In particular, standards for measuring quality of care must be led by the medical community, Leavitt says.

An employer committing to the four "cornerstone" goals would collect quality and price information through its health plan or benefit administrator, using the consensus standards, Leavitt says.

Employers committing to the goals would also be encouraged to share quality and price information with regional collaboratives, where information from many sources could be aggregated, thus producing the most broad-based and reliable information possible. The employer or its health plan would share quality information with enrollees in the plan, and would provide information on costs, including the specific costs the enrollee would expect to pay under the plan.

"This approach is about providing better information for everyone, up and down the health care system," says Leavitt. "Consumers and payers need this information, but physicians and hospitals need it just as much. That's where quality and value improvement will really take place."

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