Not-for-profit insurers are dominating the MA star ratings because they are able to focus more directly on their communities rather than on their shareholders, says the CEO of one highly rated NFP.
The years-long trend continues: Non-profit plans outperformed for-profits in the 2016 star ratings for Medicare Advantage plans with prescription drug benefits (MA-PD). The reason may be related to their different missions, but the differences between the two groups may not be as dramatic as the numbers imply.
The star ratings are derived from quality and performance measures that take into consideration outcomes, intermediate outcomes, patient experience, access, and process.
The numbers do suggest quite a lopsided win for NFPs, with approximately 70% of them receiving four or more stars compared to only 39% of the for-profit MA-PDs. Medicare reports that when weighted for enrollment, more than 70% of MA-PD enrollees are in contracts with four or more stars.
Chris Wing |
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For-profit MA-PDs have reason to take the ratings seriously because a high score is more than something to crow about. Plans earning four or more stars earn financial incentives for their performance.
NFPs are dominating the MA Star Ratings because they are able to focus more directly on their communities rather than shareholders, says Chris Wing, CEO of SCAN Health Plan, the nation's fourth largest NFP MA plan, serving 12 California counties. For 2016, SCAN earned a 4.5 star rating in all the markets it serves.
"What makes nonprofits unique is our ability to focus on our mission. As a community benefit company our fiduciary responsibility is not to shareholders, it's to our community and our members," Wing explains. "Being a nonprofit means we can take a longer view in developing and nurturing quality-focused programs and processes that may not have immediate financial benefits but which we know in the long-run are the right things to do for our members and for enhancing quality."
Wing notes that in California there are many nonprofit and for-profit plans with at least a 4-star rating. The real difference, he says, can be found in the 4.5 or higher space, where nonprofits are dominating, both in California and nationally.
The implementation of the ratings system, and the bonuses that come with high scores, represented a sea change in the dialogue between providers and health plans, Wing says.
"It ushered in a new culture of collaboration, particularly for nonprofits because we are able to share best practices without being concerned about proprietary information. And the collaboration is not just about the bonus, it's mission-driven," he says. "It's not just between plan and providers but between provider groups as well."
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As an example, Wing points to SCAN's collaboration with the UCLA Multicampus Program in Geriatric Medicine and Gerontology to encourage the sharing of best practices among 11 of the largest medical groups in California. The aim is to enhance quality of care and member satisfaction in many areas important to seniors, including chronic disease management and end-of-life care, he says.
Robert Brett |
Wing calls the MA star ratings "a marvelous tool and a relatively accurate reflection of SCAN's commitment to quality from both a clinical and a customer service standpoint."
The NFP's community focus has a direct effect on the measures that are most critical to a good star rating, agrees Robert Brett, vice president of Medicare for CareSource, a nonprofit managed health care plan headquartered in Dayton, Ohio. It is the largest Medicaid plan in Ohio and second largest in the United States. While a high star rating is achieved and maintained with high performance across a broad spectrum of measures, he notes, non-profits typically outperform for-profit plans on clinical outcomes, dimensions of care and service (HEDIS) and surveys (CAHPS) where consumers evaluate their experiences and satisfaction with healthcare.
"Non-profits can stay true to their mission and focus on quality, clinical outcomes and the overall member experience, which are all key tenets of the star rating," he says. "For-profit organizations can experience different financial and operational distractions, such as shareholder pressures and industry mergers that impact quality and clinical outcomes."
No Bias Seen
Brett sees no reason to think that the scoring disparity means the star ratings are weighted toward NFPs, either intentionally or unintentionally.
"The star ratings are designed to drive a focus on quality and the member experience, regardless of non-profit status," Brett says. "Both non-profits or for-profits can achieve high star ratings, particularly if they leverage integrated delivery systems, a structure shown to drive stars performance."
Regardless of why NFPs and for-profits score differently, the gap in scores between those two groups may not be a true indicator of any difference in quality, says David Friend, MD, MBA, chief transformation officer and managing director of BDO's Center for Healthcare Excellence & Innovation. First, there are few pure not-for-profits left because most of them have some for-profit component, he notes.
"The largest Catholic healthcare entity in the United States is a not-for-profit, but they have about 20 for-profit entities," he says. "Most of these entities are paying taxes in one way or another, and I don't think there's a difference in your care based on their tax paying status. When I hear 'not-for-profit' I want to know more about how that's defined from one organization to another."
Nevertheless, Friend emphasizes that the MA star ratings are important and will only become more important in future years.
"It behooves anyone to improve your star rating because clearly if you don't do well you're not going to be paid as well. As you start forming bundles and closed networks, the higher rated plans are going to get more business, as they should," Friend says. "I don't think your tax status has any bearing on the quality of care you provide, and those gaps in the ratings may be more a statistical anomaly than anything else."