State to issue PPO report card;

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Insurance Department survey will be similar to a study of HMOs.

Sacramento Bee (California)

The state Department of Insurance plans to issue an annual health insurance report card rating preferred provider organizations or PPOs, similar to what’s already being compiled for HMOs.

Insurance Commissioner Steve Poizner on Monday said the state’s six biggest PPOs — Aetna, Blue Shield, Cigna, Health Net, WellPoint and United — have agreed to voluntarily provide data on quality of care and patient satisfaction starting in 2008.

“This is a new program to improve the quality of health care in California,” Poizner said. “Consumers should have this information before they sign up for an insurance plan.”

PPOs cover about 34 percent of Californians insured by their employers, according to the California HealthCare Foundation.

About 1.5 million Californians are covered by the six PPO insurers who have enlisted in the project, according to the Department of Insurance.

In a PPO, members can choose any doctor or visit any hospital within a selected network. In a health maintenance organization, the members choose one primary care physician, who then directs them to specialists.

The report card data will be compiled and analyzed by a third party, such as a PPO accreditation organization, and then turned over to the state.

The Department of Insurance will issue an annual report card beginning in 2009, awarding one to four stars in four areas: preventive care, effectiveness of treatment, dealing with chronic illnesses such as diabetes and hypertension,and customer satisfaction.

Consumer advocates were skeptical of the program.

“These report cards have been a joke in the past,” said Jerry Flanagan, a spokesman for the Foundation for Taxpayer and Consumer Rights in Santa Monica. “We think the HMO report card reads like a dining guide,” by awarding stars rather than pointing out deficiencies.

Poizner, however, insisted that the report card not only would aid consumers in their buying choices, but it also would help increase the quality of care overall because the PPOs will compete for the best rankings.

“When you measure and then publish results, health care quality will improve,” Poizner said. “You can contain the escalating cost of health insurance if you improve the quality of care.”

The program was developed in cooperation with the six major PPOs over the past two months. Poizner said he has the authority to require such reporting for a report card but said the PPOs volunteered to provide the required data rather than endure a lengthy regulatory process.

“It wasn’t a difficult call,” said Lance Lange, senior medical director for Health Net of California. “You can’t improve without measuring.”

The program is modeled after one started six years ago to rank the effectiveness of HMOs. While the Department of Insurance will issue the PPO rankings, the HMO report card is prepared by the California Office of the Patient Advocate, a division of the Department of Managed Health Care.

The HMO report card provides a flawed model, Flanagan said. “If it’s a real report card, you should get bad grades when there are problems,” he said.

The Foundation for Taxpayer and Consumer Rights also has criticized the HMO report for not listing the number and types of complaints against insurers and information from arbitration awards that went against insurers.

Flanagan also questioned why PPO executives were so heavily involved in the report card process. “I get real nervous when the commissioner announces a new report card with the students standing right next to him.”

Department of Insurance spokeswoman Jennifer Kerns did not respond directly to the criticism. But in an e-mail, she said that in coming months, the department “will be working with experts to determine the best format and grading system for the PPOs.”

Others, however, backed the report card system as helpful despite its initial limitations.

“In the PPO context, you should be able to get information about your individual doctors,” said Lucia Savage, general counsel for the Pacific Business Group on Health, an organization that collects data for business and government health insurance purchasers, including information used in the HMO report card.

“It’s a great first step, but we need to do more.”


What it is: The California Department of Insurance plans to release an annual report card grading PPOs, similar to what’s already done for HMOs.

Who is involved: The state’s six biggest PPOs – Aetna, Blue Shield, Cigna, Health Net, WellPoint and United.

When it starts: The PPOs have agreed to start reporting information in 2008. The first state report will be issued in 2009.
The Bee’s Clint Swett can be reached at (916) 321-1976 or [email protected]

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