Employers Emphasize Quality of Care When Assessing Health Plans

Two big shifts occurred among employers between 2020 and 2022: more employers reported that their health plans shared safety and quality of care data and more employers did not find their health plans’ alternative payment models satisfying, according to a survey from The Leapfrog Group.

"We were a little surprised at how clearly the findings showed that employers care first and foremost about quality of care," Leah Binder, president and chief executive officer of The Leapfrog Group, said in the press release. "They want results. The report points to specific issues that appear to disappoint employers and what successful health plans do to earn their trust."

Most employers found that their payer partners enabled employees to access meaningful data (59 percent) and cared about employees’ quality of care (57 percent). Additionally, many respondents said that their health plans aimed to improve employees’ health (56 percent) and that they were dedicated to reducing low-value healthcare spending.

Employers were less likely to find that their health plans were using an alternative payment model (31 percent), offered satisfactory alternative payment models (29 percent), or that they shared quality and safety data (26 percent).

Although shared safety and quality of care data remained the least common health plan characteristic according to employers, the share of employers that reported these characteristics improved. In 2020, 13 percent of employers agreed that their health plan partners shared quality and safety data, but in 2022 that share rose to 26 percent.

"It is critical that health plans improve transparency of data," Binder said.

Meanwhile, the characteristic with the second-lowest prevalence—satisfaction with alternative payment models—took a dive since the previous survey.

In 2020, 30 percent of employers were unsatisfied with their alternative payment model options. By 2022, 41 percent reported that they were dissatisfied. Satisfaction also rose slightly, but its shift was nowhere close to the shift in disapproval.

Employers’ dissatisfaction was evident in the grading of their health plans as well. In 2020, employers gave health plans a GPA grade of 2.57 on average. In 2022, the average health plan GPA dropped to 2.29.

Among health plans that received strong GPA scores, employers were more likely to emphasize the health plan’s focus on quality of care (89 percent) and employee health improvement (84 percent). Expanding employee data access, reduced low-value care spending, and employee access to provider quality information were other appealing characteristics that employers highlighted.

The Leapfrog Group researchers concluded that health plans could focus on the quality of care improvement as a differentiator in their markets. Payers should also align with business groups, employers, and purchasers to better serve their employer partners.

“Overall, these surveys suggest employers remain disappointed in many aspects of health plan performance achieving their goals for high quality, cost-effectiveness, value, transparency, and service,” the survey concluded.

Employers—particularly self-funded employers—have a significant role in ensuring coverage as plan sponsors or fiduciaries. This role adds more weight to employers’ health plan selection and should drive payers to align with employer partners.

“This poses serious challenges as employers navigate the new Consolidated Appropriations Act passed in 2020, which enhances employers’ fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA),” the survey explained.

“Employers now bear more legal responsibility for assuring that benefits they provide are cost-effective and high quality, so the dissatisfaction in this report should be an urgent priority for health plans.”