Direct contracting health plan cuts costs, not quality

A health care plan devised by a coalition of Minnesota employers seems to cut costs without sacrificing quality, according to a study conducted by researchers at the Johns Hopkins Bloomberg School of Public Health. The study, which appears in the January/February 2002 issue of Health Affairs, is the first scientific evaluation of the direct contracting health plan and suggests the plan may be a successful health care delivery model for the future.

For the study, the researchers examined the Choice Plus plan formulated by the Buyers Health Care Action Group (BHCAG), a coalition of Saint Paul and Minneapolis businesses. Under the Choice Plus plan, the regions employers combined their buying power to purchase health care services directly from hospitals, physician groups, and other health care providers. Employees could then choose the providers they wished to use.

Direct purchasing attempts to give employees, rather than employers, the ability to choose their health care providers by cutting out the middle-man insurance companies, explains lead author Alan Lyles, ScD, MPH, associate professor at the University of Baltimore and adjunct associate professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. Our study shows that the Choice Plus plan offers employees options in the selection of their health care providers while containing costs and maintaining quality, adds Dr. Lyles.

Dr. Lyles and his colleagues examined computerized claims and enrollment records of 150,000 people receiving care through the BHCAG. The study analyzed the cost and usage of health care resources from 1996 to 1998 and compared a single provider health care plan used in 1996 to the first two years of the Choice Plus health plan. Only patients enrolled for six months or longer were included in the study. To assess the quality of care, the researchers tracked the progress of patients with diabetes, depression, or asthma as they achiev

Contact: Tim Parsons or Ming Tai
Johns Hopkins University Bloomberg School of Public Health

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