Less than 1% of premiums go toward quality improvement


Insurers spent less than 1 percent of premiums, amounting to only $29 per member, to improve healthcare quality in 2011 under the reform law's medical-loss ratio provision, according to a new study.

Based on MLRs, consumer rebates and quality improvement expenses, the Commonwealth Fund study determined insurers spent a total of $2.3 billion to directly improve quality. Of that amount, 17 percent went to health information technology, 51 percent to improving health outcomes, 13 percent to wellness, 10 percent to patient safety and 9 percent to preventing hospital readmissions.

But Commonwealth Fund Vice President Sara Collins explained the report's intention isn't to shame insurers, but inform them of industry trends. "The hope is that insurers will take the information and use it to determine if they are making an appropriate investment in improving quality and, ultimately, their members' health and well-being," she said today in a statement.

The report also found wide variation among insurers, with some companies spending more than $40 per member and other allocating less than $12 per member. And nonprofit insurers tended to spend more, devoting $35 per member, compared to for-profit insurers' $19 spent on quality, the report showed.

America's Health Insurance Plans disagreed with the findings, calling the MLR an "arbitrary cap on what health plans can spend on a variety of programs and services that improve the quality and safety of patient care, help patients navigate a complicated delivery system, and help control soaring medical costs," according to an AHIP Coverage blog post.

In addition, AHIP said the report ignored many different types of programs and services insurers have implemented to improve quality care, including fraud prevention, accountable care organization partnerships, and online and mobile access programs.

To learn more:
- here's the Commonwealth Fund study and statement
- check out the AHIP Coverage blog post

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