Managed Care and Performance Measurement: Implications for Insurance Markets

Performance measurement systems and report cards, which attempt to measure and report the quality of care provided by managed health-care organizations, have become mainstream in health insurance markets as managed care penetration continues to increase. However, little is known about the impact formal plan evaluations have on the contracting and enrollment decisions made by health insurance purchasers and consumers. Information regarding the link between performance evaluations and enrollment is crucial for those charged with projecting future enrollments in and risk profiles of managed care organizations. This paper describes the performance measurement systems currently being used to evaluate managed care plans and reviews the empirical literature for evidence regarding the impact of measures on plan enrollments.