It is perhaps the most influential bloc of health-care purchasers in the nation, spending $52 billion annually on medical coverage for nearly one in 10 Americans.
Now, this 14-month-old consortium of Fortune 500 companies and other private and public organizations is pushing the envelope of reform with its own national agenda for reducing medical costs.
Known as the Leapfrog Group, the consortium includes the benefits managers of such household names as AT&T; Corp., IBM Corp., Boeing Co., Exxon Mobil Corp. and General Motors Corp.
But the group also includes state and city insurance and health-care authorities, the Board of Pensions of the Presbyterian Church and the Southern California Schools Voluntary Employees Benefits Assn. Together, they provide health coverage for 28 million retirees and employees and their dependents.
At a time when the nation’s managed-care system is unraveling and Washington has proffered few if any systemic solutions, private- and public-sector groups such as Leapfrog are moving ahead with what many say are viable industry reforms, but ones that are on the groups’ own terms and not without controversy.
Leapfrog has launched two Web-based efforts that, to a degree, measure hospital performance.
The group’s plan eventually is to have a system in which consumers can see detailed information about how well hospitals perform in terms of patient care and medical outcomes.
Many experts say this will help employers that subsidize workers’ benefits more effectively control costs, because patients presumably will pick better-run facilities and thus experience fewer medical complications.
Critics maintain that it was employers’ insistence on excessive cost controls that caused many of the problems with managed care. Now that costs can no longer be controlled, they say, employers are pushing the costs and responsibility for decisions onto employees.
Regardless, Washington-based Leapfrog is moving ahead. Last week, the group made public a Web site that gives consumers a review of performance ratings for nearly 300 participating hospitals in California, Atlanta, Tennessee, Michigan, Minnesota, the Seattle/Tacoma area and St. Louis. The hospitals were rated according to Leapfrog-devised standards.
About 48% of hospitals that were asked to participate in the Leapfrog survey did so. About half the hospitals are in California.
Leapfrog also has unveiled a private Web site available only to the workers of five large New York-area employers. It ranks top hospitals affiliated with the state’s largest insurer both by experience with common surgeries and by mortality rates.
Hospitals Questioned on Systems, Procedures
Leapfrog’s measures are basic at this stage. Among the questions it is asking hospitals is whether they are equipped with a computerized system for prescriptions and other physician orders that could prevent, among other things, dangerous medication errors due to illegible handwritten doctors’ notes.
One question asks whether the facilities’ intensive-care units are staffed only with people specifically trained for that work, which the group advocates.
Another question focuses on the number of procedures a hospital performs, following Leapfrog’s “practice makes perfect” belief that hospitals that perform more procedures are better at it.
“Our goal is to save lives and reduce preventable medical mistakes by giving consumers the information they need to make more-informed medical choices,” said Suzanne Delbanco, the group’s executive director.
“The Leapfrog Group has focused its initial effort on giving consumers information on three proven patient safety practices,” Delbanco said. “If implemented in the nation’s [urban] hospitals, they could save nearly 60,000 lives ... each year.”
Consumer and physician advocates worried about the double-digit rise in premiums and the erosion of benefits warn that any reforms being pushed by powerful health-care purchasers will be motivated primarily by keeping costs low, not improving care.
Though generally supportive, UCLA professor William Pierskalla said the quality-of-care standards “don’t get at the real issues, such as medical complications rates and readmissions” because the hospital staff failed to do a procedure right the first time.
The authors of a federal government study in 2001 warned that the three basic standards pushed by Leapfrog “lack sufficient clinical underpinnings” and require more study before their effectiveness as a quality-care measure can be proven.
The report’s authors also said further study was needed before it could be said with assurance that computerized systems for doctors would make a real difference at all hospitals.
It will cost money to install new equipment and to train staffers on their use. And staffing intensive-care units with the best people also will cost more, given the shortage of workers in that profession and its high burnout rate. Those costs, some suggest, eventually will be passed on to consumers.
Not necessarily true, said Dr. Arnie Milstein, medical director of the Pacific Business Group on Health, a consortium of West Coast health-care purchasers that was one of the founders of Leapfrog.
“The current evidence suggest the contrary,” Milstein said. “Studies of better staffing of ICUs suggest that the costs of stay and lengths of stay are reduced with more proactive managing of the patients.”
Milstein added that the use of computerized systems “reduces duplication of medical tests and reduces costs associated with using the wrong drugs, harmful drug interactions or the wrong doses because factors such as a patient’s kidney function should have been taken into consideration.”
For the most part, health-care analysts, academicians, physicians and other experts generally perceive the efforts by groups such as Leapfrog as positive at a time when the system is badly frayed.
“Any solid information that gives consumers information and can drive down premiums is great” and should be supported, said California Insurance Commissioner Harry Low.
“The health-services industry has been very slow to adopt quality- and safety-improving changes. There have been numerous studies documenting the inordinate number of people killed in hospitals because of mistakes,” said Alain Enthoven, a professor at Stanford University’s graduate school of business and a specialist in health economics and health policy.
“These changes are long overdue. It’s a good thing Leapfrog is doing this. There has to be a system of rewards for achieving those standards and punishments for not achieving,” Enthoven said.
Dr. Jack Lewin, head of the California Medical Assn., agreed, saying, “The Leapfrog process is in general a positive direction. It will reduce patient- and health-care errors, particularly involving medication, and should improve the quality of care.”
Consortium Born From Casual Discussions
But who are the people carrying a cudgel that hasn’t been picked up by the health-care industry or by the government?
The Leapfrog idea, said Bruce Taylor, director of benefits planning for Verizon Communications Inc., began as a “a bunch of us meeting in airport clubs [in 1998 and 1999], talking about how to control costs and prevent mistakes. We thought it could be a great service for employers, shareholders and for the public at large.”
Taylor said the original members decided that the standards had to be scientifically based, but that “they also had to be something that our mothers would understand.”
The group’s influence can be seen in a variety of ways. For example, medical companies such as Baltimore-based VISICU, which provides remote-care services for intensive-care units, and Beaverton, Ore.-based Planar Systems, which makes medical workstations, are touting their products to hospitals as essential for helping them meet Leapfrog’s standards.
There are caveats. Experts and Leapfrog agree that the volume of surgical work is not the best indicator of performance, and that more definitive measures will have to come in the future.
“Using the volume of procedures a hospital performs as a surrogate for defining quality of care will prove to be the most controversial,” CMA’s Lewin said.
“There is a body of competing information that suggests that low-volume-care hospitals are providing in many instances the same outcomes as high volume,” he said. “We will need to look at this as an evolving standard.”
Lewin added that Leapfrog’s zeal may evaporate if the costs of these initiatives--and therefore the costs to business and employees--are higher than expected.
But some companies clearly are counting on the group’s influence, such as Southern California Edison, which came close to insolvency last year. Edison International’s SCE is a member of the Pacific Business Group on Health, which is a partner with Leapfrog.
“As a purchaser, we want to know what we are buying,” said Barbara Decker, Edison’s benefits manager.
“We care first of all about the cost aspect and spending wisely,” Decker said. “We want our employees to get the most appropriate care so that they can return to work and be productive.”
Others hope the standards and later improvements will catch on enough to force nonparticipating hospitals to believe they have to join or face questions from consumers about why they haven’t.
“There will be increasing pressure on hospitals to participate in these kinds of public disclosures,” said Dr. Michael Langberg, chief medical officer at Cedar-Sinai Medical Center, which participated in the survey, “whether they want to or not.”
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Procedures, by the Numbers
Leapfrog Group has devised a set of standards for grading hospitals and other medical facilities based on the number of surgical procedures performed.
The group, a consortium of Fortune 500 companies and other major purchasers of health insurance, believes that by providing such data, the rate of medical errors will decrease because consumers will choose hospitals that perform successful surgeries, thus reducing costs as well.
Here are the surgical procedures Leapfrog reviews and the minimum number of procedures hospitals should do annually to receive a top rating.
Procedure and minimum
* Coronary artery bypass: 500
* Coronary angioplasty: 400
* Abdominal aortic aneurysm: 30
* Carotid endarterectomy (for stroke prevention): 100
Esophageal cancer surgery: 7
Source: Pacific Business Group’s HealthScope Web site at www.healthscope.org