At a late June meeting quietly convened at a mountain house in
the Grand Tetons of Wyoming, representatives of some of the
largest employers and purchasers of health insurance agreed to
pursue a fundamental shift in emphasis in the nation's managed
health care systems: They want the primary focus to be placed on
measuring the quality of care now that costs have begun to be
The broad-based agreement was reached at Jackson Hole by 30
officials of federal, state and local public employees
organizations, consumer groups and officials of such major
employers as American Express, Minnesota Mining and Manufacturing
Co., Ameritech Corp. and Pepsico, which together represent an
estimated 80 million consumers of health insurance.
"Monitoring quality will be the next battlefield," said Tom
Elkin, assistant executive director of the California Public
Employees Retirement System, which represents more than 800,000
employees of state and local government and their families.
He predicted that only health plans that demonstrated high
quality would still be in existence by the year 2000.
Two elements of the consensus that emerged were regarded as
significant by leaders in health care. One was that purchasers of
health care for such a large number of consumers, with great
potential power in the marketplace, were united in their desire
for greater attention to quality.
The second was a decision to put into motion a plan to gather
data, in a more uniform and comprehensive way than ever before,
on the medical outcomes for various methods of treating patients
for major illnesses.
In the first phase of the nation's transformation to managed
care, which has accelerated in the last two years, the chief
impetus has come from employers' desires to contain their costs.
Last year those costs dropped by 1 percent after 10 years of
climbing as much as 18 percent annually. Economists attributed
the drop in part to the rapid spread of managed care, especially
health maintenance organizations that save money by closely
controlling treatment decisions as well as by paying doctors and
The HMOs have insisted all along that they have not neglected
quality in their attempts to control costs. But they face
skepticism from some patients, doctors and legislators who
contend that these organizations sometimes create incentives to
spend less on medical care, perhaps shortchanging patients.
The critics say some of the organizations, which usually
contract to provide all necessary care for a preset fee, are too
reluctant to send patients to high-cost specialists, for example,
and too quick to send patients home from hospitals.
Now, many leading HMOs as well as their critics are searching
for objective ways to measure the quality of health care, a
notoriously difficult task.
Research and accreditation groups have been working for some
time to measure the effects of treatment decisions and establish
guidelines for care. But there have been few widespread and
detailed attempts to determine the results of different
The Jackson Hole conferees agreed that over the long term such
follow-up studies would be a major factor for both improving
health and controlling costs.
The conference was held as part of a general re-evaluation
currently under way in what many in the industry call Phase 2 of
the health care revolution.
In part in response to the criticisms, managed care
organizations, employers, consumers, doctors and hospital groups
are trying to refine and revise their participation in the new
systems, for example, rethinking methods of paying hospitals and
Dr. Paul Ellwood, a pioneer in the development of HMOs and the
head of the Jackson Hole group, which convened the meeting,
called the agreement a milestone in the development of managed