How Will You Pay for a Health Care Quality Report?

A consumer reporting project is not cheap, although there are ways to reduce costs and spread them across multiple parties (including other sponsors and participating health plans or providers). Data collection costs can range from as little as a few thousand dollars for a brief, simple report based on easily available information to several hundred thousand dollars for a comprehensive report that requires a large number of observations and labor-intensive data collection and analysis. Report sponsors also have to factor in the costs of producing the report (e.g., writing, designing, and programming), promoting its use, and evaluating its impact. These costs vary widely depending on the scope of the report and the goals of the sponsor.

To finance such projects, many sponsors rely on sources beyond their own budgets. Possible sources include:

• Local health plans and providers.
• Other potential partners in your reporting effort, such as major purchasers or consumer groups.
• Government agencies.
• Foundations.

Keep in mind that when you accept money to support your reporting effort, you may be giving up some independence.

Sharing Costs With Health Plans and Providers

The most common strategy is to ask the health plans or providers to pay for parts of the project, given that they stand to benefit from seeing comparisons of their own performance to that of their competitors. The hospitals participating in the Centers for Medicare & Medicaid Services’ HospitalCompare Web site, for example, pay to collect the data they submit for reporting.

However, competitive forces and multiple demands in the health care industry are making some health plans and providers less willing to absorb the costs involved in providing detailed data. In a few cases, they are refusing to participate or at least limiting their involvement. Read about strategies for addressing this response in How Will You Gain the Trust of Providers or Plans?.

Sharing Costs With Other Partners

Perhaps the most effective way to limit your financial exposure is to undertake the project with one or more partners. By tackling the project together, partnering sponsors can reduce their costs significantly. For example, they can conduct one survey of consumers rather than two (or more), or they can produce just one performance report that meets the needs of all their audiences.

Local efforts are increasingly using multistakeholder partnerships to pursue quality-related projects, including the development of quality report cards. Examples include the AHRQ-sponsored Chartered Value Exchanges and the Robert Wood Johnson Foundation’s Aligning Forces for Quality grantees.

One prominent example of this kind of cost sharing occurs in California, where medical groups, health plans, and public and private purchasers work together to generate and publish comparative quality information for both health plans and medical groups. Through this arrangement, health plans bear the cost of collecting data on their quality; the plans also share with medical groups the cost of collecting data on medical groups. The California Office of the Patient Advocate pays for the scoring and publishing of the data that are publicly reported by the State, with the Pacific Business Group on Health developing the scoring methods and data displays.

What To Include in the Budget

While you are seeking potential sources of funding, you should also be setting a budget for the project that is based on a good understanding of the work involved and realistic projections of costs. Major functions that need to be covered in a budget typically include:

• Project management/administration.
• Data collection.
• Data analysis.
• Auditing of results to ensure the calculations are correct and bolster credibility.
• Writing/editing of the report.
• Graphic design.
• Developmental testing with consumers.
• Revisions post testing.
• Independent review. (Some sponsors arrange for an independent expert from outside their market to review the project at various points in the process to assess the reasonableness of measures used, data displays, and narrative.)
• Printing and/or Web site production and maintenance.
• Marketing of the report.
• Mailing or other distribution costs.
• Evaluation.