Research Projects
Research Projects in Health
Linking Quality and Cost: An Analysis of the Hospital Quality Information Initiatives
Measures (MPRO)
The Health Section Research Team is pleased to make available this research report which
explores the return on investment for health providers that implement certain quality programs. The study was
conducted by MPRO, Michigan’s Quality Improvement Organization, which collected data from a number of health
providers based in Michigan.
The Project Oversight Group, which oversees completion of the quality-related research
projects includes:
Curtis Lee Robbins, Chair
Jane Jensen
Karl Madrecki
Guy Marszalek
John Stark
Steve Siegel, SOA Staff Actuary
- Linking Quality and Cost: An Analysis of the
Hospital Quality Information Initiatives Measures
- Linking Quality and Costs Template
- If you have any questions regarding this report, please contact Steve Siegel, SOA Research Actuary.
- Actuarial Perspective on Quality Research
- To provide some perspective on value of this report and the role of health actuaries in
research on quality issues, John Stark, a Project Oversight Group Member, has the written the following
overview:
- Quality in medical care has become one of the hottest topics for health insurers,
providers, and the general public. Measuring quality initiatives is a daunting task at best since so many
variables are involved and the sample sizes can be small. Also, it is virtually impossible to show causality
so the best outcome is to show correlation. Finally, some of the standard actuarial techniques may not apply
since they are based on broad averages that span a variety of conditions while quality initiatives focus on a
limited number of diseases.
- Health actuaries need to be involved in not only estimating the cost savings of these
initiatives but also in their design and in setting up procedures to monitor the results. This will ensure
that the effects of the initiatives are consistent in pricing, reserving, and forecasting. In addition, with
health care costs increasing at an alarming rate, it is imperative that health insurers show the value of these
initiatives to the publics that they serve. In the same vein, if an initiative is not working or has outlived
its usefulness, it should be dropped or replaced.
- Today’s health actuary probably feels that his or her job is in a state of flux. On
the one hand, actuaries are being asked to perform the traditional tasks of pricing and reserving more
accurately and at finer levels. On the other, health actuaries are getting involved in more non-traditional
areas such as medical management. This type of work requires new tools and more emphasis on the clinical
aspect of health insurance.
- To help develop some new tools that touch on quality initiatives that are important to
health actuaries, the SOA contracted with MPRO to perform the following study to expose health actuaries to an
important and growing area of practice. Another oucome of the project is to expose actuaries to applications
in other areas that can be used by themselves or to augment studies using standard actuarial techniques.