Measuring and Improving the Performance of Health Service Networks

Abstract

Health maintenance organizations (HMOs) have intensified their efforts to establish network-like structures with service partners who are responsible for different functions along the health value chain. To calculate the potential value and cost benefits of service production within health care networks and to improve performance in such networks, the authors propose a two-step benchmarking approach. While the first step is concerned with measuring and comparing service provider performance, the second step relates to a contact program that disseminates the lessons learned during the benchmarking process. Across two empirical studies with general practitioners and specialty physicians, the authors identify in a first step tremendous overspendings and provide suggestions on cost reductions that could be achieved without threatening output levels. With regard to the second step, the authors find that detailing efforts based on the results of performance measurement helped physicians to improve their performance. Through detailing, the hub was able to inform network partners about the benchmarking results and to reveal performance gaps in their current resource utilization patterns. In addition, the authors show that managers of HMOs should seek out physicians with smaller practices and high-referral (i.e., risk-averse) physicians as targets for detailing, who are especially responsive to these initiatives.