The health care enterprise can be viewed as a complex but decentralized system in which multiple providers, consumers, and purchasers are connected by services, information systems, and financial transactions. Much of the data that emerges from the enterprise is related to documentation of specific health conditions, services, and financial reimbursements. Chart review and administrative data are coded as part of individual transactions, and their use is constrained by issues of privacy and confidentiality; information about the overall performance of the health care enterprise is difficult to obtain or develop. In theory, a marketplace achieves desired performance levels by appealing to consumer choice and fostering competition among providers. In both areas, the U.S. health care marketplace faces fundamental challenges.

Health care consumers make several types of decisions: the selection of a health plan, the selection of providers (e.g., primary care providers, specialists, and hospitals), choices among different treatment programs, and the pursuit of health-related behaviors (e.g., diet, exercise, and smoking). Although health care consumers have these choices in theory, the reality is different. The options from which they can choose are often limited; the information available to inform their decision making is usually constrained; some are not well equipped, cognitively or emotionally, to make such decisions; and the health system provides few useful decision supports to assist them.

In most communities, some degree of competition exists among health plans, but such considerations as price and proximity of services and familiarity with a particular provider are more likely to drive decision making than is the quality of care or the value of services. Most Medicare beneficiaries are able to choose between a Medicare Advantage Plan(s) or traditional, fee-for-service Medicare. CMS does make comparative data for clinical quality available to Medicare Advantage Plans (CMS, 2005c), but no such data are provided under traditional Medicare, which accounts for almost 90 percent of beneficiaries (National Health Policy Forum and California Healthcare Foundation, 2004). For most of the working population, the selection of a health plan is a decision made jointly by the employer and the employee, with the employee choosing from a plan or plans offered by the employer. The availability of information on the quality of commercial or self-insured health plans is variable.

Many health plans report performance information on a set of standardized quality measures. For example, Health Plan Employer Data and Information Set measures are reported to the National Committee for Quality Assurance or directly to large employers or employer coalitions (NCQA, 2005). But as the provider networks of health insurance plans

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