Faced with bills for quality improvement programs that the region's largest health insurer implemented with 14 hospitals in the region, large employers want some answers.

In the past two weeks, Highmark has been billing big employers for prorated shares of payments the hospitals are owed for the quality gains they made in the year ended June 30, 2003.

Smaller group plans have not been spared the costs of the program. They're simply part of the insurance premiums they pay, unlike large corporations, which pay their employees' medical claims out of pocket under health plans Highmark administers.

The problem is that few, if any, major employers knew about the program, and they are still in the dark about what kinds of improvements the participating hospitals have made or how the performance improvements have been measured. They also didn't know which hospitals were participating, until they began asking for lists.

"We were concerned that the communications weren't a little more forthright," said Donna Frisch, who manages corporate health benefits for H.J. Heinz Co. and also is president of the Pittsburgh Business Group on Health, a coalition that tracks health-care issues for 62 companies in the region.

Highmark said the improvement plans were implemented as part of the contract negotiations it had with each hospital.

Under the negotiations, the insurer agreed to pay some institutions the higher reimbursements they were demanding so long as those institutions agreed that a portion of their payments -- around 2 percent to 3 percent -- was contingent on meeting certain quality goals.

Participation was voluntary and the goals differed at each hospital because different institutions have different deficiencies, said Dr. Carey Vinson, the insurer's medical director for quality management. At some hospitals, the measurements involved quality issues of key importance to employers, such as infection control and medication errors, he said.

Vinson said he didn't have an exact tally of what the program was costing subscribers, but said it was a tiny portion of Highmark's overall billing.

He said Highmark did not announce the initiative to clients because it wanted "to build trust with the hospitals" in order to get a foothold in a much-discussed but, so far, not widely used way of curbing health-care costs. A spokeswoman said Highmark entered confidentiality agreements with the hospitals, "which are kind of reluctant to release their quality information."

National studies have shown that quality problems, such as the number of infections patients get because of a hospital stay or the number of medication errors hospitals make, add hugely to health-care costs.

Because of that research, improving the quality through pay-for-performance programs has been a battle cry among corporations that have seen their health benefit costs skyrocket.

Employers here are no exception in wanting the change, said Dan O'Malley, a benefits consultant with Towers Perrin, which caters to large clients.

Nor are employers here necessarily bothered by the amounts Highmark has billed them, he said. What the region's big employers are seeking from the insurer is "transparency" about the program, he added.

As a percentage of Heinz's total health care outlays, Frisch said the bill for the quality program "didn't even register on my calculator -- it's less than a quarter of a percent."

But she still wants more information. Frisch said she wanted to know whether all of the quality targets were among those that studies had shown add to costs. In addition, "What I've asked is ... who did the scoring, how did they collect information" and how was the information substantiated.

Frisch also speculated that the delay in receiving bills for their shares of the quality payments would be troublesome for employers, who have already closed their books on the fiscal year.

The institutions participating were: Allegheny General Hospital, Bradford Regional Medical Center, Butler Memorial Hospital, Frick Hospital, Hamot Medical Center, Heritage Valley Health System, Latrobe Area Hospital, Mon Valley Hospital, UPMC Presbyterian, UPMC Montefiore, UPMC Shadyside, Washington Hospital, West Penn Hospital and Westmoreland Regional Hospital.