Quality Health Care: New Challenges as Medicare Evolves
Final Report
Prepared for:
The National Coalition on Health Care
January 26, 1999
By:
John F. Sheils
Molly J. Coye, MD
Genny B. Jacks
Richard E. Dixon, MD
The Lewin Group, Inc.
TABLE OF CONTENTS
EXECUTIVE SUMMARY
QUALITY CARE AND MEDICARE REFORM
QUALITY OF CARE UNDER MEDICARE
MEDICARE INITIATIVE TO MAINTAIN AND IMPROVE QUALITY
OPPORTUNITIES TO IMPROVE QUALITY UNDER MEDICARE
The President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry last year declared an urgent need to improve the quality of care provided to Americans.1 The Commission’s report states that “exhaustive research documents the fact that today, in America, there is no guarantee that any individual will receive high-quality care for any particular health problem. The health care industry is plagued with overutilization of services, underutilization of services and errors in health care practice.” A second landmark report, from a roundtable of health care quality experts convened by the Institute of Medicine (IOM), concurs. It concluded that while the health care provided in the United States is often superb, the quality of care received by Americans is highly variable and in many instances poor.2
These reports come at a time when there is growing public debate over the merits of fee-for-service (FFS) medicine versus managed care delivery of health care services. The public, purchasers and clinicians have all expressed concerns that the increasing pressure for cost control under managed care may cause health plans to withhold needed health services, to the detriment of patient health. However, there also is growing evidence that quality of care under the Medicare FFS program is often substandard and that quality problems exist in both FFS and managed care environments. For example, the available research reveals areas of substantial underuse and overuse of health services for both FFS and managed care beneficiaries, which can result in poor outcomes. In fact, the IOM panel’s report states: “the problem is quality, not managed care.”
From its inception, the Medicare program has been committed to ensuring its members a quality of health care that is at least equal to that provided in the private health care delivery system. However, knowledge and data about the quality of care delivered by doctors, nurses and managed care plans is fragmented and provides little basis for confirming whether the Medicare program meets this quality standard. Moreover, available evidence indicates serious quality deficiencies throughout the health care system for both Medicare beneficiaries and privately insured persons.
The purpose of this study is to summarize what is known about the quality of care provided under Medicare and to critically evaluate Medicare’s programs for maintaining and improving the quality of care. We identify specific methods to improve the quality of care for Medicare beneficiaries. And we discuss the relevance of health care quality improvement to proposals for reforming the Medicare program.
QUALITY OF CARE AND MEDICARE REFORM
As Congress begins to consider Medicare reform initiatives, it must be careful to build into cost containment programs the mechanisms for maintaining and improving quality of care. For example, there are several proposals that would convert Medicare to a defined contribution program. Under such a program, beneficiaries would be given a voucher that can be redeemed with private insurers for health insurance coverage. This could result in beneficiaries obtaining coverage from a broad range of private insurers with no sound mechanisms for monitoring and ensuring the quality of care received by beneficiaries.
Moreover, the voucher amounts under some defined contribution proposals would grow only as fast as Medicare revenues, which is substantially lower than the projected rates of growth in health care costs. Over time, this will require patients to supplement the voucher amount just to maintain their current level of coverage. Because many lower-income persons would not be able to afford to supplement the voucher amount, many lower-income beneficiaries would tend to be enrolled in less comprehensive health plans. This would result in reduced access to some health care services and very likely a reduction in quality of care.
Medicare reform can be crafted in a way that integrates some of the desirable features of the defined-contribution model into a program that guarantees adequate benefits and adequate controls on quality. For example, the National Bipartisan Commission on the Future of Medicare is considering what it calls a “premium support” plan. Under this model, beneficiaries would choose from a selection of health plans much as they will under the Medicare+Choice program beginning this year. The government’s payments to plans would be determined based on a competitive bidding system to control cost growth. The plan indicates that all beneficiaries would be able to obtain the Medicare benefits package without having to pay an additional premium. Under this proposal, Medicare administrators would be able to affect the quality of care through regulation or by considering evidence of the quality of care provided by plans in the competitive bidding process.
Any major reform of the Medicare program must be designed from the ground up to include features that are designed to ensure the quality of care for all Medicare beneficiaries. These reform proposals should be structured in ways that create incentives for health plans and providers to adopt approaches that improve quality while eliminating unnecessary costs. Medicare reform also should reinforce mechanisms to ensure that managed care plans and providers meet Medicare standards. Moreover, subsidies will be needed to ensure that low-income persons are able to maintain at least the current Medicare benefits package. Quality assurance programs cannot be added to a reform plan as an afterthought, particularly with proposals that emphasize aggressive cost control.
QUALITY OF CARE UNDER MEDICARE
The cause for concern over the quality of care in Medicare is underscored by the sheer magnitude of the variation in medical practice for persons covered under the program. A study of medical practice variation under the Medicare program by John Wennberg demonstrated that the amount and types of care received by Medicare beneficiaries vary dramatically within and among states depending upon the local health care system and the practice styles of local physicians.3 For example, the average number of Medicare days in a hospital intensive care unit (ICU) during the last six months of life in Miami is 3.7 times greater than in Minneapolis. The rates at which radical mastectomies are performed in some areas are six- to seven-times higher than in other areas. Also, the average expenditure for inpatient care during the last six months of life is three times greater in some counties than it is in others. These variations in care are due to differences in the practice of medicine and cannot be explained simply by differences in the demographic characteristics of the beneficiary population.
In addition, numerous studies show that care for Medicare recipients and the population in general is often inadequate or inappropriate. In a review of “quality of care” articles, Schuster found that for most care that has been studied, “there are large gaps between the care that people should receive and the care they do receive.”4 Averaging across these studies, they show that only about half of the people studied received recommended preventive care, for example. They also showed that about 30 percent of both acute and chronic care was inadequate or inappropriate. Inappropriate care included both underuse and overuse of health services for all types of care, both of which can result in poor outcomes. Moreover, these gaps in quality were found for all age groups in all geographic regions regardless of the type of facility or type of health insurance.
Similarly, studies document shortfalls in the quality of care for persons with various health conditions. For example, a recent study of elderly patients with acute myocardial infarction (AMI) indicates that 79 percent of patients who could have benefited from taking (-blockers did not receive them. (The drugs have been shown to prevent reoccurrence of heart attack.) The patients who did not get the drug had a 75 percent greater mortality rate than those who did. A separate study of Medicare recipients with hip fractures indicates that up to 22 percent did not receive appropriate care. Another study of elderly hospitalized patients who were discharged with depression indicates that about one third were on a dose of antidepressants that was below the recommended level. And yet another study found that about 30 percent of patients diagnosed with depression were treated with tranquilizers despite the lack of evidence that tranquilizers work for depression.
The available evidence on quality of care in Health Maintenance Organizations (HMOs) is mixed. One study found that 59 percent of FFS patients studied did not receive treatments to control blood pressure, while only 46 percent of hypertensives in managed care plans did not receive treatments.5 The study also showed that 65 percent of women in FFS plans did not receive scheduled mammograms compared with only 45 percent of women in managed care plans. By contrast, another study showed that managed care plans failed to detect depression in 58 percent of cases, compared with only 46 percent of cases in FFS plans. Another study of chronically ill elderly patients found that quality indicators for physical health among HMO enrollees were lower than among FFS participants, but that mental health indicators tended to show better quality of care than FFS patients. However, when taken together, there is no clear indication whether FFS plans outperform HMOs in terms of quality.
The information on consumer satisfaction in Medicare HMOs is also mixed. One survey of Medicare HMO beneficiaries indicated relatively high levels of satisfaction with the care provided. This study showed that about 94 percent of Medicare HMO enrollees said they had adequate access to appointments, and 95 percent report that they received needed services. About 84 percent said that they intend to stay with the HMO. However, a study by the General Accounting Office found that HMO disenrollment rates varied widely, with a few plans losing half their members in a single year. The study found that about two-thirds of those who leave an HMO enroll in another if they have two or more HMO options.
In a review of the literature on managed care, Miller and Luft found an equal number of studies showing positive and negative HMO performance and quality of care. They concluded: “HMOs produce better, the same and worse quality of care, depending on the particular organization and particular disease.”6 Indeed the available research indicates that both HMOs and their FFS counterparts fall short in the quality of care delivered.
MEDICARE INITIATIVES TO MAINTAIN AND IMPROVE QUALITY
The Medicare program has numerous initiatives for monitoring and improving quality of care. The Health Care Financing Administration (HCFA) administers a provider certification program designed to ensure that all providers of health services to Medicare beneficiaries meet minimum standards specified by Congress. HCFA also has a Medicare HMO qualification program that is designed to ensure that all participating health plans meet congressionally specified standards under the HMO risk contracting program, and under the Medicare+Choice program that will begin in 1999. HCFA considers hospitals, nursing homes and home agencies to have met Medicare standards if they are certified by an approved private accrediting organization or a state agency operating under contract to HCFA. HCFA typically monitors HMO compliance directly with site visits conducted by HCFA personnel.
Medicare has created peer review organizations (PROs) throughout the country that are charged with reviewing the appropriateness of care provided to Medicare beneficiaries through reviews of hospital admissions. The PROs are charged with reviewing care provided in HMOs, and some are monitoring ambulatory care utilization as well. HCFA also participates in quality improvement programs based upon “best-practices” research sponsored by the Agency for Health Care Policy and Research (AHCPR). In addition, the Medicare program participates in several ongoing quality improvement programs developed in cooperation with local PROs.
The methods HCFA uses to ensure good quality health care for beneficiaries must change as innovations in quality improvement mechanisms evolve. When Medicare was created in 1965, Congress adopted standards of participation, which focused on structural criteria (e.g., adequacy of facilities, etc.) that are readily quantifiable. Utilization review also was used as a means of identifying individual examples of inappropriate or poor quality care. However, the state of the art in quality assurance in health care is rapidly shifting to the continuous quality improvement (CQI) model. This model focuses on measuring clinical processes, actual outcomes of care and developing initiatives to improve performance over time.
Congress and HCFA have already taken steps in this direction with managed care plans. Under the Quality Improvement System for Managed Care (QISMC), health plans will be required to establish a CQI program and to demonstrate actual improvements in selected outcome measures in future years. Quality indicators for competing health plans also will be distributed to consumers along with premium information under the Medicare+Choice program. However, Medicare does not impose comparable requirements on FFS providers even though 83 percent of Medicare beneficiaries are in FFS Medicare. For example, Medicare does not publish outcomes data for beneficiaries to use in choosing a provider, and FFS providers are not required to demonstrate actual improvements in patient care or performance.
OPPORTUNITIES TO IMPROVE QUALITY UNDER MEDICARE
HCFA’s current quality assurance programs for Medicare could be strengthened to address these shortfalls. For example, the government could develop a national program similar to those used in New York and Pennsylvania to report outcomes information for hospitals and other providers. These data permit providers to compare their performance with that of other similar providers to identify areas for improvement. In addition, the Medicare program could require major FFS health care providers, such as hospitals or physician practices, to have an ongoing CQI program that requires them to demonstrate improvements in outcomes over time.7 This program would, over time, raise provider participation standards to be on a par with those of health plans under the new rules enacted in the 1997 Balanced Budget Act (BBA). Implementing these outcomes-based measures will require a major commitment to the collection and analysis of data that does not currently exist in suitable form.
Once HCFA has shifted its emphasis to outcomes measurement, the lengthy list of structural measures currently used by accrediting organizations could be reduced to only those that are absolutely necessary. HCFA also could strengthen the accreditation process by requiring random inspections of facilities for this streamlined list of standards.
Another key step toward improving the quality of care for the nation’s senior citizens will be the development of a value purchasing system that enables beneficiaries to select health plans and providers on the basis of the quality of the care they provide. Under the quality provisions of the BBA, HCFA will be collecting and disseminating information on the quality of care provided by competing health plans. However, because of the extreme difficulties in developing statistically reliable risk-adjusted outcomes measures at the plan and provider levels, HCFA should increase its emphasis on process measures that indicate the degree to which health plans or providers adhere to treatments that have been shown to result in the best outcomes. Moreover, it is crucial that any value-purchasing initiative include a program for educating beneficiaries on how to interpret the information they are provided.
With pressure growing to contain Medicare costs at the same time as quality is enhanced, Congress and HCFA should consider ways to slow the growth in the utilization of high-cost medical technologies. A value-based approach to approving new technologies for coverage under Medicare would help accomplish this goal. Under such a system, most high-cost technologies would be approved only after they have been proven to be safe and effective. High-cost procedures that get approved could also be subject to prior authorization by expert medical panels. At the same time, HCFA could put more emphasis on provider education designed to prevent the overuse or misuse of these new technologies. This approach would provide a rational basis for controlling Medicare cost growth even as it seeks to improve health care quality through new and innovative technologies. Moreover, such a process would encourage the development of technologies that improve quality while reducing costs.
From its inception, Medicare has been committed to ensuring its members a quality of health care that is at least equal to that provided in the private health care delivery system.8 Unfortunately, data have never been available to determine whether Medicare meets this quality of care objective. Several organizations, including the Health Care Financing Administration (HCFA), the National Committee for Quality Assurance (NCQA), individual health plans, and provider groups have made important contributions to defining and measuring quality.9 Surveys also are conducted frequently to measure consumer satisfaction in health maintenance organizations (HMOs) according to various subjective measures. However, information on the quality of care provided by hospitals and physicians is scarce, leaving providers and consumers with only fragmented evidence to use in making health care decisions.10
There is strong evidence that the overall quality of care provided in Medicare and for all Americans is highly uneven, with many beneficiaries receiving poor quality care. The President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry declared an urgent need to improve the quality of care provided to all Americans.11 The Commission’s report states: “Exhaustive research documents the fact that today, in America, there is no guarantee that any individual will receive high-quality care for any particular health problem. The health care industry is plagued with overutilization of services, underutilization of services and errors in health care practice.” The Commission’s conclusions echo those of a panel of health care quality experts convened by the Institute of Medicine (IOM). The panel concluded that while the health care provided in the United States is often superb, the quality of care received by Americans is highly variable and is poor in many instances.12
As the health care industry undergoes substantial restructuring, there is a growing public debate over the merits of fee-for-service (FFS) medicine versus managed care delivery of health care services. The public, purchasers and clinicians have all expressed concerns that the increasing pressure for cost control under the managed care plan may cause the plans to withhold needed health services to reduce costs, to the detriment of patient health. However, there also is growing evidence that quality of care under the Medicare FFS program is also highly variable and that serious quality problems exist in both FFS and managed care environments.13 These data suggest areas of substantial underuse and overuse of health services in both FFS and managed care settings, which often results in poor quality health outcomes. Given that 83 percent of Medicare beneficiaries are enrolled in FFS Medicare, it would be a mistake to focus our attention on managed care alone.
Properly developed indicators of quality are needed by consumers to select health plans and providers. Information on best practices and outcomes also is crucial to both providers and patients in selecting among treatment alternatives. Health plans and governments also need these data to evaluate the impact of new policies such as changes in provider payment systems and new approaches to provider capitation. Moreover, quality indicator information is vital to clinicians, hospitals and health plans in evaluating their own performance.
In this study, we highlight opportunities for improving quality in Medicare and throughout the health care industry based upon an evaluation of past and current initiatives to measure and improve quality. Our analysis is presented in the following sections:
- Quality of Care under Medicare;
- Developing and Using Quality of Care Information;
- Medicare Initiatives to Monitor and Improve Quality;
- Opportunities to Improve Quality of Care; and
- Maintaining Quality under Medicare Reform.
II. QUALITY OF CARE UNDER MEDICARE
The health care quality literature suggests that the overall quality of care that is actually provided to Medicare beneficiaries and the population in general is inconsistent and often poor. Numerous studies, many of which are based upon Medicare data, show that the methods of treatment vary throughout the country, even for conditions where there is strong evidence that certain treatment protocols result in consistently superior outcomes. In fact, there is a large body of research showing that many individuals are not receiving medically appropriate treatments or are receiving care that has been shown in the literature to be inappropriate or even potentially harmful to certain patients. These quality shortfalls stem not from an inability to identify best practices, but from our inability to disseminate best-practices information in a way that changes medical practice. These problems are evident in Medicare and throughout the health care system and extend to both FFS and managed care populations.
The IOM roundtable report identified three areas of quality problems: underuse, overuse and misuse.14 Underuse is the failure to provide patients with the diagnostic tests and treatments that are proven to improve outcomes. A failure to provide (-blocker drugs to heart attack victims, despite their proven effect in prolonging life, is an example of the underuse of services. Overuse involves subjecting patients to tests and procedures that have no proven benefit and/or could even cause harm to the patient. The excessive use of surgical procedures discussed below is an example of the overuse of services.
Misuse of services refers to poorly executed tests and procedures that can have a deadly impact on patients. For example, based upon a study of over 30,000 hospitalizations in New York State, Harvard researchers estimated that about 180,000 persons die each year as a result of adverse medical events, of which 120,000 are considered preventable. The evidence on the quality of care provided to Medicare beneficiaries is summarized in the following sections:
- Evidence on Medicare Fee-for-Service Quality; and
- Quality in Medicare HMOs
A. Evidence on Medicare Fee-for-Service Quality
The cause for concern over the quality of care is underscored by the sheer magnitude of the variation in medical practice for persons covered under Medicare. A series of studies of medical practice variation under the Medicare program by John Wennberg demonstrated that the amount and types of care received by Medicare beneficiaries varies dramatically within and among states depending upon the local health care system and the practice styles of local physicians.15 For example, the average number of Medicare days in a hospital intensive care unit (ICU) during the last six months of life in Miami is 3.72 times greater than in Minneapolis. The rates at which radical mastectomies are performed in some areas are six- to seven-times higher than in other areas. Also, the average expenditure for inpatient care during the last six months of life is three times greater in some counties than it is in others.16 These studies also show that the extreme variations in care cannot be explained simply by differences in the demographic characteristics of the beneficiary population.
These variations in care are partly attributable to local differences in medical practice patterns, which are shaped by variation in the availability of hospital beds and physician specialists in a community, and variations in local standards, which in turn are shaped by consumer expectations and physician training programs. While payroll tax dollars paid to Medicare on a per-person basis are comparable across the country, these studies indicate that some counties use up to five times more Medicare funds for services on a per-member basis than others. However, the literature also indicates that even within local areas, there is variation in the types of care provided for patients with a given set of characteristics. These wide variations in practice patterns suggest significant areas of both overuse and underuse of medical services to the probable detriment of patient health.
There are numerous studies showing that the care for Medicare recipients and the population in general often is inadequate or inappropriate. A review of “quality of care” articles drawn from the National Library of Medicine’s Melvyl Medline Plus system, Schuster et al. found that for most care that has been studied, “there are large gaps between the care that people should receive and the care they do receive.”17 Averaging across these studies, they show that only about half of the people studied received the recommended preventive care. They also showed that 30 percent of the acute care provided was inappropriate and that about 30 percent of all chronic care provided was inappropriate as well. Inappropriate care included both underuse and overuse of health services for all types of care, including preventive, chronic, acute, and surgical care. Moreover, these gaps in quality were found for all age groups in all geographic regions regardless of the type of facility or type of health insurance.
For example, a 1993 study showed that only about 52 percent of persons age 65 and older received an influenza vaccine, even though this vaccination is recommended as a preventive measure for this population.18 Another study showed that only about 37 percent of patients who smoke were advised to quit smoking by their physician. There also is evidence that patients with chronic conditions are not receiving the tests and exams required to prevent complications. For example, regular eye exams are required for persons with insulin dependent and noninsulin dependent diabetes mellitus to detect diabetic retinopathy, which is a leading cause of new blindness among adults. One study found that only 61 percent of persons with these conditions had an eye exam in the prior year.19
There is evidence of quality shortfalls in acute care as well. For example, a recent study of elderly patients with myocardial infarction indicates that 79 percent of eligible patients did not receive (-blockers and that these individuals had a 75 percent greater mortality rate than those who received (-blockers.20 A separate study of elderly hospitalized patients who were discharged with depression indicated about one-third were on a dose of antidepressants that was below the recommended level.21 Another study found that about 30 percent of patients diagnosed with depression were treated with tranquilizers despite the lack of evidence that tranquilizers work for depression and the risk of side effects.22 One study of Medicare recipients with hip fractures indicates that up to 22 percent did not receive appropriate care.23
In addition, there are numerous studies showing both overuse and underuse of surgical care. For example, a landmark study of surgeries performed on Medicare patients in 1981 showed that 17 percent of coronary angiographies, 32 percent of carotid endarterectomies and 17 percent of upper gastrointestinal tract endoscopies were unnecessary and in some cases potentially harmful to the patient.24 Another study found that 16 percent of hysterectomies performed were inappropriate and an additional 25 percent were performed for reasons of uncertain clinical benefit.25 Also a study of Medicare enrollees in 11 university hospitals showed that about 20 percent of pacemaker implantations were not indicated.26
The President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry also cited avoidable errors as a significant source of quality problems. A review of the literature revealed evidence of high error rates in the United States.27 These errors include: missed diagnoses; errors in interpretation of laboratory or imaging studies; medication administration or prescribing errors; and surgical errors. One study of randomly selected hospital patient records in New York State found that adverse events occurred in 3.7 percent of hospitalizations and that 27.6 percent of these adverse advents were due to negligence.28 A study of deaths from stroke, pneumonia, and heart attack from 12 hospitals indicated that 14 percent could have been prevented with proper diagnosis and treatment.29 Another study found that deaths due to medication errors more than doubled between 1983 to 1993, resulting in 7,391 deaths in 1993 alone.30 The most common medications involved in errors include antibiotics, cardiovascular agents, gastrointestinal agents, and narcotics.31
With the rapid increase in enrollment of Medicare beneficiaries in risk-based HMOs, there has been growing concern about the quality of care provided under these plans.32 Currently, about 17 percent of Medicare beneficiaries are enrolled in HMOs, with more than 80,000 projected enrollees joining each month in 1998.33 Six states account for 70 percent of all managed care enrollees, and HMO enrollment is approaching 50 percent of eligible Medicare beneficiaries in some urban markets within these six states.34 Therefore, it is becoming increasingly important to understand the effect that managed care is having on health care quality.
In a recent review of the literature, Miller and Luft found evidence that, as compared to FFS plans, HMOs tend to reduce utilization of inpatient services and costly tests.35 Of five studies examining hospital admissions rates, three showed lower levels of admissions for HMO enrollees than in FFS plans.36 One of these studies found significantly fewer admissions for elderly Medicaid HMO enrollees than in FFS plans. Another study found 3 percent fewer hospital days for rheumatoid arthritis patients in HMOs.37 One study showed that among patients with acute myocardial infarction (AMI), HMO patients had lower angiography and revascularization rates than FFS patients, and a study of ischemic heart disease patients also showed reduced rates of revascularization in HMOs.38 Studies of home health utilization for Medicare HMO enrollees and frail elderly patients found 30 percent and 44 percent less spending respectively for persons in HMOs.39 While the evidence is mixed on physician use, there is evidence that HMO patients use more physicians’ services than do FFS patients, which is consistent with the fact that HMOs tend to emphasize primary and preventive care.40
While it is clear that the use of health services is very different than in FFS plans, it is unclear what the impact of these differences has been on quality. The impact could be very positive if the utilization reduction is attributed to the elimination of unnecessary care. However, the available evidence on this is mixed. One study found that 59 percent of FFS patients studied did not receive treatments to control blood pressure, while only 46 percent of hypertensives in managed care plans did not receive treatments.41 The study also showed that 65 percent of women in FFS plans did not receive scheduled mammograms compared with only 45 percent of women in managed care plans. By contrast, another study showed that managed care plans failed to detect depressions in 58 percent of cases, compared with only 46 percent of cases in FFS plans.42 Another study of chronically ill elderly patients found that quality indicators for physical health among HMO enrollees were lower than among FFS participants, but the mental health indicators tended to show better quality of care than FFS.43 However, when taken together, there is no clear indication of whether FFS plans outperform HMOs in terms of quality.
The information on consumer satisfaction in Medicare HMOs also is mixed. Most of this information is based upon beneficiary surveys of service quality, which is not necessarily a reliable indication of the clinical quality. One survey of consumers indicated relatively high levels of satisfaction with the care provided. This study showed that about 94 percent of Medicare HMO enrollees said they had adequate access to appointments, and 95 percent report that they received needed services (Figure 1).44 About 84 percent said that they intend to stay with the HMO. In addition, a study by the General Accounting Office (GAO) indicated that about two thirds of those who do disenroll from an HMO switch to another HMO plan in communities where there are two or more HMO options, suggesting that patients like the HMO alternative to FFS, notwithstanding their dissatisfaction with their current plan.45
A study of consumer satisfaction in Medicare HMOs by the Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) also found that beneficiaries were generally satisfied with the access to providers and the quality of care provided by HMOs.46 While the great majority of disenrollees reported that they received the Medicare services that they needed, disenrollees were more likely to report problems with access to primary and specialty care. Also, disenrollees tended to report a more rapid decline in health status during the time they were covered by an HMO. The report also indicates that many HMO enrollees did not know that they had the right to appeal an HMO’s refusal to provide or pay for services, suggesting the need for greater beneficiary education on patient rights under the HMO option. In addition, the study indicated that about one third of disenrollees did so for administrative reasons such as a change of address, while most other disenrollees had some criticism of the plan.Figure 1
Consumer Satisfaction for Active Medicare HMO Enrollees
Source: AgeWave Health Services, Inc., Emeryville, CA (based on data
extracted from: Office of Inspector General, Department of Human Resources.
(1995, March). Beneficiary Perspectives of Medicare Risk HMOs.)
HMO disenrollment rates also can be used as a proxy measure of patient satisfaction. While overall average rates of disenrollment, in the program have been moderate, some HMOs have experienced high rates of disenrollment suggesting the existence of pockets of poor quality care.47 For example, the GAO reported that disenrollment rates for individual health plans in Houston varied from 8 percent for the plan with the lowest disenrollment rate to 56 percent in the plan with the highest disenrollment rate.48 A study of HMO disenrollment rates by the Families USA Foundation also found that most Medicare beneficiaries are happy with their HMOs as indicated by low disenrollment rates in many plans. But the study found that some plans experienced aberrantly high rates of disenrollment, up to 31%.49 Since 1993, disenrollment data associated with the HMO plans have been collected and published to identify HMOs that do not meet members’ expectations. A few plans have been decertified when they did not reduce disenrollment rates to acceptable levels.
One study found that dissatisfaction with the choice of primary care provider (PCP) was the most often cited (44 percent) reason for disenrolling (Figure 2). Many of the other reasons cited also related to the choice of PCP in some way. For example, about 23 percent indicated that they do not like going through a PCP for services, and 22 percent indicated that they want to return to their prior PCP. About 29 percent said that the plan premium or copayment is too expensive, and 23 percent said that they wanted to use another hospital.Figure 2
The Major Reasons for Medicare HMO Disenrollment
Source: Office of Inspector General, Department of Human Resources.
(1995, March). Beneficiary Perspectives of Medicare Risk HMOs.
Surveys of physicians on their experiences with managed care can offer a useful perspective on quality of care as well. A recent physician survey conducted by The Commonwealth Fund indicates that “40 percent of physicians with predominantly managed care patients rate plans fair or poor on their ability to get needed treatment for patients, contrasted with 21 percent of physicians with FFS patients.50 However, there are no data that would allow us to determine whether these patients actually had poor outcomes.
HMOs offer more services than are covered under FFS Medicare, which also could have a positive impact on the overall quality of the care received by participants. When the HMO risk-contracting program was first implemented, Medicare encouraged HMOs to add additional services (preventive and routine care) under the fixed payment agreement. Many HMOs have done so either as an inducement for beneficiaries to enroll in their plan or to control costs through timely delivery of preventive care. For example, about 97 percent of Medicare risk plans cover routine physicals, and 69 percent cover some amount of outpatient prescription drugs (Figure 3). For some beneficiaries, access to these additional services can represent a substantial improvement in the quality of care received.Figure 3
Percentage of Medicare Risk Plans Offering Additional Benefits
Source: Medicare Payment Advisory Commission. (1997, October),
Medicare Risk-Plan Participation and Enrollment: A Chart Book. Washington, DC.
In their review of the literature on managed care, Miller and Luft found that there seemed to be equal numbers of studies showing positive and negative performance by HMOs. They concluded, “HMOs produce better, the same and worse quality of care, depending on the particular organization and particular disease.”51 Indeed the available research indicates that both HMOs and their FFS counterparts fall short in the quality of care delivered. As the IOM roundtable concluded, “quality of care is the problem, not managed care.”52
III. DEVELOPING AND USING QUALITY OF CARE INFORMATION
The various literature reviews on the quality of care demonstrate that quality of care can be defined and measured. There are two general components of quality that are essential in the delivery of health services: effective clinical care and satisfactory service quality. Effective clinical care is the degree to which health services produce the desired health outcomes such as the effective treatment of chronic conditions.53 Service quality is the degree to which health providers meet the perceived needs and expectation of the population served.54 Surveys of consumer satisfaction typically reflect the fact that the public equates quality with choice of providers, ease of access to providers, access to new technology, safety, and interactions with office staff.55 However, good service quality does not necessarily imply good clinical quality.56 For example, many of those who by clinical standards are overusing tests and procedures may feel that they are getting the best care available even though this overuse provides no medical benefit and/or is potentially detrimental to the patient’s health. Moreover, research has not shown a consistent relationship between consumer satisfaction and technical quality of care.57
Clinical quality of care can be measured by evaluating important processes in the delivery of care and the outcomes of services delivered.58 Clinical studies have been performed that compare outcomes for patients with a given health condition who receive alternative treatments that can be used to identify the approach with the best outcomes given an individual’s medical characteristics. These studies of “best practices” have in some instances been used to develop medical practice guidelines on how a patient with a certain condition should be treated given the progression of the disease or type of complication encountered.59 Some outcomes can be measured relatively easily, such as the improvement of vision following eye surgery. Others are more difficult to evaluate or the effects are not apparent until years after treatment is provided.
In this section, we discuss the various measures that are used to measure quality. We then describe existing systems for measuring quality and discuss the ways in which these measures have been used. Our analysis is presented in the following sections:
- Quality Measurement;
- Current Uses of Quality Indicators; and
- Limitations of Outcomes Measures.
While there are many approaches to measuring quality, they can be classified as one of three types of measures: structural, process or outcomes. “Structural quality” refers to a health system’s characteristics and capacity to provide needed services. “Process quality” refers to appropriateness and adequacy of the tests and treatments provided. “Outcome quality” refers to the health of patients once treated.60
Structural quality measures are used to evaluate the capacity of providers and/or systems of providers in their ability to meet the health care needs of patients and/or communities. Structural measures of quality include: percentage of physicians with board certification, years of experience, staffing patterns, system capacity measures, and the existence of a continuous quality improvement (CQI) program. Structural measures also can include the quality of the facility’s fire emergency evacuation program, regular inspections of elevators and other administrative factors. These structural measures often are used by accrediting institutions as criteria for certifying hospitals, physicians, and health plans.
Process measures refer to whether clinicians make the appropriate choices in diagnosing and treating patients and whether the methods employed are appropriate and consistent with professional standards of care. By one definition, care is considered to be appropriate if its expected health benefits in terms of increased life expectancy, pain relief, and improved functional capacity exceed its expected health risks such as mortality, morbidity, and pain.61 Process measures enable us to measure provider performance according to the most recent research available on the most effective courses of treatment. A wide range of studies is available showing the effect of alternative medical treatments on health outcomes for patients with selected diseases. Where empirical data comparing alternative treatments are unavailable, standards of care can be developed based upon a consensus opinion by professionals specializing in the treatment of various illnesses. These studies have been used to identify the “best practices” to be used in treating health conditions. When standards of practice are based upon clinical evaluations of medical outcomes, they are said to be “evidence-based.”
Outcome measures are designed to show the effect of the health services provided on the individual. Many outcomes measures show the effect of health services on the clinical status of the individual, such as five-year survival rates and tumor size for cancer patients; rates of complication, such as retinopathy and foot ulcers, for diabetics; and peak flow test measures for asthmatics. Other outcomes measures show the effect of health services on the functional status of patients. Typical indicators include measures of urinary, sexual, and bowel function; and measures of the degree to which the disease affects the patient’s ability to perform activities of daily living (ADLs). All of these measures provide a basis for gauging the relative performance of various health plans and providers in the delivery of health care.
B. Current Uses of Quality Indicators
There are several organizations that collect and disseminate information on quality of care. One of the best known organizations is the National Committee for Quality Assurance (NCQA). The NCQA produces a “report card” for health plans, which includes quality of care measures collected for the Health Plan Employer Data and Information Set (HEDIS(). HEDIS( is a voluntary system that collects data from HMOs. However, under the Balanced Budget Act (BBA), all Medicare risk HMOs are required to report HEDIS( data to NCQA, which will provide health quality indicators information for all HMO options available to the Medicare enrollees under the Medicare+Choice program.
The HEDIS( data report 71 measures of quality for individual HMOs relating to the effectiveness of care, provider accessibility, cost of care, consumer satisfaction, stability of health plans, informed health care choices, use of services, and plan characteristics.62 These indicators cover preventive care, acute care, and chronic care. Reports are prepared separately for commercial insurance, Medicare, and Medicaid. Most of these quality indicators are process measures, although some outcome and structural measures are included.
Unfortunately, only HMOs participate in HEDIS,( so these data do not permit comparisons of quality indicators for other coverage options under the Medicare+Choice program such as Preferred Provider Organizations (PPOs) and FFS plans. Also, only about 35.5 percent of HMOs voluntarily report indicators to either HEDIS( or the Member Satisfaction Survey, (i.e., barometer of patient satisfaction). Also, on average, participating plans report only about 50 percent to 60 percent of the HEDIS( measures.63 Consequently, the HEDIS( data are largely incomplete (reporting is expected to be complete for HMOs participating in the Medicare+Choice program under the BBA reporting requirements).
The effect of this quality information on consumer choice is difficult to predict. The available research indicates that education of consumers with quality indicator information has not resulted in substantial changes in consumer purchasing behavior. For example, a recent GAO study of two employer groups that provide employees with quality indicators information showed that while most employees surveyed indicated that this information was “helpful,” the data showed only a modest increase in enrollment in the plans with the highest quality ranking.64 Also, a recent survey of employers indicated that the HEDIS( data has not yet had a significant impact on the selection of health plans by employers and workers. One recent survey of employers indicated that only about 5 percent of employers indicated that the HEDIS( data are “very important” in selecting health plans, and only about 1 percent provided HEDIS( data to assist workers in choosing their health plan.65 66
In addition, the results of a recent Medicare demonstration of package pricing for CABG services indicated that bypass patients rarely engage in any type of comparative analysis of hospitals prior to choosing a hospital, relying instead upon the perceived reputation of the hospital.67 This is largely consistent with a study conducted by the Pacific Business Group on Health, which found that consumers often do not understand the differences between health plans and that many consumers feel ill prepared to analyze technical information on health plans, including structural and process-oriented quality measures.68 This finding reaffirms the need for consumer education as a precursor to informed consumer choice. However, even with a program of consumer education on the use of quality indicators data, this information may not have a significant impact on consumer selection of providers and health plans.
While the use of quality indicators has had only a relatively minor impact on consumer choice of health plans, other quality data collection initiatives have sometimes had a dramatic impact on hospital and physician behavior. Several programs have been initiated by state governments and private employer associations to develop and distribute measures of health care quality for hospitals and physicians. These efforts have been shown to lead to changes in care delivery methods, which have improved mortality rates for patients receiving certain medical procedures.
For example, the State of New York established the New York State Cardiac Surgery Reporting System, which reports statistics for individual hospitals and surgeons on risk-adjusted mortality rates. Certain hospitals that did poorly according to these quality data initiated changes in their CABG procedures that reduced mortality.69 In one case, a hospital in Albany that had higher-than-expected death rates for patients undergoing emergency bypass surgery found that the problems were related to the improper use of a device called an “intra-aortic balloon pump.” Death rates fell for the hospital after correcting the problem.70
These data also showed that mortality rates for patients served by physicians performing 50 or fewer bypass procedures per year had five times the statewide average mortality rate, reflecting the fact that outcomes are typically better among providers who have the greatest experience in performing the procedures. Consequently, most physicians performing fewer that 50 bypass procedures per year voluntarily stopped performing the surgery, and several hospitals now assign higher risk patients to surgeons with superior performance. One study showed that during the first four years of providing these data, risk adjusted mortality after CABG declined by 40 percent, from 4.17 percent to 2.45 percent.71 Pennsylvania, Minnesota, and the Cleveland area have systems that provide similar information for hospitals and physicians (Figure 4).72
However, it has been suggested that these reporting systems may not be responsible for these mortality improvements. For example, CABG mortality rates have improved nationally and in states that do not have these programs. Also, changes in data collection and reporting may have caused the mortality improvements to appear greater that they actually were. In addition, the Pennsylvania program has been criticized for unreliable data, inadequate risk assessment, and the absence of other quality indicators.73 However, administrators of both the Pennsylvania and the New York programs report that they have worked with providers to refine these measures and report that many doctors who initially were critical of the programs say that now they find value in the information.
| Figure 4 Existing Quality Monitoring Programs The National Committee for Quality Assurance (NCQA) Collects and publishes 71 measures of quality for individual health maintenance organizations, including: effectiveness of care, accessibility, cost of care, consumer satisfaction, stability of health plan, informed health care choices, use of services and plan characteristics.The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) requires hospitals to establish quality-monitoring programs that measure outcomes for individual hospitals.The New York State Cardiac Surgery Reporting System reports statistics for individual surgeons and hospitals on risk-adjusted mortality after care.The Pennsylvania Health Care Cost Containment Council reports actual and expected mortality rates for all Pennsylvania hospitals and surgeons providing CABG surgery.The Cleveland Health Quality Choice Program measures outcomes for all Cleveland hospitals including death rates, length of stay, and rates of complications, as well as patient satisfaction to facilitate comparison across hospitals.The Pacific Business Group on Health (PBGH) has established a fund that supports projects to measure and improve quality provided by health plans, hospitals, and physician groups.The Minnesota Health Data Institute was established by the state to collect and distribute performance information on the state’s health care delivery system.The New England HEDIS Coalition helps plans and purchasers develop, test, produce, and report measures of health plan performance.Foundation for Accountability (FACCT), formed in 1995, is a nonprofit consumer- and purchaser-driven organization that endorses, advocates, and promotes a common set of health care quality measures. FACCT has developed a framework for quality measurement across both FFS and managed care systems that focuses the data on questions of interest to consumers.The American Medical Association’s American Medical Accreditation Program (AMAP) project is being pilot tested and will make available a nationwide, standardized, quality-based credentialing program for individual physicians. |
These findings suggest that quality indicators data may have a more significant impact on provider behavior than on consumer behavior. Many consumers may pay little attention to the quality indicators data for their health plan as long as the doctor that they trust is in that plan’s network. However, providers appear to be substantially influenced by quality indicators data reported by name of provider, because it is feedback on their own performance. Providers with poor outcomes will find it difficult to ignore these findings due to peer pressure, the threat of losing surgical privileges, and the possibility that they will be excluded from health plan networks.
C. The Limitations of Outcomes Measures
While clinical outcomes measures are conceptually the most desirable quality indicators, there are serious limitations on the feasibility of using these measures for health plans and some providers. For example, one of the goals of the Medicare+Choice program enacted in 1997 is to provide consumers with information on the quality of care provided by individual health plans that they can use to choose among competing health plans.74 Ideally, the quality data would show outcomes measures for each plan, including mortality rates, clinical status indicators for persons with various diseases, and functional status for various types of patients. However, in a recent article, David Eddy argues that it generally will not be possible to develop meaningful outcome measures for health plans due to various practical limitations.75 He argues that in the case of health plans, we should downplay the use of outcomes measures and focus on the development of process measures showing the degree to which plans and providers adopt clinically appropriate treatments, as demonstrated in evidence-based research.
Eddy describes a number of obstacles to developing outcomes measures at the plan level. One of the most compelling difficulties is the low frequency of certain diseases. For example, there is evidence that breast cancer screening could change the breast cancer death rate by about 3 per 10,000 persons per year. Eddy estimates that to develop a statistically significant measure of the impact of screening would require a sample of about two million women. However, the median size health plan has fewer than 10,000 women over age 50, which makes it impossible to use this measure to produce a statistically significant outcomes-based comparison of outcomes for breast cancer care across health plans. While the frequency of disease is much greater among the aged and disabled populations covered by Medicare, the frequency of diseases still will be less than is required to make statistically significant comparisons across plans. Moreover, many outcomes measures take years to compile, such as the five-year cancer survival rates, which may be longer than most Medicare beneficiaries will be in their health plan. Also, outcomes often reflect a lifetime of care decisions that are outside of the Medicare plan’s control, such as cholesterol control prior to entering Medicare.
One of the difficulties in evaluating outcomes for both health plans and providers is the amount of information required to make valid comparisons. A full evaluation of outcomes will require a great deal of information comparable to that required in a clinical trial. This includes medical records information and measures of the severity of health conditions, which generally are not reported in insurer claims or encounter data. Obtaining these data would require laborious reviews of medical charts by medical professionals, which dramatically increases the cost of data collection.
Another major difficulty in comparing outcomes for health plans and providers is the need for risk adjustment. Outcomes will be influenced by the severity of illness experienced by the patient. Outcomes also can vary with individual characteristics such as age, gender, socioeconomic status, and environmental factors. Without properly adjusting for these factors, it is impossible to tell whether the observed differences in outcomes are attributed to differences in quality or population differences that have nothing to do with the quality of care provided. The methods required to properly account for these confounding factors are complex and typically involve a detailed review of medical chart data to determine the severity of illness.76
Eddy asserts that these difficulties of rarity, delay, weak control, and confounding influences generally make it impossible to develop reliable comparisons across plans based upon outcomes measures. These same problems substantially limit our ability to measure outcomes for smaller health care facilities. Instead of relying on outcomes measures, Eddy suggests that we should focus on comparisons of structural and process measures. Under this model, plans are compared based upon the rates at which they provide medical interventions that represent best medical practices, as demonstrated in clinical trials and other evidence-based research. A similar method could be used in comparing the quality of care for FFS providers. Detailed evaluations of outcomes would be reserved for the clinical trials that are used to develop these evidence-based standards of best practices. Although process measures would still require additional data collection, this approach would be substantially less expensive than attempting to compare actual outcomes across health plans.
There are several studies that demonstrate the linkage between process and outcomes. For example, a study of Medicare patients with congestive heart failure, heart attack, pneumonia, and stroke indicate that patients using hospitals in the lowest 25th percentile as ranked by a set of process measures had a 39 percent greater likelihood of dying within 30 days of admission than did patients in the highest 25th percentile. Another study of patients with coronary angiography for whom a revascularization procedure was considered necessary, mortality rates were about 9.0 percent for those who received the procedure compared with 16.0 percent among those who did not have the procedure.77 These results suggest that process measures would show results that are generally consistent with what outcomes measures would show.
This finding does not mean that outcomes measures should not be developed. This information is highly valuable for best practices research. However, outcomes measures may be best used by medical professionals seeking feedback on their performance who are familiar with the limitations of these data rather than by consumers who do not understand the difficulties in comparing outcomes across providers. For example, as discussed above, several states have collected and disseminated data on hospital mortality rates for patients receiving certain procedures such as coronary artery bypass graft (CABG) surgery. Despite the difficulties in comparing across facilities and the lack of adequate risk adjustment, many providers have acknowledged that the dissemination of these outcomes measures has resulted in substantial improvements in hospital performance due to a methodical review of these data and their implications by health care professionals.
IV. MEDICARE INITIATIVES TO MONITOR AND IMPROVE QUALITY
The Medicare program sponsors several initiatives for monitoring and improving the quality of care provided to Medicare beneficiaries. HCFA administers a provider certification program designed to ensure that providers of health services to Medicare beneficiaries meet minimum standards specified by Congress. Medicare also conducts a Medicare HMO qualification program that is designed to ensure that all participating health plans meet congressionally specified standards under the HMO risk contracting program, and under the Medicare+Choice program that will begin in 1999. Medicare considers facilities to have met Medicare standards if they are accredited by an approved private accrediting organization or that are certified by state agencies operating under contract to HCFA. The largest accrediting body is the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), which accredits hospitals and other health care facilities. By contrast, HCFA typically monitors HMO compliance directly with site visits conducted by HCFA personnel.
The Congress also has created peer review organizations (PROs) throughout the country that are charged with reviewing the appropriateness of care provided to Medicare beneficiaries through review of hospital admissions. The PROs also have responsibility for reviewing care provided in HMOs, and some are monitoring ambulatory care utilization as well. Medicare also participates in quality improvement programs based upon “best-practices” research sponsored by the Agency for Health Care Policy and Research (AHCPR). In addition, Medicare participates in several on-going quality improvement programs developed in cooperation with local PROs.
The principles of accreditation and quality monitoring have evolved over time as our understanding of quality improvement has progressed. For example, when Medicare was enacted, accreditation was focused on structural measures of quality. Over time, accrediting organizations have deemphasized structural standards and are placing greater emphasis on monitoring of outcomes demonstrations that facilities are using this information to improve quality. The PROs have also shifted to an outcomes orientation. For example, the predecessors to PROs, called “professional standards review organizations” (PSROs), were originated as a means of eliminating unnecessary hospitalizations through review of individual hospitalizations. The PROs then evolved as a mechanism for identifying providers who are delivering poor quality of care.
Today, both the PROs and the accrediting organizations have shifted emphasis to continuous quality improvement (CQI) efforts. CQI deemphasizes the identification of incidents of poor quality care and instead focuses on the overall performance of the health facility in terms of quality. Under the CQI model, facilities collect and analyze data on outcomes, which is reported back to the providers in a feedback loop that enables the facility to identify problems, initiate programs to improve performance, and monitor their progress in solving these problems. For example, the quality improvement initiatives of the Balanced Budget Act of 1997 (BBA) requires health plans to monitor their performance, initiate quality improvement programs, and to demonstrate actual improvements in quality over time. However, there are no comparable requirements that FFS providers must demonstrate actual quality improvements.
Our review of current Medicare quality monitoring and improvement programs is presented in the following sections:
- Medicare Provider Certification Program;
- Medicare HMO Qualification Program;
- Peer Review Organizations (PROs);
- Development of “Best-Practices” Guidelines; and
- Other Medicare Quality Improvement Initiatives.
A. Medicare Provider Certification Program
The Medicare Provider Certification Program is designed to ensure that all institutional facilities treating Medicare patients-including hospitals, nursing homes, laboratories, etc.-meet Medicare standards, called “conditions of participation.” In the original Medicare legislation, these standards included primarily “structural” indicators related to a facility’s ability to meet patient needs such as the qualifications of the staff, adequacy of facilities, and maintenance of medical records. In 1986, Congress updated the standards for hospitals to include some process measures as well. More recently, HCFA has started to implement new outcomes-oriented standards for home health agencies, nursing homes, and renal dialysis facilities.78
In the original statute, hospitals were assumed to have met these standards if they were accredited by the Joint Commission for Accreditation of Healthcare Organizations (JCAHO). For other facilities, Congress authorized HCFA to accept the certification provided by other accrediting organizations as well. If a facility has not requested accreditation from an approved accrediting organization, the appropriate state agency performs the certification survey under contract to HCFA. An accrediting organization whose certification is accepted by HCFA as compliance with these standards is said to have “deemed” status. Accreditation of facilities is also required in many states for licensure. Consequently, accrediting organizations can have a significant impact on the quality of care provided to Medicare beneficiaries. Figure 5 shows some of the major accrediting agencies used to ensure compliance with Medicare standards by sector of the health care industry.
Accrediting organizations also must maintain minimum standards to achieve deemed status. An accrediting organization must have: accreditation requirements that are at least equivalent to Medicare certification requirements; survey teams and procedures adequate to detect problems and ensure corrective action; and must make available to HCFA the results of the accreditation survey, including corrective action plans. HCFA also conducts validation surveys for a small percentage of facilities to ensure the private accreditors and state agencies are performing adequately.79Figure 5
Selected Accrediting Agencies Used by Health Care Segment
| Health Care Segment | Accrediting Agencies |
| Diagnostic Laboratories | Commission of Office Laboratory Accreditation College of American Pathologists |
| Immunology | American Association of Blood Banks American Society of Histocompatibility |
| Diagnostic and Therapeutic Radiology | American College of Radiology |
| Rehabilitation Facilities | Commission on Accreditation of Rehabilitation Facilities |
| Outpatient Surgery Facilities | American Association of Ambulatory Health Care Utilization Review Accreditation Commission JCAHO |
| Free-Standing Birthing Facilities | Commission on Accreditation of Free-Standing Birthing Centers |
| Trauma Systems | American College of Surgeons |
| Speech and Hearing Programs | American Speech and Hearing Association |
| Home Health Agencies | Community Health Accreditation Programs |
| Preferred Provider Organization | American Accreditation Programs, Inc. |
Source: Health Care Financing Administration (HCFA) Web site.
In 1996, Congress required HCFA to use a higher standard in reviewing accrediting agencies for providers other than hospitals. Before that time, the law required that the accreditation standards and implementation processes give the secretary a “reasonable assurance” that HCFA requirements are met. The 1996 law changed this to require that the accreditation organizations “meet or exceed” HCFA requirements. However, it is not clear how this will affect the accreditation process.
HCFA has the authority to revoke a provider’s certification if they fail to meet accreditation standards. Typically, when an accreditation organization finds that a provider does not comply with one or more conditions of participation, they are required to submit a corrective action plan and timetable. If the problem is serious enough to endanger Medicare beneficiaries, HCFA may revoke the provider’s certification to receive Medicare payments. The GAO has raised concern over the fact that HCFA rarely terminates hospitals from the Medicare program even though they might have been out of compliance with Medicare requirements months longer than allowed by law.80 However, recent data show that the number of hospitals found to be deficient under HCFA’s validation surveys has declined over time, suggesting that HCFA’s accreditation program is successful in ensuring that health facilities meet federal standards.81
One of the most important accrediting organizations is JCAHO, which provides accreditation for hospitals and other facilities. Brennan and Berwick provide an excellent discussion of the history of JCAHO.82 JCAHO was created in 1951 in response to physician needs to standardize practices at hospitals so the physicians could move more easily from one institution to another. The organization was dominated by major physician groups such as the American Medical Association and the American College of Surgeons and was essentially a form of self-regulation by the physician community. The organization established structural standards for hospitals and other facilities based upon principles of physical plant safety and maintenance of essential services. JCAHO also required measures to ensure clinical quality, but the hospitals were given great flexibility in this area. However, oversight has intensified since the 1970s due to corporate negligence theories related to medical liability and a growing interest in process and outcomes measures. Hospitals are surveyed every three years for a fee that hospitals pay to JCAHO. The hospitals received one of three ratings: accreditation for three years, accreditation for one year for those with compliance problems, or non-accreditation.
JCAHO has changed over the years to place greater emphasis on quality of care. In 1979, JCAHO eliminated certain audit requirements and shifted to requiring hospitals to perform quality assessments to identify areas of poor quality care. This tended to increase the perception of JCAHO as a regulatory body focusing on corrective actions in response to poor performance. Then in 1985 JCAHO announced an “agenda for change,” which reduced the number of structural standards and placed greater emphasis on monitoring performance, and taking steps to use this information to improve quality. The JCAHO also initiated an indicator measurement system (IMSystem) designed to provide outcomes measures, such as the number of cesarean sections per live birth and the number of central line system infections per day of central line use. JCAHO also put greater emphasis on quality improvement programs.
It is unclear whether these accreditation programs have succeeded in improving the quality of care. Only 1 percent to 2 percent of those who apply for accreditation receive less than fully accredited status, suggesting that minimum standards of care are widely maintained.83 However, the available evidence suggests that there is little statistical correlation between JCAHO ratings and other quality indicators. For example, a 1984 study of hospitals in New York found that hospitals with JACHO variances did not have higher mortality rates than other hospitals that did not have variances.84
Also, a recent survey of hospitals accredited by JCAHO indicated that only about 41 percent of hospitals indicated that they chose to be accredited because it helps improve the quality of care and only about one third agreed that accreditation distinguishes between good and bad facilities.85 About 80 percent said that they obtained certification to qualify for Medicare and Medicaid reimbursement, and about 70 percent cited credibility and public perception as a primary reason for seeking accreditation. The study also showed similar results for ambulatory surgical centers and other facilities accredited by JCAHO and other accrediting agencies. Thus the evidence that accreditation contributes to the quality of care is weak.
JCAHO also has been criticized for the way in which facility inspections are performed. Many hospitals report that they concentrate on accreditation issues in the six months leading up to the JACHO inspection held every three years while devoting little attention to these standards the rest of the time. Also, JACHO conducts training sessions on how to meet JACHO standards and will even send out a pre-inspection team to make sure that the facility is ready. Consequently, it is unclear whether the inspection process reflects the actual quality of care that is provided by these facilities on an ongoing basis. Also, despite JACHO’s shift in emphasis to quality improvement, it has been reported that many of their inspection teams are not qualified to evaluate CQI programs that hospitals have developed and continue to emphasize structural measures. The accreditation process also consumes a great deal of hospital resources without necessarily contributing to the quality of patient care. This is a particular concern in hospitals that also face numerous accreditation inspections from other accrediting agencies for surgical care, ambulatory care, and laboratories.
In response to these concerns, JCAHO announced the ORYX program in 1997, which will require hospitals to establish data collection and reporting systems to be used in computing a broad set of outcomes measures.86 Under this program, hospitals and long-term care facilities must select one or more of the 211 performance measurement software systems sold by over 60 vendors that have been accepted by the JCAHO Board of Commissioners. They then must select at least two clinical measures that relate to at least 20 percent of its patient population. This flexibility is provided so that hospitals may choose the measures that are most applicable for their own specialty. For example, a hospital that specializes in obstetrics will want to use different measures than a hospital specializing in cardiac care.
The purpose of the program is to increase “the relevance of accreditation” by providing hospitals and nursing homes with performance measures that help the institution improve quality while stepping back from its former more punitive practices of targeting “bad care.” Also, the use of a continuous monitoring system will ensure that at least this part of the accreditation process has a continuing impact on hospital performance throughout the accreditation period. However, hospitals have protested the cost of the program. Also, the variation in the measures and monitoring systems used by hospitals will make it difficult to use these data to compare performance across hospitals. Moreover, it remains to be seen whether JACHO will be able to change its image among hospitals as a regulator to that of a partner in helping facilities improve the quality of care that they provide.
3. Medicare FFS Monitoring Programs
In addition to accreditation, HCFA has a number of programs that monitor the performance of nursing homes, home health agencies, and other types of providers. For example, Medicare maintains a database called the “minimum data set” (MDS), which is designed to monitor health status outcomes of beneficiaries receiving care in long-term care facilities, including skilled nursing facilities (SNF), rehabilitation hospitals, and long-term care hospitals. Medicare also compiles the Outcome and Assessment Information Set (OASIS), which includes measures of health and functional status of beneficiaries receiving home health care services. In addition, the utilization review efforts of the Peer Review Organizations (PROs) (discussed below) are intended to monitor and improve quality. These monitoring efforts are summarized in Figure 6.Figure 6
Medicare Program Quality Monitoring Activities
| Activities | Year | Goals | Outcomes or Products |
| PRO Utilization Review Efforts | 1984 | Monitor and improve utilization and quality of care. | Collaborated with providers to improve efficiency and effectiveness.Investigated fraud and abuse. |
| Minimum Data Set (MDS) 2.0 | 1990 | Monitor health status outcomes of beneficiaries receiving care in long-term (>14 days) care setting (Skilled Nursing Facilities (SNF), Rehabilitation Hospitals, Long-term Care Hospitals).Collect data about characteristics of beneficiaries.Develop a severity-adjusted prospective payment system (PPS) for long-term care services and “short stay” extended care (<30 days). | Developed PPS for long-term care payment.Decreased rates of hospitalization.Mixed results on whether collection of MDS led to improved health outcomes. |
| Medicare Quality Surveillance System | 1997 | Monitor beneficiary utilization, as well as patterns and trends of utilization.Assist PROs in identifying quality improvement areas. | Quality Resume Report, a summary national and state-specific quality of care results, produced annually. |
| Outcome and Assessment Information Set | 1999 | Develop and implement measures to gauge health and functional status of beneficiaries receiving home health care services.Use data to develop a prospective payment system for services provided by home health agencies.Identify areas for quality improvement programs. | None. Implementation to begin in 1999. |
B. Medicare HMO Qualification Program
Currently, about 17 percent of Medicare beneficiaries receive their care through an HMO under the Medicare risk HMO contracting program. Under this program, beneficiaries have the option of electing HMO coverage, where HMOs are given a lump-sum premium amount in exchange for covering the care provided to these individuals. The standards for health plan participation requirements were changed under the 1997 Balanced Budget Act (BBA) to include requirements that health plans monitor various quality indicators and that plans demonstrate continuous improvement in these indicators over time. The BBA also created the Medicare+Choice program that permits plans other than HMOs to participate and requires plans to report health quality indicator data that will be provided to beneficiaries to assist in selecting among alternative health plans. The program is designed to give plans an incentive to improve the quality of care by forcing plans to compete on the basis of both price and quality.
When the Medicare risk-contracting program was created in 1982 under the Tax Equity and Fiscal Responsibility Act (TEFRA), Congress specified standards that HMOs must meet as a condition of participation, which were updated in the Omnibus Budget Reconciliation Act (OBRA) of 1986. Plans are required to be licensed by the state and must meet the definition of an HMO under the Federal HMO Act. Health plans must demonstrate their ability to provide Medicare-covered services and any additional services that the HMO proposes to cover for Medicare beneficiaries. They must also document that they will furnish services through providers and suppliers that meet Medicare statutory definitions. Plans also must agree to provide all Medicare covered services and to enroll beneficiaries on a first-come-first-served basis.
Prior to the BBA, plans were required to enroll beneficiaries on a continuous open-enrollment basis (i.e., participants can change plans at any time). Health plans were required to have at least 50 percent enrollment of commercial coverage in an attempt to ensure that the quality of care under these plans is comparable to the quality of care for the commercially insured population.87 However, the BBA changed these requirements to use an annual open enrollment period. Starting in 2003, Medicare+Choice enrollees generally will be required to remain with their plan for nine to twelve months.88 The 50 percent commercial coverage requirement also was eliminated under the BBA in an effort to attract more plans to participate.
Medicare HMOs must also demonstrate basic competencies as a part of the application and renewal process. To ensure access to quality care, health plans were required to: establish adequate provider networks; demonstrate the success of existing quality assurance programs; have continuous open enrollment; follow specific marketing and enrollment protocols; conduct health status review with new members; develop appropriate reimbursement systems for providers; and establish documented policies and procedures for managing utilization, patient satisfaction, and appeals systems. In addition, contracts with HMOs outlined specific levels of access that will be provided to members, such as: access to care 24 hours a day; same-day service for urgent appointments; routine appointments provided within 5 working days; and routine physicals within 4 weeks of request. HCFA also requires plans to submit maps and other information showing travel times to primary care providers and other facilities that are reviewed by HCFA to ensure adequate access.
Compliance with Medicare standards is enforced through on-site inspections of HMOs by HCFA personnel. HCFA does not rely upon accreditation organizations to determine compliance with Medicare standards as it does with many Medicare FFS providers. For example, the National Committee on Quality Assurance (NCQA) provides accreditation to HMOs, which has been useful to these plans in marketing their services to employers. However, due to the complexities of ensuring compliance with Title XIII (i.e., federally qualified HMO standards) and the quality improvement initiatives under the BBA, NCQA cannot be granted deemed status in determining compliance with all standards. Moreover, NCQA currently accredits only HMOs and could not be used to certify other types of health plans. However, the BBA requires that HCFA deem Medicare+Choice organizations to have met the BBA’s internal quality assurance, confidentiality and medical records requirements if the plan is accredited by an approved accrediting agency. HCFA also has indicated that accreditation by NCQA or other organizations would be considered as evidence of compliance with certain quality provisions.
The BBA also modified the standards of participation for health plans to include a quality assessment and performance improvement (QAPI) program. Under QAPI, HMOs, PSOs, PPOs, and network MSAs are required to monitor health care quality indicators and then demonstrate actual improvements in these quality indicators over time (FFS plans are exempt from QAPI). These BBA provisions have been integrated into a quality initiative begun in 1996 called the “Quality Improvement System for Managed Care” (QISMC).89 Under this program, managed care organizations must conduct two performance improvement projects that are oriented to improving outcomes. The topics chosen will be selected by the health plans and/or HCFA based upon quality indicators information supplied through the HCFA Quality Assurance Reform Initiative (QARI) and other data collection efforts. Under HCFA regulations, these topics should be ones that affect a significant portion of the organization’s Medicare enrollees and have a potentially significant impact on enrollee health, functional status, or satisfaction. After a phase-in period of two years, health plans must demonstrate actual improvements in performance under these initiatives every 12 months.
The quality improvements implemented by each plan will vary with the type of health plan and the extent of its ability to affect medical practice. For example, Medicare-coordinated care plans with relatively loose provider networks such as PPOs might have to design performance improvement projects that emphasize beneficiary education and provider education rather than the more prescriptive interventions that HMOs are able to implement. Also, some PPO contracts with providers do not allow for review of medical charts, while staff model HMOs may rely primarily upon chart review.90 Therefore, the type of quality improvement program implemented will depend upon the structure of the plan.
Also, under QISMC, managed care organizations must meet certain required levels of performance established by HCFA. For example, HCFA could specify a minimum level of flu/pneumonia immunizations for Medicare recipients. These minimum performance levels would be established by examining historical performance levels and benchmarks derived from best-practices information. The health plans will be required to take timely action to correct systemic problems that come to its attention through internal surveillance, complaints, or other mechanisms. For example, the plan would be required to correct systematic problems identified through external review organizations. Also, health plans are required to report quality indicator data to the NCQA HEDIS(r) data set so that this information can be provided to beneficiaries to assist in selecting a health plan under the Medicare+Choice program.
The QISMC program raises several issues. For example, the program imposes a requirement for plans to demonstrate actual improvement in quality, while no comparable requirements are imposed on physicians and facilities under the Medicare FFS program. Comparable requirements also could be imposed on physicians and facilities as part of a comprehensive plan to improve quality. Another concern is that the quality improvement initiatives are permitted to vary across plans. While this permits the organization to concentrate their efforts on areas that need the greatest improvement, it tends to run counter to achieving uniform nationwide standards and confounds comparison across plans.
In addition, HCFA conducts a series of quality monitoring projects for health plans. For example, the QISMC program is built upon HCFA’s Quality Assurance Reform Initiative (QARI), which was originally used to develop and test standards for states to use in monitoring and improving quality in Medicaid managed care plans. HCFA also is participating in the Consumer Assessment of Health Plans Survey (CAHPS) sponsored by the Agency for Health Care Policy Research (AHCPR), which collects detailed measures of member satisfaction. HCFA also is conducting a “Health of Seniors” survey to measure longitudinally the physical and mental functionality of beneficiaries over time, which will be included in the quality information that will be provided to beneficiaries under the Medicare+Choice program. These and other HCFA quality monitoring initiatives for managed care plans are shown in Figure 7.
Despite HCFA’s monitoring and quality assurance programs, HCFA has been criticized for being slow to enforce Medicare standards for HMOs when quality problems or deficiencies are found. The GAO cites an example where an HMO that repeatedly was found to be out of compliance was permitted to operate between 1987 and 1994 despite receiving reports from the area PRO and other sources that the HMO was providing substandard care to a significantFigure 7
Medicare Program Quality Monitoring Activities for Managed Care Plans a/
| Activity | Year | Goals | Outcomes or Products |
| Quality-related Consumer Protection Efforts | 1997 | Health plans must: Allow unrestricted access of beneficiaries to medical information.Formulate beneficiary grievance and appeals process.Disclose physician incentive programs.Pay for emergency services.Maintain written advance directive procedures. | Plans not meeting requirements are ineligible for Medicare participation.PROs investigate beneficiary complaints.Review Boards hear grievances and appeals. |
| Medicare HEDISo | 1997 | Collect standardized data for comparability with Medicaid and general population.Set minimum standards for plan performance.Provide beneficiaries information to facilitate health plan selection.Identify areas for quality improvement initiatives. | Data released to beneficiaries in November 1998.Initial audits revealed data quality problems. Currently developing efforts to improve data quality. |
| CAHPS | 1997 | Assess beneficiary perceptions of key health plan elements such as access, communication, quality of care provided.Set minimum standards for plan performance.Provide beneficiaries information to facilitate health plan selection.Identify areas for quality improvement initiatives. | None Data released November 1998. |
| Disenrollment Rates | 1997 | Publicly release plan disenrollment rates. | None Data to be released Spring 1999. |
| User Encounter Data to Assess Quality | 1998 | Use encounter data to measure access and quality of care. | None Feasibility study recently completed. |
| “Health of Seniors” Survey | 1998 | Longitudinally track and measure physical and mental functionality of beneficiaries.Provides beneficiaries information to facilitate health plan selection.Identify areas for quality improvement initiatives. | None currently, but hope to construct plan-level risk profiles. Spring 1998 – initial cohort surveys. Spring 2000 – re-measurement. |
| CAHPS Disenrollment Survey | Late 1999 | Identify reasons for disenrollment.Characterize plan experiences. | First national survey to be conducted in late 1999.Data to be released in Fall 2000. |
a/ Managed care plans defined by HCFA as health maintenance organizations, preferred
provider organizations, provider-sponsored service organizations, and other coordinated care plans.
number of beneficiaries.91 Other HMOs also were permitted to continue operation despite PRO reports of inadequate care.92 In addition, the GAO found that HCFA does not routinely release its site visit reports to the public. HCFA has indicated that they prefer to work with plans to meet these requirements rather than using enforcement actions. However, this failure to enforce these standards may reflect the fact that HCFA’s role in promoting health plan participation in the program is potentially in conflict with its role in enforcing quality standards on health plans.
Also, HCFA recently relaxed the BBA quality improvement requirements in response to industry concerns that this degree of regulation is excessive and is inconsistent with the structures of certain types of plans such as PPOs and private FFS plans.93 HCFA reduced the number of performance improvement projects required, gave plans greater flexibility in implementing quality improvement initiatives and delayed by three years the requirement that plans demonstrate improvements in quality.94 It remains to be seen whether these quality initiatives will be implemented effectively.
2. Value Purchasing Initiative
The Balanced Budget Act of 1997 introduced sweeping changes to Medicare through the Medicare+Choice program that are in part designed to create competitive incentives for health plans to improve quality. The Medicare+Choice program will permit Medicare beneficiaries to choose among a wide range of health plans in addition to the HMO coverage options now available to beneficiaries. These include private FFS programs (PFFS) Preferred Provider Organization (PPO) plans, and Medical Savings Accounts (MSAs) (for up to 390,000 persons only). The Medicare risk plans also will be allowed to offer a Point of Service (POS) option that permits use of non-HMO physicians in addition to the traditional HMO option. These changes are designed to address the consumers’ desire for choice and increase the level of competition among health plans and providers.
The BBA requires HCFA to provide Medicare beneficiaries with information on the quality of care provided by the various health plans offering coverage under the Medicare+Choice. The intention is to promote “value purchasing” of health coverage by providing beneficiaries with quality of care data to use along with other information on plan features, limitations, and premiums in selecting a health plan. This will involve collecting large amounts of data on the health conditions experienced by plan enrollees, the types of services received, and outcomes. The BBA also requires HCFA to mail to all beneficiaries general information on: benefits, cost sharing, and balance billing in original Medicare; enrollment procedures; beneficiary rights, including appeals and grievance procedures; and Medigap (i.e., supplemental benefits). The mailing also must compare plans available to the beneficiary in their area on: supplemental benefits; premiums, cost sharing, and balance billing; access to out-of-network providers; quality and performance measures, including enrollee satisfaction survey results, disenrollment rates, health outcomes, and internal plan appeals data.95
HCFA has encountered problems in implementing the Medicare+Choice program. For example, while HCFA has risk contracts with 345 HMOs, they have received applications from just two PSOs and one PPO nationwide to participate in the Medicare+Choice program. Also, some HMOs have withdrawn from the program citing reduced profitability and the burden of complying with Medicare+Choice regulations as the reasons for departure from the market. Although participation is likely to grow in future years as insurers develop more experience with the program, the lack of new participants will make the program less competitive overall. In addition, HCFA has found that the quality indicators data available for many plans are very limited and are often inappropriate for comparisons across plans.
Moreover, there are serious limitations in the types of outcomes measures that can be developed for individual health plans.96 As discussed above, many of the participating health plans have too few members to develop statistically significant comparisons of mortality by disease across plans. Also, the lack of a reliable and economical risk adjustment methodology may make it impossible to develop reliable comparisons across plans. In fact, as David Eddy argues, process measures may be the only reliable measures available for comparing health plan quality. Consequently, it is not clear whether HCFA will be able to provide reliable information comparing outcomes across health plans.
Another concern is that as the number of plan options increases under Medicare+Choice, it will make decisions more difficult for members, and will complicate data collection and analysis of outcomes.97 Medicare has earmarked $95 million ($2.44 per beneficiary) for consumer education with regard to the changes in the Medicare program under BBA. While this amount is well below the $200 million requested by Medicare, the education program will be pilot tested on a limited number of counties first. Key components of the communication quality tools slated for educating members include marketing programs, marketing materials, Internet linkages, and a consumer telephone hot line. Given the number of options in some areas and the limitations on switching among plans imposed under the BBA, this educational effort is critical for successful implementation. However, as discussed above, there is evidence that consumers may give little weight to quality performance information in choosing a health plan.
3. Other Quality Assurance Issues
The BBA also eliminates some of the quality assurance provisions under the existing HMO risk-contracting program that could affect the quality of care provided in Medicare HMOs. As discussed above, the BBA eliminates the requirement that plans have 50 percent commercial enrollment. While this change in policy is designed to encourage more health plans to enter the market, it could erode “commercial equivalent quality” as the standard for quality in these plans. The BBA also requires the devolution of responsibility from HCFA to the states with respect to contracting, accreditation, and monitoring the insurance organizations that stand between Medicare and the providers. While Medicare has strengthened the requirement for full reporting of all utilization data associated with Medicare enrollees, the states were given most of the responsibility of ensuring that the insuring entities are viable, well organized, and responsive to the consumer. This change effectively lessens HCFA’s ability to affect directly the quality of care in Medicare+Choice health plans.
The BBA also permits provider service networks (PSOs) to provide coverage under Medicare+Choice. PSOs are risk-bearing organizations, where the providers of care bear 51 percent or more of the risk associated with care delivery and care management. PSOs will assume responsibility for utilization review and quality assurance. To promote consistency in quality management across health plans and PSOs, these organizations will be required to meet Medicare or state HMO accrediting and credentialing requirements for these functions. However, PSOs will face substantially lower minimum reserve balance requirements than other health plans.
A major concern with the PSO model is that participating providers, who are part owners of the plan, will face strong financial incentives to avoid performing various high-cost treatments resulting in reduced quality of care. Medicare attempts to guard against this behavior in all types of health plans covering Medicare beneficiaries by: requiring plans to inform the agency of physician compensation arrangements; prohibiting incentive payments for individual decisions; and limiting incentive payments to 30 percent of total compensation. However, as compared with providers in other types of plans, PSO providers have an added incentive to limit the use of services due to the fact that they generally will be owners of the organizations that share in the overall profitability of the plan. Thus the financial incentives for providers in PSOs are even stronger than those faced by conventional Medicare HMO providers, which could lead to reductions in the quality of care for PSO enrollees. Consequently, continual monitoring of PSO performance and outcomes will be needed to ensure that quality is not compromised by these financial incentives.
C. Peer Review Organizations (PROs)
Peer Review Organizations evolved from the Professional Standards Review Organizations (PSROs) established by Congress in 1972. Over 200 PSROs were established throughout the country. PSROs were charged with ensuring that the care provided by physicians and institutions is medically necessary and of a quality that meets local professional standards. However, the highest priority was given to utilization review activities designed to eliminate unnecessary use in an effort to control the growth in costs under the Medicare program.98 PSROs were to develop regional norms for length of hospital stay and utilization for persons with various diseases that would be approved by the National Professional Standards Review Council (NPSRC) to achieve some degree of uniformity across the country.99 PSROs would then use these standards to identify inappropriate utilization, which typically meant unnecessary hospitalizations. PSRO functions included both retrospective and prospective utilization review as well as concurrent review of length of stay. However, PSROs were not given the authority to identify cases of substandard care (i.e., poor technical quality).
PSROs also conducted medical care evaluation (MCE) studies based upon medical record audits for locally identified quality problems related to specific disease, technologies, or procedures. In some instances, PSROs conducted area-wide studies that permitted comparisons of outcomes across hospitals. Also, in addition to basic hospital utilization review, many PSROs reviewed hospital-related ancillary services (e.g., radiology, medications, laboratory tests) and some ambulatory care services.
The PSROs reflected the tradition of physician self-regulation up to that time. The legislation required PSROs to be nonprofit organizations composed of physicians who would review the hospital treatment decisions of their peers. PSROs also were permitted to delegate quality assurance and utilization review responsibilities and MCE studies to hospitals, thus extending the principle of self-regulation to hospitals. The legislation also was designed to avoid domination by the medical societies by permitting physicians who are not members of these societies to participate. However, as Brennan and Berwick point out, the PSRO program was different than prior forms of regulation in that it addressed provider decision making, which is a key element of health care inflation.100 It also was unique in that it provided for analyses of the quality of care provided. However, PSROs failed in their primary function of controlling cost growth, thus eliminating hopes that a self-regulated system would be able to hold down costs in a fee-for-service (FFS) environment.
Partly due to the failure of PSROs in controlling costs, the Congress enacted the Prospective Payment system (PPS) for hospitals in 1983. TEFRA abolished the PSRO program and replaced it with a system of 54 peer review organizations (PROs) throughout the country. Organizations could submit bids to HCFA to administer the PRO in each of the 54 areas of the country. The Congress lessened physician control by permitting insurance companies and other fiscal intermediaries to compete for the PRO contracts. Also, unlike the PSRO program, PROs were prohibited from delegating review responsibilities to hospitals and PROS were given new authority to sanction physicians and deny payment of claims. This represented a significant break from historical practices of provider self-regulation. Moreover, these new powers to deny claims and sanction physicians established the PRO as potential antagonists for physicians.
As with the PSROs, PROs are required to perform utilization review functions. However, because the PPS system was designed to eliminate excessive length of stay, the PROs were expected to devote less time to concurrent utilization review and to concentrate more on the appropriateness of hospitalizations and the quality of care. OBRA also required PROs to review early readmissions as a potential indication of quality problems.101 However, that legislation also required PROs to devote a reasonable portion of their resources to systematic reviews of quality of care. This tended to shift the emphasis from sanctions for poor performance to broader measures of patterns that are indicative of quality problems, such as nosecomial infection rates and early readmissions.102 However, sanctions of providers who provided poor quality care continued to be a major function of PROs.
The functions of PROs are determined by the Scope of Work (SOW) specified in the Request for Proposals (RFP) that HCFA develops. The SOW has evolved over time and is one of HCFA’s primary tools for improving the quality of care provided to Medicare FFS beneficiaries. Since 1988, the SOW increased the emphasis on retrospective review of inpatient admissions. The 1988 SOW reflected a strategy for identifying instances of poor quality by requiring PROs to review a 3 percent random sample of all discharges, half of all transfers cases, and 25 percent of all readmissions within 31 days of discharge. This includes outpatient care rendered between stays, and specified percentages of cases in certain diagnostic-related groups (DRGs) that tend to involve quality problems. The PROs were also required to perform quality reviews of Medicare risk HMOs. PROs were required to perform a series of activities for each of the cases reviewed, including:
- Generic Quality Screening: This includes quality screens covering: adequacy of discharge planning; medical stability of patient at discharge; unexpected deaths; nosecomial infections; unscheduled return to surgery; and trauma suffered in the hospital.
- Retrospective Admission Review Retrospectively identifies medically unnecessary or inappropriate admissions.
- Invasive Procedure Review Retrospectively identifies medically unnecessary procedures provided while hospitalized. The process can result in payment denial.
- DRG Validation: Ensure the accurate classification of the hospital stay by DRG category.
- Coverage Review Determines whether services provided are covered by Medicare.
- Preadmission and Preprocedure Review: PROs are required to review 10 procedures on a preadmission and preprocedure basis for medical necessity and appropriateness of setting.
PROs also are required to design and implement a Quality Improvement Plan (QIP) in response to a proven quality problem. Potential QIP responses include: notification of providers or practitioners of a confirmed quality problem; provider education ranging from telephone discussions with medical professionals to continuing medical education courses; intensification of utilization review for the provider including pre-certification requirements; coordination with licensing and accreditation bodies; and recommendations for sanctions to the Secretary of DHHS. (Examples of some of these PRO QIP programs are discussed below.) In addition, PROs are required to investigate complaints from patients, which has tended to heighten perceptions that PROs are out to identify “bad apples” in the health care industry.
As discussed above, the PROs image as an inspector bent on singling out practitioners of poor quality care undermines the PROs ability to participate in a broad-based continuous quality improvement (CQI) effort that emphasizes physician participation and cooperation among all participants in the system. In response to this, HCFA launched the Health Care Quality Improvement Initiative (HCQII) in 1993, which was designed to shift the PROs from the role of policing individual providers to supplying information on quality.103 The PROs were to use nationally uniform criteria to examine patterns of care. The PROs would focus on persistent deficiencies in care while de-emphasizing occasional deficiencies. They also would supply information to providers and/or facilities and permit providers to perform careful reviews of these data. These changes are intended to put PROs in their most productive role as a participant in a continuous quality improvement system. In fact, under HCFA’s sixth SOW (covering 1999 through 2001), PROs will be required to demonstrate measurable improvement in enrollee health and functioning, with emphasis on six priority areas: diabetes, pneumonia, acute myocardial infarction (AMI), congestive heart failure, breast cancer screening, and stroke prevention.
“Best practices” are evidence-based assessments of the medical therapies that are most likely to produce the best clinical results for persons with given conditions. Information on best-practices data have been used by both the public and private sector to develop guidelines on how patients with certain conditions should be treated given the progression of the disease or type of complications encountered.104 The IOM, which is chartered by the National Academy of Sciences, defines practice guidelines as systematically developed statements that assist practitioners in making decisions about appropriate health care for specific clinical conditions.105
The purpose of medical practice guidelines is to provide the physician with a concise statement of what the consensus of the medical research literature and professional opinion indicate is the most effective course of treatment. Guidelines often are based upon scientific evidence derived from clinical trials and experience. However, where there is a lack of scientific information, guidelines often are based upon expert medical opinion. Moreover, practice guidelines are typically presented as acceptable therapy options rather than as standardized practices. There are about 75 public and private organizations that have developed over 2000 medical practice guidelines.106
The principal federal agency responsible for the development of research on best practices is the Agency for Health Care Policy Research (AHCPR).107 Much of the research developed by AHCPR is designed to help improve the quality of care provided to Medicare and Medicaid beneficiaries by focusing research on diseases that are common among these populations.108 The Health Care Financing Administration (HCFA), which is responsible for the Medicare program, does not perform research on best practices and guidelines itself, although HCFA is active in collecting outcomes data and implementing guidelines through the PROs. The best-practices research developed by AHCPR incorporate both clinical research on the efficacy of specific therapies and a broad range of outcomes measures, including mortality, quality of life, functional capacity, symptom relief, and cost.109 One approach used by AHCPR is to establish Patient Outcomes Research Teams (PORTs), which are charged with conducting outcomes research for individual topics such as ischemic heart disease and localized prostate cancer.
Clinical studies typically measure the physiological impacts of various medical therapies on patients such as a randomized controlled trial (RCT) comparing radical prostatectomy to watchful waiting for localized prostate cancer. Studies of this type are typically funded by the National Institutes of Health, private foundations, and manufacturers of drugs and medical devices. When multiple RCTs are available, AHCPR researchers often use meta analysis techniques, which effectively pool the data from multiple studies to develop efficacy measures based upon the overall pattern of the results found in the available research.110 This approach can substantially improve the confidence that can be placed in the available literature.
However, the reliability of the available research often is questionable. For example, the PORTs often found that there were few RTC studies available on the impact of alternative therapies for relatively common diseases such as localized prostate cancer. Also, many of the available studies failed to design the analysis in ways where the persons receiving a given therapy in the study are comparable to the persons receiving alternative therapies in terms of demographics and severity.111 In fact, due to the high cost of clinical trials, it is estimated that up to 80 percent of modern medical modalities have no basis in published science of adequate quality.112 Also, RCTs are generally performed on carefully selected patients at academic medical centers, raising concerns that these findings may not be generally applicable in everyday medical practice.113 Thus the clinical literature itself often does not support definitive conclusions about the effectiveness of treatment.
To complement the available literature, the PORTs also sponsor health services research studies drawing data from multiple sources to examine outcomes that are typically most important to patients such as mortality, morbidity, complications, physical functioning, health status, symptom relief, role functioning, and satisfaction with care. Some of these analyses can be performed using Medicare claims data, which provide a history of the medical conditions treated for each beneficiary and their utilization of Medicare covered health services. These data identify patients receiving certain procedures and provide data on survival rates, hospital readmissions, morbidity, and costs. However, these data are not sufficient to examine the complications resulting from medical treatment, changes in functional status, symptom relief, and other questions that are important to consumers. To obtain these data, AHCPR conducts follow-up surveys in years following treatment for persons receiving alternative treatments for selected health conditions. These data are taken together with expert opinion and published literature to develop guidelines for clinical practice.
The AHCPR also sponsors evidence-based practice centers that work with public- and private-sector organizations seeking to improve the quality of care. These centers, which are typically composed of methodologists and clinical experts, perform rigorous synthesis and meta-analyses of articles in the scientific literature on the effectiveness of health care services and technologies. While the literature on the effectiveness of alternative treatments is growing, these data are often contradictory and the reasons for these differences are not always apparent. The role of the centers is to review the appropriateness of the methodologies used in these studies and to identify their implications for the practice of medicine. The topics under study are shown in Figure 8. The centers also will work closely with public and private organizations that intend to use these products to ensure their proper use.
AHCPR has taken the results from this research and incorporated them into decision modeling systems that are designed to provide practical assistance in medical decision making. These computer-based models permit the physician to input key indicators of clinical health status, complications, medical history, and demographics to select a recommended treatment option for a patient. These models incorporate information from literature reviews on the probability of various outcomes, claims data analysis, chart abstraction, and patient surveys into a cohesive framework for identifying the treatment approach that is most likely to have the best outcomes from both a clinical and a quality of life perspective. For example, a model developed by the ischemic heart disease PORT predicts the likely outcome of alternative treatments following cardiac catheterization, including medical management, percutaneous transluminary coronary angioplasty (PTCA), and coronary artery bypass graft (CABG) surgery. The prostate disease PORT developed a model that projects life expectancy for men over age 65 who have a radical prostatectomy that can be used to assist patients and physicians in deciding between surgery or watchful waiting.114Figure 8
AHCPR’s Evidence-Based Practice Centers and Research Topics
| Evidence-Based Practice Center | Research Topic |
| Blue Cross/Blue Shield Technology Evaluation Center, Chicago, IL | Testosterone Suppression Treatment for Prostatic Cancer |
| Duke University, Durham, NC | Evaluation of Cervical Cytology |
| ECRI, Plymouth Meeting, PA | Diagnosis and Treatment of Dysphagia/Swallowing in the Elderly |
| Johns Hopkins University, Baltimore, MD | Evaluation and Treatment of New Onset of Atrial Fibrillation in the Elderly |
| McMaster University, Hamilton, Ontario, Canada | Treatment of Attention Deficit/Hyperactivity Disorder |
| MetaWorks, Inc., Boston MA | Diagnosis of Sleep Apnea |
| New England Medical Center, Boston, MA | Diagnosis and Treatment of Acute Sinusitis |
| Oregon Health Sciences University, Portland, OR | Rehabilitation of Persons with Traumatic Brain Injury |
| RAND Corporation, Santa Monica, CA | Prevention and Management of Urinary Complications in Paralyzed Persons |
| Research Triangle Institute and University of North Carolina, Chapel Hill, NC | Pharmacotherapy for Alcohol Dependence |
| University of California, San Francisco, and Stanford University, San Francisco, CA and Stanford CA | Management of Stable Angina |
| University of Texas, San Antonio, TX | Depression Treatment with New Drugs |
Source: Agency for Health Care Policy and Research (AHCPR), 1997.
AHCPR research also is directed at helping physicians integrate new drugs and technology into medical practice. For example, Warfarin is an important drug in preventing strokes that, if used where recommended, could prevent up to 40,000 strokes per year. However, AHCPR research indicates that fewer than 25 percent of eligible patients actually receive the drug because most doctors fear that their patients may experience bleeding complications. In response to this, AHCPR is supporting a clinical trial to determine the most effective way to administer the drug to increase physician confidence in its use. In another instance, AHCPR research showed an underuse of thrombolytic drugs for patients with a recent heart attack, despite a number of clinical trials showing that this treatment was effective. It also was found that a major reason for underuse was uncertainty by physicians about which patients would benefit most from these drugs. AHCPR researchers developed an algorithm that is an accurate predictor of who would benefit most. This algorithm was programmed into an electrocardiograph (EKG) so that emergency room physicians treating probable heart attack victims will receive an immediate indication of whether the patient will benefit from thrombolytic therapy (FDA approval pending).
Many private organizations have developed clinical practice guidelines. Sources of guidelines include: The American Medical Association; The American College of Cardiology; the Rand Corporation; The American Heart Association; and private companies such as Milliman and Robertson. Because there are many sources of guidelines, it is not uncommon to find that these guidelines conflict. For example, the General Accounting Office reports that there are four organizations that have issued guidelines on prostate cancer screening. The American Urological Association, the American College of Radiology, and the American Cancer Society recommend using the prostate-specific antigen test for all eligible patients aged 50 and older, whereas the U.S. Preventive Services Task Force (USPSTF)115 recommends against the routine use of the test.116
Guidelines based upon best-practices research are widely used in private managed care plans. The GAO estimates that about 76 percent of HMOs and 28 percent of preferred provider organizations (PPOs) used guidelines. The use of guidelines is actually promoted by NCQA accreditation standards, which require that health plans have guidelines for the use of preventive services. Several of the plans surveyed by the GAO indicated that these guidelines led to reduced costs while improving quality. For example, one plan reported adopting a guideline for treating stroke patients that encouraged physical therapy early in the patient’s hospital stay, resulting in reduced length of stay and improved outcomes. Another plan adopted a guideline to provide intensive management to non-insulin-dependent diabetes patients to prevent avoidable complications.
The plans interviewed by the GAO also indicated that local involvement of physicians in developing guidelines is crucial to their effective implementation. They point out that physician confidence in the guidelines improves when they have participated in their development. One plan even indicated that published guidelines need to be modified so that they are more consistent with local standards of care. However, these comments stand in sharp contrast to an emerging consensus that the wide variations in medical practice throughout the country should become more standardized to reflect the evidence on the treatment protocols that achieve the best outcomes. This tension between the need to adopt best practices and maintenance of local standards is not likely to be resolved easily.
Private efforts also are under way to encourage the diffusion of “best-practices” and protocols. The National Coalition on Health Care and the Boston-based Institute for Healthcare Improvement, for example, are jointly engaged in an initiative called “Accelerating Change Today” (ACT) For America’s Health. The initiative aims to identify exemplary health care practices and build public awareness of the need for quality improvement.117 The program will focus on best-practices innovations that are: yielding better patient outcomes; increasing access to timely medical care; lowering costs; making the health system easier to use; and reducing medical errors and inappropriate and unnecessary care.
E. Other Medicare Quality Improvement Initiatives
Efforts to improve quality of care delivered to Medicare beneficiaries include quality improvement programs (QIP) initiated by PROs, congressionally mandated demonstration projects, and HCFA participation in initiatives sponsored by outside organizations such as institutes and foundations. These initiatives are summarized in Figure 9.
Beginning in 1993 with the advent of HQIP, PROs expanded their quality monitoring focus to include quality improvement. Since quality improvement efforts are PRO-initiated, the types and quantity of quality improvement projects vary from state to state. A significant portion of QI efforts focus on inpatient care, though more recent efforts are looking at ambulatory care processes as well. The majority of improvement projects are still in progress. However, results from completed projects suggest that these efforts have resulted in quality of care improvements. For example, the Cooperative Cardiovascular Project, a four-state pilot project to improve post-heart attack care received by beneficiaries, resulted in a 10 percent reduction in 30-day mortality and an increased use of therapies such as aspirin and (-blockers that are proven to reduce the risk of future heart attacks.
Congressionally mandated demonstration projects are utilized to examine the impact of alternative financing or care delivery options on the costs and quality of care received by beneficiaries. Recent demonstrations are focusing on the impact of capitated payment on quality of care delivered. One example includes the Heart Bypass Center Demonstration. Results from this demonstration suggest that it is possible for hospitals to institute a capitated payment for coronary artery bypass graft (CABG) surgery (including physician services) without comprising quality of care.
Participation in quality improvement initiatives sponsored by other organizations represents another avenue used by HCFA to improve quality of care. For example, HCFA, PROs, and providers are participating in Rapid Early Action for Coronary Treatment (REACT) initiative, which is a quality improvement project sponsored by the National Heart, Lung, and Blood Institute to decrease the time period from heart attack onset to patient presentation in the emergency department. The intervention phase of this project was completed in August 1998, so outcomes data are not available.
In addition, the Medicare Managed Care Quality Improvement Project (MMCQIP) is designed to assist in assessing how well the ambulatory care process in managed care plans is meeting the needs of HMO beneficiaries. HCFA is currently evaluating the care received by Medicare beneficiaries with diabetes mellitus, and also is examining the incidence of screening mammography. The program is being operated in conjunction with PROs in eight states, including California, Florida, New York, Pennsylvania, Minnesota, Maryland, Iowa, and Alabama.Figure 9
Medicare Quality Improvement Projects (QIP)
| Project | Year | Scope | Groups Involved | Goals | Outcomes or Products |
| Cooperative Cardiovascular Project | 1993 | 1993 – Four state pilot 1995 – Nationwide | HCFA Peer Review Organization (PROs) American Medical Association Hospitals | Improve quality of care received by Medicare beneficiaries who have recently had a heart attack.PROs feedback quality of care indicators to improve outcomes. | Pilot intervention results: 10% drop in 30-day mortality.Increased post-heart attack aspirin use from 84% to 90%.Increased (-blocker use from 47% to 68%.Pilot expanded nationwide. |
| Rapid Early Action for Coronary Treatment (REACT) | 1994 | Four-year demonstration in seven states | National Heart, Lung, and Blood Institute (sponsor) HCFA PROs Community-Based Organizations | Decrease the elapsed time from onset of heart attack to patient arrival in hospital. | None. Intervention completed in August 1998. |
| Ambulatory Care Stroke Prevention Initiative: Management of Atrial Fibrillation | As of March 1998 | 43 projects in 42 states | HCFA PROs Center for Clinical Quality Evaluation (CCQE) Health Providers and Plans | Decrease incidence of ischemic strokes by increasing use of anti-coagulants in patients with Atrial Fibrillation. | Intervention results from 28 projects 15.2% increase in use of Warfarin.21.7% increase in use of anticoagulation therapy.Project to continue in 6th SOW. |
| Heart Bypass Center Demonstration | 1991-1996 1993-1996 | Four hospitals Three more hospitals added | HCFA Seven demonstration hospitals Control group of hospitals | Determine the feasibility and cost-effectiveness of negotiating capitated payment for coronary artery bypass graft (CABG) surgery without compromising quality of care. | Pilot results from seven hospitals Decreased length of stay from .5 to 1 day per year.$50.3 million saved.Reduced one-year mortality by 8%.No differences in self-reported health status between demonstration and nondemonstration hospitals. |
| End Stage Renal Disease (ESRD) Health Care Quality Improvement Program | 1994 1996 1996 | Nationwide: ESRD Core Indicators ProjectESRD Anemia Cooperative ProjectThree hospitals in three states: ESRD Managed Care Demonstration Project | HCFA ESRD networks & providers | Improve care delivered to ESRD patients. | Developed guides and core indicator sets to identify and implement QI initiatives.Developed algorithm for treatment of anemia in ESRD patients. |
| PRO Community Acquired Pneumonia Projects | As of March 1998 | 40 projects in 31 states | HCFA PROs Hospitals | Improve administration of antibiotics in pneumonia patients by using best-practices guidelines. | Intervention results from 30 projects 8.4% increase in proportion of patients treated with antibiotics within 4 hours of presentation.37% decreased in length of stay.22% decrease in mortality. |
| Pneumonia/Flu 2000 | As of March 1998 | 85 projects nationwide | HCFA PROs Centers for Disease Control (CDC) National Coalition for Adult Immunizations Health Plans Community-Based Organizations Beneficiaries | Increase older adults’ flu vaccinations to reach the Healthy People 2000 objective of 60%. | Nationwide results: 1995-1996 2.2% increase in proportion of beneficiaries vaccinated (40% to 42.9%). |
| PRO Bilateral Cardiac Catheterizations | As of March 1998 | 19 projects nationwide | HCFA PROs Catheterization facilities/Hospitals | Reduce inappropriate use of bilateral cardiac catheterizations. | Intervention results from 10 projects All 10 projects report decreases in catheterizations performed.Received reports of hospitals not participating in the projects voluntarily attempting to reduce bilateral catheterizations. |
| PRO Diabetes Projects | As of March 1998 | 179 projects nationwide | HCFA PROs Providers | Improve ambulatory care process within diabetic population. Projects are focusing on increasing the use of eye exams, foot exams, and ACE inhibitors. | 6% average increase in eye exams performed (7 reporting projects).9.7% average increase in foot exams performed (9 reporting projects).4.5% average increase in ACE inhibitor use (14 reporting projects).In 6th SOW, all plans required to implement a diabetes QIP. |
| Medicare Managed Care Quality Improvement Project (Diabetes) | 1994 | Five states | HCFA 5 PROs 23 Managed Care Organizations | Create, implement, and evaluate interventions to improve care delivered to diabetics.Current focus is on improving diabetic foot care by distributing education materials to providers and patients. | 1995 – baseline measurement.1998 – remeasurement occurring. |
| Diabetes Quality Improvement Project (DQIP) | 1997 | Nationwide | HCFA American Diabetes Association National Committee for Quality Assurance (NCQA) Foundation for Accountability (FACCT) American Academy of Physicians American College of Physicians Veterans Administration | Develop set of evidence-based guidelines to monitor and improve clinical and functional outcomes of diabetics. | None. 1999 – Voluntary reporting. 2000 – Mandatory reporting (part of HEDIS requirements). |
| National Medicare Mammography Campaign | 1995 | Nationwide | HCFA Public Health Service State and local health departments Advocacy groups Professional Societies | Reduce breast cancer mortality rate of women 65 and older.Increase Medicare-paid-for mammography screening rate to 60% by the year 2000 (special focus on Hispanic and African American women).Increase beneficiary awareness of mammography coverage.Increase number of Medicare mammography referrals. | Anticipate evaluating different interventions.Anticipate disseminating successful interventions.Build more formal relationships with related national-level efforts. |
| Medicare Managed Care Quality Improvement Project (Mammography Screening) | 1994-1995 | Five states | HCFA 5 PROs 23 Managed Care Organizations | Improve mammography-screening rate in female beneficiaries. | Initial results demonstrate improvement possible. |
| Nursing Home QIPs | As of 1998 | Nationwide | State survey agencies HCFA State nursing home associations JCAHO American Health Care Association (AHCA) | Improve quality of care delivered in nursing homes. | Available evidence suggests QIPs have not improved care.However, data limitations lead to inconclusive results. |
| “Older Adults Proposed Module” (Pilot Module for Behavior Risk Factor Surveillance Survey – BRFSS) | 1996 | At least 11 pilot states | CDC HCFA | Collect up-to-date information on the health status, behaviors, and risk profiles of beneficiaries. | Piloting module during 1999. |
| Medicare Coordinated Care Demonstration for FFS health plans | 1999 | At least 9 sites, including 5 urban areas, 3 rural areas, and the District of Columbia | HCFA Fee-for-Service Health plans | Evaluate coordination of care models (such as case management) to improve quality of care received by beneficiaries enrolled in FFS plans. | None. HCFA currently seeking OMB clearance to start the demonstration. |
| Sharing Innovations in Quality (Improving nursing home care) | 1997 | Nationwide | HCFA State survey agencies Consumers Professional associations | Collect, evaluate, and distribute interventions on how to improve quality of nursing home care in 10 focus areas.Collect and feedback intervention results. | None. 11/98 – first edition of approved submissions to be announced. |
| 6th Scope of Work (SOW) | 1999-2001 | Nationwide | PROs Hospitals Professional organizations Health plans Beneficiaries State health departments Numerous other organizations | Goals of Contract Period: Demonstrate measurable improvement in enrollee health and functioning.Ensure program integrity.Protect beneficiaries.Standardizing quality improvement efforts.Six Priority Areas: Diabetes – MandatedPneumonia/Flu – MandatedAMICongestive Heart FailureBreast Cancer ScreeningStroke Prevention | None. Contract period has not begun. |
V. OPPORTUNITIES TO IMPROVE QUALITY OF CARE
The methods that Medicare uses to ensure good quality health care for beneficiaries must change as new innovations in quality improvement evolve. The state of the art in quality assurance has shifted to the continuous quality improvement (CQI) model, which deemphasizes structural indicators and identification of instances of quality deficiencies while focusing on a continuous process of measuring outcomes and development of initiatives to improve performance. Medicare has already take steps toward the CQI model with the QISMC program, which requires health plans to establish a CQI program and to demonstrate actual improvements in selected outcomes measures in future years. Quality indicators for competing health plans also will be distributed to consumers along with premium information under the Medicare+Choice program. However, HCFA does not impose comparable requirements on FFS providers even though 83 percent of Medicare beneficiaries are in FFS Medicare. Also, Medicare does not publish outcomes data for beneficiaries to use in choosing a provider, and FFS providers are not required to demonstrate improvements in outcomes.
The disproportionate emphasis on CQI in managed care plans under Medicare perhaps reflects the outdated notion that FFS medicine somehow represents a “gold standard” for quality in health care, despite evidence of substantial performance problems in FFS medicine. For example, as discussed above, one study of acute myocardial infarction (AMI) patients showed that 59 percent of patients in HMOs received (-blockers, while only 46 percent of those in FFS received these drugs. However, the important finding here is not that there is a 13 percent difference in the percentage of persons receiving these drugs in these two types of plans. The truly important implication of this finding is that roughly half of all AMI patients do not receive a drug that has been shown to increase survival among these patients and that the type of health plan explains only a small portion of the problem. Consequently, there is a strong case to be made that Medicare’s emphasis on CQI among FFS providers should be increased at least to the level that is emphasized with health plans. However, doing so will require a major commitment to gather and analyze data that are currently not being collected.
The impact of improvements in the quality of care on costs will be mixed. As discussed above, the available studies identify areas of both underuse and overuse of health services. This implies that moving the nation toward standards of best practices will mean increases in utilization in areas where services are underused and reductions in utilization in areas where services are overused. Thus the overall net impact of a broad-based initiative to develop and adopt best medical practices on Medicare spending may be small, even though the changes occurring in some communities will be quite large. However, such an approach would tend to improve outcomes in both the areas of underuse and overuse of services, resulting in an overall improvement in the quality of care.
We outline seven general approaches that could improve the quality of care under Medicare including:
- Improving FFS Provider Quality;
- Value-Based Purchasing in FFS Medicare;
- Consumer Education;
- Promote Diffusion of Best-Practices Research;
- Allow MCOs to Continue Use of Closed Networks;
- Value-Based Technology Integration; and
- A Multi-generational Approach to Quality Improvement
A. Improving FFS Provider Quality
Congress could require HCFA to adapt the CQI model under QISMC for use with individual providers. For example, all hospitals could be required to have a CQI program where data are collected on outcomes and the hospital is required to show improvements in these outcomes over time. The program could be structured so that hospitals are required to initiate such a process for the 10 to 20 procedures that are most commonly performed in the facility. Thus, for example, the outcomes measures reported for a hospital specializing in obstetrics would tend to be different than those reported by tertiary care facilities. These CQI programs also could be structured so outcomes are reported separately for each physician performing these procedures so that their performance is monitored as part of the initiative. This would extend the CQI process throughout the hospital and to other providers associated with the facility.
The CQI model could be implemented through the accreditation process. For example, as discussed above, JACHO is currently incorporating outcomes measurement systems into its accreditation standards. These standards could be modified to require hospitals to demonstrate actual improvements in quality over time. The other accrediting organizations used by HCFA also could be required to adopt CQI initiatives as part of their accreditation standards. As a condition of retaining deemed status, each CQI initiative would be tailored to the individual specialty or type of facility covered by each accrediting organization. However, doing so would require thoughtful analysis of the data required and the methods that would be used to ensure the statistical reliability of the results that would be reported. Also, efforts should be made to limit the cost of accreditation so that they do not create a barrier to obtaining accreditation for smaller facilities.118
The shift in focus to CQI also could be accompanied with changes that reduce the cost of accreditation to facilities. As discussed above, hospitals devote a great deal of resources to compliance with accreditation standards during the six months prior to their triennial accreditation survey. Once attention is focused more on outcomes, it will be possible to reduce the number of structural- and process-oriented measures monitored in these surveys, thus reducing the cost of accreditation. Accrediting agencies could conduct their accreditation surveys without prior notification of the hospital. This would help ensure that these standards are maintained throughout the three-year certification period rather than just the six months prior to the survey. However, to minimize the potential administrative burdens resulting from surprise inspections, it may be wise to field-test this approach for the quality indicators that are most conducive to a surprise-inspection model before adopting this approach systemwide. The items covered in the survey also could be rotated on a random basis so that only a portion of these standards is actually verified in the survey. This would reduce costs while maintaining the incentives for hospitals to be ready for inspection on any of the standards required by the accreditation organization.
Another approach to improving quality would be to provide hospitals and other providers with regular reports on health outcomes for various procedures. As discussed above, the State of New York has already initiated data collection programs that report outcomes for CABG surgery performed in hospitals within the state to individual hospitals. This has enabled hospitals to compare their outcomes with other facilities and has helped them identify areas for improvement. The resulting changes made by these hospitals have resulted in improvements in health outcomes. Similar reports could be prepared using Medicare data for CABG and other major procedures. Data on individual physicians or physician groups also could be developed to extend the continuous quality improvement model to doctor’s offices and clinics.
Between 1988 and 1993, HCFA experimented with reporting CABG mortality rates for hospitals to help consumers differentiate provider quality. However, providers raised the concern that mortality outcomes of tertiary facilities should not be compared with mortality outcomes of primary and secondary facilities. Indeed, the validity of the comparisons across institutions was questioned due to the lack of a reliable method for adjusting for the severity of illness and health status of the patients served by these providers. Also, one of the major concerns with the programs implemented in New York and Pennsylvania was that the data were not adjusted adequately for differences in the severity of illness for patients treated in each hospital, resulting in distorted comparisons across hospitals.
Indeed, risk adjustment methodologies have not yet progressed to the point where we can adequately adjust for severity of illness. However, some of these problems can be addressed by comparing outcomes for similar hospitals. For example, outcomes measures could be provided for teaching hospitals separately from other community hospitals. Comparisons also could be provided separately for hospitals that have specialized in particular types of medicine such as obstetrics, oncology, or heart disease. This enables hospitals to compare themselves to their peers in the industry both within and across states.
Moreover, Medicare quality improvement efforts should be designed around explicit goals for quality in the program. For example, HCFA could identify goals for improving outcomes for certain types of procedures. These should include procedures that are heavily used in the Medicare population where there is evidence of need for improvements in quality. HCFA could also develop different goals for hospitals and providers with various specialties. Moreover, Medicare should be held accountable for its progress in meeting these goals. This would require regular reporting of outcomes data that would be evaluated by an independent agency such as the GAO on a regular basis.
B. Value-Based Purchasing in FFS Medicare
A value-based purchasing model for FFS Medicare would provide objective information on the quality performance of providers that consumers could use to select their doctor or hospital. The Medicare+Choice program will move Medicare toward a “value-purchasing” model for health plans by providing quality data to consumers for participating health plans. However, comparable quality data are not being developed on providers (e.g., physicians, hospitals, etc.) for use by beneficiaries who remain with the Medicare FFS program. The value purchasing approach could be expanded to the Medicare FFS population by providing various measures of physician and hospital outcomes such as mortality rates, patient satisfaction measures, and clinical certification. These data would enable individuals to select providers on the basis of quality performance.
Developing and distributing this quality indicator information would effectively reward good quality providers with increased business while leaving lower quality providers with reduced utilization. This will result in improved quality simply by shifting patients to providers that achieve better outcomes. Moreover, the need to retain patients will create strong financial incentives for providers to improve the quality of care that they provide. This approach will help move FFS Medicare to a system that rewards providers based upon health outcomes rather than on the basis of the number of services performed.
Extending the value-purchasing model to the FFS sector would require developing an extensive data collection and analysis capability. It would require a national commitment to establishing and collecting data, as well as the use of unique provider numbers, unique patient numbers, procedure codes, contractual terms with health plans, and a process to track patient outcomes. Moreover, careful analysis of these data would be required to ensure that the information presented is reliable and understandable to the consumer. In particular, it will be important to test the statistical reliability of estimates for physicians providing only a small number of the procedures for which quality data are being computed. National or regional data repositories also would be needed, with clearly defined policies to ensure patient privacy. In addition, if properly developed, this standardized coding and reporting system could become the standard for quality reporting throughout the health care industry.
A key element in this process would be developing an effective method for adjusting for differences in the health status of patients treated by various providers. For example, many of the best doctors have above average mortality rates simply because these providers tend to be sought out by the sickest individuals. Therefore, an effective method for adjusting for the health status of the patients served by each provider is crucial to permitting meaningful comparisons of provider performance. However, many physicians argue that a clinical evaluation of each patient based upon a medical records review is required to perform properly the adjustment, which could make this approach prohibitively expensive. As discussed above, an alternative approach is to present these outcomes comparisons for similar types of institutions with similar areas of specialization, which are more likely to have similar patient profiles.
Not all of the information provided to consumers would require risk adjustment. For example, data could be provided on the average number of procedures performed by individual physicians and/or hospitals per year for selected procedures such as CABG or carotid artery endarterectomies. This would enable individuals to select physicians who have the greatest experience with their particular condition potentially resulting in improved quality of care. The potential usefulness of this information is illustrated by recent data collection and analysis activities on CABG procedures performed in New York, which identified particularly high mortality rates among physicians who performed fewer than 50 CABG procedures per year. Other information on each physician also could be reported including the degree of medical education, and process measures showing the degree to which providers make use of therapies that have been shown to result in the best outcomes.
As the ability to develop reliable quality indicators improves, HCFA will need to develop mechanisms for educating consumers, providers, and health plans about the differences in the quality of health care delivery systems. HCFA has already begun to report these types of data on the Internet to consumers in a limited way. However, as discussed above, some studies have found that educating consumers is not always sufficient to change consumer behavior with respect to purchasing decisions.119 Thus it may be necessary for HCFA to set minimum standards that would be used to identify and, if necessary, exclude providers that fall short of these thresholds. Moreover, once these data are developed, it is inevitable that we will see proposals to take action with providers who show disproportionately poor ratings on outcomes. For example, Medicare could use these data to “certify” providers as providing “acceptable” or “high” quality services.C. Consumer Education
Consumer education is needed to ensure that individuals have the knowledge and the confidence needed to evaluate the quality data that they are provided. The value-purchasing model is premised on the assumption that consumers understand the quality information that they are given. Consumers will not be able to use this information to make informed choices of health plans or providers unless they know how to interpret it. This is a critical issue for any value-based purchasing initiative, whether it is selecting a health plan under Medicare+Choice or selecting a Medicare FFS provider.
In fact, as discussed above, there is substantial evidence that consumers do not see themselves as smart, informed, active shoppers for their health care. Consumers often lack a good understanding of the health care system, including the differences between managed care and FFS plans, and the roles of health plans, physicians, and hospitals. Moreover, consumers lack the technical knowledge required to evaluate various quality indicators. For example, most individuals are relatively healthy and often do not understand the relevance of quality indicators for chronic care. Also, consumers tend to focus on service quality indicators such as cost, benefits, hours of operation, choice of provider, and wait time, rather than clinical outcomes. While this is partly because clinical data are generally unavailable, it also reflects the difficulty that consumers would have in evaluating these data and the relative importance that consumers place on service quality factors.
Educational efforts will be required if Medicare beneficiaries are to use quality information in evaluating their choice of either health plans or service providers. Careful design and field-testing will be needed to develop quality measures that are both credible and relevant to beneficiaries. The ways in which these data are presented also must be carefully thought through to minimize the likelihood that beneficiaries will misinterpret the results. For example, it has been suggested that quality measures should be conveyed in ways similar to those used in Consumers Reports to explain why certain refrigerators are rated AAA for energy consumption. However, ultimately, beneficiaries will need to be educated on the meaning and the importance of quality data that are provided. This process is likely to take some time to develop, but is crucial to the future of value-purchasing initiatives at either the health plan or provider levels.
D. Promote the Diffusion of Best-Practices Information
A critical issue in the development of medical practice guidelines is the diffusion of this information to providers and patients in a way that changes the practice of medicine. Even the best medical practice research will be of little use unless it is conveyed in a way that actually changes the way care is delivered. Moreover, the fact that so much of the care that is now provided to Medicare beneficiaries is inconsistent with generally accepted practice underscores the need for more effective methods of familiarizing physicians and patients with available evidence-based research.
In a systematic review of 150 randomized clinical trials of different methods of continuing medical education, certain interventions were identified to be effective in changing the behavior of medical professionals:120
- Mini-sabbaticals – allowing clinicians to go and work in units practicing high-quality, evidence-based medicine;
- Sensitive, personalized feedback on an individual’s performance, either in comparison with that of others or against explicit standards, as part of the learning process;
- Patient education;
- Computer-assisted decision making providing reminders and easy access to evidence-based guidelines;
- On-the-job training of practical skills; and
- Use of opinion leaders or “educational influentials” in a continuing educational environment, i.e., a colleague whose performance is respected.
Another approach is to attempt to develop a culture of evidence-based practice through medical education. This could be accomplished by funding medical schools to incorporate instruction on CQI methods into the curriculum. Teaching hospitals also could set up several ongoing CQI initiatives in which medical students would be required to participate. This would have the dual impact of increasing the awareness of CQI for future physicians while also expanding the use of CQI in major teaching hospitals throughout the country. Also, funding could be provided to promote continuing medical education to help practicing physicians stay current with new developments in medical procedures.
Placing emphasis on CQI and best-practices information in teaching institutions could have a seminal effect on other institutions. As medical students graduate from teaching hospitals, they will take their CQI training to hospitals in other areas of the country. Also, studies of current CQI efforts suggest that other institutions will adopt the CQI initiatives used in major teaching hospitals to gain credibility. This research suggests that early adopters of CQI do so primarily to improve outcomes, while later adopters do so primarily to maintain legitimacy.121 Regardless of the motivations, however, teaching hospitals are in a position to take the lead in promoting CQI initiatives.
Another approach is to use the physician “profiling” methodologies already used by many managed care plans as a means of promoting the diffusion of research and other information on best practices. Medicare claims data could be used to identify physicians with aberrant practice patterns so that they can be targeted for education on relevant research. For example, the Medicare claims data could be used to identify physicians performing a disproportionate number of radical mastectomies. These physicians would then be contacted by medical professionals to inform the physician of relevant information on treatment alternatives. These physicians also could be invited to participate in continuing medical education programs in the area. In cases where these problems persist, the physicians could be targeted for additional utilization review by the PROs with possible denial of payment or enforcement action.
A critical component of diffusing best-practices information is patient education. Medicare could sponsor programs to develop attractive brochures for patients with selected diseases, which explains the relevant points of the research that the patient should be aware of with an admonishment to discuss these issues with their physician. For example, brochures could be developed for breast cancer patients that explain alternatives to mastectomy. This information could be distributed to hospitals, libraries, and health agencies for public consumption. Physicians also could be required to make this information available to the patient to ensure that both the physician and the patient are properly informed. Other media also could be explored such as tapes, videos, and the Internet.
E. Allow MCOs to Continue Use of Closed Networks
Congress is currently considering legislation that would impose substantial regulation on managed care organizations (MCOs) to prevent plans from compromising the quality of care and the health of the patient. In general, these reforms are in response to public concerns that HMOs may be denying needed services to maximize profits. Many of these proposals would require plans to: disclose information on plan rules and physician incentives; require the use of external appeals of coverage decisions by the plan; and expand medical liability for health plans to make them more accountable for their decisions.
Some of these proposed reforms also include any-willing-provider (AWP) rules that would actually eliminate the plan’s ability to form a closed panel of providers by requiring plans to accept all qualified providers who will accept the plan’s payment levels and follow the plan’s rules. These AWP provisions could enable providers to undercut the health plan’s ability to leverage price discounts through selective contracting, resulting in higher prices and increased physician income. However, it is doubtful that AWP laws would serve to improve the quality of care for consumers. In fact, AWP legislation could actually result in lower quality care by prohibiting plans from excluding providers with a history of providing poor quality care.
AWP laws also would inhibit health plans from attempting to implement practice guidelines. Closed networks permit the plan to concentrate patient volume among a limited number of physicians who have agreed to cooperate with the plan’s utilization management program, resulting in greater compliance with practice guidelines. In fact, research has demonstrated that plans are better able to affect the practice of medicine when the plan supplies a major portion of a physician’s patient volume.122 This better enables the plan to disseminate and reinforce medical practice guidelines for the patients that they cover. In fact, many of the evidence-based medical practice guidelines now in use were developed privately for managed care plans. The plan’s ability to influence medical practice would be undermined greatly if their patient volume were to become spread over a large number of providers. Thus eliminating the plan’s ability to form closed networks could inhibit the plan’s ability to advance the use of best-practices information.
F. Value-Based Technology Integration
One approach to improving quality is to adopt a framework for evaluating new technologies that will encourage the development and use of technologies that improve the quality of care while stabilizing or reducing costs. Under the current Medicare program, services using new technologies are accepted as coverable under Medicare when they have been shown to have become part of accepted medical practice for privately insured persons. Under a value-based technology approval process, new technologies would be approved only as they are proven safe and effective much as the Food and Drug Administration (FDA) approves drugs only after they have been thoroughly tested. In addition, new technologies would be approved only after they are evaluated in terms of both outcomes and cost. Such an approach could encourage the rapid adoption of new technologies that improve quality while stabilizing costs.
Considering cost in approving new technologies would be a major departure from the way in which medical technology has evolved. Historically, technologies have become part of accepted medical practice based upon their therapeutic merit rather than an evaluation of cost and benefits. In the value-based method, the benefits of the new technology are measured against the cost of these services. Technologies that result in large benefits to the patient at a low or moderate cost generally would be selected for rapid approval. However, those technologies that result in relatively small benefit to the patient at a high cost would be less likely to be approved. Alternatively, these high-cost technologies could be approved subject to prior authorization and an educational initiative for providers and patients that would deter overuse and/or misuse of these new technologies. This approach would create incentives to develop technologies that provide the maximum patient benefits at the lowest cost, which could reduce the growth in Medicare spending while also improving quality.
The primary problem with this approach is that it is difficult to measure the benefits of improved quality. For example, the benefits of a new technology are typically denominated in years of prolonged life or some notion of improved quality of life. Considering the impact on quality of life is crucial because some technologies that can prolong life often are associated with a poor quality of life. Moreover, many medical innovations have much more to do with improving the quality of life than they do with prolonging life (e.g., hip replacement surgery). However, it may be impossible to measure the benefit of prolonged life or improved quality of life in ways that are morally acceptable throughout society. Despite these conceptual difficulties, such an effort would be useful in gauging the relative cost-effectiveness of alternative technologies in advancing quality of care.
Adopting a value-based technology approval process would transform Medicare’s role in the promulgation of new technologies. Instead of approving procedures as they become adopted by the private sector, Medicare would lead the nation in attempting to rationalize the growth in high-cost medical technology in terms of their likely impact on life span and/or quality of life. This would establish Medicare as an effective force in advancing cost-effective medical technology and reducing the growth in health care costs for all payers throughout the health care system.
G. A Multi-generational Approach to Quality Improvement
Medicare is the final health care insurer in the life of most Americans. In general, by the time that individuals become eligible for Medicare, they have already adopted the lifestyle and health habits that will shape their utilization of health services while covered under Medicare. Therefore, health care costs and the quality of life for Medicare beneficiaries can be affected by promoting healthier lifestyles and improved medical treatment throughout the health care system. Healthy enrollees with realistic expectations of the health care system will be less costly to the Medicare program over time. Thus, taking steps to improve health status and medical quality for all citizens could ultimately result in substantial long-term savings to Medicare.
One approach would be to increase funding for research on best-practices and outcomes that can be used to improve health status throughout the nation. As part of this effort, Medicare could initiate programs to educate providers on what is learned from this research. Provider-profiling methodologies also could be used to identify physicians with aberrant practice patterns and target them for education on best-practices research. These efforts would promote quality throughout individuals’ lives, resulting in potential savings for future Medicare enrollees.
The health status of future Medicare beneficiaries also can be improved through other efforts to improve access and quality of care for the general population. For example, continued efforts to achieve universal health insurance coverage can lead to improved health status. Similarly, policies that support the development of high-quality, responsive, public health care systems can greatly improve health status in areas with underserved populations. Also, programs that promote healthy lifestyles such as antismoking campaigns and educational programs on nutrition and obesity, can reduce substantially the incidence of chronic respiratory illness, cardiovascular disease, diabetes, and other chronic diseases among future Medicare beneficiaries.
Some of the Medicare program’s quality improvement initiatives will have implications throughout the health care system. For example, the quality initiatives under Medicare+Choice will provide a framework for plans to extend value purchasing to the non-Medicare population, and the research on best-practices will be available for use by private health plans. Also, if reliable quality indicator data for individual providers are developed, they could be used to assist privately insured individuals in selecting their providers. Thus, Medicare is in a position to affect the practice of medicine throughout the health care system by taking the lead in developing and promulgating evidence on best practices and outcomes.
VI. MAINTAINING QUALITY UNDER MEDICARE REFORM
Medicare has entered a period of unprecedented pressure to reduce costs. This has led to a number of proposals designed to limit the growth in program spending. All could have a substantial effect on the quality of care for beneficiaries. Many of these proposals would gradually replace the existing FFS Medicare program with a system in which beneficiaries get a “defined contribution,” or voucher, to enroll in or purchase a private health insurance plan. Under these programs, competition among health insurance plans would be relied upon to help control the growth in premiums.
The primary means of controlling Medicare program cost growth under some of these proposals would be to limit the growth in the voucher amounts so that program costs do not exceed the funds available for the program. Under this defined contribution model, the voucher amounts generally would not keep pace with medical price inflation. That would require Medicare beneficiaries to supplement the voucher with their own resources just to maintain their current level of Medicare coverage. This would effectively shift the burden of coverage costs to the beneficiaries over time.123
A major concern with this approach is that lower income persons generally will not be able to afford the cost of supplementing their voucher to maintain the current level of Medicare coverage. This could result in many seniors seeking out low-cost plans, which may provide poor quality care or have such high copayment requirements that beneficiaries will skimp on needed health services. This could result in a worsening of health status and increased medical complications for low-income beneficiaries with chronic diseases. It also could result in increased mortality and a generally lower quality of life for low-income Medicare beneficiaries.
Another major concern with these proposals is that they generally do not provide for a mechanism to ensure the quality of care provided to beneficiaries. In fact, the philosophy that often underlies these defined contribution proposals is that government assurance that health plans meet quality standards would not be necessary in a competitive insurance market where information on quality of care is available. Beneficiaries, it is argued, would “vote with their feet” by leaving insurers that provide poor quality care and moving to better quality health plans.
However, there are several limitations to the idea that competition alone will force plans to maintain high standards of quality. For example, while patients can readily evaluate service quality, they typically do not have the information or background necessary to determine the clinical quality of care provided. In addition, many areas of the country have no more than one or two health plans, which may not provide enough competition to incentivize plans to maintain quality. Moreover, a truly privatized defined contribution model would eliminate Medicare’s credentialing program for specialists, hospitals, and other facilities. In fact, a fully privatized defined contribution program would virtually eliminate HCFA’s ability to affect the quality of care for Medicare beneficiaries.
The quality monitoring and enforcement problems with the defined contribution model can be addressed, but only if there is a strong commitment to maintaining and improving the quality of care for Medicare beneficiaries. For example, traditional FFS Medicare coverage could be maintained as a coverage option. Program savings could still be realized for this group by increasing the Part-B premium for those who remain with FFS Medicare, thereby shifting the cost to the beneficiary so that the government can stay within the resources available for the program.124 Retaining FFS Medicare also would maintain the need for the Medicare provider certification program and would provide a familiar program for impaired beneficiaries who would find it difficult to navigate the insurance markets.
In addition, the defined contribution model could be structured in a way that retains the quality improvement provisions of the BBA. For example, HCFA could continue to collect and publish health outcomes measures for all plans that wish to serve the Medicare population, as required under the Medicare+Choice program. This would provide information to consumers that could be used to evaluate alternative coverage options. Also, Congress could retain the BBA requirements that plans maintain a continuous quality improvement (CQI) program and that they demonstrate actual improvements in quality over time. These steps would preserve the quality improvement components of Medicare while still achieving the reduction in program spending growth intended by the defined contribution proposal.
Perhaps the most crucial step in preserving quality in a pure defined contribution model is providing subsidies to low-income persons so that they can maintain at least their current level of coverage under Medicare. Over time, the buying power of defined contribution vouchers would diminish as health care inflation outstrips the allowable annual increases in the voucher amount. Many low-income individuals would be unable to supplement the voucher amount to maintain their current level of coverage. Thus, subsidies would be needed to enable low-income beneficiaries to obtain coverage that is at least as comprehensive as what they now have under Medicare. The cost of this subsidy program would be small in the first years of the defined contribution program but would increase over time, as the gap between the cost of insurance and the voucher amounts increases over time.
Even with these modifications, some potential quality concerns will remain. For example, many beneficiaries across all income groups may settle for less comprehensive coverage over time rather than supplementing the voucher to maintain current Medicare benefit levels. This could leave some individuals substantially underinsured, resulting in some persons reducing the use of services to the possible detriment of their health. This is a particular concern for persons with chronic conditions. Moreover, this could lead to an increase in hospital uncompensated care costs and increased hospitalizations for acute conditions that could have been avoided with proper primary and preventive care.
Medicare reforms can be crafted in a way that integrates some of the desirable features of the defined-contribution model into a program that guarantees a minimum level of coverage with adequate controls on quality. For example, the National Bipartisan Commission on the Future of Medicare is considering what they call a “premium support plan.” Under this model, beneficiaries choose from a selection of health plans much as they do under Medicare+Choice. Medicare payments to plans would be determined based upon a competitive bidding system. All beneficiaries would be ensured that they would be able to obtain the Medicare benefits package without having to pay an additional premium. HCFA will also be able to affect the quality of care either through regulation or by considering evidence of the quality of care provided by plans in the competitive bidding process.
Quality implications must be considered with all of the cost-containment provisions that may be incorporated into Medicare reform.125 For example, proposals to increase the Medicare eligibility age to age 67 could leave many newly ineligible elderly persons either uninsured or underinsured. This could lead to a worsening of health status that could actually increase Medicare costs once these individuals reach the increased eligibility age. Here again, subsidies will be needed to help newly ineligible low-income persons maintain a minimum level of health insurance coverage.126
Even continuing with the present course under Medicare has significant implications for quality. Under the current Medicare FFS program, Congress often has implemented reductions in provider payment growth to reduce program costs in future years. While there is little evidence that this has affected the quality of care provided to Medicare beneficiaries, continued use of this approach could have implications for quality. That would be particularly true if this approach is relied upon to close the full amount of the Medicare funding gap in future years. Eventually, these payment reductions could lead to a reduction in the amount of new technology acquired by providers, which could have improved life expectancy or quality of life. The alternative to the provider payment reduction approach has been to use capitation payment methodologies such as DRGs to enable providers to pursue continuous quality improvement initiatives that are designed to reduce costs while improving quality through improved efficiency. In fact, the BBA included provisions that would increase the use of capitation payments for hospital outpatient and other services.
The implications of reform proposals for quality of care must be considered carefully in designing a Medicare reform model. Congress must have a clear sense of its objectives with respect to quality and must design these reforms from the ground up in a way that achieves these quality objectives in addition to other goals such as cost containment. Congress must decide whether Medicare’s role in certifying compliance of FFS providers should be continued or expanded. It also must decide whether the amount of the vouchers under any defined contribution reform proposal must be enough to maintain at least a minimum benefits package. Moreover, Congress must decide whether its efforts under the BBA to maintain a program of continuous quality improvement shall be continued and/or expanded. These issues have a direct bearing on how the program would be structured and have a substantial impact on the amount of savings that will be achieved by the program.
The available evidence suggests that the quality of care provided under the Medicare program is highly uneven, with a substantial number of beneficiaries receiving poor quality health care over time. Recent studies show wide variation in the use of various treatments, indicating areas of substantial underuse and overuse of services, both of which can result in poor quality outcomes. Studies of care provided for patients with selected health conditions also indicate that a substantial portion of the population does not receive treatments that have been shown to result in improved outcomes. Quality of care for HMO enrollees also varies across health plans. Expanded efforts to develop and disseminate research on best practices is needed to improve quality while reducing expenditures for unnecessary and ineffective treatments under Medicare and throughout the health care system.
Medicare’s current quality assurance programs could be strengthened to address these quality of care problems. Medicare could develop a national program similar to those in operation in New York and Pennsylvania to report outcomes information for hospitals and other providers. The primary purpose of these data will be to permit providers to compare their performance with that of other similar providers to identify areas for improvement. In addition, Medicare could require major FFS health care providers to have an ongoing CQI program and require that these providers demonstrate improvements in outcomes over time. This would increase participation standards for providers to be on a par with what is required of health plans under the BBA, which already requires plans to demonstrate actual improvements in quality over time. Once Medicare has shifted its emphasis to outcomes measurement, the lengthy list of structural measures currently used by accrediting organizations should be reduced to only those that are absolutely necessary to reduce the cost of accreditation. However, Medicare should strengthen the accreditation process by requiring random inspections of facilities for this streamlined list of standards.
A key step toward improving the quality of care under Medicare will be the development of a value purchasing system that enables individuals to select health plans and providers on the basis of the quality of the care that they provide. Under the quality provisions of the BBA, HCFA will be collecting and disseminating information on the quality of care provided by competing health plans. However, because of to the extreme difficulties in developing reliable risk-adjusted outcomes measures at the plan level, HCFA should increase its emphasis on process measures, which indicate the degree to which health plans adhere to treatments that have been shown to result in the best outcomes.
However, value purchasing is not likely to be enough to reduce substantially the wide geographic variation in treatment patterns across the country. For example, some studies have found that persons who are provided with quality data do not necessarily alter their purchasing decisions accordingly. Therefore, any value-purchasing initiative at either the plan or the provider level must include a consumer education component to ensure that beneficiaries can interpret the quality of information that they are provided. Moreover, it may become necessary for HCFA to set minimum standards for various quality indicators that must be met by health plans and providers to continue providing services to Medicare patients. In addition, it will continue to be important for HCFA to attempt to alter provider practice patterns by developing and promulgating information on best medical practices.
With pressure growing to contain costs under the Medicare program, it may become necessary for Medicare to slow the growth in high-cost medical technologies. This could be done by using a value-based approach to approving new technologies for coverage under Medicare that considers the costs and benefits of these technologies in terms of both the prolongation of life and improvements in quality of life. Under such a system, approval of high-cost technologies that provide only small improvements in life span and/or quality of life could be denied in favor of other more cost-effective technologies. Alternatively, these procedures could be approved subject to prior authorization and a provider education program designed to prevent the overuse or misuse of the new technologies. This approach would provide a rational basis for controlling the growth in high-cost technologies that seeks to maximize the effect of new technology growth on health care quality for beneficiaries. Moreover, such a process could be used to encourage the development of new technologies that improve quality while reducing costs.
Efforts taken to improve the health status of the population in general also will have an impact on Medicare costs and quality in the future. This is because the health care needs of persons who enter Medicare are largely determined by their experiences prior to reaching age 65. Therefore, efforts to expand insurance coverage and promote healthy behaviors among younger individuals can have a substantial impact on both the costs and quality of care under the Medicare program in future years. Also, the development and promulgation of best-practices information for persons of all ages can improve outcomes and health status for the non-Medicare population, resulting in reduced Medicare costs and improved health status for future beneficiaries.
As Congress considers the various Medicare reform initiatives, they must be careful to build into their cost containment programs mechanisms for maintaining and improving quality of care. For example, proposals to convert Medicare from a defined benefit program to a defined contribution program would result in beneficiaries obtaining coverage from a broad range of private insurers with no mechanisms for monitoring and ensuring the quality of care received by beneficiaries. Moreover, because these proposals will require patients to supplement the defined contribution amount more and more each year just to maintain the current level of benefits, many lower income beneficiaries would be in less comprehensive health plans, resulting in reduced access and a possible reduction in quality of care. Consequently, any major reform of the Medicare program must be designed from the ground up to include features that are designed to ensure the quality of care for all Medicare beneficiaries. Quality assurance programs cannot be just added to a reform plan as an afterthought, particularly with proposals that emphasize aggressive cost control.
- President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry. (1998). Improving Quality in a Changing Health Care Industry. U.S. Government Printing Office (GPO).
- Chassin, M.R., Galvin, R., & The National Roundtable on Health Care Quality. (1998). The Urgent Need to Improve Health Care Quality. Institute of Medicine (IOM) National Roundtable on Health Care Quality.
- Wennberg, J. E., & Cooper, M. M. (Eds.). (1996.) The Dartmouth Atlas of Health Care. American Hospital Association Publishing Inc.
- Schuster, M., McGlynn, E., & Brook, R. (1997, October). Why the Quality of U.S. Health Care Must Be Improved. (Report to the National Coalition on Health Care.) Santa Monica, CA: RAND, University of California, Los Angeles.
- Udvarhelyi, I. S., Jennison, K., Phillips, R. S., & Epstein, A. M. (1991). Comparison of the Quality of Ambulatory Care for Fee-for-Service (FFS) and Prepaid Patients. Annals of Internal Medicine, 115(5): 294-400.
- Miller, R. H., & Luft, H. S. (1997). Does Managed Care Lead to Better or Worse Quality of Care? Health Affairs, 16(5), 7-25.
- The Joint Commission on Accreditation of Healthcare Organizations (JCAHO), which accredits most hospitals, has recently increased its emphasis on outcomes but does not actually require hospitals to demonstrate actual improvements in outcomes, as is required of health plans under the BBA.
- Ball, R. M. (1995). Perspectives on Medicare: What Medicare’s Architects Had in Mind. Health Affairs, 14(4), 62-72.
- Advisory Commission on Consumer Protection and Quality in the Health Care Industry. (1998, March 13). Quality First: Better Health Care for All Americans. Washington D.C.; Eisenberg, J. M. (1986, February 26). Doctors’ Decisions and the Cost of Medical Care: The Reasons for Doctors’ Practice Patterns and Ways to Change Them. Ann Arbor, MI: Health Administration Press; and Eisenberg, J. M. Assessing Health Care Quality (Testimony to the Subcommittee on Health of the House Ways and Means Committee).
- Edgman-Levitan, S., & Cleary, P. D. (1996) What Information Do Consumers Want and Need? Health Affairs, 15(4), 42-56; The Henry J Kaiser Family Foundation and the Agency for Health Care Policy and Research. (1996, October). Americans as Health Care Consumers: The Role of Quality Information; and Hibbard, J. H., and Jewett, J. J. (1996). What Type of Quality Information Do Consumers Want in a Health Care Report Card? Medical Care Research and Review, 53(1), 28-47.
- President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry. (1998). Improving Quality in a Changing Health Care Industry. U.S. Government Printing Office (GPO).
- Chassin, M.R., Galvin, R., & The National Roundtable on Health Care Quality. (1998). The Urgent Need to Improve Health Care Quality. Institute of Medicine (IOM) National Roundtable on Health Care Quality.
- Shaughnessy, P. W., Schlenker, R. E., & Hittle, D. F. (1994). Home Health Care Outcomes Under Capitated and Fee-For Service Payment. Health Care Financing Review, 16(1), 187-222; Ware J. E., Jr., Bayliss, M. S., Rogers, W. H., Kosinski, M., & Tarlov, A. R. (1996). Differences in 4-year Health Outcomes for Elderly and Poor, Chronically Ill Patients Treated in HMO and Fee-For-Service Systems. Results from the Medical Outcomes Study. Journal of the American Medical Association, 276(13), 1039-1047; and Wennberg, J. E., & Cooper, M. M. (Eds.). (1996). The Dartmouth Atlas of Health Care. American Hospital Association Publishing Inc.
- Chassin, M. R. (1996). Quality of Health Care, Part 3. Improving the Quality of Care. New England Journal of Medicine, 335(14), 1060-1063.
- Wennberg, J. E., & Cooper, M. .M. (Eds.). (1996). The Dartmouth Atlas of Health Care. American Hospital Association Publishing Inc.
- Brook, R. H. (1995). Medicare Quality and Getting Older: A Personal Essay. Health Affairs, 14(4), 73-81; Eddy, D. (1984). Variations in Physician Practice: The Role of Uncertainty. Health Affairs, 3(2), 74-89; and Wennberg, J. E., & Cooper, M. M. (Eds.). (1996). The Dartmouth Atlas of Health Care. American Hospital Association Publishing Inc.
- Schuster, M., McGlynn, E., & Brook, R. (1997, October). Why the Quality of U.S. Health Care Must Be Improved. (Report to the National Coalition on Health Care). Santa Monica, CA: RAND, University of California, Los Angeles.
- Centers for Disease Control (CDC). (1995). Influenza and Pneumococcal Vaccination Coverage Levels Among Persons Age > 65 Years, United States, 1973-1993. Morbidity and Mortality Weekly Reports, 44(27), 506-515.
- Brechner, R. J., Cowie, C. C., Howie L. J., Herman, W. H., Will, J. C., & Harris, M. I. (1993). Ophthalmic Examination Among Adults with Diagnosed Diabetes Mellitus. Journal of the American Medical Association, 270(14), 1714-1718.
- Soumerai, S. B., McLaughlin, T. J., Spiegelman, D., Hertzmark, E., Thibault, G., & Goldman, L. (1997). Adverse Outcomes of Underuse of (-blockers in Elderly Survivors of Acute Myocardial Infarction. Journal of the American Medical Association, 277(2), 115-121.
- Wells, K. B., Norquist, G., Benjamin, B., Rogers, W., Kahn, K., & Brook, R. (1994). Quality of Antidepressant Medications Prescribed at Discharge to Depressed Elderly Patients in General Medical Hospitals Before and After Prospective Payment System. General Hospital Psychiatry, 16(1), 4-15.
- Wells, K. B., Katon, W. Rogers, B., & Camp, P. (1994). Use of Minor Tranquilizers and Antidepressant Medications by Depressed Outpatients: Results From the Medical Outcomes Study. American Journal of Psychiatry, 151(5), 694-700.
- Kahn, K. L., Rogers, W. H., Rubenstein, L. V., Sherwood, M. J., Reinisch, E. J., Keeler, E. B., Draper, D., Kosecoff, J., & Brook, R. H. (1990). Measuring Quality of Care with Explicit Process Criteria Before and After Implementation of DRG-based Prospective Payment System. Journal of the American Medical Association, 264(15), 1969-1973.
- Chassin, M. R., Kosecoff, J., Park, R. E., Winslow, C. M., Kahn, K. L., Merrick, N. J., Keesey, J., Fink, A., Solomon, D. H., & Brook, R. H. (1987). Does Inappropriate Use Explain Geographic Variations in the Use of Health Services? A Study of Three Procedures. Journal of the American Medical Association, 258(18), 2533-2537.
- Bernstein, S., McGlynn, E., Siu, A. L., Roth, C. P, Sherwood. M. J., Keesey, J. W., Kosecoff, J., Hicks, N. R., & Brook, R. H. (1993). The Appropriateness of Hysterectomy, a Comparison of Care in Seven Health Plans. Journal of the American Medical Association, 269(18), 2398-2402.
- Green, J., & Winfield, N. (1995). Report Cards on Cardiac Surgeons: Assessing New York State’s Approach. New England Journal of Medicine, 332(18): 1229-1232.
- Leape, L. L. (1994). Error in Medicine. Journal of the American Medical Association 272(23), 1851-1857.
- Brennan, T. A., Leape, L. L., Laird, N. M., Hebert, L., Localio, A. R., Lawthers, A. G., Newhouse, J. P., Weiler, P. C., & Hiatt, H. H. (1991). Incidence of Adverse Events and Negligence in Hospitalized Patients. Results of the Harvard Medical Practice Study I. New England Journal of Medicine, 324(6), 370-376.
- DuBois, R., & Brook, R. (1998). Preventable Deaths: Who, How Often and Why? Annals of Internal Medicine, 109(7), 582-589.
- Phillips, D. P., Christenfeld, N., & Glynn L. M. (1998). Increase in U.S. Medication-Error Deaths Between 1983 and 1998. Lancet, 351(9103), 643-644.
- Lesar, T. S., Lomaestro, B. M., & Pohl, H. (1997). Medication-prescribing Errors in a Teaching Hospital. A 9-Year Experience, 157(14), 1569-1576; and Lesar, T. S., Briceland, L., & Stein D. S. (1997). Factors Related to Errors in Medication Prescribing. Journal of the American Medical Association, 277(4), 312-317.
- Advisory Commission on Consumer Protection and Quality in the Health Care Industry. (1998, March 13). Quality First: Better Health Care for All Americans. Washington, DC; and Medicare Payment Advisory Commission. (1997, October), Medicare Risk-Plan Participation and Enrollment: A Chart Book. Washington, DC.
- General Accounting Office. (1998, April). Many HMOs Experience High Rates of Beneficiary Disenrollment (Report to the Special Committee on Aging, U.S. Senate). (GAO/HEHS-98-142); and Medicare Payment Advisory Commission, op. cit.
- General Accounting Office, op. cit.
- Miller, R. H., & Luft, H. S. (1997). Does Managed Care Lead to Better or Worse Quality of Care? Health Affairs, 16(5), 7-25.
- Found lower rates: Sisk, J. E., Gorman, S. A., Reisinger, A. L., Glied, S. A., DuMouchel, W. H., & Hynes, M. M. (1996). Evaluation of Medicaid Managed Care Satisfaction, Access, and Use. Journal of the American Medical Association, 276(1), 50-55; Lurie, N., Christianson, J., Finch, M., & Moscovice, I. (1994). The Effects of Capitation on Health and Functional Status of the Medicaid Elderly: A Randomized Trial. Annals of Internal Medicine, 120(6), 506-511; and Reed, S. K., Hennessy, K. D., Mitchell, O. S., & Babigian, H. M. (1994). A Mental Health Capitation Program II: Cost-Benefit Analysis. Hospital and Community Psychiatry, 45(11), 1097-1103. Found higher rates: Pearson, S. D., Lee, T. H., Lindsey, E., Hawkins, T., Cook, E. F., & Goldman, L. (1994). The Impact of Membership in a Health Maintenance Organization on Hospital Admission Rates For Acute Chest Pain. Health Services Research, 29(1), 59-74; and Yelin, E. H., Criswell, E. A., & Feigenbaum, P. G. (1996). Health Care Utilization and Outcomes Among Persons with Rheumatoid Arthritis in Fee-for-service and Prepaid Group Practice Settings. Journal of the American Medical Association, 276(13), 1048-1053.
- Yelin et al., op. cit.
- Every, N. R., Fihn, S. D., Maynard, C., Martin, J. S., & Weaver, W. D. (1995). Resource Utilization in Treatment of Acute Myocardial Infarction: Staff Model Health Maintenance Organization Versus Fee-for-Service Hospitals. Journal of American College of Cardiology, 26(2), 401-406; and Langa, K. M., & Sussman, E. J. (1993). The Effect of Cost-Containment Policies on Rates of Coronary Revascularization in California. New England Journal of Medicine, 329(24), 1784-1789.
- Schlenker R. E., Shaughnessy, P. W., & Hittle, D. F. (1995). Patient-level Cost of Home Health Care under Capitated and Fee-for-service Payment. Inquiry, 32(3), 252-270; and Experton, B., Ozminkowski, R. J., Branch, L. G., & Li, Z. (1996). A Comparison by Payor/Provider Type of the Cost of Dying Among Frail Older Adults. Journal of the American Geriatric Society, 44(9), 1098-1107.
- Congressional Budget Office (CBO). (1995, February). The Effects of Managed Care on Managed Competition (CBO Memorandum). Washington, DC.
- Udvarhelyi, I. S., Jennison, K., Phillips, R. S., & Epstein, A. M. (1991), Comparison of the Quality of Ambulatory Care for Fee-for-service (FFS) and Prepaid Patients. Annals of Internal Medicine, 115(5): 294-400.
- Wells, K. B., Hays, R. D., Burnam, M. A., Rogers, W., Greenfield, S., & Ware, J. E., Jr. (1989). Detection of Depressive Disorder for Patients Receiving Prepaid or Fee-for-service Care: Results from the Medical Outcomes Study. Journal of the American Medical Association, 262(23): 3298-3302.
- Ware J. E., Jr., Bayliss, M. S., Rogers, W. H., Kosinski, M., & Tarlov, A. R. (1996). Differences in 4-year Health Outcomes for Elderly and Poor, Chronically Ill Patients Treated in HMO and Fee-for-Service Systems. Results from the Medical Outcomes Study. Journal of the American Medical Association, 276(13), 1039-1047.
- AgeWave Health Services, Inc., Emeryville, CA (based on data extracted from: Office of Inspector General, Department of Human Resources. (1995, March). Beneficiary Perspectives of Medicare Risk HMOs.
- General Accounting Office. (1998, April). Many HMOs Experience High Rates of Beneficiary Disenrollment (Report to the Special Committee on Aging, U.S. Senate). (GAO/HEHS-98-142).
- Office of Inspector General, Department of Human Resources. (1995, March). Beneficiary Perspectives of Medicare Risk HMOs.
- General Accounting Office. (1998, April). Many HMOs Experience High Rates of Beneficiary Disenrollment (Report to the Special Committee on Aging, U.S. Senate). (GAO/HEHS-98-142); Office of Inspector General, Department of Human Resources. (1995, March). Beneficiary Perspectives of Medicare Risk HMOs; and Tudor, C. G., Riley, G., & Ingber, M. (1998). Satisfaction with Care: Do Medicare HMOs Make a Difference? Health Affairs, 17(2), 165-176.
- General Accounting Office. op. cit.
- Geri Dallek, G., & Swirsky, L. (1997, December). Comparing Medicare HMOs: Do They Keep Their Members? Families USA Foundation. Available at http://www.familiesusa.org/mhmo1.htm.
- Davis, K., & Schone, C. (1998). Assuring Quality Information and Choice in Managed Care. Inquiry, 35(2), 104-114.
- Miller, R. H., & Luft, H. S. (1997). Does Managed Care Lead to Better or Worse Quality of Care? Health Affairs, 16(5), 7-25.
- Chassin, M.R., Galvin, R., & The National Roundtable on Health Care Quality. (1998). The Urgent Need to Improve Health Care Quality. Institute of Medicine (IOM) National Roundtable on Health Care Quality.
- Berwick, D. M. (1989). Continuous Improvement as an Ideal in Health Care. New England Journal of Medicine, 320(1), 53-56; and Eisenberg, J. M. (1998). Health Services Research in a Market-Oriented Health Care System. Health Affairs, 17(1), 98-108.
- Edgman-Levitan, S., & Cleary. P. D. (1996). What Information Do Consumers Want and Need? Health Affairs, 15(4), 42-56; Hibbard, J. H., & Jewett, J. J. (1996). What Type of Quality Information Do Consumers Want in a Health Care Report Card? Medical Care Research and Review, 53(1), 28-47; and Kasper, J. D., & Riley, G. (1992). Satisfaction with Medical Care Among Elderly People in Fee-for-service Care and an HMO. Journal of Aging and Health, 4(2), 282-302.
- Edgman-Levitan, S., & Cleary. P. D., op. cit.; and The Henry J. Kaiser Family Foundation and the Agency for Health Care Policy and Research. (1996, October). Americans as Health Care Consumers: The Role of Quality Information.
- Aharony, L., & Strasser, S. (1993). Patient Satisfaction: What We Know About and What We Still Need to Explore. Medical Care Review, 50(1), 49-79.
- Cleary, P., & McNeil, B. (1988). Patient Satisfaction as an Indicator of Quality Care. Inquiry, 25(1), 25-36; Davies, A. R., & Ware, J.E., Jr. (1988). Involving Consumers in Quality of Care Assessment. Health Affairs, 7(1), 33-48; and Hayward, R. A., Bernard, A. M., Rosevear, J. S., Anderson, J. E., & McMahon, L. F., Jr. (1993). An Evaluation of Generic Screens for Poor Quality of Hospital Care on a General Medicine Service. Medical Care, 31(5), 394-402.
- Batalden, P. B., Nelson, E. C., & Roberts, J. S. (1996). Linking Outcomes Measurement to Continual Improvement: The Serial “V” Way of Thinking about Improving Clinical Care. Journal of Quality Improvement, 20(4), 167-180; Berry, S. (1992). Methods of Collecting Health Data. In: A. L. Stewart, & J. E. Ware (Eds.), Measuring Functioning and Well-being: The medical outcomes study approach (pp. 48-64). Durham, NC: Duke University Press; Brook, R. H., & Lohr, K. N. (1987). Monitoring Quality of Care in the Medicare Program: Two Proposed Systems. Journal of the American Medical Association, 258(21), 3138-3141; Chassin, M. R. (1996). Quality of Health Care, Part 3. Improving the Quality of Care. New England Journal of Medicine, 335(14), 1060-1063; and Yelin, E. H., Criswell, L. A., & Feigenbaum, P. G. (1996). Health Care Utilization and Outcomes Among Persons with Rheumatoid Arthritis in Fee-for-service and Prepaid Group Practice Settings. Journal of American Medical Association, 276(13), 1048-1053.
- Wennberg, J. E., & Cooper, M. M. (Eds.). (1996). The Dartmouth Atlas of Health Care. American Hospital Association Publishing Inc.; and Weingarten, S. (1997). Practice Guidelines and Prediction Rules Should Be Subject to Careful Clinical Testing. Journal of American Medical Association, 277(24), 1977-1978.
- Donabedian, A., (1980). Explorations in Quality Assessment and Monitoring: Vol. 1. The Definition of Quality and Approaches to Its Assessment. Ann Arbor, MI, Health Administration Press.
- Brook, R. H., Chassin, M. R., Fink, A., Solomon, D. H., Kosecoff, J., & Park, R. E. (1986). A Method for Detailed Assessment of the Appropriateness of Medical Technologies. International Journal of Technology Assessment in Health Care, 2(1), 53-63.
- National Committee for Quality Assurance (NCQA). (1997). HEDIS 3.0 Narrative: What’s In It and Why It Matters. Washington, DC; National Committee for Quality Assurance.
- Farley, D., McGlynn, E., & Klein, D. (1998, September). Assessing Quality in Managed Care: Health Plan Reporting of HEDIS Performance Measures (Policy Brief for the Commonwealth Fund). The RAND Corporation.
- General Accounting Office. (1998). Health Care Quality: Implications of Purchaser’s Experiences for HCFA (Report to the chairman and ranking minority member, Special Committee on Aging, U.S. Senate). (GAO-HEHS-98-69).
- Gabel, J. et al. (1998, September). When Employers Choose Health Plans: Do NCQA Accreditation and HEDIS Data Count? (Report to the Commonwealth Fund). KPMG Peat Marwick, LLP.
- There are major exceptions to this among very large employers. For example, Detroit’s big three auto makers are developing their own report cards to be used in selecting plans and demanding improved quality. See White, J. (1998, October 19). Business Plan: Big Employers Starting to Design Their Own Report Cards on Competing HMOs. Wall Street Journal, p. R18.
- The Lewin Group, Inc., & Health Economics Research (1998, September). Medicare Participating Heart Bypass Center Demonstration (Report to the HCFA Office of Research and Demonstration).
- Damberg, C., et al. (1998, May 12). Consumer Awareness and Understanding of the Health Care System and Quality of Care: A Review of the Literature. Pacific Business Group on Health.
- Chassin, M. R., Hannan, E. L., & DeBuono, B. A. (1996). Benefits and Hazards of Reporting Medical Outcomes Publicly. New England Journal of Medicine, 334(6), 394-398.
- Winslow, R. (1998, October 19). Making the Grade: Improvements in Quality of Care Suggest Hospitals Are Taking Report Cards to Heart. Wall Street Journal, p. R16.
- Hannan, E. L., Killburn, H. Jr., Racz. M., Shields, E., & Chassin, M. R. (1994). Improving the Outcomes of Coronary Artery Surgery in New York. Journal of the American Medical Association, 271(10), 761-766.
- Winslow, R. (1998, October 19). Making the Grade: Improvements in Quality of Care Suggest Hospitals Are Taking Report Cards to Heart. Wall Street Journal, p. R16.
- Schneider, E., & Epstein, A. (1996). Influence of Cardiac Surgery Performance Reports on Referral Practices and Access to Care: A Survey of Cardiovascular Specialists. New England Journal of Medicine, 354(4), 251-256.
- The Medicare+Choice program created under the Balanced Budget Act of 1997 will give Medicare beneficiaries the option of selecting from a variety of competing health plans for their Medicare coverage, including HMOs, point-of-services (POS) plans, and other FFS plans. Information on plan characteristics and quality indicators information will be provided to consumers to assist in selecting a plan.
- Eddy, D. M. (1998). Performance Measurement: Problems and Solutions. Health Affairs, 17(4).
- Iezzoni, L. I. (1996) An Introduction to Risk Adjustment. American Journal of Medical Quality, 11(1), S8 – 11.
- Kravitz, R. L., Laouri, M., Kahan, J. P., Guzy, P., Sherman, T., Hilborne, L., & Brook, R. H. (1995). Validity of Criteria Used for Detecting Underuse of Coronary Revascularization. Journal of the American Medical Association, 274(8), 632-638.
- Kang, J. (1998, February 26). Health Care Quality in Medicare (Statement Before the House Ways and Means Health Subcommittee). Center for Health Plans and Providers, Health Care Financing Administration (HCFA).
- HCFA surveys a small percentage of the facilities accredited by state agencies and contracts with state agencies to perform validation surveys for facilities accredited by private organizations.
- General Accounting Office (1991, September 5). Health Care: Actions to Terminate Problem Hospitals From Medicare Are Inadequate. (GAO/HRD-91-54).
- General Accounting Office. (1996, April 10). Medicare Quality Assurance. (GAO-HEHS-96-20).
- Brennan, T., & Berwick, D. (1996). New Rules: Regulation, Markets, and the Quality of American Health Care. San Francisco: Jossey-Bass.
- Roberts, J. G., & Redman, R. (1987). A History of the Joint Commission for Accreditation of Hospitals. Journal of the American Medical Association, 258(7), 936-940.
- Burstin, H. R., Lipsitz, S. R, & Brennan, T. A. (1992). Socioeconomic Status and Risks for Substandard Medical Care. Journal of the American Medical Association, 268(17), 2383-2387.
- Aleksandrowicz, Anna, (1997). The Health Care Accreditation Industry Report: A Comprehensive Report on the Health Care Industry’s Major Accrediting Bodies. Marblehead, MA: Opus Communication.
- Joint Commission on Accreditation of Healthcare Organizations (1998, April 3). Performance Measurement. Available at http://www.jcaho.org/perfmeas/oryx/dearcol.htm.
- Health Care Financing Administration (HCFA). (1998). Medicare+Choice Part C Statutory Requirements and Regulatory Implementation. Washington, DC.
- During 1998 through 2001, beneficiaries can leave a Medicare+Choice plan at any time with disenrollment effective the following month. In 2002, Medicare+Choice enrollees can switch or return to traditional Medicare only once during the first six months of the year, which effectively locks individuals into their choice of plans for a minimum of six months (unless they qualify for a special exception). Beginning in 2003, beneficiaries can switch plans or reenroll in traditional Medicare only once during the first three months of the year, thus locking individuals into their plan for a minimum of nine months (unless they qualify for a special exception).
- Health Care Financing Administration (HCFA). (1998, September 28). Quality Improvement System for Managed Care (QISMC) for Organizations Contracting with Medicare or Medicaid.
- Health Care Financing Administration (HCFA). (1998, September 28). Guidelines for Implementing and Monitoring Compliance with Interim QISMC Standards (Domain 1).
- General Accounting Office (GAO). (1988, August 17). Medicare: Experience Shows Ways to Improve Oversight of Health Maintenance Organizations. (GAO/HRD-88-73); GAO. (1991, November 12). Medicare: HCFA Needs to Take Stronger Actions Against HMOs Violating Federal Standards. (GAO/HRD-92-11); and GAO. (1995, August 3). Medicare: Increased HMO Oversight Could Improve Quality and Access to Care. (GAO/HEHS-95-155).
- General Accounting Office (GAO). (1991, March 13). Medicare: PRO Review Does Not Ensure Quality of Care Provided by Risk HMOs. (GAO/HRD-91-48).
- Ingagni, K. (1998, October 2). Statement on Medicare+Choice Implementation Before the House Commerce Committee, Subcommittee on Health and Environment.
- Center for Health Plans and Providers, Health Care Financing Administration, Department of Health and Human Services. (1998, September 30). Operational Policy Letter #72.
- Dallek, G. (1998, December). Consumer Protections in Medicare+Choice (Report to the Henry J. Kaiser Family Foundation). Institute for Health Care Research and Policy, Georgetown University.
- Eddy, D. M. (1998) Performance Measurement: Problems and Solutions. Health Affairs, 17(4).
- Institute of Medicine, Committee on Choice and Managed Care, Office of Health Policy Programs and Fellowships. (1998, June 22). Letter Report to the Administration of the Health Care Financing Administration on Developing an Information Infrastructure of the Medicare+Choice Program.
- Institute of Medicine (U.S.). Committee to Design a Strategy for Quality Review and Assurance in Medicare. (1990). Medicare: A Strategy for Quality Assurance. (Vol. 1). (K. N. Lohr, Ed.). Washington, DC: National Academy Press.
- P.L .92-603, ß 249F(b) (1972).
- Brennan, T., & Berwick, D. (1996). New Rules: Regulation, Markets, and the Quality of American Health Care. San Francisco: Jossey-Bass.
- P.L. 00-509, 100 Stat. 2044 (1986).
- See H.R. Conference Report 1012, 99th Cong. 2d Sess., 1986, reprinted in U.S.C.C.A.N. (1986), 400506.
- Jencks, S. F., & Wilensky, G. R. (1992). The Health Care Quality Improvement Initiative: The New Approach to Quality Assurance in Medicare. Journal of the American Medical Association, 268(7), 900-903.
- Weingarten, S. (1997). Practice Guidelines and Prediction Rules Should Be Subject to Careful Clinical Testing. Journal of the American Medical Association, 277(24), 1977-1978.
- Institute of Medicine (1992). Guidelines for Clinical Practice: From Development to Use, Washington, DC: National Academy Press.
- For a compendium of available guidelines titles, see American Medical Association. (1996). Directory of Practice Parameters. Chicago, IL.
- Eisenberg, J. M. (1998). Health Services Research in a Market-oriented Health Care System. Health Affairs, 17(1), 98-108.
- Eisenberg, J. M. (1998, April 30). AHCPR’s Role in Ensuring Americans of Quality Health Care (Statement Before the Senate Labor and Human Resources Subcommittee on Public Health and Safety).
- Maklan C. W., Greene, R., & Cummings, M., A. (1994). Methodological Challenges and Innovations in Patient Outcomes Research. Medical Care 32(Suppl. 7), JS13-JS21.
- Powe, N. R., Turner, J. A., Maklan, C. W., & Ersek, M. (1994). Alternative Methods for Formal Literature Review and Meta-Analysis in AHCPR Patient Outcomes Research Teams. Medical Care 32(Suppl. 7), JS22-JS37.
- Ibid.
- Furguson, H. (1991). Research on the Delivery of Medical Care Using Hospital Firms: Forward. Medical Care (Suppl.7), JS1.
- Feinstein, A. R. (1983). An Additional Basic Science for Clinical Medicine: II. The Limitations of Randomized Trials. Annals of Internal Medicine 99(4), 544-550.
- Fleming, C., Wasson, J. H., Albertsen, P. C., Barry, M. J., & Wennberg, J. E. (1993). A Decision Analysis of Alternative Treatment Strategies for Clinically Localized Prostate Cancer. Prostate Patient Outcomes Research Team. Journal of the American Medical Association 269(20), 2650-2658.
- USPSTF merged with AHCPR in December 1995.
- General Accounting Office. (1996, May). Practice Guidelines: Managed Care Plans Customize Guidelines to Meet Local Interest (GAO/HEHS-96-95).
- National Coalition on Health Care. (1998). Accelerating Change Today – for America’s Health, Description of Initiative. Available at http://www.nchc.org/act_initiative.html.
- Edmonds, M., et al. (1997). Managing Managed Care: Quality Improvement in Behavioral Health. Committee on Quality Assurance and Accreditation Guidelines for Managed Behavioral Health, Institute of Medicine. Washington, DC: National Academy Press.
- General Accounting Office. (1998, June). Health Care Quality: Implications of Purchasers’ Experiences for HCFA (Report to the Chairman and Ranking Minority Member, Special Committee on Aging. U.S. Senate). (GAO-HEHS-98-69).
- Davis, D. A., Thomson, M. A., Oxman A. D., & Haynes, R. B. (1995). Changing Physician Performance. A Systematic Review of the Effect of Continuing Medical Education Strategies. Journal of the American Medical Association, 274(9), 700-705.
- Westphal, J., Gulati, R., & Shortell, S. (1997). Customization or Conformity? An Institutional and Network Perspective on Content and Consequences of TQM Adoption. Administration Services Quarterly 42, 366-394.
- Stapleton D. (1994, May 5). New Evidence on Savings from Network Models of Managed Care (Report to the Healthcare Leadership Council). The Lewin Group, Inc.
- Sheils J., & Fishman, A. (1998, September). Comprehensive Medicare Reform: Defined Benefit vs. Defined Contribution (Report to the National Coalition on Health Care), The Lewin Group, Inc.
- Under this variant, the Part-B premium would be increased by the amount of the difference between average costs under FFS Medicare and the voucher amounts determined by Congress.
- The American Health Quality Association. (1997). Beyond Anecdotes: Advancing the Health Care Quality Debate.
- Sheils, J., Stapleton, D., Graus, J., & Fishman, A. (1998, June 7). Rethinking the Medicare Eligibility Age (Report to the National Coalition on Health Care), The Lewin Group, Inc.
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