[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
NEW FRONTIERS IN QUALITY INITIATIVES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
MARCH 18, 2004
__________
Serial No. 108-60
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
E. CLAY SHAW, JR., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM MCCRERY, Louisiana JIM MCDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. MCNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHIL ENGLISH, Pennsylvania LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona EARL POMEROY, North Dakota
JERRY WELLER, Illinois MAX SANDLIN, Texas
KENNY C. HULSHOF, Missouri STEPHANIE TUBBS JONES, Ohio
SCOTT MCINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
ERIC CANTOR, Virginia
Allison H. Giles, Chief of Staff
Janice Mays, Minority Chief Counsel
______
SUBCOMMITTEE ON HEALTH
NANCY L. JOHNSON, Connecticut, Chairman
JIM MCCRERY, Louisiana FORTNEY PETE STARK, California
PHILIP M. CRANE, Illinois GERALD D. KLECZKA, Wisconsin
SAM JOHNSON, Texas JOHN LEWIS, Georgia
DAVE CAMP, Michigan JIM MCDERMOTT, Washington
JIM RAMSTAD, Minnesota LLOYD DOGGETT, Texas
PHIL ENGLISH, Pennsylvania
JENNIFER DUNN, Washington
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
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C O N T E N T S
__________
Page
Advisory of March 11, 2004, announcing the hearing............... 2
WITNESSES
U.S. Department of Health and Human Services, Agency for
Healthcare Research and Quality, Carolyn Clancy, Director...... 7
Medicare Payment Advisory Commission, Glenn M. Hackbarth,
Chairman....................................................... 19
______
Federation of American Hospitals, Charles N. Kahn, III........... 56
National Citizens' Coalition for Nursing Home Reform, Sarah G.
Burger......................................................... 61
Pacific Business Group on Health, Arnold Milstein................ 37
PacifiCare Health Systems, Inc., Samuel Ho....................... 40
Permanente Foundation, Francis J. Crosson........................ 48
SUBMISSIONS FOR THE RECORD
American Academy of Family Physicians, statement................. 69
American Association of Homes and Services for the Aging,
statement...................................................... 71
American College of Surgeons, statement.......................... 76
America's Health Insurance Plans, statement...................... 78
American Health Quality Association, David G. Schulke, statement. 83
American Hospital Association, statement......................... 87
Alliance for Quality Nursing Home Care, and American Health Care
Association, joint statement................................... 91
Compliance Team, Inc., Ambler, PA, Sandra C. Canally, statement.. 94
CRUSADE, and Duke University, Division of Cardiology, Durham, NC,
Eric D. Peterson, statement.................................... 95
Medical Technology and Practice Patterns Institute, Inc.,
Baltimore, MD, Dennis J. Cotter, letter and attachment......... 97
National Athletic Trainers' Association, Dallas, TX, Eve Becker-
Doyle, statement and attachment................................ 99
Pharmaceutical Care Management Association, statement............ 103
Premier, Inc., Richard A. Norling, statement..................... 106
NEW FRONTIERS IN QUALITY INITIATIVES
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THURSDAY, MARCH 18, 2004
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Health,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:10 a.m., in
room 1100, Longworth House Office Building, Hon. Nancy L.
Johnson (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HEALTH
CONTACT: (202) 225-3943
FOR IMMEDIATE RELEASE
March 11, 2004
HL-6
Johnson Announces Hearing on
New Frontiers in Quality Initiatives
Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on
Health of the Committee on Ways and Means, today announced that the
Subcommittee will hold a hearing on health quality initiatives. The
hearing will take place on Thursday, March 18, 2004, in the main
Committee hearing room, 1100 Longworth House Office Building, beginning
at 10:00 a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only.
Witnesses will include representatives from the Administration, the
Medicare Payment Advisory Commission (MedPAC), and the private sector.
However, any individual or organization not scheduled for an oral
appearance may submit a written statement for consideration by the
Committee and for inclusion in the printed record of the hearing.
BACKGROUND:
This hearing will focus on the changes needed to improve health
care quality in America's health care systems. According to MedPAC,
Medicare beneficiaries were affected by more than 300,000 adverse
health events, such as postoperative sepsis and respiratory failure. In
fact, from 1995 to 2002, rates of adverse events in 9 out of 13
categories tracked by MedPAC increased.
The United States Department of Health and Human Services (HHS) is
developing, testing, and implementing new measures of the quality of
care furnished by hospitals, nursing homes, and home health agencies.
Building on the HHS work, the Medicare Modernization Act (MMA) included
a provision whereby hospitals were given a financial incentive to
report on 10 quality indicators, such as whether a patient with an
acute myocardial infarction receives a beta blocker at admission. As of
February 12, 2004, more than half (2,727) of all hospitals have
committed to provide public reporting on the 10 measures.
In addition, physicians are encouraged by provisions in the MMA to
use e-prescribing to reduce medical errors and to realize
administrative efficiencies. In addition, hospitals are adopting
technologies compatible with e-prescribing such as development of
electronic medical records that capture patients' clinical histories
and physician orders like laboratory tests and pharmacy. Accurate
information allows caregivers to better deliver appropriate services at
the right time.
These initiatives illustrate steps that may be taken to both
improve quality of care and provide valuable information to patients
and purchasers. Ultimately, this kind of information can be used to
encourage the use of providers who deliver high-quality care while
decreasing health costs.
In announcing the hearing, Chairman Johnson stated, ``In the
current technological environment, urging physicians to print neatly is
not enough. We must provide market-oriented incentives that encourage
the delivery of quality health care. Without good information,
consumers cannot make intelligent choices between physicians,
hospitals, or other providers, and better care will not advance.''
FOCUS OF THE HEARING:
The MMA includes provisions designed to improve quality of care.
Advances in the private sector may be instructive in incorporating
additional methods in the Medicare program. The hearing will focus on
what is known about the current state of health care quality, recent
changes to the Medicare program, and what lessons can be learned from
experiences in the commercial market. The first panel will examine
public measures of quality and government initiatives to improve care.
The second panel will discuss private initiatives and the importance of
competition and comparative information to improve quality.
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noted above.
Chairman JOHNSON. The hearing will come to order. I would
like to open the hearing on new quality initiatives. While
Americans enjoy one of the finest health systems in the world,
there are some serious gaps in quality that may threaten
patient safety and health outcomes. Providers are striving to
improve quality for their patients but need better information
and improved incentives to get the job done. The state of play
in quality shows mixed results. According to Medicare Payment
Advisory Commission (MedPAC), Medicare beneficiaries were
affected by more than 300,000 adverse health events, such as
postoperative sepsis and respiratory failure. In fact from 1995
to 2002, rates of adverse events in 9 of 13 categories tracked
by MedPAC increased.
In 1999, Congress required the Agency for Healthcare
Research and Quality (AHRQ) to report annually to Congress on
progress made toward improved health quality. The most recent
report released in December found that, while 20 of 57 measures
of quality tracked by the agency have improved, 37 have
stagnated or worsened. According to the agency, most receive
the care they need in many geographic areas, but we know low
rates for primary and preventative care are abundant and vary
widely across regions. Study after study by the Institute of
Medicine, the RAND Corporation and others document the
significant financial and health impact of avoidable medical
errors and failure to adopt known best clinical practices.
Medicare beneficiaries and disabled Americans suffer from
chronic illness in larger numbers than any other groups, they
use health services more frequently than their counterparts.
They are disproportionately affected by these deficiencies.
Congress made great strides in the recently enacted
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA) (P.L. 108-173) to improve quality for Medicare
beneficiaries. First and foremost, seniors in both fee-for-
service and managed care under Medicare will have access to
chronic disease--chronic care management which holds the
potential to dramatically improve health while reducing costs.
Our hope is that Medicare will change from a payer of bills to
a promoter of wellness. Secondly, the new law provides
financial incentives for electronic prescribing. Too many
avoidable illnesses and even deaths result from inappropriate
or counter-indicated prescriptions. Electronic prescribing will
dramatically reduce adverse drug interactions while promoting
administrative efficiencies by reducing pharmacist call-backs
to physicians. The law provides grants to physicians to
implement these programs and allows plans to provide incentive
payments to doctors for improving drug compliance.
Thirdly, the law requires development of formularies by
practicing doctors and pharmacists, mandates drug utilization
review and quality assurance and sets up a grievance and
appeals process for off-formulary drugs. It expands the work of
the Quality Improvement Organizations to Part C and D and
requires the Institute of Medicine to evaluate and report on
health care performance measures. Lastly, as a condition of
receiving a full update for hospital services, the law requires
the reporting of 10 quality indicators so that we have a
baseline for hospital performance. The Administration has also
made great strides, and I welcome Dr. Clancy from AHRQ to
discuss their initiatives to improve quality. Specifically, the
Administration will discuss data-reporting initiatives provided
by hospitals, nursing homes, and home health agencies. These
initiatives will make providers, consumers, and purchasers
better informed about their health positions.
Finally, we want to learn from the work conducted by the
private sector. Purchasing strategies, such as paying for
performance, and improving information collection, and
dissemination are important, and hopefully, we will be able to
use their successful experience in the private sector to
improve public policy governing our seniors, both to improve
the quality of care and to reduce its costs. Our distinguished
panel includes experts from hospitals, consumer advocates,
employers and health plans, and we look forward to their
testimony. I also am very pleased to welcome Dr. Hackbarth of
MedPAC for in their current report and also in their report of
6 months ago, they focused heavily on quality indicators and
how Medicare specifically can move toward providing higher
quality care to our seniors. Mr. Stark?
Mr. STARK. Well, Madam Chair, I want to thank you very much
for having this hearing and once again to reopen a topic which
I know you are very concerned about, and that is quality.
Recent RAND studies suggest that adults receive appropriate
care roughly only half of the time, resulting often in
preventable deaths or more serious illness. I know that, and I
have to talk about some philosophic things here and some budget
things. I hope I can say this in a nonpejorative sense, but I
think it would be fair to suggest that on your side of the
aisle, many of your Members have trouble with government
regulation.
I then get to this question of information technology (IT)
for people like Dr. Hackbarth, Dr. Clancy, National Institute
of Health, unless we are able to collect data and get
everybody, I don't care whether it is the doctors and the
chiropractors and the pharmacists, to agree on a format and a
system, we aren't ever going to get anywhere. That means that I
am going to have to help you to do whatever you need to do to
convince your Members that there are--I have three credit cards
here. I can walk into a store and put one in to get money out,
and it will say, ``You are a bum.'' So, I could put the other
credit card in to another bank on the other side, and they
still know I am a bum. Yet, we can't do that when going in to
buy a prescription. If I go in to RiteAid, they may not have
the same information as Walgreens Co. Somehow I think you have
to take the lead to create the atmosphere in the community
where we are going to have standardized reporting and
standardized forms, and I assure you that I will do whatever I
can to make that an easier task for you.
I want to, also, while I did vote against the Medicare
bill, it did include $50 million for AHRQ. I don't believe your
budget includes it, and I bet ours doesn't either. I would like
to help if I can to see if we can get that $50 million. It
wasn't in the Bush budget. I don't know if it is in the House
Republican budget. I am not at all sure that it is in the
Democratic budget, because it is one of those things that often
falls through the cracks--but I would pledge, if you want to
continue to push for that, to try and get that $50 million for
our friends at AHRQ who do such a good job, and I am pleased to
see Dr. Clancy here. I want to help, and I am sure that my
colleagues will help on our side in any way we can. You have to
lead it. It is going to be your group that is going to have to
approve both the legislation and push it through or add it
someplace if we can do it, and we certainly intend to help you
in every way we can. Thank you again for the hearing.
Chairman JOHNSON. Thank you very much, Mr. Stark, and we
certainly will have to make sure the $50 million is there.
Mr. STARK. I would also like to ask unanimous consent to
put a much more eloquent statement that my staff wrote in the
record.
[The opening statement of Mr. Stark follows:]
Opening Statement of The Honorable Pete Stark, a Representative in
Congress from the State of California
Thank you Madam Chair.
I am very pleased that we are again talking about quality
healthcare and hope this year we can begin again to work together to
ensure those who actually have access to healthcare services get the
best quality of care possible. While the U.S. is first in healthcare
spending relative to other countries, many of our health indicators
(e.g., life expectancy, etc.) fall short. This suggests we could be
getting more bang for the U.S. healthcare buck.
In fact, a recent RAND study suggests that adults receive
appropriate care roughly half of the time, resulting in serious threats
to the health of the American public that could contribute to thousands
of preventable deaths in the United States each year. Fortunately there
are some very innovative ideas under discussion that could have a real
positive effect on patient care and outcomes.
Advances in information technology have been widely utilized in
other sectors of the economy, but healthcare continues to lag behind in
implementing technology that is shown to improve quality and
efficiency. Electronic medical records, computerized physician order
entry and clinical decision support programs can all increase quality.
We need to find a way to ensure that providers implement these kinds of
technological advances, and I hope some of our witnesses today will
have ideas on how we can improve quality through the use of information
technology.
We have talked about adopting pay-for-performance policies for
years, and it finally seems like purchasers and providers are catching
on. Physicians and other providers will improve quality if
reimbursement is tied to specific clinical and service measures. I
think the Medicare program can truly lead the market in this respect,
and I hope we can learn from the Premiere demonstration project and
create a broad pay-for-performance program in the near future. I look
forward to MedPAC's testimony on this topic and want to recognize their
efforts to advance this debate.
In addition, a discussion about quality of care would not be
complete without talking about the use of evidence-based medicine to
improve clinical practice. Though I voted against the Medicare bill, it
did include $50 million for AHRQ (ark) to study the comparative
clinical effectiveness of healthcare services and prescription drugs.
The Bush budget, however, does not include money for this program,
jeopardizing an important area of research that could lead to improved
quality through evidence-based practice standards and lower costs.
Finally, I want to say that I am pleased to see Dr. Clancy here.
Our Committee has an important historic relationship to your agency
that has been under-utilized in recent years. AHRQ is conducting and
supporting a lot of important research on quality, innovation and cost
of healthcare that can be used to improve Medicare and other public and
private programs. I hope we will renew and strengthen our ties to the
agency in the future.
I look forward to hearing from all of our witnesses today, and hope
to work together with many of you on an ongoing basis to improve
healthcare quality.
Chairman JOHNSON. So acknowledged. Also on the issue of
standards for technology and standards for meeting, for
demonstrating quality, I think we will learn a lot about that
in this hearing, and I think a number of avenues of action will
be clear to us. I do have a very advanced legislative
initiative in the area of technology and standards, but there
are a lot of things we will be able to work on. That is why we
are having this hearing. This is a totally bipartisan issue,
and we thank you all for being with us today. Actually, I don't
know protocol. Dr. Clancy?
STATEMENT OF CAROLYN CLANCY, DIRECTOR, AGENCY FOR HEALTHCARE
RESEARCH AND QUALITY, U.S. DEPARTMENT OF HEALTH AND HUMAN
SERVICES
Dr. CLANCY. Good morning, Chairman Johnson, Congressman
Stark and distinguished Subcommittee Members. Thank you for
inviting me to testify at this important hearing on initiatives
to improve the quality of health care in America. We know that
challenges exist in making sure all Americans receive the high
quality healthcare services they deserve, and I want to assure
you that addressing those challenges is a top priority for
President Bush, Secretary Thompson and the entire U.S.
Department of Health and Human Services (HHS). My written
testimony, which I am pleased to submit for the record, details
numerous examples of current HHS quality improvement
activities, especially those affecting Medicare beneficiaries
and people enrolled in Medicaid and the State Child Health
Insurance Program (SCHIP).
I want to take a few minutes to highlight some examples of
these activities. The mission of AHRQ is to improve the
quality, safety, efficiency and effectiveness of health care
for all Americans. We help achieve that goal by sponsoring
research and other programs that target the quality challenges
we face and develop the tools and resources to overcome them.
Thus we are health care problem solvers working with doctors,
nurses, patients, purchasers, hospital administrators, States
and others to help them make the critical health care decisions
they face every day. This work includes assisting our
colleagues at Centers for Medicare and Medicaid Services (CMS)
responsible for managing the Medicare and Medicaid programs as
well as working with beneficiaries themselves. Because the vast
majority of physicians and hospitals provide care to both
publicly and privately insured people, close collaboration
between the public and private sectors in assessing and
improving quality of care is not just a nice idea, it is
actually essential. You can't have providers confronting two
sets of requirements.
That kind of collaboration is at the heart of how we
operate at AHRQ and throughout the Department. The private
sector can benefit from public investments in science measures
and tools as well as the power of CMS as a purchaser while the
public sector can learn from the private sector's flexibility
and capacity for innovation in delivering health care.
Hospitals and other health care facilities often struggle with
how to collect information to gauge the quality of their
services, as Mr. Stark noted. To address that problem, AHRQ has
developed a family of measures sometimes called indicators that
address key aspects of care. These indicators can be used with
other information hospitals already are collecting to help them
monitor their performance, compare how they are doing with
other facilities in their State or region and to make
improvements when needed.
The investment required to develop these indicators is not
one that hospitals can shoulder alone, but once the indicators
are available, hospitals have the capacity in place to use
them, and we are very pleased they were included in the MedPAC
report. In the critical area of patient safety, we are helping
to find out more about how and when medical errors occur and
how science-based information can help make the health care
system safer. This has resulted in reports like the one we
produced highlighting 73 proven patient-safety practices that
would help improve quality by reducing medical errors across
the health care system. Specifically, the report identifies 11
practices that are known to work but are not routinely used in
the Nation's hospitals and nursing homes. I am very pleased
this has become a blueprint or a starting point for many
organizations as they start their safety efforts.
To help get all of this information to people in the field
who can speed up the process of quality improvement, we have
developed innovative strategies to share new findings about
safety and quality of care. For example, we sponsor monthly
web-based medical journals that showcase patient-safety issues
drawn from actual cases of what are referred to as near misses.
This online journal allows busy health care professionals to
learn right at their own computers and benefit from insights
beyond their own institutions and also get CMS credit for doing
so. In general, IT, including computerized order-entry systems,
computer monitoring for potential adverse drug effects and
handheld electronic devices for electronic prescribing has
shown tremendous promise in reducing errors and improving
safety.
The President's fiscal year 2005 request for AHRQ includes
$84 million for patient safety, and $50 million of that will be
focused on helping hospitals and other health care
organizations invest in these new technologies in evaluating
their impact on quality and safety. This funding particularly
targets small communities in rural hospitals which often don't
have the resources or the information needed to implement
cutting-edge technologies like the ones mentioned.
The CMS is spearheading a number of equally ambitious and
important quality-of-care activities. Under Secretary
Thompson's leadership, HHS launched the Secretary's Quality
Initiative in 2001, focused on achieving better quality of care
in nursing homes, home health care and in hospitals. In
general, the initiative is built on ensuring that Americans
receive high-quality health care in these settings through
improved information for consumers coupled with the
implementation of specific improvement strategies implemented
either directly or through Medicare's quality improvement
organizations. The Nursing Home Quality Initiative is a four-
pronged effort which involves, first, regulation and
enforcement efforts conducted by CMS and State survey agencies;
second, community-based quality-improvement efforts; third,
collaboration with nursing home experts; and fourth, hosting
nursing home performance information on CMS's Nursing Home
Compare website.
In our role as problem solvers, AHRQ is assisting by
putting together research findings that can help with the
quality-improvement piece. For example, a recent AHRQ study
found that educational programs targeted at nurses and doctors
can reduce the use of drugs like nonsteroidal anti-inflammatory
drugs and substitute Tylenol so the patients can avoid serious
complications from the nonsteroidal drugs. The Home Health
Quality Initiative uses a similar four-pronged approach. On the
Hospital Quality Initiative, also known as the Voluntary
Hospital Reporting Initiative, CMS has worked closely with the
American Hospital Association, the Federation of American
Hospitals, the American Association of Medical Colleges,
American Association of Retired Persons (AARP), the American
Federation of Labor-Congress of Industrial Organizations (AFL-
CIO) and others to help expand the information available to
consumers on health care hospital quality.
The AHRQ is a close partner in this initiative working
side-by-side with CMS to develop a new standardized survey that
hospitals can use to find out patients' perspectives on the
care they receive. This new survey is based on AHRQ's
successful Consumer Assessment of Health Plans (CAHPS) project,
so the new survey will be called Hospital CAHPS (H-CAHPS) and
will help consumers make more informed choices about the
hospitals they use and create further incentives for hospitals
to improve the quality of care they provide.
More recently, provisions in the MMA will further enhance
CMS's quality-improvement activities. MMA, includes provisions
designed to encourage the delivery of high-quality care,
especially through demonstration projects focused on improving
care for people with chronic illness, where we provide the
worst care and spend the most money, as well as identifying
effective approaches for rewarding superlative performance. We
are particularly excited by provisions in the MMA to improve
chronic illness care through disease management care and pay
for performance demonstrations, and AHRQ is working very
closely with CMS on these initiatives.
It is important to note that as significant as all of these
Federal efforts are, the public sector can't improve quality of
care on its own. I am very pleased to report that the private
sector is very involved and, in some cases, leading the way on
the issue of health care quality, particularly in hospitals. We
are working closely with them to make sure that our efforts are
synergistic and complementary. We have attempted to further
these private-sector initiatives through grants and other kinds
of support. For example, AHRQ sponsors a program called
Partnerships for Quality, which includes a grant to the
Leapfrog Group, a consortium of more than 135 large health care
purchasers that buy benefits for more than 35 million
Americans. Our support is helping the Leapfrog Group continue
exploring how purchasers can create incentives for quality
improvement through their contracts with providers and plans.
We have also recently developed a partnership with the
American Hospital Association and the American Medical
Association to distribute evidence-based information on what
patients and their families can do to help improve patient
safety of care right now while we are waiting for better
information. I have brought you copies of posters that describe
the five steps to safer health care. Again, I want to thank you
for inviting me to discuss with you today the important issue
of health care quality and the initiatives that HHS has
underway to improve quality of care. I look forward to
answering any questions.
[The prepared statement of Dr. Clancy follows:]
Statement of Carolyn Clancy, M.D., Director, Agency for Healthcare
Research and Quality, U.S. Department of Health and Human Services
Chairman Johnson, Congressman Stark, distinguished Subcommittee
members, thank you for inviting me to this important hearing on
initiatives to improve the quality of health care in America. Quality
health care for all people is a high priority for President Bush and
the Department of Health and Human Services (HHS). Quality health care
is a statutory responsibility for my agency, the Agency for Healthcare
Research and Quality (AHRQ), and it is a key area of emphasis for the
Centers for Medicare & Medicaid Services (CMS).
My testimony today will address three areas: first, current
activities of the Department to improve the quality of care, including
the use of health information technology; second, the significant
provisions of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) that both build upon and advance our
efforts to improve the quality of health care; and finally, I will
provide a brief overview of private sector quality initiatives.
I. THE DEPARTMENT'S QUALITY INITIATIVES
Under Secretary Thompson's leadership, the Department has developed
a variety of quality initiatives involving hospitals, doctors, skilled
nursing facilities, and other providers. The Secretary has also placed
great emphasis on our different agencies functioning as ``one
Department''; as my testimony will outline, this has meant that AHRQ is
increasingly serving as a science partner to CMS in its many quality
initiatives.
AHRQ QUALITY OF CARE INITIATIVES
AHRQ's specific mission is to improve the quality, safety, and
effectiveness of health care for all Americans. To fulfill our role as
a science partner for CMS and State initiatives to improve quality, I
believe that AHRQ must become a true ``problem solver.'' We must
marshall existing and develop new scientific evidence that targets the
critical challenges these programs face in improving the quality of
health care they provide and the efficiency with which they operate. My
goal as Director is to ensure that AHRQ's work is useful to those who
manage these programs so that the taxpayers receive true value for
their tax dollars and to those who rely upon these programs so that
they receive appropriate, high quality care. There are four aspects of
AHRQ's work that I will discuss: research to support evidence-based
decisionmaking, using data to drive quality, accelerating the pace of
quality improvement, and improving the infrastructure for quality
health care.
Research to Support Evidence-based Decisionmaking
AHRQ's research seeks to improve quality by developing and
synthesizing scientific evidence regarding two aspects of health care:
the effectiveness and quality of clinical services and the
effectiveness and efficiency of the ways in which we organize, manage,
deliver and finance health care. With respect to clinical services, we
assess the effectiveness of health care interventions; for example, do
Medicare beneficiaries with multiple chronic illnesses benefit as much
in daily practice from a new intervention or drug as those in the
clinical trial who usually have only one problem? We also look at
comparative effectiveness: how effective is a given intervention versus
the alternatives and what are the comparative risks and side effects?
These are critical issues for physicians making treatment
recommendations and for patients who are in the best position to assess
the risks they are willing to take. For example, cholesterol lowering
drugs--commonly called ``statins''--have different safety and
effectiveness profiles. Comparative studies with statins could have
revealed that some are more likely to cause a serious life threatening
adverse event instead of relying upon adverse event reports that
eventually caused one of them to be taken off the market.
In addition, every aspect of the financing and delivery systems for
health care can matter. Our research asks similar questions in those
areas: what is effective, how does it compare with other strategies,
what is most efficient and what are the risks of unintended
consequences. Currently, we are completing two research syntheses that
focus on what research tells us needs to be taken into account in
implementing an insurance drug benefit and how employers have responded
and could respond to increases in health insurance costs.
Our work in patient safety is an excellent example of how improving
the quality and safety of health care involves both health care
services and the systems through which care is received. Our research
is addressing key unanswered questions about when and how medical
errors occur and how science-based information can make the health care
system safer. We know, for example, that medication errors are a major
issue and have made research on the safe and appropriate use of
pharmaceuticals a significant focus of our research agenda. For
example, a recent research finding has identified a disturbingly large
number of pregnant patients receiving prescriptions for drugs that are
contra-indicated during pregnancy. We are working with the FDA and
other HHS agencies to develop collaborative strategies for addressing
this problem. At the same time, medication errors also result from
faulty work flow procedures or unnecessarily complicated equipment.
Once again, we are working closely with the FDA on research on the
processes related to medication prescribing and delivery, the use of
information technology, development of an effective bar coding system,
and ``human factors research.'' This is a field of science that can
inform the design of health care equipment, like infusion pumps, to
ensure that busy, distracted, and tired health care workers are less
likely to make an error in entering the information for delivery of an
intravenous drug.
Health care decisionmakers need a synthesis of the best evidence
that is understandable, objective, and places the ever-increasing
number of scientific studies in context. AHRQ is committed to
accelerating the adoption of science into practice so that all
Americans benefit from advances in biomedical science. An example in
the patient safety area is our evidence report, titled Making Health
Care Safer, A Critical Analysis of Patient Safety Practices. This
report highlighted 73 proven patient safety practices which would help
health care administrators, medical directors, clinicians, and others
improve quality by reducing medical errors. Specifically, the report
identified 11 practices that are proven to work but not used routinely
in the Nation's hospitals and nursing homes.
It is also critical that we foster ongoing learning from experts in
the field to expedite quality improvement. For example, a critical
challenge in making health care safer is that providers do not share
lessons learned from errors and near misses due to fear of liability.
To help health care professionals benefit from insights beyond their
home institutions, AHRQ is sponsoring a monthly, Web-based medical
journal that showcases patient safety lessons drawn from actual cases
of near-errors. This unique online journal allows health care
professionals to learn about avoidable errors made in other
institutions, as well as effective strategies for preventing their
recurrence. One case each month is expanded into a ``Spotlight Case''
that includes an interactive learning module that features readers'
polls, quizzes, and other multimedia elements. Practicing physicians
may obtain continuing medical education credit by successfully
completing the spotlight case and its questions, and trainees can
receive certification credits for doing so.
Using Data to Drive Quality
To improve quality, you need strong measures, good data, and
somebody with strong reason to use them. Responding to user needs, AHRQ
has played a fundamental role in creating the measures and the data.
I'll give you two examples. The first focuses on hospital care. In
response to requests by state hospital associations, state data
organizations and others, AHRQ developed a set of Quality Indicators
which can be used in conjunction with any hospital discharge data to
let a hospital know how it is doing in terms of safety and quality. A
subset of these indicators also lets us use information about hospital
admissions to assess the performance of the health system of the
community. At the same time, employers, CMS and others who wish to
reward good-quality hospitals can use these measures with data from
particular hospitals or regions. Or they can use the module on
preventable admissions to target and launch major health improvement
efforts on a community-wide scale. These indicators have been used by a
number of states and communities to improve care and to determine how
their own hospital or health system's performance compares to other
hospitals in key areas. We have a support contract to make this easy
for all users.
A second example has to do with improving the patient experience of
care, a widely recognized component of overall quality. Several years
ago, AHRQ created a survey, CAHPS, which health plans could use to
question patients about their care experience. CAHPS is now an easy to
use kit of survey and reporting tools that provides reliable
information to help consumers and purchasers assess and choose among
health plans, providers and other health facilities. The first CAHPS
surveys, which assessed consumers' perceptions of the quality of health
plans, are used by more than 100 million Americans, including those in
Medicare managed care plans, enrollees in the Federal Employees Health
Benefits Program, and participants in the Department of Defense's
health programs.
An H-CAHPS survey built on AHRQ's earlier work in establishing
surveys and will measure the hospital care of those patients' involved
in the pilot. The survey is being considered by CMS as part of the
National Voluntary Hospital Reporting Initiative. CMS has received
comments and has lessons learned from the pilots, which could be
helpful in working with AHRQ to develop a standardized H-CAHPS.
AHRQ is stepping up its efforts to provide assistance, often web-
based, for those who are seeking to improve the quality of patient
care. For example:
AHRQ recently launched a web-based clearinghouse
[QualityToolsTM.gov] providing practical tools for assessing,
measuring, promoting and improving the quality Americans' health care.
The site's purpose is to provide health care providers, policymakers,
purchasers, patients, and consumers an accessible mechanism to
implement quality improvement recommendations and easily educate
individuals regarding their own health care needs.
In addition, AHRQ is helping patients and their families
improve the quality of the health care they receive and play an
important role in preventing medical errors. AHRQ and CMS collaborated
on a campaign to promote new ``5 Steps to Safer Health Care'' posters.
In addition, campaigns with the American Hospital Association, the
American Academy of Pediatrics, American Medical Association, and AARP
are working to implement evidence-based information that help patients
know how talk to clinicians about safe health care.
While the text of AHRQ's recent reports, National
Healthcare Quality Report and the National Healthcare Disparities
Report, are currently available on the web, AHRQ is developing a more
sophisticated search engine that will enable those seeking to improve
the quality of care at the local or state level to link to the myriad
of charts and data that are summarized in the report. Over time we
expect this to be an indispensable tool for those seeking to develop a
``road map'' for their own quality improvement efforts.
Accelerating the Pace of Quality Improvement
To accelerate the pace of quality improvement, AHRQ has launched a
program called Partnerships for Quality. The purpose of the
Partnerships program is to support models or prototypes of change led
by organizations or groups with the immediate capacity to influence the
organization and delivery of health care as well as measure and
evaluate the impact of their improvement efforts. For example, AHRQ has
awarded a grant to The Leapfrog Group, which is a consortium of more
than 135 large private and public health care purchasers buying health
benefits for more than 33 million Americans. Leapfrog has devised a
plan for conducting and rigorously evaluating financial incentive or
reward pilots in up to 6 U.S. healthcare markets in two waves over the
next three years.
Another approach to accelerating quality improvement is to involve
health care system leaders in the research enterprise itself from the
outset. AHRQ currently has three delivery-based networks that follow
this approach. The Primary Care-Based Research Network is a group of 19
primary care networks across the country that do research
collaboratively on ways to improve preventive care and other issues of
interest to primary care providers. The HIV Research Network is a
network of 22 large and sophisticated HIV care providers around the
country who share information and data so that they can learn from each
other what can work to improve quality. They also provide timely
aggregate information to policymakers and other providers interested in
improving quality and answering other questions about access and cost
of care for people with HIV. Through the work of this network and other
large HIV care providers, for example, AHRQ is looking to identify and
remedy major causes of prescribing errors for patients with HIV.
A third network, the Integrated Delivery System Research Network
(IDSRN), is a field-based research network that tests ways to improve
quality within some of the most sophisticated health plans, systems,
hospitals, nursing homes, and other provider sites in the country. In
the past year for example, provider-researcher teams have been working
on ways to reduce falls in nursing homes, and ways to limit medication
errors. Often we partner with others in the Department on these
efforts. For example, CMS asked us for a handbook on ways to improve
cultural competency of health care providers, and is now using this
handbook as the key part of their training for Medicare and Medicaid
providers. One of our contractors developed a tool to help hospitals
prepare for bioterrorist events and other emergencies, and the American
Hospital Association has since shared this tool with all of their
members and in fact provide technical assistance on how to use it.
Improving the Infrastructure for Quality Health Care
Two critical elements for improving the quality and safety of
patient care are expanding the use of information technology (IT) and
investing in human capital. The most recent report from the Institute
of Medicine's quality chasm series emphasizes the need for improved
information at the point of care and the deployment of the still
developing National Health Information Infrastructure (NHII) to improve
patient safety and quality of care, for which HHS has the lead Federal
role working with the private sector. Both AHRQ and ASPE have several
initiatives underway to advance the adoption and appropriate use of IT
tools and enable the secure and private exchange of information within
and across communities.
In FY 2004, AHRQ has launched a new initiative to improve health
care quality and reduce medical errors through the use of information
technology. AHRQ will award $50 million to help hospitals and other
health care providers invest in information technology designed to
improve patient safety, with an emphasis on small communities and rural
hospitals and systems, which don't often have the resources or
information needed to implement cutting-edge technology. An important
aspect of this program is that it will foster the implementation of
proven technology through the health care system and establish
important building blocks for the NHII.
As the NHII is developed, it will enable appropriate access to
important patient information and evidence to assist clinicians in
making diagnostic and treatment decisions that are based on the best
available science. If a Medicare beneficiary typically receives care
from an internist and specialist in Connecticut for 6 months of the
year but has different physicians in Florida during the winter, their
medications, labs, x-rays and other important health information would
be available to all their physicians at any point in time. This will
allow clinicians to provide continuous high quality of care regardless
of where a beneficiary accesses the health care system. While the
intention of HHS is to facilitate the development of the NHII, we
recognize that the most realistic strategy is to foster and support
community-based health information exchanges with the ability to share
information within and across communities nationally over time. In
addition, the FY 2005 Budget requests a new $50 million within the
Office of the Secretary to support communities with the development of
these health information exchanges in FY 2005 and disseminating lessons
learned to ensure the success and long-term viability of these local
efforts across the country.
Another infrastructure issue is the ability to share health
information in ways that enable us to make significant strides towards
improving patient safety, reducing error rates, lowering administrative
costs, and strengthening national public health and disaster
preparedness. To share health data, agencies need to adopt the same
clinical vocabularies and the same ways of transmitting that
information. This sharing information within and between agencies
establishes ``interoperability.'' Public and private groups have
emphasized how interoperability through standards will enable us to
share a common electronic patient medical record and in turn greatly
improve the quality of health care. The Consolidated Health Informatics
(CHI) initiative will establish a portfolio of existing clinical
vocabularies and messaging standards enabling Federal agencies to build
interoperable Federal health data systems. This commonality will enable
all Federal agencies to ``speak the same language'' and share that
information without the high cost of translation or data re-entry.
Federal agencies could then pursue projects meeting their individual
business needs aimed at initiatives such as sharing electronic medical
records and electronic patient identification. CHI standards will work
in conjunction with the Health Insurance Portability and Accountability
Act (HIPAA) transaction records and code sets and HIPAA security and
privacy provisions. Many departments and agencies including HHS, VA,
DOD, SSA, GSA, and NIST are active in the CHI governance process.
Even when the best tools available are used appropriately,
achieving consistent high quality care requires a solid understanding
of the delivery process and inherent risks in the system that will
never be mitigated through automation. In recognizing the importance of
intellectual component of quality improvement, AHRQ recently
established the AHRQ-VA Patient Safety Improvement Corps, a training
program for state health officials and their selected hospital
partners. During the first annual program, 50 participants will
complete coursework in three 1-week sessions at AHRQ's offices in
Rockville, MD. Participants will analyze adverse medical events and
close calls--sometimes known as ``near misses''--to identify the root
causes of these events and correct and prevent them. Anticipating that
the growing demand for patient safety expertise will exceed the
capacity of this intensive program, one aspect of this initiative will
be to develop web-based training modules. These will be in the public
domain and could be used independently or by private sector training
programs that would provide additional ``hands on'' experiences.
CMS QUALITY OF CARE INITIATIVES
In November 2001, Secretary Thompson announced the Quality
Initiative, a commitment to assure quality health care for all
Americans through published consumer information coupled with health
care quality improvement support through Medicare's Quality Improvement
Organizations (QIOs). The Quality Initiative was launched nationally in
2002 as the Nursing Home Quality Initiative and expanded in 2003 with
the Home Health Quality Initiative and the National Voluntary Hospital
Quality Reporting Initiative. The CMS Physician Focused Quality
Initiative (PFQI) began its implementation this year. Most leaders in
health care recognize that achieving the safest and highest quality of
care will require significant enhancements in the use of health
information technology and strategies to permit sharing of patient data
within communities. In FY04 and FY05 the Department will invest $150
million. In addition, the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) includes a variety of provisions
designed to encourage the delivery of quality care, including
demonstrations to focus effort on improving chronic illness care and
identifying effective approaches for rewarding superlative performance.
Nursing Homes
About 3 million elderly and disabled Americans received care in our
nation's nearly 17,000 Medicare and Medicaid-certified nursing homes in
2001. Slightly more than half of these were long-term nursing home
residents, but nearly as many had shorter stays for rehabilitation care
after an acute hospitalization. About 75 percent were age 75 or older.
As part of an effort to improve nursing home quality nationwide, the
Administration has taken a number of steps, including the Nursing Home
Quality Initiative. Working with measurement experts, the National
Quality Forum, and a broad group of nursing home industry
stakeholders--consumer groups, unions, patient groups and nursing
homes--CMS adopted a set of nursing home quality measures and launched
a six-state pilot. Encouraged by the success of the pilot, CMS expanded
the Nursing Home Quality Initiative to all 50 States in November 2002.
This quality initiative is a four-pronged effort including, regulation
and enforcement efforts conducted by CMS and state survey agencies;
continual, community-based quality improvement programs; collaboration
and partnership with stakeholders to leverage knowledge and resources;
and improved consumer information on the quality of care in nursing
homes.
As part of the effort, consumers may compare quality data,
deficiency survey results and staffing information about the nation's
Medicare and Medicaid-certified nursing homes through the Nursing Home
Compare website, which is updated quarterly. The quality measures
included on the site help consumers make informed decisions involving
nursing homes. The Nursing Home Compare tool received 9.3 million page
views in 2003 and was the most popular tool on www.medicare.gov.
Home Health
In 2001, about 3.5 million Americans received care from nearly
7,000 Medicare certified home health agencies. These agencies offer
health care and personal care to patients in their own home, often
teaching them to care for themselves. Launched nationwide in November
2003, the Home Health Quality Initiative aims to further improve the
quality of care given to the millions of Americans who use home health
care services. The initiative combines new information for consumers
about the quality of care provided by home health agencies with
important resources available to improve the quality of home health
care. Like the Nursing Home Quality Initiative, the Home Health Quality
Initiative uses the same ``four-pronged'' approach to regulate the
industry, ensure consumers have improved access to information, utilize
community-based quality improvement programs, and collaborate with the
relevant stakeholders to access resources and knowledge for home health
agencies. CMS' regulation and enforcement activities will assure that
home health agencies comply with Federal standards for patient health,
safety, and quality of care. In March 2004, CMS updated the eleven home
health quality measures on every Medicare-certified home health agency
to give consumers the ability to compare the quality of care provided
by the agencies. To access the information, consumers can call 1-800-
Medicare or use the Home Health Compare tool at www.medicare.gov. Over
the past six months, the tool has been viewed about 780,000 times.
Hospitals
The Hospital Quality Initiative consists of the National Voluntary
Hospital Reporting Initiative (NVHRI), a public-private collaboration
that reports hospital quality performance information, a three state
pilot of the Hospital Patient Perspectives on Care Survey (HCAHPS), and
the Premier Hospital Quality Incentive Demonstration. The Hospital
Quality Initiative, is more complex, and consists of more developmental
parts than the nursing home and home heath quality initiatives. The
initiative uses a variety of tools to stimulate and support a
significant improvement in the quality of hospital care. The initiative
aims to refine and standardize hospital data, data transmission, and
performance measures in order to construct a single robust, prioritized
and standard quality measure set for hospitals. The ultimate goal is
that all private and public purchasers, oversight and accrediting
entities, and payers and providers of hospital care would use the same
measures in their public reporting activities. The initiative is
intended to make critical information about hospital performance
accessible to the public and to inform and invigorate efforts to
improve quality. Among the tools used to achieve this objective are
collaborations with providers, purchasers and consumers, technical
support from Quality Improvement Organizations, research and
development of standardized measures, and commitment to assuring
compliance with our conditions of participation.
National Voluntary Hospital Reporting Initiative
The National Voluntary Hospital Reporting Initiative (NVRI) was
launched in 2003 in conjunction with the American Hospital Association,
Federation of American Hospitals, American Association of Medical
Colleges, and other stakeholders (AARP, AFL-CIO). The NVRI was
established to provide useful and valid information about hospital
quality to the public, standardize data and data collection, and foster
hospital quality improvement. For the previous initiatives, CMS had
well-studied and validated clinical data sets and standardized data
transmission infrastructure from which to draw a number of pertinent
quality measures for public reporting. Hospitals do not have a similar
comprehensive data set from which to develop the pertinent quality
measures. Thus, the American Hospital Association, the Federation of
American Hospitals and the Association of American Medical Colleges
approached the Joint Commission on Accreditation of Healthcare
Organizations, the Agency for Healthcare Research and Quality, the
National Quality Forum and CMS to explore voluntary public reporting of
hospital performance measures. CMS contracted with the National Quality
Forum (NQF) to develop such a consensus-derived set of hospital quality
measures appropriate for public reporting. We selected 10 measures from
the NQF consensus-derived set as a starter set for public reporting and
quality improvement efforts and an additional 24 measures from the set
for the hospital quality incentive demonstration. CMS has worked with
the Joint Commission on Accreditation of Healthcare Organizations
(JCAHO) and the QIOs to align their hospital quality measures to ease
the data transmission process for hospitals. This information is
currently displayed on the CMSI website and updated quarterly.
Hospital Patient Perspectives on Care Survey (HCAHPS)
Although many hospitals already collect information on their
patients' satisfaction with care, there currently is no national
standard for measuring and collecting such information that would allow
consumers to compare patient perspectives at different hospitals. CMS
worked with the Agency for Healthcare Research and Quality (AHRQ) to
pilot test Hospital Patient Perspectives on Care Survey, known as
HCAHPS. The HCAHPS survey built on AHRQ's success in establishing
surveys measuring patient perspectives on care in the United States
health care system through the development of CAHPS for health plans.
CMS has received comments and has lessons learned from the pilots,
which could be helpful in working with AHRQ to develop a standardized
H-CAHPS.
Premier Hospital Quality Incentive
The Premier Hospital Quality Incentive demonstration project also
is part of the Hospital Quality Initiative. This three-year
demonstration project recognizes and provides financial rewards to
hospitals that demonstrate high quality performance in a number of
areas of acute care. The demonstration involves a CMS partnership with
Premier Inc., a nationwide purchasing alliance of not-for-profit
hospitals, and rewards the hospitals with the best performance by
increasing their payment for Medicare patients. There are approximately
280 hospitals participating in the project. Under the demonstration,
top performing hospitals will receive bonuses based on their
performance on evidence-based quality measures for inpatients with
heart attacks, heart failure, pneumonia, coronary artery bypass graft,
and hip and knee replacements. The 34 quality measures used in the
demonstration have an extensive record of validation through research.
Using these measures, CMS will identify hospitals in the
demonstration with the highest clinical quality performance for each of
the five clinical areas. Hospitals in the top 20 percent of quality for
those clinical areas will be given a financial payment as a reward for
the quality of their care. Hospitals in the top decile of hospitals for
a given diagnosis will be provided a 2 percent bonus for the measured
condition, while hospitals in the second decile will be paid a 1
percent bonus. In year three, hospitals that do not achieve performance
improvements above the demonstration baseline will have their payment
reduced. The demonstration baseline is set during the first year of the
demonstration. Hospitals will receive a 1 percent reduction in their
DRG payment for clinical conditions that score below the ninth decile
baseline level and 2 percent less if they score below the tenth decile
baseline level.
Physician Focused Quality Initiative
Similar to the Hospital Quality Initiative, the CMS Physician
Focused Quality Initiative (PFQI) has several components with multiple
approaches to stimulating the adoption of quality strategies and
potentially reporting quality measures for physician services. The
Physician Focused Quality Initiative builds upon ongoing CMS strategies
and programs in other health care settings in order to: (1) assess the
quality of care for key illnesses and clinical conditions that affect
many Medicare beneficiaries, (2) support clinicians in providing
appropriate treatment of the conditions identified, (3) prevent health
problems that are avoidable, and (4) investigate the concept of payment
for performance.
Doctors' Office Quality (DOQ) Project
The DOQ Project is designed to develop and test a comprehensive,
integrated approach to measuring and improving the quality of care for
chronic diseases and preventive services in the outpatient setting. CMS
is working closely with key stakeholders such as nationally recognized
physicians associations, consumer advocacy groups, philanthropic
foundations, purchasers, and quality accreditation or quality
assessment organizations to develop and test the DOQ measurement set.
The DOQ measurement set has three components including a clinical
performance measurement set, a practice system assessment survey, and a
patient experience of care survey.
Doctors' Office Quality--Information Technology (DOQ-IT) Project
CMS recognizes the potential for information technology to improve
the quality, safety and efficiency of health care services. Through the
DOQ-IT project, CMS is working to support the adoption and effective
use of information technology by physicians' offices to improve the
quality and safety for Medicare beneficiaries. DOQ-IT seeks to
accomplish this by promoting greater availability of high quality
affordable health information technology and by providing assistance to
physician offices in adopting and using such technology.
Payment Demonstration Projects
CMS continues to examine financial incentives for physicians that
demonstrate higher quality performance. This approach includes the
Physician Group Practice demonstration that tests a hybrid methodology
for paying physician-driven organizations that combine Medicare fee-
for-service payments with a bonus pool derived from savings achieved
through improvements in the management of care and services.
ESRD Quality Activities
BBA required CMS to develop and implement, by January 1, 2000, a
method to measure and report the quality of renal dialysis services
provided under the Medicare program. To implement this legislation, CMS
funded the development of clinical performance measures (CPMs) based on
the National Kidney Foundation's Dialysis Outcome Quality Initiative
Clinical Practice Guidelines. Sixteen ESRD CPMs (five for hemodialysis
adequacy, three for peritoneal dialysis adequacy, and four for anemia
management) were developed and are used for quality improvement
purposes through the ESRD Networks.
II. QUALITY PROVISIONS UNDER THE MMA
The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA) includes a variety of provisions designed to encourage
the delivery of quality care, including demonstrations to focus effort
on improving chronic illness care and identifying effective approaches
for rewarding superlative performance. The law includes a number of
quality provisions such as demonstrations, electronic-prescribing,
medication therapy management, and background-checks on long-term care
facility employees. In addition, the law expands the responsibilities
of QIOs and develops a closer working relationship between AHRQ and the
Medicare, Medicaid, and SCHIP programs.
Medicare Health Care Quality Demonstration Programs
The MMA authorizes a 5-year demonstration program that expands CMS'
current Physician Group Practice (PGP) demonstration and evaluates the
effect of various factors such as the appropriate use of culturally and
ethnically sensitive health care delivery, on quality of patient care.
This demonstration defines ``health care groups'' as regional
coalitions, integrated delivery systems, and physician groups and
allows ``health care groups'' to incorporate approved alternative
payment systems and modifications to the Medicare FFS and Medicare
Advantage benefit packages. This demonstration covers both FFS and
Medicare Advantage eligible individuals and must be budget neutral.
Medicare Care Management Performance Demonstration
The MMA also authorizes a Care Management Performance Demonstration
Program in Medicare FFS. Eligible Medicare beneficiaries will include
those enrolled in Medicare Parts A and B who have one or more chronic
medical conditions, to be specified by CMS (one of which may be a
cognitive impairment). The goals of this demonstration are to promote
continuity of care, help stabilize medical conditions, prevent or
minimize acute exacerbations of chronic conditions, and reduce adverse
health outcomes, such as adverse drug interactions. This is a pay-for-
performance 3-year demonstration program with physicians. Physicians
will be required to use information technology (such as email and
clinical alerts and reminders) and evidence-based medicine to meet
beneficiaries' needs. Physicians who meet or exceed performance
standards established by CMS will receive a per beneficiary payment.
This payment amount can vary based on different levels of performance.
CMS will designate no more than 4 sites for this demonstration program,
which must also be budget neutral.
Voluntary Chronic Care Improvement under Traditional FFS
The MMA requires that CMS phase-in chronic care improvement
programs in Medicare FFS. These programs must begin no later than 1
year after enactment of MMA. Eligible beneficiaries will be those with
chronic diseases such as congestive heart failure and diabetes. Chronic
care improvement programs will help beneficiaries manage their self-
care and will provide physicians and other providers with technical
support to manage beneficiaries' clinical care. The goal of these
programs is to improve quality of life and quality of care for
beneficiaries without increasing Medicare program costs. This program
will be particularly valuable in rural areas and among populations who
encounter barriers to care by ensuring that nurses and other
professionals will be available to help chronically ill beneficiaries
manage their illnesses between office visits. CMS will identify
beneficiaries who may benefit from these programs, but participation
will be voluntary. Participating organizations must meet performance
standards and will be required to refund fees CMS paid to them if these
fees exceed estimated savings.
Incentives for Reporting
MMA provides a strong incentive for eligible hospitals to submit
data for 10 clinical quality measures. For fiscal years 2005 through
2007, hospitals will receive the full market basket payment update if
they submit the 10 hospital quality measures to CMS. If hospitals do
not submit the 10 quality measures, then they receive an update of
market basket minus 0.4 percentage points.
Electronic Prescribing
Medication errors caused by poor handwriting and other mishaps will
be sharply reduced by the electronic prescribing provisions in the MMA.
Under MMA, the Secretary of Health and Human Services is directed to
develop a national standard for electronic prescriptions with the
National Committee on Vital and Health Statistics and in consultation
with health care providers including hospitals, physicians, pharmacists
and other experts. With a national standard in place, doctors,
hospitals, and pharmacies nationwide can be sure their computer systems
are compatible. This will allow providers to share information on what
medications a patient is taking and to be alerted for possible adverse
drug interactions. A seamless computer system also will provide
information about a patient's drug plan and any prescription
formularies. This information would let the doctor know whether a
therapeutically appropriate switch to a different drug might save the
patient some money.
A one-year pilot project in 2006 will test how well the proposed
national standard works, and the Secretary may revise the standard
based on the industry's experience. Once the final standard is set (and
no later than April 2008), any prescriptions that are written
electronically for Medicare beneficiaries will have to conform to the
standard. There is, however, no requirement that prescriptions be
written electronically. Electronic prescribing is entirely voluntary
for doctors. However, MMA authorizes the federal government to give
grants to doctors to help them buy computers, software, and training to
get ready for electronic prescribing. The grants will cover up to half
of the doctor's cost of converting to electronic prescribing, and they
may be targeted to rural physicians and those who treat a large share
of Medicare patients. The first public meeting on this initiative will
take place next week.
Medicare Therapy Management
MMA requires plans offering the new Medicare drug benefit to have a
program that will ensure the appropriate use of prescription drugs in
order to improve outcomes and reduce adverse drug interactions. MMA
also contains a provision that allows plans to pay pharmacists to spend
time counseling patients and will be targeted at patients who have
multiple chronic conditions (such as asthma, diabetes, hypertension,
high cholesterol and congestive heart failure), are taking multiple
medications, and are likely to have high drug expenses. The therapy
management program also will be coordinated with other chronic care
management and disease management programs operating in other parts of
Medicare. Medication management was identified by the Institute of
Medicine as one of 20 priority areas for transforming the health care
system.
Medication therapy management will be a new service for Medicare
plans. In Medicare, the amount and structure of payment will be set by
the plans offering the new Medicare Part D, according to requirements
established by the Secretary of Health and Human Services in the coming
years.
Research on Health Care Items and Services
The bill requires AHRQ to serve as a science partner for the
Medicare, Medicaid, and S-CHIP programs. The Secretary is required to
establish a priority-setting process to identify the most critical
information needs of these three programs regarding health care items
or services (including prescription drugs). An initial list of priority
research is required by early June with the initial research completed
18 months later.
III. QUALITY INITIATIVES IN THE PRIVATE SECTOR
In the past few years, the private sector has become very involved
in the issue of healthcare quality, particularly for hospitals. Several
well-publicized landmark studies identify significant gaps and
variations in the quality and safety of health care, at a time of
rapidly escalating health costs. These reports have accelerated efforts
by accrediting bodies, large purchasers and employer coalitions, and
others to track quality at the national, state, and provider level,
publish comparative quality reports, launch quality improvement
efforts, and use public and private purchasing power to reward better
quality.
AHRQ has been an important partner in these efforts, providing
tools and data, lending technical assistance, and helping all of the
players learn from these efforts. For example, with respect to
accreditation, our research and tools have provided the basis for
measures used by HEDIS and JCAHO.
To facilitate internal quality improvement, AHRQ's Quality
Indicators (QIs) have been used by hospitals and state hospital
associations for benchmarking. Statewide hospital associations run the
indicators for all hospitals in their state and then share the
information with hospitals that can not only track their own
performance but also compare it with that of their peers. This use of
our indicators takes place in New York, Georgia, Montana, Missouri,
West Virginia, Illinois, Kentucky, Oregon, and Wisconsin. In Texas, the
Dallas-Fort Worth Hospital Council uses our indicators to target and
direct interventions to improve care diabetes in the community and
thereby prevent the need for many hospitalizations. In Illinois, Blue
Cross Blue Shield profiles hospitals uses 10 of our measures and
expects to add more shortly.
A major change in the past several years has been an acceleration
of public reporting efforts, particularly for hospitals, and this has
brought a tremendous amount of interest in AHRQ's Quality Indicators.
Two large states now have comparative quality data for all hospitals
using AHRQ's Inpatient Quality Indicators. In New York, the Niagara
Business Coalition has published statewide comparative data for two
consecutive years. The Texas Health Care Information Council also
published public scores for all 400 Texas hospitals using all 25 of
AHRQ's Inpatient Quality Indicators. The reports are posted on their
web site and a Readers' Guide is available to help consumers understand
the information. This is a new use of the Quality Indicators--one we
had not even anticipated in our original work, which was more focused
on quality improvement. To inform these public reporting efforts, AHRQ
is finalizing a guidance document for states, purchasing coalitions and
others wishing to use AHRQ's Quality Indicators for this purpose.
Another way we facilitate the private sector's reporting efforts is
to work with those using the data to find ways we can improve it. For
example, many in the private sector favor use of administrative data
because it is readily available and inexpensive. But the value of this
information can be improved by selectively linking in clinical data.
For example, the Pennsylvania Health Care Cost Containment Council
already requires that hospitals collect and submit selected clinical
data elements to supplement the administrative data and the UB-02
committee is considering adding some of these to the minimum data set.
AHRQ has funded a project to describe the value of administrative data
and is anticipating future projects focused on integrating clinical
data elements into administrative data.
Several private sector organizations are already using quality
information to guide their provider selection and payments. For
example, an increasing number of large employers and coalitions are
using a common Request for Information (eValue8) to solicit information
about quality from health plans seeking to do business with them.
Through the Leapfrog Initiative, alliances of large employers and
business coalitions are asking hospitals to provide data on three
safety practices: computer physician order entry, evidence-based
hospital referral and ICU physician staffing. In addition, both private
and public purchasers are establishing programs basing payment amounts
and/or contractual referral relationships on provider quality
information. In some cases payment is linked to mere provision of the
quality data, whereas in others it is linked to the score itself. For
example, Anthem Blue Cross in Virginia rewards hospitals for reporting
performance on several indicators, including AHRQ's Patient safety
measures. Several of AHRQ's Patient Safety measures are being used in
the CMS demonstration with Premier and, in fact, Premier is now
tracking their performance against all of these indicators as part of
an overall quality improvement effort.
AHRQ also is working closely with employers, business coalitions
and others involved in pay-for-performance initiatives. For example, at
the suggestion of Alliance Healthcare Coalition in Wisconsin, we have
done a review of what the evidence shows about the impact of financial
incentives on quality. In addition, AHRQ is doing an evaluation of
seven large pay-for-performance demonstrations involved in the Robert
Wood Johnson's Rewarding Results program, which should help purchasers
and others in the future as they design pay-for-performance schemes.
CONCLUSION
Chairwoman Johnson, Congressman Stark, distinguished Subcommittee
Members, thank you again for inviting me to discuss the health quality
initiatives that the Department of Health and Human Services is
undertaking to improve the quality of care delivered by the health care
systems across the nation. This Administration is committed to working
with the health care industry and the various stakeholders to improve
the quality of care, while also ensuring patients have access to the
information they need to make educated decisions involving their health
care. Thank you again for this opportunity, and I look forward to
answering any questions you may have.
Chairman JOHNSON. Thank you very much, Dr. Clancy, for that
speedy review of, really, an enormous amount of work on behalf
of the Executive Branch. I have never seen the Executive Branch
involved in so many aspects--and leadership--in so many areas
on health care technology, information systems, best practices
and so on. I really am excited about the base we have laid down
for action. Mr. Hackbarth, if you will continue now with
MedPAC's role in all of this?
STATEMENT OF GLENN M. HACKBARTH, CHAIRMAN, MEDICARE PAYMENT
ADVISORY COMMISSION
Mr. HACKBARTH. Thank you very much, Chairman, Mr. Stark,
other Members of the Subcommittee, and I want to add what you
just said, AHRQ and CMS, others in the Department and outside
the Department have created some tremendous tools that have
allowed MedPAC and others to begin evaluating the quality of
care provided to Medicare beneficiaries and the population at
large. What we did in our March 2004 report is examine care
provided to Medicare beneficiaries over a period of time using
these measures developed by AHRQ and CMS. For most of the
measures, the period of time examined was 1995 to 2002. On some
of the measures, it was 1998 to 2001. We looked at quality
applying a framework developed by the Institute of Medicine,
namely that quality of care should be effective care safely
delivered in a timely fashion, in a patient-centered manner.
We selected measures that would allow us to get at these
various component parts of quality. The measures we looked at
included hospital mortality, adverse events that occurred
during the hospital stay, adherence to standards of effective
care, both inside and outside the hospital, potentially
avoidable hospital admissions and patient satisfaction. On some
of these measures, we were able to compare care in the
traditional fee-for-service program against care in the
managed-care portion of Medicare. Our findings, as has been
true of other research on quality, were mixed. We found that
patient satisfaction was high and stable over the whole period
we examined. Hospital mortality improved in most instances as
did adherence to effective standards--standards of effective
care. However, we found that even after improvement in
adherence to standards of effective care, many Medicare
beneficiaries, often 20, 30 percent or more, are not receiving
care proven to be effective.
In addition, we found that adverse events within the
hospital increased for 9 out of 13 measures that we examined.
We also found that avoidable hospital admissions increased in 7
out of 12 measures that we examined. So, in sum, of course
Medicare beneficiaries receive technologically advanced care
for the most part. They usually receive a lot of care. However,
as others have found, we found significant quality gaps. To
help improve quality, in our view, we must attack the problem
with multiple tools. Of course, there are the traditional
Medicare tools of conditions of participation and
accreditation. More recently, CMS has added quality-improvement
targets and efforts and public disclosure of data to the
arsenal. What we are advocating in our March report is that we
take now the next logical step, which is to link payment for
service to the quality of care delivered. We do this with the
simple conviction that you get what you pay for. Right now, we
pay more for volume. We pay more for technological advancement.
The payment system, as currently constructed, is at best
neutral toward quality and, arguably, in some instances,
hostile to quality.
What we propose in our report is that we begin to apply
quality standards and payment in areas where there are clearly
defined consensus measures of quality with existing methods of
data collection in place. As we look at the Medicare program,
we see two noteworthy examples of that. One is in dialysis care
for patients with end-stage renal disease, and the other is in
care provided by private plans to Medicare beneficiaries. Our
recommended approach is that we take the existing payments to
those at work in the sectors, and set aside a small portion of
those payments to be redistributed based on performance against
quality measures. It would be a budget-neutral program. The
intent of our recommendation is that all of the dollars put
into the quality pool would be paid. We further recommend that
the dollars be distributed in two ways: one piece of it going
to the organizations with the highest absolute level of
quality, and then another piece delivered to organizations that
show large improvement in their quality. We believe in using
this two-pronged approach, because it will distribute dollars
in a way that provides maximum opportunity and incentive to
improve quality.
This is a complicated endeavor, a challenging endeavor. It
would be less than candid to say it is not without its
complications and, therefore, potential risk. The potential
risks that I am most concerned about are, one, creating an
incentive for health care providers to avoid the most difficult
patients, the most challenging cases, because it might make
them look bad on quality measures. A second concern is that you
might, in effect, put teaching to the test with providers
focused exclusively on improving what is measured and paid for
as opposed to other opportunities for improving quality. Those
are real risks. We think that they need to be looked at in
context. The risks of the status quo, in our judgment, are even
greater. Continuing as we are with the payment system that is
neutral or even negative towards quality is costing us a great
deal, not just in dollars but in terms of health for Medicare
beneficiaries. Thank you very much.
[The prepared statement of Mr. Hackbarth follows:]
Statement of Glenn M. Hackbarth, J.D., Chairman, Medicare Payment
Advisory Commission
Chairman Johnson, Congressman Stark, distinguished Subcommittee
members, I am Glenn Hackbarth, chairman of the Medicare Payment
Advisory Commission (MedPAC). I appreciate the opportunity to be here
with you this morning to discuss improving quality in the Medicare
program through Medicare payment policy, a subject that has been of
particular interest to the Commission.
The Quality of Care for Medicare Beneficiaries Needs to Be Improved
Ensuring that Medicare beneficiaries have access to high quality
care is the principal objective of the Medicare program. Yet Medicare
beneficiaries receive care from a system known to have quality
problems. While care is improving in several settings, as RAND, Jencks
and others have reported, significant gaps remain between what is known
to be good care and the care delivered. Studies documenting the gap
between high-quality care and the care currently delivered have called
attention to the need for improvement. As the Institute of Medicine
reported, the safety of patients, particularly in hospital settings, is
also of concern.
In our March report to the Congress, we document aspects of the
quality of care for the Medicare population using quality indicators
developed by the Agency for Healthcare Research and Quality (AHRQ) and
results from CMS using other measures. We find that although some
measures of quality show improvement over the last decade, many do not
and improvement is possible in many more.
We find quality varies based on the indicators used. Hospital
mortality rates are improving (table 1). The rate of in-hospital
mortality--an indicator of effectiveness--generally decreased between
1995 and 2002 on all conditions and procedures measured. At the same
time, many beneficiaries experience adverse events in hospitals.
Measures of the safety of patients in the hospital reveal that 9 out of
the 13 rates of adverse events we tracked for hospitalized Medicare
beneficiaries increased between 1995 and 2002 (table 2). Beneficiaries
are being admitted to hospitals for conditions that might have been
prevented in ambulatory settings (table 3). Seven out of 12 indicators
show increases in admissions between 1995 and 2002 for potentially
avoidable admissions. For beneficiaries who are hospitalized, measures
used by CMS's quality improvement organization program show
improvement. Fourteen out of 16 measures of appropriate provision of
care in hospitals improved between the periods 1998 to 1999 and 2000 to
2001 as reported by Jencks. Although improving, gaps still exist
between care delivered and optimum care.
Simply providing more care does not necessarily lead to improving
quality. The amount of care Medicare beneficiaries receive varies
widely across the nation. Yet, as noted in our June 2003 report to the
Congress, higher use of care does not appear to lead to higher quality
care; in fact it appears that states with the highest use tend to have
lower quality than states with the lowest use. Wennberg, Cooper, Fisher
and other researchers have found similar phenomena in smaller
geographic areas--areas with the highest service use tend to have
lower, not higher quality.
An Approach to Improving Quality
Quality varies from low to high among providers. This implies both
that high quality is achievable, and that a multi-faceted approach to
quality is needed to account for the differing starting points of
providers. For example, conditions for participating in the program can
assure that all providers meet minimum standards but encouraging high-
quality providers to maintain or improve their quality requires a
different approach. The ultimate goal is to find ways to continually
improve quality delivered by all providers. As a first step, quality
has to be measured and evaluated.
Measures of quality and guidelines for appropriate care are
becoming increasingly available. The Medicare program has been a
leading force in these efforts to develop and use quality measures
often leading initiatives to publicly disclose quality information,
standardize data collection tools, and give feedback to providers for
improvement. CMS has also revised its regulatory standards to require
that providers, such as hospitals, home health agencies, and health
plans, have quality improvement systems in place. By offering technical
assistance to providers, the Quality Improvement Organizations have
been a critical part of these efforts. In some sectors, these steps are
showing results. The Commission views CMS's focus on quality as an
important contribution and an excellent foundation for future
initiatives.
The private sector also has taken steps to improve quality. In our
June 2003 report, we document that most private sector organizations
began their quality improvement efforts by developing quality measures
and then providing feedback to providers followed by public disclosure.
This helped establish credibility and acceptance of the measures used
as well as developed the process for data collection. But many
organizations found that those steps alone did not achieve sufficient
improvement and began designing financial incentives to tie payment to
quality. Early experience has shown improved quality and in some cases
cost savings.
Medicare payment systems do not incorporate financial incentives
tying payment directly to quality. Current payment systems in Medicare
are at best neutral and at worst negative toward quality. All providers
meeting basic requirements are paid the same regardless of the quality
of service provided. At times providers are paid even more when quality
is worse, such as when complications occur as a result of error. It is
time for Medicare to take the next step in quality improvement and put
financial incentives for quality directly into its payment systems.
Linking payment to quality holds providers accountable for the care
they furnish. In addition, financial rewards would accrue to providers
investing in the processes that improve care encouraging investment in
such improvements. Through its actions Medicare can act as a catalyst
for improvement throughout the health delivery system.
In our June 2003 report to the Congress, the Commission recommended
that CMS move toward using financial incentives for all types of
providers and plans participating in Medicare. We also developed the
following criteria for choosing the most promising settings for
introducing payment for quality performance:
To be credible, measures must be evidence-based to the
extent possible, broadly understood, and accepted.
Most providers and plans must be able to improve upon the
measures; otherwise care may be improved for only a few beneficiaries.
Incentives should not discourage providers from taking
riskier or more complex patients.
Information to measure the quality of a plan or provider
should be collected in a standardized format without excessive burden
on the parties involved.
Building on this analysis, in our March 2004 report to the
Congress, we develop as a general design principle that a system
linking payments to quality should:
reward providers based on both improving the care they
furnish and exceeding thresholds,
be funded by setting aside a small proportion of total
payments, and
be budget neutral and distribute all payments that are
set aside for quality to providers achieving the quality criteria.
We also analyze and make specific recommendations on linking
payment to quality for two sectors judged the most ready for financial
incentives: providers of dialysis services, and private plans in
Medicare.
Using payment incentives to improve dialysis quality. The
Commission recommends that the Congress establish a quality incentive
payment policy for physicians and facilities providing outpatient
dialysis services. Although quality of outpatient dialysis services has
improved for some measures, it has not for others. Despite some
improvement in dialysis adequacy and anemia status, patients and
policymakers remain concerned about the unchanged rates of
hospitalization during the past 10 years and the poor long-term
survival of dialysis patients. By directly rewarding quality, Medicare
will encourage investments in quality and improve the care
beneficiaries receive. The recommendation would reward both the
dialysis facilities and physicians who are paid a monthly capitated
payment to treat dialysis patients. Physicians are responsible for
prescribing dialysis care and facilities are responsible for delivering
it; only together can they improve quality in the long term.
The outpatient dialysis sector is a ready environment for linking
payment to quality. It meets all of our criteria. Credible measures are
available that are broadly understood and accepted. All dialysis
facilities and physicians should be able to improve upon the measures.
Obtaining information to measure quality will not pose an excessive
burden on dialysis facilities and physicians, and measures can be
adjusted for case mix so that dialysis facilities and physicians are
not discouraged from taking riskier or more complex patients.
In keeping with our general design, MedPAC recommends a system
linking payments to quality that would:
reward facilities and physicians based on both improving
the care they furnish and meeting thresholds,
be funded by setting aside a small proportion of total
payments, and
distribute all payments that are set aside for quality to
facilities and physicians achieving the quality criteria.
Measuring the quality of care and holding providers financially
accountable will take on additional importance if Medicare broadens the
dialysis payment bundle to include commonly used injectable drugs and
laboratory services.
CMS is already planning to use quality incentives in the agency's
new end-stage renal disease management demonstration. Medicare will pay
program participants--dialysis facilities and private health plans--an
incentive payment if they improve quality of care and if they
demonstrate high levels of care compared with the national average. We
applaud CMS for linking payment to quality in the demonstration.
Quality incentives should not, however, be limited to demonstration
efforts, but rather should apply to all fee-for-service dialysis
providers so care for as many patients as possible will improve. In
addition, when using quality incentives only in a demonstration,
bidders may primarily consist of high-quality facilities and not be
representative of all facilities. By contrast, we recommend incentives
that are part of the outpatient dialysis payment system and will affect
both low- and high-quality providers.
Using payment incentives to improve the quality of care in private
plans. To reward improvements in quality for beneficiaries enrolled in
private plans we recommend that the Congress establish a quality
incentive payment policy for all private Medicare plans. This program
is a promising sector for applying payment incentives to provide high-
quality care because it meets the criteria for successful
implementation. Private Medicare plans already report to CMS on a host
of well-accepted quality measures. Plans vary in performance on the
reported quality measures and room for improvement exists on almost all
measures. Because plans are responsible for the whole spectrum of
Medicare benefits, they have unique incentives to coordinate care among
providers which is an important aspect of quality.
Although CMS would have work to do before it would be ready to
administer any incentive program, in keeping with our general design
principles we recommend creating a reward pool from a small percentage
of current plan payments and redistributing it based on plans'
performance on quality indicators. To reach the most beneficiaries,
Medicare should reward plans that meet a certain threshold on the
relevant performance measures and plans that improve their scores. The
program should be budget neutral and CMS would need to create a
mechanism that insured budget neutrality.
Next Steps to Link Payment to Quality
The Commission seeks opportunities to improve the quality of care
all Medicare beneficiaries receive. As we have discussed, beginning in
2005 we recommend paying for quality in two sectors where there is
consensus on measures and they are regularly collected--outpatient
dialysis and Medicare private plans. We anticipate expanding
recommendations on payment for quality to other sectors in the future
as better measures become available.
To help target quality improvement initiatives, we will continue to
analyze the quality of care in hospitals, ambulatory settings, post-
acute care settings, and private plans using a range of available
indicators. The hospital and ambulatory settings affect a large number
of beneficiaries and thus quality in those settings is critical to the
program. This work will raise questions for further research, but may
also point to where payment incentives are most needed. The Commission
will also investigate the relationship between cost and quality. Work
in the dialysis sector showed no correlation between cost and quality
for services paid prospectively under the composite payment. It also
found a negative correlation under the fee-for-service payment for the
sector--beneficiaries' outcomes were poorer for facilities with higher
than average costs. This correlation could, to some extent, be a
reflection of unmeasured case mix complexity.
We will also investigate how care coordination and rewarding
improvements in quality across settings can be addressed given the
fragmented nature of the current health care system. In fee-for-service
Medicare, rewarding the providers in one sector when savings from their
actions accrue in other sectors is a challenge. It is also difficult to
provide incentives to coordinate care across settings, for example,
through mechanisms such as disease management, when no single provider
is responsible. Such considerations have led many private purchasers
and plans to target their incentive initiatives at organizations--
either group practices, networks, or health plans that use some form of
risk sharing--that they believe are more effective at improving
quality. Finding effective approaches to these issues will be a major
challenge for the Medicare program.
Conclusion, The Time Is Now
The Medicare program can no longer afford for its payment systems
to be neutral or negative to quality. Although there are risks in
paying for quality--providers avoiding high-risk patients and
concentrating on the measured quality elements to the exclusion of
others--good design can ameliorate them. The risk from maintaining the
status quo is much greater. No beneficiary should be fearful for her
safety going into a hospital because of medical errors. No beneficiary
should be hospitalized when it could have been avoided through better
ambulatory care. It would be impossible to reduce medical errors or
preventable hospitalizations to zero, but evidence suggests we are far
from a tolerable level now and many improvements are possible and
needed.
In June 2003, MedPAC expressed an urgent need to improve quality in
fee-for-service Medicare and in care furnished by private plans. In our
March report we have recommended two sectors where the Congress can act
now--rewarding quality care in outpatient dialysis and Medicare
Advantage. Linking payment to quality in other sectors could encourage
broader use of best practices and thus, improve the quality of care for
more beneficiaries. A Medicare program that rewards quality would send
the strong message that it cares about the value of care beneficiaries
receive and encourages investments in improving care.
Table 1. Effectiveness of care: Hospital mortality decreased from 1995-2002
----------------------------------------------------------------------------------------------------------------
Risk-adjusted rate per 10,000
discharges Percent Observed
Diagnosis or procedure ---------------------------------------- change deaths in
1995 1998 2000 2002 1995-2002 2000
----------------------------------------------------------------------------------------------------------------
In-hospital mortality
----------------------------------------------------------------------------------------------------------------
Pneumonia 1,122 1,032 1,012 949 -15.4 78,999
----------------------------------------------------------------------------------------------------------------
AMI 1,670 1,477 1,414 1,309 -21.6 43,750
----------------------------------------------------------------------------------------------------------------
Stroke 1,357 1,240 1,212 1,159 -14.6 39,099
----------------------------------------------------------------------------------------------------------------
CHF 689 585 541 474 -31.2 38,828
----------------------------------------------------------------------------------------------------------------
GI hemorrhage 504 434 400 355 -29.5 11,155
----------------------------------------------------------------------------------------------------------------
CABG 580 522 482 427 -26.3 8,669
----------------------------------------------------------------------------------------------------------------
Craniotomy 1,033 963 986 931 -9.9 3,216
----------------------------------------------------------------------------------------------------------------
AAA repair 1,258 1,178 1,161 1,130 -10.2 2,632
----------------------------------------------------------------------------------------------------------------
30-day mortality
----------------------------------------------------------------------------------------------------------------
Pneumonia 1,525 1,531 1,377 1,557 2.1 107,502
----------------------------------------------------------------------------------------------------------------
CHF 1,063 1,006 818 907 -14.6 58,678
----------------------------------------------------------------------------------------------------------------
Stroke 1,816 1,808 1,620 1,807 -0.5 52,263
----------------------------------------------------------------------------------------------------------------
AMI 1,899 1,792 1,627 1,690 -11.0 50,367
----------------------------------------------------------------------------------------------------------------
GI hemorrhage 757 718 590 649 -14.3 16,438
----------------------------------------------------------------------------------------------------------------
CABG 532 496 441 412 -22.5 7,932
----------------------------------------------------------------------------------------------------------------
Craniotomy 1,164 1,158 1,123 1,182 1.6 3,666
----------------------------------------------------------------------------------------------------------------
AAA repair 1,158 1,116 1,069 1,072 -7.4 2,423
----------------------------------------------------------------------------------------------------------------
Note: AMI (acute myocardial infarction), CHF (congestive heart failure), GI (gastrointestinal), CABG (coronary
artery bypass graft), AAA (abdominal aortic aneurysm). Rate is for discharges eligible to be considered in the
measure.
Source: MedPAC analysis of 100 percent of MEDPAR data using Agency for Healthcare Research and Quality
indicators and methods.
Table 2. Safety of care: Adverse events affect many beneficiaries
----------------------------------------------------------------------------------------------------------------
Risk-adjusted rate per 10,000 Observed
discharges eligible Change in Percent adverse
Patient safety indicator -------------------------------- rate 1995- change events
1995 1998 2000 2002 2002 1995-2002 2000
----------------------------------------------------------------------------------------------------------------
Decubitus ulcer 237 273 297 319 82 34.5 128,774
----------------------------------------------------------------------------------------------------------------
Failure to rescue 1,772 1,683 1,652 1,511 -261 -14.7 57,491
----------------------------------------------------------------------------------------------------------------
Postoperative PE or DVT 98 108 120 123 25 24.5 36,795
----------------------------------------------------------------------------------------------------------------
Accidental puncture/laceration 28 31 32 36 8 30.7 134,171
----------------------------------------------------------------------------------------------------------------
Infection due to medical care 24 27 28 30 6 28.5 24,524
----------------------------------------------------------------------------------------------------------------
Iatrogenic pneumothorax 10 12 11 11 1 4.8 10,985
----------------------------------------------------------------------------------------------------------------
Postoperative respiratory failure 43 66 75 87 44 99.6 \b\ 8,184
----------------------------------------------------------------------------------------------------------------
Postoperative hemorrhage or hematoma N/A 27 26 24 -3 \a\ -11.2 8,056
----------------------------------------------------------------------------------------------------------------
Postoperative sepsis 89 112 127 135 46 50.7 6,739
----------------------------------------------------------------------------------------------------------------
Postoperative hip fracture 18 18 18 13 -5 -24.2 3,707
----------------------------------------------------------------------------------------------------------------
Death in low-mortality DRGs 39 30 31 30 -9 -23.6 \c\ 3,453
----------------------------------------------------------------------------------------------------------------
Postoperative wound dehiscence 38 41 37 38 0 0.4 2,043
----------------------------------------------------------------------------------------------------------------
Postoperative physiologic and metabolic 11 12 13 14 3 31.8 1,952
derangement
----------------------------------------------------------------------------------------------------------------
Note: PE (pulmonary embolism), DVT (deep vein thrombosis), N/A (not available), DRG (diagnosis related group).
\a\ Change from 1998-2002.
\b\ Some of this increase may be due to the introduction of a new code in 1998 for acute and respiratory
failure.
\c\ Agency for Healthcare Research and Quality researchers identified low-mortality DRGs for all-payers, not
Medicare beneficiaries only.
Source: MedPAC analysis of 100 percent of MEDPAR data using Agency for Healthcare Research and Quality
indicators and methods.
Table 3. Effectiveness and timeliness of care outside the hospital: The change in the rate of potentially
avoidable hospital admissions is mixed, 1995-2002
----------------------------------------------------------------------------------------------------------------
Risk-adjusted rate per 10,000
beneficiaries Percent Observed
Conditions -------------------------------- change admissions
1995 1998 2000 2002 1995-2002 in 2000
----------------------------------------------------------------------------------------------------------------
Congestive heart failure 241 257 244 238 -1.0 703,012
----------------------------------------------------------------------------------------------------------------
Bacterial pneumonia 154 182 193 192 24.1 567,995
----------------------------------------------------------------------------------------------------------------
COPD 104 121 122 118 13.6 368,674
----------------------------------------------------------------------------------------------------------------
Urinary infection 60 64 67 66 9.4 209,550
----------------------------------------------------------------------------------------------------------------
Dehydration 50 55 58 65 30.2 181,785
----------------------------------------------------------------------------------------------------------------
Diabetes long-term complication 35 38 39 41 18.5 125,053
----------------------------------------------------------------------------------------------------------------
Adult asthma 24 21 20 23 -6.3 65,680
----------------------------------------------------------------------------------------------------------------
Angina without procedure 50 24 19 14 -71.4 59,983
----------------------------------------------------------------------------------------------------------------
Hypertension 9 10 11 13 38.3 37,334
----------------------------------------------------------------------------------------------------------------
Lower extremity amputation 15 16 15 14 -2.1 24,224
----------------------------------------------------------------------------------------------------------------
Diabetes short-term complication 7 7 7 7 2.1 22,425
----------------------------------------------------------------------------------------------------------------
Diabetes uncontrolled 10 8 7 6 -38.1 22,416
----------------------------------------------------------------------------------------------------------------
Note: COPD (chronic obstructive pulmonary disease).
Source: MedPAC analysis of 100 percent of MEDPAR data using Agency for Healthcare Research and Quality
indicators and methods.
Chairman JOHNSON. Thank you very much. I am glad that you
mentioned this problem, penalizing providers for taking higher
costs, more complex, more difficult and more costly patients. I
think that is something we have to be very careful about as we
think about pay for performance. We already have that problem
in many hospitals as we have allowed surgicenters and boutique
hospitals to take the paying patients out from under community
hospitals, leaving the community hospitals with the more
complex patients and the nonpaying patients. Now, I am drawing
a very simplistic picture. We are going to be looking at
whether that is true or not. We do need to understand the
problems inherent in our current system that may be
concentrating the most difficult patients in the hospitals at
the very time we are imposing heavier standards on them and
going to attach payments. The other concern is that you will
underpay those who have the biggest problem in financing the
efforts to improve quality. So, I think on both of those
scores, we do have to proceed carefully. I wanted to ask a
couple of questions and then go on to the other Members and
maybe come back.
This issue of the health record, I mean, we have had people
into my office--they are doing this in England. Why can't we
position ourselves to have electronic health records at least
for those coming into Medicare under the Welcome to Medicare
Physical Provision in 2006? There are Health Insurance
Portability and Accountability Act of 1996 (HIPAA) (P.L. 104-
191) compliance systems; existing technology takes it. Can you
work with us? Do you think that is an achievable goal, or can
we just work as if it is an achievable goal and see how far we
get? If we could combine the provisions in the MMA that provide
a ``Welcome to Medicare Physical,'' that press forward on
technology, that provide disease management and, therefore, can
identify the early symptoms of disease management with an
electronic health care record, we would really move the system
forward in terms of ability to deliver quality care to people
with multiple illnesses dramatically. So, I look at what people
are showing me in the technology, and I say to myself, what are
the barriers; $50 million isn't going to do it. Between your
two resources, why can't we get there in 2 years?
Dr. CLANCY. I think, as you know, Mrs. Johnson, Secretary
Thompson shares your passion and asks us the same question
about every 48 hours. He is away for a couple of days, so we
are getting a brief break. We are focused right now--in
addition to learning from the investments that AHRQ will be
making in the Department as well--we are trying to look at all
opportunities in the MMA for accelerating the adoption of
electronic health records, and we would be pleased to work with
you on that.
Mr. HACKBARTH. I, personally, am a true believer in
computerized medical records, and I base that on personal
experience. When I was in Boston, I worked for Harvard
Community Health Plan and then subsequently Harvard Vanguard
Medical Associates. Harvard Community Health Plan had, I think,
the very first ambulatory computerized medical record beginning
in 1969. Then when I was Chief Executive Officer of Harvard
Vanguard, we implemented the Epicare System, which is one of
the more advanced computerized systems available. I was able to
see, in my firsthand experience, the capability that that
computerized technology gave us compared to other providers in
Boston who did not have access to it.
I believe passionately that the gains are potentially huge
for the health care system and for our patients. Having said
that, it is not inexpensive. You mentioned the $50 million
allocated. That is roughly the amount that we spent for our
600-physician group to implement the Epicare System. Once you
count the software, all of the infrastructure, the training
required, it is a very complicated endeavor. The reason it is
not more widely available is that there is no return on the
investment or at least not a readily discernible return on
investment. If you go out and buy a new magnetic resonance
imaging, you can see the dollars that are going to flow in. You
can see how the machine is going to pay for itself. When you
invest large sums in a computerized medical record system, you
can't look at the immediate financial returns.
Chairman JOHNSON. Let me ask you another unrelated
question, and then we will get back to costs. My colleague, Mr.
Stark has rightly acknowledged the reluctance of some on my
side to regulate. There is an equal problem on his side in
regard to the word privatization. I don't know how you can
achieve these advances in quality without technology and the
systems that come with it. Those systems integrate provider
communities in a collaborative fashion. While, in this bill, I
was very careful to learn how to pay for disease management and
fee-for-service medicine, personally, I think there is a limit
to how far the individual independent practitioner can go in
meeting quality standards without being part of an integrated
system. I want to try to get us over, through better
understanding technology and its power and the challenge of
quality, to get over this issue of privatization.
It is a different way of delivering medical care, and it is
going to require a different partnership between providers and
between the public and private payers. To me, technology is
absolutely essential to the next round of quality improvements.
If we let this word privatization cut us off from the very
systems that can deliver higher quality care to people with
chronic illnesses, we will destroy for Medicare recipients the
care they urgently need. I would like your input on this issue,
on the relationship between technology systems and the word
privatization, because we have to do something to lay it aside
because it is a barrier now to public understanding of how we
are trying to improve the quality of the public programs, not
just Medicare. The Secretary did put out this initiative just a
week ago, saying we will pay half if the States will pay the
other half to put disease management into Medicaid. We know
that will pay us back, and it will be budget neutral in 3
years. I need your help on this issue. What does the word
privatization have to do, either as a barrier or as an
incentive, to move us toward higher quality health care?
Dr. CLANCY. Let me start and just say that I think most
leaders in health care and health care quality agree with you
that IT alone won't solve the problems, but we can't solve them
without IT for all the reasons you and Mr. Stark and others
have very clearly articulated. The fact is that most medical
care is delivered in a ``Marcus Welby'' world where you have
paper charts and it is very hard to track information when
patients go to different settings or see different doctors and
so forth. For that reason, the Department has two sets of
investments. One is focused on making sure that the components
of health IT actually do improve quality and safety within
organizations, whether that IT is hospitals, physician
practices and so forth.
That is going to be complemented by some support for these
community or state information exchanges so that all components
of the health care sector within a community can share data in
a way that is private and confidential. We think that that is
going to be an important payoff. Dr. Hackbarth is right. Our
total investment here is fairly modest. As we are struggling to
figure out how to make the most out of the opportunities in the
current and next year's budget, we are working very hard to
identify the right incentives that would actually begin to move
the adoption of electronic medical records by physicians from
its current low of somewhere in the ballpark between 10 and 15
percent of physician practices, depending on which survey you
read. It is a huge hurdle.
Chairman JOHNSON. I would add that you are going to add $14
billion as well as the $50 million, and the $14 billion is
explicitly in the bill to try to do--a few years ago, the
Congress and the Rural Caucus insisted upon this, arbitrarily
increase the floor of payments for rural areas to try to get
plans out there. In this bill, we gave you $15 billion in money
so you can put the technology out there so that rural health
can be linked into medical centers and others, and those
doctors practicing out there solo can have the specialist
consult with them and the patient on the spot and then do the
followup. It would be a revolution in rural health care, and it
would save rural health care by keeping doctors out there.
There is a lot of money in this bill for technology if we can
figure out how to use it right. It is an opportunity to insert
not medical records, because that is a much bigger problem, but
electronic health records into those rural areas. If you do
that, then that fosters this linking and the ability to deliver
far higher quality care through specialist consultation in the
rural areas across America, and it is the only thing that will
do it. If we let this word privatization get between us and
these systems that have to be built to link urban and rural
care and are going to demand expensive technology and nobody
out there makes enough to buy it, I mean, you are not going to
be able to do that.
Often what has been described pejoratively as a slush fund
in this is probably one of the most enlightened components, and
it is imperative that we try to figure out how we can get
health records into the system by 2006 because, at that time,
these plans will be setting up in big regions, and we have to
make sure they are powered by the technology that drives
quality. I put that challenge out for all of us. I wanted to
put it out publicly. We have absolutely got to meet this
challenge because that will realize the tremendous vision of
the legislation, but also will enable us to bring to fruition
and into the practical reality of Americans throughout the
country what the knowledge base in health care already knows.
Let me move on to my other colleagues here. My colleague, Mr.
Stark.
Mr. STARK. Well, Madam Chairman, I am all for that
technology stuff, and if I could sell you some of the stocks
that I bought in echinacea companies and jojoba bean schemes
which I thought was the technology of the days back, I would be
glad to give them to you. If I could mention what I have left,
maybe it would go up, but then maybe I would make Martha
Stewart look like a Sunday school teacher. I have no quarrel
with technology. Really, I am excited by it and intrigued by it
and I am a believer. I think I am concerned and what I would
like to direct witnesses about establishing single quality
standards. I don't think we can do that. I get back to an old
saw horse that we have been beating in this Committee, and that
is basically doing some research in outcomes. While there must
be 15 different kinds of equipment that surgeons can use to
deal with my prostate or a woman's breast cancer, and there may
be 80 different kinds of drugs that oncologists can use and
protocols all over the place, patients, and I suspect
physicians, do not have very much evidence about which ones
work over a period of 5 and 10 years. We may know how many
people lived through the operation in recent trials and did not
die in the hospital or shortly after, but comparing what
happens to you 5 and 10 years out after some of these major
illnesses is an area of which we have precious little
information.
I would ask the witnesses whether, first of all, the
physician community would be more receptive to receiving
details on outcomes, which they could relay to the patients,
then they would be getting a standard. I have always heard the
doctors say, don't give us cookbook medicine. There is an art
to practicing medicine and it takes information. So, then I
guess, rather than just blindly saying any technology, ought we
not to be focusing first on gathering data which won't be
available at least for 5 or 10 years to see what happens to
folks? I would ask both of the witnesses whether they see
building this base that will give us outcomes and the results
of various protocols in treating disease as important? Or would
you rather see us start to establish quality standards, even
though I don't know quite what they would be? A specific better
treatment for prostate cancer. I don't think there is just one,
but maybe the witnesses could comment on my dilemma. Dr. Clancy
or Dr. Hackbarth?
Dr. CLANCY. The capacity to follow what happens to patients
who have received different interventions and to follow them
out to some period of time, I think, is going to be a very
important byproduct of building an information infrastructure
very similar to what Representative Johnson has been
describing. I think most doctors would welcome that. I do not
think it necessarily replaces or eliminates the need for
standards in some areas. For example, delivering preventive
care or making sure that people with diabetes get all tests we
know to be efficacious is still a good idea.
Mr. STARK. What you are suggesting? If someone is diagnosed
with diabetes, there ought to be a standard screen that they
have to go through in terms of tests. The treatment
alternatives would be something for which you might use for
outcomes research.
Dr. CLANCY. That would be one way. There are some areas
where the evidence is very clear about what is the best path.
There are many other areas--which is, really, again a byproduct
of our investments in biomedical science--where we have
different options, and that is wonderful. What would be equally
wonderful is if doctors, patients and others could make
informed decisions based on evidence about what happens to
people like me confronting a similar decision, and that will
take some time to develop.
Mr. HACKBARTH. Due to work over the last 15, 20 years, in
fact, the database of knowledge about what works and what
doesn't work has grown tremendously through the work of AHRQ
and many other organizations. We need to continue that. It is
an ongoing process and a long-term process as you point out,
Mr. Stark. There are things, however that we know today work.
What concerns us is, too often, they are not done. They perhaps
cover only a small fraction of the care delivered to Medicare
beneficiaries. So, you know, we are nowhere near the end of
solving this problem and saying we know exactly what works in
every case and what you ought to do. From our perspective, for
us in a broad way not to apply known effective treatment for
different types of patients is a problem, and we see that
shortcoming not in a few cases but on a large scale in the
treatment of Medicare beneficiaries. We have to do something
about that, and hence our recommendation that we begin moving
toward payment associated with providing appropriate, proven
effective care.
Chairman JOHNSON. Thank you. We will have a chance to
pursue that with the second panel. That is an extremely
important question. Mr. McCrery?
Mr. MCCRERY. Dr. Clancy, let's talk about the Hospital
Quality Initiative for a second and the indicators. You have 10
clinical quality indicators. Then you have another 24
indicators that will be used for the quality incentive
demonstration that will reward hospital performance. Those 34
indicators address treatment methods that have been well
established for some time now. Once hospitals begin reporting
those indicators, won't it be important to expand the
indicators to cover other critical treatment areas that are not
as well established but offer maybe greater potential for
improving quality and saving lives?
Dr. CLANCY. Without question. I think you have hit on an
important challenge in terms of developing indicators and
measures of quality and performance and that it has been
incremental. You start with a small menu and then build out
from there. Those are the ones that are linked to hospital
payment update in the MMA; they are the starter set. All
partners in this initiative recognize that is a starter set. In
addition to those within the construct of the CMS demonstration
with the premier system, there is an additional 34 measures.
Even those 34 measures actually cover only 5 broad areas. The
CMS and AHRQ in conjunction with our partners throughout this
hospital reporting initiative are about to launch a series of
activities to try to develop what we are calling a robust
measurement set that covers all aspects of quality of care for
people in the hospital. We will be getting input from
stakeholders, the public and many others. So, a series of
townhall meetings will start in April combined with some other
activities. That is just the beginning. All indicators are only
useful and credible if they are based on the latest scientific
evidence about what is the right treatment and what is the
right thing to do. The AHRQ is committed to making sure that
those indicators are indeed as evidence-based and up-to-date as
possible or else they will have no meaning.
Mr. MCCRERY. You are about to start that process of
examining additional indicators that could be added?
Dr. CLANCY. Yes.
Mr. MCCRERY. In my home State of Louisiana, the American
College of Cardiology just held their annual meeting, and they
released data from a new private quality initiative called
CRUSADE being conducted by Duke University. It is interesting
because it is looking at patients who are at high risk for
heart attack but never had a heart attack. That is one of the
examples I think of indicators that we may want to look at to
treat patients that have not gone into the hospital for acute
heart attack but may be at risk and then thereby prevent that.
The CRUSADE program is a private initiative. You talked in your
testimony about the possibility of joining efforts between the
private sector and your efforts. Could you expound on that a
little bit? How will you identify--and how can something like
CRUSADE and Duke University get entrance into your umbrella
program?
Dr. CLANCY. Sure. I am not sure if CRUSADE is a hospital-
based initiative or more broadly based than that. In general,
every effort that has been made, certainly in the public sector
and I think in the private sector, to develop indicators and
measures, there is a very broad, public call and active seeking
of input from organizations known to have expertise in this
area. The example you use, the American College of Cardiology,
I would say is one of the leading professional organizations.
They have been leading others in terms of developing guidelines
and measures and other strategies to improve quality of care.
So, they will most definitely be consulted. I think the
question we are going to confront after developing a robust
measurement set, is what is the strategy for implementing those
which are required, which are optional and so forth. That is
the nature of a partnership between the public and private
sector. I am very optimistic that this approach is the
reasonable way to go.
Mr. MCCRERY. You said, when commenting on the Chairman's
question about electronic medical records, that there is no
obvious return on investment for the industry to make that
investment and how expensive it is going to be. Why is there a
return on investment on those kinds of technological
improvements in every other sector of our economy but not
health care? I mean, if a business converts all of its records
to computer, they don't have any immediate return on that
investment, but they might be able to do with fewer employees,
which saves them money over the long term. They compete on the
basis of quality of their service or whatever. Why is it
different in the health care field?
Mr. HACKBARTH. Well, first of all, in actually making this
decision personally, among the things we looked at were
potential administrative savings, that you don't need a large
medical records department. There are certain savings that are
clear and obvious, but they are not enough in and of themselves
to justify the substantial investment. We made the decision to
go ahead and make that investment because we believed it would
change patterns of care, would change how we treated patients,
and over the long run that would mean better quality and even
some saving on cost. We were different than a lot of
organizations, though. We were fully capitated. We had a lump
sum payment for the full range of services provided to our
patient population. So, if we could save money through better
ambulatory care, reduce hospital cost, we gained from that. In
the fragmented fee-for-service delivery system, often the gains
from improvement accrue to somebody else, and so that is one of
the reasons why the financial return isn't as immediate or
apparent. Now, having said that, I think that there are some
things that we can do to change that investment calculus. One
would be to pay for quality. If in fact, by using computerized
medical records, we can enhance quality, measure and pay for
it, there starts to be a more immediate direct financial return
for the investment.
In some instances, it may be necessary to go beyond that.
This is actually an issue that MedPAC as a commission is taking
up this week and will be in the future months, so here I am
speaking for myself, as opposed to the commission as a whole,
but, you know, it may be appropriate that we make loans
available to institutions to make it easier to make this large
investment. There are a number of financial options that we
could use to change this investment calculus a little bit. I
don't want the message that I deliver to be pessimistic about
the potential. It is a challenge, but I think it is a challenge
that we can overcome, and I think the gains from computerized
medical records in clinical IT are very, very large.
Chairman JOHNSON. Just to clarify, I hear you saying that
it pays off if you are paying for health care. It doesn't pay
off in the fee-for-service system where you are simply paying
for volume of actions, whether they are good health care or
they are not good health care. So, it does pay off in a
capitated system. It just doesn't pay off in our current
system. Mr. McDermott.
Mr. MCDERMOTT. Thank you, Madam Chairman. I begin by saying
I have nothing but the highest respect for you, Dr. Clancy, and
your predecessor John Eisenberger. I think you run an agency
that requires heroes to participate in it. In listening to some
of the questioning, it seems to me that people have questions
about why these organizations don't function better, but it is
always politics that gets in the way. I am going to have a
meeting in my office today at 1:30 with Dr. Javitz, who is the
head of Ptech for the President. We were working on the problem
of trying to get a seamless transfer of information between the
Veterans--or between the military, the U.S. Department of
Defense and the U.S. Department of Veterans Affairs. We have
mandated it in the Congress, but the thing we run up against is
they each have their own computer system the veterans designed
by themselves, and the military has a proprietary system, and
somehow or other we can't seem to root out that proprietary
system and make one system so that when somebody loses their
leg in Iraq and they are discharged from the military, their
records can be easily transferred from the Defense Department
to the Department of Veterans Affairs.
I want to ask you a couple questions, Dr. Clancy, about
this whole process, because we have been watching the
Department dance around about things that they do studies on
and that are politically correct. How do you select the
processes that you are going to look at in quality? Is it done
for you? Is it done by you and submitted upstairs and approved,
or is it--or do they send the list on to you and say this is
what we want you to study? I remember the study done about back
surgery and what happened and all the flap about that. The
agency did a good job and then got chewed up by the political
process afterward. So, what is the process actually by which
you select subjects that you are going to do anything related
to quality?
Dr. CLANCY. We make investments in a number of areas. Where
we make investments in data and tools such as those used in the
MedPAC report, we are guided very much by the needs of those
who are providing health care. We are not told from on high
what subjects or areas to focus on. In some cases,
investigators come to us with very creative ideas, particularly
in the areas of how do we close the gap between evidence-based
and actual care that is being provided. For a recent report
that we produced, the National Health Care Quality Report, we
actually turned to the Institute of Medicine for guidance on
the six dimensions that Dr. Hackbarth walked through in his
testimony, and also they helped us develop a framework for
that. Then we worked with many, many partners across the
Department and also with help from the private sector. So, it
was a very open, transparent process in terms of where the
measures came from and what the priorities were.
Mr. MCDERMOTT. Then after the report is written, then it is
submitted upstairs and they put their signature on it or say
whether it is going to go out? I mean, when professionals have
looked at an issue like the Institute of Medicine and
yourselves, the question then is, why does some bureaucrat or
some political appointee make the decision about whether it
goes out? Or does that happen?
Dr. CLANCY. No. No. No. The usual clearance process is a
second level of review for technical issues. For the quality
report, the vast majority of comments we got pointed out that
tables were inadvertently mislabeled or that there had been
some technical error, sometimes coming from the people who had
given us the data. The clearance process is just one way to
make sure that all the data contained in the report are
impeccable and they challenge us to edit the document in terms
of readability. That is really all that happened in the process
for that report.
Mr. MCDERMOTT. We used to have a process in the Congress
before the Republicans took over called the Technological
Advisory Committee. Representative Amo Houghton and others sat
on it with me, where any Member of Congress could submit
something that you wanted to be technologically reviewed by
this Committee. It was a bipartisan 50-50 kind of Committee,
basically supposed to be nonpartisan. We don't have any place
to do that anymore, because it was considered not worthwhile. I
wonder if I submitted a request to you to study the
effectiveness of cardiac bypass surgery and the enormous
amounts of money we spend on it or, for instance, the issue of
renal dialysis--the Medicare Program has kind of a one-size-
fits-all approach in many respects, although people's kidneys
are not one-size-fits-all, and so there needs to be some
variation--if I were to submit a request to you, what would
happen to that?
Dr. CLANCY. It depends on the specific question and the
state of the evidence and information available. In some cases,
I might be able to tell you that we have a study ongoing or
recently completed, and that would be great news. One of the
mechanisms that we use a lot, we have 13 evidence-based
practice centers across North America that do very rigorous
reviews of existing literature, and in order to select the
topics for that, we actually turn to people in the private and
public sectors for nominations of topics. That is one way that
we do that. We use that process, for example, to give CMS the
best evidence to give to the Medicare Coverage Advisory
Committee when they are debating whether to cover a new
service. So, that would be another approach. In some cases,
your question might lend itself to a question that, using one
of our databases in-house, we could easily do an internal
analysis. To some extent, it would depend on the question, but
you would get a response.
Mr. MCDERMOTT. Who would make the decision--I mean, so all
435 Members have questions. They could submit things to you
that they think are good or bad or are not being covered or
whatever by Medicare, and who would make the decision about
whether or not these were subjects worthy of research?
Dr. CLANCY. If the question or subject required a large
investment, we would need to be candid with you about that in
terms of whether there were resources available to be able to
support that. We certainly use that kind of input from a
variety of stakeholders, including Members of the Congress, to
feed into our priorities as we are planning our budget. Does
that help?
Mr. MCDERMOTT. It tells me I need a little more political
power to get done what I want to get done. Thank you very much.
Chairman JOHNSON. Mr. Ryan from the full Committee has
joined us today.
Mr. RYAN. Thank you. Thank you for allowing me to
participate in this as well, Mrs. Chairman. I want to start by
addressing something that Mr. Stark said earlier. He said
people to the right of this side of the gavel don't like
regulating. That is typically true, but in this instance it is
not necessarily so. The concern that some of us have is if we
put too much of a command-and-control, cookie-cutter kind of
regulatory system on technology, then we are going to stunt
innovation and slow down new innovations. So, how you do that
regulating so that you can capture constant improvements in
technology and innovation is really important. So, there is
probably somewhere where we can agree on this. We just don't
want to have a heavy-handed, top-down, innovation-slowing
process.
Mr. STARK. Will the gentleman yield?
Mr. RYAN. Sure.
Mr. STARK. What I look forward to in the regulatory world
is getting it started. My feeling is nobody is going to do it
unless somebody says this must be done by a certain date and
everybody has got to participate, and that I think can only
come from on top.
Mr. RYAN. Reclaiming my time, there is a lot of variables.
My first question to the panelists, looking into this whole
technology issue and the fact that there seems to be a lack of
return on equity from some of the providers to purchase these
hardware and software systems, is there not also a little bit
of a problem with respect to the vendors of software and
hardware between the issue of universal connectivity and
interoperability? In the IT field you have people who have
proprietary systems that don't talk to each other, that want to
sell these systems and continue to carve this market niche.
Does that not prevent a problem from having everybody talking
to each other? Can you elaborate on that little friction we
have in the marketplace? What will it take from this side, from
Congress, to get this smoothed out and make sure that the IT
system is selling to the marketplace when we get this Return on
Equity fixed for the providers, when we get this out there,
that they have universally connectible, interoperable systems?
Mr. HACKBARTH. I could easily get in way over my head in
talking about the technical----
Mr. RYAN. I have already gone there.
Mr. HACKBARTH. I don't want to wade in too far, but
certainly the ability to communicate across institutions is a
critical problem, particularly given the nature of American
health care, which tends to be somewhat fragmented. So, it is a
barrier and one that needs to be overcome through standards
about interoperability and the like.
Mr. RYAN. You see this barrier in the marketplace today?
Mr. HACKBARTH. Yes. It is a problem today, this ability to
communicate. As to the solutions, that is where I am over my
head. You know, in other industries we manage the ability to
communicate across companies, and I can't imagine that there is
an insuperable problem. So, yes, but we can do it. How we do it
I will leave to somebody else.
Mr. RYAN. You think that that is something that has to be
done by government?
Mr. HACKBARTH. I am not really well educated on the subject
enough to know that. I don't think that it was necessarily done
by government in other sectors.
Mr. RYAN. That is correct.
Dr. CLANCY. The development and diffusion of standards has
been advanced over the past couple of years through the
Consolidated Health Informatics Initiative for which HHS had
the lead. There was an initial set adopted last year by HHS,
the Department of Veteran Affairs, and the Department of
Defense as a starting menu in order to have some of the
standards that are required for interoperability. The MMA is
forcing us to ramp up very quickly on the standards that are
going to be needed for electronic prescribing. So, thank you.
Some portion of our investment this year and next year is going
to be focused on identifying additional standards that will be
needed to enhance interoperability.
There are a couple of these communities in the country
right now. The two that are cited a lot are Santa Barbara,
California, and Indianapolis, where a mechanism has been set up
for health care organizations to share data in a confidential
fashion, and it seems to work pretty well. We have a little bit
to learn about the financial sustainability of such a model. I
don't think anyone thinks the government ought to go in and pay
and just simply run this. I think we do believe that the
government has an important role in convening the people who
would need to take the lead in helping communities set up that
sort of governance, because it will yield many, many benefits
for all people in the community in terms of improved quality
and efficiency. I would be happy to follow up with you on that.
I don't want to get----
Mr. RYAN. No. I would like to come by and talk to you about
that, if I may, because that was the goal, more than just
cutting down on medical errors, was to get this system up in
place through which quality and price data can go to the
consumer. Do I have time for one more?
Chairman JOHNSON. I think we need to move on to the other
panel, because we are going to have some votes and we may be
able to get through all the other panels', at least, opening
statements.
Mr. RYAN. Thank you very much.
Chairman JOHNSON. Thank you very much for being here. I
would ask that you look at my legislation in regard to
technology, because the Administration has provided very
aggressive leadership, but it has tended to bring together the
people in government. They aren't necessarily the ones on the
cutting edge. While I know you talked about cutting-edge
people, I do think, since it is going to be a 10-, 20-year,
ongoing project, we need to have a clear public/private group
that works on technology standards as a regular thing and knows
all of the Medicaid issues as well as Medicare and private
sector. I think also in HHS we need one office who is sort of
the lead office in all of this, because right now the authority
and opportunity to participate and go off in different
directions is quite disparate. I mean, this, Mr. Secretary, has
been brought together, but that is not an adequate, in my
estimation, way to manage what is going to be a major aspect of
not only quality care in health care but also cost containment
in health care. So, if you take a look at that, both of you, I
would appreciate it. Thank you very much for your input. I
appreciate it.
Now we will turn to our second panel. We were supposed to
have a vote about 11:00, so it was--glad we could get through
this panel, but since the vote hasn't been called, it will be
effectively a one-half hour hiatus. If we could start now with
the second panel, that would be very useful. We will start with
Dr. Milstein, then go to Dr. Ho, Dr. Crosson, Mr. Kahn and Ms.
Burger. We thank you all for being here. The second panel has a
lot of practical experience with technology and quality
standards, and we hope to learn from you both what the private
sector is doing and what thoughts you might have for applying
your experience to Medicare and other public sector programs to
enhance the quality of care available under those programs.
Thank you for being here. Dr. Milstein, if you would--well, if
you are not--let's see. Dr. Milstein, if you will proceed.
STATEMENT OF ARNOLD MILSTEIN, MEDICAL DIRECTOR, PACIFIC
BUSINESS GROUP ON HEALTH, SAN FRANCISCO, CALIFORNIA
Dr. MILSTEIN. Thank you for the opportunity to speak on
behalf of large American employers. Employers, insurers and
Medicare Program unintentionally contribute to today's poor
health care industry performance. We do this via incentives
that do not reward doctors or hospitals for quality or for
superior total cost efficiency over the longitudinal course of
an acute or chronic illness. We pay unintended bonuses for
preventable complications and for more reserve-intensive
clinical practice styles that are not improving patient health
or patient satisfaction. Robust payment incentives that reward
doctors and hospitals for excellence in quality and in
longitudinal efficiency can improve clinical performance.
Accordingly, many employers support health insurers' new
efforts to apply such incentives.
Roughly 40 such incentive programs are currently operating.
The largest of these is California's Integrated Healthcare
Association initiative that is projected to pay approximately
$100 million to medical groups with top scores in quality
patient satisfaction and clinical information systems adoption
during 2004. Payment incentives are not the only market levers
for lifting clinical performance. Sunshine in the form of
easily understood public performance comparisons has been shown
to triple quality improvement efforts in poorly scoring
hospitals and to raise performance scores. There are budget-
neutral opportunities for Congress to more rigorously reinforce
private sector momentum. These include: first, encourage CMS to
speed up and significantly expand its current efforts to make
publicly available quantified measures of hospital and
physician quality and to coordinate its physician and hospital
incentives with large private sector incentive programs such as
the Leapfrog Group.
Second, within CMS and AHRQ efforts to compare and improve
clinical performance, much more heavily prioritize measures of
the cost-efficiency for doctors and hospitals over the duration
of an episode of acute illness or a year of chronic illness.
Given the crisis in health care affordability both in the
private and public sectors and evidence of a roughly 40-percent
uncaptured efficiencies in the American health care industry,
this facet of performance measurement and incentivization
deserves a higher priority. Third, while fully protecting
Medicare beneficiary privacy rights under HIPAA and the Privacy
Act, allow private sector health plans routine access to the
beneficiary de-identified, full Medicare claims database.
Almost no private sector purchasers or insurers have enough
claims experience in any one location to measure precisely the
longitudinal cost efficiency and quality of individual
physicians and specific hospital service lines. Access to the
full Medicare claims database would allow them to more
precisely measure and therefore reward more robustly physicians
and hospitals for superior quality and longitudinal efficiency.
Rapid improvement in performance measurement would
emancipate America's doctors and hospitals from the
irrationality of public and private health benefit plans that
primarily reward the cheapest unit prices and often
unintentionally punish improvements in quality and longitudinal
efficiency. America's current movement to use consumer-directed
health benefit plans to incentivize Americans to select more
efficient, higher-quality health care options can provide about
half the horsepower we need to achieve breakthroughs in the
affordability and quality of our health care. The rest must
come from reformed public and private sector payment systems
that make an irresistible business case to our health care
industry to take up modern tools of performance management and
drive quality and longitudinal efficiency up to the levels that
America needs and deserves. Thank you.
[The prepared statement of Dr. Milstein follows:]
Statement of Arnold Milstein, M.D., Medical Director, Pacific Business
Group on Health, San Francisco, California
I am Dr. Arnold Milstein, a physician at Mercer Human Resource
Consulting and Medical Director of the Pacific Business Group on Health
(PBGH). PBGH is California's coalition of large employer health care
purchasers and also supports the health benefits needs of more than
9,000 small California employers.
I have helped to develop, and currently participate in the
governance of, three private sector programs to pay American doctors
and/or hospitals for superior performance: the Leapfrog Group, Bridges
to Excellence, and the Integrated Healthcare Association's (IHA) Pay-
for-Performance Program. The IHA program is projected to pay over $100
million to better performing California physician groups in 2004. My
comments today on health care pay-for-performance programs are not
intended to represent these five organizations.
A more detailed review of U.S. health care pay-for-performance
programs will be published on the Commonwealth Foundation's website in
April. It is based on a paper commissioned by the Foundation that I
prepared for the Foundation's International Health Care Leadership
Colloquium at Bagshot, England in July of 2003.
1. The American health care industry is severely underperforming.
Compared to other developed countries, we spend substantially more of
our GDP on health care. In return, we get easier access to advanced
biomedical innovations, but poor health care industry adherence to
evidence-based treatment guidelines, patient safety standards, and
efficient care delivery methods. Current scientific estimates
(specified in my testimony to the Joint Economic Committee on February
25 and Senate HELP Committee on January 28) by Rand, the Institute of
Medicine, and nationally respected health services researchers at
Dartmouth, Harvard and Intermountain Health Care, give us an
approximately 50% national score on exposing Americans to substandard
quality of care and preventable treatment complications and a 40%
national score on wasting their health benefits spending via services
with undetectable health benefit and/or inefficient service delivery
methods. Though the health care industry is making efforts to improve,
the level of effect is not yet scaled to the magnitude of the problem.
2. One root cause of this unintended equilibrium is toxic payment
incentives that do not reward doctors, hospitals, managed care
organizations, or treatment innovators for superior quality and
superior total cost efficiency over the longitudinal course of an acute
or chronic illness. As Tom Scully frequently observed, it is insanity
to pay the same price for any service without regard to differences in
performance. Others such as Dr. Brent James at Intermountain Health
Care have detailed how improvements in longitudinal cost-efficiency and
quality are often penalized under today's performance-insensitive
payment systems. Why would we expect that quality and longitudinal cost
efficiency would flourish under such an incentive system?
3. Payment incentives can be effective in improving health
industry performance. While the evidence to support this statement is
based as much on anecdote as on scientific evidence, most private
sector purchasers regard it as self-evident, based on all other
American markets for products and services. I've attached a thoughtful
recent synopsis by researchers at the Harvard School of Public Health
of experience to date in 37 recent U.S. programs to pay doctors and/or
hospitals for higher performance. Its most important conclusion is that
it will be difficult to measure or maximize the effectiveness of doctor
and hospital pay-for-performance programs, until they affect a much
larger fraction of physician and hospital total income.
4. Performance-based payment incentives for doctors, hospitals,
and managed care organizations are an increasing private sector trend.
Few of the 36 private sector incentive programs included in the Harvard
study existed five years ago.
5. Payment incentives are not the only market levers for lifting
clinical performance. ``Sunlight'' created by the public release of
easily understandable, credible, and comparable performance measures on
important measures of quality such as death rates, complication rates,
and rates of adherence to clinical guidelines, has been shown to
motivate a 3X increase in provider improvement effort (J. Hibbard,
Health Affairs, January 2003) and improved clinical results (E. Hannan,
Medical Care, January 2004). Other powerful private sector market
levers on performance include substantial loss of patient volume from
insurance plans that exclude or reduce insurance coverage for less well
performing physicians, hospitals, and/or treatment options.
6. Market based payment incentives are more effective when
combined with other performance drivers. Among the most important are
physician and hospital access to and training in two generic tools of
modern performance management of complex, high risk consumer service
industries such as commercial airlines: (1) electronic, interoperable
information systems that allow continuous prompting of professionals
and/or service users whenever opportunities exist to improve a plan of
services or prevent service implementation errors; and (2) greater use
of operations engineering expertise in managing performance over the
entire course of a consumer's period of service need. Almost sixty
years of post World War II progress in biomedical technology has
transformed American health care from a relatively simple, ineffective,
low-risk, and inexpensive service menu of services to a highly complex,
potentially very effective, dangerous, and expensive service menu.
However, our clinical information systems continue to depend on
handwriting, paper documents, and highly fallible human memory; and
advanced expertise in operations engineering is wholly absent in the
clinical work of most hospitals and physician offices. Early
performance exemplars such as Intermountain Health Care in Salt Lake
City and Theta Care in Appleton, Wisconsin have shown that insertion of
these two modern industrial tools into the DNA of American health care
delivery can generate very large quality increases and/or efficiency
capture. Multiple new private sector programs to incentivize physician
and/or hospital performance breakthrough (such as the Leapfrog Group,
the Integrated Health Care Association, and Bridges to Excellence)
recognize the importance of these two ingredients and have directed a
substantial fraction of their incentives at provider adoption of them,
in addition to incentivizing high performance.
7. There are budget-neutral opportunities for Congress to much
more vigorously reinforce private sector momentum to incentivize
longitudinal cost-efficiency and quality among doctors and hospitals.
These include:
A.
Encourage CMS to speed and significantly expand its current,
laudable efforts to (1) make publicly available quantified measures of
hospital and physician quality, clinical information system adoption,
and clinical management capabilities (for example, achieving NCQA's
certification in physician office systems); and (2) coordinate its
physician and hospital incentives with large national private sector
incentive programs such as the Leapfrog Group; and (3) prepare to
implement promptly recommendations for CMS provider incentives,
expected in 2005 from the Institute of Medicine.
B.
Reprioritize NIH spending in favor of AHRQ, especially for
efforts to (a) test and refine comparable measures of performance of
physicians, hospitals, and treatment options; and (b) accelerate
physician and hospital use of clinical information systems and
operations engineering tools to improve their performance. NIH
biomedical research is America's health care muscle; AHRQ health
services research is America's health care brain. We currently allocate
NIH funds in an approximate ratio of 99% muscle to 1% brain. The result
is an American A+ on treatment discovery and an American C- on
efficient, high quality delivery of these treatments.
C.
Within CMS and AHRQ efforts to compare and improve American
clinical performance, much more heavily prioritize measures of
longitudinal cost-efficiency for doctors, hospitals, and treatment
options. Given the crisis of health care affordability in both the
private and public sectors and evidence of roughly 40% uncaptured
efficiencies in the American health industry, this facet of performance
measurement and incentivization deserves higher prioritization within
CMS and AHRQ. Recently enacted Medicare demonstration projects are
directionally favorable, but more broadly applicable near-term
incentives for longitudinal cost-efficiency are warranted.
D.
While fully protecting Medicare beneficiary privacy rights
under the Privacy Act and HIPAA, allow private sector health plans
continuous access to the beneficiary de-identified, full Medicare
claims database. Almost no private sector purchasers have enough claims
experience in any one location to measure precisely the longitudinal
cost-efficiency and quality of most individual physicians and specific
hospital service lines, such as knee replacement surgery. Access to the
Medicare claims database would allow them to identify more precisely
measure and therefore reward more robustly physicians and hospitals for
superior quality and longitudinal cost-efficiency. In addition,
expansion of billing data required for Medicare payment would greatly
improve the cost and precision of performance measurement. Such an
expansion is illustrated by recent recommendations of the Quality Work
Group of the National Committee on Vital and Health Statistics. Rapid
improvement in performance measurement would emancipate America's
doctors, hospitals, and treatment innovators from the tyranny and
irrationality of public and private health benefit plans that primarily
reward the cheapest unit prices and often unintentionally punish them
for improvements in quality and longitudinal cost efficiency.
America's current movement to use consumer-directed health benefit
plans to incentivize Americans to select more efficient, higher quality
health care options, including improved health behaviors, can provide
half of the horsepower we need to achieve breakthroughs in the
affordability and quality of our health care. The rest must come from
reformed public and private sector payment systems that make an
irresistible business case to our health care industry to take up
modern tools of performance management and use them to continuously
optimize quality and longitudinal cost-efficiency.
Chairman JOHNSON. Thank you very much, Dr. Milstein. Dr.
Ho.
STATEMENT OF SAMUEL HO, SENIOR VICE PRESIDENT AND CHIEF MEDICAL
OFFICER, PACIFICARE HEALTH SYSTEMS, INC., CYPRESS, CALIFORNIA
Dr. HO. Good morning. My name is Sam Ho. I am the Chief
Medical Officer of PacifiCare Health Systems, Inc., and I thank
you for the opportunity to share PacifiCare's experiences and
results on the health care quality improvement. Today I will be
providing you an overview of the comprehensive and integrated
strategy that PacifiCare has developed around quality
initiatives. Some of these programs I knew. Others reflect
years of effort. For example, since 1998, we have engaged in
sophisticated provider profiling, as reflected in our Quality
Index. In 2002, we began provider payment incentives, as
exemplified by our quality incentive program. We also created
value or tiered networks in 2002, and 7 years ago we initiated
what I believe are noteworthy disease management programs. Most
recently, we have implemented consumer incentive programs
intended to reward consumers who engage in healthier behaviors.
I will briefly touch on each of these. Taken together, we
believe this integrated suite of programs has shown remarkable
results in improving quality health care delivered to our
members.
First, the Quality Index Profile has been a powerful tool
to help close what the Institute of Medicine has characterized
as the quality chasm. This consumer-oriented, publicly
disclosed report card of provider performance has been
published semiannually since 1998. Encompassing 55 measures of
clinical and service quality, this profile has proven to be a
credible and relevant information tool for consumers and
providers. Over the past 5 years, 65 percent of the Quality
Index measures have demonstrated annual improvement in cancer
screening rates, treatment of diabetes, coronary disease,
congestive heart failure, asthma and acute infections as well
as improvement in patient satisfaction and specialty referrals.
Providers have effectively responded to the Quality Index
by competing and moving the needle on quality. Conversely, our
members have also emphatically responded. Over 30,000 members
have gravitated to better performing providers each year,
averaging over a 6-percent increase in membership to these
providers on an annual basis. This is a statistically
significant response. The second component of our Quality Index
strategy is the Quality Incentive Program. Begun in 2002, this
program has incorporated 10 measures from the Quality Index
well as other measures of patient safety and patient
satisfaction. After establishing an incentive pool of $14
million and requiring performance levels by providers over the
75th percentile for each indicator, over 140 medical groups in
California have been rewarded with quality bonuses on a
quarterly basis since last July. As a result, we have seen 12
of the 16 measures demonstrating significant improvement; and
the average relative increase exceeds 30 percent, which is a
remarkable achievement in so short a time.
Currently, we are expanding our 2004 initiative to include
21 measures, increasing the thresholds to the 85th percentile
and increasing the overall incentive pool to $21 million. We
have demonstrated that both report cards and incentives work in
improving quality and benefiting both patients and doctors. The
third component in our strategy is the development of a value
network and a value insurance product. Derived from our Quality
Index profiles, we defined a subnetwork of providers who have
demonstrated greater efficiency and effectiveness in managing
health care. Employers such as Wells Fargo Bank, Lockheed
Martin Corporation and Xerox have purchased our value health
plan product, where costs in general are approximately 20-
percent lower and quality is approximately 20-percent higher
than our standard plan.
Furthermore, health care cost trends are 14-percent lower
in the value network. Such an insurance product benefits both
employers looking for relief from health care cost inflation as
well as consumers who are rewarded with higher quality.
Briefly, the fourth component of our Quality Index strategy is
our comprehensive suite of programs geared to addressing our
members' health and disease status. Applying evidence-based
medicine, we have demonstrated significant improvements in many
areas of preventive health and chronic diseases. Four such
examples of our results include increasing appropriate
medication use in patients with congestive heart failure by 26
percent, thereby reducing hospitalizations by 50 percent and
saving over $69 million cumulatively; improving the use of
life-saving medication with patients with coronary disease to
98 percent when recent studies show that the national average
is 45 percent; for patients with chronic lung disease,
improving symptoms by 29 percent and quit-smoking rates by 30
percent; and for diabetics we have improved blood sugar and
cholesterol control levels by 25 to 30 percent.
The last component of our QI strategy is our newly launched
Health Credits, which is a rewards and report card program
customized for Members. In this program, consumers can earn
credits by participating in any of 16 health and disease
management programs around diabetes, for example, or heart
disease and improving their health via better diet, exercise
and lifestyle choices. Also available is an online health risk
assessment to help members gauge their current health status,
as well as to receive tips on how to improve their health. In
summary, I feel that PacifiCare has demonstrated health care
initiatives and report cards as well as incentives that work
for both consumers and physicians. Again, I thank you for
allowing me this opportunity. I would be happy to answer any
questions.
[The prepared statement of Dr. Ho follows:]
Statement of Samuel Ho, M.D., Senior Vice President and Chief Medical
Officer, PacifiCare Health Systems, Inc., Cypress, California
Good Morning, Chairman Johnson and members of the Subcommittee. I
am Dr. Sam Ho, Senior Vice President and Chief Medical Officer of
PacifiCare Health Systems, and I appreciate the opportunity to discuss
PacifiCare's experience with health quality initiatives. PacifiCare
Health Systems (PHS) serves more than 3 million health plan members and
approximately 9 million specialty plan members nationwide and has
annual revenues of nearly $11 billion. PacifiCare offers individuals,
employers, and Medicare beneficiaries a variety of consumer-driven
health care and life insurance products including HMO, Value HMO, PPO,
self insured and fully insured consumer-directed health plans, EPO, and
Medicare+Choice (now Medicare Advantage) plans. Specialty operations
include behavioral health, dental, vision, and complete pharmacy
benefits management.
PacifiCare believes that a quality-driven, consumer-centric health
plan should focus on improving and maintaining the health of its
members in every stage of their life--whether they are sick, well, or
in-between. We have developed a broad array of programs across the
continuum of health care services built upon scientifically proven
criteria and evidence-based medicine, with a focus on improving
members' quality of life and enhancing providers' practice of evidence-
based medicine, as illustrated by the following simple diagram.
[GRAPHIC] [TIFF OMITTED] T9678A.001
NCQA (National Committee on Quality Assurance) Accreditation
PacifiCare has a demonstrated interest and experience in improving
the quality and affordability of care provided to our members, as
exemplified by consistent NCQA Excellent Accreditation awards, award-
winning disease management programs and quality improvement
initiatives, and industry-leading medical management techniques.
Starting in 1991, PacifiCare has demonstrated effective
programmatic structure, processes and outcomes in quality improvement,
as reflected in continuous NCQA accreditation, at the ``Excellent''
level. For example, PacifiCare of California was the first statewide
managed care organization to have earned NCQA's highest level of
accreditation, an Excellent status. Our most recent survey results
include four `stars' in the five categories surveyed: Access and
Service, Qualified Providers, Staying Healthy, Getting Better, and
Living with Illness. This recognition highlights our proven strengths
in quality improvement, comprehensive chronic condition management and
development of clinical practice guidelines and the extensive array of
education materials we make available to our members.
HEDIS (Health Plan Employer Data and Information Set) Performance
Across PacifiCare commercial health plans, HEDIS 2003 results
improved 4.3 percent from 2002, across 14 of the 15 measures with
stable NCQA definitions, meeting or exceeding prior year performance.
Performance, as compared to the national 90th percentile published by
NCQA, was noteworthy in several areas:
All PacifiCare plans met the national 90th percentile for
Beta Blocker Treatment Following a Heart Attack.
Among the measures pertaining to women's health, the
national 90th percentile was met by 75 percent of PacifiCare plans for
cervical cancer screening.
Among the measures pertaining to Comprehensive Diabetes
Care, the 90th percentile was met by 63 percent of PacifiCare plans for
HgA1c Testing, 75 percent of PacifiCare plans for Eye Exams and
Monitoring for nephropathy and 100 percent of PacifiCare plans for LDL-
C Screening.
Health and Disease Management Programs
Our cutting edge Health and Disease Management programs and
services include educational and screening guidelines and programs
available through a member's primary care physicians and health-related
information and programs accessible on our Internet site at
www.pacificare.com. We also have a direct mail reminder program for
healthy members who appear to be missing recommended periodic
preventive health screenings. PacifiCare's population-based health
management programs include: Taking Charge of Diabetes',
Taking Charge of Your Heart Health', Taking Charge of
Depression', StopSmoking, Taking Charge of
Asthma', Pregnancy to Preschool and Health AtoZ.
We have also developed case-based disease management programs,
addressing the most-at-risk patients with coronary artery disease,
stroke, congestive heart failure, chronic obstructive pulmonary
disease, end stage renal disease, cancer, orthopedics, and neonatal ICU
care, to improve the quality of the care received by our members with
chronic diseases.
These programs enable PacifiCare to offer the appropriate level of
care at the right time and place at no additional cost to its members.
By extension, these programs help to improve or stabilize the
healthcare cost inflation trend and reduce the demand on provider
services by complementing other programs we offer to members. Since
1997, PacifiCare has earned many national distinctions for its impact
on improving clinical outcomes amongst these cohorts.
Results from our disease management programs have been notable. For
example, life-saving medication use, such as beta-blocker therapy for
patients with coronary artery disease or ACE-inhibitor use for our
patients with congestive heart failure, have increased by 20-30 percent
and those rates are double the national average reported in FFS
medicine. Also, case management and disease management proactively
manage outcomes by preventing inappropriate hospitalizations from
occurring. Rather than wait for a hospital admission to signal
eligibility in these programs, we employ advanced analytics and
identify patients earlier.
Four examples of our results include:
Increasing appropriate medication in patients with
Congestive Heart Failure by 26 percent and thereby reducing
hospitalizations by 50 percent and saving over $75 million
cumulatively.
Improving the use of life-saving medications for patients
with coronary artery disease to 98 percent when recent studies show
that the national average is 45 percent.
For patients with chronic lung disease, improving
symptoms by 29 percent and decreasing smoking rates by 30 percent.
For diabetics, we've improved blood sugar and cholesterol
control by 25-30 percent.
To date, documented savings have exceeded $185 million in these
programs. Although 90 percent of those savings are attributed to
Medicare+Choice patients (due to the high prevalence of chronic disease
among seniors), commercial patients have been similarly and favorably
impacted as well.
Focused Medical Management
PacifiCare has developed industry-leading Medical Management
programs to ensure each member receives all the appropriate care. Our
Medical Management programs focus on reducing variation, improving the
quality of care provided and assuring cost effectiveness. We base
medical decisions on scientific evidence, and all of our medical
management services include physician leadership and input. PacifiCare
has developed online, science-based and objective Utilization
Management criteria as well as technology-based clinical decision
support systems related to case/utilization/disease management. Our
extensive suite of programs includes:
prior authorization
on-site concurrent review
telephonic concurrent review
post service review
case management
disease management
advanced care management
Disease management, demand management and case management are all
primarily geared toward reducing preventable admissions to hospitals,
whereas our medical management programs are primarily focused on
assuring appropriate lengths of stay during hospital admissions.
PacifiCare's medical management programs include: rigorous data
analysis, identification of outlier groups of physicians and hospitals,
collaborative physician education and assistance, expedited care
coordination involving multi-disciplinary approaches and the
incorporation of ``high-touch'' contact with ``high-tech'' monitoring.
Incorporating the above components, PacifiCare introduced Care
Coordination, a program for managing inpatient care that combines the
skills and experience of its centralized team with the effectiveness of
the field staff. Pacificare has taken its extensive on-site and
telephonic medical management experience and produced a refined program
that assures patients receive the appropriate care at the right time
and place.
Our care coordination model focuses resources on the 20 percent of
hospitals in every market, which are responsible for 85 percent of the
variant or outlier bed days. In this way, we can impact bed day
management in a focused manner, rather than micro-management, which is
unnecessary and inefficient.
Quality Improvement Initiatives
PacifiCare has demonstrated successful results in improving the
quality and affordability of care provided to our members through a
comprehensive and integrated strategy. For example, we have engaged in
sophisticated provider profiling leading to the development of our
Quality Index' program in 1998; in 2002, we began provider
payment incentives as exemplified by our Quality Incentive Program; we
also created value, or tiered, networks in 2002; seven years ago, we
created and implemented what I believe are noteworthy disease
management programs; and, most recently, we have implemented consumer
incentive programs intended to reward consumers who engage in healthier
behaviors. Taken together, we believe this integrated suite of programs
has shown remarkable results in improving the quality health care
delivered to our members.
PacifiCare's Integrated Strategy
[GRAPHIC] [TIFF OMITTED] T9678A.002
As a cornerstone, PacifiCare introduced comprehensive provider
profiling in 1994 as an effective management tool to improve provider
behavior and clinical results. When combined with health and disease
management programs, focused medical and utilization management
programs, and care management programs, these profiles have represented
leading-edge analyses and measurements to assist contracting providers
to better manage clinical quality, as well as healthcare costs.
Building on provider profiling, in 1998 PacifiCare released its
QUALITY INDEX' Profile of Physician Organizations. This
unique report provides consumer information on provider group
performance in selected areas of clinical and service quality and
affordability. The QUALITY INDEX' Profile provides consumers
with an effective tool to make informed health care decisions,
including the quality, affordability and value of the services they
receive from our contracted network of providers. Ongoing measures
range from preventive health screenings and clinical treatment of
chronic diseases to frequency of member complaints and overall
satisfaction with the level of service. Physician groups ranking in the
90th percentile or above in any of the measures receive a ``best
practice'' designation, which is also included in PacifiCare's provider
directory. This semi-annual, award-winning report has been expanded and
enhanced since its first release, and now features the relative
performance achieved by provider groups on 58 credible and relevant
measures.
Providers have responded by competing and improving average mean
performance in 65 percent of clinical and service measures. Also,
members have `voted with their feet' by changing to better performing
providers, which, in turn, represents $18 million in additional annual
capitation payments to those providers. Both results, `voting with
their feet' and providers `moving the needle' on performance, represent
a significant impact on the quality of health care delivered to our
members and rewards given to our providers and these results have been
sustained annually since 1998 and are unprecedented in the health care
industry.
[GRAPHIC] [TIFF OMITTED] T9678A.003
In 2001, PacifiCare of California introduced the first edition of
the QUALITY INDEX' Profile for Women. This unique report is
comprised of data specific to female patients from providers in our
contracted network. It measures relative provider group performance on
14 selected areas of clinical and service quality. The charts within
the QUALITY INDEX' Profile for Women illustrate how provider
groups address the needs of their female patients and also how
satisfied the female patients are with the care they receive from their
providers. In 2003, PacifiCare took a further step and published the
QUALITY INDEX' of Hospitals, a report card on the relative
performance of hospitals in our contracted network on 56 measures of
risk-adjusted complication rates and mortality rates, hospital patient
safety measures, utilization and patient satisfaction related to common
medical, surgical, obstetrical, orthopedic and pediatric conditions.
These profiles are shared on PacifiCare's public website,
summarized in our Provider Directory and are mailed annually to
commercial members through our member newsletter/magazine.
Tiering Benefits Based on Quality and Cost
Based on the success of member migration to best performing groups,
as well as the impact of competition on unnecessary variation in
quality and cost outcomes amongst provider delivery systems, PacifiCare
was the first plan in the country to develop tiered benefits based on
the performance of providers selected. In 2002, PacifiCare initiated
the first tiered hospital network in the country, based on underlying
costs of hospitals within California. In 2002-2003, PacifiCare
developed and launched the first-ever value network product (PacifiCare
SignatureValueSM Advantage), based on the quality and costs
of providers selected. The foundation for such product development has
been the QUALITY INDEX' profiles. In PacifiCare's value
health plan network, the participating medical groups have been
selected using 17 measures of both medical group and hospital
performance.
In order to qualify for the value health plan network, providers
must meet established cost and quality targets. Health care cost
measures link physician costs, pharmacy costs, and the costs of
hospitals to which primary admissions are directed. In 2002, quality
measures included 10 indicators of physician group performance and 6
measures of hospital performance. Physician performance included 5
clinical measures (breast cancer and cervical cancer screening rates,
childhood immunization rates, diabetic and coronary artery disease care
metrics) and 5 service/satisfaction measures (all derived from CAHPS).
Hospital performance was based on a subset of patient safety measures
and 1 patient satisfaction measure based on PEP-C (hospital-derived
CAHPS survey). In 2003, the 5 patient safety measures have been
incorporated into 3 general indicators from PacifiCare's QUALITY
INDEX' profile of Hospitals, which represent aggregates of
48 measures.
Approximately 70 percent of PacifiCare's standard HMO network
participates in the value HMO network in the counties where this is
offered, and PacifiCare SignatureValueSM Advantage is
offered in conjunction with PacifiCare's standard HMO product.
By driving market share to cost-effective providers and hospitals,
based on differential premium contributions and/or co-pays tied to
differential performance of providers, healthcare costs are
approximately 20 percent lower and quality is approximately 20 percent
higher than our standard plan. Furthermore, health care cost trends are
14 percent lower in the value network.
[GRAPHIC] [TIFF OMITTED] T9678A.004
Quality Incentive Program (Paying for Performance)
PacifiCare's Provider Quality Incentive Program (QIP) was initiated
in 2002 aligning the identical measures used to determine value network
eligibility with a pay-for-performance program. After the first 12
months of the QIP program, over 140 medical groups performed at or
above the 75 percentile level in at least one of 16 indicators, and
were rewarded from an incentive pool of $14 million. In 12 of the 16
measures, improvement occurred throughout the network, and averaged
over 30 percent. In the second year of the QIP, 5 more measures have
been added, thresholds have been raised to the 85 percentile per
indicator, and the incentive pool has been increased to $21 million. By
aligning our Quality Index' profile with an insurance
product design and a quality incentive program, PacifiCare has begun to
optimize provider, member, and purchaser behavior to focus on value-
based choices and actions.
Consumer Rewards--HealthCredits \SM\
In 2003, PacifiCare launched it HealthCreditsSM program
to encourage and reward consumers in practicing healthier lifestyles
and behavior. For example, points, or credits, will be earned after
documentation of healthier activities, such as completion of a health
risk assessment, sustained enrollment in a disease management program,
consistent attendance in weight management programs or consistent
completion of on-line nutrition and exercise plans through PacifiCare's
VirtualHealthClubSM. After an established threshold of
credits has been reached, members are eligible for prizes and discounts
on health promoting products.
Additionally, employers may introduce richer benefits, such as
reduced copays, or increased employer contribution, or perhaps
additional personal time off/vacation days. Such an approach leverages
the automobile or homeowners insurance model, where lower premiums are
offered to subscribers who wear seat belts, avoid traffic violations,
or purchase fire/security alarm systems.
Information, Integration and Innovation
PacifiCare has developed a well-integrated strategy to exploit its
core competency in health and disease management programs, focused
medical management and quality improvement initiatives. Such a strategy
includes innovative and industry-leading programs such as our QUALITY
INDEX' Profile of Physician Organizations, of Hospitals, and
for Women; our Value Network plan, our Quality Incentive Program and
our HealthCreditsSM program. Such programs represent the
leading edge in helping to close the ``quality chasm'' and help manage
healthcare costs, largely through the activation and engagement of
consumers through information, incentives and informed choices.
In conclusion, I would like to thank the Members of this
Subcommittee for their interest in health care quality innovation and
for the opportunity to present PacifiCare's views on this important
topic. Thank you.
Chairman JOHNSON. Thank you very much, Dr. Ho. Dr. Crosson.
STATEMENT OF FRANCIS J. CROSSON, EXECUTIVE DIRECTOR, PERMANENTE
FOUNDATION, OAKLAND, CALIFORNIA
Dr. CROSSON. Madam Chairman, Members of the Subcommittee,
my name is Dr. Francis J. Crosson. I am the Executive Director
of the Permanente Federation, a national organization of
Permanente medical groups. Thank you very much for inviting me
to testify on this vitally important topic. I would ask that my
written testimony be included in the record. Today, I am
speaking on behalf of Kaiser Permanente. I want to share some
observations about the key reasons for our six decades of
success in delivering high-quality, cost-effective health care.
We hope that these observations might help point the way to
better, more efficient health care for all Americans. First, at
Kaiser Permanente integration is more than a promise. It is a
reality. Our delivery system is based on physicians organized
into large multispecialty group practices. The group practice
culture stresses a coordinated team approach to the delivery of
care. Also, integrated care is greatly facilitated, because
physicians in group practice share a unified medical record for
every patient, a powerful engine of quality and safety.
Second, the multispecialty group practice model enables us
to integrate the entire continuum of care. As our members move
from one stage of life to another, their needs change. We meet
these needs best through a single system that delivers care
through primary care physicians, specialists in hospitals, home
health programs, health education programs, pharmacies and
clinical laboratories. Finally, at Kaiser Permanente, the
entire organization is aligned in the pursuit of improved
quality. In addition, to clinical integration, the delivery
system operates in a close partnership with the insurance
operations, especially those that affect care delivery such as
benefit design and the uses of capital. Why does all this
integration and collaboration matter to health care consumers
or purchasers? Let me cite just three examples.
The multispecialty group model is uncommonly capable of
coordinating care for patients with multiple chronic
conditions, an already large population that is growing rapidly
with the aging of America. For example, one in four Kaiser
Permanente members with diabetes also suffers from coronary
artery disease or heart failure. Because we can coordinate care
across specialties in a single setting, we can meet virtually
all of our patients' needs in a tightly coordinated way. Our
success at doing so is evident in our chronic disease
prevention and management quality measures as rated by the
National Committee for Quality Assurance and others.
Integration from patient education to early intervention to
critical care is evident in the way we address the problem of
heart disease. In our Northern California region, thanks to
more than a decade-long program to implement systematic,
evidence-based programs of chronic condition management, heart
disease is no longer the leading cause of death for that
region's 3.5 million members, although it remains so for the
non Kaiser Permanente population.
Finally, our integrated delivery model is an ideal
environment for reaping the extraordinary benefits of clinical
IT. We are convinced that IT is the key to dramatic
improvements in patient safety, health outcomes and health care
resource utilization. This is why we are investing more than $3
billion over the next few years to implement a state-of-the-art
clinical information system everywhere that our patients are
treated throughout our program. So, how can the Federal
Government help transfer the lessons we have learned at Kaiser
Permanente about improving care to other delivery systems and
providers?
First, the Federal Government can play a key leadership
role in promoting the development of more sophisticated,
evidence-based quality measures, widely adopted measures
against which plans and providers can be held accountable. Such
accountability, we believe, promotes integration. Second, the
Federal Government can further promote a quality-driven health
care market by using and encouraging other public and private
purchasers to employ financial incentives related to
performance on the same measures. Third, widespread use of
state-of-the-art IT is vital to the kind of transformation of
the health care delivery system envisioned by the Institute of
Medicine in its 2001 report, Crossing the Quality Chasm. Both
public and private purchasers need to support that
transformation through provider and delivery system incentives.
Finally, recognizing the importance of expanding the science
base of medicine, last year's MMA included a provision to
authorize the AHRQ to initiate a research agenda to compare the
relative effectiveness of prescription drugs and other
interventions designed to treat the same condition, a valuable
step toward better quality in efficiency. I want to urge the
Congress this year to make at least $75 million in fiscal year
2005 available for that effort. Thank you for the opportunity
to address you.
[The prepared statement of Dr. Crosson follows:]
Statement of Francis J. Crosson, M.D., Executive Director, Permanente
Foundation, Oakland, California
Madame Chairwoman, Representative Stark, members of the
Subcommittee, I am honored to be here today to testify before you on
health care quality, an issue that is sure to grow in significance as
the nation grapples with the challenges of the uninsured, the growth of
health care costs, and delivery system reform. My name is Dr. Francis
J. Crosson. I am the Executive Director of the Permanente Federation,
the national organization of the Permanente Medical Groups. Today, I am
speaking on behalf of Kaiser Permanente, one of the nation's leading
health plans and its largest private-sector health care delivery
system. Kaiser Permanente provides health care coverage and medical
care to more than 8.3 million members in nine states and the District
of Columbia. The Permanente Medical Groups include more than 12,000
physicians, who are supported by approximately 125,000 professional and
administrative employees.
In my remarks today, I want to share some information and
observations about what we at Kaiser Permanente believe are the key
challenges to improving American health care. I will also discuss how
Kaiser Permanente is responding to these challenges through our
integrated, team-based care delivery model, innovative care processes,
state-of-the-art information technology, evidence-based provision of
pharmaceuticals, and an overarching focus on preventive care and the
achievement of health, in addition to the improvement in quality of
life for those with chronic conditions. I will conclude my remarks with
some suggestions for ways in which we believe health care
policymakers--not only the government but the large purchasers of
health care, as well--could contribute to the goal of creating a
stronger, more effective and more efficient health care delivery system
for all Americans.
The Institute of Medicine's (IOM) 2001 report, Crossing the Quality
Chasm, provides a very useful review of many of the shortfalls of the
American health care delivery system. As the ``Chasm'' report states,
``If we want safer, higher-quality care, we will need to have
redesigned systems of care, including the use of information technology
to support clinical and administrative processes. . . . The current
care systems cannot do the job. Trying harder will not work. Changing
systems of care will.''
Improved systems of care, strengthened by the power of information
technology: That, in a nutshell, is the IOM's prescription for crossing
the great ``quality chasm'' that persists in American health care.
Across America, there are a number of models of systematic health
care delivery systems, based on multispecialty group practice, that are
producing encouraging results and warrant close attention. For more
than half a century, Kaiser Permanente has systematically promoted the
dynamic integration of patients, physicians and other clinicians across
the entire delivery system, along with a commitment to evidence-based
medicine. Today, I am pleased to tell you, we are leveraging the power
of that integration by investing more than two billion dollars in a
state-of-the-art clinical and administrative information system. Within
three to four years, virtually all of our 8.3 million members, and all
of our physicians and ancillary staff--nurses, lab technicians,
pharmacists, radiologists, care managers and others--will have access
to a comprehensive electronic medical record system with powerful
decision support capabilities.
A New Care Paradigm
But new systems of care, even those leveraged by powerful IT
systems, will not be enough to keep pace with the changing,
accelerating demands of today's and tomorrow's health care consumers.
To meet those demands--especially the needs of an aging population
beset with multiple chronic conditions--a new paradigm of care is
required. Tomorrow's systems of care must be held accountable, through
widely endorsed standards of quality and efficiency, not only for the
``sick care'' they provide--the treatment of heart attacks, strokes,
fractures, infections and other acute, episodic events--but even more
importantly for the way in which such systems are focused on the cost-
efficient promotion of overall health and quality of life. There is now
compelling scientific evidence that, through concerted, systematic
action, chronic conditions such as diabetes and heart disease need not
result in an inevitable progression to debility and death. In the
health care system of the future, even the very near future, the valid
metric of accountability must be expressed not merely in units of
health care provided, but most importantly in terms of the overall
dimensions of health.
Kaiser Permanente has made significant strides toward the
realization of the kind of IT-enhanced, integrated care system
envisioned by the IOM. In addition, because of our more than half a
century of experience with population-based care, we have continually
sought ways to move the focus of care from the downstream demands of
acute, invasive--and increasingly costly--episodic care to the rich,
upstream potential of prevention, care management, and strategies to
maintain the health and quality of life of our members. I would like to
share with you some examples of Kaiser Permanente's innovative
approaches to improving quality and the results we have achieved.
Today, I will focus on the areas of chronic care management, the use of
clinical information systems, pharmaceutical use management, and elder
care. In addition, I would like to offer some observations about how
our integrated system of care has enabled us to achieve dramatic
strides in these areas.
Chronic Care Management: The Challenge of Our Era
As you know, chronic and complex conditions are now the leading
cause of disability, acute illness, and death. As the IOM has noted,
they affect nearly 1 in 2 Americans, and they consume the lion's share
of all health care expenditures (Hoffman et al., 1996; The Robert Wood
Johnson Foundation, 1996). Among Kaiser Permanente's non-Medicare
members in our Northern California region, individuals with chronic
conditions account for two-thirds of all costs, and the share is
significantly higher for our Medicare members. For Kaiser Permanente,
as for almost any other health care organization offering comprehensive
benefits, the ability to deliver high-quality care efficiently to this
population is an imperative.
To meet that imperative, in 1997 we created the Kaiser Permanente
Care Management Institute, a program-wide resource that works with
regional experts to identify, disseminate and support the adoption of
evidence-based best practices. Tools provided to physicians and members
include evidence-based care guidelines, medication protocols,
participation in interdisciplinary care teams that identify ways to
manage patients who have more than one chronic condition, and ``beyond
the exam room'' support for members to make and sustain lifestyle
changes that can reduce their burden of illness, such as smoking
cessation, weight management, increased physical activity, and dietary
counseling.
Comprehensive, team-based programs are being developed for the 20
most common, high-impact conditions identified as priorities by the
IOM. By facilitating the development and diffusion of this knowledge
base throughout our organization, we have moved the average performance
of all eight KP regions on many key metrics of quality to a level that
significantly exceeds what had been the peak performance level of the
very best KP region just three to six years ago. Each year brings
further advances at the leading edge of performance. For example:
Coronary artery disease (CAD)--Unlike the rest of the
United States, heart disease is no longer the leading cause of death
for members in Kaiser Permanente's Northern California region. Focused
efforts in managing heart disease over more than a decade have reduced
mortality from heart disease for these 3.5 million Americans by 30
percent, so that it is now the second leading cause of death, behind
cancer.
Diabetes--Control of blood sugar in members with diabetes
has increased steadily since 1996. Between 1996 and 2002, 37,000 more
members with diabetes achieved a good level of control. This will
translate into significantly fewer complications. For example, if these
same 37,000 members maintain a good blood glucose (sugar) level over
the next 10 years, at least 875 of them would greatly reduce their risk
of blindness. The rates of stroke and of amputations would also
decrease.
Heart failure hospitalizations--The rate for heart
failure hospitalization declined by 18 percent between 1998 and 2002,
to 2.3 per 1,000 KP members.
Asthma--Since 1997, rates of hospitalization and
emergency room visits for asthma have fallen 21.1 and 48.8 percent
respectively.
The IOM has set the goal--research and pilot studies will help lead
the way--but true success for Americans needs to be defined as getting
the whole population across the quality chasm through organized,
efficient systems of care. There is growing evidence that broad
systematic pursuit of such performance improvements results in enhanced
value (quality as a function of cost) to whole populations of consumers
and health care purchasers:
While the cost of caring for a KP member with heart
failure is on average four times as much as caring for a similar member
without heart failure, pursuit of improved care management
significantly improves overall quality for all members in this
population. At the same time, this relative marginal cost for the
entire population of KP members with heart failure has remained steady
or gone down slightly.
Similarly, the relative cost of caring for all members
with diabetes, coronary artery disease, depression, and asthma,
compared with caring for similar members without these conditions, has
remained steady or declined as substantial improvements in quality
measures and health outcomes have been achieved.
Information Technology: The Electronic Medical Record and More
We are convinced that the achievements we have already realized in
chronic care management will be significantly accelerated by the
ongoing implementation of what we call KP HealthConnect, a large,
integrated suite of clinical and administrative information systems
that is being deployed across all KP regions. KP HealthConnect (like
similar IT systems at other organizations) is the vital lynchpin of
care improvement efforts in virtually all areas of sub-optimal quality:
underuse, overuse, and misuse. A few examples:
Reducing underuse: Whenever diabetes patients come to our
pharmacies for supplies in our Colorado region, where an automated
clinical information system has been deployed for more than five years,
KP pharmacists are able to review an electronic diabetes flow sheet
that indicates which patients are due for required lab tests and then
order them electronically at the same time the supplies are dispensed.
Reducing Overuse: Evidence indicates that when care
guidelines are embedded in automated systems, patients spend less time
on ventilators and are discharged sooner from ICUs. In ambulatory
settings, the use of antibiotics for patients with viral upper
respiratory infections has significantly declined in our Colorado
region, and unnecessary imaging procedures have been reduced in our
Northwest region, which piloted an early version of KP HealthConnect.
Reducing misuse: Data from our Northwest region shows
virtual elimination of preventable drug/drug interactions and a
significant decline in adverse drug reactions by using automated drug
order entry in our clinical information system.
Perhaps the greatest power of KP HealthConnect, or any such system,
is its ability to help move the primary locus of care beyond the
confines of the exam room or hospital and into members' homes and
workplaces. The average KP member may spend only 1-2 hours each year in
KP facilities (a few office visits and no hospitalizations). The
remainder of the time, they oversee their own care or receive care from
family members and friends. A clinical information system with web-
based access enables them to ``visit,'' or interact with, the KP health
care system whenever they want and for whatever length of time is
required.
Ubiquitous Care Via Web-Accessed Electronic Medical Records
In short, web-accessed clinical information systems will touch
patients wherever they are, whenever they need it, enabling far greater
patient engagement in their own health care. It will not only link
patients to their health records and their care teams, but it will
enable care teams to work more efficiently and productively, even
remotely. Importantly, it will link all health care practitioners and
patients to the continuously expanding body of medical knowledge, and
help process that knowledge into clinician- and patient-usable
information at the point of care, promoting greater patient involvement
and shared decisionmaking. Finally, it will continuously monitor the
efficiency and outcomes of care processes, target interventions to
improve processes where necessary, and measure outcomes again following
the interventions--the real-time transfer of research into practice.
This broad array of performance improvement activities requires
much more than a simple electronic medical chart. KP HealthConnect also
enables ambulatory and inpatient scheduling, registration, admission,
discharge, transfer systems, and billing and claims management. It
greatly enhances inpatient pharmacy management, and it includes
specialized modules for emergency department and operating room
management and documentation. With a web-based ``front end,'' it can be
used by any physician with Internet access and appropriate
authorizations anywhere in the world. All personal health records will
be fully protected in our secure network and fully compliant with all
HIPAA regulations. A web-based front end for members, tailored to their
specific needs based on their age, sex, and medical problems, enables
them to review their own medical records, see their laboratory and x-
ray results (once reviewed by their physician), make appointments, see
a list of their current and past medications, refill their
prescriptions, review all instructions given to them by their
physician, make notes in their medical record, and communicate via
secure email with members of their health care team. All of these
systems are available 24 hours a day, 7 days a week, and they are
available in multiple locations simultaneously.
When fully deployed, a KP member will be able to seek care in any
region and know that all of their medical information is available to
the practitioner they are seeing. In addition to member's health
information, practitioners will be provided a wide variety of decision
support tools at every moment they are caring for our members. This
will include automatic prevention alerts and reminders, health and
wellness reminders, automatic alerts related to all allergies,
including drug allergies, and notification about drug interactions--all
initiated as prescribing occurs. Evidence-based guidance for care
related to common and serious conditions, including chronic conditions,
will be instantly available.
Clinical information systems such as KP HealthConnect represent the
launching pad from which health care will be propelled across the
quality chasm and into a healthier future. I am proud that my own
organization is a leader among those multispecialty group practiced-
based organizations that are in the vanguard of this endeavor, but it
is vitally important that the rest of American health care following
this lead.
Putting Data in the Driver's Seat for Pharmacy Services
Quality problems related to overuse, underuse and misuse are
nowhere more challenging than in the area of prescription drug
utilization, where clinicians must contend with a constantly expanding
armamentarium of new pharmaceuticals. New drugs account for billions of
dollars in added costs to total health care spending every year, and
while some represent valuable, less invasive alternatives to existing
products or procedures, many others offer only marginally enhanced
benefit, if at all.
Integrated health care systems, enhanced by clinical information
systems, can serve as a powerful antidote to the costly problems of
drug overuse, underuse and misuse. In Kaiser Permanente, the linkage of
prescription data with diagnosis and encounter data has enabled our
Pharmacy Outcomes Research Group to continually evaluate pharmaceutical
manufacturers' claims regarding the efficacy and cost-effectiveness of
pharmaceuticals.
Example: Beta Agonist Inhalers
A good example of our use of computerized data to improve outcomes
for our patients and control overall health care spending is a program
that evaluates asthma patients and compares their use of beta agonist
inhalers that provide quick relief but no real improvement in the
underlying disease as opposed to inhaled corticosteroids that improve
the patient's health by addressing the cause of the symptoms.
Physicians are able to monitor the pattern of use for each patient, and
they can address misunderstandings and other potential adherence issues
with patients who do not appear to be following the prescribed regimen.
In addition to improving our members' health, these interventions can
save money by eliminating the need to change a patient to a more
expensive agent when the reason for treatment failure is non-compliance
rather than ineffectiveness of the medication.
Available information technologies can be particularly useful in
assuring that pharmaceuticals are prescribed in the highest quality and
most cost-effective manner in the first instance. A wide variety of
prescription drug therapies are available for many chronic medical
conditions. Information systems have the ability to translate the best
available medical evidence into support tools for physicians faced with
making complex prescribing decisions for patients with differing health
needs. If best practices based on both the individual patient and drug
characteristics can be identified, information technology accessing all
available clinical data can provide the physician with the relevant and
timely data needed to make a quality decision. Systems have already
been developed in the group practice environment to provide this
information in the physician's office at the time of the patient
encounter to make it easier for physicians to do the right thing at the
right time when prescribing drugs.
Example: Cox-2 Inhibitors
An excellent example of this is the development of a scoring tool
to assist physicians in targeting the use of the Cox-2 inhibitor drugs
in the class of nonsteroidal anti-inflammatory drugs (``NSAIDs'') used
for treatment of osteoarthritis. Many excellent NSAIDs have long been
on the market and are now generically available. Medicines in the newer
Cox-2 inhibitor group of NSAIDs are now widely prescribed. Medical
evidence indicates that these drugs, which are no more effective than
older NSAIDs at relieving pain and inflammation, have a somewhat lower
incidence of gastrointestinal side-effects, and as a result reduce the
likelihood of severe gastrointestinal bleeding in patients who are at
high-risk of such bleeding. But only about 3-4 percent of NSAID users
are at high risk of this bleeding, while nationally, outside of KP,
Cox-2 inhibitors are currently prescribed more than 50 percent of the
time for new NSAID users. There is virtually no advantage in using
these drugs outside of the high-risk population.
Researchers at Stanford University, collaborating with Kaiser
Permanente physicians, developed a scoring tool to identify high-risk
patients prospectively, based on a series of research-defined and
validated risk factors, to assure that these patients are treated with
Cox-2s or other lower-risk alternatives, and to promote the use of
traditional anti-inflammatory agents in patients for whom Cox-2s
provide no advantage. Initially established as a manual questionnaire,
Kaiser Permanente's pharmacy operations team in California developed
information systems to automatically query Kaiser Permanente's
enrollment systems, laboratory systems, pharmacy systems and hospital
systems to automatically score all California KP patients for
gastrointestinal risk each night. A score, based on up-to-date data, is
provided to physicians at the time of seeing a patient to support
appropriate prescribing, if an NSAID is called for during the patient's
visit. This has resulted in a Cox-2 prescribing rate within KP of
approximately 6 percent, very close to the expected target for optimal
prescribing, assuring both the patients at high-risk and those at
lower-than-high risk for gastrointestinal bleeding are appropriately
treated.
Even this single example has major implications for the health care
system. Cox-2 inhibitors are prescribed nationally 10 times more often
than is medically necessary, at a per-prescription cost 10 times that
of the available generic alternatives. Cox-2 inhibitors alone consume
more than $5 billion annually across the United States. More
appropriate prescribing in this single class could reduce unnecessary
U.S. drug spending by more than $4 billion annually--money that could
be better used for other health care purposes.
Caring for Our Senior Members
Almost 900,000 of Kaiser Permanente's members are 65 years of age
or older, and 70,000 KP members are over 85. Most are Medicare
beneficiaries who have been with Kaiser Permanente for decades. We know
these numbers will increase dramatically in the years ahead, both for
Kaiser Permanente and across the entire landscape of American health
care. How are we to deal with what we know will be monumental
challenges in the care of the elderly, especially those with multiple
chronic conditions?
Again, we believe that integrated systems of care, enhanced by
information technology, will provide a critically important part of the
answer.
The challenges in care for the aging already are enormous. There
are well documented quality problems in the care for the common age-
related conditions that greatly affect older adults' independence and
quality of life--conditions such as falls, Alzheimer's disease and
other dementias, incontinence, and depression. As anyone responsible
for a seriously ill, older relative knows, there are failures in
continuity of care when older adults move from one site of care to
another, such as from hospital to home or skilled nursing care
facility.
To assess the extent of the problem, RAND's ACOVE project
(Assessing Care of Vulnerable Elders), using evidence in the literature
and the consensus of nationally recognized experts, developed minimal
standards or quality indicators for the care of those older adults who
are at a four-fold risk of death or functional decline within two
years. Thirty percent of elders are in this ``at risk'' category.
ACOVE also developed quality indicators for the care of 22
conditions at a system level, not individual patient level. The
conditions included the care of diseases like diabetes, heart failure
and high blood pressure, but also age-related or geriatric problems
such as falling, incontinence, dementia, continuity of care, hospital
care, chronic pain and end-of-life care. The quality measures covered
four aspects of care--prevention, diagnosis, treatment and followup.
As part of the study, the medical records of over 400 vulnerable
older adults were reviewed to evaluate the quality of care they
received. The findings are startling. Only 52 percent of the time did
vulnerable elders receive recommended care for common medical
conditions like diabetes mellitus, high blood pressure, and heart
failure. They received recommended care for the age-related conditions
such as dementia, falling and incontinence only 31 percent of the time.
Kaiser Permanente firmly believes that our integrated program and
our systematic approach to care is an exemplary model for the provision
of quality care to older adults. We are currently investing significant
resources to build and test even better ways to care for these members.
Kaiser Permanente's Aging Network
The cornerstone of our elder care program is the Kaiser Permanente
Aging Network (KPAN). It is made up of physicians, nurses, outside
business people and many others, including community-based
organizations and academic geriatric experts. This group is charged
with recommending strategies and developing specific tactics to improve
the quality of care to our older members. KPAN works in close
cooperation with Kaiser Permanente's Care Management Institute (CMI)
(see above), which has established the elderly as a priority
population. CMI develops guidelines and identifies model approaches to
improving care. CMI's Elder Care work includes population screening and
appropriate follow up, chronic care, dementia care, care for people
with advanced illnesses, care in nursing homes, reducing the use of
medications considered high risk in older adults, care at transitions
and care at the end of life.
Following are just a few examples of accomplishments in this area:
Dementia is a condition that afflicts one in ten people
over 65 and nearly half of people over 85. There are quality deficits
in the early detection and diagnosis of dementia as well as in the
education, support and followup care that is required once the
diagnosis is made. Kaiser Permanente has collaborated with local
Alzheimer's Association chapters to develop model approaches and
systems of care to ensure that our members with dementia and their
families reliably are linked with community resources. The
collaboration is the result of both Kaiser Permanente and the
Alzheimer's Association recognizing that most people with Alzheimer's
and other dementias are not receiving appropriate care, from proper
diagnosis and treatment to information about their condition and
referrals to vital community services. New programs are growing
throughout Kaiser Permanente to make the entire care process for people
with dementia reliable and not subject to chance. A study among
Alzheimer's disease patients in our Ohio region found that if patients
were reliably referred to the Alzheimer's Association there was higher
family satisfaction and less use of emergency and hospital services.
The Alzheimer's Association has hailed Kaiser Permanente's work and
programs as ``a 21st century model for the nation's health care
system.''
Kaiser Permanente's Care Management Institute has
identified as a priority the reduction in the use of medications that
present high risk to older adults because of the presence of multiple
medical conditions, slower metabolism, and greater sensitivity to side
effects. Examples are medications that can cause confusion, falls,
gastric hemorrhage and very low blood sugar. Some of these medications
are categorized as being acceptable for short-term use but others are
in an ``always avoid'' category. Targeted educational efforts have been
instituted. Reminders are electronically generated and placed on
medical records to prompt physicians to consider discontinuing risky
medication. There has been progress throughout the program in reducing
these medications. The most dramatic results have been in the Northwest
Region where an electronic medical record has been is use for years.
There, the use of ``always avoid'' medications is the lowest within
Kaiser Permanente and improvement continues. Computers immediately
prompt physicians and suggest safer alternatives if a risky medication
is being ordered. This means that fewer older adult members are being
exposed to risky medications.
In conclusion, I must again quote from the IOM's outstanding 2001
report, Crossing the Quality Chasm: ``What is perhaps most disturbing
(in the present health care environment) is the absence of real
progress toward restructuring health care systems to address both
quality and cost concerns, or toward applying advances in information
technology to improve administrative and clinical processes.'' Kaiser
Permanente could not agree more: Restructuring health care delivery
into genuine systems of care, and supercharging those systems through
the widespread use of information technology, is the right prescription
for getting America across the quality chasm. It is the route that
Kaiser Permanente has pursued, and we strongly encourage all others to
join in leading the way to IOM's vision of a safer, more timely, more
effective, more efficient, more equitable, and more patient-centered
health care system for all Americans.
Recommendations
To promote the ideal health care delivery system envisioned in the
IOM's ``Crossing the Quality Chasm'' report, all health care
stakeholders--physicians, health plans, consumer groups, purchasers,
and government agencies--need to become engaged in a broad array of
quality and efficiency improvement efforts. In the interests of both
brevity and focused impact, I will limit our recommendations for
federal government leadership to four key areas:
Federal agencies can play a key leadership role in
promoting and facilitating the development of a set of widely endorsed,
evidence-based health care quality standards and measures against which
plans and providers can be held accountable by their payors and
consumers.
The Centers for Medicare and Medicaid Services could help
promote the creation of a quality-driven health care market among both
public and private purchasers by developing a financial incentive
system tied to the kind of widely endorsed, evidence-based quality
standards and measures suggested above. CMS could take a very valuable
leadership role in bringing about financing reforms that finally link
pay to performance.
Information technology is a vital key to the kind of
transformation of the health care delivery system promoted by the IOM.
Both public and private purchasers need to support that transformation
by creating incentives for providers and delivery systems to purchase
and deploy clinical and administrative information systems. In
addition, a vitally important role exists for the federal government to
promote and facilitate the interoperability of information systems so
that, in the not-too-distant future, the entire American health care
system can communicate and share information through a common language.
Evidence-based medicine is only as good as the science on
which it is based. When deciding how best to treat a particular
patient, physicians frequently have two or more options from which to
chose. All too often, strong empirical evidence does not exist to help
the physician make the right choice for the individual patient they are
treating at that moment. Last year's Medicare Modernization Act
included a provision to authorize the Agency for Health Care Research
and Quality to undertake a research agenda designed to compare the
relative effectiveness of different interventions designed to treat the
same condition. This year, it is vital that the Congress make at least
$75 million in FY 2005 available for this effort. Additionally, given
the increasing importance of prescription drugs in treating patients
and their rapidly rising costs, comparative effectiveness research on
prescription drugs should be the first priority.
Chairman JOHNSON. Thank you very much, Dr. Crosson. Mr.
Kahn.
STATEMENT OF CHARLES N. KAHN, III, PRESIDENT, FEDERATION OF
AMERICAN HOSPITALS
Mr. KAHN. Thank you, Madam Chairman. It is my pleasure to
testify today on behalf of the Federation of American
Hospitals. Hospitals should act effectively, assertively and
continuously to improve performance. One of the keys to
improving performance is developing objective and comparable
measurement of care and reporting that measurement. With
reporting, clinicians and hospitals can improve services and
patients can obtain information for making better informed
medical decisions. Many third-party payers, employers,
government entities and accrediting agencies have been
developing quality measurements of hospital performance. The
movement is both understandable and positive. However, the
varied approaches taken by these groups are likely to produce
mixed results and possibly even conflicting findings.
Additionally, the potential new ask-fors for hospitals are
myriad and will create new costs and unpredictable demands on
an already pressed hospital system.
To assure success of these new efforts for measurement in
reporting, the Federation took the lead with the American
Hospital Association and the Association of American Medical
Colleges to forge the Quality Initiative--a Public Resource on
Hospital Performance. The CMS, AHRQ, Joint Commission on
Accreditation of Healthcare Organizations, the AFL-CIO and the
AARP joined us in initiating this program. The purpose of our
collaborative voluntary effort is to establish a shared
strategy for hospital quality measurement and public
accountability. Together, the initial partners as well as other
groups who have joined later are building a national uniform
framework that provides valid and useful performance data. This
framework will give us a dynamic process for continuously
refining and adding data for collection and dissemination. It
will contribute to improving hospital care and will provide the
public with meaningful information for medical decisionmaking.
Beginning in May of 2003, we asked all hospitals in the
country to submit data to CMS that will be used to compare
performance on treatment for cardiac conditions and pneumonia.
As of last month, almost 3,000 of the Nation's hospitals have
pledged to participate in the Quality Initiative. This
represents about 70 percent of all eligible hospitals and more
than three-quarters of all admissions to hospitals with a
hundred beds or more. Currently, about 1,400 hospitals have
posted on the CMS website at least 1 of the 10 measures, and
almost 500 hospitals have reported all 10 quality measures. We
expect later this year that there will be a significant
increase in the number of hospitals reporting with the added
incentive of receiving full market basket payment offered in
the MMA for hospitals that report the current 10 measures.
These 10 measures are just the first step in building a
national, standardized hospital quality measures database. Over
the next year, our partnership will ask hospitals to submit
additional performance measures. From there, based on meetings
with key stakeholders and meetings across the country, CMS will
identify other hospital performance measures that are feasible
for hospitals to collect and report. I am pleased to report
that virtually all of the Federation's acute care hospital
members participate in the Quality Initiative. Even before the
enactment of the MMA, our largest members had a 100 percent
participation. We are proud of the Federation's role in
advancing this ground-breaking initiative.
The Quality Initiative recognizes the patient's perception
of their treatment is as important as the quality of the care
they receive directly. The Quality Initiative will encourage
hospitals to participate in the CMS patient experience survey
that now is underdeveloped with AHRQ. We are all working
together with the backing of consumers as well as providers to
produce the best research tools to give the public objective
and comparable information on the patient experience in
hospitals. Obviously, hospitals are taking the initiative in
other areas to improve performance. For example, one of our
large systems is at the forefront of adopting bar coding and
computerized physician order entry, both for administering and
ordering drugs, but the successes and pitfalls of their
experience illustrate opportunities and challenges of the
critical path toward significantly improving the quality and
safety of hospital care. First, with the impetus of the new
Food and Drug Administration regulations and adoption of proven
technology, this large system is adapting bar coding for all
its hospitals. So, from the pharmacy to the bedside, the
likelihood of error in dispensing of drugs is lowered
significantly. Bar coding can be a success with the tools now
available to hospitals.
Despite the strong case for computerized physician order
entry, here the obstacles are undeniable and illustrative.
There is no readily usable off-the-shelf technology. This is a
problem that will resolve itself over time. However, there are
also daunting IT questions. Computer physician order entry, to
work as it should, depends on a medical record that is largely
electronic. That is not a reality today. Finally, there is the
issue of physician participation. Even if a hospital can solve
all the technical and IT concerns, the initial ventures with
computer physician order entry have generally met with
insufficient physician cooperation. Hospitals have much control
over the resources and technology so important to quality care,
but the most important factor in improving patient care is a
successful partnership between hospitals and medical staffs. To
make the reporting initiative as well as our other efforts best
serve the patients, hospitals and physicians must work
together. Thank you.
[The prepared statement of Mr. Kahn follows:]
Statement of Charles N. Kahn, III, President, Federation of American
Hospitals
On behalf of the Federation of American Hospitals (FAH), I am
pleased to offer our views on new frontiers in health care quality. FAH
is the national representative of investor-owned or managed community
hospitals and health systems throughout the United States. Our members
include general community hospitals and teaching hospitals in urban and
rural America.
It is the mission of FAH member companies to provide high quality
care to the patients we serve. It is the responsibility of hospitals to
provide high quality care and safe environments, and we believe that
informed consumers will make better personal health care choices.
Today's hearing provides a good opportunity for us to describe what
hospitals are doing to enhance the quality of medical care and to
better inform American consumers of their health care choices.
Background
FAH has taken an active role in advancing policy initiatives to
improve the safety and quality of hospital care in this country, and to
promote the availability of patient information in a hospital setting.
Our Board of Directors has adopted policies regarding principles for
patient safety reporting systems; methods for reducing medication
errors; requirements for creating effective quality measures; and most
recently, the reporting of such measures to the public.
We are entering an important period in the evolution of quality
performance measurement, improvement and reporting. There is a growing
commitment to evidence-based care by clinicians. There is growing
energy and momentum surrounding health care consumerism fueled by an
increase in cost sharing and new insurance coverage alternatives like
health savings accounts, and the Internet has made it possible to
disseminate information about medical care services broadly for the
first time.
By all accounts, the American public wants and needs more
information about medical care. A public opinion survey conducted for
FAH last fall found significant support for a website that evaluates
hospitals about the treatment of certain diseases and new procedures.
Almost half of survey respondents--48 percent--said that this
information either could be the most significant factor, or an
important factor, in helping them decide which hospital to choose for
care.
A Myriad of Hospital Quality Information Exists Today
From our point of view there are two primary objectives for the
collection of information about on hospital quality measures. First,
and foremost, such information can serve as a critical tool for
clinicians and hospitals to learn about their performance so that
improvements in care can be made. And second, such information can
enable consumers to make better health care decisions.
Despite the best of intentions, the myriad of hospital quality
performance reporting efforts that exist today are working at cross-
purposes regarding these two objectives. These varied approaches are
producing incomplete, poorly analyzed, conflicting and even misleading
information for clinicians, hospitals and consumers alike. They also
are creating expensive, burdensome and unpredictable requirements on
hospitals.
Individual states, insurers and other payers, the business
community, consumer organizations, commercial enterprises, the Joint
Commission on Accreditation of Health Care Organizations (JCAHO), and
the National Quality Forum (NQF) all are advocating hospital reporting
initiatives. However, many of these parties are proceeding on separate
tracks. Clearly, we need a more rational and coordinated approach.
As an example, state programs in New York, Pennsylvania and
California focus performance measurement on coronary artery bypass
graft (CABG) surgery mortality rates. Maryland, Rhode Island,
Connecticut, and Texas have implemented state-wide hospital quality
reporting programs that measure performance on a number of medical
conditions.
There are several private sector initiatives. For the last three
years, The Leapfrog Group, representing several of the nation's largest
employers, has advocated that employees consider hospital performance
by using three safety indicators before selecting their choice for
care. A fourth ``leap''--a composite index of 27 individual safety
measures endorsed by NQF--will be added later this year.
Health plan initiatives include PacifiCare, a managed care plan
that began publishing reports on individual hospital performance across
56 quality measures, for 200 California hospitals. Commercial
initiatives include J.D. Power and Associates and Health Grades, Inc.
which have joined forces to develop a tool to measure and publicly
recognize superior quality hospitals based on service and clinical
excellence.
All of these efforts are attempting to empower consumers with
information to make them better decisionmakers about their care.
However, the proliferation of sources of information, and the uneven
nature of that information, raises many questions as to whether or how
this consumerism model actually will work in practice.
Clearly, hospitals and physicians must have valid and standardized
information about their performance to allow them to assess areas where
improvement is needed and compare their efforts to other hospitals.
From today's myriad of hospital quality initiatives, there is no
standardized information collected across all hospitals that can be
used to compare and improve care.
We also do not know how consumers will use information about
hospital performance in their decisionmaking since patients generally
choose hospitals based on where their physicians have admitting
privileges and where the hospital is located. None of the current
hospital reporting programs has addressed whether, or how, information
about hospital performance relates to physician-patient decisionmaking.
To begin a process to address these concerns, in 2003, FAH, along
with the American Hospital Association and the Association of American
Medical Colleges launched ``The Quality Initiative--A Public Resource
on Hospital Performance.'' Working in conjunction with several public
and private sector organizations, our purpose is to forge a shared
national strategy for hospital quality measurement and public
accountability. Together, we want to build a national uniform
framework, available to hospitals, physicians, public and private
payers and the public that provides valid and useful performance data,
contributes to improving hospital care, and that provides the public
with meaningful information for making medical decisions.
In addition to the hospital groups, the initiating partners in the
collaborative effort include the Centers for Medicare & Medicaid
Services (CMS), the Agency for Healthcare Research and Quality (AHRQ),
JCAHO, NQF, the AFL-CIO and AARP.
Beginning in May 2003, every hospital in the country was asked to
submit data to CMS that would compare their performance related to the
treatment of cardiac illness and pneumonia. Ten specific measures were
selected because they are supported by evidence showing their
effectiveness, because many hospitals already collecting these data,
and because these measures were agreed upon universally by medical
experts, including the National Quality Forum.
As of last month, almost 3,000 of the nation's hospitals had
pledged to participate in The Quality Initiative. This represents about
70 percent of all eligible hospitals in the country and more than
three-fourths of all admissions to hospitals with 100 beds or more.
Currently, about 1,400 hospitals have posted on the CMS website data
about at least one of the 10 measures, including almost 500 hospitals
reporting all 10 quality measures. We expect that later this year that
there will be a significant increase in the number of hospitals
reporting with the added incentive of receiving full market basket
payment offered in the Medicare Modernization Act for hospitals
reporting the current measures.
These ten measures, however, are just the first step in building a
national, standardized hospital quality measures database. Over the
next year, our partnership will ask hospitals to submit additional
performance measures related to cardiac illness and pneumonia. After
that, hospitals will be asked to submit data assessing their
performance on surgical infection prevention. From there, based on
meetings with key stakeholders and experts across the country, CMS will
identify additional high priority, evidence-based hospital performance
measures that are feasible for hospitals to collect and report.
I am pleased to report that virtually all of FAH members' acute
care hospitals participate in The Quality Initiative. Even before the
enactment of the Medicare Modernization Act that includes the added
payment incentive, our largest members had 100 percent of their
hospitals participating in the program. We are proud of the
Federation's role in advancing this groundbreaking initiative.
With the implementation of The Quality Initiative, we can begin to
answer several questions, which, until now, have been academic. These
questions include:
1. Will hospitals act on their reported results and implement
changes to improve their performance? We certainly believe they will,
that is why we have been proponents of this effort.
2. What will we learn about the role of physicians as the critical
link between patients and hospitals? Hospitals and physicians must work
collaboratively to improve quality; the medical staff and individual
physicians will need to take leadership in the change. Furthermore,
will the availability of comparable data on performance move
physicians? This is the key to the success of the quality performance
reporting program.
3. Is the information on hospital performance that is meaningful
to clinicians also meaningful to consumers? And how will that
information best be used in the critical physician-patient relationship
where consumer choice is so integrally related to care and
decisionmaking?
4. Can a national infrastructure be created and maintained that
identifies valid, evidence-based and standardized measures applicable
to all hospitals?
5. Finally, once we identify the best indicators of performance,
how can the information be used in payment systems to reward those
hospitals that excel?
In addition to these ``macro'' questions, there also are a number
of infrastructure issues that hospitals can address to improve their
performance related to quality and patient safety.
Information Technology
Bar-coding medications--as promulgated in final regulations by the
Food and Drug Administration last month--will go a long way toward
reducing medication errors, especially because unit dose packages are
included. Our largest member, HCA, Inc., has fully implemented bar-
coded medications in 82 hospitals and is planning to have bar-coding in
place in 186 hospitals by the end of the year. This relatively simple,
low-cost technology has been extremely effective in virtually
eliminating medication administration errors.
On the other hand, while computerized physician order entry (CPOE)
holds great promise in reducing medication errors and improving patient
care--especially when integrated with other clinical data bases--a
range of issues challenge broad implementation at this time. Off-the-
shelf software for CPOE just now is being developed, and presents
significant cost and training requirements.
However, the ultimate key to successful CPOE implementation depends
on physician cooperation, engagement and compliance. Physician
engagement and compliance has been difficult for two reasons--many
doctors do not want to use new technology, and secondly, the technology
actually can be slower to use than old-fashioned pen and paper, taking
more of their time, not less. Because of these difficulties, HCA, Inc.
is choosing a deliberate and cautious approach in implementing CPOE,
beginning with three hospitals and a small number of physicians in
each. Their goal is to pilot test CPOE in 10 hospitals by the end of
2005.
Finally, for hospitals to implement widespread quality reporting,
it will become essential to be able to extract data from electronic
medical records, rather than from paper. The increasing burden on
clinical staff time to collect and report data will not be sustainable
otherwise. We are encouraged by the Administration's National Health
Information Infrastructure initiative and are pleased to participate in
this groundbreaking effort. In addition, FAH is working with eHealth
Initiative, a collaborative effort which has brought together
hospitals, clinicians, employers, health plans, public health agencies,
and healthcare information technology suppliers to work with the public
sector to address barriers related to using information technology to
improve the quality, safety and efficiency of healthcare.
Definition of a ``Good'' Quality Measure
Another challenge to building a national framework is defining what
constitutes a ``good'' quality performance measure. We believe that a
``good'' measure must be based on widely accepted evidence that the
practice improves performance, that it is feasible to collect without
inhibiting hospitals ability to fulfill their primary mission of
providing patient care, and that it is meaningful to users--clinicians,
payers and consumers. Finally, a ``good'' measure must be one that all
hospitals can implement so that it can be adopted universally.
When evaluated against these criteria, many worthy ideas are just
that--they do not yet and may never rise to the level of becoming
standards for all hospitals. Examples of such efforts include the use
of hospital intensivists and specific nurse staffing ratios. Neither is
based on adequate or definitive evidence, nor would it be feasible for
all hospitals to implement them.
Measuring Patient Experience of Care While Hospitalized
Although not a measure of the quality of clinical care per se,
patient satisfaction or experience while hospitalized is viewed by many
as an aspect of hospital quality. Therefore, conceptually, FAH supports
the inclusion of such information in The Quality Initiative.
However, several issues need to be resolved before FAH can support
the survey and its administration as currently proposed. The survey
tool must be designed to provide consumers with useful information that
has a demonstrated link to quality. Equally important, the survey
should not repeat or duplicate current hospital survey efforts.
Hospitals simply cannot afford to take on the additional cost of a
redundant survey that does not lead to quality improvement in a
hospital, especially given all the competing demands for the collection
and reporting of other quality information. We are working with CMS and
AHRQ to produce a process that is workable and practicable for
hospitals.
A Coordinated and Cooperative Framework
As I indicated earlier, many different types of organizations, both
public and private, have begun hospital quality reporting initiatives.
We strongly believe that these fragmented and disjointed efforts must
be united under a common and standardized infrastructure so that
consumers have access to common information that applies to all
hospitals.
Achieving this level of cooperation across so many players will not
be easy. However, we believe that the greater good warrants that
leaders of all stakeholder organizations support a single common
approach. The three hospital associations, AHA, FAH and AAMC--along
with CMS, AHRQ, JCAHO, and NQF--are working together to begin this
process. FAH seeks to continue this collective effort, and we encourage
others to join and strengthen our initiative, rather than begin or
continue their own.
Conclusions
Quality Initiative Will Provide Answers
The hospital Quality Initiative will give policy makers the
opportunity to observe and evaluate a number of important questions,
including whether such information will result in improved performance
by hospitals, and what information about quality is actually useful to
medical professionals and consumers. FAH supports this initiative and
is working hard to make it successful.
Build a Common National Framework
However, to achieve widespread hospital participation, there must
be a coordinated and unified approach at the national level. All
stakeholder organizations must support the use of the same measures or
there will be mass confusion by the public, and an unreasonable burden
placed on hospitals.
Engage Physicians in Measuring Hospital Performance
Hospitals and physicians need to work together to improve patient
care. Improving hospital performance, whether through improved clinical
care or the use of new technology, is dependent upon physician
cooperation and support.
Continue to Research Linking Payment and Performance
It is good to provide incentives to participate in hospital
reporting, but the reporting initiative is only one step toward
improving performance. More testing and information is needed before an
equitable, effective and efficient reimbursement system can be built.
The first step is to determine if we are measuring quality correctly.
After that, testing and demonstrations, such as the CMS demonstration
project with Premier hospitals, are important and necessary second
steps.
I hope our comments have been useful to your deliberations today.
Thank you for the opportunity to share our views. I am happy to answer
any questions that you might have.
Chairman JOHNSON. Thank you very much, Mr. Kahn. Ms.
Burger.
STATEMENT OF SARAH G. BURGER, CONSULTANT, NATIONAL CITIZENS'
COALITION FOR NURSING HOME REFORM
Ms. BURGER. Thank you. The National Citizens' Coalition for
Nursing Home Reform (NCCNHR), is a 27-year-old consumer
organization whose mission is to improve the quality of care
and life for nursing home residents. The Administration on
Aging-funded National Long-Term Care Ombudsman Research Center,
which supports 53 State ombudsmen and 1,000 paid local
ombudsmen and 8,400 volunteers working to resolve resident
complaints--is also at NCCNHR. Throughout its history, NCCNHR
has had an active commitment to identifying and disseminating
excellent care practices; and NCCNHR thanks the Subcommittee
Chairman for this opportunity to present this part of our work.
Every year a large part of our annual meeting is devoted to
exposing long-term care ombudsmen, citizen advocates, residents
and families to exemplary care practices that are replicable in
their own communities across the Nation. One such opportunity
presented itself in 1995 when we invited four providers who had
previously not known each other to present their visionary
ideas together on one panel. That event was the catalyst for
the formation of the Pioneer Network of innovative practice
providers in 1997.
Nursing home residents and their families know good care
when they receive it. Nursing homes have followed a hospital
care model. Imagine at 80 or 85 years of age adjusting to a
hospital-like institution's scheduling for the rest of your
life, sometimes 1 to 5 years, even having someone else decide
when you will go to the bathroom. This toxic approach to care,
physically and mentally, destroys both residents and staff. The
Pioneer Network's new vision of nursing homes is that this is
not a hospital but your home. The long nursing home corridors
are divided into small neighborhoods or households. Staff are
no longer organized hierarchically by departments but divided
into interdisciplinary teams in the households. Staff do not
rotate among units but remain permanently with the household,
developing strong relationships with the residents and their
families. Staff don't perform a list of tasks on people--
bathing, eating, toileting, moving--but use residents' lifelong
routines to guide care. A late riser gets to sleep in. Can you
imagine trying to arouse a demented late rouser at 6:00 a.m.?
It will take two people to do that wrenching work, which can be
done easily by one aide using the resident's lifelong time of
awakening in late morning. Food is not served hospital style on
a tray but family style, and it is available whenever a
resident wants it. How would you know if you were in this kind
of a home? There is no urine smell, because people are toileted
regularly. Residents don't cry out, because their needs are
met--food, water, exercising, toileting, bathing and pain
control. You see the same staff every day and know them.
Administrators and directors of nursing have been there a long
time. They know every resident and every staff member.
You and your family are welcomed as part of the household.
Spontaneity drives activities, and people are engaged. Good
care is good business. For instance: toileting people according
to their own individual needs saves money on diapers. One home
saved enough to pay for another nursing assistant around the
clock. Physical and chemical restraint use and antidepressant
use diminishes. Nursing staff turnover (45 percent nationwide),
and a very expensive item, in the nursing homes decreases. The
cost of replacing a single certified nursing assistant is about
$4,000. Supplemental food costs plummet. Food waste is minimal.
Census remains full. Pioneer Network practices are the vision
for residents Congress had in mind when it passed the Nursing
Home Reform Act 1987 requiring facilities to provide nursing
care and service to meet each resident's mental, physical and
well-being. The CMS is so struck by this commonsense approach
that they held a web cast on Pioneer Network practices on
September 27, 2002; and I think there is another one coming up,
by the way, this month at the end of March. This is a true
partnership. Thank you.
Chairman JOHNSON. Thank you very much to the whole panel.
[The prepared statement of Ms. Burger follows:]
Statement of Sarah G. Burger, Consultant, National Citizens' Coalition
for Nursing Home Reform
The National Citizens' Coalition for Nursing Home Reform (NCCNHR)
is a twenty-seven year old consumer organization, founded by Elma
Holder, whose mission is to improve the quality of care and life for
nursing home residents. The Administration on Aging-funded National
Long-Term Care Ombudsman Resource Center--which supports the 53 state
ombudsmen, 1,000 paid local ombudsmen, and 8,400 volunteers working to
resolve resident complaints--is also at NCCNHR.
Throughout its history, NCCNHR has had an active commitment to
identifying and disseminating excellent care practices. NCCNHR thanks
the Ways and Means Subcommittee Chairman, Congresswoman Nancy L.
Johnson, and Members of the Subcommittee for the opportunity to
spotlight this most rewarding part of NCCNHR's work.
Every year a large part of NCCNHR's annual meeting is devoted to
exposing long-term care ombudsmen, citizen advocates, residents, and
families to exemplary care practices that are replicable in their own
communities across the nation. One such opportunity presented itself in
1995, when we invited four providers who had not previously known each
other to present their visionary ideas together on one panel. That
event was the catalyst for the formation of the Pioneer Network of
innovative providers in 1997. The keys to the success of this story
are: vision, stakeholder coalitions respectful of one another,
including government, and commitment to change over time.
Nursing home residents and their families know good care when they
receive it. Nursing homes follow a hospital care model, yet in 1999
about 75 percent of the residents lived in a nursing home from one to
five years. Imagine at 80-85 years of age adjusting to a hospital-like
institution's schedule for the rest of your life--even having someone
else decide when you will go to the bathroom. This toxic approach to
care and to life physically and mentally destroys both residents and
the staff who care for them.
The Pioneer Network's new vision of nursing homes is that this is
not a hospital but your home.
The long nursing home corridors are divided into small
``households.''
Staff are no longer organized hierarchically by
departments, but divided into interdisciplinary teams in the
households. Human resources are close to the residents.
Staff are no longer rotated among units, but remain
permanently with the household, so they develop good relationships with
residents and families.
Staff don't perform a list of tasks on people (bathing,
eating, toileting, movement) but follow residents' lifelong routines in
providing care. A later riser gets to sleep in, for example. Can you
imagine trying to arouse a demented late-riser at six a.m.? It will
take two people to do the work, which can be done by one later in the
morning. The first experience is wrenching for all, the other is
satisfying for both resident and staff.
Staff don't make decisions for residents. Residents make
their own decisions.
Food is not served hospital-style on a tray, but family
style, and it is available whenever a resident wants it.
How would you know if you are in this kind of home?
There is no urine smell because people are toileted
regularly.
Residents don't cry out because their basic needs--food
water, exercise, toileting, bathing, pain control--are met.
You see the same staff every day and know them.
Administrators and Directors of Nursing have been there a long time.
They know every staff member and resident.
You and your family are welcomed as part of the
household. Householders are out in the community.
Spontaneity drives activities and people are engaged.
Good care is good business. For instance:
Toileting people according to their individual needs
saves money on diapers. One home saved enough to pay for another
nursing assistant around the clock.
Physical and chemical restraint use diminishes.
There is a decrease in the use of antidepressants.
Staff turnover, which is about 45 percent nationwide,
decreases. This is a tremendous savings when you consider that the cost
of replacing a single certified nursing assistant is around $4,000.
Supplemental food costs plummet. Food waste is minimal.
Census remains full, increasing reimbursement.
Pioneer Network practices are the vision for residents Congress had
when it passed the Nursing Home Reform Act of 1987 requiring facilities
to provide care and services to preserve each residents' highest
practicable mental, physical, and psychosocial well-being. The Centers
for Medicare and Medicaid Services (CMS) is so struck with the common
sense of this approach that it held a Webcast on Pioneer Network
practices on September 27th of 2002. This is a true partnership.
Thank you Chairman Johnson and Members of the Subcommittee on
Health for inviting NCCNHR to present the consumer view of good nursing
home care and how to achieve it.
Chairman JOHNSON. Ms. Burger, I will be interested to hear
after that meeting if you all could begin focusing on how the
current survey and certification system is a barrier to the
development of the kind of care you espouse and what are the
new ways, reflecting what we have heard from the other
programists in other areas, that we could use to set a
different survey and certification process in place to
encourage the quality of care that you clearly are committed to
and are succeeding in delivering. It has always distressed me
that the government is only interested in sometimes very minor
ways in which a nursing home doesn't do precisely what we think
they should do. I had one--a nursing home cited because a stack
of things on the top shelf was 2 inches closer to the ceiling
than it should have been. We are talking 8 to 10 inches rather
than 10 to 12, really absurd. Yet never--our law never allowing
citing for achievement. I think we couldn't be getting where we
are in other areas if the systems that we have been talking
about today didn't also reward positive achievement as opposed
to simply faulting either major or minor defects. So, I look
forward to working with you on that.
Ms. BURGER. Thank you very much.
Chairman JOHNSON. Dr. Ho, in your testimony, you cited that
in your plan you were able to reduce costs by 20 percent.
Health care costs are approximately 20-percent lower and
quality is approximately 20-percent higher and that,
furthermore, health care cost trends are 14-percent lower in
the value network. That is extremely significant, particularly
in today's arena. I know you all have these figures. I just
happened to pull them out more specifically from Dr. Ho's
testimony. You also do a lot of work with Medicare patients, so
I wonder if you have been able to achieve any of those kinds of
statistics in your Medicare networks.
Then you also make this comment on now page 4 that these
programs enable PacifiCare to offer the appropriate level of
care at the right--sorry, wrong paragraph--that their
achievement rates--this is in terms of ace inhibitor--will
double the national average reported in fee-for-service
medicine. Why are we having so much more trouble implementing
quality standards? Are we, across the board, all of you, are we
having more trouble implementing these new standards in sort of
the fee-for-service setting than we are in the systems setting?
Are we--for those of you who offer both, are we able to either
improve quality and reduce costs in each setting equally, or do
we need to know that one system is better than the other or
they could both be handled equally?
Dr. Ho. Then anyone who wants to comment on that larger
issue of to what extent does the system of delivery determine
the outcome when in Medicare we do have two systems of
delivery, fee-for-service and systems. Dr. Ho.
Dr. HO. Thank you. There are some similarities. For
example, in the disease management programs that I summarized,
we have comparable results for both the Medicare population and
the Medicare Advantage plan that we offer as well as in the
commercial plan that we offer. So, there is no discrepancy
whatsoever in the disease management program nor in the results
that we have been able to achieve with our Medicare Advantage
beneficiaries as with our commercial or active--commercial or
health plan beneficiaries. On the other hand, there have been
quite a few challenges in implementing the full integrated
strategy that I summarized for the Medicare beneficiaries. A
lot of them have been challenges related to regulatory
barriers. I will give you an example. In 1997, we went to CMS
to request disclosure of our public report card, the Quality
Index which was released in 1998. We never got that approval
until 2002. So, Medicare beneficiaries have not been able to
access or have accessible disclosure or provider performance,
which, as I have summarized, has shown to be so effective in
moving the needle in quality as well as helping members vote
with their feet.
The value network has not been able to get the type of
discussion around innovation nor the rewards for health plans
like PacifiCare that have been willing to innovate and kind of
push the edge of the envelope a little bit further from the
regulators, either by reducing the barriers to innovate or the
hassle factor, if you will, or actually increasing financial or
nonfinancial incentives in terms of preferential marketing or
collaboration on communication pieces to members and so forth.
So, I would have to say that our overall quality improvement
strategy has been suboptimized with the Medicare Advantage,
with the notable exception of our disease management programs
which have been actually implemented to the Medicare
beneficiaries as well.
Chairman JOHNSON. Thank you very much. Dr. Crosson.
Dr. CROSSON. Thank you, Madam Chairman. I can't speak for
the disaggregated fee-for-service world. I have spent 27 years
now as a physician in Kaiser Permanente, and I can speak for
that. I think it is absolutely correct that the structure of
group practice, particularly prepaid group practice, as well as
the culture that evolves among physicians makes it easier to
take knowledge science constructed into guidelines or organized
care processes and see that it is implemented. In fact, that is
what we do; and some of the information I presented was a
consequence of that. Furthermore, I think this issue is going
to become more important rather than less important in the
future because Medicare is becoming more complex, not less
complex, and it requires more coordination among doctors and
among other care givers than it did a generation ago, for sure.
Finally, I think it is going to become more important because I
believe, as I said earlier, that the ability to use clinical IT
is going to occur fastest and most effectively in organized
systems of care, and that technology offers such a gigantic
leap for health care delivery that it strongly influences me
and has influenced our organization to make that investment.
Thank you.
Chairman JOHNSON. Mr. Kahn.
Mr. KAHN. Yes, Mrs. Johnson. I believe that most hospitals
want to participate in the Quality Initiative and would like to
move as quickly as possible to more measures of their
performance. One of the key issues here, though, is the
technology. Every time a new measure is applied, that is more
paper that has to be filtered through to produce the results so
you can find out what is happening at the hospital. If we had
the IT--if we had the medical record and it was a matter of
just pushing a couple of buttons, it would make a big
difference in terms of accumulating the information so we can
understand much of what goes on in a hospital today. Let me
also say, though, that if we look at Medicare, there are
opportunities within Medicare for moving to more organized care
and integrated care through managed care if Medicare Advantage
takes off. Let me say, on the private sector side, I think the
opposite could take place. We actually I think on the private
sector side are finding more of a preference by consumers for
preferred provider organization, for quasi fee-for-service
products, and in some ways that actually may be the future
there. So, I think we are going to have to find other means
other than necessarily through the payment system to encourage
the development of a kind of--at least record integration for
patients, because I am not sure we are going to have for many
patients ever the kind of organized system that would bring
about integration like you can do in a Kaiser Permanente
environment.
Chairman JOHNSON. Mr. McCrery.
Mr. MCCRERY. Dr. Crosson, what was the figure you used that
described the level of your coming investment in technology
improvements?
Dr. CROSSON. Yes, Congressman McCrery, it was $3 billion.
Mr. MCCRERY. $3 billion--with a ``b''?
Dr. CROSSON. Yes, sir.
Mr. MCCRERY. Well, that is very impressive. Are you a
competitor of PacifiCare?
Dr. CROSSON. Our organization and PacifiCare are both
present predominantly in the State of California.
Mr. MCCRERY. So, that would be a yes?
Dr. CROSSON. That would be a yes.
Mr. MCCRERY. Well, it was interesting, because it was kind
of like dueling plans there, the juxtaposition of Dr. Ho and
Dr. Crosson. Dr. Ho's testimony was certainly impressive. So
was yours. So, I could almost hear the advertisements and
reading the pamphlets that you must be distributing about your
quality improvements. That is very interesting and obviously
very good, but it kind of goes against what I took from the
first panel which was that this is impossible to expect the
private sector to do, to accomplish. I know that is not what
they meant to convey, but somebody listening might have gotten
that impression. It seems to me that you all at least are
moving right ahead with quality improvements through technology
improvements. You are making the investigation, and obviously
you are paying for it or you expect to be able to pay for it
through your operations--through income from your operations,
right?
Dr. CROSSON. Yes, Congressman. I might on that note
underscore what Mr. Hackbarth said because his experience at
Harvard Community Health Plan was similar to ours, and that is
because we are a prospectively paid organization. The business
case, if you will, affects the way you look at it. The business
case for this investment is much more robust than I think it is
in the fee-for-service model because, as Mr. Hackbarth noted,
to the extent we can use the systems effectively to not only
improve quality but to manage costs, then we can reap those
savings and then reinvest them in the system and that is not a
characteristic of the dynamic that exists when the payment is
based on fee-for-service payment.
Mr. MCCRERY. I understand that and we don't need to get
into all of this, but it really concerns me that we are talking
about the government basically underwriting these kinds of
investments for fee-for-service delivery or disaggregated
health care delivery as opposed to the kind of services that
you all have and that Harvard plan has. It gets to the basic
question of choice for consumers but also I think to the basic
question of choosing to pay, and I am not sure that we can
continue to underwrite at the government level everything that
everybody wants and expect to have a good result in the end.
So, I am not sure, Madam Chairman, if we ought not take from
this a lesson. You know, depending on what the consumer wants,
maybe they are going to have to choose a plan that is capitated
or it is a managed care plan in order to get the kind of
quality in terms of the technological improvements. If they
want to stay in fee-for-service and they want that kind of
improvement, they may have to pay for it. Yes, Mr. Kahn, I see
you are anxiously awaiting.
Mr. KAHN. I think on the noncapitated side, and today
really most providers are on the noncapitated side in terms of
the way they receive their payments from, I think over time
this problem will carry itself. I mean, obviously over time IT
becomes less expensive. Over time there will be more products
to buy off the shelf that hospitals can purchase to serve all
these functions. I think, though, if we are pushed on the
measurement and quality side, we can only meet so many
expectations there, and I think if people are patient I would
argue the private sector will solve the problem generally, but
it is going to take a great deal of time and more than I think
some policymakers may be willing to allow.
Mr. MCCRERY. If policymakers insist on certain benchmarks,
certain measurements, we may have to pay for them in the short
run?
Mr. KAHN. In the short run, unfunded mandates are unfunded
mandates.
Chairman JOHNSON. Thank you very much. Yes, Dr. Ho.
Dr. HO. I would like to mention one thing that hasn't been
raised this morning. The technology actually as a solution or
an enabler to improve clinical decision support has been
available for 10 to 15 years and who pays is obviously always a
salient question, but I think there is a culture, a culture in
the fee-for-service practitioner world that has to be raised as
well, a culture that has historically not been in favor of
accountability, but more in favor of autonomy and not
necessarily in favor of a consumer-directed health delivery
system versus a practitioner-directed delivery system. I think
the issue here is--and we at PacifiCare firmly believe in
technology and electronic health records. In fact, we spend
millions of dollars in trying to pursue those objectives, but
it is still difficult. It is a difficult sell when you have an
intransigent practitioner community that is resistant to
automation, resistant to accountability, resistant to outcomes
and disclosing outcomes.
One comment, the RAND study that has been shown before that
beta blocker use by people who have had a heart attack
nationally is 45 percent. It is not because doctors don't know
what to do. They are very familiar with the guidelines and some
of them even have reminder systems. There has not been either
an incentive program or a report card program to disclose what
the results are or there is not a disincentive or a program
that would maybe reduce their pay if they didn't do the right
thing the first time. So, I think, not to belabor the topic,
but I think it is a very complex subject. It is not just a
matter of funding nor a matter of technology, it is really a
matter of reeducating an entire practitioner community.
Chairman JOHNSON. Thank you for your comments. Did you want
to comment, Dr. Milstein?
Dr. MILSTEIN. I think the perspective on the employer side
is to keep incentives focused on performance with perhaps the
single exception of adoption of information systems. I think
the predominant purchaser sector view would be not necessarily
to handout grants, government grants for IT, but to make the
provider payments sensitive to the performance levels of
doctors and hospitals, including adoption of information
systems, longitudinal cost efficiency, and quality of care.
Chairman JOHNSON. I know some of the experiments in the
private sector that look at pay for performance have been
sensitive to the cost of technology and have encouraged the
meeting of standards that you already know about, like beta
blockers that you could do within your existing structure and
use that as a way of earning higher payments so you can buy the
technology. We will be having a hearing on paying for
performance and specific systems that have worked, and I invite
all of you to follow up with any specific, outside of the
general payment structure of Medicare, but specific barriers.
It is ridiculous that you wanted to reveal publicly quality
information in 1998 and it took you 4 years for the right to do
so for your own consumers.
So, we need to be more conscious of the specific barriers
that exist in Medicare now to the development of higher-quality
health care, and we need to hear that both from systems people
and from fee-for-service providers as well. Then we will be
looking at pay systems and a number of other aspects, the
problems we face. I certainly appreciate your testifying and
your leadership in challenging the traditional health care
delivery system to meet the future. It is not without
significance that No Child Left Behind is also about
accountability. It is about a system that works very, very well
for a lot of people and is not working very well for others.
So, I think there is a different culture, as you mentioned, Dr.
Ho. I think there is a greater interest in accountability
because technology can help us with that now, but there is also
a greater interest in the individual consumer and their
individual needs, whether it is the child in the school or the
patient in the health system, and if we can use technology to
achieve both greater accountability and more patient-centered
care, then we will improve American health care in the next
decade and reach a high of both cost effectiveness and quality.
Thank you very much for your participation today.
[Whereupon, at 12:05 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of American Academy of Family Physicians
Background
This statement is submitted for the record to the Ways and Means
Health Subcommittee hearing entitled, ``New Frontiers in Quality
Initiatives'' on behalf of the American Academy of Family Physicians
representing more than 93,700 members throughout the United States.
This testimony includes an overview of the ongoing quality
initiatives that the Academy has undertaken. In addition, it introduces
as a necessary feature of Medicare quality improvement, a method of
supporting the primary care infrastructure required to care for the 80
percent of Medicare beneficiaries with chronic conditions. Family
physicians are integral to Medicare quality improvement efforts since
the majority of Medicare beneficiaries who identify a physician as
their usual source of care report that they have chosen a family
physician.
Quality improvement efforts and medical errors research reveal the
importance of navigating complex interactions across multiple care
settings. Again, family physicians logically perform the role of
integrating care for Medicare beneficiaries since they function as
patients' usual, ongoing source of health care. Unless financing
mechanisms specifically support the role of primary care in integrating
care for beneficiaries with chronic diseases, patients' experiences in
the current fragmented healthcare system are likely to grow worse. This
is particularly true for the two-thirds of Medicare beneficiaries with
multiple chronic conditions.
Chronic Care in the Medicare Population
The incidence and prevalence of chronic disease among Medicare
beneficiaries, as well as the multiple challenges of treating and
managing these diseases and the cost associated with doing so, are well
documented. Medicare funds are increasingly directed toward
beneficiaries with chronic illness. The Robert Wood Johnson
Foundation's initiative entitled, Partnership for Solutions, estimates
that about two-thirds of Medicare dollars go to participants with 5 or
more longstanding conditions. This is a startling figure for a program
that not only costs taxpayers billions of dollars, but also fosters
fragmented care. Additional information from Partnership for Solutions
reveals that 66 percent of Americans over the age of 65 currently have
at least one chronic condition, and the majority go on to be afflicted
with a number of illnesses. Data from the Medicare Standard Analytic
File (1999) shows that beneficiaries without chronic conditions saw an
average of 1.3 physicians in 1999. Beneficiaries with a single chronic
illness saw an average of 3.5 physicians while those with two saw an
average of 4.5 physicians. Seniors with six chronic conditions saw an
average of 9.2 physicians in 1999. These figures argue for a single
primary care physician who can provide cost-effective, integrated care
for Medicare beneficiaries who have chosen to have a ``personal
physician'' oversee their care.
The Link Between Systems Change and Quality Improvement
The Institute of Medicine (IOM) report, Crossing the Quality Chasm,
has documented the performance gap between high quality health care and
what is actually delivered in our current fragmented and costly system.
The report is clear: ``The current care systems cannot do the job.
Trying harder will not work. Changing systems of care will.'' The
report urges health payers, including Medicare, to create an
infrastructure for evidence-based medicine; facilitate the use of
information technology; and align payment incentives around six
priorities for care (i.e., safe, effective, patient-centered, timely,
efficient, and equitable care). The current system of fragmented,
costly and often substandard care is unacceptable for Medicare
beneficiaries and financially unsustainable for the Medicare program.
America's family physicians are taking bold steps to change this
inadequate system of care. These include major Academy initiatives to:
improve chronic illness care within offices of family
physicians by building on the Chronic Care Model that Edward Wagner,
M.D. has developed,
reinvent and redesign family physician practices to
implement the IOM report, Crossing the Quality Chasm, which set out six
aims and 10 simple rules for the 21st century health care system and to
ensure that every American has a personal physician (Future of Family
Medicine initiative),
accelerate family physicians' adoption and utilization of
electronic health records (EHRs) and other information technologies in
the Partners for Patients initiative, and
promote standards that improve the quality of care and
patient safety, such as the Continuity of Care Record, a portable
electronic format record of clinically relevant health care data.
Family physicians are trained to manage multiple chronic diseases
using evidence-based guidelines, patient management tools and
information technologies while engaging other specialists and community
resources as appropriate. However, the current financing mechanism that
supports office-based ambulatory care, including Medicare Part B, is
outdated and does not foster optimal care for seniors beset by multiple
chronic diseases. The current visit-based reimbursement system has
compromised the ability of primary care physicians to serve in the role
that they are trained and prepared to deliver. Rather than rewarding
care that is more cost-effective, it rewards physicians for ordering
tests and performing procedures. Family physicians are not currently
reimbursed for the considerable time that they spend with patients in
coordinating care and in behavioral counseling to improve patient self-
care. There is no direct compensation to physicians nor any systemic
incentive for assuring care is organized correctly and integrated in a
way that makes sense to patients.
The IOM report, Crossing the Quality Chasm, stresses the need to
realign incentives in health care delivery to the promotion of these
functions. Providing a funding mechanism that encourages primary care
physicians to build ongoing medical relationships with their patients
also allows them to promote behavioral changes (i.e., eating right,
exercising, quitting smoking and initiating other self-management
behaviors). In this way, the earliest and best chronic care is based on
sound behavior and lifestyle changes that primary care physicians can
encourage.
Effective chronic care management involves:
developing a partnership with each patient;
developing a care plan;
coordinating disparate systems to integrate their care;
and
providing patient education resources and delivery
systems.
Performing these functions requires additional time and resources
not currently recognized in the existing office-based reimbursement
system. However, organizing care in this manner has proven worthwhile.
For instance, thirty-nine studies have validated the Chronic Care Model
developed by Ed Wagner, M.D., Director of Improving Chronic Illness
Care (ICIC) at the MacColl Institute for Healthcare Innovation.
Implementation of this model reduces unnecessary subspecialty
referrals, contains costs, reduces duplicative care, improves patient
satisfaction and results in better health outcomes. The six components
of this model are:
training patients in self-management;
providing clinical decision support;
redesigning the office-based medical practice;
disseminating information technology systems;
developing integrated systems of care; and
linking physicians to community resources.
In fact, Bodenheimer et al. found that 18 of 27 studies concerning
just three chronic conditions (congestive heart failure, asthma, and
diabetes) demonstrated reduced costs or lower use of health care
services when this Chronic Care Model was fully implemented, almost
exclusively in primary care settings.
The AAFP is recommending the use of a chronic care management fee
for primary care physicians that would support the implementation of
this Chronic Care Model within the Medicare program.
Chronic Care Management Fee
The Academy recognizes the significance of Chairman Johnson's
efforts to improve chronic care management through the development of
the Section 721 chronic disease management pilot program. The Academy
appreciates the Chairman's inclusion of primary care physicians as
eligible providers under Section 721.
Sections 649 and 721 of the Medicare Prescription Drug Improvement
and Modernization Act are designed to develop and test innovative and
transformative models for chronic disease management. Section 721 is
designed to test systems of care that improve health outcomes for
Medicare beneficiaries with chronic illnesses. The more limited Section
649 provides the opportunity for CMS to work with physicians more
directly through state-based Quality Improvement Organizations (QIO).
The Doctors' Office Quality-Information Technology (DOQ-IT) project is
an example of such collaboration.
The AAFP is working with CMS officials to ensure that
implementation of the pilot project under Section 721 proactively
enrolls primary care physicians and provides appropriate financial
support to the creation of an integrated system of care based on the
Chronic Care Model. In fact, the attendant benefits of the Chronic Care
Model cannot be delivered without the inclusion of physician practices.
The system of care that Section 721 seeks to create must establish
primary care physician offices as the basis for creating systems of
care for Medicare beneficiaries with chronic conditions.
The Academy supports a per-beneficiary chronic care management fee
that is paid directly to the physician in addition to fee-for-service
payments. This fee would be paid to whichever patient-selected
physician, who is willing to perform the performing the following
activities or functions as well as provide technology support:
tracking and monitoring all aspects of patients' care;
acting as a referral agent;
coordinating clinical reports from others involved in
patients' care;
maintaining an electronic health record;
providing greater time in the office visit as needed; and
having appropriate staff and administrative abilities.
The implementation of a chronic care management fee, added to the
regular Medicare fee-for-service reimbursement, would encourage the
acquisition of medical information technology since the cost of this
technology is the single biggest barrier to its implementation. This
new reimbursement stream would also ensure that beneficiaries received
coordinated, evidence-based medical care while the Medicare program
would reap the resulting cost savings.
Conclusion
The Institute of Medicine has identified the improvements in a
patient's health associated with a ``usual source of care,'' also
described as ``a medical home.'' Care management models using this
concept as a way to ensure the six quality characteristics have been
successfully employed. For example, Medicaid primary care case
management programs that pay primary care physician practices a monthly
fee for care coordination responsibilities are meeting with success.
Testing a similar model adapted to the needs of Medicare patients who
characteristically possess several chronic conditions is a timely and
appropriate innovation within the existing Medicare pilot and
demonstration projects.
Statement of American Association of Homes and Services for the Aging
The American Association of Homes and Services for the Aging
(AAHSA) appreciates the opportunity to submit this statement for the
record of the Subcommittee's hearing on quality initiatives in health
care. AAHSA represents more than 5,600 mission-driven, not-for-profit
members providing affordable senior housing, assisted living, nursing
home care, continuing care retirement communities, and community
services. Every day, our members serve more than two million older
persons across the country. AAHSA is committed to advancing the vision
of healthy, affordable, and ethical aging services for America.
For the past forty-two years, AAHSA has been an advocate for
elderly nursing home residents and has striven in the public policy
arena to create a long-term care delivery system that assures the
provision of quality care to every individual our members serve in a
manner and environment that enhances his or her quality of life.
Although we have been closely involved in the development of Federal
nursing home quality standards, we recognize that continued efforts are
needed to ensure ongoing quality improvement. Long-term care providers
themselves must do much of the work, but we believe that there are also
opportunities for public policy changes to encourage continued
improvement in the quality of care in our nation's nursing homes.
Quality First
AAHSA, partnering with the American Health Care Association and the
Alliance for Quality Nursing Home Care, has embarked on a multi-year
plan to ensure true excellence in aging services, going beyond simple
compliance with government quality initiatives and taking the
responsibility for raising the bar in our field. So far, close to 2,000
AAHSA members have signed a covenant that we view as a pact between
providers, consumers, and government, and the number of AAHSA members
who have signed is growing steadily. All of AAHSA's thirty-seven state
affiliates have endorsed the covenant as well.
Covenant signors commit themselves to a process that is based on
seven core principles: continuous quality improvement, public
disclosure and accountability, consumer and family rights, workforce
excellence, community involvement, ethical practices, and financial
integrity. The goals for Quality First are continued improvements in
compliance with regulatory requirements, progress in promoting fiscal
integrity, prevention of abuse and neglect, demonstrable improvements
in clinical outcomes, high scores on consumer satisfaction surveys, and
higher employee retention rates and reduction in turnover.
To accomplish these goals, AAHSA is developing tools for members
that give them the information they need on best practices in our
field, how to evaluate their current strengths and weaknesses, and how
to orient all of their operations toward quality care. We are
emphasizing research into best practices, education and shared
knowledge among our members, leading-edge care and services, codes of
ethics, and fiscal and social accountability. We are committing
ourselves to providing full and accessible information to consumers on
facilities' services, policies, amenities, and rates. To address
staffing issues, covenant signers promise to invest in staff training,
competitive wages and benefits, and a supportive work environment for
both paid caregivers and volunteers. Quality First emphasizes ongoing
assessments of facilities' policies and practices to ensure a
continuous process of quality improvement.
To measure and report on the success of this initiative, AAHSA and
its partners have engaged the National Quality Forum to appoint a
national commission made up of academic experts and leaders from the
private sector who have no financial interest in or direct ties to our
field. These impartial community representatives will keep nursing
homes accountable for living up to the commitments we have made under
the Quality First Covenant and will provide a credible resource for
consumers, government, and other stakeholders.
Institute for the Future of Aging Services
Key to any improvement in the quality of nursing home care will be
staff recruitment, training and retention. A number of well-documented
challenges face health care and aging services providers across the
spectrum of care, including the shrinkage of the working-age population
in relation to the aging population, broader career opportunities for
women who traditionally worked as caregivers, less attractive wages and
benefits in the care giving field, and so on.
The Institute for the Future of Aging Services (IFAS), housed
within AAHSA and under the leadership of Dr. Robyn Stone, is
implementing several initiatives directed at finding creative solutions
to these staffing challenges, including the following:
Better Jobs/Better Care (BJBC), a four-year research and
demonstration program to achieve changes in long-term care policy and
practice that help to reduce high vacancy and turnover rates among
direct care staff across the spectrum of long-term care settings and
contribute to improved workforce quality. Working in partnership with
the Paraprofessional Healthcare Institute and with funding from the
Robert Wood Johnson Foundation and Atlantic Philanthropies, BJBC has
made grants for both demonstration projects and applied research and
evaluation. Funding is going to teams of long-term care providers,
workers, and consumers to work with state and local officials in
developing and implementing changes in policy and provider practices to
support recruitment and retention of a quality workforce. Other grants
have also been awarded to study Federal and state policy changes,
workplace management and culture, job preparation and training for
long-term care workers, and innovative approaches to recruiting
qualified workers.
Practice Profile Database
The Institute for the Future of Aging Services and the
Paraprofessional Healthcare Institute also have teamed up in putting
on-line a database of successful direct-care worker recruitment,
training and retention programs that aging services organizations can
use to improve staffing. The database, at www.futureofaging.org,
provides information on a variety of topics, including recruitment,
career advancement, and training for both entry-level workers and
management. Projects selected for the database were required to provide
quantitative or qualitative evidence of results in the areas of staff
satisfaction, successful completion of training programs, and employee-
resident relations. Listings in the database include complete
information on how the project was implemented and contact information
for further discussion. This database provides proven, real-life
solutions to staffing issues that confront all long-term care
providers.
Wellspring Model Refinement, Replication, and
Sustainability
Almost ten years ago, a group of eleven AAHSA members in
Wisconsin decided to pool their resources to accomplish two objectives:
to improve clinical care for residents and to create a better working
environment by giving employees needed skills, a voice in how their
work should be accomplished, and the ability to work as a team toward
common goals. The Wellspring alliance included clinical education by a
geriatric nurse practitioner, shared staff training and data on
resident outcomes, and culture change that empowered front-line workers
to develop and implement care practices that they determined would be
beneficial for residents.
A fifteen-month study and evaluation by IFAS and a team of
leading academicians in the field of long-term care concluded that the
Wellspring alliance had achieved its goals and had pioneered changes
that could have broad implications for improving the quality of nursing
home care. Positive outcomes noted in the evaluation included greatly
reduced staff turnover, improved performance on Federal surveys,
increased staff initiative to assess and act on care problems, better
quality of life for residents, and improved relationships between staff
and residents.
With a followup grant from the Commonwealth Fund, IFAS staff
and a business consultant developed a business case statement for
Wellspring to use with CEOs, upper management and boards of
organizations interested in adopting this quality/culture change model.
The team also developed a business plan for a new Wellspring Institute
that would move beyond the ``home-grown'' organization that had been
managing model replication and that could help bring the program to a
greater scale. A full-time executive director of the new institute was
recently hired (formerly the staff person from the California QIO who
was responsible for implementing the Nursing Home Quality Initiative).
Besides alliances in Wisconsin and Illinois, the Wellspring Institute
just began a replication in Maryland and is exploring other alliances
in North and South Carolina and California.
Real-time Care Plans for Nursing Home Quality Improvement
IFAS is partnering as a subcontractor to the Institute for
Clinical Outcomes Research on a study to design, support, and
facilitate change that is likely to lead to documented improvements in
health care quality and ensure that these improvements become part of
the ongoing practice of health care providers and clinicians.
Working with nursing homes and state Quality Improvement
Organizations (QIOs), this project will design, implement, and evaluate
a process using automated standardized documentation forms and an IT
tool to implement best practices. This project will make better use of
staff time and improve resident outcomes by: focusing staff time on
specific interventions associated with improved outcomes; incorporating
evidence-based protocols developed through extensive research on
pressure ulcer prevention (comprehensive database of 2,500 residents);
ensuring protocol adherence by providing automated standardized tools
for documenting and reporting information related to prevention of
pressure ulcers; eliminating extra paper documentation and redundant
data entry; facilitating clinical process redesign; and minimizing
labor-intensive manual data abstraction process for MDS and quality
indicators.
Measuring Long-Term Care Work: A Guide to Selected
Instruments to Examine Direct Care Worker Experiences and Outcomes
IFAS has developed a guide to help LTC organizations improve
their use of measurement tools to understand direct care workforce
problems and to inform their solutions. The issues addressed by the
instruments include: retention, turnover, vacancies, staff empowerment,
job design, job satisfaction, organizational commitment, worker-
supervisor relationships and workload. These tools are designed to help
providers measure the quality of the job and the workplace for staff--
an important and essential dimension of quality outcomes.
Policy Recommendations
Survey Improvement
Through the nursing home survey and enforcement process mandated by
the Omnibus Budget Reconciliation Act of 1987 (OBRA), the federal
government has sought to ensure that nursing homes meet minimal
standards of quality. As noted previously, AAHSA was closely involved
in the development of the OBRA standards, and we believe that the
quality of care in nursing homes today generally is far above the level
that prevailed prior to OBRA.
However, there continue to be serious issues with inconsistency in
survey results and the imposition of remedies. We believe that
improvements to the present system need to be considered objectively
and with an unbiased view toward better ensuring quality care. OBRA was
enacted sixteen years ago, and the system that it implemented was based
on research that now is over twenty years old. Best practices in our
field have advanced enormously since that time, and yet those in our
field who want to provide innovative, high-quality care are sometimes
hamstrung by a highly prescriptive Federal regulatory system that in
many respects is out-of-date.
A number of states, including Minnesota, Washington and Wisconsin,
have worked hard and thoughtfully to develop alternative approaches for
measuring and ensuring quality nursing home care. They have sought
waivers from CMS to use these alternatives in place of the OBRA-
mandated system. Realistically, given the resources that states must
now commit to the current survey system, they cannot carry out parallel
survey processes. CMS has not granted any waiver requests from states,
and may be precluded from doing so by the OBRA statute. We would
recommend that Congress authorize a limited number of waivers under
close supervision by CMS to give states greater flexibility to develop
and explore innovative approaches to ensuring quality care. Ultimately,
these state experiments could well lead to improvements in the present
Federal survey system that would better ensure quality care nationwide.
Payment amd Quality
AAHSA firmly believes that a two-way commitment is essential to
foster improvement in the quality of care and services provided in
nursing homes. As the dominant payers for nursing home care, the
Federal and state governments have an obligation to ensure that
payments for nursing home care are adequate to allow for the provision
of high quality clinical care in an atmosphere that also ensures
quality of life for residents.
Nursing home providers, in turn, have an obligation to serve as
responsible stewards of public funds by ensuring that they are
delivering the high quality of care and services that Federal and state
governments purchase for their residents through the Medicare and
Medicaid programs. This is possible only by dedicating sufficient
resources to the costs of direct care services.
AAHSA welcomes the growing focus of this Administration, Congress,
and other interested parties on the question of how payment policies
can be re-designed to foster and support the provision of the highest
possible quality in health care. We were pleased with the
recommendations of the Medicare Payment Advisory Commission (MedPAC) in
their June 2003 report calling for demonstrations of ``provider payment
differentials and revised payment structures to improve quality.'' As
MedPAC points out, ``In the Medicare program, the payment system is
largely neutral or negative towards quality. All providers meeting
basic requirements are paid the same regardless of the quality of
service provided. At times, providers are paid even more when quality
is worse, such as when complications occur as the result of error.''
This is equally true of some state Medicaid payment systems, though a
number have successfully implemented strategies to foster greater
accountability and quality.
AAHSA is eager to work closely with the Administration and Congress
to design and test alternative approaches to payment for long-term care
services that will not be blind to quality.
Building on State Experience; Implementing a Demonstration
We offer two approaches to re-orient payment for nursing home
services to promote high quality care:
One way of linking payment and quality involves applying lessons
learned in successful state Medicaid programs. Payment systems need to
balance a set of competing objectives: quality, reasonable cost
containment, and administrative feasibility. A number of states--
including Iowa, Indiana, Ohio, and Pennsylvania--have ``modified
pricing'' systems that create this balance and provide accountability
for public payments by splitting payments into at least two components.
Prospective payments for direct care (e.g., nurse staffing) are
directly tied to spending on direct care (up to appropriate limits);
profit potential on this direct care component is minimized. This
linkage ensures that dollars added to the system achieve the desired
objective--sufficient staffing to deliver high quality services and
meet residents' needs. Incentives to reduce spendingare focused on
other aspects of nursing home costs such as administration. By
contrast, the Medicare system and some state Medicaid systems create
strong incentives for homes to reduce spending on both direct and
indirect care by providing profit opportunities on the total payment
amount. AAHSA suggests that Medicare consider adapting some successful
strategies such as modified pricing systems used in state Medicaid
payment systems to better link payment and quality.
Second, AAHSA recommends that the federal government implement a
demonstration program, with a strong evaluation component, to explore
ways to successfully link the quality of care and services provided
with payments for nursing home care, beyond ensuring that sufficient
resources are allocated to direct care services. The demonstration
should develop and test a method for paying bonuses to facilities that
achieve excellent ratings in performance of a set of appropriate
quality markers--similar to the current Medicare demonstration on
hospital payments.
A critical first step in implementing such a demonstration for
nursing facilities would be the development of a set of quality markers
that capture desired processes of care that should be fostered, e.g.,
implementation of standardized pressure ulcer risk assessment protocols
to identify high risk residents, use of pressure-reducing devices and
strategies for residents at high risk of developing pressure ulcers,
consistent screening and monitoring of all residents for pain, etc.
Current measures used in long-term care focus on resident-level
outcomes, e.g., prevalence of pressure ulcers, prevalence of pain,
decline in ability to perform Activities of Daily Living, etc. The
outcomes measured are often the result of a vast set of complex
interactions between intrinsic resident-specific factors (e.g., major
medical conditions, co-morbidities, resident preferences and choices,
etc.) and the care provided by the nursing home and other providers.
The difficulties inherent in teasing apart the relative influence on
outcomes of intrinsic versus extrinsic factors have led to a greater
focus on process measures in other health care settings such as
hospitals and managed care plans.
Definition of valid process markers, based on research to identify
clinically appropriate, evidence-based care for specific types of
residents, will allow public and private payers to create incentives
that encourage the adoption and consistent use of evidence-based care
processes. This can be expected, in turn, to lead to improved outcomes.
Focusing on measurement of appropriate processes, however, rather than
outcomes, eliminates the need for complex, controversial risk-
adjustment formulas to attempt to account for the various intrinsic
factors that play a significant part in influencing resident outcomes.
Process measurement also allows for capturing the implementation of
appropriate preventive health services that should be offered to
nursing home residents, such as immunizations to prevent influenza and
pneumonia.
In addition to incorporating markers of quality care processes, it
is equally important for such a demonstration to expand the definition
of nursing home quality beyond the clinical domain addressed in
currently available measure sets. It is critical that a system designed
to link payment with quality also includes valid, reliable markers of
resident quality of life, as well as resident and staff satisfaction.
Nursing homes are far more than settings where clinical care is
provided--for long-term residents, these facilities are in fact, their
homes. To accurately capture key elements of quality that are important
to nursing home residents, our systems for measuring quality must
evolve to be more holistic.
Finally, AASHA believes that this demonstration should also involve
implementing and testing innovative technologies for information
management that improve accuracy while reducing the paper work burden
on staff. Better information systems and technology will be an
important part of tracking the type of quality markers we envision
without new and excessive paperwork. In addition, advances in
technology, including information technology, are critical to enhancing
the quality of aging services for the future.
AAHSA strongly encourages the Administration and Congress to embark
upon this path of greater accountability for public funds directed to
the provision of services for America's frail elderly and looks forward
to participating in the process of designing a system that will benefit
nursing home residents across the nation.
Conclusion
Achieving the vision of the highest possible quality long-term care
for all Americans will require all of us--Members of Congress, long-
term care providers, consumers, workers, families, and other
stakeholders--to work together on innovative solutions to the
challenges we all face in making sure that our residents receive the
care and services they need.
Statement of American College of Surgeons
The American College of Surgeons (ACS) commends House Ways and
Means Health Subcommittee Chair Nancy Johnson for convening today's
hearing on health quality initiatives. Improving the quality of
surgical care is a founding principle of ACS and we are pleased to
submit this statement for the record on behalf of our 66,000 Fellows.
History of Surgical Quality Improvement Initiatives
ACS was formed in 1913 to improve the quality of care of the
surgical patient by setting high standards for surgical education and
practice. Since then, the College has developed a number of innovative
programs and initiatives to achieve this goal.
In 1922, the College established the multi-disciplinary Commission
on Cancer (CoC) to set standards for quality cancer care delivered in
hospital settings. Today, its membership is comprised of more than 100
individuals representing 39 national professional organizations. Among
other initiatives, the CoC establishes standards for 1,438 Commission-
accredited cancer programs; provides clinical oversight for standard-
setting activities and the development and dissemination of patient
care guidelines; and coordinates national site-specific studies of
pattern of care and outcomes through the annual collection, analysis,
and dissemination of data for all cancer sites.
In addition to our cancer initiatives, the College is working to
develop a program that accurately measures quality for most major
operations. Through a grant funded by the Agency for Healthcare
Research and Quality (AHRQ) in 2002, the College was able to further
validate the Department of Veterans Affairs (VA) National Surgical
Quality Improvement Program (NSQIP) in 14 private sector hospitals. The
NSQIP program allows surgeons to compare their observed versus expected
outcomes experience with national averages and comparable hospitals.
The College now plans to expand the NSQIP program into over 100
additional private sector hospitals.
With regard to surgical education, the College administers the
Surgical Education and Self-Assessment Program (SESAP) to help surgeons
stay abreast of current practice standards. Based on the opinions of
expert surgeons and the published literature, SESAP reproduces the
diagnostic and treatment challenges faced in the practice of surgery
and provides immediate feedback for self-improvement.
Recognizing that much of surgical practice has not been evidence
based--especially during the introduction of new surgical technology--
the College initiated a program to develop and implement clinical
trials in 1994. The first trials, designed to assess watchful waiting,
open operation, and laparoscopic hernia repairs, were funded by AHRQ
and the VA Cooperative Studies Program. Subsequently, the American
College of Surgeons Oncology Group was established with funding from
the National Cancer Institute to evaluate the surgical management of
patients with malignant solid tumors. The purpose of the clinical
trials program is to test the safety and efficacy of new surgical
procedures before they are widely disseminated into practice, develop
educational programs that help surgeons safely introduce new technology
into their practices, and critically evaluate current practices.
The College also maintains several other resources that surgeons
utilize in their practices. ACS pioneered the development of a systems
approach for trauma; and its Advanced Trauma Life Support program is
now the worldwide standard for training providers who first attend to
injured patients. The College has also established a National Trauma
Data Bank, which is used to inform the medical community, the public,
and decision makers about a wide variety of issues that characterize
the current state of care for injured persons. The information
contained in the data bank has implications in many areas including
epidemiology, injury control, research, education, acute care, and
resource allocation.
In short, for the last 91 years, through the programs and
initiatives outlined above and other efforts, the College has
consistently worked to improve the quality of surgical care.
MedPAC's March 2004 Report
In its March 2004 Report to Congress, MedPAC examines the issue of
improving the quality of care for Medicare beneficiaries and concludes
that the Medicare payment system should incorporate incentives for
improving quality. We would like to commend the Commission for its
focus on quality improvement. Surgery has never lost sight of its
fundamental responsibility to be the patient's quality care advocate
and provider. Towards this end, we strongly agree with the Commission
that surgeons must consistently measure, analyze, and improve the
quality of care they provide to patients. However, the College is
concerned about several of the specific measures and techniques used to
assess quality in the March 2004 Report.
Using administrative data, the Commission measured the
effectiveness of care for eight procedures based on mortality rates
both in the hospital and 30 days after admission. Three of the
procedures assess surgical care: CABG; Craniotomy; and AAA repair. In
addition, the report references evidence suggesting that facilities
with higher volume have lower rates of mortality for similar
populations.
Although convenient and fairly inexpensive to collect,
administrative data alone cannot be used to assess surgical outcomes.
More specifically, age, sex, and all patient refine diagnosis related
groups (APR-DRGs) are not adequate risk-adjustment measures. For
example, recent research has identified the following characteristics
as some of the most powerful predictors of surgical outcomes: American
Society of Anesthesiologists (ASA) class, preoperative functional
status (fully independent, partially dependent, full dependent),
whether or not the operation was done as an emergency, and DNR
status.\1\ Unfortunately, none of these characteristics has a
corresponding ICD-9-CM code and therefore is not included in the
billing record. We believe surgical outcomes data must be gathered by a
highly-trained clinical nurse from medical records and a 30-day patient
followup survey. While it is currently more expensive to collect such
non-administrative data, emerging medical technology systems will
clearly help alleviate many of the additional financial and
administrative burdens.
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\1\ Best, WR et al, ``Identifying Patient Preoperative Risk Factors
and Postoperative Adverse Events in Administrative Databases: Results
from the Department of Veterans Affairs National Surgical Quality
Improvement Program,'' Journal of the American College of Surgeons,
Vol. 194, No. 3, 2002, Pg. 257-266.
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We are also concerned by the report's reference to evidence that
facilities with higher volume have lower rates of mortality for similar
populations. We do not believe that surgical volume alone provides an
accurate measure of surgical quality. In fact, we would like to draw
your attention to a study published in the Annals of Surgery that
analyzed the relationship of surgical volume to outcomes in eight
common operations. The study found no statistically significant
associations between procedure or specialty volume and 30-day mortality
rate.\2\ In addition, it is important to keep in mind that the volume
numbers linked to many of the most technically demanding surgical
procedures--for which the relationship between volume and quality are
perhaps strongest--are really very small and easily skewed by just a
few poor outcomes that may be unrelated to the quality of the care
provided.
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\2\ Khuri, SF et al, ``Relation of Surgical Volume to Outcome in
Eight Common Operations,'' Annals of Surgery, Vol. 230, No. 3, 1999,
Pg. 414-432.
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We are hopeful that the Commission and Congress will consider using
a different model to measure the quality of surgical care: the NSQIP
effort mentioned earlier. NSQIP is the first national, validated,
outcome-based, risk-adjusted, and peer-controlled program for the
measurement and enhancement of the quality of surgical care. Developed
12 years ago by the Veterans Administration (VA), NSQIP compares the
performance of all VA hospitals providing surgical services. The
results of these comparisons are provided to each hospital and are used
to identify areas of poor performance and excess adverse events.
Since NSQIP was implemented, the VA has seen a 28 percent reduction
in 30-day postoperative mortality and a 43 percent reduction in 30-day
postoperative morbidity.
The College also has serious concerns about using administrative
data to measure patient safety. Many of the selected adverse events can
be caused by pre-existing conditions that are not identified in the
hospital billing record. For example, seniors commonly experience
postoperative physiologic derangement after surgery. This condition is
often unrelated to poor surgical care, but rather results from the
senior being confused or disoriented because they are in an unfamiliar
setting. Heavy drinkers also experience postoperative physiologic
conditions, yet rarely is their drinking history noted in the
administrative comorbidity data.
In its landmark 1999 report, ``To Error is Human: Building a Safer
Health System,'' the Institutes of Medicine (IOM) identifies another
example of how adverse events identified through administrative data
cannot measure performance. The report states, ``. . . if a patient has
surgery and dies from pneumonia he or she got postoperatively, it is an
adverse event. If analysis of the case reveals that the patient got
pneumonia because of poor hand washing or instrument cleaning
techniques by staff, the adverse event was preventable (attributable to
an error of execution). But the analysis may conclude that no error
occurred and the patient would be presumed to have had a difficult
surgery and recovery (not a preventable adverse event).'' \3\
Administrative data alone cannot measure performance. A detailed
analysis must also be conducted to identify the true cause of the
problem.
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\3\ Committee on the Quality of Health Care in America, Institute
of Medicine, 1999, To Error is Human: Building a Safer Health System,
Washington, DC, National Academy Press, Pg. 6.
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In the conclusion of the March 2004 Report's chapter on quality,
MedPAC acknowledges that ``more and better data on quality to be used
in pay-for-performance programs is needed.'' The College is committed
to working with the Commission and Congress to resolve the concerns
addressed above and identifying accurate and effective ways to improve
the quality of surgical care for Medicare beneficiaries.
Conclusion
Surgeons have a unique responsibility to improve the quality of
surgical care for their patients. Since many procedures are performed
on an emergent or urgent basis, there is often no time to provide
patients with comparative information that they can actually use to
make their own assessments and perhaps choose alternatives. Instead,
they count on their surgeons to help them make informed decisions based
on their own unique circumstances. Consequently, an even greater burden
is placed on our profession to not only define and measure quality, but
to develop the systems and practices that can actually elevate the
quality of care generally.
We applaud Subcommittee Chair Johnson, Ranking Member Stark, and
the rest of the House Ways and Means Health Subcommittee for their
commitment to improving the quality of our nation's health care system.
We look forward to working together with you to ensure all Americans
have access to high-quality surgical care.
The American College of Surgeons is a scientific and educational
organization of surgeons that was founded in 1913 to raise the
standards of surgical practice and to improve the care of the surgical
patient. The college is dedicated to the ethical and competent practice
of surgery. Its achievements have significantly influenced the course
of scientific surgery in American and have established it as an
important advocate for all patients. The College has more than 66,000
members and is the largest organization of surgeons in the world.
Statement of America's Health Insurance Plans
INTRODUCTION
America's Health Insurance Plans (AHIP) is the national
organization which represents companies providing health benefits to
over 200 million Americans. AHIP member companies contract with large
and small employers, state and local governments, as well as with
public programs, including Medicare, Medicaid, the Federal Employee
Health Benefits Program (FEHBP), the State Children's Health Insurance
Program (SCHIP) and the military's TRICARE program.
AHIP commends the U.S. House of Representatives Ways and Means
Subcommittee on Health for convening this important hearing to explore
measures to improve health care quality. As demonstrated by two
statements recently approved by AHIP's Board of Directors--A Commitment
to Improve Health Care Quality, Access and Affordability (March 2004)
and Improving Health Care Quality Through Transparency (February
2003)--we strongly share the Subcommittee's goals of promoting high-
quality care for all Americans and helping to ensure that consumers
have the information they need to make informed health care decisions.
DEFINING THE SCOPE OF THE QUALITY CHALLENGE
Health policy experts have written compellingly about the
disturbing gap between what science suggests and what practitioners
actually do as well as the need to engage and empower consumers with
information about their health care. The landmark 2001 Institute of
Medicine (IOM) report, Crossing the Quality Chasm, found that many
patients consistently fail to receive high-quality health care, and
wide variations in practice--even in clinical situations where there is
data on what works and what does not--suggest that relevant and
meaningful information fails to reach many clinicians and patients. The
IOM study called for a renewed national commitment to build an
information infrastructure to support health care delivery, public
accountability, research and education. Further, the study recommended
that the health care system be transparent, making information publicly
available so that patients and families can make informed health care
decisions.
Recent major studies support the IOM's conclusions that evidence-
based medicine \1\ is not consistently being practiced, including
continuing research by Dr. John Wennberg and others at Dartmouth \2\
and a 2003 RAND study finding that patients receive only 55% of
treatments that have been determined to be the ``best practices'' for
addressing their medical conditions.\3\
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\1\ Evidence-based medicine is the daily practice of medicine based
on the highest level of available evidence determined through
scientific study.
\2\ E. Fisher, D. Wennberg, T. Stukel, D. Gottlieb, F.L. Lucas, E.
Pinder, ``The Implications of Regional Variations in Medicare Spending.
Part 2: Health Outcomes and Satisfaction with Care,'' Annals of
Internal Medicine, February 18, 2003. J.E. Wennberg and M.M. Cooper,
The Dartmouth Atlas of Health Care in the United States, 1999.
\3\ E. McGlynn, S. Asch, J. Adams, J. Keesey, J. Hicks, A.
DeCristofaro and E. Kerr, ``The Quality of Health Care Delivered to
Adults in the United States,'' NEJM, June 26, 2003.
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As this documented overuse, underuse and misuse of services
continues, the health care system is also plagued with an unacceptably
high number of preventable medical errors each year. The highly
publicized Institute of Medicine report, To Err is Human, found that
between 44,000-98,000 Americans die each year as a result of
preventable medical errors.\4\
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\4\ To Err is Human, Institute of Medicine, 1999.
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Clearly, the consistent adoption of what we know works (and
elimination of what we know does not work) in everyday medical practice
and a reduction in preventable medical errors would improve health
outcomes and, ultimately, the health of Americans. What may not be as
obvious is that both also would result in significant efficiencies to
the entire health care system:
Thirty percent of all direct health care outlays are the
result of poor quality; this translates into $420 billion spent each
year. Indirect costs of poor quality (e.g., reduced productivity due to
absenteeism) include an additional $105-$210 billion.\5\
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\5\ Reducing the Costs of Poor-Quality Health Care, Midwest
Business Group on Health in collaboration with the Juran Institute,
Inc. and The Severyn Group, Inc., 2003.
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Total health costs due to preventable adverse events
(medical errors resulting in injury) are estimated to be more than
$8.5-$14.5 billion.\6\
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\6\ To Err is Human, Institute of Medicine, 1999.
All of these findings emphasize the need for health plans and
insurers, employers, physicians, hospitals and policymakers to work
together to build momentum for system-wide change. To most effectively
improve quality, the IOM calls for the transformation of our system
across the entire health care industry, and not individual segments.
Thus, all stakeholders play a role in ensuring that physicians,
hospitals and other health professionals have useful information about
the latest scientific evidence and about their performance, and that
consumers have meaningful quality information to make informed
decisions.
ONGOING HEALTH PLAN AND INSURER INITIATIVES TO PROMOTE A SAFER AND MORE
EFFECTIVE HEALTH CARE SYSTEM
By promoting evidence-based medicine, increasing transparency, and
reducing preventable medical errors, health plans and insurers actively
engage providers and consumers to improve health outcomes and overall
health status. Specific strategies that our member companies use
include:
Report cards on health plan and insurer performance;
Investing in information technology, particularly in the
area of pharmacy management; and
Incentives to reward quality.
Report Cards on Health Plan and Insurer Performance
Collecting and disclosing information is an important first step to
quality improvement. Performance benchmarks are also needed for
stakeholders to determine the extent to which providers are delivering
treatments that have proven to be effective. This information allows
consumers and employers to select the highest quality physicians,
hospitals, medical groups and other health professionals.
For nearly ten years, health plans and insurers have been
collecting and reporting on more than 50 measures of quality and
performance using the Health Plan Employer Data and Information Set
(HEDIS)'. In 2003, 513 commercial, Medicaid, and Medicare
health plans and insurers nationwide covering 72 million people
collected HEDIS data that was independently audited to assure validity.
Performance on these benchmarks is broadly and publicly disclosed by
the National Committee for Quality Assurance (NCQA) in its annual
report, data base and website, as well as by Federal, state and local
government agencies and other regional collaboratives.
Performance is also made transparent through health plan-specific
report cards that are readily available on their respective websites.
These report cards assist employers and consumers to make choices among
various health care products, among various types of health plans and
insurers, and among doctors, hospitals and other health professionals
who deliver medical care. Examples include:
AvMed Health Plan publishes results from NCQA's HEDIS
measures on its website so that members can compare their commercial
health plan's value to other health plans. Reports from HEDIS 2000
through 2003 are available on the website. The AvMed HEDIS 2003 report
is divided into six sections, featuring multiple measures: (1)
effectiveness of care (e.g., immunization rates); (2) health plan
stability (e.g., physician turnover); (3) access/availability (e.g.,
children's access to primary care physicians); (4) satisfaction with
the experience of care (e.g., overall satisfaction with plan); (5) use
of services (e.g., number of well child visits in the first 15 months
of life); and (6) plan description (e.g., member enrollment numbers).
CIGNA HealthCare recognizes participating physicians and
hospitals who have met certain quality criteria in its online Provider
Excellence Recognition Directory. Physicians are recognized for being
certified by the National Committee for Quality Assurance for providing
high quality diabetes or heart/stroke care. Hospitals are highlighted
for meeting the Leapfrog Group's three patient safety standards (e.g.,
Computer Physician Order Entry systems, Intensive Care Unit Physician
Staffing, and Evidence-based Hospital Referrals).
Since 1998, PacifiCare Health Systems has produced
publicly disclosed medical group-specific report cards on approximately
fifty-five measures that focus on clinical quality (e.g., cervical
cancer screening), service quality (e.g., claims complaints),
affordability (e.g., member cost for hospital and pharmacy services),
and administrative accuracy (e.g., quality of the claims and encounter
data submitted by the medical groups). Additional report cards focus on
hospitals and women's health.
Investing in Information Technology, Particularly in the Area of
Pharmacy
Management
A growing body of evidence indicates that investing in information
technology improves both patient safety and quality of patient care.\7\
According to a California Health Care Foundation survey of small
physician practices on the benefits of an electronic medical record
(EMR), almost all physician practices reported increased quality of
patient care due to better data legibility, accessibility and
organization, as well as prescription ordering, and prevention and
disease management care decision support. One physician responded that:
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\7\ Investing in electronic medical records also often results in
financial benefits partially due to decreased staff (e.g.,
transcriptionist, medical records, data entry, billing and
receptionist) costs. A couple of physicians in one small practice
reaped gains of more than $20,000 per year by implementing the EMR.
Electronic Medical Records: Lessons from Small Physician Practices,
California Health Care Foundation, Prepared by University of
California, San Francisco, October 2003.
``The biggest benefit [of an EMR] is to patient care. Patient care
charts are legible and drug interactions can be seen. One of the
biggest problems is that patients are on multiple medications and go to
multiple specialists and pharmacies, so nobody knows who's taking what.
Now, every time they come in, they get a print-out of all their
medicines and they're told `take this to all your different
specialists. . . .' So all the specialists know exactly what the
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patient is taking.''
Recognizing its value in improving quality and patient safety, our
member companies have implemented various information technology
systems and e-health initiatives. These initiatives provide patients
and physicians with online access to extensive information about
prescription drugs, including their appropriate uses, potential side
effects and adverse interactions. They also improve administrative
processes and communications between patients and physicians, such as
online enrollment, online physician selection, and online patient care
advice. Examples include:
Blue Cross Blue Shield of Massachusetts and Tufts Health
Plan are working together to facilitate prescription drug ordering by
physicians. Initially, the two health plans conducted separate
demonstration projects providing 200 physicians with handheld e-
prescribing tools. Results from the demonstrations showed impressive
improvements in quality, patient safety (through the reduction of
preventable medical errors), and cost efficiencies. Currently, the two
health plans, located in one service area, are collectively
contributing $3 million for more widespread rollout, providing over
3,400 physicians with handheld e-prescribing tools by the end of 2003.
In 2003, Horizon Blue Cross Blue Shield of New Jersey
launched a pilot program to allow patients to visit their physicians
on-line. The goal of the program is to assist members to better manage
their health through the convenience of the Internet. The pilot,
involving 2,500 members and two participating physician groups, enables
members to schedule appointments, request specialist referrals, obtain
their medical histories, refill prescriptions and receive routine lab
results.
On its health plan member website, Humana, Inc. offers a
comprehensive pharmacy section that offers access to information
related to: (1) members' pharmacy benefit packages; (2) cost
differences among drugs, alternatives to specific drugs by therapeutic
class, and potential drug interactions; (3) a prescription drug
library, with reference information about medications; (4)
participating pharmacies; and (5) personalized prescription drug claims
history (including ability to track deductibles and maximum benefits).
In another section on the members' homepage, members can access a
``natural'' health encyclopedia, with detailed information about herbs
and natural supplements and other health information about disease
conditions from Healthwise Knowledgebase. During 2003, there were more
than 3 million visits to Humana's ePharmacy website.
United Healthcare offers an interactive website for
health plan members to: (1) order prescription drugs and over-the-
counter medications online; (2) ask a pharmacist questions about
medications; (3) identify adverse drug interactions; (4) access
clinical and other information about specified health conditions; and
(5) set up a ``my health'' account, which tracks medical and medication
history and provides tools to promote wellness, prevention, and
prescription drug compliance.
In January 2004, WellPoint announced a new $40 million
initiative that will provide either a ``Prescription Improvement
Package'' or a ``Paperwork Reduction Package'' to 19,000 physicians in
California, Georgia, Missouri and Wisconsin. The ``Prescription
Improvement Package'' features wireless handheld Personal Digital
Assistants (PDAs) that allow physicians to check prescription drug
coverage and formulary inclusion, screen for adverse drug interactions,
write prescriptions electronically, and have them automatically faxed
directly to the pharmacy. Alternatively, physicians may choose a
``Paperwork Reduction Package,'' which includes computer systems that
will help facilitate real-time on-line communication between the
physician's office and WellPoint or other health insurers to verify
enrollee eligibility and streamline claims processing and
reimbursement.
Incentives to Reward Quality
In general, payment systems have traditionally not paid for higher
quality (e.g., improved clinical outcomes and patient satisfaction), or
improvements in processes and structures, such as developing integrated
information systems. Instead, traditional payments to providers have
historically been based on the volume and technical complexity of
services.
Responding to these concerns, the Institute of Medicine urged
health care stakeholders to re-align payment incentives with the
delivery of safe and effective, high-quality care. Our member companies
have been at the forefront of this movement and are developing
innovative paying for quality programs for physicians, medical groups
and hospitals, and incentives for consumers who select high quality
providers. These programs include:
In January 2004, Aetna launched a network of specialist
physicians developed based on quality and efficiency indicators. The
new AexcelSM network was created by identifying medical
specialties associated with a large portion of health care spending and
features specialists who demonstrate effectiveness against certain
clinical measures (such as hospital readmission rates over a 30-day
period, and reduced rates of unexpected complications by hospitalized
patients), volume of Aetna members' cases, and efficient use of health
care resources. Physicians in six medical specialties--cardiology,
cardiothoracic surgery, gastroenterology, general surgery, obstetrics/
gynecology, and orthopedics--who have met the established measures have
been designated to participate initially in the network option. Aexcel
benefits consumers through lower copayments for seeking services from
more efficient providers and providers benefit through increasing the
volume of patients to their practice. The Aexcel network is currently
available in the three markets of Dallas/Fort Worth, North Florida and
Seattle/Western Washington and will be expanded to additional service
areas and specialties throughout the next two years.
Anthem Blue Cross and Blue Shield is one of the first
health benefits companies to collaborate with hospitals on an extensive
hospital quality program that includes increased reimbursement based in
part on quality measures. The program has been successful in improving
the quality of care and outcomes at participating hospitals for all
patients, not just Anthem members.
Anthem's Hospital Quality Program began in Ohio in 1992 with the
quality reimbursement component added in 2002. The Hospital Quality
Program evaluates quality of care provided in its network hospitals
based on quality indicators, such as care provided for coronary
services, obstetrics, breast cancer, asthma, joint replacement surgery,
emergency departments, patient safety and accreditation status. Since
its inception, this program has made statistically significant
improvements in the care delivered to Anthem members in areas such as
neonatal mortality rates, the use of beta blockers after heart attacks,
and patient safety. Hospitals convene and share best practices. This
Midwest program has been extended across all Anthem regions. These
programs incorporate a payment system to recognize and reward
physicians and hospitals for improved health care quality, patient
safety and clinical results, such as reduced infections or medical
errors. The programs measure a broad set of metrics that are based on
best practices and developed in collaboration with participating
hospitals and specialty medical societies.
Empire Blue Cross Blue Shield is working with several of
its large employer customers--IBM, PepsiCo, Xerox, and Verizon--to
provide bonuses to hospitals that implement two of the Leapfrog Group
standards: Computer Physician Order Entry (CPOE) and Intensive Care
Unit (ICU) staffing. As of December 31, 2002, 53 hospitals in the
plan's service area had completed the voluntary Leapfrog Group hospital
survey and self-certified the status of CPOE and ICU staffing at their
facilities. Bonuses were paid under the program to 29 hospitals during
2002.
Harvard Pilgrim Health Care has a Provider Network
Quality Incentive Program which includes support for medical directors
and clinical practices, a Quality Grant Program and an Honor Roll
program that publicly recognizes outstanding physicians. Another
component of the Provider Network Incentive Program is a Rewards for
Excellence program that recognizes and rewards the exemplary
performance that local quality efforts achieve. Harvard Pilgrim has
identified a subset of key HEDIS performance measures where effective
clinical interventions have been identified and/or where current levels
of performance--nationally, regionally, and within Harvard Pilgrim--are
less than clinically optimal. Harvard Pilgrim offers its providers
financial rewards for achieving excellent levels of performance in the
defined target areas. In 2003, Harvard Pilgrim rewarded 55 out of 66
eligible practices.
In California, the Integrated Healthcare Association,
including health plans and insurers, physician groups, and health care
systems, is implementing a state-wide Pay for Performance initiative.
Participating health plans/insurers include Aetna, Blue Cross of
California, Blue Shield of California, CIGNA HealthCare of California,
Inc., Health Net, and PacifiCare Health Systems. A common set of
performance measures will evaluate physician groups in six clinical
areas, patient satisfaction, and information technology investment
(e.g., electronic medical records or computerized physician order entry
of medications) and financial incentives will subsequently be awarded
based on the physician groups' performance. A public scorecard will be
available in September 2004 and initial payouts are expected in June
2005.
CONCLUSION
We agree with the Committee that there are opportunities to achieve
the goal of a safer and more effective health care system. We believe
that all stakeholders, including payers, providers, consumers, and
employers, should play a role in making health care information
publicly available so that consumers can make more informed health care
decisions and choices.
Health plans and insurers have led the way in:
Measuring the performance of health care providers and
health care organizations in providing safe and effective care;
Promoting transparency and public disclosure of health
system performance in meeting quality goals;
Working with health care practitioners and other
stakeholders in the health care system to improve health care quality
and reduce preventable medical errors through the use of information
technology and system changes; and
Promoting the incorporation of evidence-based medicine
into everyday medical practice by aligning payment incentives with
quality.
We urge Congress to advance the national effort to improve health
care quality by considering proven private sector initiatives,
including the alignment of incentives with quality, as models for the
broader health care system.
Statement of David G. Schulke, American Health Quality Association
The American Health Quality Association (AHQA) represents
independent private organizations--known as Quality Improvement
Organizations (QIOs)--that hold contracts with the Centers for Medicare
& Medicaid Services (CMS) to improve the quality of health care for
Medicare beneficiaries in all 50 states and the U.S. territories.
AHQA is pleased that the Ways and Means Subcommittee on Health is
conducting a hearing to examine Federal and private sector initiatives
to improve health care quality. While recent reports published by the
Agency for Healthcare Research and Quality (AHRQ) and the Medicare
Payment Advisory Commission (MedPAC) show that the quality of care
provided to Medicare beneficiaries is improving for a number of
important quality measures, it also shows a clear gap between the care
beneficiaries need and what they actually receive. To close this gap,
it is imperative to develop, test and implement initiatives that will
accelerate the pace of quality improvement.
WHY THE QIO APPROACH WORKS
The Medicare QIO program represents the largest coordinated Federal
effort dedicated to improving the quality of health care for Americans.
QIOs are local organizations, employing local professionals, with a
national mandate to improve systems of care. As such, QIOs are
catalysts for change trusted by both beneficiaries and providers. QIOs
educate beneficiaries about preventive care and encourage hospitals and
doctors to adopt and build ``best practices'' into daily routines for
treating seniors with common and serious medical conditions.
Medical professionals work voluntarily and often enthusiastically
with QIOs because QIO projects reduce duplication of effort for doctors
participating in multiple hospitals and health plans. These projects
also reduce the burden on hospitals that participate in multiple health
plans, by bringing the parties together to work on the same urgent
clinical priorities, using the same measures, the same abstraction
tools, the same key messages. Even the best consultants working for
individual hospitals cannot have this effect--and many providers cannot
afford costly consultants. In short, QIOs accelerate diffusion of
evidence-based medicine to all providers--small, large, urban and
rural--in all health care settings.
The QIOs are helping to close the gap in quality of care by
continuing to work on the health care quality improvement aims set
forth by the Institute of Medicine in its landmark 2001 report
``Crossing the Quality Chasm,''--that care is safe, timely, effective,
efficient, equitable, and patient-centered. Today, QIOs are working to:
Improve patient safety and reduce common and dangerous
errors of omission.
Ensure that appropriate care is delivered in a timely
manner.
Ensure care is provided in accordance with professional
standards of care.
Ensure preventive care is delivered to avoid unnecessary
costs to the health care system.
Eliminate health care disparities among minority
populations.
Help consumers use available quality information to make
health care decisions and resolve beneficiary complaints about the
clinical quality of care they receive.
NURSING HOMES
As part of the CMS National Nursing Home Quality Initiative (NHQI),
QIOs have been assisting long-term care facilities on a national basis
since 2002. The effort has involved helping consumers understand and
use publicly reported quality data for making better health care
choices, providing informational material and workshops for facilities,
as well as offering intensive technical assistance to a smaller group
of nursing homes in each state--with a specific focus on nursing home
quality measures (addressing pain, pressure sores, delirium, and
others) approved by the National Quality Forum.
Historically, most nursing homes have focused on compliance with
regulations and quality assurance. But the impetus of public reporting
of quality data and the availability of QIOs for technical assistance
has resulted in more and more nursing homes developing a quality
improvement approach to improving resident outcomes and quality of
life. Across the country, nursing homes are voluntarily connecting with
QIOs that are training nursing home managers to implement quality
improvement systems in a culture where front line staff not only
participate in quality improvement projects, but also are empowered to
continually identify and solve problems.
While the initiative has been in place for just a year and a half,
nursing homes and their QIO partners already boast unprecedented
nationwide improvement on selected quality measures (see nursing home
success stories at www.ahqa.org). In January, CMS reported that since
the NHQI began in 2002:
Approximately 2,500 nursing homes are actively pursuing
quality improvement efforts with the help of their state QIO, and
nearly all (99.5%) of the nation's 17,000 nursing homes have been
contacted by their local QIO to participate in quality improvement
efforts.
Residents with chronic pain dropped by more than 30%
(from 10.7% to 7.3%) and improvement has been achieved in every state.
Residents who were physically restrained declined by 15%
(from 9.7% to 8.2%) nationally and improvement has been achieved in 92%
of states.
Short stay residents who experienced pain decreased
nationally by 11% in one year (from 25.4% to 22.6%).
In fact, every QIO is surpassing its required targets for quality
improvement in the nursing home setting as measured by the publicly
reported quality indicators. But performance on some measures has not
improved as rapidly as others. So QIOs are working with nursing homes--
and continuing to engage other stakeholders such as state survey
agencies, long-term care ombudsmen, and hospital discharge planners--on
new and innovative ways to drive performance and build on early
successes.
HOME HEALTH
QIOs also are playing a pivotal role in a Federal initiative to
help home health agencies improve the quality of their care and assist
beneficiaries in understanding how publicly reported quality data can
be used to select a home health agency provider. QIOs are training
agency caregivers to evaluate their own performance using standardized
Medicare quality measures; select treatment processes for improvement;
create and implement step-by-step plans to improve care; and integrate
continuous quality improvement into ongoing staff training.
QIOs are training home health agencies in an evidence-based
process--called Outcomes-Based Quality Improvement (OBQI). OBQI
involves collection, analysis, and feedback of data on quality of care
and patient progress that is of practical value to clinicians. The data
documents how well agencies are helping patients improve grooming,
bathing, dressing, meal preparation, and other activities. OBQI
provides home health agencies with methods for interpreting patient
data, targeting care processes for improvement, restructuring care, and
monitoring how change in care impacts patient recovery and quality of
life.
The Delmarva Foundation, the QIO for Maryland and the District of
Columbia, trained all QIOs in the OBQI method prior to the launch of
the initiative, and those QIOs in turn trained the home health agencies
in their states that volunteered to participate. As of this week, 5,275
agencies, or three-quarters (76%) of all Medicare-certified Home Health
Agencies, have been trained by QIOs. Nearly two-thirds (63%) of all
Medicare-certified HHAs have submitted quality improvement plans of
action based on their OBQI training and self-assessment, and more than
half (55%) of all HHAs have signed up to share quality improvement
information with other agencies via the website OBQI.org, where they
can also receive refresher trainings from QIOs. These Home Health
Agencies continue to demonstrate a persistent dedication to working
with QIOs on improving their residents' clinical outcomes and quality
of life (see home health success stories at http://www.ahqa.org/pub/
media/159_766_4627.CFM).
HOSPITALS AND PHYSICIAN OFFICES
QIOs work with hospitals and physician offices to improve clinical
care for heart attack, congestive heart failure, pneumonia and post-
surgical infections in the inpatient setting, as well as diabetes,
breast cancer and influenza and pneumonia in the outpatient setting.
QIOs work in these settings to assess the use of accepted best
practices, analyze systems for providing care and assist with
implementation of quality improvement interventions. As outlined in a
January 15, 2003 JAMA article by Jencks, et al, the QIOs, working with
the medical community, reduced the overall gap in quality by about 13%
between 1998-2001. For example, for the median state, prescription of
the correct antibiotic for pneumonia patients went from 79% (a quality
gap of 21%) in 1998-1999 to 85% (a quality gap of 15%) in 2000-2001.
This 6-point absolute improvement represents a 32% closing of the
quality gap, expressed in the study as ``relative improvement.'' Areas
showing strong gains nationally in relative improvement also included
administration of aspirin for heart attack with 24 hours (15% relative
improvement), beta-blockers at discharge for heart attack patients (28%
relative improvement), avoidance of nifedipine for acute stroke
patients (77% relative improvement), annual hemoglobin test for
diabetes (29% relative improvement), and bi-annual lipid test for
diabetes (38% relative improvement). QIOs are refining their methods in
areas where improvement was less significant. (Please see hospital
success stories at http://www.ahqa.org/pub/media/159_766_4627.CFM.)
REDUCING DISPARITIES/IMPROVING RURAL CARE
As part of their contracts with CMS, each QIO conducts a quality
improvement project in their state to improve care for rural
beneficiaries or address racial and ethnic disparities in care between
minority populations and the general Medicare populations.
QIOs have partnered with local coalitions addressing disparities,
particularly faith-based organizations, to reach out to African
Americans, Hispanics, and other minority beneficiaries to assist them
in getting evidence-based health care. In addition, QIOs work with
health care providers and practitioners on ways to recognize and
eliminate racial and ethnic disparities that may exist in their
treatment of patients. The establishment of systematic, reliable
methods of routinely delivering evidence-based care to every patient
can eliminate much of the under treatment that otherwise afflicts
vulnerable populations.
About 20 QIOs are currently working with critical access hospitals,
health centers, and clinics to improve care delivered to rural
beneficiaries. However, the demand for QIO assistance in rural areas
far exceeds available funding. AHQA supports statements by MedPAC and
others recommending that the HHS Secretary increase and dedicate
funding for QIO work in rural areas, so the rural population can
receive more attention without undermining work that focuses on high-
volume providers in order to achieve the greatest benefit for Medicare
beneficiaries.
CASE-BASED QUALITY IMPROVEMENT
Case-based quality improvement helps QIOs improve patient safety,
protect beneficiaries and identify opportunities to improve systemic
quality of care. Investigating beneficiary complaints, ensuring proper
coding, adjudicating certain beneficiary appeals and reviewing EMTALA
cases are all examples of how QIOs protect both beneficiaries and
taxpayers by ensuring that quality care is delivered appropriately, and
that the Medicare trust fund does not pay for unnecessary care.
PUBLIC REPORTING
Public reporting of health care quality data can help many
consumers make more informed health care choices. Equally important is
the effect of public reporting on providers--making apparent clinical
areas where the quality of their care can be improved, and motivating
them to seek out assistance to do so. While participation in QIO
quality improvement activities is voluntary, the volume of providers
seeking assistance has been tremendous, and appears to have been
increased by public reporting.
Beginning in 2002, CMS launched new national quality initiatives in
nursing homes, home health agencies and hospitals. Consumers can turn
to their local QIOs in those initiatives for help in understanding the
publicly reported quality measures and how they can be used to make
better health care decisions. QIOs are also assisting hospitals,
nursing homes and home health agencies to ensure the accuracy of the
information they collect.
Public reporting of hospital quality data depends on capturing
large amounts of comparable data, requiring a set of uniform quality
measures and a data collection tool that permits easy reporting of a
standard set of quality data. The QIO program funded the creation of a
sophisticated set of evidence-based clinical quality process measures,
now widely used in both public and private sectors, which provides an
ongoing assessment of the quality of fee for service health care under
Medicare. In addition, all QIOs have been offering technical assistance
to hospitals to facilitate their use of a free, CMS-developed data
collection tool, and to help providers submit quality data to a
centralized data warehouse.
PAY FOR PERFORMANCE
The concept of payment-for-performance holds real potential for
spurring improvement and should be examined carefully. CMS should
continue to test ways to provide differential payments to providers and
practitioners that provide high quality care. QIOs are available to
assist hospitals in the Premier Hospital Quality Incentive
Demonstration with data submission and quality improvement. CMS is also
using QIOs through the Doctors Office Quality--Information Technology
project (DOQ-IT) to implement the care management performance
demonstration required by the Medicare Modernization Act. In this
capacity, QIOs will work with physicians to implement technology to
improve care for chronically ill beneficiaries, provide technical
assistance with quality improvement interventions and care process
redesign, and measure provider performance on quality measures that
could lead to increased payment.
Some QIOs are also working with private sector innovators to
examine options for differential payment. One key challenge of such
programs is that no payer, public or private, should offer additional
payments for performance that has not been verified by an independent
organization such as a QIO. The Virginia Health Quality Center (VHQC),
which serves as the Medicare QIO for the Commonwealth of Virginia, is
participating in a private pay-for-performance initiative sponsored by
Anthem Blue Cross and Blue Shield of Virginia (Anthem). VHQC is
facilitating the initiative as a Patient Safety Organization,
designated under Virginia state law. The QIO receives quality and
safety measures submitted by hospitals, and validates them against
confidential medical records, so that Anthem can be assured of paying
only for verified quality improvement. The Anthem-VHQC partnership is a
model for national payment incentives program that we urge Congress to
emulate in the context of the Medicare program.
PATIENT SAFETY
The IOM's 1999 report To Err is Human publicized previous research
finding as many 98,000 deaths annually are attributable to health care
errors in the inpatient setting alone. Clinical quality improvement
efforts by QIOs are reducing errors of commission and errors of
omission in a wide variety of settings. MedPAC notes in their March
2004 report to Congress that Medicare QIO program measures show
improvement in the areas of timeliness and effectiveness of care, two
key dimensions of quality identified by the IOM in its work on patient
safety and quality.
The current work of the QIOs to reduce the frequency of surgical
site infections will soon be expanded in the Surgical Complication
Improvement Project (SCIP), a vital initiative to improve patient
safety while reducing costs. States are also increasingly turning to
QIOs in their patient safety efforts, and some QIOs are serving as
Patient Safety Organizations, in addition to their work for Medicare to
improve health care quality.
HEALTH CARE INFORMATION TECHNOLOGY
More than a decade ago the IOM presciently recommended that
electronic health records become the standard for patient care. The
widespread adoption of electronic health records and other technologies
holds great potential for transforming the health care system by
accelerating the pace of quality improvement, reducing and preventing
errors, increasing efficiency, and promoting development of systems of
patient-centered care.
While the potential for health information technology to improve
quality is great, a number of challenges remain. Barriers to the
automation of clinical information include the lack of national
standards for interoperability, privacy, security, and confidentiality
of information, and little to no means to finance investments in new
technology, particularly for rural providers. However, many experts
agree that the most challenging barrier to the widespread adoption of
electronic health records and other IT tools is managerial in nature,
demanding redesigned clinical processes and workflow in office
practices and hospitals. QIOs are building the expertise required to
effectively educate and assist practitioners and providers in adopting
information technology in clinical practice.
NEW OPPORTUNITIES FOR QUALITY IMPROVEMENT
The MMA has created major new opportunities for quality
improvement, expanding the work of the QIOs to Medicare Advantage plans
under Part C and outpatient prescription drugs under Part D. QIOs will
offer quality improvement assistance to providers, practitioners, MA
plans and prescription drug plans with regard to medication therapy.
The QIOs are in a unique position to integrate inpatient and outpatient
claims and medical record data with prescription drug data to provide a
more complete view of patient care. This will be a powerful tool for
efforts to support the safe and effective use of prescription drugs in
the health care of Medicare beneficiaries.
CONCLUSION
AHQA supports full consideration by Congress and the administration
of innovations to accelerate the pace of quality improvement. We
believe it will take a coordinated effort on the part of government and
the private sector to close the significant quality gaps that exist in
American health care. There are clear indications that the QIO program
is helping private plans and providers employ standardized quality
measures, report them publicly, and work together to eliminate those
gaps. Without QIO assistance, the pace of progress would slow down, as
every plan and provider would be obliged to rediscover proven
techniques already implemented by others.
In the year 2002, Medicare spent just $6.33 per beneficiary to fund
the quality improvement activities of the QIOs. While these funds are
being put to effective use, the resources are extremely low in relation
to the scope and size of the problem. The QIO program is an investment
in a coordinated national effort to improve health care. AHQA urges
Congress and the administration to ensure that the investment is
adequate to meet the goals the program is striving to achieve.
Statement of American Hospital Association
Hospitals: Committed to Quality Improvement and Patient Safety
On behalf of our nearly 5,000 member hospitals, health systems,
networks and other providers of care, the American Hospital Association
(AHA) is pleased to share its views on the future of health care
quality improvement. Hospital care is the single largest component of
health care in the United States. In the year 2001 alone, hospitals
cared for 612 million outpatients, treated 109 million in emergencies,
performed 27 million surgeries and delivered more than 4 million
babies. Caring for millions of ill and injured patients is an
extraordinary responsibility, and it is a responsibility that hospitals
take very seriously. Hospitals believe that every patient who enters
their doors deserves the guarantee of safe, high-quality care. As such,
quality and patient safety are the cornerstones of every hospital's
mission, and caregivers continually strive to improve safety and
outcomes.
Despite hospitals' efforts to ensure safe, high quality care,
mistakes do occur, and there is both overuse and under use of some
diagnostic and treatment procedures, as described in the Institute of
Medicine's (IOM) landmark 1999 report, ``To Err is Human: Building a
Safer Health System,'' and its second report, ``Crossing the Quality
Chasm.'' Though the exact consequences of missteps in care are
sometimes unknown, any preventable harm to patients is unacceptable and
underscores the need for a comprehensive, unified approach to quality
improvement.
The Quality Initiative: A Unified Approach to Quality Reporting
Since the IOM released its 1999 report on errors in America's
health care system, public demand for more and better information about
hospitals' safety and performance has been overwhelming. In recent
years, there has been a proliferation of quality measurement
activities: Organizations such as the Joint Commission on Accreditation
of Healthcare Organizations (JCAHO), states, hospitals, researchers,
insurers and other payers, the business community, consumer
organizations, commercial enterprises that compile and sell ``report
cards,'' and the media all offer the public different concepts of
quality and relevant data.
According to a 2000 Rand Health report, ``Dying to Know: Public
Release of Information about Quality of Health Care,'' the California
Office of Statewide Health Planning and Development in 1994 identified
more than 40 report cards using a total of 118 different measures of
quality, and the number of organizations trying to collect and use
quality data has grown exponentially since then. Not only does the
information differ from rating system to rating system, it is collected
using different methodologies, and the validity and reliability of the
data are highly variable. Providers are confused by the disparate
ratings and rankings, and the potential for confusing the public with
conflicting and sometimes misleading information is even greater.
On December 12, 2002, leaders of the AHA, Association of American
Medical Colleges (AAMC) and Federation of American Hospitals (FAH)
announced hospitals' effort to create a more unified approach to
collecting and sharing hospital performance data with the public. The
initiative was developed with the full support of Federal agencies,
consumer and employer organizations and accrediting bodies alike,
including the Department of Health and Human Services (HHS) and its
Centers for Medicare & Medicaid Services (CMS) and Agency for
Healthcare Research and Quality (AHRQ), the Joint Commission on
Accreditation of Healthcare Organizations (JCAHO), the National Quality
Forum (NQF), the AARP and the AFL-CIO.
The national, hospital-led initiative aims to:
Provide the public with meaningful, relevant and easily
understood information about hospital quality;
Bolster hospital and physician efforts to improve care;
and
Standardize data collection priorities and streamline
duplicative and burdensome hospital reporting requirements.
This landmark public-private partnership marks an important first
step in developing predictable, useful and understandable quality
information about hospital patient care and outcomes. The initiative
begins by asking hospitals to voluntarily report performance data on 10
measures of care for three conditions:
Heart Attack
Aspirin at arrival
Aspirin at discharge
Beta blocker at arrival
Beta blocker at discharge
ACE inhibitor for left ventricular systolic
dysfunction (LVSD)
Heart Failure
Left ventricular function assessment
ACE inhibitor for LVSD
Pneumonia
Initial antibiotic timing (within four
hours)
Pneumococcal vaccination
Oxygenation assessment
These measures were carefully selected based on their scientific
validity and near universal acceptance. JCAHO and CMS use these
measures, and the National Quality Forum endorsed them as part of their
core set for hospitals.
Hospitals swiftly embraced The Quality Initiative, seizing the
opportunity to demonstrate their commitment to openness and
accountability. More than 500 hospitals agreed to take part in the
initiative within the first month, and that number had more than
tripled to 1,700 within less than six months. Today, more than 3,300 of
the nation's approximately 4,200 acute care hospitals have pledged to
take part in the effort. Though the Medicare Modernization Act--which
requires hospitals paid under the inpatient prospective payment system
to report these measures in order to receive a full Medicare inpatient
market basket update--provides an added incentive for hospitals to take
part in the initiative, hospital participation was increasing steadily
before its enactment.
Hospital Participation in The Quality Initiative
[GRAPHIC] [TIFF OMITTED] T9678A.005
Since October of 2003, hospitals' performance on the initiative's
10 measures has been displayed on a public CMS Web site,
www.cms.hhs.gov/quality/hospital. Though intended primarily as a ``test
site,'' valuable primarily for researchers and clinicians, the launch
of the site marked the first step toward creating a comprehensive,
user-friendly consumer site. By February, more than 1,400 hospitals had
allowed their data to be shared, and that number is expected to jump to
2,000 hospitals when the site is updated in May. Our partners in the
Quality Initiative have been impressed by hospitals' willingness to
step forward and share this data.
From the beginning, we've noted that the 10 measures of care with
which we began were just a starting point. Creating a truly meaningful
resource on hospital quality, one that will arm consumers with
information they need to make the most appropriate decisions about
their care, and clinicians with a tool for continued quality
improvement, requires data on a broad range of hospital services. As
promised, partners in the initiative recently agreed on 12 new measures
of care, including new measures of the steps taken to prevent surgical
infections, which hospitals will be asked to share starting early next
year. The Hospital CAHPS survey developed by CMS and AHRQ, which will
allow a comparison across hospitals of patients' perceptions of the
care they received, also will become a key component of the Quality
Initiative next year following further testing of the survey tool and
its administration instructions. In addition, we are eager to begin to
develop measures for hospitals for which the current measures do not
apply, including small, rural hospitals, children's hospitals and
psychiatric hospitals.
Moving Forward: Challenges in Sharing Quality Information with the
Public
1. Making Information Useful
Despite the wealth of information available to the public on
hospital quality, research suggests that few are using the information
to make decisions about their care. A survey of nearly 500 patients who
had undergone coronary artery bypass graft (CABG) surgery at one of the
four hospitals rated in Pennsylvania's Consumer Guide, found that only
12 percent were aware of a report card on cardiac surgery mortality
before undergoing surgery, and fewer than 1 percent knew the correct
rating of their surgeon or provider and reported that it had a moderate
to major impact on their selection. A 2000 Kaiser Family Foundation/
AHRQ survey of 2,000 adults similarly found that only 4 percent had
used information comparing the quality of hospitals to make a decision
about their care. While 63 percent of respondents said their family and
friends would have ``a lot'' of influence on their choice of a
hospital, few said the same of same of newspapers and magazines (12%)
or government agencies (15%). In fact, 62 percent said they would
choose a hospital that their family and friends had used for many years
without problems over a hospital that is rated higher.
Though it is still important to share hospital performance
information with the public, these findings suggest that clinical
measures will be of more value to clinicians than to consumers.
Therefore, clinical measures chosen for public reporting must be
actionable, credible, science-based measures that will help clinicians
assess and improve the quality of care they are providing.
2. Measuring the Right Elements
Measures must be selected carefully to ensure they paint an
accurate picture of hospital quality. For instance, some organizations,
like the Leapfrog Group, have sought to use volume as a proxy for
quality; yet, a study published in a recent issue of Journal of the
American Medical Association concludes that volume is an unreliable
indicator of a provider's quality of care. The authors of the study
analyzed outcomes for very low birth-weight infants at more than 300
hospitals with neonatal intensive care units and found that the annual
number of very low birth-weight babies admitted to a hospital is not an
accurate predictor of the hospital's outcomes. Data collected by the
Veterans Administration as part of the National Surgical Quality
Improvement Project have also shown that volume is not a reliable proxy
for quality for surgical patients. Moreover, hospital volume is not an
``actionable'' item that caregivers can change to improve care.
We also must ensure that the measures used are true indicators of
the care provided--and not of other factors. For instance, mortality
rates, if not properly adjusted for the health status of the patients,
say more about the severity of patients' conditions than they do about
the quality of care provided, and can have harmful unintended
consequences. The 1996 study by Eric Schneider, M.D. and Arnold
Epstein, M.D., ``Influence of Cardiac-Surgery Performance Reports on
Referral Practices and Access to Care--A Survey of Cardiovascular
Specialists,'' suggests that using mortality rates as a performance
indicator deters physicians from operating on risky or especially ill
patients. The physicians surveyed in the study overwhelmingly indicated
that risk adjustment was inadequate.
3. Adapting to Advances in Care
Though providers and consumers share the goal of standardizing care
so that patients receive the recommended care regardless of the
setting, mandating or regulating the use of clinical standards may
impede caregivers' ability to respond to advances in science. Standards
of care change over time, and caregivers need the flexibility to adapt
to those changes.
For instance, hormone replacement therapy (HRT) was, for decades,
the standard treatment for alleviating menopausal symptoms. In recent
years, HRT even was thought to reduce the risk of cardiovascular
disease and to help prevent memory loss and Alzheimer's disease. In
July of 2002, however, researchers from the National Institute of
Health's Women's Health Initiative announced that they were pulling the
plug on a study of HRT, three years before its scheduled completion,
after having discovered a link between the therapy and an increased
risk for heart disease, breast cancer and stroke. The researchers
concluded that the long-term risks of the therapy could outweigh its
benefits. If providers were being measured on how often they put women
on hormone replacement therapy, the measure would no longer be a good
indicator of whether clinicians were treating patients in accordance
with medical science.
Even when a standard of care is proven safe and effective, there
may be equally acceptable alternatives, as evidenced by a recent study
led by researchers at Brigham and Women's Hospital, Duke University and
the University of Glasgow. Though ACE inhibitors have been a standard
of care since 1992, when they were shown to reduce one-year mortality
rates in heart attack patients by 19 percent, the researchers found
that a new medication, the angiotensin-receptor blocker valsartan, is
just as clinically effective as an ACE inhibitor in improving outcomes
for heart attack patients. While it is important to promote the use of
clinical standards so that patients receive the best possible care
regardless of the provider, this discovery demonstrates that clinicians
often have several options to consider when caring for patients.
The Road Ahead: The Role of the Federal Government in Fostering Quality
Improvement
We applaud Congress for recognizing the important role it can play
in fostering continued health care quality improvement. The federal
government is the largest single purchaser of health care in the United
States, and as such, can be a powerful agent in spurring progress. As
we move forward with a national, unified quality improvement agenda,
continued collaboration between the public and private sectors will be
critical. However, it is sometimes difficult for Federal agencies to
fully partner as part of a collaborative effort. Therefore, Congress
might want to consider analyzing whether or not CMS should have
expanded authority to work collaboratively with other organizations.
Also critical is continued support for the quality improvement
activities of AHRQ. Their research is essential to creating the
evidence-based clinical measures and the information technology
standards that will ensure patients receive the safest, most
appropriate care--no matter where they live or which hospital they
choose. Finally, because hospitals experience many competing resource
demands, it is difficult for many hospitals to find the capital to
invest in some of the new information technologies that will help to
improve quality and patient safety. Congress also may want to consider
grants and other funding mechanisms to promote the faster adoption of
IT.
Again, hospitals thank you for taking an active interest in
promoting their patients' quality of care. Our shared commitment to
quality improvement will ensure that Americans enjoy the promise of
safer, more effective care in the years to come.
Statement of Alliance for Quality Nursing Home Care, and American
Health Care Association
The American Health Care Association (AHCA) and the Alliance for
Quality Nursing Home Care appreciate the opportunity to provide the
House Ways and Means Subcommittee on Health with perspective on the
progress we are making in regard to improving the quality of long term
care we provide to more than 1.5 million elderly and disabled Americans
annually.
We thank Chairman Johnson for calling this important hearing, and
for providing stakeholders a valuable opportunity to discuss our
ongoing commitment to quality long term care services. It is especially
essential that we foster an environment in which the federal government
and the profession can continue to work successfully together.
The process of health care delivery is dynamic and achieving
progressively higher levels of care quality and customer satisfaction
is an ongoing effort--as is the progressive effort to measure, assess,
evaluate and report quality care itself.
The long term care profession is demonstrating its dedication to
quality and performance excellence by joining together to create
Quality First, the first-ever, nationwide, publicly articulated pledge
to voluntarily establish and meet quality improvement targets. Through
this initiative and other programs, we as a profession have partnered
with the federal government and consumer advocates, among other
stakeholders, to work in tandem to ensure the delivery of quality care
in our nation's nursing homes, assisted living residences and homes for
persons with mental retardation and developmental disabilities. The
broad collaboration has fostered successful practices of the delivery
and measurement of quality in long term care, which is focused on those
we serve each day--the patients, residents and their families in long
term care facilities nationwide.
Quality improvement is an internal process that is complex. Survey
compliance rates are one of several measures that are used to assess
the provision of quality in long term. Additional measures that
benchmark the delivery of quality include Centers for Medicare and
Medicaid Services' (CMS) quality measures, resident, family and staff
satisfaction, employee retention, and financial stability. Quality
First provides the tools to more accurately measure quality based on
the full spectrum of care and outcomes, rather than isolated incidents.
Today's emphasis on evaluating and reporting results benefits
patients, policymakers, caregivers and consumers alike. Just as
competition spurs choice, productivity and product innovation in the
economic marketplace, the increasing competition that stems from public
disclosure of quality information is producing similar benefits in the
health care marketplace.
The many innovations and improvements in healthcare quality
measurement we've seen in just the past two decades have been
extraordinary, and we fully expect and hope that more reliable systems
to measure quality will emerge. We are excited about the pace of change
in long term, and we look forward to working collaboratively with all
stakeholders to determine, on an ongoing basis, which measures best
predict quality, and how we can use those measures to keep improving
patient care.
In evaluating the initiatives and progress the entire health care
provider community is making on the quality front, Mr. Chairman, it is
notable and significant that America's long term care profession came
to the forefront first. As home health care and hospitals are just now
becoming involved in government quality improvement initiatives, we
maintain the positive involvement and results experienced by long term
care providers and patients have served as a useful, positive and
instructive guide for the entire health care system.
In prefacing our comments and evaluation of government and
profession-wide quality initiatives, we cannot stress enough the
important linkage between the financial stability of the long term care
sector and the extent to which care quality improvements have moved
forward and will continue moving forward.
Our responsibility to maintain and sustain quality improvements is
straightforward and obvious; it is also obvious and necessary that the
federal government must to do its part to help bring about a more
stable and viable financing environment for Medicare and Medicaid.
In this context, it is noteworthy that the Medicare Payment
Advisory Committee's (MedPAC) March 2004 report to Congress
specifically noted that:
``Many efforts are currently underway to improve quality in Skilled
Nursing facilities (SNF's) and nursing homes, but these efforts are
grafted onto a payment system that is largely neutral or even negative
with respect to quality.''
As the first panel of today's hearing will discuss government
quality initiatives, we will outline our participation in the Nursing
Home Quality Initiative (NHQI). For the second panel, we will discuss
the progress of the long term care profession's successful and
innovative Quality First initiative.
The NHQI: More Accountability, Increased Disclosure, More Competition
The NHQI, like our profession's Quality First initiative, has
helped place us on the course necessary to ensure care quality improves
and evolves in a manner that best serves patient needs.
Its focus on resident centered care, care outcomes, increased
public disclosure, better collaboration and increased accountability
and dissemination of best practices models of care delivery is making a
positive, measurable difference in the lives of our patients.
Implemented nationally in 2002, the long term care profession
endorsed CMS' NHQI from its inception, and the profession has been
intimately involved with the initiative's implementation. NHQI, in
conjunction with the long term care profession, is working successfully
to:
Improve regulation and enforcement efforts to assure
nursing homes' compliance with rules regarding patient health, safety
and quality of care;
Improve consumers' access to nursing home quality
information via internet and other public media;
Encourage nursing homes to seek help from the Medicare
quality improvement organizations (QIOs) to improve performance; and
Encourage more communication among Federal and state
agencies, QIOs, independent health quality organizations, consumer
advocates and nursing home providers regarding ways to improve nursing
home quality.
According to the CMS, the NHQI efforts have resulted in
approximately 2,500 nursing homes nationwide pursuing quality
improvements with assistance from their QIOs, nearly all nursing homes
contacting their QIOs about the NHQI, and more than 60 percent of
nursing homes attending QIO-sponsored workshops.
CMS has found notable improvements since the inception of NHQI,
including, among others, ``decreasing reports of pain among long and
short stay patients and decreasing use of physical restraints.''
CMS has also taken recent steps to improve its quality measures and
is now using an updated set of measures endorsed by the National
Quality Forum (NQF)--the non-profit consensus-building organization.
CMS, stakeholders, members of congress, researchers and consumers
recognize the value of quality assessment and improvement methods and
their effectiveness in measuring, promoting and rewarding quality
outcomes in nursing facilities.
The increasing complexity of the long term care environment in
recent years and the growing demands and expectations on the regulatory
process offer both an opportunity and a need to creatively incorporate
methods into the equation of providing and regulating long term care.
Patient, family and staff satisfaction should, officially, we
believe, be a key measurement of quality. We recommend that Congress
allow CMS to use measures in addition to the survey process to assess
patient outcomes and their satisfaction. CMS will then have the
requisite legal latitude and authority to develop better measures of
quality of care in skilled nursing facilities so the process can begin
to design appropriate payment incentives.
Quality First: A Proactive, Profession-Wide Partnership to Advance
Quality Care
The long term care profession is also taking the lead in the area
of improving care quality, public trust and customer satisfaction, and
we are doing this on a voluntary basis. In July of 2002, AHCA, the
Alliance for Quality Nursing Home Care and American Association of
Homes and Services for the Aging (AAHSA) joined together to establish
Quality First--a proactive, profession-wide partnership to advance the
quality of care and services for seniors and persons with disabilities.
We are proud of the fact long term care providers are leading the
way in taking steps to improve quality through increasing
accountability and disclosure--a voluntary initiative no other health
care provider group has taken.
Our Quality First Covenant, as it is known, is based upon seven
principles that cultivate and nourish an environment of continuous
quality improvement, openness and leadership.
These principles include: Continuous quality assurance and quality
improvement, public disclosure and accountability, patient/resident and
family rights, workforce excellence, public input and community
involvement, ethical practices, and financial stewardship.
Quality First supports and builds upon CMS's Nursing Home Quality
Initiative--and is based on the concept that reliably measuring nursing
home quality and making the results available to the public is in the
best interest of consumer and caregiver alike.
Within Quality First there are six expected outcomes for assessing
quality, and, by 2006, we are working to achieve the following
benchmarks:
Continued improvement in compliance with Federal
regulations;
Demonstrable progress in promoting financial integrity
and preventing occurrences of fraud;
Demonstrable progress in the quality of clinical outcomes
and prevention of confirmed abuse and neglect;
Measurable improvements in all CMS Quality Improvement
measures;
High rates on consumer satisfaction surveys that will
indicate improved consumer satisfaction with services; and,
Demonstrable improvement in employee retention and
turnover rates.
Since Quality First was announced, a growing number of providers
nationwide have joined this effort as we move forward toward the goal
of establishing an independent National Commission--overseen by the
National Quality Forum--to objectively advise and monitor performance
and the need for improvement.
The National Commission will be a private sector, non-partisan
panel composed of nationally respected health care and quality
improvement experts, consumer representatives, former government
officials, and business leaders.
As part of its work, the Commission will independently evaluate the
current state of long term care performance, identify key factors
influencing the ability of providers to achieve meaningful quality
improvement, and make recommendations on national initiatives that will
lead to sustainable quality improvement.
Mr. Chairman, we look forward to sharing and elaborating upon the
findings and opinions of the Commission as they are announced. It is
our assumption and expectation there will be contentious issues raised
by the Commission from time to time, but, consistent with the intent of
Quality First, we believe all long term care stakeholders are best
served by maintaining an open, collaborative dialogue in a manner that
best lends itself to problem-solving and, ultimately, improved patient
care across the board.
We would like to thank the Committee again for providing us the
opportunity to share our views about how we can continue to work
together to improve the quality of long term care for our nation's
frail, elderly and disabled--and do so in a manner that helps us best
measure both progress as well as shortcomings.
AHCA and the Alliance are enormously pleased there has never been a
broader recognition of the importance of quality, nor a broader
commitment to ensure quality improvements are sustained.
We are committed to continuing to achieve demonstrable, measurable
quality improvements on every front so our nation is prepared to
provide quality care for seniors today, and for the 77 million baby
boomers who will inevitably require quality long term care services in
the decades ahead.
Statement of Sandra C. Canally, Compliance Team, Inc., Ambler,
Pennsylvania
Chairman Johnson and distinguished Committee Members:
Thank you for your thoughtful consideration in creating this
opportunity for those of us who could not attend your March 18th
hearing. I believe that your recommendations regarding the future
course of healthcare quality initiatives is a most serious matter that
will have a far reaching impact on our national interests. Thus, I am
compelled to respond to your call for contributions to the discussion
by informing the Committee of my company's efforts to change the status
quo in the critically important realm of healthcare accreditation.
During my formative years in healthcare some forty years ago, I
came to believe that all patients deserve exemplary care no matter what
their social status happened to be at the time care is delivered. Years
later when I began my professional career as a Nurse Oncologist and
National Cancer Institute Instructor, my heroes were those providers
who put the interests of their patients first above all else.
Ten years ago I formed The Compliance Team, Incorporated for the
purpose of exploring new approaches to healthcare quality evaluation.
As a matter of professional survival, I became expert in government
mandates dealing with healthcare delivery regulations as well as the
myriad requirements of private healthcare accreditation plans put
forward by such entities as the NCQA, JCAHO, URAC and others.
During The Compliance Team's first years in business, we conducted
National Committee on Quality Assurance-driven credentialing
inspections of more than 4,000 physician practices, and nearly 40,000
medical record reviews for various managed care interests based in the
middle Atlantic states. In addition, I personally took on a managed
care assignment to develop their Medicaid patient quality protocols.
Since I was intimately familiar with the JCAHO accreditation
process as the result of my experiences with a national orthopedic
rehabilitation equipment company some years before, a substantial part
of the Compliance Team's business in the early years was devoted to
healthcare accreditation consulting for home health durable medical
equipment companies going through JCAHO accreditation.
Long before the Medicare Modernization Act mandated that home
health and durable medical equipment providers go through an
accreditation process in order to participate in Medicare programs, I
decided that the arcane world of accreditation had become far too
complex and much too costly (when consulting fees et al were factored
in) for the average small business that represents your typical home
medical equipment operation.
A close reading of the Institute of Medicine's much heralded Report
to Congress ``To Err is Human'' lends credence to the assertion that
overly complex accreditation requirements may be a root cause of many
medical staff errors. In 1999, the CMS Report to Congress on the quest
by the JCAHO for deemed status to review Skilled Nursing Facilities was
even more direct. The CMS Report concluded that because JCAHO's process
of accreditation was needlessly complex and confusing, ``patients would
be placed at serious risk'' if it were granted deemed status. Indeed,
my earlier findings had been validated. What had started out in 1953 as
a sensible effort to standardize surgical theater procedures had
morphed into a confusing milieu of minutia filled directives that
tended to distract healthcare providers rather than lead them towards
better patient care.
Beginning in 1996, a full two-years before the aforementioned
Reports to Congress came to the public's attention, I set out to
develop a new type of accreditation process through which healthcare
organizations could validate their quality claims while putting the
best interests of their patients above those of the accrediting body.
In fall 1998, the Compliance Team's Exemplary ProviderTM
Award programs were launched. Each Award (so far there are 12 in all)
is a service and/or product-line specific measured continuous quality
improvement program that is driven by a dramatically simplified set of
Quality Standards and Evidence of Compliance.
March 1999 marked a milestone for private accreditation
competition. The Compliance Team received its first formal recognition
as a Home Health DME accrediting body by North Carolina Blue Cross/Blue
Shield. Shortly thereafter, Medicare's National Supplier Clearinghouse
recommended our programs to providers seeking to avoid fraud and abuse
sanctions. (To this day, we remain the only accrediting body to
incorporate Corporate Compliance measures into our programs.)
March 16th, 2004 marked another hallmark in the Compliance Team's
quest for national recognition. I was invited to join JCAHO, ACHC
(Accreditation Commission for Healthcare) and CHAP (Community Health
Accreditation Plan) at the Accreditation Summit which convened in Las
Vegas, Nevada at the Medtrade Spring medical equipment exposition. It
was the first time that the durable medical equipment industry
sponsored such an event. Approximately 150 providers had an opportunity
to hear the four DME accrediting bodies give comparative details about
our programs.
The key point I would like to make about the Summit is most germane
to the deliberations of your Subcommittee. With the coming of mandatory
accreditation, ad hoc private healthcare quality initiatives such as
the Compliance Team's Exemplary Provider Award programs represent a
clear departure from the status quo. The failures of accreditation
plans in the past have contributed to a growing cynicism among
healthcare providers. Many believe that our government today doesn't
really care that patients have become America's most ``at risk''
consumers.
In the few short years that the Compliance Team's programs have
become known to our old school competitors (our quality standards can
be obtained FREE of charge), they each in turn have adopted many of the
features that we first introduced in 1998; a clear sign that we are
winning converts in the marketplace of ideas.
Although we take some comfort in knowing that our peers at JCAHO,
ACHC and CHAP grasp the merits of our ideas, their market dominance
constantly reminds us of the perils we face. (Since we are in essence
social entrepreneurs, we chose to give away our intellectual property
as an altruistic gesture in the hope that we will win even greater
public and industry support in the future).
Although we are a small fledgling enterprise that lacks the deep
pockets of our competitors, we have deep beliefs; a belief that every
patient deserves exemplary care; the belief that healthcare delivery
excellence does not have to be costly or difficult; and the belief that
all providers should excel in the three areas that matter most to
patients--Safety, Honesty and CaringTM.
Madam Chairman and distinguished Committee Members, the following
pages contain an outline of our paradigm shifting programs. More
details and instructions on how to obtain a PDF copy of our quality
standards can be found on our web site--www.exemplaryprovider.com.
In closing, I make reference to the Committee's March 11th Advisory
regarding one of the principle focuses of the March 18th hearing. The
Compliance Team's programs represent a challenge to the status quo that
brings real competition and comparative information to the
accreditation marketplace which leads me to ask for the Committee's
support in recommending that the Exemplary Provider Award programs be
included among the accreditation plans approved by the Department of
Health and Human Services and CMS when mandatory accreditation is fully
implemented. Thank you again for this opportunity to address the
Committee.
Statement of Eric D. Peterson, Duke University, Division of Cardiology,
and CRUSADE, Durham, North Carolina
Chairman Johnson and Members of the Subcommittee, I appreciate the
opportunity to submit written testimony for the March 18, 2004 hearing
``New Frontiers in Quality Initiatives.'' I applaud your efforts and
those of your colleagues to improve the quality of health care in
America. The Hospital Quality Initiative provisions you included in the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA) are critical first steps toward achieving measurable improvements
in patient outcomes. I am pleased that as a focus of this hearing you
are considering quality initiatives that are ongoing in the private
sector that have a direct relationship to what you would like to
accomplish in the Medicare program.
As a practicing cardiologist, as a researcher, and as an active
participant and contributor in the health quality community, I am
involved in a number of activities to improve outcomes in heart care.
These private-sector efforts involve hundreds of hospitals and hundreds
of thousands of patients. These programs are achieving considerable
success in improving hospital practices across the country. The
indicators Medicare is encouraging hospitals to report (which will
become the basis rewarding performance) are focused on the acute
myocardial infarction (AMI), coronary artery bypass graft (CABG), and
heart failure populations--those who are having the most serious
conditions--a full-blown heart attack or surgical intervention. The
private sector quality initiatives cover a broader spectrum of heart
patients and a wider range of treatments.
Today, I would like to tell you about one of these programs that is
improving outcomes for a group of patients that is different from the
population that is the focus of Medicare's Hospital Quality Initiative.
My purpose in doing so is to make two points: First, it is important
that the CMS Hospital Quality Initiative build on and coordinate with
existing private-sector efforts on which hospitals are already
expending considerable resources. Working together, we can all be much
more effective. Second, we would like to work with CMS in broadening
its indicator program over time. There is a danger in focusing hospital
attention on the things we can most easily measure and causing them to
shortchange Medicare populations that may be at greater risk and could
benefit more from optimal treatment.
The program I want to discuss is called CRUSADE--``Can Rapid risk
stratification of Unstable angina patients Suppress ADverse outcomes
with Early Implementation of the American College of Cardiology/
American Heart Association (ACC/AHA) treatment guidelines.''
Acute coronary syndromes (ACS) include acute ST-segment elevation
myocardial infarction (MI), non-ST-segment elevation MI (NSTEMI), and
unstable angina and are a major cause of morbidity and mortality
worldwide. CRUSADE is a national quality improvement initiative
designed to improve the care of high-risk patients with unstable angina
and non-ST-segment elevation acute coronary syndromes (NSTE ACS)--the
patients are what you might call the ``early heart attack'' patients.
There are approximately 1.4 million patients presenting at the
hospitals every year with these serious heart conditions--so it is a
larger population than the 600,000 a year AMI population, with a higher
mortality than the AMI population. Nevertheless, it is a population
that is currently not tracked and monitored by federal government
quality indicator and quality measurement programs.
CRUSADE aims to improve patient outcomes for the NSTEMI ACS
population by collecting data regarding practice patterns in the U.S.
and using those data to target educational interventions designed to
improve adherence to the ACC/AHA practice guidelines.
CRUSADE is a unique collaboration between many academic
institutions from around the country and private industry. The program
is run and owned by the Duke Clinical Research Institute, with an
executive committee that is comprised of leading cardiologists and
emergency physicians from around the country. It has private sector
funding, including grants from several pharmaceutical and biotechnology
companies.
Since the CRUSADE program began in 2001, more than 90,000
retrospectively collected data collection forms have been submitted
from over 430 hospitals across the country. The data that CRUSADE has
compiled has been astonishing. For example, recent CRUSADE analyses
show that:
Adherence to ACC/AHA Guidelines varies markedly among
U.S. hospitals. Hospitals with the highest adherence rates (top
quartile of centers using evidence-based treatments) have 40% lower
mortality rates than those hospitals with the lowest adherence rates
(bottom quartile). Thus, better care truly translates to better patient
outcomes. (Peterson ED, Roe MT, Lytle BL, Newby LK, Fraulo ES, Gibler
WB, Ohman EM. The association between care and outcomes in patients
with acute coronary syndrome: national results from CRUSADE. J Am Coll
Cardiol 2004;43(5):406A)
We also found that hospitals whose care improves over
time as part of participating in the CRUSADE initiative see significant
reductions in in-hospital mortality at their centers. In contrast,
those who did not improve care patterns did not experience any change
in patient outcomes. This provides further evidence that quality
improvement efforts translate into meaningful benefits for patients.
(Peterson--personal communication)
One hospital that participates in the CRUSADE program
found that after modifying treatment protocols to more closely adhere
to the ACC/AHA guidelines, FY 2000 to FY 2002, in-hospital mortality of
ACS patients dropped from 4.8% to 1.9%, and length of stay dropped from
5.9 days to 4.6 days. The average cost per case dropped form $11,777 to
$10,623, an average savings of $1,154 per ACS patient. (Jackson S,
Sistrunk H, Staman. Improved patient care and reduced costs: results of
Baptist Health Systems' acute coronary syndromes project. J Cardio
Management 2003;14:17-20)
Despite having higher-risk characteristics at
presentation and greater in-hospital risk, women with NSTE ACS are
consistently treated less aggressively than men. (Blomkalns AL, Newby
LK, Chen A, Peterson ED, Trynosky K, Diercks D, Boden WE, Roe MT, Ohman
EM, Gibler WB, Hochman JS. Sex disparities in the treatment of non-ST-
segment elevation acute coronary syndromes. J Am Coll Cardiol
2004;43(5):304A)
African American patients with NSTE ACS are significantly
less likely than whites to receive medical and invasive therapy. (Sonel
AF, Good CB, Mulgand J, Roe MT, Gibler WB, Smith SC Jr, Cohen MG,
Zalenski R, Pollack CV Jr, Ohman EM, Peterson ED. Racial variations in
treatment and outcomes of African-American and white patients with non-
ST-elevation acute coronary syndromes: insights from CRUSADE. J Am Coll
Cardiol 2004;43(5):414A)
Medicaid patients younger than 65 admitted with NSTE ACS
are less likely to receive evidence-based therapies and interventions
and have significantly higher in-hospital mortality rates than those
with other forms of insurance. (Calvin JE, Roe MT, Chen A, Brogan GX
Jr, DeLong ER, Gibler WB, Ohman EM, Fintel D, Smith SC Jr, Peterson ED.
Higher mortality and less evidence-based therapies among Medicaid-
insured patients with high-risk acute coronary syndromes (ACS): results
from CRUSADE. J Am Coll Cardiol 2004;43(5):413A)
CRUSADE has shown us that there is a large population of ACS
patients being under-treated today, compared to the care recommended by
evidence-based clinical practice guidelines published by the American
College of Cardiology and the American Heart Association, and this is
largely a Medicare population. CRUSADE has also shown us that there are
prominent gender, race, and socioeconomic disparities in the quality of
care provided to patients with ACS and that adherence to evidence-based
clinical process indicators are strongly associated with reduced
mortality in this population, as in the ACS population.
At this point, Medicare is not measuring the quality of care
provided to the ACS population and the Medicare Quality Improvement
Organizations (QIOs) are not deployed to help hospitals improve the
quality of care they provide to this patient population. I believe that
the Centers for Medicare and Medicaid Services, the Agency for
Healthcare Research and Quality, and other government agencies and
programs could help address this population. I would offer three
recommendations to address this problem:
CMS should evaluate the ACS indicators being used in the
CRUSADE study for inclusion in its heart disease (AMI) quality
indicator set, even if only for use in the Quality Improvement
Organization program (not necessarily for public reporting).
CMS should fund a QIO to conduct either a national or a
significant pilot breakthrough collaborative with some or all of the
400+ CRUSADE hospitals.
QIOs should have the ability to distribute information
that does not directly pertain to the Medicare's hospital quality
indicators.
In summary, government programs currently do not track the ACS
population, and the CRUSADE program is generating valuable data and
making a difference at hospitals around the country. I urge you and
your committee to further explore private-sector quality initiatives
such as CRUSADE and look to find ways for such programs to collaborate
with government quality programs. I believe we have an ethical
professional duty to address this problem if we can.
I would be happy to answer any questions or work with you and your
colleagues on this very important issue. Thank you again for the
opportunity to provide this testimony.
Medical Technology and Practice Patterns Institute, Inc.
Bethesda, Maryland 20814
March 30, 2004
Congresswoman Nancy L. Johnson
Chairman
Subcommittee on Health of the Committee on Ways and Means
U.S. House of Representatives
Washington, D.C.
Dear Congresswoman Johnson:
I am writing to suggest that implementation of MMA include a
provision that relevant physiological information be included in future
Medicare claims for prescription drugs. Such a requirement will
enhancing the informational content of the health care system and its
treatment outcomes of Medicare beneficiaries.
As an example of the usefulness of such information, we are
studying--hematocrit values contained in Medicare administrative
databases for purposes of epoetin billing--to enhance understanding of
therapy, outcomes, and cost-effectiveness associated with an expensive
drug. Unlike controlled clinical trials, our observational analysis of
administrative data must grapple with the confounding effects of
unobserved events. If done well, analysis of such information can
provide important insight into the `real-world' risks and benefits of
new interventions.
Our work was recently presented at The American Society of
Nephrology's (ASN), 36th Annual Meeting & Scientific Exposition
conference November 2003, San Diego. The poster (attached) contained a
review of our current research on epoetin alfa dosing levels and
patient survival. This information has also been submitted to the
Centers for Medicare & Medicaid Services in response to their request
(attached) for `scientific evidence related to EPO (Epoetin) dosing and
hematocrit/hemoglobin levels that will assist us in the development of
a clinically and scientifically robust policy that will ensure
appropriate administration of EPO in ESRD patients.'
Sincerely,
Dennis J. Cotter
President
----------
Centers for Medicare and Medicaid Services
Office of Clinical Standards and Quality
Baltimore, Maryland 21244
September 22, 2003
To Those Interested in Medicare Coverage of Erythropoietin:
Medicare coverage for erythropoietin (EPO) is consistent with the
Kidney Dialysis Outcome Quality Initiative (K-DOQI) guidelines and the
Food and Drug Administration (FDA) approved indications. K-DOQI
recommends management of anemia within a target hematocrit range of 33
to 36 percent. FDA has approved EPO to treat patients with anemia when
it is used to raise the blood hematocrit to a target range of 30 to 36
percent (or the blood hemoglobin to a range of 10 to 12 grams per
deciliter). Neither entity recommends the use of EPO for raising
hematocrit levels above 36 percent.
Medicare pays over a billion dollars annually for EPO administered
to end stage renal disease (ESRD) patients, with aggregate payments for
the drug doubling between 1998 (550 million) and 2001 (1.1 billion).
The law provides a payment formula of $10 per 1000 units of EPO
administered to ESRD patients. There is concern that this payment
formula may result in some patients receiving more EPO than is required
to maintain their hematocrit level within the target range. If so,
Medicare spending on EPO may be higher than necessary without resulting
in optimal patient benefit.
In an effort to reduce potential EPO over-utilization, CMS issued a
policy in 1997 instructing Medicare contractors to monitor the
hematocrit levels of ESRD patients. This policy provided for pre-
payment review of EPO claims and denial of claims when the 90-day
average hematocrit level exceeded 36.5 percent. Through discussions
with clinicians and industry representatives, we learned that normal
fluctuations in hematocrit levels make it extremely difficult to
maintain patients at the upper end of the target range without
exceeding the upper boundary of the range.
Over the past three years, CMS has issued temporary instructions to
implement a revised policy that allows more flexibility at the upper
boundary of the hematocrit range. The current instructions prohibit
Medicare contractors from performing pre-payment review of EPO claims.
Contractors are instead instructed to perform post-payment review using
a 90-day average hematocrit level of 37.5 percent to trigger further
medical review. It has come to our attention that this policy may be
difficult to implement because of the administrative burden of
continually averaging hematocrit levels. CMS has also been asked to
provide more precise definitions for several critical terms in the
existing Program Memorandum AB-02-100. In addition, we have been asked
to revise the point at which facilities may initiate EPO therapy.
For these reasons, CMS will undertake a thorough review of our
current policy on EPO utilization in ESRD. We have established a
schedule for this re-evaluation (see table below). In the meantime, we
have reissued the temporary policy in Program Memorandum AB-03-138. We
invite interested parties to send us scientific evidence related to EPO
dosing and hematocrit/hemoglobin levels that will assist us in the
development of a clinically and scientifically robust policy that will
ensure appropriate administration of EPO in ESRD patients.
----------------------------------------------------------------------------------------------------------------
Time Period Activity
----------------------------------------------------------------------------------------------------------------
Letter Issuance Date--November 30, 2003 The public is invited to submit scientific
evidence related to EPO dosing and hematocrit/
hemoglobin levels. Parties submitting data are
invited to also schedule meetings to present
data and provide verbal explanations of their
analysis if they so desire.
----------------------------------------------------------------------------------------------------------------
December 1, 2003-February 1, 2004 CMS staff will analyze data submitted. We may
supplement the submittals with data from the
USRDS or CMS data sources such as national
claims history files, performance measurements,
REBUS, etc.
----------------------------------------------------------------------------------------------------------------
March 1, 2004 CMS will circulate a draft policy for comment.
----------------------------------------------------------------------------------------------------------------
May 1, 2004 CMS will issue a final revised policy or a
memorandum announcing the decision regarding
national monitoring of EPO for ESRD patients.
----------------------------------------------------------------------------------------------------------------
We encourage all interested experts and stakeholders to participate
in this public process by submitting scientific evidence related to EPO
dosing, hematocrit levels and ESRD patient outcomes. Interested parties
can submit information to Steve Phurrough, MD, MPA, Director, Coverage
and Analysis Group, Centers for Medicare and Medicaid Services, Mail
Stop C1-09-06, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.
If you have questions or wish to schedule an appointment to discuss
your submittal, please contact Jackie Sheridan-Moore at 410-786-4635 or
by email at [email protected].
Sincerely,
Sean R. Tunis
Chief Medical Officer
Statement of Eve Becker-Doyle, National Athletic Trainers' Association,
Dallas, Texas
As executive director of the 30,000-member National Athletic
Trainers' Association (NATA),\1\ I am sharing the NATA's thoughts on
improving quality of care in America's health care systems, with a
specific emphasis on therapy services. The NATA maintains that a wide
range of health care professionals are well qualified to provide
outpatient therapy services. The Social Security Act currently
recognizes only physical therapists and PT assistants, occupational
therapists and OT assistants, and speech and language pathologists as
qualified to provide outpatient therapy services--but athletic trainers
are equally as qualified, educated and capable of providing quality
outpatient therapy services.\2\ We believe all allied health care
professionals qualified to provide outpatient therapy services should
be permitted to provide and receive reimbursement for therapy services.
---------------------------------------------------------------------------
\1\ See Exhibit A for required supplemental statement supplying
NATA's contact information.
\2\ Social Security Act, Title XVIII, Section 1861(p); 42 USC s.
1359x(p).
---------------------------------------------------------------------------
Because of its rapid growth, both in terms of aggregate dollars and
as a share of the U.S. budget, the Medicare program has been a major
focus of deficit reduction legislation considered by Congress in recent
years.\3\ At the same time, concerns about quality of care are also at
the top of the agenda. Balancing cost reductions with improving quality
of care is a daunting task. Although the perfect balance is difficult,
if not impossible, to obtain, measures can be taken to improve this
balance. One such measure to achieve improved quality of care is to
offer financial incentives to health care providers. While this may be
effective in achieving higher quality of care, it does not address, and
even has a negative impact on, the rising cost of health care with
which the government, private insurers, and all Americans struggle.
---------------------------------------------------------------------------
\3\ U.S. House of Representatives, Ways and Means Committee, 2004
Green Book, D-2 (Feb. 11, 2004).
---------------------------------------------------------------------------
Competition promotes both cost-containment and achieves high
quality of care for Americans. Restricting reimbursement for health
care services to a small, incomplete list of qualified providers is
unreasonable, arbitrary and anti-competitive. It improperly provides
those groups exclusive rights to Medicare reimbursement. Moreover, it
unreasonably restrains trade and prevents patients from receiving the
highest quality of care available in a truly competitive market. While
regulating health care providers is an essential aspect of ensuring
quality of care, excluding those health care providers who are amply
qualified tends to have the reverse effect on the quality of care
provided.
The provision of therapy services is an excellent example of the
impact competition could have on a segment of the health care market.
As mentioned above, Medicare currently only reimburses physical
therapists and PT assistants, occupational therapists and OT
assistants, and speech and language pathologists for the provision of
outpatient therapy services. Having no competition for employment or
referrals provides little incentive for professionals to strive to
provide above-average quality health care services that still adhere to
Medicare rehabilitation rules. If, however, athletic trainers were
integrated into the Medicare reimbursement system for outpatient
therapy services, all health care professionals would have to strive to
provide a superior quality of care in order to remain competitive in
the health care market.
Certified athletic trainers (ATCs) are fully qualified to provide
outpatient therapy services.\4\ ATCs have national academic and
certification standards. ATCs are highly skilled allied medical
professionals who specialize in the prevention, assessment, treatment
and rehabilitation of injuries and illnesses that occur to both the
physically active and athletes. All ATCs have a bachelor's degree, and
more than 70 percent have a master's degree. Medically-related
continuing education is required to maintain certification.
---------------------------------------------------------------------------
\4\ See Exhibit B.
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ATCs work in a wide array of settings, including physicians'
offices, clinics, hospitals, corporate health programs, secondary
schools, colleges and universities, and professional athletics.
Practicing ATCs satisfy stringent educational and experiential
requirements, and are required to pass a day-long, three-part
competency examination administered by the NATA Board of Certification
(NATABOC). The NATABOC is reviewed and re-accredited every five years
by the National Commission for Certifying Agencies.
Furthermore, most ATCs practice under the direction of licensed
physicians. The Commission on Accreditation of Allied Health Education
Programs (CAAHEP), which certifies programs representing 21 allied
health education professions, accredits programs for athletic training
based on input and approval of the American Academy of Family
Physicians, the American Academy of Pediatrics, the American Orthopedic
Society for Sports Medicine, and the NATA. CAAHEP provides that ``the
athletic trainer, with the consultation and supervision of attending
and/or consulting physicians, is an integral part of the health care
system associated with physical activity and sports.''
To facilitate competition in the health care market, and therefore
enhance the overall quality of care provided, all health care
professionals must be permitted to provide and receive reimbursement
for the provision of health care services for which they are qualified.
The NATA requests that you will consider the following in your analysis
of the health care industry's quality of care initiatives:
The U.S. is experiencing an increasing shortage of
credentialed allied and other health care professionals, particularly
in rural and outlying areas. If patients are not permitted to utilize a
variety of qualified health care professionals, it is likely the
patient will suffer delays in health care, greater cost and a lack of
local and immediate treatment.
Patients who would be referred outside of the physician's
office would incur delays of access. In the case of rural Medicare
patients, this could not only involve delays but, as mentioned above,
cost the patient in time and travel expense. Most importantly, delays
would hinder the patient's recovery and/or increase recovery time,
which would ultimately add to the medical expenditures of Medicare. In
the worst cases, lack of immediate therapy could result in nursing home
admittance and long-term care.
Curtailing to whom the physician can delegate outpatient
therapy services will result in physicians performing more of these
routine treatments themselves. Increasing the workload of physicians
diminishes the physician's ability to provide the best possible patient
care in the least amount of time.
Thank you for the opportunity to submit our comments. We look
forward to hearing the Subcommittee on Health's conclusions regarding
quality of care initiatives, a tremendously vital issue to all
Americans.
----------
EXHIBIT B
The FACTS About Certified Athletic Trainers and The National Athletic
Trainers' Association
This document corrects misinformation frequently cited about
Certified Athletic Trainers (ATCs). It is provided to state and Federal
legislators and regulators, compliance specialists, third-party payers,
physician office and group practice managers, hospital and clinic
administrators, school boards and district administrators, post-
secondary health care educators and others interested in the facts
about the athletic training profession in the 21st century. Readers
should note that the treatment of an adolescent or adult person does
not change simply because the injury or treatment location changes.
Whether the person is on a soccer field or manufacturing floor, the
treatment protocols and methods for injuries and illnesses remain the
same.
1. FACT: All athletic trainers have a bachelor's degree from an
accredited college or university. Athletic trainers are equivalent mid-
level professionals to other therapists, including physical,
occupational, speech, language and similar specialties.
ALL certified or licensed athletic trainers must have a bachelor's
degree from an accredited college or university. Degrees are in
accredited athletic training programs and include established academic
curricula. Prior to obtaining a bachelor's degree in athletic training,
athletic trainers gained bachelor's degrees in pre-medical sciences,
kinesiology, exercise physiology, biology, exercise science and
physical education. Academic programs are approved and certified by the
Commission on Accreditation of Allied Health Education Programs (CAAHP)
and the Joint Review Commission of Athletic Training.
2. FACT: This is the Athletic Training Program content for a bachelor's
degree, which has been in place since the 1980s.
Risk Management and Injury Prevention
Pathology of Injury and Illness
Assessment and Evaluation
Acute Care of Injury and Illness
Pharmacology
Therapeutic Modalities
Therapeutic Exercise
General Medical Conditions and Disabilities
Nutritional Aspects of Injury and Illness
Psychosocial Intervention and Referral
Health Care Administration
Professional Development and Responsibilities
(added in mid-1990s)
Note that these academic subjects are not setting-
or practitioner-specialized. Nor is course content specific to
athletes.
3. FACT: 70% of athletic trainers have a master's or doctorate degree.
ATCs are highly educated. Seventy (70) percent of certified
athletic trainers (ATCs) hold a master's degree or higher. This is
equal in education to physical therapists, occupational therapists,
registered nurses, speech therapists and many other mid-level health
care practitioners. The ATC's educational and clinical skills greatly
exceed those of paraprofessionals like physical therapy assistants or
medical aids/assistants.
4. FACT: Athletic trainers know and practice the medical arts at the
highest professional standards.
Athletic trainers meet the qualifications and standards of any
group--including Medicare and Medicaid--necessary to render skilled
services and gain reimbursement for services rendered. A four-year
undergraduate and/or two-year graduate academic major in the field are
qualifications needed to render skilled services. Athletic trainers
specialize in injury and illness prevention, assessment, treatment and
rehabilitation for all physically active people, including the general
public.
5. FACT: An independent board nationally certifies athletic trainers.
The independent Board of Certification Inc. (BOC) nationally
certifies athletic trainers. Athletic trainers must pass a three-part
written and practical examination and hold a bachelor's degree to
become an Athletic Trainer, Certified (ATC). To retain certification,
ATCs must obtain 80 hours of medically related continuing education
credits every three years and adhere to a code of ethics. The BOC is
accredited by the National Commission for Certifying Agencies.
6. FACT: ATCs are recognized by the American Medical Association as
allied health care professionals.
ATCs are highly skilled, multi-skilled allied health care
professionals, and have been part of the American Medical Association's
Health Professions Career and Education Directory for more than a
decade. Additionally, American Academy of Family Physicians, the
American Academy of Pediatrics and the American Orthopaedic Society for
Sports Medicine are all strong clinical and academic supporters of
certified athletic trainers.
7. FACT: 40 percent of NATA's certified athletic trainer members work
outside of school athletic settings, and provide services to physically
active people of all ages, including athletes.
ATCs work in physician offices as physician extenders. They also
work in rural and urban hospitals, hospital emergency rooms, urgent and
ambulatory care centers, military hospitals, physical therapy clinics,
high schools, colleges/universities, commercial employers, professional
sports teams and performance arts companies. ATCs are multi-skilled
health care workers who, like others in the medical community with
science-based degrees, are in great demand because of the continued and
increasing shortage of registered nurses and other health care workers.
The skills of ATCs have been sought and valued by sports medicine
specialists and other physicians for more than 50 years. As the U.S.
begins its fight against the obesity epidemic, it is important that
people have access to health care professionals who can support
lifelong physical activity for all ages.
8. FACT: Athletic trainers have designated CPT/UB codes.
The American Medical Association (AMA) granted Current Procedural
Terminology (CPT) codes for athletic training evaluation and re-
evaluation (97005, 97006) in 2000. The codes were effective in 2002. In
addition, the American Hospital Association established Uniform Billing
(UB) codes for athletic training in 1999, effective 2000.
9. FACT: CPT and UB codes are not provider specific.
The AMA states that the term ``provider,'' as found in the Physical
Medicine section of the CPT code, is a general term used to define the
individual performing the service described by the code. According to
the AMA, the term therapist is not intended to denote any specific
practice or specialty field. Physical therapists and/or any other type
of therapist are not the exclusive provider of physical therapy
examinations, evaluations and interventions.
10. FACT: ATCs improve patient outcomes.
Results from a nationwide Medical Outcomes Survey conducted 1996-
1998 demonstrate that care provided by ATCs effects a significant
change in all outcomes variables measured, with the greatest change in
functional outcomes and physical outcomes. The investigation indicates
that care provided by ATCs generates a change in health-related quality
of life patient outcomes. (ref: Albohm MJ, Wilkerson GB. An outcomes
assessment of care provided by certified athletic trainers. J Rehabil
Outcomes Meas. 1999; 3(3):51-56.)
11. FACT: ATCs provide the same or better outcomes in clinical settings
as other providers, including physical therapists.
Results of a comparative analysis of care provided by certified
athletic trainers and physical therapists in a clinical setting
indicated that ATCs provide the same levels of outcomes, value and
patient satisfaction as physical therapists in a clinical setting.
(ref: Reimbursement of Athletic Training by Albohm, MJ; Campbel, Konin,
pp. 25)
12. FACT: ATCs demonstrate high patient satisfaction ratings.
Patient satisfaction ratings are more than 96 percent when
treatment is provided by ATCs.
13. FACT: ATCs frequently work in rural, frontier and medically
underserved areas and with physically active people of all ages.
ATCs are accustomed to working in urgent care environments that
have challenging, sometimes-adverse work and environmental conditions.
The athletic training tradition and hands-on clinical and academic
education combine to create a health care professional that is flexible
and inventive--ideal managers of patient care and health care delivery.
14. FACT: ATCs specialize in patient education to prevent injuries and
reduce rehabilitative and other health care costs.
Recent studies, reports, outcomes measures surveys, total joint
replacement studies and many other case studies demonstrate how the
services of ATCs save money for the employers and improve quality of
life for the patient. For each $1 invested in preventive care,
employers gained up to a $7 return on investment, according to one NATA
survey. The use of certified athletic trainers supports a market-driven
health care economy that increases competition in order to reduce
patient and disease costs. The patient's standard of care is not
sacrificed by using ATCs. Instead, care is enhanced because of the
ATCs' broad medical knowledge and capabilities.
15. FACT: Regulated and licensed health care workers.
While practice act oversight varies by state, the athletic training
professional practices under state statute recognizing them as a health
care professional similar to physicians, physician assistants, nurse
practitioners, registered nurses, physical therapists, occupational
therapists and similar mid-level professionals practice. Athletic
training licensure/regulation exists in 43 states, with aggressive
efforts underway to pursue licensure in the remaining states. Athletic
trainers work under the direction of physicians.
16. FACT: The National Athletic Trainers' Association represents 30,000
members.
The National Athletic Trainers' Association (NATA), founded in
1950, represents more than 30,000 members of the international
profession. Of the total membership, 24,000 are ATCs, which represents
more than 90 percent of ATCs practicing in the United States.
Statement of Pharmaceutical Care Management Association
I. INTRODUCTION
PCMA is the national association representing America's
pharmaceutical benefit managers (PBMs). PCMA represents both
independent, stand-alone PBMs and health plans' PBM subsidiaries.
Together, PCMA member companies administer prescription drug plans that
provide access to safe, effective, and affordable prescription drugs
for more than 200 million Americans in private and public health care
programs. PCMA appreciates the opportunity to submit testimony to the
House Ways and Means Health Subcommittee regarding ``New Frontiers on
Quality Initiatives.'' We applaud Chairwoman Johnson for her leadership
on this important issue.
PCMA believes that PBMs' quality initiatives have demonstrated real
value for consumers resulting in better health and lower costs through
therapeutic compliance and disease management programs. We now
anticipate the same benefits for the Medicare population with the
recent enactment of the Medicare Modernization Act. By availing itself
of the very best that the private sector has to offer beneficiaries,
the MMA has expanded choices and benefits for seniors in a way that
maximizes private sector competition.
II. OVERVIEW OF PBMs
PBMs are the cornerstone for any system seeking to manage a
prescription drug benefit. Prescription drugs must be an integrated
component to health delivery because of the value which they offer
consumers. This is particularly true for those living with chronic
conditions who, through prescription drugs, can now manage life-
threatening illnesses.
Today, PBMs' clients are major purchasers of health care. They
include employers, unions, Federal and state governments, and health
plans which rely on us to manage their drug benefits. Our ability to
drive down prescription drug costs while increasing patient safety
through disease and therapeutic management services is well
documented--18-47% according to the General Accounting Office.\1\
---------------------------------------------------------------------------
\1\ ``Federal Employees Health Benefits: Effects of Using Pharmacy
Benefit Managers on Health Plans, Enrollees, & Pharmacies,'' GAO,
January 2003.
---------------------------------------------------------------------------
PBMs have evolved over the years to not only administer drug
benefits, but to offer home delivery pharmacy services, provide real-
time electronic claims adjudication, negotiate deep discounts from
prescription drug manufacturers and pharmacies, and now even offer
clinically-based services. These include drug utilization review;
disease management techniques; consumer, pharmacy and physician
education services; and compliance programs that not only reduce costs
but add tremendous quality to drug management.
The PBM marketplace today is highly competitive, with PBMs existing
in a number of forms which offer public and private purchasers a wide
variety of choices to meet the needs of their plan members. A PBM may
offer multiple variations of models from the more basic plan to the
most comprehensive plan relying on multi-tiered co-payments,
formularies developed with physicians and pharmacists, pharmacy
networks, home-delivery pharmacy, and other similar tools that make
drugs more affordable and accessible.
Home Delivery Service. Home delivery or mail-service pharmacy
allows for even more convenient access to even deeper discounts through
an automated system (as much as 53% for generic medications according
to GAO).\2\ PBM-owned home delivery pharmacies predominantly fill
prescriptions for maintenance medications for individuals managing
complex or chronic illnesses. Consumers save money through reduced co-
payments and the highly efficient method for managing prescriptions and
refills through the automated system.
---------------------------------------------------------------------------
\2\ Ibid.
---------------------------------------------------------------------------
Although automated, mail-service pharmacies provide services to on-
staff pharmacists available to counsel consumers and consult with
physicians on appropriate drug therapies. Counseling is done primarily
through a toll-free telephone and most mail-service pharmacies have
counseling by pharmacists available 24 hours a day/seven days a week.
The process offers convenience to consumers, particularly seniors and
the disabled, who may have transportation or other constraints that
make going to a retail pharmacy difficult. The mail-service pharmacy
option is also particularly helpful in serving residents of rural areas
who would otherwise have to travel long distances to the nearest retail
pharmacy. In addition, some consumers may prefer telephone consultation
in order to afford them more privacy than consultations available in
public at retail pharmacies would.
According to a survey of nearly 14,000 mail-service pharmacy users,
customer satisfaction was as high as 98%.
[GRAPHIC] [TIFF OMITTED] T9678A.006
Rebates and Discounts. Individual PBMs use a variety of strategies
to provide their clients with value. For instance, some PBMs focus on
securing retailer discounts, some focus on pharmaceutical manufacturer
discounts for volume purchases, and others on obtaining discounts for
key generic drugs. As a result of the confidential nature of their
contracts and the diversity of their discounting strategies, PBMs are
not certain of the competition's position which motivates PBMs to
continually improve its products, services, and contracts out of fear
that a competitor may have improved its services and deepened its
discounts.
PBMs currently require drug manufacturers to bid confidentially for
preferred drug status through a blind bidding process which has
tremendous pro-competitive implications. Risk adverse manufacturers
raise rebates in order to prevent being underbid and losing market
share. These motivating factors generate higher rebates which translate
into lower consumer prices. In addition, blind bidding prevents
collusive pricing among manufacturers--or price fixing. Implementation
of the MMA must recognize this or risk higher drug prices and less
competition.
While public disclosure of drug prices for consumer shopping is
important, it is imperative that this not include confidential
contracting information on rebates and discounts which would eviscerate
competition. This includes the protection from public disclosure of
financial arrangements between PBMs and prescription drug manufacturers
or labelers, as well as other information that may be broad enough to
require PBMs to publicly disclosure their negotiated prices with
manufacturers and their negotiated reimbursement rates with individual
retail pharmacies. We recognize that the federal government is a
sophisticated market player and that it has the authority to
appropriately monitor our contracts and prices to prevent any type of
``bait and switch.'' Clients must keep this information confidential,
as well, to prevent broader disclosure of highly significant,
competitive information that will inevitably lead to loss of control
over the data. Without assurances of confidentiality, competitors could
obtain detailed pricing information and, ultimately, set prices.
III. QUALITY ACTIVITIES
Claims Data Technology. PBMs offer sophisticated data management
and information systems, processing 98% of claims electronically. We
adjudicate claims on a real-time basis and determine eligibility, and
the amount of co-payment to collect. Real-time claims administration
activities work in tandem with our ability to increase patient safety.
Patient Safety. While maintaining privacy and confidentiality, PBMs
work with physicians and pharmacists to monitor what drugs enrollees
are getting from the pharmacy, and provide real-time information at the
point of sale to the pharmacist on potential drug-drug interactions,
dosage issues, or other safety concerns before a patient receives a
drug. The pharmacist may also act to resolve the issue by contacting
the prescribing physician at that time.
Prescription Drug History. PBMs are often the only repository of a
patient's total prescription drug history because we hold information
in one centralized electronic file. This is especially important when
enrollees are prescribed medications by more than one physician or when
enrollees use more than one retail pharmacy to purchase their
prescriptions.
Inappropriate Use and Fraud Detection. Centralizing patient drug
history information also serves to help identify fraud or inappropriate
prescribing practices. If a patient is using multiple physicians to get
multiple prescriptions of an inappropriately used medication, PBMs are
well-suited to identify that pattern.
Disease and Therapeutic Drug Management. It is well documented that
chronic patients must stay in compliance with drug regimes to stay
healthy. The Institute of Medicine states that 18,000 Americans die
each year from heart attacks because they did not receive preventive
medications.\3\ Disease management programs typically target common
chronic diseases such as asthma, diabetes, depression, hypertension,
heart failure, and certain other cardiovascular conditions in hopes of
preventing hospitalization and death.
---------------------------------------------------------------------------
\3\ Chassin, 1997; Institute of Medicine, 2003.
---------------------------------------------------------------------------
PBM disease management programs employ a team of clinicians to
identify appropriate individuals for intervention, educate the
participants about their disease, and provide them with self-management
tools. This is particularly important since those with chronic
conditions often do not refill their medications. PBMs will collaborate
with the treating physician providing them with treatment guidelines
developed from medical literature, patient profiles, and patient
management tools. It its worth noting that all treatment and
prescribing decisions rest with the treating physician and PBMs offer
assistance where needed. For some participants, the PBM will arrange
for nurse outreach and case management intervention programs.
Therapeutic Compliance. Through the above-referenced disease
management programs, PBMs can increase patient compliance by
coordinating and monitoring patient care with specific drug therapies.
Clinical outcomes are then tracked and additional information may be
given to participants to help them continue to manage their condition.
These strategies have been proven effective--in fact, according to a
recent study in the Archives of Internal Medicine, therapeutic drug
management served to increase the rate of achieving therapeutic goals
for patients from 74 to 89 percent.\4\
---------------------------------------------------------------------------
\4\ Brian J. Isetts, PhD, BCPS; Lawrence M. Brown, PharmD; Stephen
W. Schondelmeyer, PharmD, PhD; Lois A. Lenarz, MD. ``Quality Assessment
of a Collaborative Approach for Decreasing Drug-Related Morbidity and
Achieving Therapeutic Goals.'' Arch. Of Intern Med. 2003;163;1813-1820.
---------------------------------------------------------------------------
Electronic Prescribing. Adverse drug events have been cited as a
contributing factor to the rising incidence of medical errors in the
health care system. However, electronic prescribing by physicians holds
the promise of decreasing drug related medical errors through the
application of enhanced technology. PBMs are health care leaders in
electronic prescribing. We use technology to improve the prescribing
process for both physicians and their patients. Advantages of e-
prescribing include reduced dispensing errors due to illegible
handwriting, real-time physician access to benefits, eligibility and
formulary information, notification to pharmacists of possible adverse
drug interactions, and the availability of medication history
information for use by physicians and pharmacists in their care
decisions. Sending prescriptions electronically saves significant time
for the patient in filling their medication and enhances efficiency in
the prescribing process by reducing administrative burdens.
E-prescribing, once implemented for use in Medicare, will be a
significant tool in reducing costs to the program through increased use
of the most clinically effective and least costly medications,
including greater use of generics. Congress included an important first
step toward e-prescribing in the new MMA. With the appropriate efforts
dedicated to standards development, this can truly prove a pivotal
policy to reduce medical errors, increase administrative efficiency and
save costs for the program.
IV. CONCLUSION
PBMs bring tremendous value, in addition to cost containment, to
the delivery of prescription drugs through our leadership in the use of
advanced technology and information systems. The MMA is a historic
opportunity to expand that value to the Medicare population through
PBMs. PCMA believes that our participation in Medicare will only serve
to improve and strengthen the program in the years ahead.
Statement of Richard A. Norling, Premier, Inc.
I would like to thank the Chairwoman and distinguished Members of
the House Ways and Means Subcommittee on Health for taking the time to
hold a hearing (March 18, 2004) on an issue so critical to the health
of our communities as quality of care improvement. As an alliance of
leading not-for-profit hospitals and health systems across the country,
Premier exists to facilitate hospitals' delivery of the highest quality
healthcare services.
In July 2003, Premier and the Centers for Medicare and Medicaid
Services (CMS) launched the Hospital Quality Incentive Demonstration
Project, a three-year program designed to demonstrate that economic
incentives are, indeed, effective at improving the quality of inpatient
care. In the course of this joint demonstration, CMS will measure and
pay incentives, in the form of enhanced Medicare payments, for high-
quality inpatient care delivery among hospitals participating in
Premier's PerspectiveTM quality measurement system. To be
sure, the incentives achievable by these hospitals are based entirely
on clinical performance.
Significantly, Premier is providing data collection and analysis
services in support of a new and innovative Medicare demonstration
project that is testing the impact of incentive payments on quality of
care improvement. A total of 278 participating hospitals began
submitting data in October 2003. For each of the next three years, the
top-performing hospitals in each of five clinical areas (acute
myocardial infarction (AMI); coronary artery bypass graft (CABG); heart
failure; community-acquired pneumonia; and hip and knee replacement)
will receive additional payments from the Medicare program. (In order
to participate in the project, however, hospitals must be able to
submit quality data corresponding to all five clinical areas.)
As Dr. Carolyn Clancy, director of HHS' Agency for Healthcare
Research and Quality (AHRQ), noted in her testimony before the
Subcommittee, demo-participating hospitals that perform in the top 10
percent (decile) for a given diagnosis or clinical area--CABG, for
instance--will see a two-percent increase (i.e., bonus payment) in
their Medicare base rate for the measured condition. Hospitals
performing in the second decile will be paid a one-percent bonus.
Scores will be calculated at least semi-annually, and bonus payments
will be made annually in a lump sum. In the third year, participating
hospitals that fail to improve their performance in a specific clinical
area beyond a minimum threshold established in the first year of the
project will be subject to a payment reduction of one- or two percent.
Thus, hospitals will be duly motivated to not only improve, but
maintain the gains throughout the course of the project.
The 34 indicators utilized in the Hospital Quality Incentive
Demonstration Project are widely accepted throughout the industry as
important to quality of care. They stem from quality care research
conducted by the National Quality Forum (NQF), the Joint Commission on
the Accreditation of Healthcare Organizations (JCAHO), the Centers for
Medicare and Medicaid Services' (CMS) 7th Scope of Work initiative, the
Leapfrog Group, the Agency for Health Research and Quality (AHRQ) and
others. These are both process indicators--measuring such things as
timely administration of medication--and outcome indicators--measuring
mortality rate and the like. Significantly, case volume is not one of
the indicators.
As Premier, providers on the frontlines, and countless authorities
in the quality care arena have long hypothesized, we are already
seeing, through our initial data collection and analyses, indications
that high quality and volume are certainly not mutually exclusive. A
forthcoming study using the Premier PerspectiveTM database
demonstrates that the incidence of adverse events, as defined by
patient safety indicators developed by the Agency for Healthcare
Research and Quality (AHRQ), did not, in fact, decrease as hospital
volume increased. Further, no meaningful difference between low-volume
and high-volume facility quality of care could be identified in the
clinical area of coronary artery bypass graft (CABG) surgery. (Kathryn
Leonhardt, MD, MPH; Stephen Grossbart, Ph.D.: ``Metrics and
Measurements in Patient Safety,'' scheduled for presentation at the
sixth annual NPSF Patient Safety Congress, May 4, 2004.)
Medicare Payment Advisory Committee (MedPAC) Chairman Glenn
Hackbarth testified in a similar vein before the Subcommittee during
the March 18 hearing:
Simply providing more care does not necessarily lead to
improving quality. The amount of care Medicare beneficiaries
receive varies widely across the nation. Yet, as noted in our
June 2003 report to the Congress, higher use of care does not
appear to lead to higher quality care; in fact, it appears that
states with the highest use tend to have lower quality than
states with the lowest use. . . . Other researchers have found
similar phenomena in smaller geographic areas--that is, areas
with the highest service use tend to have lower, not higher
quality.
In closing, I'd like to reference an open letter published in the
November/December edition of the Health Affairs policy journal in which
several leading and veteran authorities on the quality care landscape
argued that government, private payers, and other stakeholders must
``support and continue efforts to provide economic incentives for high
quality care.'' The authors concur that ``payment for performance
should become a top national priority, and [that] Medicare payments
should lead in this effort, with an immediate priority for hospital
care.'' In that vein, they recognize and applaud CMS for having
``launched a breakthrough demonstration project . . . to pay quality-
improvement incentive bonuses for Medicare patients at participating
institutions.'' The CMS-Premier demonstration, the authors conclude,
shows that we have ``adequate tools to accelerate the pace of change.''
As President and CEO of Premier, in which the majority of
demonstration hospitals are allied, I can assure you that this project
will make a significant contribution to that effort. Thank you, most
sincerely, for your time and consideration.