Government

The quality challenge: How best to raise the bar for medical care

Medicare needs to become a leader in the health care quality movement, experts say. Will it use a carrot or a stick?

By Markian Hawryluk — Posted March 1, 2004

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There's an old riddle asking what a 300-pound gorilla eats. Anything it wants, is the answer. With Medicare playing the role of the 300-pounder in health care, policy experts are saying it needs to be a lot more discriminating in its diet.

Several quality improvement efforts have provided encouraging proof that U.S. health care could be vastly better than it is. But unless the federal government uses its massive power as a health care purchaser, provider and regulator, the health care system is unlikely to achieve widespread, meaningful change, experts say.

The government's approach might well determine whether physicians will come to the table willingly or be dragged Fay Wray-style, kicking and screaming.

The nation's health care system is too fragmented and complex to reach lofty quality goals on its own, said Stephen C. Schoenbaum, MD, senior vice president of the Commonwealth Fund. The list of players is long: more than 5,500 acute-care hospitals, 18,000 nursing homes, 800,000 physicians and myriad other health professionals, hundreds of insurers and thousands of self-insured payers.

Added to that are licensure boards and regulatory agencies in all 50 states; multiple accrediting organizations; and hundreds of professional organizations, boards and societies. Given the diversity of interests, it is unrealistic that leadership can emerge from the industry itself, he said.

"The government can organize and facilitate improvement processes, which has happened in other industries," Dr. Schoenbaum said. "And through federal leadership, it would be possible to improve to a greater degree than has already happened."

He argues that federal and state programs, principally Medicare and Medicaid, should provide incentives for physicians and other health care professionals to improve quality systemwide.

"Together, federal and state governments pay for almost half of all U.S. health care spending," he said. "They can exert enormous leverage by developing, implementing and evaluating models to link payment to guidelines and performance standards."

Dr. Schoenbaum suggested establishing a new federal agency with the sole purpose of overseeing health care quality improvement. The same recommendation was made by a presidential advisory commission in 1988, but neither the Clinton nor Bush administrations have pursued it. That commission also recommended the creation of the National Quality Forum to promote the use of standardized quality measures and public reporting of results. The forum began collecting and endorsing those measures in 2000, but it relies on health care practitioners to voluntarily adopt their use.

NQF President and CEO Kenneth Kizer, MD, said there needs to be at least a point of focus within the federal government to help coordinate efforts. "If we're going to see the improvements in patient safety and health care quality overall that have been so well defined by the Institute of Medicine in recent years, then the U.S. government has to play a central and an active role in that regard," Dr. Kizer said.

The NQF could expand its role, if asked by the federal government, to include such activities as endorsing national quality improvement priorities, establishing a national medical error reporting system, and creating a uniform medical licensure process, he said.

Physician reluctance

Many of those efforts could help bring quality improvement into physician offices in a systematic way. But, Dr. Kizer said, physicians have had a hard time accepting the concept of performance measurement and public reporting.

"They simply need to get over it, because it's going to happen," he said. "We need to make sure the measures are as good as possible, but it's certainly part of the future landscape."

Doctors have been slow to warm to quality measures, particularly public reporting, for a number of reasons. For one, many physicians fear the data might be used as evidence against them in malpractice cases.

The key is creating a system in which assessment is done using constructive feedback aimed at improving care, not assigning blame, said Robert Graham, MD, acting deputy director for the Agency for Healthcare Research and Quality.

"You really have to make an assessment of a provider's or an institution's performance based upon the totality of what they do, rather than specific incidents," he said. One solution might be incorporating performance measurement into the certification process. The American Board of Medical Specialties is promoting "maintenance of certification," which would force physicians to demonstrate continued competency through benchmarking on standardized quality measurements and use of evidence-based medicine.

Ultimately, physicians' buy-in is necessary for quality improvement to take hold, even with federal leadership, Dr. Graham said.

"It takes more than just push -- there's got to be pull. There's got to be more than a federal entity or centralized entity saying you must do this," he said. "There has to be a culture of quality that is developed locally, institution by institution, practitioner by practitioner, that says this is part of our professional responsibility."

But physicians also have balked at the added burden of gathering and reporting quality data. Doctors complain more and more about time constraints, particularly the multiple administrative tasks required by various payers and regulators.

Those time constraints could be alleviated by automating data collection through the use of electronic medical records. Support for a national health care information technology infrastructure is growing, but this area also will require federal leadership to reach consensus.

"If we don't have electronic health records, we have a major limiting factor in our ability to measure performance," said Dennis O'Leary, president of the Joint Commission on Accreditation of Healthcare Organizations.

Doctors also remain skeptical about whether measures provide an accurate picture of their quality of care. Although large group practices might have the patient volume to accurately measure quality, small or solo practices often don't see enough patients for a meaningful assessment.

"The scale of a physician's office, combined with the variety of patients and procedures that are performed, make it virtually impossible to measure quality accurately and fairly in a physician office," said Robert Reischauer, PhD, president of the Urban Institute, a Washington, D.C., think tank, and a member of the Medicare Payment Advisory Commission.

But that doesn't mean Medicare and other public programs can't begin to experiment with quality incentives for physicians, Dr. Reischauer said.

"I don't think we have to wait in the sense that we can apply qualitative measures and reward those with high quality," he said. "And those who choose to organize their practices as solo practitioners will just be out of that income stream."

Measuring quality in physician offices remains beyond the government's reach for now, said Tom Scully, former administrator for the Centers for Medicare & Medicaid Services.

"It's just too complicated. You've got how many hundreds of thousands of physicians, and appropriately measuring them is years off," he said. "My view is they all work in institutions, and what you're really trying to do is not necessarily rate the individual physicians, you're trying to drive change. If you can rate the institutions, it drives that."

Taking the first steps

Medicare implemented several quality-of-care demonstration projects under Scully's watch, but those were limited to hospitals, nursing homes and larger group practices.

CMS began requiring quality measurement and public reporting of nursing home data in 2003.

"When we started publishing those things in the newspaper, even if no senior understood, the boards, the nurses paid attention and wanted to know: 'Why do we have the worst bedsore [rates]?' " Scully said. "And it changed behavior overnight." In the initiative's first year, the percentage of nursing home residents with chronic pain dropped by more than 30%, and the use of physical restraints by 15%.

"There are just the first year's numbers," said David Schulke, executive vice president of the American Health Quality Assn. "But they give cause for optimism that public reporting and technical assistance from [Medicare-contracting] quality improvement organizations can significantly improve quality of care in nursing homes."

CMS recently implemented a provision included in the new Medicare reform law that will offer 0.4% higher payments in 2005 to hospitals that report performance data on 10 quality measures for all patients, not just Medicare beneficiaries.

"Valid, reliable, comparable and salient quality measures provide a potent stimulus for clinicians and providers to improve the quality of care they provide," said Acting CMS Administrator Dennis Smith in announcing the program.

In addition, a hospital demonstration project in development will provide bonus payments to hospitals that score in the top 20% on quality measures. In the future, hospitals in the bottom 20% will see a payment cut.

White House Senior Policy Adviser Doug Badger said the hospital initiatives represented Medicare's first experimentation with pay for performance, and he suggested that health care practitioners could see more of that approach.

"We think that's a first step as we begin to look at government as a prudent purchaser of health care to try to pay for better quality care," he said.

All told, Congress allocated more than $1 billion for the next three years specifically for Medicare's quality improvement work.

Medicare musters the private sector

Other provisions in the Medicare reform law likely will drive quality improvement, Scully said. Incentives to managed care companies to re-enter the Medicare market will provide greater leverage for private plans in negotiations with hospitals and doctors.

"You're going to find a lot more differential payments, a lot more negotiations, a lot more pressure on the whole health care system to change for the better," he said. "If you have commercial clout, but also Medicare clout, you can start to drive people to better performing docs and hospitals."

And unlike Medicare, private plans can implement quality improvement measures without having to jump through legislative and regulatory hoops. Former CMS Administrator Gail Wilensky, PhD, said private plans often could move more quickly than public-sector initiatives.

"The federal government can be helpful in jump-starting the use of innovative strategies through its research and demonstration authority," Dr. Wilensky said. "But the private sector is likely to be much more nimble in terms of trying alternative strategies, discarding those that don't work, and experimenting with those that work imperfectly."

Medicare ultimately will have to alter payment structures, such as the physician fee schedule or the hospital prospective payment system, to encourage quality, she said.

"The current reimbursement system not only doesn't pay for quality, it pays more for defects, since it pays for the initial service and then again for correcting any defect associated with the initial service," she said.

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ADDITIONAL INFORMATION

Demonstrating quality

Medicare has relied mainly on demonstration projects to test quality improvement strategies. Recent initiatives include:

Premier hospital quality incentive, July 2003 Hospitals can receive bonuses based on quality measures selected for inpatients with heart attack, heart failure, pneumonia, coronary artery bypass graft, and hip and knee replacements.

End-stage renal disease management, June 2003 Organizations treating ESRD patients can receive a capitated payment to test the effectiveness of disease management models. Participating organizations also can choose a fee-for-service model under which they coordinate the health care of ESRD patients.

Medicare capitated disease management, February 2003 Health organizations can receive a capitated payment to provide all the Medicare services needed for disease management for chronically ill patients. Payment rates are determined based on the projected costs of the enrollee for the payment year, fully adjusted for their health status.

Medicare physician group practice, September 2002 Physician groups can receive bonus payments from savings achieved through improvements in the management of chronically ill Medicare beneficiaries and the coordination of services. Participating groups have annual performance targets based on average Medicare spending on their beneficiaries.

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