HHS unveils local quality reporting plan

Washington -- When it comes to publicly reporting the quality and price of medical services, the Dept. of Health and Human Services wants to think nationally but act locally.

That's the driving concept behind the latest HHS quality and cost initiative, known as "value exchanges." Selected local, nonprofit collaboratives of health care professionals and purchasers will receive federal charters to issue report cards for participating physicians, nurses, hospitals and others.

By comparing information about multiple caregivers, health care consumers would be able to decide where to receive treatment based on the quality of care provided, its price or a combination of both. A physician who chooses not to participate would not be listed as an option on the consumer guides.

Although they will follow federal standards in measuring quality, the collaboratives will be self-governing. The voluntary effort, part of a broader quality and price transparency initiative that the Bush administration unveiled last year, aims to build on a Medicare public reporting pilot project operating in six states.

Within about 10 years, HHS hopes to establish a network of these value exchanges to give patients in many areas a tool for choosing where they receive care. Value exchanges will also be able to use the network to share successful innovations with each other.

Combining federal standards with local control is necessary to ensure that the initiative works, said HHS Secretary Michael Leavitt. Until a comprehensive national system of electronic medical records exists, much of this process will involve gleaning quality and cost information from paper claims -- which must be done at the local level.

In addition, more physicians will be willing to participate in a voluntary reporting program controlled by a regional collaborative than a national one under the direct control of the federal government, Leavitt said. "Doctors will not trust this enough unless it is done locally."

Growing tensions

The HHS plan for health exchanges will not guarantee that doctors and others will cooperate or help create a useful tool, federal officials and physicians acknowledged.

One possible impediment is that any new program will join the growing list of quality and cost reporting efforts already sponsored by the government, many insurers and employer groups, said Timothy Hobbs, MD, CEO of Community Physicians of Indiana. His physician network is preparing to participate in a separate quality reporting and bonus project sponsored by a local collaborative.

The concern is that physicians are held to different standards depending on the program. That potentially could mean they will be expected to report widely varying information to different programs and will receive widely varying scores depending on who is processing the data.

"If physicians get too scattered, that will kill any effective results we might get," Dr. Hobbs said. "The more consistency we can have between programs, the better."

Physicians are also mindful of the extra burden on their practices of collecting the data and submitting it, said Carolyn M. Clancy, MD, director of the HHS Agency for Healthcare Research and Quality, which will decide who receives the value exchange charters. The $4 million that the Bush administration has proposed for value exchanges in fiscal 2008 would serve as seed money for the local coalitions but would not go toward increased administrative payments for doctors.

Physician organizations such as the American Medical Association have questioned the utility of including price information along with quality scores. With the federal government and private insurers largely dictating reimbursement rates, doctors often don't determine their own charges, they said.

Leavitt described the tension between major employers and other payers who are hungry for quality information and doctors who are worried that some reporting programs could be used purely as a cost-control mechanism. Some large firms are under so much cost pressure that they have expressed a strong interest in obtaining these data to find efficiencies even if the information does not conform to widely accepted standards.

"If you're a doctor, those are very frightening words to you, because you want it perfect," Leavitt said.

One way HHS hopes its latest effort will succeed is by using quality measures that physician organizations have embraced. Dr. Clancy said a major source of the quality measures will be the Physician Consortium for Performance Improvement, a group convened by the AMA that is working on consensus measures.

"This is actually what the profession believes is the best science rather than the government saying, 'Here's what you have to do,' " she said.

The road to pay-for-performance?

The work of the value exchanges will lay important groundwork for the day when Medicare compensates doctors based on the quality -- not just the volume -- of the care they provide, Leavitt said. "If there is no way to systematically measure that and collect these data in a rapid and scalable way, then actually making that system work is extraordinarily difficult."

Still, much of the role that the value exchanges can play in ensuring that the system transitions smoothly toward such a goal remains unclear. In addition to numerous pilot programs, the administration has separate upcoming plans for physicians to receive bonuses for reporting quality measures and for hospitals to receive rate reductions if they do not. Federal officials did not describe how the latest effort will dovetail with those programs, if at all.

Leavitt also did not provide details on how the federal government will pass down Medicare claims information to the value exchanges. Federal officials and physicians agree that collaboratives need to be able to compare their data with Medicare information in order to make accurate assessments of the value of care that a doctor or hospital provides.

"If we're going to be sharing our data, we'd certainly like for them to share their data so we have the ability to balance things out," Dr. Hobbs said.

HHS plans to release more details before this summer, when the AHRQ will begin accepting grant applications from coalitions hoping to become value exchanges.