Although the federal government has for decades relied extensively on regulatory strategies to address quality concerns, there has been considerable evolution in the types of regulatory requirements. Traditionally, regulatory requirements focused on quality assurance—structural or competency requirements for hospitals (e.g., all hospitals must have well-defined infection control processes) or health care professionals (e.g., physicians and nurses must attain a given level of training and maintain current state licenses). Over decades, regulatory strategies, especially those applicable to the government programs that deliver care through the private sector (i.e., Medicare, Medicaid, and the State Children’s Health Insurance Program [SCHIP]), have incorporated quality improvement approaches that focus more on demonstrating improvement in care processes and patient outcomes. For example, Medicare+Choice (M+C) health plans must collect data on specific performance measures and demonstrate improvement over time. Regulatory strategies that focus on quality improvement offer some potential to shift the quality distribution to the right, although very little is known about which of these approaches works best.

It is this transition from quality assurance to quality improvement strategies that has also broadened the potential for the government to strengthen its roles as purchaser and health care provider. Quality improvement strategies emphasize direct measurement of the clinical quality of care and of patient perceptions and outcomes, and these data then enable differentiation of various levels of quality.

In its purchaser role, the government could reward providers that achieve high levels of quality. Purchasing strategies can raise the quality of care provided by the majority of providers thus shifting the curve to the right. Such strategies include public disclosure of comparative quality data on providers and health plans, and financial and other rewards for high levels of quality.

The disclosure of comparative performance data on hospitals, health plans, physicians, and other providers draws attention to best practices in hopes of encouraging other providers to adopt them. To the extent that consumers act on this information when making choices, health care providers have incentives to improve their performance, thus increasing demand for their services and their market share. Public disclosure of comparative quality data may spur action on the part of providers themselves or professional groups, with steps being taken to encourage poor performers to enhance their knowledge and skills or limit the scope of their practice. Furthermore, public disclosure may stimulate public support for the exercising of regulatory authority by federal or state governments to address persistent poor performance.

The purchaser role also relies on linkages between payment and per-



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