LEADERSHIP BY EXAMPLE

Coordinating Government Roles in Improving Health Care Quality

Committee on Enhancing Federal Healthcare Quality Programs

Janet M. Corrigan, Jill Eden, and Barbara M. Smith, Editors

INSTITUTE OF MEDICINE OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS
Washington, D.C.
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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality LEADERSHIP BY EXAMPLE Coordinating Government Roles in Improving Health Care Quality Committee on Enhancing Federal Healthcare Quality Programs Janet M. Corrigan, Jill Eden, and Barbara M. Smith, Editors INSTITUTE OF MEDICINE OF THE NATIONAL ACADEMIES THE NATIONAL ACADEMIES PRESS Washington, D.C. ww.nap.edu

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. Support for this project was provided by the Department of Health and Human Services, the Commonwealth Fund, and the California Healthcare Foundation. The views presented in this report are those of the Institute of Medicine Committee on Enhancing Federal Health Care Quality Programs, and are not necessarily those of the funding agencies. Library of Congress Cataloging-in-Publication Data Institute of Medicine (U.S.). Committee on Enhancing Federal Healthcare Quality Programs. Leadership by example : coordinating government roles in improving healthcare quality / Committee on Enhancing Federal Healthcare Quality Programs ; Janet M. Corrigan, Jill Eden, and Barbara M. Smith, Editors. p. ; cm. Includes bibliographical references and index. ISBN 0-309-08618-3 (pbk.) 1. Medical policy—United States. 2. National health services—United States. [DNLM: 1. Health Care Reform—United States. 2. Government Programs—United States. 3. Quality Assurance, Health Care—United States. WA 540 AA1 I455L 2003] I. Corrigan, Janet. II. Eden, Jill. III. Smith, Barbara M. IV. Title. RA395.A3I4935 2003 362.1’0973—dc21 2003001324 ISBN 0-309-51693-5 (pdf) Additional copies of this report are available from the National Academies Press, 500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu. For more information about the Institute of Medicine, visit the IOM home page at: www.iom.edu. Copyright 2003 by the National Academy of Sciences. All rights reserved. Printed in the United States of America. The serpent has been a symbol of long life, healing, and knowledge among almost all cultures and religions since the beginning of recorded history. The serpent adopted as a logotype by the Institute of Medicine is a relief carving from ancient Greece, now held by the Staatliche Museen in Berlin.

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality “Knowing is not enough; we must apply. Willing is not enough; we must do.” —Goethe INSTITUTE OF MEDICINE OF THE NATIONAL ACADEMIES Shaping the Future for Health

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality THE NATIONAL ACADEMIES Advisers to the Nation on Science, Engineering, and Medicine The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. Wm. A. Wulf are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality COMMITTEE ON ENHANCING FEDERAL HEALTH CARE QUALITY PROGRAMS Gilbert S. Omenn (Chair), Professor of Internal Medicine, Human Genetics, and Public Health, University of Michigan, Ann Arbor MI George K. Anderson, Senior Partner, New World Healthcare Solutions, Inc., Vienna VA Gerard F. Anderson, Professor and Director, Center for Hospital Finance & Management, Johns Hopkins University, Baltimore MD Stuart Baker, Executive Vice President, VHA, Inc., Irving TX E. Andrew Balas, Dean and Professor, School of Public Health, St. Louis University, St. Louis MO Charles R. Buck, Jr., Health Care Consultant, Former Program Leader, Health Care Quality and Strategy Initiatives, General Electric Company, Weston CT Bruce Bullen, Senior Vice President and Chief Operating Officer, Harvard Pilgrim Health Care, Wellesley MA Colleen Conway-Welch, Dean and Professor, School of Nursing and Associate Director, VUMC Patient Care Services, Vanderbilt University, Nashville TN Gordon H. DeFriese, Professor of Social Medicine, University of North Carolina at Chapel Hill, Chapel Hill NC Sam Ho, Senior Vice President and Chief Medical Officer, PacifiCare Health Systems, Santa Ana CA Sylvia Drew Ivie, Executive Director, T.H.E. Clinic, Los Angeles CA Arthur Levin, Director, Center for Medical Consumers, New York NY Jan Malcolm, Commissioner, Minnesota Department of Health, Minneapolis MN Elizabeth A. McGlynn, Associate Director, RAND Health, Santa Monica CA James M. Perrin, Professor of Pediatrics, Harvard Medical School and MassGeneral Hospital for Children, Boston MA Helen Smits, Visiting Scholar, Robert F. Wagner School of Public Service and Visiting Scholar, the Institute for Medicare Practice, New York University, New York NY Douglas L. Wood, Vice-Chair, Department of Medicine, Mayo Clinic, Rochester MN

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Study Staff Janet M. Corrigan, Study Director, Director, Board on Health Care Services Jill Eden, Senior Program Officer Barbara M. Smith, Senior Program Officer Hope R. Hare, Senior Project Assistant Auxiliary Staff Tony Burton, Administrative Assistant Shari Erickson, Research Associate Julie Wolcott, Program Officer Editor Rona Brière

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Reviewers The report was reviewed by individuals chosen for their diverse perspectives and technical expertise in accordance with procedures approved by the National Research Council’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments to assist the authors and the Institute of Medicine in making the published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. The committee wishes to thank the following individuals for their review of this report: John C. Beck, Emeritus Professor, School of Medicine, UCLA School of Medicine, Pacific Palisades CA Maureen Booth, Muskie School of Public Service, Portland ME Joseph Cassells, Health Care Consultant, Bethesda MD J. Jarrett Clinton, DHHS Regional Health Administrator, Atlanta GA John Colmers, Milbank Memorial Fund, New York NY Kathryn J. Coltin, Director, Clinical Measurement Systems and External Affairs, Harvard Pilgrim Health Care, Brookline MA William Cors, Senior Vice President, Somerset Medical Center, Somerville NJ David Dantzker, Wheatley MedTech Partner LP, New York NY Robert Galvin, Director of Corporate Health Care and Medical Programs, General Electric Company, Fairfield CT

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Thomas Garthwaite, Director and Chief Medical Officer, Department of Health Services, County of Los Angeles, Los Angeles CA Charles B. Inlander, President, People’s Medical Society, Fogelsville PA Jeff Kang, Cigna Health Care, Hartford CT David Kibbe, Director of Health Information Technology, American Academy of Family Physicians, Chapel Hill NC David Lansky, President, Foundation for Accountability, Portland OR Chris Queram, The Alliance, Madison WI Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations nor did they see the final draft of the report before its release. The review of this report was overseen by Neal A. Vanselow (retired), Rio Verde, Arizona, and Judith Lave, University of Pittsburgh, Pennsylvania. Appointed by the National Research Council and Institute of Medicine, they were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Preface The American health care sector is in need of improvement. In recent years, distinguished panels of experts, academic researchers, and hospital and health plan accreditors have called attention to serious safety and quality shortcomings in American health care. In 1998, the Institute of Medicine’s (IOM) Roundtable on Quality published a statement entitled The Urgent Need to Improve Health Care Quality. A 1999 IOM report, To Err Is Human: Building a Safer Health System, focused national attention on patient safety problems as a common cause of preventable deaths. In the 2001 report Crossing the Quality Chasm: A New Health System for the 21st Century, the IOM called for fundamental reform of the health care sector. Against this backdrop, Congress directed the Department of Health and Human Services to contract with the IOM to conduct a study of the federal government’s health care quality enhancement processes in six major government programs—Medicare, Medicaid, the State Children’s Health Insurance Program, the Department of Defense TRICARE and TRICARE for Life (DOD TRICARE), the Veterans Health Administration, and the Indian Health Service. The IOM established the Committee on Enhancing Federal Health Care Quality Programs to conduct this study. Committee members brought to the effort expertise in quality measurement and improvement, organization and financing of health care services and care delivery, patient care, and consumer advocacy, as well as experience in directing government quality oversight programs and in responding to quality oversight requirements from the perspective of a health care provider.

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Throughout its work, the committee strove to view the programs under its charge from the perspective of patients. A patient-centered perspective places a premium on coordinated care over time, across care settings, and across multiple payers—especially important for those with chronic conditions. Such a focus requires government programs and health care providers to unify and standardize their quality improvement efforts. In this study, the committee addressed two overarching questions. First, is the federal government adequately carrying out its quality-related responsibilities to the beneficiaries of these six major government programs? Second, what steps can be taken to make government’s quality enhancement processes more responsive to the needs of beneficiaries? The Committee’s overall conclusion is that the federal government must assume a stronger leadership role to address quality concerns. By exercising its roles as purchaser, regulator, provider of health care services and sponsor of applied health services research, the federal government has the necessary influence to direct the attention and resources of the health care sector in pursuit of quality. There is no other stakeholder with such a combination of roles and influence. In assuming a leadership role, the federal government will attract many partners. The desire to help patients is what drives so many of America’s brightest citizens to enter the health professions, whether as doctors, nurses, pharmacists or administrators in the public or private sectors. The satisfaction of contributing to improvements in the health of one’s community often motivates service on health care boards. Concerns that consumers, employers, and taxpayers receive the greatest value for dollars invested in health care will motivate the business community to support quality improvements. Finally, few issues are of greater concern to the American public than their health and their health care. We all have a stake in improving America’s health care system. Gilbert S. Omenn, M.D., Ph.D., Chair

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Acknowledgments The Committee on Enhancing Federal Health Care Quality Programs wishes to acknowledge the many people whose contributions made this report possible. Special thanks to Caroline Taplin (Office of the Assistant Secretary for Policy and Evaluation) who provided ongoing support and encouragement throughout the project. Numerous other experts in federal departments, federal agencies, and other organizations served as important sources of information, generously giving their time and sharing their knowledge to further the committee’s efforts. In the Agency for Healthcare Research and Quality, they include Charles Darby, Nancy E. Foster, Nancy Krauss, Gregg Meyers, and Thomas W. Reilly. In the Centers for Medicaid and Medicare Services, they include Rachel Block, Regina Buchanan, Eileen Davidson, Paul Elstein, Barbara Fleming, Lisa Hines, Tom Hoyer, Stephen F. Jencks, Jeffrey Kang, Steve Klauser, Patricia MacTaggart, Regina McPhillips, Dorothea Musgrave, Barbara Paul, Thomas Scully, Armen Thoumaian, and Sidney Trieger. In the Department of Defense, they include D. E. Casey Jones, Marie-Jocelyne Charles, Daniel L. Cohen, Victor Eilenfield, Marion Gosnell, Bart Harmon, Bonnie Jennings, Pamela Jordan, Brian Kelly, Ben Long, Dan Magee, Reta Michak, Mark Paris, Jessica Powers, Geoffrey W. Rake, Jr., David Ray, Kimberly Roe, Teresa Sommese, Wyatt Smith, Frances Stewart, and Robert Wah. In the Health Resources and Services Administration, they include Laura McNally and William Robinson.

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality In the National Institutes of Health, they include Nancy Miller and Molla Donaldson. In the Indian Health Services, they include Angela Kihega, Edna Paisano, Robert Pittman, and Rosetta Tracy. In the Veterans Health Administration, they include James Bagian, Darryl Campbell, Gary Christopherson, John Demakis, Noel Eldridge, David Gaba, Frances Murphy, Jonathan B. Perlin, Marta Render, Louise Van Diepen, and William Weeks. Numerous other individuals made important contributions to the committee’s work. They include Richard J. Bringewatt of the National Chronic Care Consortium, Suzanne Delbanco of the Leapfrog Group, Robert Galvin of the General Electric Company, Sheldon Greenfield of the New England Medical Center, Kenneth W. Kizer of the National Quality Forum, Kathleen Lohr of the Research Triangle Institute, Margaret E. O’Kane of the National Committee on Quality Assurance, Elaine Power of the National Quality Forum, James Reinertsen of the Reinertsen Group, Burtt Richardson of the Healthy Futures Partnership in Maine, Trish Riley of the National Academy for State Health Policy, Sara Rosenbaum of the George Washington University Center for Health Services Research and Policy, Thomas C. Royer of CHRISTUS Health, Matthew Salo of the National Governors Association, David G. Schulke of the American Health Quality Association, Shoshanna Sofaer of Baruch College, William Stead of Vanderbilt University, Edward Wagner of the Group Health Cooperative of Puget Sound, Edward Westrick of Rhode Island Quality Partners, Helen Wu of the National Quality Forum, and Ann Page and Elaine Swift of the Institute of Medicine. October 2002

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Glossary Chronic conditions. A condition that requires ongoing medical care including monitoring, treatment, and coordination among multiple providers, limits what one can do, and is likely to last longer than one year. Examples include diabetes, cancer, and cardiovascular disease (Partnerships for Solutions, 2002). Clinicians. Individual health care providers, such as physicians, nurse practitioners, nurses, physician assistants, and others. Dual eligible. Individuals enrolled in more than one government health care program. For example, individuals who are beneficiaries of both the Medicare and Medicaid programs, or those receiving benefits under both the Veterans Health Administration and Medicare. Government health care programs. The six government-sponsored insurance and/or health care delivery programs reviewed in this report: Medicare, Medicaid, the State Children’s Health Insurance Program, the Department of Defense’s TRICARE and TRICARE for Life Programs, the Veterans Health Administration program, and the Indian Health Service program. Providers. Refers to both institutional providers of health care services (e.g., health plans, health maintenance organizations (HMOs), hospitals, nursing homes) and clinicians (e.g., physicians, nurse practitioners, nurses, physician assistants). Quality. The degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge (Institute of Medicine, 1990).

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Quality aims. Six dimensions of quality that constitute the goals of the health system (Institute of Medicine, 2001). They are: Safe—avoiding injuries to patients from the care that is intended to help them. Effective—providing services based on scientific knowledge to all who could benefit and refraining from providing services to those not likely to benefit (avoiding underuse and overuse, respectively). Patient-centered—providing care that is respectful of and responsive to individual patient preferences, needs, and values and ensuring that patient values guide all clinical decisions. Timely—reducing waits and sometimes harmful delays for both those who receive and those who give care. Efficient—avoiding waste, including waste of equipment, supplies, ideas, and energy. Equitable—providing care that does not vary in quality because of personal characteristics such as gender, ethnicity, geographic location, and socioeconomic status. Quality enhancement processes. The range of activities—including review, certification, performance measurement, and technical assistance—pursued by government health care programs to assess and improve the quality of health care outcomes, structures, and processes. Quality management activity (internal). The ongoing, organized activities of a provider that focus on measuring, monitoring, or improving the quality of services it provides. Quality (or performance) measures. These include measures of patient perspectives on care, clinical quality, and patient outcomes. • Measures of patient perspectives include patient assessment and satisfaction with their access to and interactions with the care delivery system (e.g., waiting times, information received from providers, choice of providers). • Measures of clinical quality are specific quantitative indicators to identify whether the care provided conforms to established treatment goals and care processes for specific clinical presentations. Clinical quality measures generally consist of a descriptive statement or indicator (e.g., the rate of beta blocker usage after heart attack, the 30-day mortality rate following coronary artery bypass graft surgery), a list of data elements that are necessary to construct and/or report the measure, detailed specifications that direct how the data elements are to be collected (including the source of data), the population on whom the measure is constructed, the timing of data collection and reporting, the analytic models used to construct the measure, and the format in which the results will be presented. Measures may also include thresholds, standards, or other benchmarks of performance (McGlynn, 2002).

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality • Measures of patient outcomes include mortality, morbidity, and physical and mental functioning. Quality review (external). Ongoing, organized reviews, conducted by independent external entities, of the quality of services offered by a health care provider. For example, states are required to contract with independent external review organizations to conduct annual assessments of the quality of services provided to Medicaid beneficiaries in HMOs. Risk adjustment. A process that modifies the analysis of performance measurement results by those characteristics of the patient population that affect results, are out of the control of providers, and are likely to be common and not randomly distributed. Safety-net providers. Providers that historically have had large Medicaid and indigent care caseloads relative to other providers and are willing to offer services regardless of the patient’s ability to pay (AcademyHealth, 2002). Vulnerable populations. Persons who are at increased risk of poor health outcomes. For example, persons with severe and chronic mental illness, the frail elderly, racial minorities, and the poor. REFERENCE LIST AcademyHealth. 2002. “Academy Publications: Glossary of Terms Commonly Used in Health Care.” Online. Available at http://www.academyhealth.org/publications/glossary.pdf [accessed July 3, 2002]. Institute of Medicine. 1990. Medicare: A Strategy for Quality Assurance. Washington DC: National Academy Press. ———. 2001. Crossing the Quality Chasm: A New Health System for the 21st Century. Washington DC: National Academy Press. McGlynn, E. A. (RAND Health). July 2002. Quality Measures. Personal communication to Janet Corrigan. Partnerships for Solutions. 2002. Better Lives for People with Chronic Conditions. Medicare: Cost and prevalence of chronic conditions. Baltimore MD: Johns Hopkins University.

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Contents     EXECUTIVE SUMMARY   1      Overview of Current Quality Enhancement Processes,   2      Opportunities for Improvement,   4      The Need for Federal Leadership Now,   5      The Federal Government’s Unique Position,   6      The Transformation of Quality Enhancement,   8      Need for Applied Health Services Research,   14      Getting from Here to There,   15 1   INTRODUCTION   21      Study Process and Scope,   22      Study Context,   23      Organization of the Report,   25 2   OVERVIEW OF THE GOVERNMENT HEALTH CARE PROGRAMS   28      Medicare,   29      Medicaid,   32      State Children’s Health Insurance Program,   34      Veterans Health Administration,   35      DOD TRICARE,   35      Indian Health Service,   36      Broad Trends Affecting the Needs and Expectations of Beneficiaries,   37      Key Program Features,   41

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality 3   COORDINATING THE ROLES OF THE FEDERAL GOVERNMENT TO ENHANCE QUALITY OF CARE   56      Overview of Federal Roles,   57      Regulatory Strategies,   60      Purchasing Strategies,   67      Care Delivery,   69      Current Efforts to Standardize and Coordinate,   70      Leveraging the Government Roles,   72 4   PERFORMANCE MEASURES   79      Types of Performance Measures,   81      Commonly Used Performance Measure Sets,   83      Overview of Current Performance Measurement Activities,   87      DOD TRICARE,   98      Optimizing the Government’s Use of Performance Measures,   100      Need to Standardize Quality Performance Measures,   101 5   BUILDING STRONGER INFORMATION CAPABILITIES   108      The Status of Information Technology Development,   112      Motivating Change,   117      Access to Information,   121 6   A RESEARCH AGENDA TO SUPPORT QUALITY ENHANCEMENT PROCESSES   129      Overview of Current Research Activities,   130      Coordination of Research Activities,   141      Critical Research Priorities,   143     APPENDIXES     A   List of Acronyms, Abbreviations, and Web Addresses   153 B   Adult Diabetes Care: Performance Measurement Set for 18- to 75-Year-Olds   158 C   Technical Overview: Health Information Systems of VHA and DOD   162 D   Selected Agency Websites   171     INDEX   173

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality Tables, Figures, and Boxes TABLES ES-1   Government Health Care Programs in Fiscal Year 2001,   3 2-1   Government Health Care Programs and Populations at a Glance,   30 2-2   Insurance Plans Covering Benefits Important to Chronically Ill Persons, 2000,   42 3-1   Overview of Regulatory Requirements in Medicare, Medicaid, and SCHIP,   62 3-2   Overview of Regulatory Requirements: VHA, DOD TRICARE, and IHS,   64 3-3   Internal Quality Management Activities: VHA, DOD TRICARE, and IHS,   71 4-1   Selected Performance Measure Sets Used by One or More Government Health Programs,   84 4-2   National Medicare QIO Projects in the 6th SOW,   91

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality FIGURES ES-1   Implementation Timeline,   16 2-1   Medicare Beneficiaries with Cognitive and/or Physical Limitations as a Percentage of Beneficiary Population and Total Medicare Expenditures, 1997,   32 2-2   Medicare Beneficiaries with Five or More Chronic Conditions Account for Two-Thirds of Medicare Spending,   33 2-3   Distribution of Persons Served Through Medicaid and Payments by Basis of Eligibility, Fiscal Year 1998,   34 3-1   Distribution of Care by Level of Quality, A Conceptual Scheme,   57 BOXES 2-1   Possible Financial Incentive Models for Rewarding Providers for Quality Improvements,   47 4-1   Quality Improvement Organizations: Objectives, Staffing, and Financing,   89 4-2   ORYX: JCAHO’s Performance Measurement Initiative,   94 4-3   Six Attributes of Quality,   100

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Leadership by Example: Coordinating Government Roles in Improving Health Care Quality LEADERSHIP BY EXAMPLE

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