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Pathways to Quality Health Care MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM Maximizing Potential Committee on Redesigning Health Insurance Performance Measures, Payment, and Performance Improvement Programs Board on Health Care Services

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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 Na- tional Academy of Sciences, the National Academy of Engineering, and the Institute of Medi- cine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This study was supported by Contract No. HHSM-500-2004-00010C between the National Academy of Sciences and the United States Department of Health and Human Services through the Centers for Medicare and Medicaid Services. Any opinions, findings, conclusions, or rec- ommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the organizations or agencies that provided support for this project. Library of Congress Cataloging-in-Publication Data Medicare's quality improvement organization program : maximizing potential / Committee on Redesigning Health Insurance Performance Measures, Payment, and Performance Improvement Programs, Board on Health Care Services. p. ; cm. -- (Pathways to quality health care) "This study was supported by Contract No. HHSM-500-2004-00010C between the National Academy of Sciences and the United States Department of Health and Human Services through the Centers for Medicare and Medicaid Services"--T.p. verso. Includes bibliographical references and index. ISBN 0-309-10108-5 (hardback) 1. Medicare--Quality control. 2. Medical care--United States--Quality control. 3. Health care reform--United States. I. Institute of Medicine (U.S.). Committee on Redesigning Health Insurance Performance Measures, Payment, and Performance Improvement Pro- grams. II. Series. [DNLM: 1. Medicare--organization & administration. 2. Quality Assurance, Health Care --organization & administration--United States. 3. Health Care Reform--organization & administration--United States. 4. Quality of Health Care--organization & administration-- United States. WT 31 M4898 2006] RA412.3.M449 2006 368.4260068--dc22 2006014099 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 2006 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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"Knowing is not enough; we must apply. Willing is not enough; we must do." --Goethe Advising the Nation. Improving Health.

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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 Acad- emy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone 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 engi- neers. 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 engineer- ing programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is presi- dent 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 con- gressional 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 Coun- cil is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Wm. A. Wulf are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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COMMITTEE ON REDESIGNING HEALTH INSURANCE PERFORMANCE MEASURES, PAYMENT, AND PERFORMANCE IMPROVEMENT PROGRAMS STEVEN A. SCHROEDER (Chair), Distinguished Professor of Health and Health Care, University of California, San Francisco BOBBIE BERKOWITZ, Alumni Endowed Professor of Nursing, Psychosocial and Community Health, University of Washington, Seattle DONALD M. BERWICK, President and Chief Executive Officer, Institute for Healthcare Improvement, Cambridge, MA BRUCE E. BRADLEY, Director, Health Care Strategy and Public Policy, Health Care Initiatives, General Motors Corporation, Pontiac, MI JANET M. CORRIGAN,1 President and Chief Executive Officer, National Committee for Quality Health Care, Washington, DC KAREN DAVIS, President, The Commonwealth Fund, New York NANCY-ANN MIN DEPARLE, Senior Advisor, JPMorgan Partners, LLC, Washington, DC ELLIOTT S. FISHER, Professor of Medicine and Community Family Medicine, Dartmouth Medical School, Hanover, NH RICHARD G. FRANK, Margaret T. Morris Professor of Health Economics, Harvard Medical School, Boston, MA ROBERT S. GALVIN, Director, Global Health Care, General Electric Company, Fairfield, CT DAVID H. GUSTAFSON, Research Professor of Industrial Engineering, University of Wisconsin, Madison MARY ANNE KODA-KIMBLE, Professor and Dean, School of Pharmacy, University of California, San Francisco ALAN R. NELSON, Special Advisor to the Executive Vice President, American College of Physicians, Fairfax, VA NORMAN C. PAYSON, President, NCP, Inc., Concord, NH WILLIAM A. PECK, Director, Center for Health Policy, Washington University School of Medicine, St. Louis, MO NEIL R. POWE, Professor of Medicine, Epidemiology and Health Policy, The Johns Hopkins University School of Medicine and Johns Hopkins Bloomberg School of Public Health, Baltimore, MD CHRISTOPHER QUERAM, President and Chief Executive Officer, Wisconsin Collaborative for Healthcare Quality, Madison ROBERT D. REISCHAUER, President, The Urban Institute, Washington, DC 1Appointed to the committee beginning June 1, 2005. v

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WILLIAM C. RICHARDSON, President Emeritus, The Johns Hopkins University and W.K. Kellogg Foundation, Hickory Corners, MI CHERYL M. SCOTT, President Emerita, Group Health Cooperative, Seattle, WA STEPHEN M. SHORTELL, Blue Cross of California Distinguished Professor of Health Policy and Management and Dean, School of Public Health, University of California, Berkeley SAMUEL O. THIER, Professor of Medicine and Professor of Health Care Policy, Harvard Medical School, Massachusetts General Hospital, Boston GAIL R. WILENSKY, Senior Fellow, Project HOPE, Bethesda, MD Study Staff JANET CORRIGAN,2 Project Director ROSEMARY A. CHALK,3 Project Director KAREN ADAMS,4 Senior Program Officer, Lead Staff for the Subcommittee on Performance Measurement Evaluation DIANNE MILLER WOLMAN, Senior Program Officer, Lead Staff on Quality Improvement Organization Program Evaluation CONTESSA FINCHER,5 Program Officer TRACY A. HARRIS, Program Officer SAMANTHA M. CHAO, Senior Health Policy Associate DANITZA VALDIVIA, Program Associate MICHELLE BAZEMORE, Senior Program Assistant 2Served through May 2005. 3Served beginning May 2005. 4Served through February 2006. 5Served through July 2005. vi

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Reviewers This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with proce- dures approved by the National Research Council's Report Review Com- mittee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its 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. We wish to thank the following individuals for their review of this report: BRUCE BAGLEY, Medical Director for Quality Improvement, American Academy of Family Physicians, Leawood, KS LAWRENCE P. CASALINO, Assistant Professor, University of Chicago, Department of Health Studies, Chicago, IL BARBARA B. FLEMING, Chief, Office of Quality and Performance, Veterans Health Administration, Washington, DC MARY ANNE KEHOE, Chief Operating Officer, Lincoln Lutheran Home, Racine, WI PETER V. LEE, President and Chief Executive Officer, Pacific Business Group on Health, San Francisco, CA RICARDO MARTINEZ, Executive Vice President of Medical Affairs, The Schumacher Group, Kennesaw, GA MYLES MAXFIELD, Associate Director of Health Research, Mathematica Policy Research, Inc., Washington, DC vii

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viii REVIEWERS ELIZABETH A. MCGLYNN, Associate Director, Center for Research on Quality Health Care, RAND Corporation, Santa Monica, CA DON NIELSEN, Senior Vice President for Quality Leadership, American Hospital Association, Washington, DC L. GREGORY PAWLSON, Executive Vice President, National Committee for Quality Assurance, Washington, DC MICHAEL ROBBINS-ROTHMAN, Senior Consultant, Clinical Systems Improvement, University of Mississippi Medical Center, Jackson TIMOTHY SIZE, Executive Director, Rural Wisconsin Health Cooperative, Sauk City ANDREW WEBBER, President and Chief Executive Officer, National Business Coalition on Health, Washington, DC ALAN ZASLAVSKY, Professor of Statistics, Department of Health Care Policy, Harvard Medical School, Boston, MA Although the reviewers listed above provided many constructive com- ments and suggestions, they were not asked to endorse the report's conclu- sions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by coordinator DONALD M. STEINWACHS, Professor and Chair, Johns Hopkins Bloom- berg School of Public Health, Baltimore, Maryland, and monitor HAROLD C. SOX, Editor, Annals of Internal Medicine, Philadelphia, Pennsylvania. Appointed by the National Research Council and the 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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Foreword Transformation of the U.S. health care system will not come easily. It will require concerted action by many public- and private-sector partici- pants working toward the goals of safety, effectiveness, efficiency, patient- centered care, timeliness, and equity, which the Institute of Medicine (IOM) has previously identified as the critical aims of health care quality. This report is part of a new IOM series titled Pathways to Quality Health Care. The series of reports explores how to transition between the existing health care system and the system we should create if we are to reduce waste and unnecessary procedures while fostering value and perfor- mance. The present report aims to help individual and institutional provid- ers improve their clinical performance and achieve higher levels of quality as assessed by purchasers and consumers. The report highlights the impor- tant roles that a national program with private organizations in each state can play in supporting higher-quality care, especially for those providers who serve Medicare beneficiaries. As discussed in the first report in the Pathways series, Performance Measurement: Accelerating Improvement, more visible and consistent measures of quality must be associated with specific providers and health care settings to support better decisions and investments in health care. In this second report, the committee looks closely at the sources of technical assistance that encourage providers to improve their performance. In the early history of quality improvement, Congress thought it best to review individual case records of beneficiaries in seeking to improve care in the Medicare system. More recent experience in other sectors of the economy suggests that such retrospective record reviews are only one dimension of ix

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x FOREWORD what is needed to achieve higher levels of performance from a complex enterprise. Broader system-level interventions frequently offer better ways to nurture behavioral and organizational change that can improve performance. Many health care providers and organizations have made great strides in improving their quality of care. But the pace of progress is uneven. Some providers want and deserve technical assistance in eliminating key barriers that impede their progress. All providers and their patients can benefit from opportunities to learn from one another and to share lessons learned from experience in implementing higher standards of care. In this report, the IOM Committee on Redesigning Health Insurance Performance Measures, Payment, and Performance Improvement Programs carefully examines the Quality Improvement Organizations that serve every state, as well as the national program that guides and supports them. The committee's recommendations deserve careful consideration as our elected leaders and health care purchasers seek to reward high-performing provid- ers. The committee recommends focusing public resources for technical as- sistance to achieve better quality on those providers that demonstrate the potential for change, with priority given to those in greatest need. The re- port suggests public- and private-sector collaborations that can strengthen the foundation for this valuable technical assistance. It is important to note that, consistent with IOM policy and procedures, one member of the study committee who currently serves on the board of a Quality Improvement Organization did not participate in the committee deliberations that led to the development of this report. This report is a further step from the "what" of quality improvement to the "how." By providing an in-depth assessment of the federal experience with quality improvement, the report helps point the way for those who strive to create higher quality and better value in health care. Harvey V. Fineberg, M.D., Ph.D. President, Institute of Medicine February 2006

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Preface This report, Medicare's Quality Improvement Organization Program: Maximizing Potential, is the second in the Institute of Medicine's (IOM) Pathways to Quality Health Care series and was authored by the IOM's Committee on Redesigning Health Insurance Performance Measures, Pay- ment, and Performance Improvement Programs. The committee concludes that the changing environment of health care, with the increased public reporting of performance measures and payment incentives for providers who meet certain quality standards, will create a growing demand from providers for technical assistance with the reporting of performance mea- sures and analysis, as well as with process and systems improvements. The Pathways to Quality Health Care series builds on earlier IOM studies, known collectively as the Quality Chasm series, which highlight the importance of strengthening key elements of the health care infrastructure to dramatically improve the quality of care delivered to patients across all health care settings. The Pathways to Quality Health Care series addresses the critical role of performance measurement and reporting, quality im- provement, and payment incentives in reducing the fragmentation of the health care delivery system and improving care. In 2005, the IOM released the first report in the Pathways to Quality Health Care series, Performance Measurement: Accelerating Improvement, which recommends adoption of leading performance measures, identifies gaps in performance measures and areas for further development, and calls for a coherent national system to support robust performance measurement and public reporting. The con- gressional request for a comprehensive evaluation of the Medicare Quality Improvement Organization (QIO) program provided a timely opportunity xi

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Acknowledgments Medicare's Quality Improvement Organization Program: Maximizing Potential benefited from the contributions of many people. The committee takes this opportunity to recognize those who helped develop the data and analyses on which the report is based. The committee acknowledges the members of the Subcommittee on Quality Improvement Organization Program Evaluation, who contributed so much to this report: Stephen M. Shortell, Chair, University of California, Berkeley; Anne-Marie J. Audet, The Commonwealth Fund; Jack L. Cox, consultant; David H. Gustafson, University of Wisconsin; Jeff Kang, CIGNA HealthCare; Alan R. Nelson, American College of Physicians; Gregg Pane, District of Columbia Department of Health; Barbara R. Paul, BEI; William A. Peck, Washington University School of Medicine; Eric D. Peterson, Duke University School of Medicine; and Shoshanna Sofaer, Baruch College. All members of the subcommittee gave much time and advice in designing the original data collection tools and procedures, in performing the critical lit- erature review that supports this report's findings and conclusions, and in reviewing and critiquing primary research articles. John Ring and Clyde Behney also contributed as directors of the Board on Health Care Services of the Institute of Medicine. The committee benefited from presentations made by a number of ex- perts. The following individuals shared their research, experience, and per- spectives with the committee: Marc M. Boutin, National Health Council; Elizabeth Bradley, Yale School of Public Health; David Brailer, U.S. De- partment of Health and Human Services; Donald W. Fisher, American Medical Group Association, Inc.; Nancy Foster, American Hospital Asso- xv

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xvi ACKNOWLEDGMENTS ciation; Larry A. Green, American Academy of Family Physicians; Maulik Joshi, Delmarva Foundation; Barbara B. Manard, American Association of Homes and Services for the Aging; Mark McClellan, Centers for Medicare and Medicaid Services; Gordon Mosser, Institute for Clinical Systems Im- provement; Peter Pronovost, The Johns Hopkins University School of Medi- cine; and Andrew Webber, National Business Coalition on Health. The American Health Quality Association was an important source of information and support. Many staff and members, especially the following individuals, generously gave their time and knowledge and made presenta- tions to further the committee's aims: David Adler, Dale Bratzler, Todd Ketch, David Schulke, and Jonathan Sugarman. The committee acknowledges the particular contributions of Allyson Ross Davies, consultant, in the development and implementation of a web- based data collection tool, and Cheryl Ulmer, consultant, in the conduct and analysis of 20 telephone interviews. Timothy Jost, professor, Washing- ton and Lee University School of Law, provided valuable legal advice. Eric Lawrence, Assistant Professor of Political Science, The George Washington University, offered guidance on research methodologies and statistics. Rona Briere, Alisa Decatur, and Michael K. Hayes provided editorial assistance and assistance with the preparation of the manuscript for publication. The committee extends special thanks to all 53 Quality Improvement Organizations for their willing and active participation in multiple inter- views, site visits, and data collection efforts. Funding for the project came from the Centers for Medicare and Med- icaid Services (CMS). The committee appreciates the assistance and infor- mation received from CMS staff around the country and particularly recog- nizes Gary Christopherson, Steve Jencks, Joyce Kelly, and Bill Rollow for their extra support throughout the project.

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Contents SUMMARY 1 Background, 2 Key Findings and Conclusions, 4 Recommendations, 11 INTRODUCTION 19 Background, 20 Audiences for This Report, 27 Study Approach, 27 Organization of This Report, 29 References, 30 INTRODUCTION TO PART I 33 1 A HISTORICAL PERSPECTIVE AND THE CURRENT QIO PROGRAM 35 History of the QIO Program, 36 Evolution of Medicare's Quality Improvement Program, 39 Summary, 52 References, 53 2 ASSESSMENT OF THE QIO PROGRAM: FINDINGS AND CONCLUSIONS 55 Evidence of Quality Improvement in Medicare, 56 Alternatives to the Current QIO Program, 61 xvii

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xviii CONTENTS Program Infrastructure, 63 Functions of the QIOs, 66 Structural Issues, 69 Oversight of the QIO Program, 74 Summary, 79 References, 79 3 PERFORMANCE MEASUREMENT, QUALITY IMPROVEMENT, AND OTHER ENTITIES 82 The Need for an Organized Performance Measurement and Reporting System, 83 Functions of the National Quality Coordination Board and Implications for QIOs, 90 References, 101 4 IMPROVING QUALITY AND PERFORMANCE MEASUREMENT BY THE QIO PROGRAM 102 Technical Assistance Functions, 105 QIO Support for Quality Improvement Efforts, 109 QIO Board and Organizational Structure, 110 Responsibility for Complaints, Appeals, and Case Reviews, 112 References, 118 5 CMS OVERSIGHT OF THE OPERATIONS AND MANAGEMENT OF THE QIO PROGRAM 120 Data Processing, 121 QIO Program Management, 126 QIO Program Evaluations, 134 QIO Program Funding, 138 References, 141 INTRODUCTION TO PART II 143 6 STUDY APPROACH 145 Data Sources, 146 Focused Literature Review, 148 Web-Based Data Collection, 149 Quantitative Analyses of QIO Performance, 150 Visits to QIOs, 151 Telephone Interviews, 151 Three-Day Briefing by CMS, 154 Access to QIONet, 154 Face-to-Face Interviews, 155

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CONTENTS xix Focus Group, 155 Specific Data Requests to CMS Staff, 156 Formal and Informal Discussions with AHQA, 156 Informal Discussions with Consumer Organizations and Providers, 156 National Conferences and Meetings, 157 Suggestions of "Other Entities," 157 Research Challenges, 157 Strength of Research Conclusions, 158 References, 159 7 STRUCTURE AND FINANCES 160 Structure of QIOs, 160 QIO Support Centers, 173 Finances of QIOs, 179 Summary, 188 References, 190 8 TECHNICAL ASSISTANCE FOR QUALITY IMPROVEMENT 192 Defining Technical Assistance, 193 Recruitment of Identified Participants, 193 Interaction with Providers, 197 Technical Assistance During the 7th and 8th SOWs, 199 Nursing Homes, 201 Home Health, 205 Hospitals, 208 Physicians' Offices and Practices, 213 Underserved and Rural Beneficiaries, 218 Managed Care, 221 QIO Support Centers, 223 Summary, 227 References, 228 9 IMPACT OF TECHNICAL ASSISTANCE FOR QUALITY IMPROVEMENT AND KNOWLEDGE TRANSFER 230 Quality Improvement, 230 Approaches to Quality Improvement, 239 Knowledge Transfer, 243 Summary, 252 References, 252

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xx CONTENTS 10 EVALUATION OF QUALITY IMPROVEMENT ACHIEVED BY THE QIO PROGRAM 257 CMS Evaluation of QIO Performance on Technical Assistance Tasks, 257 IOM Analysis of Task 1 Performance by QIOs, 262 Impact of Intense QIO Assistance, 272 Provider Satisfaction, 273 Programwide Evaluation of Impact, 276 Summary, 277 References, 278 11 BENEFICIARY EDUCATION AND COMMUNICATIONS 279 Task 2a: Promoting the Use of Performance Data, 279 Task 2b: Transitioning to Hospital-Generated Data, 285 Task 2c: Other Mandated Communications Activities, 287 Role of QIOs in Beneficiary Education: Telephone Interviews, 288 QIO Support Centers in the 7th and 8th SOWs, 293 Summary, 295 References, 295 12 PROTECTION OF MEDICARE BENEFICIARIES AND PROGRAM INTEGRITY 297 Case Review Activities in the 7th SOW, 298 Mediation in the 7th SOW, 307 Medicare Beneficiary Protection QIOSC, 308 QIO Performance Evaluation in the 7th SOW, 310 Case Review Activities in the 8th SOW, 310 Hospital Payment Monitoring Program in the 7th SOW, 311 HPMP in the 8th SOW, 315 Impact of Protective Activities in the 7th SOW, 318 Summary, 322 References, 323 13 CMS OVERSIGHT 325 Organizational Structure of QIO Program in CMS, 325 Communications and Information Technology Services, 333 Data Flow, 341 Data Lag Issues, 343 QIO Contracts, 345 Overall Program Guidance, 351 Summary, 358 References, 359

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CONTENTS xxi APPENDIXES A SUPPORTING TABLES 363 B PRIVATE-SECTOR ORGANIZATIONS OFFERING SERVICES RELATED TO QUALITY IMPROVEMENT 435 C APPROACHES TO EVALUATION DESIGN 466 D GLOSSARY AND ACRONYMS 473 E COMMITTEE BIOGRAPHIES 481 INDEX 501

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MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM

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