Operational links between the structures of quality assurance and utilization management and review need to be more clearly defined in a number of areas. These include consistency in clinical guidelines and criteria for making prospective decisions about care; consistency in guidelines and criteria in retrospective review of care; methods (both informal and formal) for resolving disagreements about the level of quality of care in those situations when the utilization and the quality programs yield conflicting findings; and procedures for sharing information between the two efforts.

Medicare’s Physician Payment System

Reform of the physician payment system for Medicare has emerged recently as a contentious issue (PPRC, 1988, 1989). Expenditures for physician services have grown significantly over the years, increasing the financial burden on both beneficiaries and the taxpayers. In addition, increases in physician charges, the unwillingness of some physicians to accept Medicare assignment, and the impact on beneficiary out-of-pocket expenditures (in terms of copayments and extra billing) raise concern about diminished access to quality care for Medicare beneficiaries who, under the constraints of limited financial resources, avoid seeking services that may not be reimbursed.


The current revolution in the organization and financing of health services is unprecedented in this country and without parallel elsewhere. It calls for imaginative and carefully constructed approaches to quality review and assurance. These should cover a comprehensive range of services; evaluate complex health care organizations involving widely varying institutions and providers; be sensitive to the availability of appropriate health services; monitor the appropriate use of services and counter both underuse and overuse; and be reasonable in the resource use they entail. With that goal in mind, we examine the question of quality of health care as a public policy issue.


Burden of Harm of Poor Quality

The elderly are usually quite satisfied with their own medical care and the health care providers with whom they interact, although they may express dissatisfaction about access or financial barriers to care. Despite this positive view, a large body of literature documents specific areas of defi-

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