12
Recommendations and a Strategy for Quality Review and Assurance in Medicare

This final chapter summarizes the Institute of Medicine (IOM) committee’s main findings and conclusions and outlines our vision of an “ideal” quality assurance system. It states our explicit recommendations for a strategy and structure for a reformulated quality assurance system for Medicare, based on our findings and conclusions and in response to the congressional charges for this study. It describes in some detail how we think such a system might work, recognizing that many organizational and operational features of the system would not be completed until well into implementation. Finally, a section on implementation strategy briefly discusses tasks to be undertaken in three phases.

The committee debated many issues over the course of this project. On some issues it reached broad consensus, as reflected in our findings and conclusions. On others the committee was more divided on a stance to take, chiefly because of conflicting or insufficient evidence. Still other positions were arrived at only after weighing concrete findings against more intangible considerations of organizational, financial, or political factors.

Many approaches to a strategy for quality assurance in Medicare were considered in reaching our decisions and recommendations (some of which are briefly noted below). This chapter does not, however, give a rigorous organizational, financial, or political evaluation of different strategies that might be considered. We do not explicitly discuss the pros and cons or the benefits and side effects of the recommendations we have made or of possible alternative options. Our recommendations about a long-term strategy for Medicare quality assurance are explicated, although little solid evidence about risks or benefits of an as-yet untested strategy to be followed over a decade could be marshalled at this time. The decade-long implementation strategy we recommend is intended to provide information about the advan-



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Medicare: A Strategy for Quality Assurance - Volume I 12 Recommendations and a Strategy for Quality Review and Assurance in Medicare This final chapter summarizes the Institute of Medicine (IOM) committee’s main findings and conclusions and outlines our vision of an “ideal” quality assurance system. It states our explicit recommendations for a strategy and structure for a reformulated quality assurance system for Medicare, based on our findings and conclusions and in response to the congressional charges for this study. It describes in some detail how we think such a system might work, recognizing that many organizational and operational features of the system would not be completed until well into implementation. Finally, a section on implementation strategy briefly discusses tasks to be undertaken in three phases. The committee debated many issues over the course of this project. On some issues it reached broad consensus, as reflected in our findings and conclusions. On others the committee was more divided on a stance to take, chiefly because of conflicting or insufficient evidence. Still other positions were arrived at only after weighing concrete findings against more intangible considerations of organizational, financial, or political factors. Many approaches to a strategy for quality assurance in Medicare were considered in reaching our decisions and recommendations (some of which are briefly noted below). This chapter does not, however, give a rigorous organizational, financial, or political evaluation of different strategies that might be considered. We do not explicitly discuss the pros and cons or the benefits and side effects of the recommendations we have made or of possible alternative options. Our recommendations about a long-term strategy for Medicare quality assurance are explicated, although little solid evidence about risks or benefits of an as-yet untested strategy to be followed over a decade could be marshalled at this time. The decade-long implementation strategy we recommend is intended to provide information about the advan-

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Medicare: A Strategy for Quality Assurance - Volume I tages and disadvantages of a new system so that its realization can be in some ways self-correcting. FINDINGS AND CONCLUSIONS The nation is generally perceived to have a solid, admirable base of good quality health care, and the elderly are usually satisfied with the quality of care they personally receive. Contrasting with this positive perception of the overall quality of care in the nation is a large body of literature that documents areas of deficiencies in all parts of the health sector. Some of these relate to overuse of unnecessary and inappropriate services, some to underuse of needed services, and some to inadequate technical skills, poor interpersonal care, or faulty judgment in the delivery of appropriate services. The committee concluded that significant problems exist in quality of care and in our present approaches to quality assurance. The problems are sufficient to justify a major redirection for quality assurance in this country and, in particular, a more comprehensive strategy for quality assurance in Medicare. Our major findings and conclusions include the following: A quality assurance program should be guided by a clear definition of quality of care. No single approach or conceptual framework to quality assurance is likely to suit all purposes. Regarding the elderly, the elderly population continues to grow, both in absolute numbers and as a proportion of the entire population, the average number of years lived after age 65 continues to increase, and an increasing number of people in this population live with chronic illness and disabling conditions. Regarding Medicare and the elderly, health care costs continue to rise, pressures for cost containment increase, and use of sites of care other than inpatient (i.e., outpatient and long-term-care facilities and home settings) continues to expand. Near universal coverage of the elderly population by the Medicare program gives them better access to health care than any other age group; nevertheless, gaps in coverage and financial barriers do exist and adversely affect quality. Regarding the burden of poor quality, evidence of overuse of health services is substantial,

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Medicare: A Strategy for Quality Assurance - Volume I underuse is hard to detect under existing surveillance systems, but we suspect it is considerable, and numerous examples of poor performance have been documented by health professionals in health services research studies. Different approaches to quality assurance may be necessary for different sites of care (e.g., hospital, home care, or ambulatory settings) and for different organizational structures such as health maintenance organizations (HMOs) and fee-for-service practices. Quality-of-care criteria sets can be classified into three main groups, namely appropriateness (or clinical practice) guidelines, patient management and evaluation criteria, and case-finding screens, and vary considerably in internal and external validity. Criteria for evaluating quality-of-care criteria sets can be defined in terms of about two dozen substantive (or structural) attributes and implementation (or process) attributes, differ by type of criteria set, and can be grouped into larger clusters of substantive attributes (scientific grounding, latitude for clinical and patient judgment, design, and efficiency) and implementation attributes (implementation, ease of use, appealability, and dynamism). Currently available methods of quality assurance suggest that a small number of outliers account for a large number of serious quality problems, are inadequate in coping successfully with outlier providers, tend to focus on single events and single settings, may not identify underuse and overuse of services, are constrained (sometimes in counterproductive ways) by regulatory and legal systems, and are of questionable value in improving average provider behavior. The Utilization and Quality Review Peer Review Organizations (PROs) constitute a potentially valuable infrastructure for quality assurance. Nevertheless, it is the perception of the committee that PROs give primary attention to utilization rather than quality, focus on outliers rather than the average provider, concentrate on inpatient care, impose excessive burdens on providers, do not use positive incentives to alter performance, are perceived as adversarial and punitive, use a sanctioning process that is largely ineffective, are rendered relatively inflexible by program funding arrangements, use methods that are redundant with other public and internal quality assurance programs, and

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Medicare: A Strategy for Quality Assurance - Volume I have not been evaluated with respect to their effect on quality. Mechanisms for ensuring that hospitals meet the Medicare Conditions of Participation are generally sound in terms of the concept of “deemed status”, but warrant strengthening in several aspects, especially the survey and certification procedures for hospitals that are not accredited. The present structure does not have the capacity to achieve a comprehensive and maximally effective quality assurance system. Required research and capacity building include basic methodological research, applications research, research on methods of diffusion, training of professionals in research skills, quality assurance, and continuous improvement, and methods to improve patient decision making. Model of Quality Assurance for Medicare Based on these findings and conclusions, the committee proposes a quality assurance system that: focuses on the health care decision making and health outcomes of Medicare beneficiaries, enhances professional responsibility and capacity for improving care, uses clinical practice as a source of information to improve quality of care, and can be shown to improve the health of the elderly population. This ideal system stands in sharp contrast to the existing quality assurance system; the latter relies too heavily on provider-oriented process measures, regulation, and external monitoring, contributes little new knowledge to improve the quality of care, and has not been evaluated in terms of impact on the health of the elderly. We believe that any future quality assurance program requires a better balance than exists today between regulation and professionalism, provider orientation and patient orientation, and process of care and outcomes. Our proposed program for quality review and assurance aims to alter the mix of elements that make up such a program. We propose to shift the emphasis from current directions or tasks to ones that more fully reflect our vision of a quality assurance program (Table 12.1). The current PRO program is inclined toward reaction, external inspection, and regulation. We suggest that the future Medicare quality assurance program be more proactive in data collection and feedback and that it actively foster professionalism and internal quality improvement. The present system heavily emphasizes providers and the process of care. We suggest that in the future it give more attention to patient and consumer concerns and decision making and that it adopt an aggressive outcomes orientation. The present approach relies on monitoring information and on data collected for other purposes (such as billing), and it does little constructive

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Medicare: A Strategy for Quality Assurance - Volume I TABLE 12.1 Shifts in Emphasis for a Quality Assurance Program for Medicare Current Emphases Future Emphases Regulation Inspection External monitoring Professionalism Improvement Internal programs Provider and process orientation Patient/consumer and outcomes orientation Mostly nonclinical information with no feedback Develop and use new knowledge from clinical practice and return information to providers to improve decision making Individual providers and incidents of care Systems of care and episodes of care Hospital focus Broader focus on all settings of care Little public accountability or program evaluation Greater public accountability and program evaluation feedback to providers. We propose a program that generates new knowledge from clinical practice and that returns that information to providers in a timely way that improves clinical decision making. Although any quality assurance program must be concerned with individual providers and specific incidents of care, as is presently the case, we believe that the future program must place stronger emphasis on systems of care, the joint production of services by many different providers, and continuity and episodes of care. The Medicare peer review programs have traditionally focused on hospital inpatient care and have been able to do little or nothing with ambulatory, office-based care or care in other nonhospital settings. We thus see a need for a major thrust toward quality assurance in all major settings in which the elderly receive care. Quality assurance in those settings is important in its own right, but it also is necessary if patient outcomes and episodes of care are to become significant components of this new program. A major deficiency of the present program, in our view, is the lack of evaluation and public oversight. It is virtually impossible to know what the nation is getting for the Medicare resources presently devoted to the peer review program or to know which parts of that program are successful and which are not. In our reformulation, therefore, we place considerable em-

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Medicare: A Strategy for Quality Assurance - Volume I phasis on public accountability, so that policymakers and the nation more generally can know what impact the program is having and can express their views about program goals and directions. Finally, in addition to these points, we note that the present program is not grounded in a firm conceptualization or definition of quality of care. We strongly believe the future program of quality assurance in Medicare should direct its activities on the basis of a clear understanding and acceptance of a definition of the concept of quality of care. Alternative Options Debated by the Committee The committee discussed several options for Medicare quality assurance at one point or another during its deliberations. Mostly these centered on what to do, or not do, with the existing PRO program. One clear option was to keep the PRO program more or less intact and simply recommend marginal changes (such as strengthening the sanctioning process and improving generic screens) in line with suggestions that have been made by other investigative or advisory bodies. This option was judged not responsive to the congressional charge (“to design a strategy”) and in any case not sufficient to the task of creating a long-term strategy for quality assurance for the entire Medicare program. A variant on that option was to reduce the PRO program severely to a simple regulatory mechanism that would concentrate on outlier providers and practitioners, leaving to the private sector and professional organizations and associations all efforts at detecting less egregious but perhaps more prevalent quality problems and all quality assurance and improvement responsibilities. This seemed to lead to an artificial split in responsibilities and to make the PRO program even less appealing to the provider community than it is now, and it certainly would not enable the federal government to argue that it was doing all in its power to ensure that the elderly receive high quality care. Another variant was to keep the PRO program more or less intact but to eliminate its regulatory or sanctioning powers and strengthen its educational powers. This was viewed as an unattractive option for at least two reasons. First, it undercut the vision of a comprehensive quality assurance program that the committee believed important. Second, the sanctioning powers of the PROs have value in terms of the leverage they provide the PROs in insisting that deficient practitioners and providers undertake corrective actions, including educational ones; removing that leverage threatened to make the PROs very ineffectual. A completely opposite tack was to recommend that the PRO program be immediately terminated and replaced with something very different—for instance, a technical assistance program to aid the provider community in developing and maintaining their own quality assurance efforts, or a pro-

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Medicare: A Strategy for Quality Assurance - Volume I gram that worked through other existing efforts such as those of state health departments or the Joint Commission for Accreditation of Healthcare Organizations. This option was considered to be neither practically nor politically feasible, particularly because even less evidence is available on the likely success of those alternatives than on the success of the current PRO program. Other Key Questions Other major splits developed as the committee moved through its deliberations. First, should the committee embrace the precepts of continuous quality improvement? Proponents argued strenuously for giving this new model a central place in the new Medicare quality assurance program. Others were more skeptical, believing that although the continuous improvement systems and their underlying philosophy and practical tools are attractive, the evidence of their success in dealing with clinical problems or in applications beyond the hospital setting provides an insufficient base for a major federal initiative. Second, to what extent should patient outcomes be the main variables for judging quality of care? Many, if not all, members of the committee agreed that, in principle, good outcomes are the ultimate criteria for judging the quality of health care rendered. Many also recognized, however, that outcome measurement and outcomes management have severe technical drawbacks. They therefore argued that a focus on process-of-care measurement will always have to be part of any quality assurance, or continuous improvement, program. A third disagreement centered on how much a quality assurance program should involve itself with cost containment and utilization control or can afford to do so without fatally undermining its quality assurance goals. In other words, to what extent should the PRO program, or its successor, be assigned responsibilities for utilization review and management tasks whose chief aim appears to be to control use of services? Should these tasks, such as prior authorization of procedures, be assigned elsewhere, for instance to Medicare fiscal intermediaries (FIs) or carriers? The committee never completely settled on a single answer to these questions. In all cases (to embrace continuous improvement models, to base a new program exclusively on outcomes, or to move utilization management out of the quality assurance program), the committee opted for middle positions: support for continuous improvement for organizations that can successfully mount such efforts but retain a more traditional approach to quality review and assurance for the federal effort; emphasize both outcomes and process of care indefinitely; and retain only those utilization review activities that have a clear clinical or peer review component and serve an

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Medicare: A Strategy for Quality Assurance - Volume I unequivocal quality-of-care purpose. The committee’s basic position was that evidence accumulated through the lengthy implementation period for its recommended program should be used to help resolve these or other conflicts. In summary, our conclusions and ultimately our vision of a Medicare quality assurance effort should be understood as reflecting our best collective judgment about an achievable strategy to pursue to ensure high quality care for Medicare beneficiaries in the face of many uncertainties about the organization and financing of health care in the 1990s. Although our recommendations may seem either too radical or not venturesome enough for some readers, we believe that they represent an appropriate synthesis of the evidence and experience to date and that they will provide a practical starting point and implementation strategy for the future. Our intermediate position on adopting the continuous improvement model as a guiding philosophy for quality assurance in Medicare is a case in point. RECOMMENDATIONS Our findings and our vision of a quality assurance system for Medicare have led us to 10 major recommendations. This section presents those recommendations, which are summarized in Table 12.2. Medicare Mission and Quality Assurance RECOMMENDATION NO. 1. Congress should expand the mission of Medicare to include an explicit responsibility for assuring the quality of care for Medicare enrollees, where quality of care is defined as the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. Successful quality assurance resembles quality health care: both have elements of science and art. Effective implementation of a quality assurance program may depend on advanced assessment instruments and sophisticated data banks and on the motivation and commitment of the participants, but more is needed than tools and good intentions. Such a program must be directed to serve a health care mission important to both individuals and to society collectively. A program of quality assurance should correspond conceptually and respond practically to an accepted definition of quality of care. For this report we have adopted the definition set forth in Chapter 1 and stated above. A quality assurance program responsive to desired health outcomes and attentive both to individuals and populations calls for a markedly stronger and broader mission statement than appears in the legislation that presently

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Medicare: A Strategy for Quality Assurance - Volume I TABLE 12.2 Summary of the Recommendations for a Strategy for Quality Review and Assurance in Medicare RECOMMENDATION NO. 1. Congress should expand the mission of Medicare to include an explicit responsibility for assuring the quality of care for Medicare enrollees, where quality of care is defined as the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. RECOMMENDATION NO. 2. Congress should adopt the following three goals for the quality assurance activities of the Medicare program: 1. Continuously improve the quality of health care for Medicare enrollees, where quality is as defined in our first recommendation; 2. Strengthen the ability of health care organizations and practitioners to assess and improve their performance; and 3. Identify system and policy barriers to achieving quality of care and generate options to overcome such barriers. RECOMMENDATION NO. 3. Congress should restructure the Utilization and Quality Control Peer Review Organization (PRO) program, rename it the Medicare Program to Assure Quality (MPAQ), and redefine its functions. RECOMMENDATION NO. 4. Congress should establish a Quality Program Advisory Commission (QualPAC) to oversee activities of the MPAQ and to report to Congress on these activities. RECOMMENDATION NO. 5. Congress should establish within the Department of Health and Human Services a National Council on Medicare Quality Assurance to assist in the implementation, operation, and evaluation of the MPAQ. RECOMMENDATION NO. 6. Congress should direct the Secretary of the Department of Health and Human Services (DHHS) to report to Congress, no less frequently than every two years, on the quality of care for Medicare beneficiaries and on the effectiveness of MPAQ in meeting the goals outlined in recommendation no. 2. RECOMMENDATION NO. 7. Congress should direct the Secretary of DHHS to initiate a program to make the Medicare Conditions of Participation consistent with and supportive of the overall federal quality assurance effort. RECOMMENDATION NO. 8. Congress should direct the Secretary of DHHS to support, expand, and improve research in and the knowledge base on efficacy, effectiveness, and outcomes of care and to support a systematic effort to develop clinical practice guidelines and standards of care. RECOMMENDATION NO. 9. Congress should direct the Secretary of DHHS to establish and fund educational activities designed to enhance the nation’s capacity to improve the quality of care it receives. RECOMMENDATION NO. 10. Congress should authorize and appropriate such funds as are needed to implement these recommendations.

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Medicare: A Strategy for Quality Assurance - Volume I guides the Medicare quality assurance effort.1 We believe a more explicit commitment to quality is needed to counter the perception by providers and beneficiaries that monitoring efforts in the Medicare program are primarily concerned with cost containment. The Medicare program has a major responsibility to support quality assurance efforts that will not only address the technical components of health care but also respond to gaps in services, access problems, resource constraints, and ethical dilemmas that affect the quality of care. It must be alert to problems for both the users of Medicare services and the populations eligible to be served by Medicare who may not currently be receiving services. The committee took the position, after much deliberation, intentionally to exclude resource constraints from the definition of quality. It did so in the belief that the quality assurance program would then be able to identify situations in the health care system where quality is being threatened because resource constraints have been tightened or could be improved if additional resources were available. That is, an effective monitoring system should be able to distinguish between quality and cost problems. This distinction recognizes that, in the future, some forms of explicit rationing of health care may be necessary, and we urge that quality-of-care concerns be taken into account when making such rationing decisions. The Medicare program may not be the sole responsible agent to resolve these issues, but its quality assurance program can assist in bringing the issues into the appropriate arenas for debate. By focusing on health services, desired health outcomes, and levels of professional knowledge, our definition of quality calls for broad action by provider organizations and by the Medicare program in data collection, analysis, feedback, and dissemination. Clearly this implies a considerably expanded and richer conceptualization of the outcomes about which data will be acquired than has been evident heretofore in any (external or internal) quality assurance efforts. It also implies greater attention to the scientific knowledge base, to health care technology assessment, and to the actual processes of everyday practice. It requires that better use be made of what is known about the effectiveness of health care services and about the links between process and outcome. Finally, by highlighting the need for attention to both individuals and populations, we underscore the importance of requiring the Medicare program as a whole (and those vehicles used by it to serve defined populations, such as the risk-contract HMOs) to take responsibility for understanding the health outcomes of the populations for which they are accountable, not just for the persons actually served. Quality Assurance Goals of the Medicare Program RECOMMENDATION NO. 2. Congress should adopt the following three goals for the quality assurance activities of the Medicare program:

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Medicare: A Strategy for Quality Assurance - Volume I Continuously improve the quality of health care for Medicare enrollees, where quality is as defined in our first recommendation; Strengthen the ability of health care organizations and practitioners to assess and improve their performance; and Identify system and policy barriers to achieving quality of care and generate options to overcome such barriers. We will recommend below an ongoing evaluation of the quality assurance program and its impact. These are the goals for which that program should be held accountable: improved health, enhanced capabilities of providers in quality assurance, and better understanding of broad system obstacles to high quality of care. These goals are at once more explicit and more comprehensive than the status quo. Medicare Program to Assure Quality (MPAQ) RECOMMENDATION NO. 3. Congress should restructure the PRO program, rename it the Medicare Program to Assure Quality (MPAQ), and redefine its functions. To discharge the responsibilities implied by earlier recommendations, Medicare will need a revised and expanded quality assurance program at the federal level. To underscore this shift, the focus and responsibility of this new program should be deliberately changed to quality of care and away from utilization or cost control. In addition, Congress should authorize the Secretary of the Department of Health and Human Services (DHHS) to support local entities in the performance of the MPAQ activities. We refer to these local entities as Medicare Quality Review Organizations (MQROs). Our proposed program is described more fully later in this chapter (see sections on responsibilities and tasks of the MPAQ and the MQROs). Briefly, the MPAQ would be responsible for the planning and administration of the quality assurance program for Medicare: (1) to engage in long- and short-term program planning for MQROs (e.g., to define the program guidelines for the MQROs, to review applications and make awards to MQROs, and to provide or arrange for technical assistance to MQROs); (2) to monitor and evaluate MQRO operations and performance; and (3) to aggregate, analyze, and report quality-of-care data. MQROs would have several primary responsibilities: (1) to obtain information on patient and population-based outcomes and practitioner and provider processes of care; (2) to analyze these data, making appropriate adjustments for case mix, patient characteristics, and other pertinent information by various types of providers; (3) to use these data to assess practitioner or provider performance; (4) to feed such information back to the

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Medicare: A Strategy for Quality Assurance - Volume I outcomes measures, but many other possibilities exist. The structure, content, scoring, and interpretation of such profiles should be thoroughly tested and reviewed by QualPAC, the National Council, and the technical assistance contractors before final promulgation. Quality Interventions With respect to quality interventions, the MPAQ (and hence the MQROs) will be confronted with a dilemma. They must balance the need for predictable and equitable intervention strategies for all providers with an emphasis on local decision making, flexible response to different problems, and support for emerging internal quality improvement programs. This dilemma becomes especially acute when the main focus of a quality assurance program is on outcomes of care, and especially when outcomes attempt to take patient values and preferences into account. Our basic position is that the MPAQ will need to articulate explicit bases or common factors for choosing among intervention options and then leave individual decisions to MQROs. In theory, our approach would not be very different from the PRO program’s present quality intervention plan (Chapter 6). It gives broad authority for many different types of interventions—from notification of concern about a quality problem through mandated continuing medical education of many sorts, to intensified review, and finally to various legal and financial sanctions. Issues concerning the current PRO and OIG sanctioning process will need to be addressed, however. In practice, not all the operational components of the PRO program (such as severity levels or weighted triggers for quality interventions) would necessarily be retained indefinitely. Other innovative interventions should be developed. Options for dealing with outlier providers should be strengthened (e.g., mandated consultations for certain clinical problems). More important are efforts to assist internal quality assurance programs to handle their own problems and to find ways to stimulate improvement across the broad spectrum of practitioners and providers. In other words, MQROs would ultimately have a clear set of options (established through a rulemaking process) and clear directions on how to select among them. With our emphasis on local decision making and flexibility, we expect that different MQROs might well adopt different interventional and correctional approaches, but they would have to do so within well-defined guidelines. In our view, innovative options for responding to quality problems have not been fully developed by any federal quality assurance program. Virtually no good strategies for working with quality distributions exist, certainly none that relate to health outcomes of the sort advocated in this proposed program or to organizations that are attempting to implement continuous quality improvement models. For that reason, we suggest that some

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Medicare: A Strategy for Quality Assurance - Volume I demonstrations or quasi-experiments be conducted to explore the feasibility and effectiveness of various approaches that MQROs might take to quality interventions. Example. In the event of poor scores on the performance profiles or a single egregious problem, one local MQRO might simply notify the provider, agency, or practice group to suggest some first-order responses. If these seem appropriate and later data indicate a satisfactory resolution, no further MQRO action would be needed. If no correction is evidenced, then the MQRO would intervene more directly, first by taking on many of the actions normally reserved to the internal quality mechanism and then by using stronger remedies (such as stiff sanctions) for uncorrected problems. Example. A different MQRO might establish the policy of requiring all providers ranked in the lowest third of a quality distribution to adopt a six-month corrective action. This MQRO would evaluate those providers carefully at the end of that six-month period. It might also conduct a 100-percent concurrent review for all providers ranked in the lowest sixth of the quality distribution, using explicit process measures and instruments approved by MPAQ and the National Council. Sanctions We recognize the need for continuance of a sanctioning authority for MPAQ and MQROs. Sanctions (e.g., exclusions and monetary penalties) are a topic of considerable debate as this report is being prepared (Chapter 6). We have adopted no formal position on these issues except to note the conclusions in Chapter 6 that generally support the recommendations of the Administrative Conference of the United States. The many obstacles to broadening the options for sanctions, maintaining equity across types of providers, and otherwise strengthening this aspect of the MPAQ’s and MQROs’ response to intractable quality programs deserve a separate, in-depth examination, perhaps by QualPAC or another outside body. IMPLEMENTATION STRATEGY AND PHASES This section outlines proposed steps in a 10-year implementation strategy; the timeframe is fiscal year (FY) 1991 to FY 2000. We divide this strategy into three phases and identify basic tasks in those phases (Table 12.4). Many steps imply ongoing activities; when this is so, we identify the step at the time we would expect it to begin and do not necessarily follow it through the full implementation period. Special projects, studies, and ac-

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Medicare: A Strategy for Quality Assurance - Volume I tivities begun in Phase II may well continue into Phase III. As with other parts of this chapter, details should be considered illustrative, not prescriptive. Phase I: Years 1 and 2 Establish the MPAQ and its Adjuncts Congress and DHHS should establish the MPAQ. Necessary steps include adopting Recommendation nos. 1 to 5, providing the appropriate authorizations and appropriations for the MPAQ and QualPAC, staffing QualPAC and the National Council, and detailed program planning for MQROs. TABLE 12.4 Overview of Implementation Activities, by Phase Phase Activity Phase I: Years 1 and 2 Establish MPAQ,a MQROs,b QualPAC,c and National Council for Medicare Quality Assurance Start program evaluation activities and appoint Technical Advisory Panel (TAP) Review existing PRO program features and Conditions of Participation Begin long-term research and capacity-building efforts Phase II: Years 3 to 8 Design and test approaches for data collection, data analysis, and information dissemination Conduct special projects on Quality distributions Improve average level of performance and foster continuing improvement models Incentives for good and exemplary performance Responses to outliers Phase III: Years 9 and 10 Move to full implementation based on outcomes of work in Phase II Continue public oversight, program evaluation, research, and capacity building aMedicare Program to Assure Quality bMedicare Quality Review Organizations cQuality Program Advisory Commission

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Medicare: A Strategy for Quality Assurance - Volume I Steps to improve the public oversight and evaluation of the program should be initiated. Evaluation Planning for MPAQ evaluation activities should begin in Phase I. Congress or DHHS, or both, should articulate MPAQ goals in legislation or official policy (Recommendation no. 2), which would be used as the criteria against which the MPAQ should be evaluated. Fundamental changes in the organization or financing of health services for the elderly may have a significant impact on quality and should be included in the evaluation. If the office assigned the MPAQ evaluation responsibility calls on a TAP to assist in the planning, implementation, and documentation of periodic MPAQ evaluations, the TAP would be appointed in this phase. We have advised that this evaluation component include a periodic report from the Secretary of DHHS to Congress on implementation of MPAQ and on the success of MPAQ in meeting its goals. Thus, planning for the first impact report to Congress should begin early in Phase I, and the first report should be delivered during Phase I (Recommendation no. 6). As a rule, we would expect this report to be related to the goals of the MPAQ. Because we are concerned about the dangers of premature evaluation, however, we suggest that the first such report cover only the progress of implementing MPAQ. Other Activities Several other program planning and implementation tasks would begin in Phase I. Among them are the review of current PRO program activities and the changes suggested with respect to hospital Conditions of Participation (Recommendation no. 7). The shift from contracting to a grant or cooperative agreement mechanism (or hybrid mechanisms) would start in this phase. We have advocated strong support for research in the area of quality assessment and assurance and in related subjects. We have also argued for a much more forceful effort at capacity building. Work in this area should be started in this phase, although because we see it as needing to outlast the implementation of MPAQ, we discuss these topics more fully in the section on Phase III, below. Phase II: Years 3 Through 8 The middle phase of implementation involves data collection, analysis, information dissemination, and special projects. These activities focus on the design, testing, and implementation of major components of the MPAQ

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Medicare: A Strategy for Quality Assurance - Volume I model. We assume that these activities would be started in the second or third year of the MPAQ and generally would take anywhere from three to six years to complete. We assume further that the best of the approaches would then be incorporated into the full MPAQ in Phase III. Data Collection The importance to this Medicare quality assurance program (and to the Medicare program more broadly) of a greatly enhanced data base on use of services, patient outcomes, and the process of care is difficult to overstate. To create and maintain such an information base, only the foundations of which are in place, and to make it useful for assuring the quality of health care for the elderly over the long run is a massive undertaking. Because the development and testing of such a system is necessarily evolutionary and must be responsive to environmental and technical factors, putting this data collection effort in place can be expected to take the middle part of this 10-year strategy. Design and implementation of the data-collection efforts would focus on use of services, processes of care, and patient outcomes, as discussed in earlier sections of this chapter. Detailed action plans for this work might be developed with the guidance (or advice and consent) of the National Council and QualPAC. Research or demonstration projects could be conducted as needed. Data Analysis Capabilities The data analysis capabilities for MPAQ exceed those available in contemporary quality assurance programs, both public and private. Thus, HCFA will need to begin early in this phase to expand and improve its internal data analysis capacity and, more importantly, the data-analysis capacity of the MQROs. Specific attention should be given to strengthening several key elements, especially analytic personnel and computer capability. The technical assistance effort—that is, using outside expert consultants on an advisory or contractual basis—would be implemented in Phase II. Information Dissemination Our proposed program calls for a sophisticated approach to feeding useful clinical practice and quality-related information back to practitioners and provider institutions of all types. Few good models of such feedback loops exist in contemporary quality assurance programs. Therefore, Phase II activities would include considerable efforts to design and test such models, which would be coordinated with the data collection and analysis projects.

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Medicare: A Strategy for Quality Assurance - Volume I Compared with research and demonstration projects concerning feedback to providers, we see less need for projects related to public release of information or to data sharing. These are as much policy issues as technical ones. Some formal, external studies of these issues might be undertaken during this phase, with a focus on their legal, regulatory, and policy ramifications. Special Projects Distinguishing providers on the basis of quality and outcomes. If MQROs are to be able to respond differently to providers according to their performance in rendering superior, acceptable, or only poor care, they have to be able to create “quality distributions” of providers. To overcome the conceptual, practical, and political difficulties implied by this aspect of the program, we recommend that DHHS sponsor or conduct a series of studies to test different methods of creating quality distributions for the major types of Medicare providers. Such analyses should be conducted by or with the assistance of outside experts in the appropriate research fields. The final choices as to what types of methods would eventually be used should not be made until the QualPAC has had the opportunity to review and comment. Improving the average level of performance. Improving average performance (shifting the curve) is critical to the MPAQ; so is fostering better internal, organization-based quality assurance programs. Because this is such a new area, various research, demonstration, and pilot projects will be needed during Phase II. These studies might be (1) done through joint efforts of the MQROs and individual providers, (2) focused on geriatric-specific quality concerns, (3) be community-wide, and (4) involve several providers in either similar or different care settings. Existing PRO pilot projects could be absorbed into this program. Incentives for good and exemplary performance. Early in Phase II, the MPAQ should study ways to identify and reward both good and exemplary (or superior) providers. Lowering the amount of intrusive external review to which good providers are subjected is the probable first step. Other incentives to be investigated might include publishing superior rankings, awarding special recognition for performance and innovation, selective contracting, and sharing information on exemplary providers with private third-party purchasers. No incentive plan would be put in place until the QualPAC has had an opportunity for review and comment. Dealing with outliers. At some point, providers not meeting criteria for satisfactory performance on the quality indicators will have to be subjected to more intensive review and other quality interventions, as they are now.

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Medicare: A Strategy for Quality Assurance - Volume I A mechanism would also be devised for real-time intervention in the event of catastrophic malfeasance or poor performance. Special attention needs to be given to how the MPAQ and MQROs should respond to very poor performance because of the decentralized nature of this program. Phase III: Years 9 and 10 Our goal is a functioning quality assurance program at the end of this 10-year period, one that can respond creatively to changing environmental circumstances. Some of these circumstances can be foreseen (even if their particulars cannot be specified), such as a larger and older elderly population and different Medicare payment systems. Others are a matter of speculation, such as the strength of the nation’s economy. Most of the reforms suggested for the first two phases of this implementation strategy are intended to provide a firm foundation for this program. They will take several years to implement fully; most should be completed by Phase III, so that they can be folded into a fully operational program over the last two years of the implementation strategy. In Phase III, we would expect to see a shift from demonstrations to implementation, continued improvement in quality of care and in the conduct of quality assurance, and a major reassessment to determine if the MPAQ is on target. We discuss four other topics for Phase III—public oversight of the Medicare quality assurance effort, program evaluation, research, and capacity building—because of their very broad and long-range public policy implications. Although activities in these areas are expected to start in Phase I, we emphasize here the need for steady investment by DHHS because of the broad nature of the work and the larger policy implications for the Department. Public Oversight A consistent theme in this report has been engagement of patients and consumers in quality assurance. A corollary is that the public is entitled to have some voice about public monies spent on quality assurance programs and to bring quality-related problems to the policymakers’ attention. We have implicitly invested these responsibilities in QualPAC, but all facets of the Medicare program should be represented. Therefore, we suggest that efforts be coordinated among all the Medicare Commissions (especially ProPAC, PPRC, and QualPAC), to avoid duplication of effort and forestall major policy gaps. Among the issues that might be monitored is the likelihood and severity of quality problems confronting the MPAQ as reimbursement mechanisms and Medicare benefits change over the 1990s, but other issues may well arise. To accomplish this coordination, Congress might direct that the Commis-

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Medicare: A Strategy for Quality Assurance - Volume I sions meet jointly, say once every other year, in addition to or as part of their regularly scheduled meetings. This could be done as a single three-party meeting or as a series of meetings between the QualPAC and another Commission on a rotating basis. Other coordinating efforts, such as staff communications, should also be encouraged. Evaluation of the MPAQ We strongly emphasized rigorous program evaluation in this report. To this end, we suggested that HCFA devise and test various program evaluation activities in Phases I and II, including ways to assess the cost-effectiveness of a quality assurance program. This effort goes beyond evaluating the success of individual MQROs and focuses on the program itself, not on its agents. By Phase III, a formal, operational program evaluation effort (outside the MPAQ) should be in place. Approximately 1 percent of the monies appropriated for the MPAQ program itself might be directed to this evaluation effort. Research Success for this proposed program depends heavily on adequate testing of many different models for data collection, analysis, and feedback. We expect that some of this will be done through MPAQ and the MQROs. A goodly portion would be done by other research and demonstration mechanisms available to HCFA and DHHS. We wish to emphasize the need for continued, indeed expanded, research on certain other topics (as outlined in Chapter 11), even as we acknowledge the attention that Congress has very recently drawn to this area. Priorities for steady long-term research support that are not subsumed in the special projects and other efforts discussed specifically for MPAQ include at least the following areas: (1) variations, effectiveness, and appropriateness of clinical interventions; (2) practice guidelines and the mechanisms by which they can be developed, refined, disseminated, and updated; (3) measures of the technical and interpersonal aspects of the process of care; (4) measures of health status and health-related quality of life; (5) methods for changing provider and practitioner habits, behaviors, and performance including those related to continuous quality improvement; (6) data and information management systems; and (7) program evaluation. Capacity Building: Supporting the Field of Quality Assurance If quality assurance is to move forward forcefully, it will require a corps of professionals prepared to provide both technical skills and leadership.

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Medicare: A Strategy for Quality Assurance - Volume I At present we lack an adequate number of such professionals to staff a national set of organizations. An early priority must therefore be to establish training programs to prepare these health professionals. The educational programs would likely require a year of study and could be built on existing programs in epidemiology, health services research, and biostatistics. Two approaches must be pursued. First, education for existing staffs and those senior professionals already in or about to enter this work will have to use techniques of intensive continuing education and technical assistance. Second, more organized programs of training with field experience will be needed to prepare a new cadre of health workers with the tools needed to collect and apply information based on outcomes in quality assurance. Attention to the tools employed in continuous quality improvement is warranted. Resources will be needed to underwrite the curriculum development and to support the education of these professionals. Especially because many will be asked to forego more lucrative professional activities, support for the educational programs other than traditional tuition will be necessary. Ways to make quality assurance more of a profession with a clear career path should be developed. As with the research effort, this work must be carried on well after MPAQ implementation has ended. SUMMARY This chapter has presented our strategy for a quality review and assurance program for Medicare. The new program, which this strategy aims to have in place by the year 2000, is intended to respond to several major issues the burdens of harm of poor quality of care (poor personal performance, unnecessary and inappropriate services, and lack of needed and appropriate services); difficulties and incentives presented by the organization and financing of health care; the state of scientific knowledge; the problems of adversarial, punitive, and burdensome quality assurance activities; the federal role in quality assurance; the adequacy of quality review and assurance methods and tools; the tension between dealing with outliers and improving the average; the clarity of goals of a quality assurance program for Medicare; and the human and financial resources for quality assurance. Our proposed program will evolve from the present Medicare PRO pro-

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Medicare: A Strategy for Quality Assurance - Volume I gram but will have several different emphases. It will focus far more directly on quality assurance, it will cover all major settings of care, and it will emphasize both a wide range of patient outcomes and the process of care. It will also have a greatly expanded program evaluation component and greater public oversight and accountability. These new emphases present extraordinary challenges. We advance 10 recommendations to support our proposed program. The first two change the mission of Medicare to include explicit goals for assuring the quality of care for Medicare enrollees, in accordance with this committee’s definition of quality of care. Three recommendations establish the MPAQ, MQROs, and two advisory bodies, namely the QualPAC for Congress and the National Council on Medicare Quality Assurance for the Secretary of DHHS. A related recommendation directs the Secretary of DHHS to report periodically to Congress on the quality of care for Medicare beneficiaries and the impact of the new MPAQ program on that care. Another recommendation calls for a program to improve both the accreditation and the certification procedures related to Medicare Conditions of Participation. Two recommendations call for the Secretary of DHHS to support and expand research and educational activities designed to improve the nation’s knowledge base and capacity for quality assurance. The final recommendation asks that Congress authorize and appropriate the necessary funds to implement all the preceding recommendations. We also outline a strategy to implement the MPAQ over a 10-year span. Phase I would establish the MPAQ and its adjuncts, institute key program planning and evaluation activities, review PRO program activities, institute changes in hospital Conditions of Participation procedures at HCFA, and begin broad research and capacity building activities across the Department. Phase II would focus on design, testing, and implementation of data collection, data analysis, and information dissemination mechanisms. It would also include special projects on four issues: distinguishing providers on the basis of quality and patient outcomes; improving the average level of performance; providing incentives for good and exemplary performance; and dealing with outliers. In Phase III, tasks begun in Phases I and II would be completed and full implementation of the MPAQ would begin. In addition, four issues of special long-range concern would be addressed. Two of these involve the MPAQ directly, namely, public oversight and accountability and program evaluation. The third and fourth are research and capacity building, which encompass issues well beyond the implementation of the Medicare quality assurance program and hence involve policy issues for all of DHHS. The MPAQ strategy outlined in this chapter is skeletal, yet very ambitious. We made our recommendations aware that the system of care in the

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Medicare: A Strategy for Quality Assurance - Volume I next century will likely be very different from today’s. The steps described were intended to show how the nation and the Medicare program might move from “here” to “there” over the next decade, to produce a quality assurance program responsive to that changing environment and whose principles will stand the tests of time and change. We close by emphasizing the diversity of support for addressing the extraordinary challenges of quality assurance. The Medicare program has a responsibility to assure the quality of care for the elderly population; by no means does it have the sole responsibility. Patients, providers, and societal agents all must participate in this strategy for quality review and assurance if we are to meet these challenges. It is our hope and expectation that this strategy will accomplish a goal shared by all involved with medical care for the elderly—the improvement of quality for all. NOTES 1.   The act establishing the Professional Standards Review Organizations (P.L. 92–603) set out to promote effective, efficient, and economical delivery of health care services of “proper quality”; it uses terms such as “medically necessary,” provides for the “exercise of reasonable limits of professional discretion,” and refers specifically to “services for which payment may be made under the Social Security Act.” The legislation creating the Peer Review Organization program (P.L. 97–248) does not materially change that focus; for instance, the duties and functions of PROs are to assure the quality of services for which payment may be made by Medicare and to eliminate unreasonable, unnecessary, and inappropriate care provided to Medicare beneficiaries. 2.   Repeal of the Medicare Catastrophic Coverage Act eliminated the outpatient drug benefit and, by extension, development of the Part C medications files. The importance of medications data for comprehensive understanding of the quality of care rendered to the elderly remains as great as ever, however.