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4
The Health Care Financing
Administration and the
Effectiveness Initiative
Louis B. Hays
My objective in this chapter is to discuss the basis of the Health Care
Financing Administration's (HCFA) interest in the subject of effectiveness,
how we got to where we are today, what our role has been, and what it will
be in the future.
HCFA'S INTEREST IN EFFECTIVENESS
In late 1987, HCFA Administrator William Roper and several others of
us at HCFA became aware that research had been going on for years in the
area of effectiveness, but for some reason it had not yet gotten into the
consciousness of health policy officials, at least in Washington, D.C. We
began to review the available information and to talk to some of the people
who have been and continue to be so actively involved people like John
Wennberg, Robert Brook, and David Eddy. We began to learn more and
more about effectiveness, or, as we say, "what does and does not work in
the practice of medicine." We became increasingly concerned about the
lack of empirical data to support so much of what occurs in the practice of
medicine. To paraphrase what a prominent person in this field likes to say,
"Most procedures in medicine, whether they be surgical procedures, diagnostic
tests, or whatever, are not subject to the same elementary scrutiny for safety
and effectiveness that drugs must undergo before they are approved for
public use."
Given the fact that we have responsibility for 33 million Medicare beneficiaries,
an indirect responsibility for many millions of Medicaid recipients, and a
responsibility for the quality of care, particularly for Medicare beneficiaries,
we became increasingly interested in the area of effectiveness.
We also began to recognize the wealth of information that we have at our
27
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28
EFFECTIVENESS AND OUTCOMES IN HEALTH CARE
disposal within lICFA information on those 33 million Medicare benefi-
ciaries and what happens to them as they go through the entire spectrum of
the health care system. We have information on their treatment by the
500,000 or so physicians who provide services to Medicare beneficiaries,
the 6,000 hospitals, the 15,000 nursing homes, and so on. The claims data
that we have from our fiscal intermediaries and carriers contain a wealth of
information.
In addition, through our Peer Review Organizations we have the capacity
to generate more and more clinical information, which computers can marry
with or connect to claims data. Together they provide an incredibly rich
source of data for analysis, research, and evaluation.
Unfortunately, there is a certain risk in looking at effectiveness as a
panacea, whether it be for improving quality of care or as a way of ensuring
that all services are appropriate and that we are not wasting our health care
dollars. We have already seen evidence that effectiveness can be used as an
excuse for avoiding reform or other systemic changes. Nonetheless, above
is a thumbnail sketch of the reasons that HCFA became so interested in the
subject of effectiveness.
THE EFFECTIVENESS INITIATIVE
The first public HCFA effectiveness activity was a meeting convened by
Dr. Roper in June 1988. He brought together many of the major players in
the health policy arena to talk about effectiveness and the ability of HCFA
and other researchers to use the data that we have available to learn more
about what works in the practice of medicine. I believe the June 1988
meeting was a historic development because there was a consensus that
effectiveness was an idea whose time had come and that the uses that HCFA
and other researchers were making of claims and clinical data were the way
to proceed.
Another critical event, which followed the June 1988 meeting, was an
article published in the New England Journal of Medicine by Dr. Roper, Dr.
Krakauer, and others outlining the HCFA approach to effectiveness and a
very interesting companion editorial written by Arnold Relman. Dr. Relman
heralded effectiveness as the third revolution in health policy in this country.
HCFA also collaborated with the Institute of Medicine (IOM) to develop
a series of meetings on effectiveness. The first meeting was held in October
1988 to look at the broad areas of medicine that we should consider in our
effectiveness work. It was, in effect, an agenda-setting meeting. Obviously
we could not take on the entire spectrum of medicine. The meeting was
very helpful in recommending priorities, and it resulted in a series of three
follow-up workshops. The workshops addressed in more detail the areas of
acute myocardial infarction, breast cancer, and hip fracture. All of this
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POLICY AND RESEARCH ENVIRONMENTS
29
culminated in the proceedings published in this volume, which give an idea
of where we go from here.
I have mentioned William Roper several times, and I believe he deserves
recognition for what he has accomplished. Dr. Roper would be the first
person to acknowledge that he did not invent effectiveness and that long
before we even heard of the word or the concept several people had spent
many productive years of work in this area. However, I do think it is fair to
say that Dr. Roper "discovered" effectiveness from the standpoint of the
health policy agenda. Along with the IOM and the New England Journal of
Medicine, he has helped to popularize the concept of effectiveness. Largely
as a result of his efforts, the Bush administration and Congress have put
effectiveness high on their list of priorities; as a result, we are clearly going
to have increased funding from the federal government for effectiveness
. . .
actlvltles.
There are several other important activities within HCFA related to effectiveness.
We will shortly be publishing our third annual hospital mortality release,
showing for the nation's hospitals that participate in Medicare the actual
and expected mortality rates in general and the rates for a number of specific
. . .
conditions.
We are also working on our second annual release of nursing home
information, which shows certain performance indicators for the 15,000
nursing homes across the country that participate in Medicare and Medicaid.
While not directly part of effectiveness work, these efforts demonstrate the
power of putting good information and data into the hands of both providers
and consumers of health care.
FUTURE ACTIVITIES
I see the first meeting in June 1988, which produced an amazing degree
of consensus within the health policy community, and this meeting today as
bookends in terms of HCFA's leadership in the Effectiveness Initiative.
This has been the critical first leg of the effectiveness race, and I believe we
have completed it successfully. Now it is time for HCFA to pass the baton
to the Public Health Service, which will assume leadership in the area of
effectiveness within the Department of Health and Human Services.
I think that we can look forward to outstanding results. James Mason,
Assistant Secretary for Health, has been a distinguished public health official
for many years, having, among other things, headed the Centers for Disease
Control in Atlanta. Dr. Mason has the full support of Louis Sullivan,
himself a distinguished physician and academician who has established ef-
fectiveness as one of a small number of priorities for his tenure as Secretary
of Health and Human Services.
Of course, we continue to have the good offices of Dr. Roper, now
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EFFECTIVENESS AND OUTCOMES IN HEALTH CARE
serving in the White House as Deputy Assistant to the President. Finally,
as evidenced by his remarks in the swearing-in ceremony for Dr. Sullivan,
President Bush is interested in the subject of effectiveness.
Certainly HCFA will be working in close cooperation with the Public
Health Service, continuing in many of the activities that we have started.
For example, we are operating and expanding our health care information
resource center, in which we will increasingly make available to qualified
researchers more and better data, both from Medicare and from other sources.
We will continue to work with the American Hospital Association, the
American Medical Association, the Joint Commission on Accreditation of
Healthcare Organizations, and others to complete the uniform clinical data
set. This will provide, on a regular, systematic basis, a wealth of clinical
information to us and to other researchers.
A final critical task is dissemination of information. We can all do
wonderful work on outcomes, have all kinds of great information, but if it is
not put into the hands of real practitioners and real patients, we will not
really have accomplished very much.
Looking to the future, I would hope that effectiveness will ultimately
supersede traditional quality assurance and peer review activities, perhaps
as suggested by Paul Ellwood in his outcomes management approach. I
hope that effectiveness will produce a quantum leap forward in quality of
care, not focusing just on the few bad actors, but rather improving all
practice of medicine so that all services to all people can be as effective as
possible.
Practitioners and consumers alike look forward to the fruits of your activities
and the activities of your colleagues. What we are looking forward to is not
by any means cookbook medicine, but rather an informed and empirically
based practice of medicine that can ensure the best possible outcomes for
all Americans.
ACKNOWLEDGEMENTS
I would like to thank the Institute of Medicine, particularly its president,
Samuel Thier, for the leadership they have provided in the effectiveness
area and the work they have done with the HCFA. I would also like to
thank the IOM staff who have been so heavily involved, Kathleen Lohr,
Richard Rettig, Karl Yordy, and others. Finally, I am grateful to Kenneth
Shine for the leadership he has exerted in chairing these various events. He
has a remarkable ability to keep the trains running on time and still allow
for free and open discussion on the part of all of the participants.
Representative terms from entire chapter:
care financing
