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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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30 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.