Medicare: New Directions in Quality Assurance Proceedings (1991)

Duncan vB. Neuhauser

One of the good things about this Institute of Medicine report (IOM, 1990) on Medicare quality is that it looks toward a 10-year time horizon. Let me go beyond that to consider a 20-year horizon. This desire comes partly from being infected by continuous quality improvement ideas, such as constancy of purpose, and partly from recently observing several small companies destroy themselves by being concerned only with maximizing the next quarter's profits. If we voters do not express our concern for the future, Washington will never get the message.

Using this long time horizon leads me to believe that the classic form of health insurance on which Medicare is based, that is, paying for units of care and relying on inspection for quality control, is on its way to extinction. There is going to have to be a major massive involvement by the federal government in improving the quality of the services Medicare pays for, or Medicare as we now know it will simply become a dinosaur.

One measure of the depths of the problem we are dealing with relates to the well-known film on prostate surgery by John Wennberg and his colleagues. Videos such as this should be available to everyone. Seeing them should be the minimum standard of informed consent prior to surgery. Medicare apparently is unable to create such a requirement and to promote the development of other such films. That is a problem of the first order.

In my city of Cleveland, as elsewhere, health maintenance organizations (HMOs) and preferred provider organizations (PPOs) are taking over much of the market for medical care. Our local business coalition, called the Health Action Council, has the potential to organize sensible care for its employees

and their families through provider-payer-user partnerships. Along with Kaiser Permanente, Blue Cross and other PPOs, and Medicaid HMOs, most people in this area are entering managed care plans. Medicare in my city is becoming the major stumbling block to reorganizing high-quality and efficient care, because it has a lack of capacity and a lack of levers to move care in a more sensible direction. Medicare is becoming more and more part of the problem rather than part of the solution.

Managers of one Blue Cross plan in a nearby state were considering stopping payment for bypass surgery in 40 hospitals doing fewer than 100 procedures a year. Could Medicare do this if it wished to? Employers and unions are talking about developing ongoing working groups with physicians (partnerships) to improve specific categories of care such as substance abuse and low back pain. These partnerships would meet and go on continuously. The Kingsport, Tennessee, model should received more attention. Could Medicare do these things? Not as it is currently structured. Medicare is being left behind.

I think that ultimately the medical model for care of the elderly, the health insurance model, will be on its way out and that it will be replaced by a social support model of care for the elderly. I think we will keep coming back to more of those bizarre creatures, such as Social-HMOs, On Lok Senior Health Services, and even medieval Beguines. We will eventually move to the very different view that social support is the major model for helping the elderly. The medical model will become a subsidiary perspective.

Once there were the Foundations for Medical Care. They begat EMCROs. EMCROs begat PSROs. PSROs begat PROs, and they are about to beget MQROs.¹ PROs are based on inspection, as far as I can tell. By the way, this violates one of Edwards Deming's 14 principles of total quality management and, therefore, from his point of view should be done away with altogether.

About 1978, I met with a dozen managers of PSROs, and we talked about how to evaluate their performance. Could we find out and demonstrate what good work they were doing? The general response from these executives was that they were not very interested. If somebody else would do it, and if it would cost them neither money nor effort, they would perhaps go along with it—reluctantly. They were sure that they were doing good

work and that, with a little more money, they certainly could do better. They were very busy implementing their programs, and they certainly did not have time, thank you very much.

As you probably know, and if you do not know you should, the standards for what makes good evidence of health outcomes were laid down in the first 21 verses of the biblical book of Daniel. The PSRO directors failed to follow the wise example of Daniel. Rightfully the PSROs were found wanting, and their kingdom was divided among the Medes and the Persians, and those PSRO managers have all lost their jobs. Can we say whether the PRO managers have learned to listen and heed the advice of the prophet Daniel? Are they carefully evaluating what they are doing to demonstrate the usefulness of their activities? They probably are not.

There are now about 50 PROs. Would it not be a marvelous thing if we could randomly choose 10 PROs and assign them to John Wennberg to run according to his philosophy? Another randomly chosen 10 could be given to Robert Brook and Jacqueline Kosecoff² for them to run. Randomly choose another 10 and give them to the people involved in Deming's continuous quality improvement. We could watch and see what happens, and maybe on that basis we could choose one of the more sensible approaches.

I am a great believer in management by randomization as opposed to rigid uniformity in government systems. Governments tend to prefer standard, uniform, monolithic systems. This is true for the British National Health Service, for the Costa Rican health services in rural areas, for the Department of Veterans Affairs, and for Medicare. We pay a disastrous price for having single monolithic institutions. This is a simpleminded, one-style-fits-everybody philosophy as opposed to a massive commitment to experimental changes.

If this IOM report creates a vehicle for evaluating care, it ought to be empowered to provide systematic randomized changes in many aspects of the Medicare program. Then the managers of this program can produce a long menu of possible answers when the next political crisis comes along, with the next set of politicians whose future orientation does not exceed the next election two years from now. It ought to be a vehicle for good management that should help guide a longer-term view of things, rather than what the British call redisorganization.

I am very much pleased with the report and its proposals. We are living in wonderful times in terms of quality assurance improvement and evaluation. Today there are more exciting things being tried in these areas than at

any time since the death of Ernest Avery Codman. We ought to cheer on these efforts. This is exactly the wrong time to set any one of these approaches in concrete and make it mandatory for everybody. This is certainly the time to ask many questions, to continue discussion, to debate and comment, and to evaluate. I think that is exactly what this report has proposed to do. Therefore, three cheers.

Institute of Medicine. Medicare: A Strategy for Quality Assurance. Volumes I and II. Lohr, K.N., ed. Washington, D.C.: National Academy Press, 1990.