2
Challenges in Health Care Delivery for Patients with Serious and Complex Medical Conditions

As the paradigm for health has shifted in focus away from acute care interventions and reducing deaths, a new model of health care delivery has emerged. This model emphasizes the provision of ongoing care to sustain life at the highest level of quality possible, proactive interventions to prevent development of further problems, and intermittent medical interventions to address acute exacerbation of illness and disability. These efforts are accompanied by services to support and sustain individuals' physical, social, and mental health and well-being. As noted by the Institute of Medicine: "To accommodate the changing needs of an increasingly older society we must broaden the traditional goals of health—curing disease and preventing its occurrence—to include preventing the ill from becoming disabled and helping the disabled cope with and prevent further disability" (Institute of Medicine, 1999). Rising health care costs, rising consumer expectations, and national efforts to ensure access to care and improve and sustain the quality of health care in the United States are all contributing factors to the need for changes in the traditional health care delivery system.

This chapter briefly reviews issues considered by the committee to have relevance to implementation of regulations concerning patients with serious and complex medical conditions. An in-depth analysis of these issues is beyond both the charge to this committee and the scope of this report. The committee feels, however, that it is critical to recognize the dual roles of HCFA in implementation of regulations for the Medicare+Choice program. First, HCFA is charged with ensuring that patients with serious and complex medical conditions have access to requisite services that will benefit their overall health, well-being, and quality of life. Second, HCFA must be mindful of the need to regulate the costs of care for this patient population to ensure affordability of the Medicare+Choice program.



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--> 2 Challenges in Health Care Delivery for Patients with Serious and Complex Medical Conditions As the paradigm for health has shifted in focus away from acute care interventions and reducing deaths, a new model of health care delivery has emerged. This model emphasizes the provision of ongoing care to sustain life at the highest level of quality possible, proactive interventions to prevent development of further problems, and intermittent medical interventions to address acute exacerbation of illness and disability. These efforts are accompanied by services to support and sustain individuals' physical, social, and mental health and well-being. As noted by the Institute of Medicine: "To accommodate the changing needs of an increasingly older society we must broaden the traditional goals of health—curing disease and preventing its occurrence—to include preventing the ill from becoming disabled and helping the disabled cope with and prevent further disability" (Institute of Medicine, 1999). Rising health care costs, rising consumer expectations, and national efforts to ensure access to care and improve and sustain the quality of health care in the United States are all contributing factors to the need for changes in the traditional health care delivery system. This chapter briefly reviews issues considered by the committee to have relevance to implementation of regulations concerning patients with serious and complex medical conditions. An in-depth analysis of these issues is beyond both the charge to this committee and the scope of this report. The committee feels, however, that it is critical to recognize the dual roles of HCFA in implementation of regulations for the Medicare+Choice program. First, HCFA is charged with ensuring that patients with serious and complex medical conditions have access to requisite services that will benefit their overall health, well-being, and quality of life. Second, HCFA must be mindful of the need to regulate the costs of care for this patient population to ensure affordability of the Medicare+Choice program.

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--> Quality of Health Care Although financing the expanding health care costs associated with the management of serious and complex medical conditions remains a pressing concern, so too are issues addressing quality of care for the growing numbers of individuals with serious and complex medical conditions. Receipt of high-quality care is essential to sustain or restore the health and functioning of millions of Americans with serious and complex medical conditions. Quality of care has been 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" (Institute of Medicine, 1990). A number of initiatives including the Institute of Medicine's National Roundtable on Health Care Quality and the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry have focused on major sources of compromise in the quality of care delivered to patients (Institute of Medicine, 1999; President's Advisory Commission, 1998b). Although most Americans receive high-quality health care, a significant number experience substandard care regardless of the type of health care delivery system. Due to the potential for a higher level and frequency of involvement with the health care delivery system, persons with serious and complex conditions could be considered at particular risk for errors in the care delivery process. Four major categories of errors contributing to substandard health care quality have been identified: (1) avoidable errors; (2) underutilization of services; (3) overuse of services; and (4) errors associated with wide variations in health care practices, including regional and small-area variations. Avoidable errors refer to injuries sustained by patients during the course of their care. Some patients die prematurely as a result of such injuries. Underutilization of health care services has also been cited as a major factor contributing to the delivery of poor-quality health care service that can lead to detrimental outcomes associated with functional status and quality of life and may also result in premature death. Underutilization occurs when patients fail to receive an intervention whose benefits outweigh its risks. Overuse of health care services can also undermine the quality of care. Specifically, overuse refers to the delivery of a health care intervention with a higher likelihood of risk than potential benefit to patients. Finally, errors associated with variations in health care practices have been noted for different patient populations, health care providers, and health care delivery systems. Patient Characteristics A number of studies reveal that characteristics of patient populations are associated with variations in the quality of health care. For example, compromises in care have been noted for the elderly, women, members of racial or ethnic minority groups, and members of low socioeconomic or low educational attain-

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--> ment groups. There is evidence of improved quality of care and better outcomes for patients with active systems of social support and for those who have access to care in urban versus rural settings. Health insurance status has also been cited as a predictor of variations in quality of care, with lack of insurance or inadequate coverage associated with lower quality of care (Aday, 1994; Aday et al., 1993b; Blazer et al., 1995; Brook et al., 1990; Elnicki et al., 1995; Erlich, 1985; Fox and Newacheck, 1990; Frenzen, 1991; Freund and Hurley, 1995; Freund and Lewit, 1993; Gibbons et al., 1991; Hofer and Katz, 1996; Imperiale et al., 1988; Ireys et al., 1996; Lave et al., 1995; Lillie-Blanton et al., 1993, 1996; Newacheck et al., 1996; Riley and Lubitz, 1985, 1986; Rogers, 1993; Rowland and Lyons, 1989; Stano and Folland, 1988; Starfield, 1992; Starfield et al., 1991, 1998; Van Nostrand, 1993; Vayda, 1973; Woolhandler and Himmelstein, 1988). Provider Characteristics Characteristics of health care providers have also been identified as predictors of variations in quality of care. Provider gender is associated with differential referral rates for gender-specific screening exams. For example, male providers are less likely than their female counterparts to refer female patients for breast and cervical cancer screening exams. Age of providers and length of time in practice are also associated with delivery of state-of-the-art care to patients, with a slightly decreased likelihood of such care by younger providers with fewer years in practice. In contrast, physicians with board certification in particular areas of specialty care and those affiliated with professional societies demonstrate greater knowledge and more frequent use of practice-based guidelines for primary, secondary, and tertiary prevention when compared to their counterparts who lack board certification or membership in professional societies (Bernard et al., 1990; Bunker, 1970; Cherkin et al., 1987; Eisenberg, 1986; Feinglass et al., 1991; Folland and Stano, 1989, 1990; Forrest and Starfield, 1998; Franks and Dickinson, 1986; Garber et al., 1984; Garg et al., 1979; Gittelsohn and Powe, 1995; Greenfield et al., 1992; Greenwald et al., 1984; Hartley et al., 1987; Horn et al., 1986; Kravitz et al., 1992; Linn et al., 1984; McPherson et al., 1982; Powe et al., 1996; Roos et al., 1986; Sandrick, 1984; Stafford et al., 1999; Starfield et al., 1994; Wennberg, 1984, 1985a, 1985b, 1986; Wennberg and Gittelsohn, 1973; White et al., 1984). Patient Volume In recent years, studies have begun to examine the correlation between clinical outcomes and hospital or provider case volume for a variety of medical and surgical procedures. Although additional research is required to increase the general understanding of the relationship between patient volume and outcomes, a number of studies have yielded convincing evidence that high-volume, re-

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--> gional providers can deliver complex care with improved short-term outcomes at lower costs when compared to their low-volume regional counterparts. The majority of these studies have compared mortality and morbidity rates and length of hospital stay between high-and low-volume groups. Lower mortality and morbidity rates have been noted for patients receiving care for a wide variety of conditions, including but not limited to, cancer, hepatic resection, arthroplasty and hip fractures, selected surgical procedures, repair of abdominal aortic aneurysms, repair of congenital cardiac defects, carotid surgery, AIDS, organ transplantation, acute myocardial infarction, and neonatal mortality (Banta and Box, 1991; Banta et al., 1992; Bennett et al., 1989, 1995; Choti et al., 1998; Espehaug et al., 1999; Farley and Ozminkowski, 1992; Hannan, 1991; Hannan et al., 1991, 1994, 1995, 1997a, 1997b, 1998; Hillner and Smith, 1999, Hughes et al., 1987, 1988; Jollis et al., 1994; Kantonen et al., 1998; Lavernia and Guzman, 1995; Luft, 1980; Norton et al., 1998; Phibbs et al., 1996; Phillips et al., 1995; Riley and Lubitz, 1985; Rosenfeld et al., 1987; Sollano et al., 1999; Stone et al., 1992; Thiemann et al., 1999). Health Care Delivery System Variations in quality of care have also been attributed to aspects of the health care delivery system such as access to academic centers of tertiary care and single versus multiple specialty practice settings. Delivery of care in academic settings is generally associated with improved quality of care. Similarly, quality of care is better for patients receiving services in a multiple specialty practice environment and from practitioners caring for a high volume of patients with a particular illness. A recent meta-analysis of evidence comparing the performance of managed care plans with that of fee-for-service plans examined results from 37 peer-reviewed studies (Miller and Luft, 1997). Operationalization of quality-of-care measures included hospital admission rates, patient outcomes, lengths-of-stay, hospital expenditures, use of costly procedures, physician visits, outpatient spending, home health care spending and use, total spending, and enrollee satisfaction. There were equal numbers of statistically significant positive and negative results for managed care plan performance compared with fee-for-service plans. However, there was a lack of consistency in the evidence, and more research will be required before conclusions can be drawn about the relative contributions of source of care and payment to variations in quality of care (Bindman et al., 1996; Bradbury et al., 1991; Fine et al., 1990; Gemson and Elinson, 1986; Geraci et al., 1993; Gonnella et al., 1990; Greenfield et al., 1992; Hawkes, 1989; Hill and Brown, 1990; Hillner and Smith, 1999; Holahan et al., 1998; Horn et al., 1991; Iezzoni et al., 1988, 1991, 1992, 1994b; Institute of Medicine, 1999; Kellie and Kelly, 1991; Knaus et al., 1986, 1993; Lambrew et al., 1996; Miller and Luft, 1997; Naessens et al., 1992; Oleske et al., 1998; Riley et al., 1991, 1993, 1994, 1995; Saag et al., 1998; Shwartz et al., 1996; Silber et al.,

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--> 1992; Stano and Folland, 1988; Starfield et al., 1991, 1994; Thiemann, 1999; Weiner et al., 1995, 1996b). The President's Advisory Commission and the Institute of Medicine Roundtable concluded that quality of care varies considerably throughout the United States, with wide variations apparent within and between communities, hospitals, practitioners, patients, health care delivery systems, geographic regions, and health conditions (Institute of Medicine, 1999; President's Advisory Commission, 1998b). Such variation in the quality of health care in America is a major cause of excess morbidity and mortality, as well as a contributing factor to rising health care costs and expenditures. Interventions to improve the overall quality of health care have the potential to save lives, reduce disability, improve quality of life and productivity, and reduce health care spending. Given the potential for higher utilization of services of the traditional and expanded health care delivery system, patients with serious and complex medical conditions could be considered at even greater risk of experiencing poor-quality health care in terms of one or more of the major quality-of-care measures. Access to Care Of particular relevance to the rising expectations of consumers with serious and complex medical conditions is the right to select providers and health care plans that ensure access to appropriate high-quality health care. Specifically, the Consumers' Bill of Rights and Responsibilities states that "consumers with complex or serious medical conditions who require frequent specialty care should have direct access to a qualified specialist of their choice within a plan's network of providers. Authorization, when required, should be for an adequate number of direct access visits under an approved treatment plan." The literature relevant to access to care presents a conflicting picture. The past decade has been marked by a significant increase in the number and types of health insurance products available to consumers in most geographic regions. Current options include traditional indemnity plans, health maintenance organizations, preferred provider organizations, and other types of managed care plans with various options concerning benefits, premiums, copayments, and health care delivery systems (President's Advisory Commission, 1998b). These options have prompted a reduction in enrollment in fee-for-service plans from 59 percent of American workers in 1991 to 35 percent in 1995 (Employee Benefits Research Institute, 1997). In 1997, more than 5 million Medicare beneficiaries enrolled in 336 managed care plans, an increase of more than 100 percent over 4 years. Similarly, 35 million Medicaid beneficiaries enrolled in managed care plans during the same interval for an increase of more than 170 percent (President's Advisory Commission, 1998b). The commission notes, however, that the choice in health insurance products is available largely at the level of the group purchaser rather than the individual consumer. In fact, between 1988 and 1997, the choice of health plan of-

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--> ferings by employers decreased. With respect to consumer preferences for health insurance coverage, the majority prefer a high-cost, broad-benefit options package to a lower-cost option with a more limited range of benefits (Kaiser Family Foundation and the Agency for Health Care Policy and Research, 1996). In the survey issued by Kaiser and the Agency for Health Care Policy and Research, the most frequently stated reason for consumers' preferences for greater choice in physicians and other health care professionals was to "see ... whatever doctor you think is best qualified to treat a particular medical condition." Although the literature on access to specialized services is just beginning to develop, there is some evidence to suggest that vulnerable groups such as the nonelderly disabled; the "oldest old" (85 years and older); those with functional impairments; and those in fair, poor, or worsening health are more likely to report problems in accessing the care they need compared to their less vulnerable counterparts (Nelson et al., 1997). Such problems have been shown to occur more frequently for enrollees in health maintenance organizations than for those in fee-for-service plans (Nelson et al., 1997). Similarly, a recent study of populations with low incomes demonstrated that Medicaid beneficiaries enrolled in managed care plans are more likely to have difficulties with access to care than their counterparts who are enrolled in commercial plans or Medicaid fee-for-service plans. The most frequent problems in accessing care are noted among Medicaid managed care enrollees in poor health (Lillie-Blanton and Lyons, 1998). Other studies have shown that Medicare beneficiaries enrolled in health maintenance organizations are more likely to disenroll when they are less healthy as measured by mortality rates, preenrollment health care costs, and self-reported health status (Hill and Brown, 1999; Riley et al., 1991, 1996; Rossiter et al., 1988; Sullivan, 1990). In contrast, other studies do not yield support for the premise that vulnerable populations have limited access to specialized services, poor service, greater inconvenience in accessing care, and restricted choice of providers (Aday and Andersen, 1981; Aday et al., 1993a; DesHarnais, 1985; Dowd et al., 1992; Fama et al., 1995; Luft and Miller, 1988; Moy and Hogan, 1993; Newhouse, 1994; Schlesinger and Mechanic, 1993). For example, disenrollment rates of Medicare health maintenance organization enrollees were compared between cancer patients and noncancer patients. Overall, cancer patients were no more likely to disenroll than other types of enrollees (Riley et al., 1996). Similarly, analysis of data from the National Health Interview Survey revealed that indemnity plans have an equal number of enrollees with chronic illnesses compared to patients enrolled in health maintenance organizations (Fama et al., 1995).

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--> Health Care Cost Containment The health care industry—especially Medicare, Medicaid, health maintenance organizations, and other managed care organizations—is struggling to respond to the increasing prevalence of persistent and disabling conditions and the cost burden these conditions bring to bear on the health care delivery system. In terms of actual expenditures, HCFA estimates that by the year 2000, health care costs in the United States will exceed $1.6 trillion and will comprise more than 16 percent of the gross national product. It is estimated that fully 80 percent of all medical expenses can be attributed to care for individuals with serious and complex conditions. During the past two decades, significant increases in expenditures have been noted for the two major categories of long-term care, nursing home and home health care. Specifically, annual nursing home care expenditures in 1980 were approximately $20 billion, while home health care expenditures averaged $2 billion. Today, annual costs for nursing home care have increased to $70 billion and for home health care to $25 billion. Similarly, pharmacy drug costs are increasing at a 16 to 18 percent annual inflation rate among Medicare beneficiaries. Medicare and Medicaid Medicare has assumed a leading role in responding to the complex care needs of populations with serious and complex medical conditions. Similarly, Medicaid has stepped in to meet the needs of children, economically disadvantaged populations, and persons with disabilities who have serious and complex medical conditions. Although Medicare was first designed as a benefit to provide acute care services, a number of factors have contributed to its emergence as a provider of health care services associated with persistent illness, disability, and long-term care. These include advances in medical technology, consumer preferences, policy changes, and the development of a "postacute care industry," which has expanded Medicare benefits to include skilled nursing facility services, home health services, rehabilitation therapies, hospice care, and durable medical equipment (Ash et al., 1989; Dowd et al., 1992; Lubitz and Riley, 1993; Maguire et al., 1998; Riley and Lubitz, 1989; Riley et al., 1986, 1987). Medicaid has long been the primary source of public funding for long-term-care interventions. Medicaid reimbursements include nursing home care, intermediate care facilities for persons with mental retardation, home health care, personal care, and home-and community-based services. Medicaid also assumes financial responsibility for reimbursement of both acute and long-term health care services required by persons with disabilities. For example, in 1992, 59 percent of Medicaid spending was directed toward long-term care for the elderly, while 36 and 5 percent, respectively, covered long-term-care services for younger adults and children. In 1993, Medicaid expenditures on home health care and home-and community-based services exceeded $4.5 billion, 10 times

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--> the amount spent on home care in 1980 (Freund and Hurley, 1995; Freund and Lewit, 1993; Holahan et al., 1998; Oleske et al., 1998). Utilization Review and Management Strategies for cost containment include utilization management and the development of peer review organizations, which attempt to ensure that a comprehensive array of medical services are available when needed while limiting the expenditure of resources for unnecessary and inappropriate medical services. The Institute of Medicine Committee on Utilization Management by Third Parties defines utilization management ''as a set of techniques used by or on behalf of purchasers of health benefits to manage health care costs by influencing patient care decision-making through case-by-case assessments of the appropriateness of care prior to its provision" (Institute of Medicine, 1989). Utilization review or management focuses on a single episode of an illness, examines a large number of patients at a low level of intensity, and relies on prior authorization, concurrent review, and retrospective review to evaluate medical necessity (Kellie and Kelly, 1991). Care Management Alternatively, some managed care plans have begun to develop comprehensive, integrated service delivery systems such as care management for individuals with persistent, disabling, or progressively life-threatening conditions. Care management has been defined as "a collaborative process which assesses, plans, implements, coordinates, monitors, and evaluates options and services to meet an individual's health needs through communication and available resources to promote quality, cost-effective outcomes" (Case Management Society of America, 1996). Unlike utilization review, care management is proactive in its efforts to identify patients at risk for exacerbation of an illness or disability. Care management focuses on the continuum of care, addresses the needs of a small number of patients, and emphasizes medically appropriate care. Care management plans are intended to ensure better integration of health care service delivery (including social and mental health services, if necessary), minimize duplication of services, and increase the likelihood of proactive identification of costly problems that might arise in the future. Screening and Risk Assessment A third effort by plans to deal with rising health care costs and the increasing numbers of individuals with serious and complex conditions focuses on screening and risk assessment. This approach relies on the assessment of interrelationships among the biological, environmental, and behavioral factors con-

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--> sidered to be associated with elevated risk for specific health outcomes and increased need for special or intensive therapies. Individuals identified at higher risk for negative physical, social, or mental outcomes can receive interventions earlier in an effort to prevent such outcomes. Such preventive interventions can help reduce overall costs of care and can result in significant improvements in health status and quality of life. Relevant dimensions of risk include age; gender; acute clinical stability; principal diagnosis; severity of principal diagnosis; extent and severity of comorbidities; physical functional status; psychological, cognitive, and psychosocial functioning; cultural, ethnic, and socioeconomic attributes and behaviors; health status and quality of life; and patient attitudes and preferences for outcomes (Ellis et al., 1996; Iezzoni et al., 1988, 1991, 1992, 1994a, 1994b; Naessens et al., 1992; Weiner et al., 1996a). Alternative Strategies for Cost Containment Other efforts are underway to control health care costs for patients with serious and complex conditions while ensuring appropriate access to necessary services. For example, disease management programs and multidisciplinary teams for care management are used with increasing frequency to improve the efficiency and coordination of care for patients with serious and complex medical conditions. Efforts are also being made to better manage health care costs while ensuring access to quality services through the use of nurses, nurse specialists, and social workers to manage routine health care and respond to needs for ancillary services. It is evident from these brief reviews of literature relevant to health care quality and health care cost containment that the relationships among quality of health care, access to care, types of insurance coverage, and serious and complex medical conditions are only beginning to emerge. A great deal of further study will be necessary for any conclusions to be drawn about issues such as access to specialty care, quality of health care, insurance preferences, insurance options, and disenrollment in plans for patients with serious and complex conditions. It is within the constraints of this emerging literature that this committee determined its final conclusions and recommendations concerning persons with serious and complex medical conditions.