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II. THE PRINCIPLES OF QUALITY ASSURANCE The nation is presently committed by the PSRO legislation to particular mechanisms for regulating the quality of care but the Jaw leaves some leeway for administratively determined policies and specific approaches to be developed by individual PSROs. The committee has chosen not to limit its concern to the provision of detailed guidance for implementation of PSROs within the bounds of existing law. Such an approach, while perhaps of immediate use to those implementing the legislation, would belie the long-range potential of a quality assurance program to achieve the goal we have enunciated. And a limited approach also would imply that all the techniques are now in hand to achieve our goa1. The committee finds no existing definitive method for assessing and regulating the quality of health care. But we can postulate the principles that are fundamental to any such method and that can guide the future evolution of the program, including desirable legislative changes. In the following dis- cussion these principles are grouped under seven general head- ings: scope, methods and data requirements, standards, sanctions and behavior, management and control, costs and evaluation, and research. The final section of this report compares these prin- ciples to the present legislation. Scope three issues are raised by consideration of a program's scope. There is the jurisdiction of a quality assurance scheme, the population base for assessment, and the type of providers to be judged and employed in the review process. Jurisdiction. Determining the jurisdiction of a quality assurance system entails a number of considerations: the den- sity and demographic composition of the general population served in the review area; the types and numbers of practi- tioners in the area; the validity of measures of performance, which for infrequent diseases or procedures require coverage of a substantial population; the degree to which quality assur- ance systems should be compatible and geographically coexten- sive with political jurisdictions in the area; the possibili- ties for economies of size; the extent to which practitioners participating in the review should be known to each other; and the amount of responsibility to be given providers for the ini- tial review. Thene are two principal models of jurisdiction. One would establish a quality assurance scheme at the level of the health care organization, such as a group practice, a single hospital or a hospital chain, or a clinic. Examples of such provider organizations are the Kaiser-Permanente health plans, the Mayo 7

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Clinic, or the New York City Health and Hospitals Corporation. The system would be established coextensive with the organiza- tion or with several organizations if one alone lacked a suf- ficient population of consumers or practitioners to provide valid statistical analyses. The "Commission on Quality Health Care Assurance," proposed in a recent Senate bill, follows this format.* A second model, similar to the PSRO approach, has population- based geographic areas of review. It would cover many different medical care organizations in a geographic area and review the care provided to the entire population of the area. Although in each model some review of cases would take place within the medical care organization, the first places more reliance on the initial internal review while the second requires an external mechanism to review the care provided by a number of organizations and individuals. The committee believes that geographically defined popu- lation bases offer advantages of a large enough general popu- lation to permit valid statistical comparisons,-and reviews that are less subject to influence by organizational pressures and professional relationships. Defining a population within a geographic area on the basis of enrollment in a financing plan (such as Medicare) can offer the same advantages and could extend to the entire population if mandatory national health insurance is enacted. On the other hand, an institu- tional basis for review offers some possible advantage in feedback of the review to influence individual provider be- havior and institutional policy. On balance, the committee considers the geographic area advantages to be greater. The committee recommends that quaZity assurance programs be estabZished initiaZZy to encompass a total population in a geographic area rather than a partio~Zar health mare organiza- tion. In view of the Limited experience with either system, however, experimentation is justified with different schemes or quality assurance review at the ZeveZ of the health mare organization. Recent debate over the criteria to be used by HEW in des- ignating geographic areas for PSROs indicates that the issues of jurisdiction are more likely to be resolved on the basis of political factors than of information and experience. An early example of political pressure is the push by state medical so- cieties for the designation of each state as a single PSRO. The committee believes that the designation of jurisdiction on political grounds without consideration for the patterns of re- lationship among health care providers will tend to create a " S.14, 93rd Congress, January 1973. 8

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perception of the quality assurance system as a remote bureau- cracy concerned primarily with miscreants rather than a group that is intimately concerned with the overall improvement in the quality of care provided in a general population or com- munity. the committee recommends that the jurisdiction for a quaZity assurance program not extend beyond a natural "medioaZ trade" area which foZZo~s existing referral patterns. Population base. in which the focus of inquiry is on the people to be served, has two distinct varieties. Quality assurance could be limited to an examination of those services actually delivered to pa- tients or it could take into account the health status of all persons living in a geographic area or eligible for a health benefit program. The matter of general population base. The committee emphasizes the importance of comparing pa- tient services actually delivered with the health care needs of all persons in the region served or of all persons in a de- fined segment of that population. However, we recognize prob- lems inherent in that approach. Medical record abstract information for persons receiving health services can be compared to survey information that mea- sures health care needs of general populations to establish the relationship between health care need, demand, use and perfor- mance. The measurement of health status might be attempted Ja- ter but it is affected by many variables other than medical care and its measurement is much more difficult. Apparent discrepancies between need and the receipt of medical care should not imply that it is the sole responsibility of individual providers serving the area to correct deficits. An overburdened rural physician, for instance, should not bear the primary responsibility for the Jack of access to medical care in his area. Removing inequities may require action by the entire community or broader groups of professionals to pro- vide additional or reorganized services. Comparable terms, definitions, and classifications must be used in collecting data about both persons receiving and per- sons not receiving health services, otherwise valid comparisons are likely to be impossible or meaningless. the committee recommends that quality assurance programs use information both about patients receiving services and about the genera Z population, most of whom fizz not be receiving serv- ioes during a specific period. Providers of medioaZ care Fizz be reviewed primarily in regard to persona, health ware services provided, but paraZZeZ survey information should be empZoyed to assess the heaZth needs and demands of aZZ persons in the review area, including those not receiving services during the period under consideration, using terms, definitions, and oZassifioations oomparabZe to those used for the patient record information. 9

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corollary: The problem of responsibility for meeting the health serv- ices needs of those not being served is beyond the scope of this report, involving issues of access, financing, and indi- vidua~ behavior. In a later section (p. 41) she committee recommends that Special project support be proffered to quality assurance programs that agree to undertake assessments of the relative health needs and health status of the general and un- derserved populations. It is clear that initially only a few areas will have the requisite trained manpower to do population surveys. Also, population surveys are costly, and the benefits from a particular survey design must be weighed against the costs. It is the committee's intention that only periodic and selected sample population studies be conducted by persons ex- perienced in this field. Provid are to be ino bud ed . The PSRO legislation seems to place primary emphasis on review of decisions by physicians, who also dominate the administrative mechanisms established. But providers other than physicians are responsible, in prac- tice if not by law, for the provision of services* either in- dividually or as part of a health care team. Consequently a system of quality assurance directed only to services rendered by physicians would be deficient in several respects: some services not easily traceable to a given physician might es- cape review; some services, judged inadequate, might be attri- buted to a physician who neither assumed the responsibility nor supervised the encounter. Moreover, there are providers such as dentists, clinical psychologists, and optometrists whose practice is independent of the physician but who should be subject to review the same as physicians. The committee recommends that aZZ persons who make inde- pendent, Zisorete judgments affecting the provision of serv- ioes be subject to review by quality assurance programs. This recommendation necessitates, in all fairness, a The committee recommends that at: health ware praoti- tioners subject to review participate in the setting of stan- Zards for the review process and in the performance review itself. i; The reason for the distinction of the types of providers is that the law, in general, does not recognize the "indepen- dence" of other health personnel such as nurses, physician's assistants, dental hygienists and technicians. The concept of an "independent" provider of services is evolving and should be re-examined at frequent intervals. 10

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The engagement of all health care practitioners in standard-setting and review will make unnecessary the estab- lishment of separate standards for each professional group, and the separate audit or separate review of practitioner performance.* The committee believes that proliferation of different standards for different professional groups engaged in the same care process should be discouraged, as should the development of separate auditing and review systems. Ino fusion o f ambu Zatory care . Review only of hospital care is insufficient for an assessment of cost and quality of health care generally. Unless ambulatory care is also con- sidered, there is no way to determine the natural history of an episode of illness. In addition, adequate ambulatory care can sometimes prevent hospitalization. Finally, many ill- nesses that do not require hospitalization but do cause dis- abiJity, suffering, or even death would not be subject to quality review that only covered hospitals. Different prob- lems are involved in reviewing ambulatory care, such as the smaller number of discrete services per visit or the frequent difficulty in specifying the diagnosis or problem. However, the development of coding schemes for problems is helping to overcome the difficulties. The importance of covering ambu- latory care in quality assurance programs warrants its inclu- sion as soon as possible. the committee recommends that review be made of ambu Za- tory mare series as me ZZ as services provided in hospit~Zs. Methods and Data Requirements The PSRO legislation does not specify the methods to be used in reviewing care, and its references to date require- ments are quite general. This lack of specificity may re- flect an understanding that the state of the art is quite rudimentary and that groups of strong proponents are forming around the various methods aimed at quality assurance. The committee does not believe that clear superiority has been established for any one method; we have chosen to concentrate on generic principles that should guide the development of specific methods and data requirements and their evaluation in the future. Because an understanding of the state of the art is fundamental to our recommendations, both for immediate actions and long-range development of the field, we present in the following sections considerable detail on methods and data. We recognize that there will have to be separate cri- teria for certain health professions such as dentistry. 11

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Methods Many different methods have been employed to assess the quality of medical care. This section presents a matrix for classifying these methods, discusses some principles, and raises problems associated with some of the methods. A de- tailed discussion of each method is beyond the scope of this report but discussions can be found in some of the articles listed in the annotated bibliography attached to the report as Appendix A. Quality assurance methods differ mainly in two regards: the type of data to be used and the source from which the data are obtained. Figure ~ presents a summary of the possible interrelationships among these two matters. Some definitions will facilitate consideration of the figure. Type of data to be ooZZeoted Struo ture data describe a variety of characteristics of health facilities, including the size of institu- tiQn, equipment in a hospital or safety and hygiene standards in a nursing home, experience or creden- tials of health practitioners in the institution, such as whether a physician is "board certified" or how many years a nurse has been invo~ved-in direct patient care, the characteristics of patients, and the case mix. Prooess data describe what physicians and other health providers do to and for a patient e Outoome data describe the end result for the patient or population, reckoned by such factors as longevity, change in symptoms, dependency, and functional capacity. Methods for ooZZeoting data Resource and organization data, gathered by a vari- ety of agencies, include the number of hospital beds in a community, vital statistics, and the ratio of physicians to population. Hos pi ta Z discharge abs tract includes a uniform ba- sic set of data collected for all patients dis- charged from all hospitals and expressed in standardized terms, definitions, and classifica- tions. This basic data set can be augmented by problem or disease-specific information. 12

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Figure 1 Quality of Care Assessment: Possible relationships between the type of data by which the assessment of the quality of care will be made and method by which that data will be collected. Type of Data Method- and Sources Routinely Reported Data about Population, Resources, and Organizations Hospital Discharge Abstract Claims Form Encounter Form Source-Oriented Medical Record Problem-Oriented Medical Record Direct Observation of Physicians Simulation Techniques Patient Interview Tracer Disease Strategy Population Survey Combination of Above Structure Process Outcome Combination X X X X X X X This type of data can be collected by this method. 13 X

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Claims form includes basic data used by a physi- cian or health facility in billing insurance in- termediaries for reimbursement. By employing uniform terms, definitions, and classifications, it can be linked to or incorporated with the Hos- pital Discharge Abstract. Encounter f orm includes a uniform basic data set as part of the record for each patient visit; a statement of the patient's problems, diagnosis, procedures such as laboratory tests, services provided and disposition of the patient is in- cluded. It can be linked to a claims form and in some instances to a hospital discharge abstract Souroe-oriented medical record is the traditional manner in which the medical record is kept. Each provider participating in the care, such as nurses and physicians, initiates data, usually in differ- ent parts of the record. ProbZem-orienbed mesa? record is a recent inno- vation in medical record keeping. The record sys- tem is basically time-sequential; the patient's salient problems are defined, and the record clearly links each problem to its clinical investigation and management. Such records provide a clear indication of the physician's clinical logic and differ from source-oriented records in that for any given en- counter all the data relating to the encounter are found in one place in the chart, regardless of who entered them and arm redated to the appropriate problem. Direot observation of practitioners is data acquisi- tion by trained observers who watch and record in- formation about what a health professional actually does in practice. Simu Z ation technique s employ actors, computers, and other means to simulate clinical situations which enable an assessment of a health professional's re- sponse. Patient interview is the collection of data by in-- terviewing patients (face-to-face, by telephone, or by mailed questionnaire) who sought services from a give-e health provider.

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Tracer disease s trategy is an approach to selecting and using indicators to assess the 'qualify of medical care. It relies on sampling sets of discrete units of process for which-o~t'come can be identified'. Analysis of the sample data provides a basis for generalizing about the effectiveness of medical processes, provider performance, and organizational management at a collection site. Pop u Cation survey is the collection of data by means of household interviews or health examination surveys from properly selected random samples of a defined population or an entire population, both those who have and those who have not actually used health services during a speci- fied time period, such as two weeks or a year. Criteria for the app Ligation of data After the types of data and methods of data collection have been determined, criteria must be established for apply- ing the data to the assessment of the quality of care. Evi- dence suggests that the results of qualify 'of care assessment will vary with the purpose 'for which the criteria were estab- lished, who determined the criteria, and the methods used in the establishment of criteria. The broad range of possible approaches illustrates the complexity of attempting to assess quality on a uniform and objective basis: The purpose for establishing criteria can be ad- ministrative alone, or designed to serve an inte- gral role in the care of the patient. Criteria can be set by groups of providers external to the provider group whose care is being reviewed, or established by the group subject to review. The manner in which criteria are established can be explicit (predetermined and understood by the group in ' advance) or implicit (judgments relying on the subjective opinion of the individual judge). Explicit criteria can be normative judgments based on the opinions of an individual or a group of ap- propriate experts, or empirical judgments based upon data obtained from objective assessments, evaluations, or analyses. The way in which criteria are set may help determine the degree of compliance. Local physicians may be less coopera- tive with criteria established at the national or state levels than those established locally, but local criteria may not re- flect the most desirable practice of health care based on more objective analysis. 15

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A later section of this report (see p. 28) discusses the setting of standards, which are defined as the expected level of compliance with criteria. The setting of standards raises many of the same issues involved in establishing criteria. Although the issues are similar, the setting of standards is considered separately because, in the context of this report, standards represent a regulatory decision which may involve many factors other than the technical criteria, whereas the establishment of criteria is a technical task based on profes- sional competence. Examination of Figure ~ suggests that the choice of a method of quality assurance is a complex undertaking. Yet even this figure oversimplifies the task. Other variables to be considered in developing a method to assess quality of care include the extent of concern about availability, accessibility and cost of care; the costs of the method; whether criteria for adequate care will be set externally or internally; and whether the criteria will be derived administratively by a public agency. The committee recommends that the process of setting ori- teria for the use of data in a system of quality assessment be kept fLexibZe so that the system may combine, as appropri- ate, the values of various techniques in criteria setting. StruoturaZ, prowess, and outcome data Any method of assessing the quality of health care should either measure improvements in the health of the population served by the system as well as in the population not served, or should measure a set of variables that have a highly pre- dictable and reproducible correlation with changes in health status. In addition, a quality assurance system should assist in efforts to understand the relative effect of personal health care services on health status as against the effect of other influences such as the environment. In Figure 1, the ''type of data to be used" is arranged so that proceeding down any column yields categories in which in- creasingly more direct measurements of' health can be made. But the categories in the left-hand columns--'~process" and r structure"--provide insufficient data by any collection method to serve as the sole basis for assessing medical care quality. In most cases, research has not substantiated the relationship between these categories and health status. A number of commonly accepted structural indicators of good quality, such as the extent of a provider Is training, have not been consistently shown to account for all the differences in quality of medical care, although structural factors may make measurable improvements in the processes of care. Such fac- tors as class rank and grades in medical school, a physician r S 16

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board certification status, the place of physician training, the presence of a full-time radiologist or pathologist on the staff of a hospital, and the percentage of patients autopsied may have some relationship to measurable quality, but they are not sufficient factors by themselves. Such factors as the number of journals read, participation in continuing edu- cation as it is currently practiced in most situations, and membership in medical societies have no identifiable relation- ship to outcomes of health care. Inherent unreliability notwithstanding, certain struc- tural and process information that can be related to outcome of care is useful in assessing the quality of care. An exam- ple is standards for safety in electrical equipment used in care. Many other structural aspects of care need to be assessed in terms of effects on outcomes. When it can be con- clusively shown that a process or structural factor is causally related to outcomes, greater reliance can be placed on it. Data source, 408 t, and re Ziabi Zi by Possible sources of data are displayed along the vertical axis of Figure 1. In general, unless sampling of data is per- formed, data obtained from the sources listed toward the bottom of this axis are more expensive than data obtained from sources toward the top. However, except for data derived from hospital case fatality rates or complication rates, which can be obtained from a hospital abstract or medical record, patient outcome data are generally available only from patient interviews and popu- lation surveys. Such outcome data are usually expensive, al- though methods recently tested suggest that under certain cir- cumstances functional capacity or disability and distress levels can be assessed Reliably and collected at the time of and during hospitalization.; Only through the use of a community survey or survey of a registered population can information be obtained from a prop- erly selected random sample of those in a population who used services as well as those who did not. To assess the effective- ness of health services, users have to be compared with nonusers. Besides content, there are q~e*stions about data with re- spect to reliability and validity and to the amount of pro- fessional time needed for its acquisition. Data abstracted ... Rosser and Watts: 1972. ~ ''Reliable" data give the same result in successive usages. "Valid" means that the data are appropriate to the . . ~ ~ enc In view. 17

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assurance system is to minimize unnecessary increases in costs of care, it must be designed for the benefit of the population as a whole' not only the population receiving health care.- Improving Performance: Education and Sanctions A function of quality assurance should be to change both provider and consumer behavior, using a minimum of coercion and punishment. Education of the provider is the keystone in achieving the quality assurance goals agreed on by this commit- tee. The basis of any set of sanctions against providers must be the transformation of behavior toward improved quality. Inadequate performance by a provider can be more than a matter of individual error. There also can be failure in the health care system as well, in which case system changes can improve performance. Often it is assumed that inadequate per- formance on the part of practitioners is due to the actions of just a few. The corollary then is that regulation of perfor- mance can be expediently accomplished by "rascal-hunting." While it is undoubtedly true that some practitioners of health care are error-prone and incompetent, it is also true that the health care system can enhance rather than diminish error by even the most well-intentioned. This concept lies at the root of the committee's recommendations in this section. To the maximum extent feasible, the quality assurance system should serve as an educational device to improve provider performance, although state licensing bodies and existing con- tinuing education programs will continue to play a role. The purpose of quality assurance is the elevation of performance of all providers, not the detection and punishment of a few of- fenders or incompetents. The failure of an organization or institution, such as a hospital, to meet the requirements of quality assurance can be due to poor management, insufficient feedback, and the like. In these circumstances, the isolation of individual failure may not only be difficult but also inappropriate and mislead- ing. Failure of the health system may be as much a factor in providing poor health care as individual failure of health professionals. There also must be sanctions designed to change the behavior of the system, as distinct from the behavior of individuals in it. These sanctions might include the imposing of technical assistance, close monitoring of performance for a probationary period, or reducing reimbursement to an institu- tion under Medicare and Medicaid, although we recognize that the current Jaw requires an "all-or-none'' response. Positive incentives should be used as much as possible. Methods must be developed to reward satisfactory--and more 32

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important, exemplary--performance. This effort can be en- hanced by publicizing the results of quality assurance serv- ices, awarding special commendations, and offering merit awards for innovation and high quality performance. When sanctions must be applied, they should be appropri- ately selected from a graduated schedule of possible actions. There is sufficient evidence--from nursing home regulation or physician licensure, for example--that when only a severe sanc- tion is available, its imposition is rare. WhiJe not wishing to encourage frequent imposition of sanctions, the committee believes that a set of sanctions graded in severity will pro- vide a more flexible means of securing provider compliance. Examples of possible sanctions include mandatory continuing education, dissemination of information about performance, fiscal penalties (particularly in the form of reduced reim- bursement, either per procedure or against total reimburse- ment payable), restrictions on practice, and suspension of licensure. Provider profiles developed through quality assurance should be made available to appropriate state licensure bodies and specialty boards. It has been established that state Ji- censure bodies under provider control seldom initiate disci- plinary action on the grounds of medical incompetence.'; This is due largely to the fact that licensure statutes, which were enacted at the behest of providers, do not include either oc- casional or recurrent incompetence as a basis for discipline. Nonetheless, action against a provider's license could serve as a potentially effective sanction. For specialty boards, evidence of continued failure of any provider to meet quality assurance standards should be the basis for withdrawal or modi- fication of specialty qualifications. A substantial amount of information about provider perfor- mance will be amassed by quality assurance systems. This in- formation, in statistically aggregated form and checked for validity and reliability, should be digested and disseminated to the public in a manner reasonably calculated to be construc- tive and understandable. This should help improve choices by consumers and provide incentives for improved practitioner per- formance. But there are a number of precautions to be recognized in implementing public information about provider performance: ~d; Derbyshire, R.C., 1969. 33

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--The relative crudeness of quality assurance methods implies that health care institutions should be the initial subjects of information disclosure. Attribu- tion of error among individual practitioners is often difficult and could be misleading. And for diseases of infrequent incidence, individual practitioners will not process enough patients to enable an assess- ment of their performance. However, where a valid basis does exist for describing facts relevant to the performance of individual practitioners, the committee believes that dissemination of information identifying practitioners by name is justified. --Education and changes in behavior being the prime objectives of quality assurance, information about provider performance should contribute to those ob- jectives. Hence, in addition to public dissemina- tion, and in most cases prior to it, providers should be given information about performance. --Any provider named in information planned for public dissemination should be given a reasonable period of time to' review the information and offer suggestions for correction and explanation. All information to be disseminated should be placed in context. Public dis- semination of information about individual practition- ers' performance should be applied only after less stringent measures fail to improve performance. --Information to be publicly disseminated should be re- Jeased in sequence according to its potential for individual onus. The first to be red eased would be aggregate statistical data describing the frequency of events an their outcomes by institutions and serv- ices; next would be data relating to specific health care processes and their objectively established ef- ficacy; and finally, as a last resort, data about the performance of individual practitioners. --Information designed for the public should be readily accessible to the public and not buried in obscure reports. Dissemination of it should be handled by the officially designated 'qualify review agency in an authorized report available to anyone. Management and Control Management of a quality assurance program is not neces- sarily the same as control of it, the latter entailing formu- lation of policy that is implemented by management. The PSRO legislation emphasizes the rode of physicians in both functions. 34

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The committee believes, however, that providers and consumers both are concerned with quality assurance. The relative par- ticipation and responsibilities of each must be explored, as must the Federal role in administration. The following discussion and recommendations address the degree of professional expertise required for participation at the several levels of the quality assurance system--the initial review level and the supervisory level--and the appro- priate participation of consumers in the management and con- trol of the program. Expertise : review Zeve Z . At the initial review Reveal, ex- pertise is most important. It is possible for consumers to understand the issues in quality assurance but the judgments to be made require both technical knowledge and professional commentary. This is not to say that the initial review pro- cess must be the exclusive province of the professional. Con- sumers can play at least two important roles at this level. The history of self-regulation in all fields suggests that there is an inherent constraint, arising out of identification with one's peers, upon members of a profession who review the performance of a fellow member. The presence of consumers during the review process, far from compromising the expertise of the professional, can enhance it by fostering objectivity. The consumer's other function is self-education. Patients who have little knowledge of health care and its limitations expect far too much of the provider. They can react with hos- tility when the healing arts don't heal. But it is in the quality assurance process that the capacities and limits of health care are best revealed. Consequently, participation by consumers in quality assurance, particularly perceptive consu- mers who play leadership roles in the community, will ulti- mately help to close the gap between public expectations and provider performance. The committee recognizes that consumer participation may be more effective for some questions than others, particularly at the beginning of a quality assurance program. There are four general categories of inquiry that will arise at various levels of quality assurance review. The first is whether the given process of health care is one of established efficacy. The second is whether the care provided by a given practitioner-to a given patient meets the standards of quality. The third is the performance of * The committee uses the term "consumers" to include all those who receive or are potentially in receipt of health services. 35

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certain providers (individuals and institutions) compared with others. The fourth, based on information obtained in the other three, is to decide on an optima] allocation of resources. In the committee's view, consumer participation is more Jikely to be appropriate and effective in the proportions il- lustrated in Figure 2. Expertise : supervisory Zeve Z. The committee's examina- tion has been Jimited to publicly authorized quality assurance systems, such as PSROs, in which it is understood that non- providers will assume some supervisory responsibilities in the inevitable bureaucracies. But, it is essential that providers seek and be accepted for supervisory positions so that their expertise will be available to the government in its adminis- tration of quality assurance programs. Contro Z. In its technical definition, control refers to the formal composition of the governing body of a legal entity. For example, comprehensive health planning agencies are puta- tively controlled by nonproviders because the enabling legis- lation mandates their majority. But because of the expertise, interest, and resolve of providers, the effective control of many CHP agencies rests with providers. In the case of quality assurance, control of the program at the Federal level will ultimately rest with nonproviders through the government. Control is exercised more directly at the bureaucratic level by the nonproviders who dominate HEW. The remaining question is the form of control at the in- termediate supervisory Jevels and at the local review level. At the local review Jevel, the importance of expertise makes it necessary to place majority control with providers. Consumers should constitute less than a majority for reasons that already have been stated. At the supervisory level, foreseen as state or regional advisory councils, consumers should participate extensively. Whether they should control the entity should be the subject of experimentation. Enabling legislation should not require either provider or consumer control but should permit the de- velopment of both forms for comparison as to effectiveness. The same opportunity to experiment with various forms should be permitted any Federal advisory body. Management. Effective management is not usually related to whether the manager is a provider or consumer. This implies that the most skillet managers should be sought for a quality assurance program irrespective of their status. Nevertheless, managers with experience as providers are possibly the most suitable at the review level where frequent interaction with 36

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Figure 2 Relative Rot .es of Providers and Consumers in Review of Care and Supervision of Quality Assurance Systems Level of Participation Federal policy setting State review Area review Review of care by local quality assurance system or institution ~ / 1' '''' - / . . ~ Proportion of Cons t 1mer Participation Proportion of / Provider Participation 37

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other providers is essential. At the supervisory level, the situation is less clear and the probable result will be a mixture. She committee recommends that the review process at the Zo~aZ Level be oontroZZeZ and preferably managed by providers with a minority of consumers participating. At the supervi- sory and advisory bevels, control should rest various by with providers and consumers, and management should include non- providers, such as statisticians, epidemiologists, and systems analysts. Quality assurance is sufficiently important that the frag- mentation characteristic of public administration of health programs should be minimized. This can be achieved in a num- ber of ways; the committee offers only a few general recommendations: - --A single Federal agency should have the fuZZ responsi- biZity of supporting and monitoring ZocaZ qua Zity as- suranoe programs. The National Center for Health Statistios should have responsibility for determin- ing uniform terms, definitions, oZassifioations and standards for data processing functions. Foous of Federal responsibility Ritz ensure that the agency is visible and responsible to providers, which can be enhanced by having the agency report direotZy to the Assistant Seoretary-for HeaZth, HEW. Many problems can be avoided by focusing Federal respond bilities in a single.agency. The current confusion surround- ing the administration of the PSRO programs at the Federal level illustrates the importance of this point. The Federal health bureaucracy is fragmented, and it is unclear who bears the responsibility for the administration of quality assurance programs. There is an office charged with responsibility for the PSRO programs but it is in jurisdictional conflict with other agencies that have a.role in quality assurance activities. The structure makes unclear to providers the source of rules and regulations and technical assistance. --In order to ensure the pertinence and availability of research and development findings, the agency responsible for quality assurance should have the authority to expend funds for applied research and development in quality assurance methods and prao- tioes. The evaluation of programs should be shared between the bureau having operational responsibility and another evaZuation function located outside the operating bevel. Other agencies should be mandated to fund basic research related to quality assurance. 38

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One of the keys to the success of quality assurance is a research program to help develop the technology of quality as- surance. If one agency administers a program and another ad- ministers research and development funds, it is unlikely that the research results will meet all the needs of the administer- ing agency. This problem can be addressed by fusing the quality assurance research and development responsibility with responsibility for its administration. The evaluation of the quality assurance program should be carried out both by the operating bureau for those operational matters where a direct feedback to management is desirable and by an evaluation function at a different administrative level to examine those issues which relate to the basic nature of the program. By this split of the evaluative function, both ongoing managerial response and objectivity concerning major program changes should be served. Some additional responsibility to support fundamental re- search into new methods of quality assurance should be given to an agency that is not responsible for day-to-day operational problems. The Bureau of Health Services Research and Evaluation would seem to be an appropriate location for this fundamental re- search support. --The Federal agency with the responsibi Zity for ad~mini- s Oration o f qua Zi by as surance s hou Zig a is o pos s e ss the authority to determine the needs for data about pro- viZer performance and control application of that data to qua Zi by as suranoe . The committee has recommended that the National Center for Health Statistics be designated to collect and interpret data with respect to the delivery of health care services. Having no operational authority, NCHS should be responsive to the re- quirements of the quality assurance program. Additionally, NCHS should be governed by the decisions of the quality assur- ance agency with respect to the use of the data bearing on that aspect of health care. --The agency responsible for quality assurance at the FeZeraZ [eye Z should have the power to assure that poZioles for payment to providers under aZZ Federal health mare financing programs support the actions of quality assurance programs in administering sanctions. To make effective the sanctions that the quality assurance programs choose to administer, they must have the authority to impose fiscal sanctions. The Social Security Administra- tion, or any successor agency for financing health care, should accept, implement, and, if necessary, delegate authority for any fiscal sanctions imposed by the quality assurance agency. 39

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A Federat oZearinghouse should be estabZished for (1) information related to standards for quality assurance and f2J analyses and information respeot- ing provider performances as measured by qua City assurance systems other statistical Fatal and speoiaZ studies. this function shouter be assigned to the FederaZ bureau charged with responsibility for quality assurance programs rather than those agencies concerned primariZy with the financing of services. The committee has recommended that standards for quality assurance be formulated initially at the local level. This implies a passive role for the Federal government in the early stages, one of monitoring performance of local review agencies. Data needs at the various levels of the quality assurance system will vary, and each level will wish to abstract data as appropriate. The performance of quality assurance at the local levee will require retrievability of data at that level. Data are also needed at the national level in order to facili- tate comparisons and contrasts across the country. This is particularly true of information about standards. There are at least three types of information that should be centralized. Because the development and application of quality assurance standards are decentralized, each local re- view unit should forward information about local standards to a central repository for comparison and analysis. Also, ag- gregated statistical data on provider performance within re- gions across the country should be centralized, at least on a sample basis, so that comparisons can be made between provider performance in various regions. And the central repository should serve as a clearinghouse for literature, studies and analyses on the quality of care in this country or elsewhere. At present, if a group of providers in one part of the country wishes to establish a quality assurance program, they must rely largely on their own ability to learn about other experiences. Research, Development' and Evaluation By means of the PSRO program, this nation is beginning a major innovative social experiment that the committee would like to see committed to a goal of improving the effectiveness of health care. Little is known about the varying quality of provider performance and its relation to this goal or the ap- propriate methods to assess that performance. The committee has noted earlier that the quality of care has been a matter of public and professional concern for decades but that only in the past few years has sufficient public interest developed to establish a formal program for quality assurance. In part, this interest arises from the expansion of the governmental 40

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role in financing health care. But it also manifests an in- creasing conviction among providers and consumers that a bet- ter job must be done in health care. The effectiveness of present methods for quality assurance are not sufficient. A substantial continuing program of research is needed. Results of that research must be rigorously evaluated before they are deployed in the operation of the quality assurance system. In addition, every quality assurance system should have an evalua- tion design available--and resources to conduct the evaJuation-- before it becomes operational. Every local quality assurance program should have a minimal level of evaluation activity that feeds back to management of the system. But recognizing that prospective evaluations are costly in time and money, some pro- grams should have more complex evaluation protocols to estab- Jish definitively the value of particular techniques. The overall program evaluation responsibility should be assigned to a group that is not directly responsible for operation of the quality assurance program in order to assure objectivity. We also recognize that sufficient evaluation expertise does not exist currently and needs to be developed. Research requirements go beyond the methods of quality as- surance. There is need for investigation of provider and con- sumer behavior, alteration of which is part of quality advance- ment. Ways must be found to encourage innovation in quality assurance methods. Special funds could help programs undertake and analyze promising projects, such as a survey of the health status and health needs of that portion of a population that was not utilizing health services. Project grants for these purposes should be made available in addition to sums paid to quality assurance programs for start-up and maintenance costs. The committee recommends that a substantial research and development program be launched to augment and improve the teehnoZogy of qua City assurances inoZuding data ooZZeotion and analysis, and that, before quality assurance systems become operational, designs and tease Line data for their evaZuation Size be developed and ready for impZementation. Some plans for evaluation must be developed for the nation as a whole for those aspects which need larger numbers than are available Zo~aZZy. Moreover, provision should be made in the design of any quality assurance system for the systematic feeZ- baok of evaluation resuZts and fief experience to faoiZitate the periodic re-e~amination and retoo Zing of quality assurance programs. In addition, R & D programs should be developed to design methods of aZtering provider and consumer behavior, and for innovative quality assurance projects. 41

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