This final chapter summarizes the Institute of Medicine (IOM) committee’s main findings and conclusions and outlines our vision of an “ideal” quality assurance system. It states our explicit recommendations for a strategy and structure for a reformulated quality assurance system for Medicare, based on our findings and conclusions and in response to the congressional charges for this study. It describes in some detail how we think such a system might work, recognizing that many organizational and operational features of the system would not be completed until well into implementation. Finally, a section on implementation strategy briefly discusses tasks to be undertaken in three phases.

The committee debated many issues over the course of this project. On some issues it reached broad consensus, as reflected in our findings and conclusions. On others the committee was more divided on a stance to take, chiefly because of conflicting or insufficient evidence. Still other positions were arrived at only after weighing concrete findings against more intangible considerations of organizational, financial, or political factors.

Many approaches to a strategy for quality assurance in Medicare were considered in reaching our decisions and recommendations (some of which are briefly noted below). This chapter does not, however, give a rigorous organizational, financial, or political evaluation of different strategies that might be considered. We do not explicitly discuss the pros and cons or the benefits and side effects of the recommendations we have made or of possible alternative options. Our recommendations about a long-term strategy for Medicare quality assurance are explicated, although little solid evidence about risks or benefits of an as-yet untested strategy to be followed over a decade could be marshalled at this time. The decade-long implementation strategy we recommend is intended to provide information about the advan-

tages and disadvantages of a new system so that its realization can be in some ways self-correcting.

The nation is generally perceived to have a solid, admirable base of good quality health care, and the elderly are usually satisfied with the quality of care they personally receive. Contrasting with this positive perception of the overall quality of care in the nation is a large body of literature that documents areas of deficiencies in all parts of the health sector. Some of these relate to overuse of unnecessary and inappropriate services, some to underuse of needed services, and some to inadequate technical skills, poor interpersonal care, or faulty judgment in the delivery of appropriate services.

The committee concluded that significant problems exist in quality of care and in our present approaches to quality assurance. The problems are sufficient to justify a major redirection for quality assurance in this country and, in particular, a more comprehensive strategy for quality assurance in Medicare.

Our major findings and conclusions include the following:

• A quality assurance program should be guided by a clear definition of quality of care.

• No single approach or conceptual framework to quality assurance is likely to suit all purposes.

• Regarding the elderly,

• the elderly population continues to grow, both in absolute numbers and as a proportion of the entire population,

• the average number of years lived after age 65 continues to increase, and

• an increasing number of people in this population live with chronic illness and disabling conditions.

• Regarding Medicare and the elderly,

• health care costs continue to rise,

• pressures for cost containment increase, and

• use of sites of care other than inpatient (i.e., outpatient and long-term-care facilities and home settings) continues to expand.

• Near universal coverage of the elderly population by the Medicare program gives them better access to health care than any other age group; nevertheless, gaps in coverage and financial barriers do exist and adversely affect quality.

• Regarding the burden of poor quality,

• evidence of overuse of health services is substantial,

• underuse is hard to detect under existing surveillance systems, but we suspect it is considerable, and

• numerous examples of poor performance have been documented by health professionals in health services research studies.

• Different approaches to quality assurance may be necessary

• for different sites of care (e.g., hospital, home care, or ambulatory settings) and

• for different organizational structures such as health maintenance organizations (HMOs) and fee-for-service practices.

• Quality-of-care criteria sets

• can be classified into three main groups, namely appropriateness (or clinical practice) guidelines, patient management and evaluation criteria, and case-finding screens, and

• vary considerably in internal and external validity.

• Criteria for evaluating quality-of-care criteria sets

• can be defined in terms of about two dozen substantive (or structural) attributes and implementation (or process) attributes,

• differ by type of criteria set, and

• can be grouped into larger clusters of substantive attributes (scientific grounding, latitude for clinical and patient judgment, design, and efficiency) and implementation attributes (implementation, ease of use, appealability, and dynamism).

• Currently available methods of quality assurance

• suggest that a small number of outliers account for a large number of serious quality problems,

• are inadequate in coping successfully with outlier providers,

• tend to focus on single events and single settings,

• may not identify underuse and overuse of services,

• are constrained (sometimes in counterproductive ways) by regulatory and legal systems, and

• are of questionable value in improving average provider behavior.

• The Utilization and Quality Review Peer Review Organizations (PROs) constitute a potentially valuable infrastructure for quality assurance. Nevertheless, it is the perception of the committee that PROs

• give primary attention to utilization rather than quality,

• focus on outliers rather than the average provider,

• concentrate on inpatient care,

• impose excessive burdens on providers,

• do not use positive incentives to alter performance,

• are perceived as adversarial and punitive,

• use a sanctioning process that is largely ineffective,

• are rendered relatively inflexible by program funding arrangements,

• use methods that are redundant with other public and internal quality assurance programs, and

• have not been evaluated with respect to their effect on quality.

• Mechanisms for ensuring that hospitals meet the Medicare Conditions of Participation

• are generally sound in terms of the concept of “deemed status”, but

• warrant strengthening in several aspects, especially the survey and certification procedures for hospitals that are not accredited.

• The present structure does not have the capacity to achieve a comprehensive and maximally effective quality assurance system. Required research and capacity building include

• basic methodological research,

• applications research,

• research on methods of diffusion,

• training of professionals in research skills, quality assurance, and continuous improvement, and

• methods to improve patient decision making.

Based on these findings and conclusions, the committee proposes a quality assurance system that: focuses on the health care decision making and health outcomes of Medicare beneficiaries, enhances professional responsibility and capacity for improving care, uses clinical practice as a source of information to improve quality of care, and can be shown to improve the health of the elderly population. This ideal system stands in sharp contrast to the existing quality assurance system; the latter relies too heavily on provider-oriented process measures, regulation, and external monitoring, contributes little new knowledge to improve the quality of care, and has not been evaluated in terms of impact on the health of the elderly. We believe that any future quality assurance program requires a better balance than exists today between regulation and professionalism, provider orientation and patient orientation, and process of care and outcomes.

Our proposed program for quality review and assurance aims to alter the mix of elements that make up such a program. We propose to shift the emphasis from current directions or tasks to ones that more fully reflect our vision of a quality assurance program (Table 12.1).

The current PRO program is inclined toward reaction, external inspection, and regulation. We suggest that the future Medicare quality assurance program be more proactive in data collection and feedback and that it actively foster professionalism and internal quality improvement. The present system heavily emphasizes providers and the process of care. We suggest that in the future it give more attention to patient and consumer concerns and decision making and that it adopt an aggressive outcomes orientation.

The present approach relies on monitoring information and on data collected for other purposes (such as billing), and it does little constructive

feedback to providers. We propose a program that generates new knowledge from clinical practice and that returns that information to providers in a timely way that improves clinical decision making.

Although any quality assurance program must be concerned with individual providers and specific incidents of care, as is presently the case, we believe that the future program must place stronger emphasis on systems of care, the joint production of services by many different providers, and continuity and episodes of care. The Medicare peer review programs have traditionally focused on hospital inpatient care and have been able to do little or nothing with ambulatory, office-based care or care in other nonhospital settings. We thus see a need for a major thrust toward quality assurance in all major settings in which the elderly receive care. Quality assurance in those settings is important in its own right, but it also is necessary if patient outcomes and episodes of care are to become significant components of this new program.

A major deficiency of the present program, in our view, is the lack of evaluation and public oversight. It is virtually impossible to know what the nation is getting for the Medicare resources presently devoted to the peer review program or to know which parts of that program are successful and which are not. In our reformulation, therefore, we place considerable em-

phasis on public accountability, so that policymakers and the nation more generally can know what impact the program is having and can express their views about program goals and directions. Finally, in addition to these points, we note that the present program is not grounded in a firm conceptualization or definition of quality of care. We strongly believe the future program of quality assurance in Medicare should direct its activities on the basis of a clear understanding and acceptance of a definition of the concept of quality of care.

The committee discussed several options for Medicare quality assurance at one point or another during its deliberations. Mostly these centered on what to do, or not do, with the existing PRO program. One clear option was to keep the PRO program more or less intact and simply recommend marginal changes (such as strengthening the sanctioning process and improving generic screens) in line with suggestions that have been made by other investigative or advisory bodies. This option was judged not responsive to the congressional charge (“to design a strategy”) and in any case not sufficient to the task of creating a long-term strategy for quality assurance for the entire Medicare program. A variant on that option was to reduce the PRO program severely to a simple regulatory mechanism that would concentrate on outlier providers and practitioners, leaving to the private sector and professional organizations and associations all efforts at detecting less egregious but perhaps more prevalent quality problems and all quality assurance and improvement responsibilities. This seemed to lead to an artificial split in responsibilities and to make the PRO program even less appealing to the provider community than it is now, and it certainly would not enable the federal government to argue that it was doing all in its power to ensure that the elderly receive high quality care.

Another variant was to keep the PRO program more or less intact but to eliminate its regulatory or sanctioning powers and strengthen its educational powers. This was viewed as an unattractive option for at least two reasons. First, it undercut the vision of a comprehensive quality assurance program that the committee believed important. Second, the sanctioning powers of the PROs have value in terms of the leverage they provide the PROs in insisting that deficient practitioners and providers undertake corrective actions, including educational ones; removing that leverage threatened to make the PROs very ineffectual.

A completely opposite tack was to recommend that the PRO program be immediately terminated and replaced with something very different—for instance, a technical assistance program to aid the provider community in developing and maintaining their own quality assurance efforts, or a pro-

gram that worked through other existing efforts such as those of state health departments or the Joint Commission for Accreditation of Healthcare Organizations. This option was considered to be neither practically nor politically feasible, particularly because even less evidence is available on the likely success of those alternatives than on the success of the current PRO program.

Other major splits developed as the committee moved through its deliberations. First, should the committee embrace the precepts of continuous quality improvement? Proponents argued strenuously for giving this new model a central place in the new Medicare quality assurance program. Others were more skeptical, believing that although the continuous improvement systems and their underlying philosophy and practical tools are attractive, the evidence of their success in dealing with clinical problems or in applications beyond the hospital setting provides an insufficient base for a major federal initiative.

Second, to what extent should patient outcomes be the main variables for judging quality of care? Many, if not all, members of the committee agreed that, in principle, good outcomes are the ultimate criteria for judging the quality of health care rendered. Many also recognized, however, that outcome measurement and outcomes management have severe technical drawbacks. They therefore argued that a focus on process-of-care measurement will always have to be part of any quality assurance, or continuous improvement, program.

A third disagreement centered on how much a quality assurance program should involve itself with cost containment and utilization control or can afford to do so without fatally undermining its quality assurance goals. In other words, to what extent should the PRO program, or its successor, be assigned responsibilities for utilization review and management tasks whose chief aim appears to be to control use of services? Should these tasks, such as prior authorization of procedures, be assigned elsewhere, for instance to Medicare fiscal intermediaries (FIs) or carriers?

The committee never completely settled on a single answer to these questions. In all cases (to embrace continuous improvement models, to base a new program exclusively on outcomes, or to move utilization management out of the quality assurance program), the committee opted for middle positions: support for continuous improvement for organizations that can successfully mount such efforts but retain a more traditional approach to quality review and assurance for the federal effort; emphasize both outcomes and process of care indefinitely; and retain only those utilization review activities that have a clear clinical or peer review component and serve an

unequivocal quality-of-care purpose. The committee’s basic position was that evidence accumulated through the lengthy implementation period for its recommended program should be used to help resolve these or other conflicts.

In summary, our conclusions and ultimately our vision of a Medicare quality assurance effort should be understood as reflecting our best collective judgment about an achievable strategy to pursue to ensure high quality care for Medicare beneficiaries in the face of many uncertainties about the organization and financing of health care in the 1990s. Although our recommendations may seem either too radical or not venturesome enough for some readers, we believe that they represent an appropriate synthesis of the evidence and experience to date and that they will provide a practical starting point and implementation strategy for the future. Our intermediate position on adopting the continuous improvement model as a guiding philosophy for quality assurance in Medicare is a case in point.

Our findings and our vision of a quality assurance system for Medicare have led us to 10 major recommendations. This section presents those recommendations, which are summarized in Table 12.2.

RECOMMENDATIONNO. 1. Congress should expand the mission of Medicare to include an explicit responsibility for assuring the quality of care for Medicare enrollees, where quality of care is 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.

Successful quality assurance resembles quality health care: both have elements of science and art. Effective implementation of a quality assurance program may depend on advanced assessment instruments and sophisticated data banks and on the motivation and commitment of the participants, but more is needed than tools and good intentions. Such a program must be directed to serve a health care mission important to both individuals and to society collectively.

A program of quality assurance should correspond conceptually and respond practically to an accepted definition of quality of care. For this report we have adopted the definition set forth in Chapter 1 and stated above. A quality assurance program responsive to desired health outcomes and attentive both to individuals and populations calls for a markedly stronger and broader mission statement than appears in the legislation that presently

guides the Medicare quality assurance effort.¹ We believe a more explicit commitment to quality is needed to counter the perception by providers and beneficiaries that monitoring efforts in the Medicare program are primarily concerned with cost containment.

The Medicare program has a major responsibility to support quality assurance efforts that will not only address the technical components of health care but also respond to gaps in services, access problems, resource constraints, and ethical dilemmas that affect the quality of care. It must be alert to problems for both the users of Medicare services and the populations eligible to be served by Medicare who may not currently be receiving services.

The committee took the position, after much deliberation, intentionally to exclude resource constraints from the definition of quality. It did so in the belief that the quality assurance program would then be able to identify situations in the health care system where quality is being threatened because resource constraints have been tightened or could be improved if additional resources were available. That is, an effective monitoring system should be able to distinguish between quality and cost problems. This distinction recognizes that, in the future, some forms of explicit rationing of health care may be necessary, and we urge that quality-of-care concerns be taken into account when making such rationing decisions. The Medicare program may not be the sole responsible agent to resolve these issues, but its quality assurance program can assist in bringing the issues into the appropriate arenas for debate.

By focusing on health services, desired health outcomes, and levels of professional knowledge, our definition of quality calls for broad action by provider organizations and by the Medicare program in data collection, analysis, feedback, and dissemination. Clearly this implies a considerably expanded and richer conceptualization of the outcomes about which data will be acquired than has been evident heretofore in any (external or internal) quality assurance efforts. It also implies greater attention to the scientific knowledge base, to health care technology assessment, and to the actual processes of everyday practice. It requires that better use be made of what is known about the effectiveness of health care services and about the links between process and outcome. Finally, by highlighting the need for attention to both individuals and populations, we underscore the importance of requiring the Medicare program as a whole (and those vehicles used by it to serve defined populations, such as the risk-contract HMOs) to take responsibility for understanding the health outcomes of the populations for which they are accountable, not just for the persons actually served.

RECOMMENDATIONNO. 2. Congress should adopt the following three goals for the quality assurance activities of the Medicare program:

• Continuously improve the quality of health care for Medicare enrollees, where quality is as defined in our first recommendation;

• Strengthen the ability of health care organizations and practitioners to assess and improve their performance; and

• Identify system and policy barriers to achieving quality of care and generate options to overcome such barriers.

We will recommend below an ongoing evaluation of the quality assurance program and its impact. These are the goals for which that program should be held accountable: improved health, enhanced capabilities of providers in quality assurance, and better understanding of broad system obstacles to high quality of care. These goals are at once more explicit and more comprehensive than the status quo.

RECOMMENDATIONNO. 3. Congress should restructure the PRO program, rename it the Medicare Program to Assure Quality (MPAQ), and redefine its functions.

To discharge the responsibilities implied by earlier recommendations, Medicare will need a revised and expanded quality assurance program at the federal level. To underscore this shift, the focus and responsibility of this new program should be deliberately changed to quality of care and away from utilization or cost control. In addition, Congress should authorize the Secretary of the Department of Health and Human Services (DHHS) to support local entities in the performance of the MPAQ activities. We refer to these local entities as Medicare Quality Review Organizations (MQROs).

Our proposed program is described more fully later in this chapter (see sections on responsibilities and tasks of the MPAQ and the MQROs). Briefly, the MPAQ would be responsible for the planning and administration of the quality assurance program for Medicare: (1) to engage in long- and short-term program planning for MQROs (e.g., to define the program guidelines for the MQROs, to review applications and make awards to MQROs, and to provide or arrange for technical assistance to MQROs); (2) to monitor and evaluate MQRO operations and performance; and (3) to aggregate, analyze, and report quality-of-care data.

MQROs would have several primary responsibilities: (1) to obtain information on patient and population-based outcomes and practitioner and provider processes of care; (2) to analyze these data, making appropriate adjustments for case mix, patient characteristics, and other pertinent information by various types of providers; (3) to use these data to assess practitioner or provider performance; (4) to feed such information back to the

internal quality assurance programs of practitioners and providers (as well as report it to the MPAQ); and (5) to carry out quality interventions and technical assistance to internal, organization-based quality assurance programs.

This information will serve important monitoring functions. MQROs must be able to identify providers at both ends of a “quality distribution” if they are to direct needed corrective action and to spotlight and reward exemplary performance. They should, however, be perceived by all providers and institutions as a source of objective, valid, comparable information that will facilitate priority-setting for and evaluation of internal quality assurance activities. To serve this public good function, MQROs, with guidance from MPAQ and outside help from technical assistance contractors, must devise reliable, valid, and sensitive methods for analyzing and disseminating data.

We expect that in many instances MQROs would be (or be similar to) the organizations with which the Health Care Financing Administration (HCFA) presently contracts through the PRO program. We do not believe that these entities must be statewide organizations. Instead, they might operate at substate, state, or multistate levels, depending on what configuration appeared to best suit the practicalities of data collection, analysis, and feedback, geography, and population.

MQRO activities should not be regarded as simply expanded PRO tasks, and not all that the PROs currently do should be part of the MQRO agenda. Rather, MQRO responsibilities will be redirected in line with the emphases shown in Table 12.1 to give a far more central role to data collection, analysis, and dissemination and to fostering internal quality assurance programs.

RECOMMENDATIONNO. 4. Congress should establish a Quality Program Advisory Commission (QualPAC) to oversee activities of the MPAQ and to report to Congress on these activities.

RECOMMENDATIONNO. 5. Congress should establish within DHHS a National Council on Medicare Quality Assurance to assist in the implementation, operation, and evaluation of the MPAQ.

RECOMMENDATIONNO. 6. Congress should direct the Secretary of DHHS to report to Congress, no less frequently than every two years, on the quality of care for Medicare beneficiaries and on the effectiveness of MPAQ in meeting the goals outlined in recommendation no. 2.

We believe that the MPAQ and the impact it has should be rigorously evaluated. It needs to be accountable for public monies expended in this

effort, and it needs to guard against the inclination of some organizations to work only on “easy” quality-of-care problems. Moreover, the MPAQ may find itself directly or indirectly affecting the Medicare program. This brings it foursquare into the public policy arena, where more extensive accountability and oversight enter the picture.

Thus, in addition to the MPAQ and its MQROs, we have recommended that two other entities—QualPAC and a National Council on Medicare Quality Assurance—be created to form a comprehensive structure to promote, coordinate, and supervise quality review and assurance activities at the national level. Furthermore, we call for a periodic report to Congress that describes the state of quality of care for Medicare beneficiaries and the impact of the MPAQ on quality of care. Because of the importance of these evaluation activities, we also suggest that the Secretary of DHHS establish a Technical Advisory Panel (TAP) to assist in the evaluation efforts. Table 12.3 summarizes the organizational relationships and responsibilities we have in mind.

These two organizations, which are described in more detail below, have four major purposes

• To bring a greater degree of public and scientific oversight and input into the quality assurance program;

• To provide a way for both the MPAQ and the MQROs to avail themselves of the most advanced techniques available through the private sector;

• To provide a basis by which the program itself can be more effectively evaluated; and

• To assist in program management and operations.

The QualPAC would have several main responsibilities. It should provide advice to the Congress on strategies and methods for improving quality of care for Medicare beneficiaries and on areas where quality improvement is needed. It should conduct studies and analyses as needed to form the basis for policy and programmatic recommendations related to MPAQ. A third responsibility would be to analyze aggregate and person-based national data from many sources, including the National Center for Health Statistics, to identify quality problems, such as access, at a population level. It should also integrate existing and new research findings to augment our knowledge about and methods for quality assessment and assurance. Finally, it should serve as a forum for all major interested parties to have a voice in the planning and evaluation of MPAQ activities.

QualPAC would be composed of appropriately qualified representatives of the public who are not officers or employees of the United States government and are representative of professions and entities concerned with or

affected by activities relating to the MPAQ. It might, for instance, comprise:

• Individuals distinguished in providing health care (including at least one with experience in geriatrics);

• Experts in the field of quality review and assurance;

• Persons knowledgeable in the fields of insurance, health economics, law, ethics, and related areas;

• Persons distinguished in research, demonstration projects and evaluations with respect to health care and public programs; and

• Representatives of the elderly, consumers, labor and business.

Finally, we suggest that QualPAC could be established and run in much the same way as other Commissions set up since the advent of the Medicare Prospective Payment System (PPS), such as the Prospective Payment Assessment Commission (ProPAC) and the Physician Payment Review Commission (PPRC). QualPAC staff and resources should be comparable to those provided for the other Commissions. We advise that QualPAC be funded separately from the MPAQ at levels sufficient to enable it to carry out its duties.

The National Council on Medicare Quality Assurance would have a pivotal role in achieving a constructive integration of MPAQ with quality-of-care management and research in the nation’s health care system. It would be responsible for advising the Secretary of DHHS, the Administrator of HCFA, and the Director of the Health Standards and Quality Bureau (HSQB) on all aspects of MPAQ strategy, program planning, and operations. For instance, it could provide oversight for intramural research, for MQRO evaluation, and for the many decisions that will have to be made as the MPAQ is implemented.

To accomplish these objectives, the National Council must comprise representatives of top management and leadership of health care delivery institutions and systems, medical specialties, research institutions, and consumer organizations. The Secretary of DHHS would set the criteria for membership and operations of the National Council. The MPAQ would provide staff support.

We suggest that systematic evaluations of the MPAQ be conducted by an agency other than the one responsible for operating it; that is, formal MPAQ evaluations should be conducted outside HSQB (and perhaps outside HCFA). We further suggest that these evaluations be mounted at the outset of the program. To provide public oversight and strong evaluation expertise to

this effort, we propose that the Secretary of DHHS empanel a second executive branch body, a TAP, to advise on MPAQ program evaluation, including the preparation of the periodic evaluation report. The Secretary would set the criteria for TAP membership (which we believe should include a majority of experts from outside the government), define its operational characteristics, direct the production of the periodic impact report to Congress, and determine which agency in the Department would conduct the MPAQ evaluation.

We suggest two other organizational and financing features for these bodies. The first concerns membership. Cross-representation of members would be valuable; thus, chairpersons or other persons delegated by the chair of each body might be ex officio members of one of the other two entities. The second concerns funding. For QualPAC, we suggest authorizations and appropriations independent of those for MPAQ, because the QualPAC would be accountable directly to the Congress. The other two advisory groups could be financed out of MPAQ annual appropriations.

Finally, we do not mean by this to preclude special reviews by other executive branch agencies, such as the Office of Inspector General (OIG). Furthermore, it is probable that congressional arms, such as the General Accounting Office (GAO) or the Congressional Budget Office (CBO), might continue to be asked to investigate particular aspects of the MPAQ. Nevertheless, we do not view these agencies as appropriate entities for ongoing evaluation of MPAQ. Moreover, in addition to the reports from the Secretary of DHHS, we have implicitly invested in the QualPAC the responsibility of periodic evaluation reports directly to Congress about the progress and impact of the MPAQ.

RECOMMENDATIONNO. 7. Congress should direct the Secretary of DHHS to initiate a program to make the Medicare Conditions of Participation consistent with and supportive of the overall federal quality assurance effort.

We have emphasized throughout this report the use of process-of-care information and especially patient outcomes data in evaluating quality of care. Nevertheless, all conceptual frameworks of quality assurance emphasize the importance of the capacity of an organization to render high-quality care—essentially a structural measure. Indirectly, such capacity is measured through mechanisms such as accreditation. In the case of the hospital sector and Medicare, this translates into deemed status for those facilities accredited through the Joint Commission for Accreditation of Healthcare Organizations and certification through state survey and certification agencies for those not so accredited.

In Chapter 5 and in Volume II, Chapter 7, we discuss several problems with the current HCFA program for survey and certification of hospitals and for delegating certification of unaccredited hospitals to state agencies, and we propose several actions for HCFA to take to address those problems.

Four steps deserve attention. First, HCFA should update the Conditions of Participation, and their related standards and elements, within the next two years and periodically thereafter (no more infrequently, say, than every three years). The revised conditions should require hospitals to use up-to-date quality assurance procedures and to adopt any structural or process standards that are shown to be related to quality of patient care.

Second, HCFA should continue to support the concept of deemed status for hospitals. The agency should encourage the Joint Commission in its efforts to develop a state-of-the-art quality assurance program and to disclose information to the agency about conditionally accredited and nonaccredited hospitals in a timely fashion. HCFA should also maintain contact with Joint Commission activities to ensure that the Joint Commission’s accreditation program remains consistent with the intentions of the emerging MPAQ.

Third, HCFA should increase the capacity of the survey and certification system to encourage and enforce compliance with the conditions (i.e., for those hospitals not meeting them by virtue of deemed status), specifically (1) to specify the size and composition of state survey teams; (2) to use survey procedures and instruments that focus more on patients and less on medical records; (3) to develop explicit national decision rules for determining compliance and taking enforcement actions; (4) to adopt intermediate sanctions, such as fines or temporary bans on Medicare admissions, that better match the severity of the quality problem; and (5) to increase the number of federal inspectors to evaluate state agency performance (through validation surveys) and to inspect hospital facilities.

Finally, HCFA should improve the coordination of federal quality assurance efforts by developing criteria and procedures for referring cases involving serious quality problems between the MQROs and the Office of Survey and Certification.

RECOMMENDATIONNO. 8. Congress should direct the Secretary of DHHS to support, expand, and improve research in and the knowledge base on efficacy, effectiveness, and outcomes of care and to support a systematic effort to develop clinical practice guidelines and standards of care.

RECOMMENDATIONNO. 9. Congress should direct the Secretary of DHHS to establish and fund educational activities designed to enhance the nation’s capacity to improve the quality of care it receives.

We applaud the recent attention and support that Congress and DHHS have given to effectiveness and outcomes research and to efforts to stimulate the development of clinical practice guidelines. We endorse expanded funding for all these efforts. DHHS should also undertake broad efforts to improve coordination of data systems and data collection activities within the Department.

Financial, technical, and other support for research and special projects is also needed in the following areas:

• quality assessment and assurance methods, including continuous improvement models, technical and art-of-care process measures, and outcomes, health status, and quality of life measures;

• links between process of care and patient outcomes;

• efficient data collection and analysis methods appropriate to both process of care and outcomes;

• effectiveness of quality assurance interventions;

• effect of setting of care, organizational factors, and financing on quality of care and quality assurance;

• population-based variations in use of services;

• rural health care;

• data systems and hardware;

• methods of data sharing, feedback, and disclosure; and

• improved methods of program evaluation.

We define capacity building as activities that will enhance the ability of professionals and patients to assess and to improve quality of care. Chapter 11 discussed the research and capacity building efforts that we believe would contribute most to the quality assurance mission of Medicare. With respect to the latter, three steps warrant priority attention:

• Training health care professionals in the research skills needed to conduct a broad range of quality-related studies;

• Educating current and future health care professionals in applied quality assurance and continuous improvement concepts and techniques; and

• Educating patients and consumers about how best they can contribute to evaluating and improving the care they receive and participate in decision making about their health care.

RECOMMENDATIONNO. 10. Congress should authorize and appropriate such funds as are needed to implement these recommendations.

The MPAQ must be adequately funded from the start, if it is to be successfully implemented and operated. Annual funding levels for the

Medicare peer review programs have barely reached one-half of 1 percent of Medicare expenditures over the past decade; PRO budgets, at about $300 million per year, are closer to 0.3 percent of expenditures. We concluded that this level of support, given the many different and complex assignments Congress has given the PRO program, seemed insufficient to the task, although greater efficiency can probably be attained.

The new MPAQ entails a considerably expanded data collection, analysis, evaluation, and technical assistance effort, all aimed at improving quality of care. In addition, we assume that Congress and HCFA will continue to expect the MPAQ to do much of what the PRO program does now in the quality assurance area, even as the latter turns over to other agencies emphases on cost and utilization control and other peripheral duties. Regardless of possible efficiency gains or other developments that might otherwise occur in the PRO program, however, we conclude that an increase in the MPAQ budget over present PRO levels is necessary.

We have not specified a target amount for several reasons. First, implementation of this proposed program will take a long time, and many details will emerge only as the program progresses. Moreover, internal and external quality assurance efforts have an element of joint production, and not all the activities envisioned in this proposed plan may involve new costs. Nevertheless, a reasonable estimate of the costs of this program might be that, eventually, they will reach as much as double the investments in the present PRO program, but it should be recognized that this is an order-of-magnitude estimate, not a detailed point estimate.

Such sums should be used for all MPAQ administrative, operational, and evaluation activities. These would include (but not be limited to) all data collection, analysis, and feedback activities related to quality review and assurance as well as any activities related to utilization review or management that clearly serve primarily a quality-improvement goal. Funding would cover whatever research in quality review and assurance methods and approaches is sponsored by the MPAQ. These would include pilot projects and experimental efforts at the MQRO or individual provider level, such as initiating a program of awards for exemplary performance. Finally, it would include evaluations of the impact of MPAQ on patient outcomes and quality of care.

This recommendation is potentially costly. We have concluded, however, that an underfunded quality assurance program, as we judge the PSRO and later the PRO programs to have been, cannot discharge its responsibilities effectively and is thus wasteful of the funds it is provided. It earns little respect from the provider community, and it cannot demonstrate any meaningful impact on either quality of care or the health of the beneficiary population.

The program we are proposing is intended to overcome some of those

pitfalls. Its aims are to provide a considerably enhanced body of knowledge about the health and well-being of the elderly and current medical practice and to improve the mechanics of quality review and assurance in all major settings of care. Furthermore, we have built into our proposals a rigorous evaluation component, so that society can know what it is getting for its investment. In our view, the MPAQ simply will not be able to accomplish its objectives with funding that remains at historical levels, and we thus advocate an appreciable increase in support.

This report responds to a congressional charge to design a strategy for quality review and assurance in Medicare. We have three aims. The first is to have in place a fully functioning program by the year 2000. The second is to have many of its parts operating well before that time. The third is to create a system that can grow and mature well into the next century, when health care needs, health care delivery systems and financing mechanisms, and social realities may be vastly different from those we encounter today. Achieving these aims will require patience, the commitment of considerable public and private resources, and appreciable good will among all those who have a stake in the success of the Medicare program and of quality assurance more generally. Although the approach we outline is a substantial undertaking, we believe the benefits of a sensitive, well structured quality assurance program for Medicare beneficiaries is worth the effort.

The conceptual foundation of the MPAQ approach is the classic triad of structure, process, and outcome. We also draw on five constructs of the continuous improvement model: (1) to differentiate external quality monitoring from internal quality improvement and assurance efforts; (2) to emphasize increased use by internal programs of data on outcomes, systems, and processes of care; (3) to reward providers that implement successful internal quality improvement programs; (4) to focus on a broad range of “customer” outcomes that include those of patients, practitioners, and the broader community; and (5) to foster cooperative communication and negotiation between many different pairs of parties in the health care delivery setting.

The practical starting point for the MPAQ is the existing Medicare program and the private, local organizations that presently do (or could) cany out the current PRO agenda. We emphasize transition, not starting over, and we believe that many elements of the PRO program—those that foster

quality improvement—can and should be retained. Our decision to recommend steady transition from the present PRO program to the MPAQ reflects our judgment that an abrupt end to or shift from a complex existing program with historical ties to earlier Medicare peer review efforts is neither desirable nor feasible. At the same time, we have renamed the program to emphasize the substantial changes in concept and function that we have recommended.

Our model of quality assurance has three levels. The first level is that of the federal program, the MPAQ. It might also embrace other organizations that operate nationally and that might be considered complementary to this effort, such as the accreditation programs of the Joint Commission or the National League of Nursing. The middle level is that of local or regional entities, the MQROs. As we have stated previously, MQROs would have a considerable data collection, analysis, and feedback function. The functions and activities of both these levels are described more fully below. The third level is one based on internal, organization-based quality assurance and continuous quality improvement models.

We have given considerable recognition to the emerging concepts of continuous quality improvement and organization-based, internal quality assurance efforts, because self-review and self-regulation remain the hallmark of the healing professions. We do not prescribe the approach to quality assurance that such institutions, agencies, or practices might take because that, in our view, should be left to the discretion of providers. We comment here on what we expect they would do, recognizing that we have proposed an external program intended to detect and correct problems that internal quality improvement efforts miss.

Some internal quality assurance programs may pursue traditional quality assurance efforts. Others may implement advanced continuous quality improvement models. Still others may experiment with novel review and assurance activities tailored to their particular needs and circumstances. The MQROs should encourage and assist the development of all such efforts, for instance, by sending provider-specific information back to internal organization-based programs in a constructive and timely manner. Although we expect internal programs to use outcome data for their own purposes, as is basic to continuous improvement models, we also expect them to empha-

size the actual systems and processes of care as a means of knowing where to act when problems arise or where to improve care more generally.

Internal programs should document their quality-assurance procedures and results. Although the choice of specific approaches to solve quality problems would be left to individual providers or institutions, they should be able to document that their surveillance systems identify and attempt to solve important quality problems.

For instance, providers might institute programs designed to monitor and correct overuse of inappropriate and unnecessary services, to identify problems with underuse of services (including poor access to care across an episode of care as well as inappropriately low use of specific types of services), and to examine the process of care for poor performance. Because of our emphasis on patient-provider decision making, we also hope that providers would give more attention to educating their professional and support staffs in this area, and to informing patients about health and quality-of-care issues and about the choices they can make concerning their own health care. Education for professionals should include feedback of new knowledge from clinical practice data to inform their ongoing clinical decisions.

If internal programs cannot document their quality assurance procedures and impact, or if the results of the external MQRO monitoring suggest that these activities are not being done well, then the MQRO will have to become more actively involved. Such MQRO interventions might involve abstracting process-of-care information on-site, consulting in the planning of quality assurance activities, imposing corrective actions of the sort now available to PROs, and pursuing new intervention strategies developed during the implementation of the MPAQ.

A central theme of our recommendations and the proposed program for quality assurance in Medicare is a greater emphasis on the outcomes of care. Attention to outcomes offers several advantages. It allows monitoring of the system while leaving the providers unconstrained to undertake their own quality improvement efforts. It calls for systematic data collection that can be used to inform workers in the health care field about how process components are related to specific outcomes. It fosters looking across time and appreciating the temporal and service links within episodes of care. It emphasizes those aspects of care that are most relevant to patients and to society.

The evolution of an outcome-based quality assurance program will re-

quire several steps. Objective and reproducible outcomes must be defined, these outcomes must be adjusted for patient-specific risk factors, and the role of specific processes of care in producing these outcomes must be evaluated. Generally, outcomes should be related to specific patient conditions, diagnoses, and problems. Because the knowledge, skills, and systems are not yet available to put this program in place for a broad set of conditions and care settings, it will necessarily have to develop incrementally.

Operationally, we picture a local or regional unit, not unlike the current PROs, that would be responsible for collecting systematic information on patient outcomes and care. We begin with hospitals and inpatient care, because such facilities address some of the larger problems in medicine. We would immediately include other forms of care that substitute for inpatient hospital care, such as ambulatory surgery. We would then extend this approach to other forms and settings of care—nursing home, home care, and ambulatory care—as quickly as feasible, allowing for more technical development in these areas.

Systematic information on patients’ outcomes would be collected across a number of dimensions. The MPAQ and MQROs must choose outcomes that are easily and reproducibly defined, are feasible to obtain, and are important to Medicare beneficiaries. These outcomes could include mortality and medical complications, relevant physiologic measures, functional outcomes (such as patients’ mental and emotional status), physical capabilities (such as the ability to walk or climb stairs), activities of daily living (such as bathing, dressing, feeding, and toileting), placement of the patient at home or in a long-term-care facility, and patients’ and families’ satisfaction with care.

A very difficult aspect of outcome-directed quality assurance efforts will be to adjust outcomes for the risk factors present in the population being studied. This will be necessary to ensure that comparisons of the outcomes of patients who are treated by different physicians, groups, and hospitals or who are covered by different plans are appropriate.

The choice of the initial conditions to be studied must reflect the availability of information about known risk factors. For example, few data are available that predict the mortality, morbidity, loss of function, development of confusion, or discharge site of elderly patients admitted to a hospital with pneumonia. For patients with a hip fracture, by contrast, numerous authorities agree that mental status, functional status before the fracture, associated medical conditions, age, sex, and race affect both the mortality and recovery of function. Thus, a study of patients with hip fractures can adjust for risk factors more effectively than a study of elderly patients hospitalized for pneumonia.

Effective outcome studies must ensure that information on all relevant risk factors is identified and collected at the time that care is provided (e.g.,

at hospital admission for patients with fractured hips). When needed information is difficult to obtain from retrospective medical chart review (such as the patients’s mental status and function before the fracture), it must be obtained prospectively.

The adjustment of outcome for these risk factors will require analytical expertise. This expertise must be available to the MQRO for the system to have scientific credibility and to be effective.

Studying outcomes, however, does not yield a complete picture of quality of care. In addition to risk adjustment, the appropriateness with which patients are selected to receive a particular health intervention must also be taken into account. For example, particular hospitals or surgical teams may have extremely low risk-adjusted operative morbidity and mortality if they select for surgery patients who are very healthy and do not need the operation under study.

Adjusted, comparative information would be returned to the appropriate providers. Those providers whose performance is significantly poorer than the mean would be asked to examine their activities carefully, to identify the specific systems or processes of care that may have contributed to these results, and to make appropriate corrections. Follow-up studies should be performed in appropriate time frames to assess the impact of these corrections. Failure to improve would result in closer monitoring and potentially more stringent actions, including public disclosure of their status. We emphasize the need for creative responses by MQROs to the wide range of situations they will encounter in monitoring the quality of care rendered in so many different and new settings.

Aggregate information would also be shared with provider groups to serve as a basis for better understanding of effective patient management interventions. This information would form part of a national data base to be used to improve clinical decision making.

The size of this undertaking means that not all discharges could be monitored for outcomes. At least some conditions would be studied nationally for periods of time to acquire adequate comparative data. In other cases, regional needs (perhaps based in part on variations in performance) might be used as the basis for selecting conditions to include in the outcomes agenda.

This attention to outcomes is not intended to slight the importance of process-of-care measurement. Process measures have strengths missing in an outcome focus. These areas include the lack of sensitivity of outcome measures for detecting certain rare but catastrophic events. Process-of-care measurements also reflect the need to use process measures as proxies for

outcomes for patients with complex medical conditions where the many variables that influence outcome of care cannot be controlled. Further, the long lead time required for some adverse outcomes is such that process surrogates are needed. Many small processes are what make up the health care that produces the outcomes of interest and are thus the critical element of the continuous improvement models.

Much of the process evaluation in our program is expected to be carried out by the providers themselves. Related activities, such as the development of clinical standards and criteria for appropriateness, will be best done by national groups informed by data generated by this quality assurance program. For instance, the increased interest and research in effectiveness and outcomes of care should enrich the literature in the near future. The MPAQ or MQROs should encourage, stimulate, and participate in this work as much as possible.

It will be very difficult for the MQRO or any external agency to identify (let alone respond to) the aspects of the process of care mainly responsible for good or poor outcomes. That is best done by the internal quality assurance departments of these institutions, organizations, or provider groups. For example, the MQRO would report to a hospital on the results of patients with fractured hips treated at that institution. The quality assurance department of this hospital would be responsible for studying all aspects of care, from pre-operative assessment, surgical technique, post-surgical care, inpatient rehabilitation, discharge planning, and rehabilitation in a nursing home or home health care, to determine which aspect of this care was responsible for any problems with care.

The emphasis on care beyond a single setting or facility is a new direction in quality assurance. It is essential if ultimate outcomes are to be understood and affected. Superb inpatient care followed by poor posthospital care, for instance, cannot be acceptable. Each care provider and institution is part of a system of care. Each must recognize a responsibility to ensure that the continuum of the process of care brings a good outcome for the patient.

It is appropriate to acknowledge real or potential drawbacks with this model. First, this design is ambitious and far-reaching. It will be more difficult to develop in the ambulatory and home care setting than in the institutional one.

Second, even though important progress has been made for inpatient

hospital care, the data and methods to implement such a system today are inadequate or not easily transferable from other research applications. For instance, ways to collect appropriate outcome data efficiently, to adjust properly for risk and severity of illness, and to create distributions of providers by outcomes all need further development. It is this dearth of off-the-shelf methods applicable to a broad-scope quality assurance program that necessitates the 10-year implementation strategy we describe later in this chapter (and the research agenda offered in Chapter 11). The evolution of this model will require an extensive research and development phase, moving from such hospital-based conditions as fractured hips to outpatient conditions such as hypertension and congestive heart failure.

Third, any quality assurance system has the potential for “gaming” by providers; a program as invested in promoting internal quality improvement efforts as this one is more at risk for such gaming. For instance, patients may receive procedures or other services they do not need; their functioning after the service might be very good on occasion, skewing the overall outcome scores upward without taking the overuse of services into account. Relying on self-review, delegated review, and self-regulation are problematic approaches, and they deserve careful study.

Fourth, we have emphasized transition from a complex, poorly received program that currently relies on local organizations of varying effectiveness and reputation, rather than an abrupt shift to something completely new, because of the potential value of the expertise and inter-organizational relationships that already exist. Some critics may view this decision as the equivalent of pouring new wine into old wineskins, and that may prove to be true. We assume, however, that existing physician-based organizations can turn successfully to this new strategy more readily than completely new organizations can be invented.

Fifth, there is little experience to draw on to evaluate a program as complex and ambitious as this one. The program therefore runs a considerable risk of seeming to be ineffective, inefficient, and wasteful of society’s dollars. The issues of gaming and lack of evaluation experience in particular point to a need for public oversight and rigorous evaluation and prompt us to recommend the expanded evaluation components described earlier.

One charge to this committee was to develop criteria that could be used to set priorities in the allocation of resources, both funds and personnel, in reviewing and assuring quality of care. Resource needs can be expected to increase as the action plan for MPAQ is implemented. We propose that the following general criteria be considered in establishing the priorities for allocating resources for the Medicare quality assurance effort.

• The allocation of resources should reflect a balance between short-term and long-term goals.

• High priority should be given to strengthening the capacity of those assessing health care in two areas, detecting and correcting quality problems, as well as in continuously improving quality of care.

• Efforts to improve knowledge about and the performance of “change agents”—those persons, tools, and programs that make happen what has been identified as desirable or necessary if quality of care is to be improved—must be given early attention.

• Evaluation of all levels of MPAQ and MQROs must be given high priority from the start of the program.

• Resources should follow the need and the opportunity for impact. Rigid national formulae and regulations for reviewing care should be relaxed in favor of local decision making about the types of quality problems, the settings of care, and the systems of care that warrant most attention.

• Activities that support the infrastructure of the MPAQ and the MQROs should receive adequate and long-term sustaining resources. These include data collection, analysis, and feedback mechanisms.

• Adequate funding should be made available for the technical assistance aspects of the proposed program.

The MPAQ may continue in the short run to have Medicare program responsibilities beyond the quality assurance effort, because many functions now administered through the PRO program are related to the PPS reimbursement structure of Medicare. Although the committee has identified the lack of clarity in the mission of Medicare as a major issue, we also acknowledge some advantage in consolidating functions such as utilization review within the same operating program. We concluded that the MPAQ should have flexibility in determining to what extent the current non-quality-related review activities should be administered by its local MQROs, presumably retaining those that require clinical data expertise.

The issue of where utilization review should be conducted is a particularly difficult one. Many experts have the strong opinion that utilization review and quality assurance should be separated, so that no stigma of “cost containment” attaches to the organization chiefly responsible for quality assessment and assurance. Nevertheless, utilization review has always had a place in the quality assurance armamentarium. In some cases it may be virtually indistinguishable from quality assurance, as in the cases of prior

authorization procedures that clearly forestall an unnecessary and potentially risky procedure or retrospective review efforts that identify poor medication-prescribing patterns.

The basic question is whether these activities should be split between two entities so as to avoid the conflict between cost control and quality assurance, or at a minimum whether the review function and payment decisions (or retrospective denials) functions should be separated. That is, should the nation incur the costs of a “double” review effort so as to preserve a desirable dividing line between cost containment and quality assurance? Should all prospective or retrospective utilization review be assigned to other entities, such as Medicare FIs or carriers? We conclude that those utilization review activities for which clinical (or peer) judgment is paramount, as well as those that clearly serve a quality-assurance role, should remain with the MPAQ (and the MQROs). Continued monitoring is needed, of course, to ensure an appropriate balance between a focus on overuse and a focus on underuse and poor performance in the overall process.

The continued usefulness of several aspects of the present PRO program can be questioned (see Chapter 6 and Volume II, Chapter 8). In the fee-for-service sector, these review activities include several PPS-related activities such as diagnosis-related group (DRG) validation and physician attestation, day and cost outlier review, Medicare code editor review, and invasive procedure review. For the prepaid group practice sector, aspects of the PRO program warranting reconsideration include the three-level (limited, basic, and intensified) approach for reviewing risk-contract HMOs and competitive medical plans (CMPs) and the procedures for records and case selection.

Other issues should be considered in the early planning for MPAQ. One group of questions concerns quality measurement techniques to prevent and detect problems: (1) the reliability, validity, sensitivity, specificity, and feasibility of hospital generic screens; (2) the pending generic screens for nonhospital settings; and (3) the computerized screening algorithms for the Uniform Clinical Data Set (UCDS).

Another group of questions centers on the functions assigned to PROs, FIs, and carriers—in particular, the appropriate delegation of responsibility for utilization review whose chief aim is that of utilization or cost control rather than quality assessment. Questions related more to quality assurance include the following: (1) current approaches to corrective action and sanction options; (2) denials for substandard quality of care; and (3) consumer

outreach and education that could be more efficiently accomplished on a national basis.

Cutting across all these issues are three broad problems: (1) the administrative procedures used by HCFA for funding and oversight of the MPAQ; (2) HCFA’s survey and certification capability as it relates to Medicare Conditions of Participation; and (3) sharing data with voluntary accreditation groups, state boards of licensure, accreditation, and certification, and the National Practitioner Data Bank. As to sharing data, we urge that specific attention be given to how the data to be collected by hospitals for the Joint Commission (as part of its hospital-based Agenda for Change and clinical indicators projects) can be coordinated with or mapped to the data required by certain state data commissions and thence to data required for this quality assurance program. Much of this information is likely to be duplicative; at least for the hospital sector, we believe that it could be collected only once and put to multiple purposes.

Concerning the parts of the PRO program to retain or to phase out, a thorough review of current PRO program elements—in the context of our proposed MPAQ—is needed. We suggest that at an early stage HCFA should review, with the assistance of the National Council, the third PRO Scope of Work (SOW) and related contract modifications to determine what elements need to be deleted, modified, or expanded and what new elements must be added to facilitate a timely and efficient transition to MPAQ. Because of the singular importance of Congress in assigning tasks to the PRO (and now MPAQ) program, this review might be coordinated with the first meeting of the QualPAC, so that explicit advice to Congress about needed changes (additions or repeal) in existing legislation can be made. No changes to the third SOW should be made until that review is completed, except as necessary to conform to congressional legislation that may be enacted in the meantime and to enable existing PROs to conduct or finish certain pilot projects already underway in the areas of post-acute review, ambulatory care review, and small area analysis.

For assistance with this program review, the advice of QualPAC and the other Medicare commissions might be sought. This might be accomplished, for instance, through joint meetings. The agendas might include: (1) determining whether some of the activities related to PPS (e.g., DRG validation, monitoring of hospital notices of denials, and similar tasks) or to cost containment (e.g., prior authorization of services) are still needed, and (2) deciding whether the MPAQ and MQROs remain the proper sites for those activities.

Program planning depends heavily on the financing mechanism selected for MQROs. The contracting strategy for the PROs has become over-

specified and rigid; it is not conducive to the long-term goals of this program. We advise that the MPAQ use a grant or cooperative agreement mechanism in preference to the current contracting approach.

In establishing program plans for MQROs, the MPAQ will need either to streamline its Request for Proposal/SOW efforts or to establish mechanisms by which it can design and publish grant or cooperative agreement solicitations. Some hybrid funding mechanisms might be developed, for instance with data collection per se being a contracted operation and innovative quality assurance efforts a cooperative agreement operation. In any case, the MPAQ should allow ample time for response from potential awardees (e.g., a minimum of 60 days).

The MPAQ should consider establishing standing review panels for evaluation of proposals. Such review panels might include individuals from outside HSQB, outside HCFA, and perhaps outside the federal government to ensure adequate representation of appropriate interested parties. For instance, the agencies or offices charged with the responsibility of outcomes and effectiveness research might be represented.

As described more fully in the section on MQROs, we envision a considerably expanded data acquisition effort aimed at outcomes of care, use of services, and processes of care. With respect to the first, outcomes information should be related to important patient conditions and problems. In keeping with our desire to introduce more innovation and flexibility into the quality assurance effort, we do not believe that the national MPAQ should mandate all the patient conditions on which outcomes and other information should be collected. Rather, we propose a two-pronged approach: some “national” conditions on which all MQROs would collect and report data and some “MQRO-specific” (state-, locality-, or region-specific) conditions selected by the MQROs. Among those suggested later in this chapter, for instance, are major cardiovascular, pulmonary, and cerebrovascular conditions and surgical procedures common in the elderly population.

The MPAQ should establish and announce the criteria by which all conditions would be selected and choose a set, or sets, of national conditions according to those criteria. A crucial selection criterion might be high likelihood of quality-of-care problems. The MQROs should be expected to justify their choices of local conditions against the same criteria, and the MPAQ should have the right to disapprove MQRO choices.

In work for HCFA relating to the Effectiveness Initiative, the IOM used the following criteria in recommending key patient conditions for effectiveness and outcomes research: (1) high prevalence of the illness in the elderly population or in particular subgroups of the elderly; (2) burden of the illness on the elderly; (3) substantial variation in per-person use of services or

in the outcomes of care for the condition (i.e., variation beyond that explained by differences in patient characteristics, severity of illness, or health resources in a geographic area); (4) relatively high costs to the Medicare program of reimbursing for condition-related diagnostic and therapeutic services; (5) existence of alternative strategies for managing the care of patients with the condition that are in dispute or reflect professional and clinical uncertainty; and (6) reasonable availability of data. The criteria for selecting conditions for quality review (e.g., in HMO ambulatory care) are also discussed in Chapter 6, Volume II. These or similar criteria might be used or adapted for the MPAQ effort.

MQROs will not necessarily have all the data collection, analysis, and reporting capabilities envisioned by this strategy, especially in the beginning. Thus, technical assistance will need to be available to them. High-priority areas for such aid would include: (1) identifying local patient conditions for outcomes follow-up; (2) developing ways (e.g., computer hardware, software, and criteria) to gather, analyze, and interpret data; (3) refining methods for timely feedback of constructive, comparative information; and (4) designing procedures and policies for triggering more intensive review of individual provider institutions.

Comprehensive assistance of this sort probably cannot be rendered directly by MPAQ personnel or by staff of DHHS regional offices. Thus, we suggest that one or more technical assistance contractors be engaged for this purpose (Table 12.3). Their principal job would be to provide standardized, state-of-the-art assistance to MQROs in all aspects of outcome and process-of-care measurements. In addition, these technical assistance bodies would undertake a major educational effort to assist the MQROs in assimilating in a timely fashion findings and products from the research community.

MQRO evaluation will probably require two components. First, we support continuation of multi-year funding for MQROs, but interim (e.g., annual) evaluation of progress and performance will be needed. Second, we have placed considerable emphasis on outcomes of care. Because MQROs will not be able to show instantaneous success, we believe that short-term progress and performance elements should also be built into the evaluation design.

A major task for the MPAQ at the outset will be to establish clear criteria by which MQRO performance will be evaluated. We advocate heavy emphasis on documentation of impact on quality of care and on the success

with which MQROs foster the development of internal quality-assurance efforts by providers. Because one aim of our proposed program is to encourage diversity, objective evaluation of the MQROs using uniform “scales” cannot be the sole assessment technique. More implicit criteria, such as site visits by expert peer panels analogous to major grant reviews, may be more appropriate.

The evaluation criteria must place greatest emphasis on quality of care and performance and less emphasis on cost savings and on meeting specifications of financing instruments (such as precise numbers or timing of completed reviews). The MPAQ should seek assistance with the evaluation plan for MQROs from the National Council.

We do not minimize the legitimate concerns of the legislative and executive branches about the costs of the Medicare program. We have concluded, however, that evaluating the MPAQ and MQROs on the basis of how well they monitor the implementation of PPS or other radical changes in Medicare financing, or on how much money they save, would seriously distort the quality assessment and assurance goals of the program. Tracking the implications and actual effects of quality improvement on expenditures and costs remains an important component of program evaluation, but we are advocating a deliberate shift in the evaluation criteria of MPAQ away from dollar savings and toward quality improvement.

Many ideas generated by this study are transferable or generalizable to other public sector programs such as Medicaid and to the private sector; we hope that will happen. Nevertheless, from the point of view of quality of care, the elderly are a special and often vulnerable group. Complex chronic health states, frailty, inability to gain access to needed care, isolation, and similar factors all have significant implications for undermining the quality of their health care. We believe, therefore, that the MPAQ should mount specific efforts to clarify what factors must be taken into account in designing and operating a quality assurance program that will meet the special needs of the elderly.

Our proposal calls for the MPAQ to be sensitive to several major issues: the burden of harm of poor quality; the effect of organization and financing on quality of care; the state of scientific knowledge; adversarial, punitive, and burdensome quality assurance activities; methods, tools, and interventions; clarity of goals; and resource availability. That agenda, plus the need for public input and oversight of a program as ambitious as this one, require that QualPAC and the National Council be kept informed of program plans.

More importantly, a formal advise-and-consent relationship needs to be established between either QualPAC or the National Council (or both) and the MPAQ for all major program decisions and regulations.

We also advise that formal public notice and rulemaking steps should be followed in MPAQ program planning. Guidance for this can be found in the rules of the Administrative Procedure Act and in recent recommendations of the Administrative Conference of the United States relating to the PRO program (as discussed in Chapter 6).

Because we give the MQROs the main responsibility for data collection, analysis, and use, that aspect of this strategy is described in the next section. Certain data, however, will be reported to the national MPAQ. These data should be designed to provide an “epidemiology” of quality-of-care problems for the Medicare population as a whole (which implies that the size of the MQRO areas should be large enough to develop reasonable estimates). Although the major source of information for the MPAQ will be data collected through the MQROs, we do not mean to constrain the MPAQ to just those data. For instance, it might be appropriate for the MPAQ to contract with the National Center for Health Statistics for population-based surveys that would supplement MQRO data.

One premise of our proposed model is that the MPAQ exemplify activities and performance expected of MQROs. Hence, the MPAQ should report on patterns of high use of apparently inappropriate or unnecessary care. It should identify health problems or geographic areas in which beneficiaries appear to be receiving too little care. This underuse may arise from Medicare benefit, coverage, and reimbursement policies, its own or others’ utilization management and prior authorization efforts, or independent provider decision making. It should also support analyses intended to clarify the types of technical and interpersonal care problems that most frequently arise across the country. Analyses in all three areas would give explicit attention to beneficiary characteristics, such as degree of frailty, geographic area, income, race, and ethnicity.

Information on this epidemiology of quality problems will be disseminated in four ways: to DHHS officials, to QualPAC, to the provider community, and to the public. The level of aggregation of the information would differ, in accordance with existing rules of confidentiality and privacy and in accordance with the uses to which the information would be put.

Overall, our program attempts to reinforce the belief that quality assurance belongs primarily in the province of the professional and the provider

organization and only secondarily (or in the face of failure of the professional or the organization) in the province of the external review agent. To this end, we have designed an oversight function for the MQROs that rests heavily on data collection, analysis, and feedback. We emphasize, however, that our strategy assumes a long developmental period in which several operational options might be tested. Details in the remainder of this section are intended to illustrate possible options.

First, different types of efforts will be needed for hospital episodes (including post-acute care), for physician office-based care, and for other services such as home care. Second, we see the data collection and analyses efforts taking place in “cycles,” for instance, three-month follow-up periods for hospital care. Third, we believe that fee-for-service and prepaid group practice review should be made as alike as possible, and thus we make no major distinctions here about how such review, data collection, or analysis should proceed. Prepaid group practice settings and some large multispecialty clinics lead the typical fee-for-service office-based setting in ambulatory care review. The MPAQ might therefore apply techniques from the private sector group practice experience to the fee-for-service arena, rather than develop completely independent ambulatory care review systems de novo. Fourth, we expect that some form of peer review will always be needed, regardless of how successfully MPAQ moves to outcome measurement or how effective provider-based continuous quality improvement programs become. The criticisms of the PROs’ peer review capabilities (discussed in Chapter 6), however, will have to be satisfactorily resolved.

Information collected and used by both the external program (MPAQ and the MQROs) and internal quality assurance programs should include structure, process, and outcome variables. We expect these to be defined in part to reflect the unique health care needs of the elderly.

Structural variables. We view structural data as less important than either process or outcome data. Their main use is to reflect the organization’s capacity to deliver high-quality care, documented through its own quality-improvement systems or reflected in information about licensing, certification, and accreditation. Structural information will, however, always have a place in quality assurance. Therefore, we suggest that the MPAQ have a more decisive role in setting Medicare Conditions of Participation and in

determining whether provider organizations have met those conditions. One condition should be that the organization has a viable internal quality assurance program that can document solutions to important quality problems. Information from MQROs should contribute to those determinations.

Process-of-care information. For quality assurance purposes, information on the process of care is central. It is required for: (1) documenting continuity of care across settings and among providers; (2) detecting and verifying problems of overuse of services; (3) identifying populations having difficulty gaining access to care or otherwise facing problems of underuse of services; and (4) pinpointing cases of obviously poor performance.

Process information may indicate the reasons for those problems, which can range from Medicare program policies and financial incentives, resource constraints, and cost-containment efforts, to deteriorating practitioner knowledge or technical skills. Examining the process of care will also be important for those providers identified as having poor outcomes. Presumably, by correcting processes of care they know to be deficient, they can improve those outcomes. Finally, process data point to inappropriate, unnecessary, and poor care, especially in situations in which outcomes are not a good measure (e.g., ambulatory care for acute ailments).

We have emphasized patient and clinician decision making in our conceptual model. Assessment of this activity clearly belongs more to the provider organization and its internal quality improvement program than to the federal Medicare program and the MQROs. The practical consequence of this is to place the bulk of the process measurement effort on the internal programs. An important aspect of this will be to ensure that such internal data collection serves as many purposes simultaneously as possible—that is, the needs of the organization and those of external quality assurance bodies.

There are instances, however, in which the MQROs might conduct their own process-of-care evaluations. The first instance is in serious cases of poor performance of those providers monitored chiefly by outcomes, at least (or especially) when such providers voluntarily seek such outside help and technical assistance. The second is in routine collection of process data for all providers, so that information on the process-outcome links can be expanded.

The third instance is when individuals or agencies file complaints about providers. Some quality assurance groups have found this a productive way to identify quality problems (especially those of poor technical or interpersonal practices). Furthermore, it helps to meet the MPAQ’s responsibility to maintain constructive relationships with the patient community.

The fourth instance is in evaluating ambulatory care, such as that delivered in physician office-based practice, where process measures are pres-

ently the main assessment tool. For this last case in particular, the MQROs will need to develop special approaches. Process-of-care management is one area where the technical assistance function will be crucial.

Outcomes data. Both external and internal quality assurance efforts should involve a broad set of health status outcomes. In keeping with our focus on desired health outcomes, we suggest that all major domains of health status and quality of life, such as physical, mental, and social functioning and satisfaction with care (Chapter 2), should be included. Data should be sought from the four sources discussed below (under Sources of Data). It is in this realm that we see a greatly expanded need for obtaining data directly from enrollees (both users and nonusers of care) concerning expectations about care, preferences for outcomes, actual outcomes, and satisfaction.

To use patient outcomes in a quality assurance program, they must bear some demonstrable relationship to process of care. Such relationships, however, are not well documented in the clinical or quality-of-care literature. Although the volume of clinical data may be very large, most experts identify the process-outcome link as a very weak link indeed in the quality assurance chain. This may indicate that much of the poor care identified by process criteria is not accompanied by poor outcomes, at least in the short run, although such care still needs to be improved.

Use of services data. The MQROs will collect (or acquire from other public agencies or private sector bodies) information on population-based rates of use of services. These will be aggregated at the local level into profiles for categories of enrollees (e.g., the very old, those enrolled in capitated systems, or those residing in underserved areas) and for providers. MQROs will report data to the MPAQ, so that population-based rates of utilization can be aggregated and analyzed at the national level, in particular when categories of enrollees are too small in number to support significant analysis by a given MQRO.

We see four main sources of information: (1) administrative data bases; (2) medical charts and similar records; (3) providers; and (4) Medicare enrollees. For instance, the administrative or insurance claims data banks will be a good (necessary, but not sufficient) source of information about use of services. Medical chart information will be gathered by the provider or the MQROs, or both, after care is rendered; in the future, such information might also be forwarded electronically when computerized medical records are widely available.

Information on patient outcomes will usually involve direct contact with

physicians, patients, or proxies by questionnaire, telephone, or direct interview. It may also come from tracking administrative records for evidence of later use of services, institutionalization, or death.

Clinical information needed for case-adjustment might be taken from hospital discharge data sets mandated at the state level, the Joint Commission’s clinical indicators, or the Medicare UCDS. The MPAQ might differ from the UCDS effort in two ways. First, the chart abstracting or data reporting would stop short of the very large number of elements now in the UCDS. Second, MPAQ would emphasize a different selection of cases. For instance, it might expand the random and the disease- or condition-specific case selection and reduce the emphasis on abstracting cases that PROs review for reasons only tangential to quality or outcomes.

We foresee two parallel review efforts, defined mainly by setting of care. One major form of review focuses on services provided by hospitals, quasi-inpatient facilities, such as ambulatory surgery clinics, and institutions and agencies that render posthospital care. The other major form of review focuses on office-based ambulatory care. In what follows, the details should be taken as illustrative, not prescriptive.

In keeping with our focus on three categories of quality problems—poor technical care, overuse, and underuse—we suggest that MQROs might study several “tracers” or “conditions” per category. For instance, if nine review conditions were to be studied, three might be selected nationally and the remainder locally. More (or fewer) conditions might be studied in any review cycle, depending on the extent of the problems expected or the length of time needed for adequate outcomes data collection.

Conditions. Selection of tracers or conditions by a given MQRO would be based on input from local providers in accordance with priorities set by the MPAQ and the National Council. Guidance from QualPAC, on the basis of its analyses of national data, might also be sought. Among the types of conditions warranting systematic follow-up of outcomes of inpatient or surgical care are hip fracture and hip replacement, cerebrovascular diseases such as stroke, cardiovascular and pulmonary problems such as acute myocardial infarction, chronic obstructive pulmonary disease, and congestive heart failure, and cataract removal and lens implantation. Some MQROs might elect to study elective procedures widely subjected to prior authorization.

Among diagnoses that might be considered for ambulatory care review are highly prevalent chronic illnesses such as hypertension, arthritis, and heart disease. Other conditions are those that, with adequate ambulatory care, should not result in hospitalizations for their own complications. For example, appropriate care for diabetes should forestall hospitalization for diabetic ketoacidosis, although it would not necessarily be expected to forestall hospitalization for atherosclerotic complications.

Sentinel events. In addition to the nationally and locally defined conditions, sentinel events might serve as indicators of possible problems. Criteria to guide the selection of sentinel events include: (1) sensitivity to identifying problems of overuse, underuse, and poor technical care for Medicare enrollees; (2) appropriateness for the health care setting under review; and (3) expected burden of harm of each of the three types of problems for a given setting.

The MPAQ, with guidance from the National Council, could develop optional sentinel events from which MQROs might elect a minimum number. MQROs might also be able to propose local sentinel events as triggers for all providers in their jurisdiction. Complaints to MQROs might also serve as possible triggers. MQROs would be encouraged to work with institutional providers and specialty groups to conduct ad hoc studies to expand the knowledge base on the sensitivity, specificity, reliability, and validity of both sentinel events and outcome measures.

In keeping with our concerns about coordination of care and a desired focus on episodes of care, we propose that the MQROs begin their oversight and monitoring with hospital and other quasi-inpatient episodes. By this we mean an index admission to a hospital or an ambulatory surgical clinic plus all post-discharge care rendered by home health agencies, nursing homes, and other facilities (e.g., the hospital or clinic). An example of how information on outcomes, process of care, and certain other variables (e.g., severity of illness) might be collected and analyzed follows.

Example. On a periodic basis, the MQRO would receive from hospitals, ambulatory surgical centers, home health agencies, and post-acute care nursing homes basic administrative data on all discharged Medicare patients who meet the condition-specific or sentinel-event criteria. Approximately three months after discharge, the MQRO would follow up by telephone or possibly by face-to-face interview; either all or specified samples of patients would be contacted. Special procedures would be adopted for review of care of patients who had died in the interim and for those who could not

be located. (To the extent that providers could perform this function in a verifiable way, the MQRO could receive information from providers rather than collect it themselves.)

The interview would obtain three major types of outcomes data: (1) symptoms and general health status (i.e., functioning) before the health care encounter; (2) the same information at the time of the interview; and (3) satisfaction with the health care encounter. Included in this interview might be items intended to elicit patients’ values or preferences for their levels of health status before and after the health care encounter.

At some point during that three-month period, the MQRO (or provider) would abstract the medical chart to obtain information on general health and functional status on admission and discharge, key indicators of severity, process-of-care measures, and the appropriateness of admission and of any procedures. Similar medical record data would also be collected for all patients not otherwise accounted for above (e.g., those who had been discharged dead or those lost to follow-up).

After this data collection process has been completed for, say, a 12-month period (e.g., four cycles of three months each), the MQRO would analyze the data. (Interim aggregation and analysis could be conducted, especially if the particular condition or sentinel event under study is a long-term review topic.) Specifically, the MQRO might use information from the telephone or personal interviews to construct an observed quality outcome score and information from chart review to develop an expected quality outcome score. The MQRO might then develop an expected probability of a specific outcome for each reviewed patient; from these scores, condition- or event-specific observed-to-expected ratios or profiles could be calculated for providers. Ultimately, the MQRO might be able to aggregate profiles for a given provider into global performance profiles.

We recommend that MQROs monitor the care rendered by home health agencies to all elderly clients, not just to those who become home health care recipients after discharge from a hospital or ambulatory surgical clinic. Data collection and analysis could mimic procedures given in the hospital example above (e.g., health and functional status, satisfaction, indicators of severity, and process measures when home health care is started and periodically thereafter). Because there is so little experience in this area, however, we believe that a significant pilot-testing effort will be needed.

This is an area where outcomes—health status and satisfaction—are particularly important. Several groups are working on various outcome measures for home health care, and the Uniform Needs Assessment Instrument may be useful in this enterprise (see Volume II, Chapter 6 for more discus-

sion). Thus, we would expect the MQRO effort to draw heavily on the experiences and instruments now in various stages of development and testing.

Both overuse and underuse of services are of concern in the physician-office setting. In addition, this setting has its share of technical and interpersonal problems. To tackle all these problems requires both provider-oriented and patient-oriented information, which implies that information should be obtained from physicians, office charts, and patients.

We know far less about methods for reviewing the quality of care in the ambulatory setting than those for inpatient care. In the coming years, information from PRO pilot projects, HMO experiences, and research and demonstration studies focusing on outcomes management in ambulatory care should help to close that gap. In addition, some existing assessment methods might now be used to monitor overuse and underuse of outpatient surgery. Thus, within a few years we believe that MQROs will be in a better position to expand their oversight and monitoring responsibilities to the physician’s office. Some illustrative steps are suggested below.

Example. Medical record information might be abstracted on-site (in cycles of perhaps once or twice a year). In later years, chart-based information might be available electronically from the physician’s office. Both outcome and process-of-care measures would be relevant. Generic health measures, such as functioning and well-being, would be emphasized given the high prevalence of chronic conditions among the elderly seeking office-based care; health status assessment surveys might be completed on-site with a lap-top computer.

To address our concerns with technical and interpersonal skills, process measures need to be developed that reflect clinical issues, patient participation in decision making, adherence to agreed-on regimens, and satisfaction. Some of these data would be obtained through patient interviews, perhaps scheduled to correspond to the cycles for medical record abstraction. The selection of process measures must take into account the complexity of care frequently received by the elderly. Less emphasis would be placed on specific actions or interventions and more emphasis on processes that relate to primary and secondary disease prevention, counseling, continuity and coordination of care, pain reduction and other quality-of-life dimensions, reinforcement of dignity and independent functioning, and “interactive” issues such as multiple medications, diet, and nutrition.

Self-administered practitioner questionnaires (for, e.g., physicians or nurse practitioners) might be used for periodic data collection on practice pat-

terns. Data might include many of the same elements that previous studies have indicated to be relevant to outcome. Among these are referral and consultant patterns, preventive care and patient education programs, access to facilities and to technologies such as x-ray and laboratory services, satisfaction with one’s practice, and the availability and use of community-based nonmedical support services.

Medicare Part B (Supplementary Medical Insurance) files may also provide data to the MQROs for use in developing profiles of ambulatory services utilization by community or population subgroups. Such data might identify indicators for more intensive data collection efforts. Coverage of outpatient prescription drugs would mean that “Part C” files would also be a valuable source of quality information. For instance, models already exist to use drug tracers to identify potential complications or interactions of medications.²

To the extent that data collection focuses on an episode of care, the analysis provides a better understanding of the quality of the ambulatory care. As advances are made in the knowledge base on the link between process and outcome in the ambulatory setting and as ambulatory management information systems improve, the major target of analysis might be patient-physician decision making, using criteria mapping and algorithms that include patient preferences. MQROs should work closely with the health care community in interpreting such data, in particular for solo practitioners or small groups for whom the MQROs’ analyses may be a major source of information for improving performance in physicians’ offices.

Feedback and data reporting have three primary dimensions: information made available to internal quality assurance programs and practitioners, to the public, and to policymakers. Although making data available in a timely way to the latter audiences (data reporting) is an important goal, we believe that designing effective mechanisms for giving information back to practitioners and provider institutions (feedback) is central to our proposed quality assurance program. Thus, we advise that the MPAQ give considerable attention at the outset to testing various options for provider feedback.

Example. The MPAQ, through the MQROs, should plan and test models for feedback of patient outcome and process-of-care data to practitioners and providers. These models should yield reliable, valid information on individuals or institutions that permits comparisons with peer groups; the information should be timely; and it should be presented in an easy-to-interpret manner. Because feedback is so important to an efficient and

effective quality assurance program, we believe that such models should be developed and tested according to rigorous scientific standards. Implementation of all feedback and data-reporting mechanisms for the entire MPAQ program might, in fact, be delayed until such testing has occurred and until the QualPAC has had an opportunity to review and comment.

A major principle of the MPAQ is that reliable, valid, and useful data ought to be available to or placed in the public domain. A corollary is that misleading information and poorly presented data are harmful to providers and, ultimately, to the public. We take the position that forestalling the latter takes precedence over accomplishing the former.

Example. Each MQRO might release selected information on providers to the public, initially perhaps on only a few procedures or outcomes. Eventually, they might well release information that gives distributions or rankings of providers.

We have specified neither the criteria for release of performance information to the public nor the procedures for MQROs to follow. Much depends on the technology of quality measurement and assurance methods—the reliability and validity of outcome measures, for instance, and the adequacy of case-mix and severity adjustors. The credibility and usefulness of these data must be thoroughly established. Moreover, providers must be given the opportunity and the necessary time to review and act creatively and responsibly on such information before its release.

The MPAQ should develop procedures and timeframes to be followed by MQROs before the public release of information. The advice of the QualPAC and the National Council should be sought in this effort. Such procedures might specify different timetables depending on whether the ratings or rankings are positive or negative. “Good news” (i.e., for those providers determined to be exemplary) might be released fairly quickly, whereas “bad news” (i.e., for poor quality providers) might be held to give them a reasonable amount of time to undertake changes to improve performance.

Example. The MPAQ might set in place a mechanism for regularly disseminating aggregate analyses on, say, the use of services by beneficiary groups to policymakers, legislators, and the public. This might include the mandated impact report delivered biennially to Congress, but many other options might be considered, including routine publication of utilization data in a manner similar to the Vital and Health Statistics series of the National Center of Health Statistics. Such reports should address both overuse and underuse of services as national data on quality problems become available. The information should be presented in a format that pro-

vides state-level analyses when possible. Because a separate DHHS agency has been charged with the development and promulgation of practice guidelines, the MPAQ might also make its information available as necessary to that agency.

Related to data reporting and feedback is data sharing, which attempts to make use of the range of public- and private-sector quality review and improvement efforts in ways that minimize duplicative data collection and reporting. Any program as obviously data-intensive as this one risks duplicating the data collection, analysis, and reporting efforts of internal programs themselves and of other external efforts, particularly those of the accrediting bodies and state agencies.

We propose that considerable efforts be made to enable these groups to share quality-related information so that duplication of effort and waste of resources can be minimized. This explicitly includes sharing information and experiences across MQROs, between major units of HCFA and within HSQB (e.g., between the Office of Research and Demonstrations and HSQB, and between the offices in HSQB responsible for MQROs and those responsible for survey and certification), between HCFA and the Joint Commission, and between HCFA (or the MQROs) and state agencies. The laws and regulations governing release of peer review and other quality-related data (e.g., those from state-mandated data commissions and those collected under the auspices of the Health Care Quality Improvement Act) appear to be unclear, possibly contradictory, or open to interpretation. Thus, we believe that a careful review of the relevant statutes, regulations, and case law is needed.

The issues of protecting raw data, certain research data, peer-review deliberations, and the like from disclosure via the Freedom of Information Act are extremely complex. Despite our support for the principle of public disclosure, we believe that this subject deserves full examination at a national level, perhaps by QualPAC or an outside institution.

MQROs might aggregate outcome and process-of-care data into performance indicators or profiles for individual providers for feedback and data reporting. The example we used earlier was observed-to-expected ratios for

outcomes measures, but many other possibilities exist. The structure, content, scoring, and interpretation of such profiles should be thoroughly tested and reviewed by QualPAC, the National Council, and the technical assistance contractors before final promulgation.

With respect to quality interventions, the MPAQ (and hence the MQROs) will be confronted with a dilemma. They must balance the need for predictable and equitable intervention strategies for all providers with an emphasis on local decision making, flexible response to different problems, and support for emerging internal quality improvement programs. This dilemma becomes especially acute when the main focus of a quality assurance program is on outcomes of care, and especially when outcomes attempt to take patient values and preferences into account.

Our basic position is that the MPAQ will need to articulate explicit bases or common factors for choosing among intervention options and then leave individual decisions to MQROs. In theory, our approach would not be very different from the PRO program’s present quality intervention plan (Chapter 6). It gives broad authority for many different types of interventions—from notification of concern about a quality problem through mandated continuing medical education of many sorts, to intensified review, and finally to various legal and financial sanctions. Issues concerning the current PRO and OIG sanctioning process will need to be addressed, however.

In practice, not all the operational components of the PRO program (such as severity levels or weighted triggers for quality interventions) would necessarily be retained indefinitely. Other innovative interventions should be developed. Options for dealing with outlier providers should be strengthened (e.g., mandated consultations for certain clinical problems). More important are efforts to assist internal quality assurance programs to handle their own problems and to find ways to stimulate improvement across the broad spectrum of practitioners and providers.

In other words, MQROs would ultimately have a clear set of options (established through a rulemaking process) and clear directions on how to select among them. With our emphasis on local decision making and flexibility, we expect that different MQROs might well adopt different interventional and correctional approaches, but they would have to do so within well-defined guidelines.

In our view, innovative options for responding to quality problems have not been fully developed by any federal quality assurance program. Virtually no good strategies for working with quality distributions exist, certainly none that relate to health outcomes of the sort advocated in this proposed program or to organizations that are attempting to implement continuous quality improvement models. For that reason, we suggest that some

demonstrations or quasi-experiments be conducted to explore the feasibility and effectiveness of various approaches that MQROs might take to quality interventions.

Example. In the event of poor scores on the performance profiles or a single egregious problem, one local MQRO might simply notify the provider, agency, or practice group to suggest some first-order responses. If these seem appropriate and later data indicate a satisfactory resolution, no further MQRO action would be needed. If no correction is evidenced, then the MQRO would intervene more directly, first by taking on many of the actions normally reserved to the internal quality mechanism and then by using stronger remedies (such as stiff sanctions) for uncorrected problems.

Example. A different MQRO might establish the policy of requiring all providers ranked in the lowest third of a quality distribution to adopt a six-month corrective action. This MQRO would evaluate those providers carefully at the end of that six-month period. It might also conduct a 100-percent concurrent review for all providers ranked in the lowest sixth of the quality distribution, using explicit process measures and instruments approved by MPAQ and the National Council.

We recognize the need for continuance of a sanctioning authority for MPAQ and MQROs. Sanctions (e.g., exclusions and monetary penalties) are a topic of considerable debate as this report is being prepared (Chapter 6). We have adopted no formal position on these issues except to note the conclusions in Chapter 6 that generally support the recommendations of the Administrative Conference of the United States. The many obstacles to broadening the options for sanctions, maintaining equity across types of providers, and otherwise strengthening this aspect of the MPAQ’s and MQROs’ response to intractable quality programs deserve a separate, in-depth examination, perhaps by QualPAC or another outside body.

This section outlines proposed steps in a 10-year implementation strategy; the timeframe is fiscal year (FY) 1991 to FY 2000. We divide this strategy into three phases and identify basic tasks in those phases (Table 12.4). Many steps imply ongoing activities; when this is so, we identify the step at the time we would expect it to begin and do not necessarily follow it through the full implementation period. Special projects, studies, and ac-

tivities begun in Phase II may well continue into Phase III. As with other parts of this chapter, details should be considered illustrative, not prescriptive.

Congress and DHHS should establish the MPAQ. Necessary steps include adopting Recommendation nos. 1 to 5, providing the appropriate authorizations and appropriations for the MPAQ and QualPAC, staffing QualPAC and the National Council, and detailed program planning for MQROs.

Steps to improve the public oversight and evaluation of the program should be initiated.

Planning for MPAQ evaluation activities should begin in Phase I. Congress or DHHS, or both, should articulate MPAQ goals in legislation or official policy (Recommendation no. 2), which would be used as the criteria against which the MPAQ should be evaluated. Fundamental changes in the organization or financing of health services for the elderly may have a significant impact on quality and should be included in the evaluation. If the office assigned the MPAQ evaluation responsibility calls on a TAP to assist in the planning, implementation, and documentation of periodic MPAQ evaluations, the TAP would be appointed in this phase.

We have advised that this evaluation component include a periodic report from the Secretary of DHHS to Congress on implementation of MPAQ and on the success of MPAQ in meeting its goals. Thus, planning for the first impact report to Congress should begin early in Phase I, and the first report should be delivered during Phase I (Recommendation no. 6). As a rule, we would expect this report to be related to the goals of the MPAQ. Because we are concerned about the dangers of premature evaluation, however, we suggest that the first such report cover only the progress of implementing MPAQ.

Several other program planning and implementation tasks would begin in Phase I. Among them are the review of current PRO program activities and the changes suggested with respect to hospital Conditions of Participation (Recommendation no. 7). The shift from contracting to a grant or cooperative agreement mechanism (or hybrid mechanisms) would start in this phase.

We have advocated strong support for research in the area of quality assessment and assurance and in related subjects. We have also argued for a much more forceful effort at capacity building. Work in this area should be started in this phase, although because we see it as needing to outlast the implementation of MPAQ, we discuss these topics more fully in the section on Phase III, below.

The middle phase of implementation involves data collection, analysis, information dissemination, and special projects. These activities focus on the design, testing, and implementation of major components of the MPAQ

model. We assume that these activities would be started in the second or third year of the MPAQ and generally would take anywhere from three to six years to complete. We assume further that the best of the approaches would then be incorporated into the full MPAQ in Phase III.

The importance to this Medicare quality assurance program (and to the Medicare program more broadly) of a greatly enhanced data base on use of services, patient outcomes, and the process of care is difficult to overstate. To create and maintain such an information base, only the foundations of which are in place, and to make it useful for assuring the quality of health care for the elderly over the long run is a massive undertaking. Because the development and testing of such a system is necessarily evolutionary and must be responsive to environmental and technical factors, putting this data collection effort in place can be expected to take the middle part of this 10-year strategy.

Design and implementation of the data-collection efforts would focus on use of services, processes of care, and patient outcomes, as discussed in earlier sections of this chapter. Detailed action plans for this work might be developed with the guidance (or advice and consent) of the National Council and QualPAC. Research or demonstration projects could be conducted as needed.

The data analysis capabilities for MPAQ exceed those available in contemporary quality assurance programs, both public and private. Thus, HCFA will need to begin early in this phase to expand and improve its internal data analysis capacity and, more importantly, the data-analysis capacity of the MQROs. Specific attention should be given to strengthening several key elements, especially analytic personnel and computer capability. The technical assistance effort—that is, using outside expert consultants on an advisory or contractual basis—would be implemented in Phase II.

Our proposed program calls for a sophisticated approach to feeding useful clinical practice and quality-related information back to practitioners and provider institutions of all types. Few good models of such feedback loops exist in contemporary quality assurance programs. Therefore, Phase II activities would include considerable efforts to design and test such models, which would be coordinated with the data collection and analysis projects.

Compared with research and demonstration projects concerning feedback to providers, we see less need for projects related to public release of information or to data sharing. These are as much policy issues as technical ones. Some formal, external studies of these issues might be undertaken during this phase, with a focus on their legal, regulatory, and policy ramifications.

Distinguishing providers on the basis of quality and outcomes. If MQROs are to be able to respond differently to providers according to their performance in rendering superior, acceptable, or only poor care, they have to be able to create “quality distributions” of providers. To overcome the conceptual, practical, and political difficulties implied by this aspect of the program, we recommend that DHHS sponsor or conduct a series of studies to test different methods of creating quality distributions for the major types of Medicare providers. Such analyses should be conducted by or with the assistance of outside experts in the appropriate research fields. The final choices as to what types of methods would eventually be used should not be made until the QualPAC has had the opportunity to review and comment.

Improving the average level of performance. Improving average performance (shifting the curve) is critical to the MPAQ; so is fostering better internal, organization-based quality assurance programs. Because this is such a new area, various research, demonstration, and pilot projects will be needed during Phase II. These studies might be (1) done through joint efforts of the MQROs and individual providers, (2) focused on geriatric-specific quality concerns, (3) be community-wide, and (4) involve several providers in either similar or different care settings. Existing PRO pilot projects could be absorbed into this program.

Incentives for good and exemplary performance. Early in Phase II, the MPAQ should study ways to identify and reward both good and exemplary (or superior) providers. Lowering the amount of intrusive external review to which good providers are subjected is the probable first step. Other incentives to be investigated might include publishing superior rankings, awarding special recognition for performance and innovation, selective contracting, and sharing information on exemplary providers with private third-party purchasers. No incentive plan would be put in place until the QualPAC has had an opportunity for review and comment.

Dealing with outliers. At some point, providers not meeting criteria for satisfactory performance on the quality indicators will have to be subjected to more intensive review and other quality interventions, as they are now.

A mechanism would also be devised for real-time intervention in the event of catastrophic malfeasance or poor performance. Special attention needs to be given to how the MPAQ and MQROs should respond to very poor performance because of the decentralized nature of this program.

Our goal is a functioning quality assurance program at the end of this 10-year period, one that can respond creatively to changing environmental circumstances. Some of these circumstances can be foreseen (even if their particulars cannot be specified), such as a larger and older elderly population and different Medicare payment systems. Others are a matter of speculation, such as the strength of the nation’s economy.

Most of the reforms suggested for the first two phases of this implementation strategy are intended to provide a firm foundation for this program. They will take several years to implement fully; most should be completed by Phase III, so that they can be folded into a fully operational program over the last two years of the implementation strategy. In Phase III, we would expect to see a shift from demonstrations to implementation, continued improvement in quality of care and in the conduct of quality assurance, and a major reassessment to determine if the MPAQ is on target.

We discuss four other topics for Phase III—public oversight of the Medicare quality assurance effort, program evaluation, research, and capacity building—because of their very broad and long-range public policy implications. Although activities in these areas are expected to start in Phase I, we emphasize here the need for steady investment by DHHS because of the broad nature of the work and the larger policy implications for the Department.

A consistent theme in this report has been engagement of patients and consumers in quality assurance. A corollary is that the public is entitled to have some voice about public monies spent on quality assurance programs and to bring quality-related problems to the policymakers’ attention.

We have implicitly invested these responsibilities in QualPAC, but all facets of the Medicare program should be represented. Therefore, we suggest that efforts be coordinated among all the Medicare Commissions (especially ProPAC, PPRC, and QualPAC), to avoid duplication of effort and forestall major policy gaps. Among the issues that might be monitored is the likelihood and severity of quality problems confronting the MPAQ as reimbursement mechanisms and Medicare benefits change over the 1990s, but other issues may well arise.

To accomplish this coordination, Congress might direct that the Commis-

sions meet jointly, say once every other year, in addition to or as part of their regularly scheduled meetings. This could be done as a single three-party meeting or as a series of meetings between the QualPAC and another Commission on a rotating basis. Other coordinating efforts, such as staff communications, should also be encouraged.

We strongly emphasized rigorous program evaluation in this report. To this end, we suggested that HCFA devise and test various program evaluation activities in Phases I and II, including ways to assess the cost-effectiveness of a quality assurance program. This effort goes beyond evaluating the success of individual MQROs and focuses on the program itself, not on its agents.

By Phase III, a formal, operational program evaluation effort (outside the MPAQ) should be in place. Approximately 1 percent of the monies appropriated for the MPAQ program itself might be directed to this evaluation effort.

Success for this proposed program depends heavily on adequate testing of many different models for data collection, analysis, and feedback. We expect that some of this will be done through MPAQ and the MQROs. A goodly portion would be done by other research and demonstration mechanisms available to HCFA and DHHS.

We wish to emphasize the need for continued, indeed expanded, research on certain other topics (as outlined in Chapter 11), even as we acknowledge the attention that Congress has very recently drawn to this area. Priorities for steady long-term research support that are not subsumed in the special projects and other efforts discussed specifically for MPAQ include at least the following areas: (1) variations, effectiveness, and appropriateness of clinical interventions; (2) practice guidelines and the mechanisms by which they can be developed, refined, disseminated, and updated; (3) measures of the technical and interpersonal aspects of the process of care; (4) measures of health status and health-related quality of life; (5) methods for changing provider and practitioner habits, behaviors, and performance including those related to continuous quality improvement; (6) data and information management systems; and (7) program evaluation.

If quality assurance is to move forward forcefully, it will require a corps of professionals prepared to provide both technical skills and leadership.

At present we lack an adequate number of such professionals to staff a national set of organizations. An early priority must therefore be to establish training programs to prepare these health professionals. The educational programs would likely require a year of study and could be built on existing programs in epidemiology, health services research, and biostatistics.

Two approaches must be pursued. First, education for existing staffs and those senior professionals already in or about to enter this work will have to use techniques of intensive continuing education and technical assistance. Second, more organized programs of training with field experience will be needed to prepare a new cadre of health workers with the tools needed to collect and apply information based on outcomes in quality assurance. Attention to the tools employed in continuous quality improvement is warranted.

Resources will be needed to underwrite the curriculum development and to support the education of these professionals. Especially because many will be asked to forego more lucrative professional activities, support for the educational programs other than traditional tuition will be necessary. Ways to make quality assurance more of a profession with a clear career path should be developed. As with the research effort, this work must be carried on well after MPAQ implementation has ended.

This chapter has presented our strategy for a quality review and assurance program for Medicare. The new program, which this strategy aims to have in place by the year 2000, is intended to respond to several major issues

• the burdens of harm of poor quality of care (poor personal performance, unnecessary and inappropriate services, and lack of needed and appropriate services);

• difficulties and incentives presented by the organization and financing of health care;

• the state of scientific knowledge;

• the problems of adversarial, punitive, and burdensome quality assurance activities;

• the federal role in quality assurance;

• the adequacy of quality review and assurance methods and tools;

• the tension between dealing with outliers and improving the average;

• the clarity of goals of a quality assurance program for Medicare; and

• the human and financial resources for quality assurance.

Our proposed program will evolve from the present Medicare PRO pro-

gram but will have several different emphases. It will focus far more directly on quality assurance, it will cover all major settings of care, and it will emphasize both a wide range of patient outcomes and the process of care. It will also have a greatly expanded program evaluation component and greater public oversight and accountability. These new emphases present extraordinary challenges.

We advance 10 recommendations to support our proposed program. The first two change the mission of Medicare to include explicit goals for assuring the quality of care for Medicare enrollees, in accordance with this committee’s definition of quality of care.

Three recommendations establish the MPAQ, MQROs, and two advisory bodies, namely the QualPAC for Congress and the National Council on Medicare Quality Assurance for the Secretary of DHHS. A related recommendation directs the Secretary of DHHS to report periodically to Congress on the quality of care for Medicare beneficiaries and the impact of the new MPAQ program on that care. Another recommendation calls for a program to improve both the accreditation and the certification procedures related to Medicare Conditions of Participation.

Two recommendations call for the Secretary of DHHS to support and expand research and educational activities designed to improve the nation’s knowledge base and capacity for quality assurance. The final recommendation asks that Congress authorize and appropriate the necessary funds to implement all the preceding recommendations.

We also outline a strategy to implement the MPAQ over a 10-year span. Phase I would establish the MPAQ and its adjuncts, institute key program planning and evaluation activities, review PRO program activities, institute changes in hospital Conditions of Participation procedures at HCFA, and begin broad research and capacity building activities across the Department.

Phase II would focus on design, testing, and implementation of data collection, data analysis, and information dissemination mechanisms. It would also include special projects on four issues: distinguishing providers on the basis of quality and patient outcomes; improving the average level of performance; providing incentives for good and exemplary performance; and dealing with outliers.

In Phase III, tasks begun in Phases I and II would be completed and full implementation of the MPAQ would begin. In addition, four issues of special long-range concern would be addressed. Two of these involve the MPAQ directly, namely, public oversight and accountability and program evaluation. The third and fourth are research and capacity building, which encompass issues well beyond the implementation of the Medicare quality assurance program and hence involve policy issues for all of DHHS.

The MPAQ strategy outlined in this chapter is skeletal, yet very ambitious. We made our recommendations aware that the system of care in the

next century will likely be very different from today’s. The steps described were intended to show how the nation and the Medicare program might move from “here” to “there” over the next decade, to produce a quality assurance program responsive to that changing environment and whose principles will stand the tests of time and change.

We close by emphasizing the diversity of support for addressing the extraordinary challenges of quality assurance. The Medicare program has a responsibility to assure the quality of care for the elderly population; by no means does it have the sole responsibility. Patients, providers, and societal agents all must participate in this strategy for quality review and assurance if we are to meet these challenges. It is our hope and expectation that this strategy will accomplish a goal shared by all involved with medical care for the elderly—the improvement of quality for all.