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Performance Budget Submission for Congressional Justification

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Impact of Market Forces

Both nationally and locally, health care markets continue to undergo rapid change. Through a variety of mechanisms, purchasers have increased price competition between plans and providers and some are using available tools to measure, monitor, and reward quality. Insurers' and providers' response to this purchaser activity is varied and complex. As a major purchaser and provider of care, the federal government must understand, monitor and evaluate the impact of these changes.

In recent years, investigator-initiated research at AHCPR has provided rigorous evidence about the nature of these developments and their impact on consumers and communities, in an effort to take public and private decision makers beyond anecdotes and speculation. AHCPR's market forces research provided evidence of the extent of these changes in market structure, ownership, and contracting patterns, and the impact of these developments on physicians, consumers, and others. These findings include the first empirical evidence that physicians' nominal earnings dropped 4 percent from 1993 to 1994, the first time earnings have declined since 1982 (the first year that salary data was collected.)

More recently, the November issue of Health Affairs included seven articles by AHCPR-supported researchers and staff from this initiative, meeting AHCPR's goal of producing useful research products in less than two years. These articles provide fundamental knowledge about the link between financing and delivery of health care and the quality of services. Highlights include:

  • Segmentation of Hospital Markets: Where Do HMO Enrollees Get Care? Jose Escarce and colleagues suggest that health maintenance organizations (HMOs) may not systematically channel their enrollees to high-volume or low-mortality hospitals. These findings are consistent with other evidence that in many areas of the country, incentives for managed care plans to lower costs may outweigh incentives to improve quality.
  • Which Types of Hospital Mergers Save Consumers Money? Robert A. Connor and colleagues find that, overall, horizontal mergers benefit consumers but more antitrust scrutiny is needed.
  • Effects of HMO Penetration on Physicians' Work Effort and Satisfaction Jack Hadley and Jean M. Mitchell document the extent and nature of physicians' reservations about how they now practice medicine.
  • HMO Market Structure and Performance: 1985-1995 Douglas R. Wholey and colleagues take a comprehensive look at a decade of managed care data and find evidence confirming the widely held perception that hospital days are declining among HMO patients, while use of ambulatory care is up. Their analysis not only documents the role of plan competition but also provides a closer look at the differential patterns of competition for different kinds of managed care organizations.

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Managed Care

Over 80 percent of privately insured Americans now depend on some form of managed care for their health needs, as do roughly 30 percent of Medicaid recipients and nearly 14 percent of Medicare beneficiaries. To determine the impact of different features of health plans on the quality of care provided to patients with chronic illnesses and on outcomes, AHCPR, with the American Association of Health Plans' Foundation (AAHPF), announced the availability of up to $7 million, over a three-year period beginning in FY 1998, to support peer-reviewed, outcomes-focused studies.

This research has moved beyond questions of differences between managed and fee-for-service care or between types of health maintenance organizations. The focus is now on how changes in organizational structures and care models being developed by health plans impact patient health. This research will focus on special populations, including women, minorities and the elderly.

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Primary Care

More than half of all Americans are now covered by managed care plans, which often require the use of a primary care physician or gatekeeper to manage the referral of patients from primary to specialty care. Primary care is the most frequent site of health care delivery, and the source of most referrals to secondary and tertiary care. The rate of referral to specialists from primary care affects both the cost and quality of health care. More referrals drive costs up, while inappropriate referrals or non-referrals harm quality.

AHCPR's research in this area focuses on the processes of referrals and consultations by primary care clinicians and on variations in referral patterns. Research also evaluates strategies that lead to changes in provider behavior and improved quality of care. Outcomes from recent studies include:

  • Investigators from Boston University assessed the cost-effectiveness of interventions to prevent infections in patients with HIV; the cost-effectiveness of current protocols varies widely. The results can be used by physicians and health care organizations to prioritize treatment for patients with HIV.
  • Use of a specialized treatment unit in the Emergency Department for patients with asthma can reduce costs without affecting outcomes (relapse rates or subsequent hospitalizations).
  • Depression and coexisting (medical) illnesses should be treated together to reduce costs and improve outcomes. Older primary care patients who are depressed have higher overall costs than those who are not depressed. However, the costs are not due to depression but to the effects of depression on other medical conditions. Improving care and reducing costs for older patients with depression and other medical conditions requires that physicians treat both simultaneously.

In addition, AHCPR published a targeted solicitation in March 1996, Referrals from Primary to Specialty Care, to address further research issues in this area.

In the area of advance directives, the Patient Self-Determination Act passed in 1991 requires health care institutions to educate patients about advance directives and document their wishes for life-sustaining treatments in certain situations. However, multiple studies have demonstrated that these discussions are difficult for both patients and physicians, and either do not occur or happen too late to influence treatment. AHCPR has supported a number of studies in this area. Findings include:

  • Less than one in five nursing home residents has a written advance directive or durable power of attorney, suggesting that health care providers may have to rely on decision making by surrogates (family, friends or court-appointed guardian) whose understanding of the affected individual's preferences may be limited.
  • Advance directives are often not specific enough to be useful. Many individuals are asked to say they would want to "treat everything" or "comfort care only" but these general recommendations are not helpful to physicians in developing treatment strategies consistent with patients' preferences.
  • Computerized reminders to physicians at the time of outpatient visits significantly enhanced the number of patients who completed an advance directive (less than 5 percent in the control group vs. 20 percent in the intervention group).

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Quality Measurement and Improvement

Research on quality measurement and improvement is essential to efforts to integrate knowledge about health care into clinical practice, especially at this time of rapid and profound changes in the health care system. There are anecdotes, but not much reliable information, about the effects of these changes on quality of care and the effectiveness of attempts to assess and assure quality. Understanding the effects of these changes requires reliable and valid information about clinical quality of care and methods for obtaining and using that information to assure and improve quality.

When based on the science of AHCPR's Evidence-based Practice Centers and on medical outcomes and effectiveness research, clinical performance measures provide meaningful information that:

  • Enables providers to "benchmark," to identify best practices, and to prioritize areas for clinical quality improvement.
  • Enables providers to manage their patients better, to produce high quality care.
  • Allows assessment of the impact of changes in delivery systems on patient care and health outcomes.
  • Permits purchasers and consumers to make informed choices about their health care.

The Computerized Needs-Oriented Quality Measurement Evaluation System (CONQUEST) is a key AHCPR project in this area, focusing on collecting and evaluating existing clinical quality measures. There are literally hundreds, if not thousands, of performance measures developed by public and private organizations, but there is a lack of information about the quality of those measures. CONQUEST provides validated quality measures for a large variety of clinical conditions and has helped to identify where new performance measures are needed, e.g., complex and chronic illnesses; for children in general and children with special health care needs; for individuals with disabilities; and for those who suffer from mental health or substance abuse problems.

To address these needs, AHCPR-funded eight, five year awards collectively known as Q-SPAN (Expanding Quality of Care Measures). Select for a more detailed information on the Q-SPAN projects. These new studies support the development and testing of new performance measures for specific conditions such as hip fracture, dental care, home care, and asthma. Upon their availability, AHCPR may include measures produced by the studies in the CONQUEST system.

Q-Span Projects (Quality Measure Expansion Projects)

Title ConsortiaSites
Clinical Performance Measures for Dental Plans UNC, Chapel Hill: Kaiser Permanente Center for Health Res. & Dental Program; Group Health Foundation/Health Partners 2 dental HMOs: Kaiser Permanente, Health Partners
Developing & Testing Asthma Quality of Care Measures University of Texas Southwestern Medical Center Parkland Memorial Center
Ongoing Development & Evaluation of HEDIS Measures Harvard Medical School; RAND; NCQA; Center for Survey Research Through NCQA, 22 health plans are participating
Measuring Quality by Achievable Benchmarks of Care University of Alabama, Birmingham; AL Quality Assurance Foundation 20 Alabama hospitals; BCBS of Alabama; Triton/VIVA HMO; Physician Practices
Adult Global Quality Assessment Tool RAND United HealthCare; PacifiCare; Harvard Pilgrim; Aetna-US Healthcare
Quality of Care Measures for Cardiovascular Care Harvard Medical School; Harvard School of Public Health Allina; PacifiCare; Prudential; United HealthCare Prudential; PacifiCare; United HealthCare; Allina/Healthcare Education & Research Foundation
Quality Outcomes in Subacute & Home Care Programs Hebrew Rehabilitation Center for Aged; University of Michigan; Harvard University; Prism Health Group Patients served by Prism Health Group; Transitional subacute & home care settings (w/ Hebrew Rehabilitation Center for Aged)

To expand research on quality measurement and improvement, AHCPR issued a Request for Applications in FY 1998 to fund up to 10 grants for research in three priority areas:

  • Methods and Measures. Improved quality depends on better methods and measures including development and testing of outcomes measures and severity adjustment methods, and refinement and expansion of health and functional status and health-related quality of life. Research also is needed in relatively unexplored areas such as timeliness of care; the importance of communication in quality of care; and the translation of information about quality of care into health care management.
  • Organizational Change and Quality Measurement and Improvement. Research is needed to incorporate new methods and measures effectively into ongoing health care programs and to determine how health care measurement can lead to improved care in a variety of settings. Organization and system issues include how different approaches to designing and implementing quality improvement interventions work in and across health care delivery settings. Through this RFA, AHCPR seeks to form partnerships with the private sector—employers, payers and providers to examine ways to improve quality.
  • Using Quality-related Information. Research is needed on how information on quality affects decision making at various levels of the health care system. Research issues include how the use of information on quality improves the ability of patients, providers, employees, employers, health care purchasers and health plans to work together effectively.

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Tracking the Nation's Progress

A critical role for Government is conducting research and evaluations to assess how well the market is meeting critical health care objectives. That role has never been more important. Public programs are being reorganized, downsized, and privatized. Recent Federal legislation has made some of the most significant changes in Federal health policy in nearly two decades—revisions in Medicare and Medicaid policy, the Medical Savings Accounts demonstrations, and the State Child Health Insurance Program—which require evaluation. An even more dramatic revolution is taking place in the private sector with the phenomenal growth of managed care, increasing vertical and horizontal integration, and new alliances and relationships among insurers, providers, and purchasers in an increasingly competitive marketplace.

The recent public debate regarding the impact of managed care on the quality of health care services has highlighted the need for putting in place the capacity to assess and track at the national and state and levels the impact of these changes. National spending on health care continues to be an issue, as indications emerge that costs may increase rapidly once again. There are many questions about current spending: are we spending too much or too little; is the spending efficient in purchasing value for money; is the spending equitable; and how does it affect access and quality?

To address these questions, it is important to collect and examine nationally representative data on:

  • The types of health care services Americans use.
  • How frequently they use them.
  • How much is paid for the services used.
  • Who pays what portion of those payments.

It is also important to have information on the types and costs of private health insurance available to, and held by, the U.S. population.

HIV Cost and Services Utilization Study (HCSUS)

In FY 1998, AHCPR supported the final year of the HIV Cost and Services Utilization Study (HCSUS), a large-scale study that assists in health care policy making by providing vital information on costs and services resulting from health care delivery to the HIV-infected persons. In addition to providing estimates of utilization rates for inpatient, outpatient, home health, and mental health services, HCSUS collected primary data about access and barriers to care in different geographic locations and health care delivery system settings. It provided current information about relevant demographic and socioeconomic variables (e.g., race, gender, insurance status, income, education, exposure category). In addition, HCSUS specifically addressed access to and cost and use of protease inhibitors. It is expected to provide information about patients attitudes toward antiretroviral treatment and factors that may facilitate compliance with complex medical regimes.

A unique feature of HCSUS is the use of probability sampling techniques to obtain a nationally representative sample of persons with HIV disease receiving treatment. The population from which this sample was drawn consists of persons receiving HIV-related medical care in the two-month population definition period of January-February, 1996. HCSUS used a three-stage sampling design, in which geographic locales were sampled, providers were sampled within locales, and patients sampled within providers. Women were oversampled at a 2:1 ratio. Overall, 2,865 HIV-infected patients were enrolled into the sample and completed a baseline interview (with a coverage rate of 70%). The HCSUS design includes a baseline interview and two follow-up interviews, 6 months and 12 months after baseline. The 6-month and 12-month interviews have been completed, with a completion rate over 85%. Initial findings from this project will be presented at scientific meetings and submitted for publication this year.

HCSUS was funded through a cooperative agreement with RAND for four years beginning in FY 1994. The National Institute of Mental Health, National Institute of Drug Abuse and the Health Resources and Services Administration have provided support for HCSUS through interagency agreements. This intra-Department partnership allowed this survey to achieve an adequate rural sample, a specific focus on mental health, and an expanded drug abuse research component

Select for a discussion of the Medical Expenditures Panel Surveys (MEPS) (23 KB), a critical resource for tracking the Nation's health care use and expenditures.

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