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Performance Plans for FY 2003 and 2004 and Performance Report for FY 2002

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Budget Line 2.2—Medical Expenditure Panel Survey (MEPS)

Funding Levels:

FY 2002$48,500,000 (Actual)
FY 2003 $53,300,000 (President's Budget)
FY 2004 $55,300,000 (Request)

2.2.1 Performance Goal 4: To Provide Comprehensive, Relevant and Timely Data on Health Care Use and Expenditures for Use by Public and Private Sector Decisionmakers and Researchers

Program Description And Context

MEPS is designed to provide policymakers, health care administrators, businesses, and others with continual, timely, comprehensive information about health care use and costs in the United States and to improve the accuracy of their economic projections.

MEPS collects data on the specific health services that Americans use, how frequently they use them, the cost of these services and how they are paid for, as well as data on the cost, scope, and breadth of private health insurance held by and available to the U.S. population.

MEPS is unparalleled for the degree of detail in its data, as well as its ability to link data on health services spending and health insurance to the demographic, employment, economic, health status, and other characteristics of survey respondents. Moreover, MEPS is the only national survey that provides a foundation for estimating the impact of changes in sources of payment and insurance coverage on different economic groups or special populations of interest, such as the poor, elderly, families, veterans, the uninsured, and racial and ethnic minorities.

MEPS is designed to help understand how the dramatic growth of managed care, changes in private health insurance, and other dynamics of today's market-driven health care delivery system have affected and are likely to affect the kinds, amounts, and costs of health care that Americans use. MEPS also is necessary for projecting who benefits from and who bears the cost of changes to existing health policy and the creation of new policies.

MEPS has been used by:

  • CMS and other HHS agencies, the Congressional Budget Office, the Office of Management and Budget, the Department of the Treasury, the Physician Payment Review Commission, Prospective Payment Assessment Commission, and other Federal government agencies.
  • The Heritage Foundation, Lewin-VHI, Urban Institute, RAND Corporation, Project Hope, and other foundations and think-tanks.
  • Health insurance companies, pharmaceutical firms, health care consultants, and other health-related businesses.
  • Academic institutions and individual researchers.

MEPS provides answers to hundreds of questions, including:

  • How health care use and spending vary among different sectors of the population, such as the elderly, veterans, children, disabled persons, minorities, the poor, and the uninsured.
  • How the health insurance of households varies by demographics, employment status and characteristics, geographic locale, and other factors.

MEPS also answers key questions about private health insurance costs and coverage, such as how employers' costs vary by region. The answers to these and other MEPS questions enable Congress, the Federal government's executive branch, and other public- and private sector policymakers to:

  • Make timely national estimates of individual and family health care use and spending, private and public health insurance coverage, and the availability, costs, and scope of private health insurance among Americans.
  • Evaluate the growing impact of managed care and of enrollment in different types of managed care plans.
  • Examine the effects of changes in how chronic care and disability are managed and financed.
  • Assess the impact of changes in employer-supported health insurance.
  • Evaluate the impact of changes in Federal and State health care policies.
  • Examine access to and the costs of health care for common diseases and conditions, prescription drug use, and other health care issues.

Strategies To Improve Information Available to Decisionmakers:

Household Component (HC) of MEPS

The HC collects data on approximately 15,000 families and 39,000 individuals across the Nation, drawn from a nationally representative sub-sample of households that participated in the prior year's National Center for Health Statistic's National Health Interview Survey.

The objective is to produce annual estimates for a variety of measures of health status, health insurance coverage, health care use and expenditures, and sources of payment for health services. These data are particularly important because statisticians and researchers use them to generalize to people in the civilian non-institutionalized population of the United States as well as to conduct research in which the family is the unit of analysis.

The panel design of the survey, which features several rounds of interviewing covering two full calendar years, makes it possible to determine how changes in respondents' health status, income, employment, eligibility for public and private insurance coverage, use of services, and payment for care are related. Because the data are comparable to those from earlier medical expenditure surveys, it is possible to analyze long-term trends.

Medical Provider Component (MPC) of MEPS

The MPC covers approximately 4,000 hospitals, nearly 22,000 physicians, and 700 home health care providers, and 9,000 pharmacies. Its purpose is to supplement information received from respondents to the MEPS HC. The MPC also collects additional information that can be used to estimate the expenses of people enrolled in health maintenance organizations and other types of managed care plans.

Insurance Component (IC) of MEPS

The IC consists of two sub-components, the household sample and the list sample. The household sample collects detailed information on the health insurance held by and offered to respondents to the MEPS HC. The number of employers and union officials interviewed varies from year to year as the number of respondents in the previous year's HC varies. These data, when linked back to the original household respondent, allow for the analysis of individual behavior and choices made with respect to health care use and spending.

The list sample consists of a sample of approximately 40,000 business establishments and governments throughout the United States. From this survey, national, regional, and State-level estimates, for approximately 40 States each year, can be made of the amount, types, and costs of health insurance available to Americans through their workplace.

Program Performance Analysis

New National Survey Details Americans Experiences with Health Care Services

Recent MEPS data indicates that the slightly more than half of Americans age 18 and older (53.8 percent) who do not live in institutions or serve in the military always received urgent medical care as soon as they wanted it in calendar year 2000. While there was very little difference between blacks and whites aged 18 to 64 in their reports of timeliness of receiving urgent care, 51.5 percent and 52.9 percent respectively, only 41.2 percent of Hispanics reported always receiving urgent care when they wanted it.

Among those aged 18 to 64, people without insurance were more likely than those with coverage to report sometimes or never receiving urgent care as soon as they wanted (28.6 percent, uninsured; 19.1 percent, publicly insured; and 16.1 percent, privately insured).

The questions were taken from AHRQ's CAHPS® survey tool that assesses people's experiences with their own health plans. Respondents were asked about the timeliness in which they received urgent and routine medical care and they also were asked about their experiences during care. These measures will be included in the AHRQ National Quality Report due out in 2003.

Medication Use in Long-term Care

Using the MEPS institutional component data from 1996, AHRQ developed a national prescription drug file which will be useful to assess a broad set of issues related to drug prescribing in nursing homes. This file will enable studies of drug complications and outcome studies to determine the benefits and negative impacts of prescribing practices in nursing homes.

Long-term Goals and FY 2004 Targets

The following goals represent AHRQ's view of the future. Success is contingent upon adequate funding.

Performance Goal FY 2004 Targets
By 2008, point in time data from the MEPS survey will be available within 12-Months after final data collection. Data available within 12 months after final data collection.
FY 2004 Performance Goals and Targets
Performance Goal FY 2004 Targets
Insurance Component tables will be available within 7 months of collection. Tables available within 7 months after final data collection.
MEPS Use and Demographic Files will be available 12 months after final data collection. Available 15 months after final data collection.
Full Year Expenditure Data. Data available 12 months after final data collection.

Budget Line 2.3—Program Support

Funding Level:

FY 2002 $2,585,000 (Actual)
FY 2003 $2,700,000 (President's Budget)
FY 2004 $2,700,000 (Request)

2.3.1 Performance Goal 5: Maximize the Value of AHRQ by Developing Efficient and Responsive Business Processes, aligning Human Capital policies and practices with AHRQ's mission, and building an integrated and reliable information technology infrastructure.

Program Description and Context

In FY 2000, AHRQ conducted an Agency-wide workforce and workload analysis that identified major work processes and functions, captured data on the competencies of the current workforce and estimated levels of future workforce capacities. In FY 2001, the Agency began following up on the 2000 Study in four areas:

  1. A refinement and expansion of Agency work functions and activities that captures more detailed administrative and operational processes.
  2. Refinement of the staff competencies needed to perform the work of the Agency.
  3. Review of the Agency's recruitment and selection activities and processes in order to make recommendations for improvement.
  4. The development of a multi-year strategy to systematically address the Agency's structure, technology and workforce related issues.
Developing Efficient and Responsive Business Processes

The Agency's five-year workforce restructuring plan, as approved by the Office of the Secretary, focuses on periodic analysis of the manner in which the Agency conducts its work and how well the existing structures, technology, and systems support this work.

  • Develop and implement a plan for identifying, obtaining, storing and using programmatic and operations management and performance data to help inform resource allocation decisions.
  • Prioritize established work processes and develop a plan to conduct business process reviews. These reviews will be designed to ensure that the following issues are addressed: Are there unnecessary managerial and organizational levels?; Is decisionmaking authority appropriately delegated?; and, Do managers have sufficient authority to carry out their responsibilities and manage their programs?
  • Initiate a business process review of the AHRQ grants process from conception of a grant announcement to tracking of publications coming from completed grants with the goal being to make this process more effective and efficient.
Strategic Management of Human Capital

In FY 2000, AHRQ estimated future workforce requirements based on projected workload, retirement, and attrition trends. In FY 2001, the Agency built on the outcomes of the 2000 Study by continuing to refine its workforce planning tools and conduct additional organizational assessments through four initiatives:

  • Development of a more detailed model of the Agency's work that captures the administrative, operational, and programmatic functions and activities.
  • Refinement of the core, technical, and leadership competencies needed to perform functions and activities outlined in the model of the Agency's work.
  • Review of the Agency's recruitment and selection processes to include recommendations for improvements.
  • Development of a multi-year strategy designed to identify resources, tools, and information needed to meet the changing demands of their work as well as streamline costs.

The first initiative in FY 2001 involved the development of a detailed model of AHRQ's functions and activities to outline AHRQ's current work. The agency used this model as an assessment tool for such things as future workload analyses and assessment of gaps in work activities.

In the second initiative, the competencies identified in the Spring 2000 effort were refined and validated to create competency models based on the more detailed functions and activities model. These models assist the agency in recruiting, selection, training, development and performance assessment activities.

The third initiative, the recruiting and selection process assessment, benchmarking, and recommendations task, resulted in four primary recommendations for improving AHRQ's processes for recruiting and selecting new employees. These recommendations are currently being evaluated for implementation.

Building an Integrated and Reliable Information Technology Infrastructure

AHRQ is continuing to undertake a comprehensive review of its business processes and products. This will undoubtedly change how the Agency forwards its work daily as well as how information flows within the organization. This review will also redefine AHRQ's information technology architecture so that not only does it meet multiple statutory requirements, such as GISRA and Clinger-Cohen but also so that it meets the management and organizational needs of the Agency. Evolving technologies, such as Web-based applications, provide opportunities for the Agency to accomplish work in new, more efficient and timely ways. The IT infrastructure developed must be adaptable to meet new requirements and while maintaining information security and critical infrastructure protections.

Developing Efficient and Responsive Business Processes

Since the creation of AHRQ by Congress in 1989, Agency has realized significant growth both in staffing and budget and has been given ever-increasing responsibilities with regard to conducting research that will lead to improvements in the quality, cost and financing, access, organization and delivery of healthcare to all Americans. The Agency has undergone a number of organizational changes during this time to reflect this growth and expanding mission.

The relative youth and size of AHRQ has allowed the Agency to develop and evolve in a carefully considered, systematic manner. The principals that have guided this growth include:

An organizational structure that stresses simplified, shared decisionmaking:

  • Avoidance of redundancies.
  • Clear lines of communication and authority.
  • A clear emphasis on employee involvement in all Agency matters.
  • Recognition of employee accomplishments and contributions.

The results of the application of these principals are clearly reflected in at least two ways:

  • In the most recent two Department Human Resource Management Index surveys, AHRQ scored higher than any other OPDIV on employee organizational satisfaction in a variety of management areas.
  • AHRQ is an essentially flat organization. There are no more than three management levels anywhere in the Agency, which allows for timely decisionmaking and simplified communications.

To complement the organizational efficiencies already realized, the organizational changes the Agency is undertaking are expected to achieve the following workforce restructuring objectives:

  • Reduce the Number of Managers.
  • Reduce Organizational Levels.
  • Reduce Time Taken to Make Decisions.
  • Increase Span of Control.
  • Re-assign Staff to Mission-Critical Positions.

Consistent with the Department's and OMB workforce restructuring goals, by the end of FY 2002, the Office of Management alone will abolish three Divisions (from 6 to 3, a 50 percent reduction) and reduce the number of administrative positions by twelve (from 53 to 41, a 22 percent reduction). The effects of FY 2002 agency-wide restructuring actions are summarized in the following table.

Effects of FY 2002 Agency-Wide Restructuring Actions
Number of organizational units/levels to be eliminated:
  • Division of Human Resources Management, OM
  • Division of Information Technology Management, OM
  • Division of Grants Management, OM
  • Division of Research Policy, Coordination & Analysis, ORREP
4
Number of supervisory positions to be eliminated:
  • Deputy Director, Office of Management
  • Director, Division of Information Technology Management/OM
  • Director, Division of Human Resources Management/OM
  • Supervisory Human Resources Specialist/DHRM/OM
  • Director, Division of Grants Management
  • Supervisory Budget Analyst
  • Director, Division of Research Policy, Coordination & Analysis, ORREP
7
Number of administrative FTEs to be redeployed to support research program functions:
  • 8 FTEs which supported HR functions
  • 2 FTEs which supported grants business management functions
  • 1 Deputy Director, OM
  • 1 analyst which supported administrative services functions
12

The Agency's five-year restructuring plan, submitted to OMB in June 2001, focused on periodic analysis of the manner in which the Agency conducts its work and how well the existing structures, technology, and systems support this work. The Agency will eliminate any supervisory positions below the Division Director level and Deputy Director positions, (with the exception of the Agency Deputy Director,) will become incumbent only and will not be back-filled. The Agency is also reviewing its various administrative and operational support systems and, working closely with others in the Department, looking to consolidate these systems to promote efficiency and effectiveness. The Agency will also periodically assess the capacity of its workforce to meet its mission requirements. The plan is consistent with other management reform initiatives including making greater use of performance-based contracting and contracting with small and minority owned businesses, expanding the application of on-line procurement, and the Agency's recently submitted A-76 FAIR Act Report.

The Agency's Five Year Restructuring Plan is designed to address three strategic workforce goals:

  1. Evaluation of Agency work processes and functions and refinement and/or consolidation of these functions and processes to promote efficiencies and effectiveness.
  2. Acquisition, development, and maintenance of a talented, diverse workforce.
  3. Development and maintenance of an Agency infrastructure conducive to maximum employee productivity and satisfaction.
Building an Integrated and Reliable Information Technology Infrastructure

In FY 2002, AHRQ began development of an integrated E-Government program. The intent of this program is to increase gains in business performance. This is a particularly important priority since AHRQ carries out the MEPS program, an important and unique resource for public and private sector decisionmakers. No other surveys, either Federal or private sector, provide this level of detailed information on health care cost, use, and insurance coverage. Moreover, AHRQ is the lead agency in HHS on patient safety efforts including the Patient Safety Task Force project to coordinate the integration of data collection on medical errors and adverse events. This project is to be carried out in conjunction with the Centers for Disease Control, the Food and Drug Administration and the Centers for Medicare and Medicaid Services. The major priorities are to integrate information and business processes across agency boundaries, share information more quickly, automate internal processes and work more efficiently with the commercial medical community, academic institutions and research bodies.

In line with this program initiative, AHRQ's Information Technology (IT) services team explicitly defined its mission and vision, buttressed by three strategic goals:

  • Provide quality customer service and operations support to AHRQ's centers and offices;
  • Ensure that AHRQ's IT initiatives are selected and managed to deliver quality solutions that contribute to the Agency's mission and objectives; and,
  • Ensure AHRQ's IT initiatives are aligned with departmental and agency enterprise architectures.

In addition to the strategic goals in support of the agency mission, the IT services team's function is to support AHRQ business operations through the effective and efficient application of IT products and services. Accompanying this mission is the vision of providing timely access to reliable and secure information that supports the business operations of the Agency, serving as a model for best practices in IT management throughout HHS.

e-Government Implementation Approach2

The Agency has adopted a specific implementation model. This model takes a balanced approach to E-Government, based on four cornerstones (Figure 1).

  • Customer relationship management—AHRQ must constantly know who their customers are, what they want, and how to best meet their needs.
  • Organizational capability—Prepare the organization for change by implementing controls to better manage specific E-Government initiatives. This includes implementing governance, rigorous IT capital planning processes and establishing a balanced portfolio of E-Government initiatives. Establishing this cornerstone is especially important, as this is the area where the overall utility of specific projects are assessed and the development of efforts is managed and implemented.
  • Enterprise architecture—This area ensures the relationships between enterprise IT architecture and business operations are fashioned as a partnership. When these two essential elements work together, they act as a force multiplier for customer relationship management.
  • Security/Privacy—Finally, customers must have trust in not only the business operations they participate in, but also the operations' supporting information technology. Customers must know that information is used only for its intended purpose and that the information is secure, stable and not vulnerable to intrusion.

With each area properly managed, supported by specific tasks performed under time definite goals and milestones, this framework ensures that AHRQ's E-Government implementation moves forward in a balanced, deliberate manner.


2. This model is based on concepts of the e-Government program first developed at the Department of Labor.


Integrating Budget and Performance Management

General program direction and budget and performance integration is accomplished through the collaboration of the Office of the Director (with its four administrative offices) and six research centers that have programmatic responsibility for portions of the Agency's research portfolio. The Agency links budget and performance management through its focus on the Annual Performance Plan.

The Agency's strategic plan guides the overall management of the Agency. Each Office and Center (O/C) have individual strategic and operations plans. The annual operations plans identify critical success factors that illustrate how each O/C contributes to AHRQ achieving its strategic and annual performance plan goals, as well as internal O/C management goals. In turn these critical success factors serve as the basis for each employee's annual performance plan. This nesting of plans allows the individual employee to see how her or his job and accomplishments further the respective unit's goals and the Agency's mission. At the end of each year, the Office and Center directors and their staffs review their accomplishments in relation to the annual operations plans and draft the next year's plans. The results of the reviews contribute significantly to the performance reports that are influential in revising the operations plans and in turn the Agency strategic plan.

Strategic Management at AHRQ

As a result of the increased emphasis on strategic planning (select for Figure 2), the Agency has shifted from a focus on output and process measurement to a focus on outcome measures. A detailed description of this progress can be found in the FY 2002 performance report and initial FY 2004 performance plan.

AHRQ's commitment to budget and performance integration is reflected not only in how programs are evaluated but also in the organizational structure of the Agency itself. In 2002, AHRQ reorganized it's management structure, aligning those who are responsible for budget formulation, execution and providing services and guidance in all aspects of financial management with those who are responsible for planning, performance measurement and evaluation within the Office of the Director.

Finally, AHRQ worked with the Office of Management and Budget (OMB) to complete comprehensive program assessments on four key programs within the Agency:

These reviews provided the basis for the Agency to move forward in more closely linking high quality outcomes with associated costs of programs. Over the next few years, the Agency will focus on fully integrating financial management of these programs with their performance.

FY 2004 Performance Goals and Targets
Performance Goals FY 2004 Targets
Human Capital   Develop a plan to recruit new or train existing staff to acquire skills necessary to fill identified gaps.
Expanded E-Government   Complete implementation of the control review cycle.
Implement the evaluation cycle.
Integrate capital planning processes with enterprise architecture processes.
Improve IT Security/Privacy Continue risk assessments on AHRQ's second tier systems.
Implement the business continuity and contingency program plans.
Establish IT Enterprise Architecture Develop the target architecture.
Create the migration plan.
Integrate enterprise architecture processes with capital planning processes.
Budget and Performance Integration   Implement planning system.
Complete initial PART reviews on all major agency programs.

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