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Written Statement

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National Summit on Medical Errors and Patient Safety Research

Panel 1: Consumers and Purchasers

Testimony by Mary Jane England, President, Washington Business Group on Health


The first National Summit on Medical Errors and Patient Safety Research was held on September 11, 2000, in Washington, DC. Sponsored by the Quality Interagency Coordination Task Force (QuIC), the Summitís goal was to review the information needs of individuals involved in reducing medical errors and improving patient safety. More importantly, the summit set a coordinated and usable research agenda for the future to answer these identified needs.

Individuals were selected by the Agency for Healthcare Research and Quality (AHRQ) to testify at the summit as members of the witness panels. Each submitted written statements for the record before the event, documenting key issues that they confront with regard to patient safety as well as questions to be researched. Other applicants were invited to submit written statements.

Disclaimer and Copyright Statements


Large employers are alarmed at the lack of patient safety in healthcare today. National-level initiatives have placed this issue in front of the American public: the Institute of Medicine (IOM) medical errors report,1 the President's Advisory Commission and the ensuing National Quality Forum, the Agency for Healthcare Research and Quality (AHRQ), and the Quality Interagency Coordination Task Force (QuIC), among others.

The Washington Business Group on Health (WBGH) is a national non-profit organization whose members represent the Fortune 500 service and industrial companies, and public sector health care purchasers, including the Office of Personnel Management. Our members collectively reach 39 million employees, retirees and dependents. Our mission is "to promote performance-driven healthcare systems and competitive markets that improve the health and productivity of companies and communities." As the representative of many of the largest, most sophisticated and innovative managers of employer-sponsored healthcare in the United States, WBGH has invested significant time and effort to understand the concerns and questions of our members regarding medical errors and patient safety.


1To Err is Human: Building a Safer Health System. Institute of Medicine, National Academy Press, 1999.

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Context for Research Questions

For 26 years, WBGH members have been actively involved in private and public sector efforts to improve the quality, cost effectiveness and accountability of the U.S. healthcare delivery system. These efforts reflect an employer's need for a healthy, functioning and productive workforce.

To an employer purchaser, quality in healthcare includes a "floor" of assurance that consumers will not be victims of errors by the health delivery system: in other words, the system will "do no harm." This particular focus within healthcare quality improvement is known as patient safety. The IOM report on medical errors describes medical errors that threaten patient safety as overuse, underuse and misuse of healthcare treatments and services.

When evaluating health delivery systems, employers want to see a solid quality improvement system built on this "floor" of safety assurance. A number of innovative large employers describe the hallmarks of healthcare quality as the five "rights." That is, when they purchase healthcare, they expect the right healthcare, from the right provider, at the right time, in the right place and at the right price...the first time. These five "rights" overlap with the IOM's three categories describing medical errors, and the common underlying concepts and expectations are often used to define appropriateness of care. Delivery of appropriate care relies on these interdependent—at times inseparable—concepts of patient safety and rigorous quality improvement. Employers expect both in the care they purchase for their employees.

The remarkable achievements and changes in healthcare technology, financing, and delivery in the 20th century necessitate the provision of appropriate care that is integrated, not fragmented. WBGH members have sought to purchase healthcare from a health system that is accountable for realizing integrated, patient-centered, and continuously improved care.2 To express these expectations, employers and other stakeholders first joined WBGH in developing its Organized Systems of Care framework in 1993. This framework describes characteristics of such systems.3

From a consumer's perspective, an organized (or integrated) system of care "will enable me [and my family] to learn more about my health needs, manage my own health status, and make informed choices when I need health care."

WBGH's framework describes such a system as providing a "health home" (part physical, part virtual) to aid consumers in decision making and facilitate clinical excellence—that is, appropriate care the first time. It is a central source for the consumer for health care, services, advice and information, and it facilitates continuity of care. In this framework, the planning and operations of a "health home" are sensitive and responsive to the health and functional needs of its customers. Care spans prevention, early intervention, restoration and support to optimize health and daily functioning. Health decisions are informed by reliable health and quality information that is relevant to consumers and easily accessed and understood.4


2Goff VV and S. Coberly, Distinguishing Organized Systems of Care. Washington DC: Washington Business Group on Health, 1995.
3Cronin, C. and K. Milgate, A Vision of the Future Health Care Delivery System: Organized Systems of Care. Washington DC: Washington Business Group on Health, 1993.
4WBGH Organized Systems of Care Committee final report, upcoming September 2000.

Given these purchaser expectations, what is the employer interest in health care safety and quality? Is there a "business case" to be made? Conceptually, it seems logical that ineffective, inefficient, and erroneous care affects health and functioning, purchaser cost and a company's productivity. Providing integrated care with an eye on functional status—and delivering it "right" the first time—sounds like a good investment in an employer's workforce. But where is evidence to evaluate and recognize this? Moreover, if our employees don't have relevant and useable information to aid their self-care and healthcare decision making, how can they learn to be smart, satisfied consumers? These questions endure regardless of who's paying the bill for healthcare.

A number of employers stand on these concepts and questions in their pursuit of healthcare safety for their employees. Some have capitalized on the patient safety publicity resulting from the release of the IOM report late last year. For example, the Leap Frog Group, who is also testifying today at this Summit, built on the work of the IOM report and has centered its initial focus on three indicators of inpatient safety. Traditionally, the acute inpatient setting has been at the center of health payment analysis and policy, and thus offers more ample descriptive databases to inform current efforts to reduce medical errors.

WBGH supports the work of the Leap Frog Group, and has chosen a parallel and complementary focus to capitalize on employer efforts to improve patient safety in 2000. Also building on the IOM report, WBGH is assessing the status of medication safety in ambulatory settings, to identify how its members can help ensure appropriate and safe medication delivery to their employees, retirees and dependents.

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What's So Alarming About Medication Safety in Ambulatory Settings?

Although the prescription drug benefit is easily the fastest growing health care expense for employers (and holds promise to remain so), there is a lack of evidence of safeguards against errors and rigorous quality improvement processes in ambulatory medication delivery. Most alarming, the current healthcare market has very few tools of accountability or quality indicators to ensure appropriateness and safety in medication delivery.

Drugs: the fastest growing cost item in health benefits

Employer health benefit costs continue to grow, and the cost increases for prescription drug benefits are the most dramatic. WBGH and Watson Wyatt surveyed employers earlier this year regarding these cost trends.5 The 60 employer respondents from companies with at least 1,000 employees reported prescription drug benefit cost increases of 22.5 percent for active employees, and 23.4 percent for retirees. In comparison, overall medical costs increased 12.2 percent (actives) and 13.3 percent (retirees).

This strong growth in prescription drug benefit expenses is not expected to slow anytime soon. In fact, the combined effect of the following factors points to continued exponential growth in pharmaceutical utilization, particularly in ambulatory settings.

Growth in ambulatory settings—The last twenty years have witnessed enormous growth in the numbers and types of ambulatory providers and settings. These changes stem largely from technological advancements that allow less (or non-) invasive procedures, as well as the incentives inherent in both managed care and the Medicare prospective payment system to shift care away from acute inpatient settings.


5 Health Care Costs 2001 Survey, 2000, Watson Wyatt/WBGH, July 2000.

Greater demand for, use and price of pharmaceutical agents—The recent generation of breakthrough medications and biotechology has enabled many individuals to improve their health and functioning. More people are now living with a chronic condition, and life expectancies are lengthening. The aging of America's baby boomer generation is creating a stronger demand for access to state-of-the-art pharmaceuticals and treatments and other aids to enhance quality of life.

Over the past year, WBGH helped to form RxHealthValue, an organization of major private-sector stakeholders committed to "sponsoring research, educating the public and recommending private and public sector solutions to assure that the public realizes the health and economic value of prescription drugs."6 RxHealthValue recently released results from a national study of prescription drug use, conducted with Brandeis University earlier this year. This study, using PCS Systems data from the years 1996-1999, found strong evidence that more people now use more prescriptions, at younger ages (45-65) and for more conditions.7

Some emerging pharmaceuticals replace older medications and treatments, and others target previously untreated conditions and diseases. A large number of them are more costly than their predecessor technology. The combination of higher prices with increased volume guarantees further expenditure growth in the pharmaceutical benefit—with little information to evaluate the quality and value of the investment.

Direct effect of medications on workforce productivity—Many pharmaceuticals can effectively restore health and functioning. Some of the newer drugs may do this more quickly, for example, the newer anti-depressants (SSRIs). But anyone who has experienced a major side effect—or erroneous administration—of a drug can readily describe the disabling nature and extent of the disruption to their lives and that of their families. Medication side effects and errors frequently disable the individual's immediate ability to function, or even be present at work or for other duties.


6 RxHealthValue press briefing kit, May 10, 2000.
7 RxHealthValue, May 2000.

The fragmented delivery system in the U.S. magnifies this effect. The absence of a "health home" for a consumer can only increase the risk of adverse drug reactions and events. "Silo" or uncoordinated treatment planning is less likely to evaluate drug choices with an eye on improved health status and concurrent restoration of function. Again, for employers this will likely surface as larger benefit costs for prescription drugs, but also for health care and disability. These medication errors and inefficiencies also very likely increase absenteeism and lower productivity.

Lack of evidence of safeguards or accountability

Delivery of medications in ambulatory settings is one of the most frequent interactions that many individuals have with the healthcare delivery system. Despite this frequency, its risk for errors, and the growing cost of the drug benefit, employers lack the information and tools to assess the quality or value-or potential for errors—of their prescription drug benefit vendor.

An employer can furnish its prescription drug benefit in a number of ways, most commonly through a contract with a health plan or a separate contract with a pharmacy benefit management vendor (PBM). Currently, little data or information is available to employers to identify standards of care for quality medication delivery, or to compare drug benefit managers on error rates, quality improvement systems, and quality performance. So employers are unable to hold their pharmacy benefit manager accountable for appropriate, safe medication delivery...and for doing it right the first time.

Inadequate information and data are available to fully describe the nature, extent and cost of medication errors and adverse reactions in various ambulatory settings. A few research studies do shed a bit of light on the magnitude of this issue. Some of the findings include:

  • Using 1992 hospital admissions data, the costs associated with drug-related morbidity and mortality in ambulatory settings in the United States were estimated to be $76.6 billion; the largest component was drug-related hospitalizations.8
  • Deaths due to medication errors occurring in the outpatient setting increased 8.5 fold from 1983 to 1993 (from 172 to 1459).9
  • A study of drug-related admissions in 1983 of patients age 50 years and older found that 48 percent were a result of adverse drug reactions. Other factors included intentional noncompliance (27 percent), treatment failure (19 percent), alcohol (14 percent) and medication error (10 percent).10

8 Johnson JA and J L Bootman. "Drug-Related Morbidity and Mortality: A Cost-of-illness Model" Archives of Internal Medicine 155:1949-1956, 1995.
9 Phillips DP, et al. "Increases in U.S. medication error deaths between 1983 and 1993," Lancet 351:643-44, 1998.
10 Grymonpre RE et al. "Drug-Associated Hospital Admissions in Older Medical Patients", Journal of the American Geriatric Society 36:1092-1098, 1988.

A significant risk is inherent in just taking a drug, particularly for high-risk populations, such as children, people with concomitant prescriptions or chronic conditions, and the elderly. For example, a number of psychiatric drugs have not been approved for use in children, yet "off-label" use of these drugs for this age group is not uncommon.

Medication errors are happening in ambulatory settings—including fatal events, such as those recently recorded on the front page of the Washington Post:

"Mike McClave is a foreman for the CSX railroad in Virginia. If one of his workers is injured, he has to tell the federal government. If a train slips off the tracks, he files a report. And when an engineer has worked for 12 hours, he stops and rests. ...So when McClave's eight year old daughter died six years ago after a Hampton Roads [Virginia] pharmacy gave her the wrong medication, McClave was shocked to learn that pharmacists in most states don't have to report their mistakes to anyone. He couldn't believe that they have no limits on the lengths of their shifts and that technicians who help fill prescriptions don't have to be certified in most states. 'If one wheel slips off the rail, we have to report it to the federal government,' McClave said. 'Here's a whole industry that has much more of a direct impact on the public's health, and they're not subject to reporting. I think it gives a false sense of security about how safe it is.' ...[Upon hearing of a second child's recent death from a medication delivery error], McClave said...'there was a pain in the pit of my stomach. We're still out there arguing about these things, and there are children dying'..."11

11 Glod, M. "Prescription Deaths Bring Call for Checks," Washington Post, section A, page 1. July 3, 2000.

In its May 2000 press release, RxHealthValue issued a recommendation "that the FDA require improved post-marketing surveillance of prescription drugs by manufacturers...to monitor adverse drug reactions." The group believes that this will reduce, and where possible, eliminate exposure of patients to harmful drugs due to unanticipated effects or polypharmacy.

In sum, the alarm intensifies as employers realize that although prescription drugs are their most pressing expense in healthcare, they face a huge information gap in their ability to assess the safety and appropriateness of the prescriptions that their employees are receiving. With no reliable information to equip them, employers are hard-pressed to build the business case for their company's interest in and demand for safe and high quality medication delivery.

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What Do We Know About Ambulatory Medication Delivery Processes?

To initially identify the current medication delivery processes in ambulatory settings, and to assess employers' data and information needs around safety and quality in this regard, WBGH convened a small group of its members for a one-day forum on July 26, 2000. We invited a PBM representative to talk with the group regarding the current safeguards and capacities of the PBM industry for monitoring ambulatory medication safety issues, and to describe any internal quality improvement processes. The employers then discussed their concerns and information needs, and explored possible next steps that they could take to foster accountability, and to demand more rigorous quality improvement systems and more appropriate medication delivery.

Based on the presentation by the PBM, the group identified various components, or stages, common to ambulatory medication delivery processes. These include:

  1. Prescription Selection ("point of care").
    • Involves prescribing physician/practitioner and patient/family.
    • Appropriate selection is contingent on accurate clinical assessment and the quality and completeness of available drug information.
  2. Prescription Administration and Review.
    • Involves pharmacy benefit manager.
    • Administration and review processes may include drug utilization reviews (DURs), utilization profiling and disease management programs.
    • If a prescription requires clarification, the prescribing practitioner is contacted. Clarifications often result from unclear directions, missing administrative data, unclear dosage, absence of a signature, order for a discontinued medication, or if the prescription appears altered.
  3. Prescription Dispensing ("point of service").
    • Involves pharmacist, pharmacy technicians; if facility-based, other clinical and patient care staff.
    • Review processes and clarifications also occur at this stage.
    • Ambulatory settings (e.g., non-inpatient) include retail pharmacies, home-based care and post-acute (or sub-acute) facility-based care, such as a skilled nursing facility. Increasingly, individuals receive their prescribed medications through a mail-order prescription drug (MOPD) program.
  4. Prescription Delivery and Consumption.
    • Involves consumer and family, and professionals who dispense.
    • Basic medication information is given to consumer at purchase.
    • Appropriate consumption is contingent on the quality, clarity and completeness of available medication information to the consumer and family, as well as realization of behavioral and lifestyle habits that optimize the pharmaceutical's effectiveness.

The forum participants also questioned where in these processes are the high-risk areas for medication errors to occur? What interventions for improvement would be most effective? And at what point(s) in the process should they occur?

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Employer Questions for AHRQ Research

WBGH intended this testimony to communicate the critical information that employers lack to assess safety and quality in ambulatory medication delivery processes. WBGH and its members are moving forward in identifying the best ways to manage today's challenges today. Our emerging employer/PBM project is one example, to better identify available data that can inform our current decisions.

However, WBGH and its employer members are looking to AHRQ to develop and accomplish a research agenda for nation-wide, systemic improvements in the safety and quality of ambulatory medication delivery processes. The following four concerns summarize for AHRQ our research questions on this issue.

The Business Case: What Is It?

  • Is there a business case for employers to address medication errors in ambulatory settings? If so, what are the most compelling components?
  • What are the medication errors in the various ambulatory settings today? How prevalent are they?
  • What morbidities and disabilities ensue from these errors and adverse drug reactions and events?
  • How does each error, morbidity or disability
    • reduce health status and functioning?
    • increase healthcare and pharmacy utilization?
    • increase time lost from work?
    • Increase disability management costs?
    • lower productivity?
  • What is the total cost to employers from the effects of these errors, morbidities and disabilities?

Accountability for Safe, Appropriate and Cost-effective Medication Delivery

  • What are the indicators of safety and quality in an ambulatory medication delivery process?
  • What set of indicators that best reflect safety and quality can be measured most cost-effectively?
  • Is there a common set of indicators across products and markets?
  • Are PBMs (and other organizations that perform pharmacy benefit management) accountable for achieving excellent performance against these indicators? Who else might be accountable, and for what?
  • How should these accountabilities be coordinated with other existing accountabilities in the U.S. healthcare delivery system?

What Will Work?

  • Given the various current stages and activities of various ambulatory medication delivery processes:
    • Where are the high-risk points for errors to occur?
    • What interventions will be effective and cost-effective?
    • At what points in the process should these interventions occur?

What Can Employers Do?

  • What are the most effective roles for employers to encourage safe and appropriate medication delivery in ambulatory settings?
  • In our role as healthcare purchaser, how can we best employ the results of AHRQ's research in this area to foster safe and quality medication delivery to our employees?
  • Large employers remain a primary source of healthcare information for America's workers. In our daily interactions with our employees, dependents and retirees, how can we more effectively enable these individuals to fulfil their role in managing and protecting their own health?
  • What employer-based demonstration projects would provide learnings and results that would be of use to further AHRQ's research and dissemination efforts?
    • Testing new purchasing approaches to fostering safety, quality and accountability.
    • Testing innovative tools and processes in employer-employee communications to support employees in their healthcare decision making and self-care.

Current as of September 2000


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