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Performance Budget Submission for Congressional Justification

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The mission of the Agency for Health Care Policy and Research (AHCPR) is to generate and disseminate information that improves the delivery of health care. This mission is unique. AHCPR's research goals are to determine what works best in clinical practice; improve the cost-effective use of health care resources; help consumers make more informed choices; and measure and improve the quality of care. These goals were developed to explicitly address the major changes affecting health care and the role of government.

Today, rapid changes in the health care system are dramatically altering the services available to both publicly and privately insured patients. Managed care is restructuring delivery to rely more heavily on primary care services and providers with largely unknown impact on cost and quality. The increasing complexity of the choices facing patients, physicians, health plans, and purchasers has resulted in an explosion in the need for the knowledge, measures, and tools of health services research. Patients, providers, purchasers, and plans that make decisions about health care services in an increasingly market-sensitive health care system require information about their options to improve health outcomes and effectiveness.

In addition to informing decisionmakers about the effectiveness, outcomes, and quality of clinical services, health services research also informs decisionmakers about the impact of changes in the organization and financing of health care. This is particularly relevant today, when competition is altering the nature and content of primary care services. Thus, the science base developed by AHCPR serves as the key navigational tool for decisions at each of these levels of decisionmaking about health care.

The fiscal year 1999 request totals $171,435,000, an increase of $25,000,000 over the fiscal year 1998 appropriation. In budget authority, the fiscal year 1999 request totals $100,788,000, an increase of $10,559,000 over the fiscal year 1998 appropriation. An additional $70,647,000 is requested in one-percent evaluation funds.

  • Budget Authority ............................. $100,788,000
  • One-percent Evaluation Funds.................. $ 70,647,000
  • Total, Program Level.......................... $171,435,000

For background information, select Appropriation History Table.

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Major Programs

The fiscal year 1999 request supports the established goals of the Department of Health and Human Services (HHS), principally Goal 4: Improving Quality, and Goal 6: Strengthening the Science Base. Specifically, AHCPR's research is designed to focus on four areas:

  • Improving clinical practice. Clinicians, patients and health care institutions need information about what works, for whom, when, and at what cost.
  • Improving health care systems. Medical practices, hospitals and other institutions, health networks, and plans need information to improve the health care system's capacity to deliver quality care.
  • Tracking the Nation's progress. Policymakers at all levels of government as well as private-sector policymakers need more information to monitor and evaluate the impact of system changes on access, cost, and use of health care.
  • Improving activities that support all areas of research. These include dissemination; cost effectiveness analysis; priority populations including minority and ethnic groups, women, children, and the elderly; and health services research training.

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Health Costs, Quality, and Outcomes (HCQO)

All four areas of research are targeted through our budget activity research on Health Costs, Quality, and Outcomes (HCQO). This is a new budget activity; the fiscal year 1999 request proposes to change activity structure and activity titles to reflect the integration that has occurred in AHCPR's research due to enormous changes in the health care market that place a growing emphasis on quality in the health care system.

Current Budget ActivityProposed Budget Activity
Research on Health Care Systems Cost and access (HCSCA) Research on Health Costs, Quality, and Outcomes (HCQO)
Research on Health Care Outcomes and Quality (HCOQ) Included in HCQO
Health Insurance and Expenditure Surveys (HIES) Medical Expenditure Panel Survey (MEPS)
Program Support Program Support

Research on Health Costs, Quality, and Outcomes (HCQO) funds research and development of tools to improve the functioning of the health care system. Whether at the level of an individual patient and clinician confronting discrete care choices, a medical director of a managed care plan caring for a defined population, a State official addressing the health needs of entire communities, or public and private purchasers seeking value for their health care dollar, health services research answers the enduring central questions: What works? Under what circumstances? For which conditions? At what cost?

For details from the justification, select Research on Health Costs, Quality, and Outcomes (25 KB).

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Medical Expenditure Panel Survey (MEPS)

AHCPR's Medical Expenditure Panel Survey (MEPS) provides public and private-sector decisionmakers with the ability to obtain timely national estimates of health care use and expenditures, private and public health insurance coverage, and the availability, costs, and scope of private health insurance benefits among the U.S. population. Using the information from MEPS, AHCPR provides analysis of changes in behavior as a result of market forces or policy changes on health care use, expenditures, and insurance coverage; develops cost/savings estimates of proposed changes in policy; and identifies the impact of changes in policy for key sectors of the industry (e.g., primary care)and important subgroups of the population (i.e., who benefits and who pays more).

For details on MEPS from the justification, select Medical Expenditure Panel Survey (23 KB).

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Program Support

Program Support provides support for the overall direction and management of the AHCPR. This includes the formulation of policies and program objectives; program planning and evaluation; grants and contracts management; resource management; and administrative management and services activities.

Select for details about Program Support (3 KB).

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Fiscal Year 1999 Request

The fiscal year 1999 request includes funding for commitments and provides for new extramural research in areas such as outcomes and effectiveness research; measuring quality; research on health care markets, organization, and delivery; evidence-based practice research; pharmaceutical research; and health services research training. The request also includes continued funding for the Medical Expenditure Panel Survey (MEPS) at $27,800,000 (a reduction of $8,500,000 from the fiscal year 1998 level) to be used for new and enhanced research on minority health, women's health, and cost effectiveness analysis.

The increase of $25,000,000 over the fiscal year 1998 appropriation will support:

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Improving Health Care Quality

The Government plays a number of key roles in improving health care quality. As the major purchaser of health care services, the Government has a responsibility to make effective use of its purchasing power to ensure that the individuals it serves receive quality health care services at a reasonable price. As a leading provider of health care services, the Government has the responsibility to ensure that its programs continuously assess and improve the quality of care that they provide. As the leading supporter of health research, the Government has the responsibility to provide the objective scientific information that Americans need to make more informed health care choices, to determine the outcomes and effectiveness of health services, to develop and validate measures of quality, and to determine effective ways to improve the quality of health care.

The Secretarial Quality Initiative will:

  • Facilitate Consumers' Use of Information on Quality. Consumers seldom have the information they need to make informed decisions about health plans, providers, and treatments. In a market-driven health care system, informed decisions will lead to better quality care. This initiative will help determine the outcomes and effectiveness of health care services and enable consumers to understand and use quality information effectively.
  • Strengthen Value-Based Purchasing by the Department. This initiative will use the Department's power as a major health care purchaser to ensure high quality care through prudent, value-based purchasing decisions. The Department will use key elements in purchasing, such as payment criteria, contract specifications, performance measures to assess health care quality, and standards for access to culturally competent providers and adequate provider networks. This initiative will also set a framework for other purchasers of care to be value based, to focus on performance, and to emphasize quality.
  • Improve the Quality of Health Care Services Delivered Directly by HHS Programs. The Department provides direct care through many programs, each of which has its own quality improvement activities. This initiative will identify quality improvement strategies that work and promote their adoption across these programs.
  • Expand Research that Improves Quality. The Department has a substantial portfolio of research on quality of care, but translating that knowledge base into concrete improvements in health care is still a challenge. This initiative will support research to measure quality of care, particularly those elements of quality that are important to the public, to use health outcomes to assess care, and to develop and determine which quality improvement methods work, and in which settings. It will also support research to understand how to redesign the tasks of delivering care, to eliminate unnecessary steps and minimize the chances for error.
  • Measure National Health Care Quality. Little objective information currently exists to determine what is happening to the overall quality of health care in America. Under this initiative the Department will build upon existing data reporting systems to provide an ongoing picture of the state of health care quality, an early warning system for quality problems, and opportunities for improvement.

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Improving Outcomes for the Elderly and Chronically Ill

The growing size of the elderly population presents a demographic shift of monumental proportions that will have a dramatic impact on the cost and organization of health care. The health needs of the elderly are largely driven by the occurrence of chronic illness and disability; hence, health services research for this important population will be focused on the cost, quality, and outcomes of care for chronic illness and disability. At the same time, others remain active and in the workforce with the expectation that their chronic illness will be adequately managed by the health care system. The growing demands being placed on long-term and home-care facilities have also raised questions about the adequacy, cost, and quality of these services.

Chronic disease is the main cause of disability in this country, the number one reason that people use health services, and accounts for 70 percent of health care resources. Yet the health care system is arranged largely for acute care. There is growing evidence that this structure is neither efficient nor particularly effective at meeting the needs of persons with chronic and disabling conditions and is not cost-effective. The challenge here is to determine what works best in providing high-quality, cost-effective care, whether in the acute, ambulatory setting, long-term care, or home-based settings.

This initiative will:

  • Develop a "toolbox" of well-defined and validated measurement instruments, including a core set of outcomes measures to address the top conditions paid for by Medicare, that have been specifically tested for use in older individuals in different health care settings, including managed care and fee for services.
  • Examine how various system characteristics—including how physicians are compensated, which services are "carved-out" and provided separately, and the degree of clinical integration—affect the health outcomes for the elderly and chronically ill including studies to identify the most cost-effective solutions for both the Medicare and Medicaid populations.
  • Include a specific focus on the health outcomes and needs of racial and ethnic minorities and women, who represent a large and growing proportion of this population.

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Clinical Preventive Services

There is great interest among providers and patients in the delivery of the full range of appropriate preventive care—screening tests for the early detection of disease, advice to help people change their risky health-related behaviors, and immunizations to prevent infections. These interventions have enormous potential to improve the health of the American people, but without careful assessment of what works and what doesn't, costs could be astronomical. This initiative will support two-to-four major new assessments of preventive services and updates of priority topics, providing targeted, timely information to help providers and patients make appropriate decisions on preventive services.

AHCPR also will sponsor the "Put Prevention into Practice" initiative, which creates and disseminates tools for providers, health systems, and patients to improve delivery and receipt of these preventive care recommendations.

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Centers for Education and Research Therapeutics (CERTs)

The recently-passed Food and Drug Administration Modernization and Accountability Act of 1997 includes new responsibilities for AHCPR. A level of $1,000,000 will allow AHCPR to make grants to support the establishment and operation of two Centers for Education and Research Therapeutics (CERTs). The CERTs will increase the awareness of new uses and risks of medical products; provide information to health care participants to help them use new products most effectively; improve the appropriate use of medical products by health professionals; and prevent adverse effects of medical products and the consequences of these effects.

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Improving the Quality of Children's Health

With the passage of the State Child Health Insurance Program (SCHIP) as part of the Balanced Budget Act of 1997, the Nation is once again focused on health care for children and adolescents, especially those in low-income families. The passage of SCHIP provides a landmark opportunity to develop and apply tools to measure and improve the quality of care for children in this country. This initiative will support:

  • Applied research and demonstrations to develop a toolbox of measures, instruments, and proven strategies to improve quality and outcomes of care.
  • Outcomes research on the most important challenges in children's health.
  • Research and evaluations on the impact of various State and local approaches to implementing the SCHIP legislation to identify evidence-based practices.
  • Dissemination of findings and technical assistance to states, providers, and communities about what works in improving child health.

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Medical Expenditure Panel Survey (MEPS)

MEPS funding totaling $27,800,000 is included in the fiscal year 1999 request. No other surveys provide the foundation for estimating the impact of changes on different economic groups or special populations of interest, such as the poor, elderly, veterans, the uninsured, or racial/ethnic groups. The data from MEPS will help reach the objective of assuring the long-term solvency and integrity of Medicare by providing information for analysis on financing implications of proposed changes to Medicare.

In fiscal year 1999, data collection will be ongoing for the MEPS Household Survey, the MEPS Medical Provider Survey, and the MEPS Insurance Component (which consists of the MEPS Health Insurance Plans Survey and a national employer health insurance survey). All of the MEPS components will be heavily engaged in survey-related activities directed to the following tasks: data editing, imputation, data preparation and data processing, development of estimation weights and variance estimation capabilities for the component surveys, preparation of public use tapes, and development of analytical and methodological reports.

Select MEPS for details from the justification.

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Current as of February 1998


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