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Performance Budget Submission for Congressional Justification

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Fiscal Year 2002 Budget Policy, HCQO

The Fiscal Year 2002 Request provides an increase of +$28,699,000 for the Research on Health Costs, Quality and Outcomes budget activity. The priorities are:

1. Research and Training Grants: + $16,063,000
2. The National Quality Report: + $2,000,000 (also see MEPS)
3. Patient Safety Data Development: + $3,000,000
4. Information Technology: + $3,000,000
5. The National Disparities Report: + $1,000,000 (also see MEPS)
6. Research Management: + $3,636,000

Priority 1—Research and Training Grants + $16,063,000

The health services research (HSR) sponsored by AHRQ is different from but complementary to the type of research performed in laboratories with test tubes and centrifuges. The data gathered for AHRQ-funded HSR comes from the people receiving the care and the clinicians and systems providing the care:

  • From employees enrolled in health plans, in order to measure and compare satisfaction.
  • From hospital records provided by States working together to obtain detailed information about differences in the health care their citizens receive.
  • From clinicians poring over reams of research articles to synthesize for the medical community how they can apply that knowledge to make their patients better more quickly, with the most effective and cost-effective care.

Health services research completes the work begun in the lab. It strives to answer the question: Does this work in daily practice with real people whose characteristics and needs are so different and who live in so many different areas and conditions? This is the role of AHRQ and the research it funds.

The rapid changes in health care delivery, changing demographics and the proliferation of new health care services make the need for high-quality health services research more critical than ever. The future of the field and the vision for health services research come from the scientific community—investigators who are on the front lines of the clinical, health system, and health policy problems to be resolved through health services research.

The nurturing of novel research approaches, concepts, and directions is essential for progress within the health services research field. There is no better way to increase the breadth and productivity of research approaches than to actively encourage and support peer-reviewed, investigator-initiated research. This strategy has been fundamental to the success of the Nation's biomedical enterprise through the National Institutes of Health, and is just as important in research on health care quality, outcomes, cost, use, and access.

Fiscal Year 2002 Request. Strong support for the funding and dissemination of health services research is essential if our Nation is going to continue improvement in health care. Similar to the essential investments in basic science at the NIH that reap life-saving benefits, investing in the basic science of health services research will pay off in important gains. The Fiscal Year 2002 request provides an increase of $16,063,000 for research and training grants. In the last several years, AHRQ's new research has been concentrated in targeted areas such as patient safety, disparities in care, and translating research into practice.

In order to balance the research portfolio, AHRQ is allocating a significant portion of the budget increase plus funds available from expiring grants to new research project grants . In Fiscal Year 2002, AHRQ will use $40,306,000 to support 210 new research and training grants, a decrease of $23,394,000 from the Fiscal Year 2001 level.

In addition to reviewing and funding grant applications which reflect the basic research ideas of those in the field, AHRQ is interested in reviewing and funding applications which address three broad areas of health services research:

  1. Centering health care around the patient.
  2. Structuring, financing, and managing high-quality, efficient care delivery systems.
  3. Informing those who make health care decisions—from patients to policymakers—on how to implement the lessons learned from research.

These criteria are consistent and complement the Institute of Medicine's March, 2001, report entitled Crossing the Quality Chasm, which provides a sort of guide to improving the quality of health care services in America.

It is widely acknowledged that patients, more educated than ever about their health care, should be as active as they wish in decisionmaking regarding their care. For this to occur, both technical care and interpersonal interactions must be centered around the needs and preferences of individual patients—and research has shown that this approach yields better outcomes. As a result, health services research should be able to do more to identify and disseminate widely information about the factors that create an ideal environment for patient-centered care. As the recent IOM report stated, we must "modify the care to respond to the person, not the person to the care."

The question for AHRQ-funded research in this area could be: Which of those possible modifications would be best, and how could they be implemented most effectively? For example, the report concluded that the health care system is not designed to provide the best possible care for individuals with one or more chronic illnesses. While prior research funded by AHRQ cited in this report, including programs to engage patients in co-managing their illnesses with their providers or share in making important clinical decisions, have identified promising possibilities, current knowledge regarding specific incentives that would facilitate wide scale implementation of these approaches is extremely limited.

Advances in information technology, in particular, offer immense opportunities to engage patients as co-producers of health as never before, but we lack basic information about how to present relevant evidence to patients in a way that is effective and integrated with all aspects of their care.

Health care in the United States is provided within large systems, with complex funding streams. To improve the quality and efficiency of that care, providers, purchasers and policymakers need knowledge about how these systems operate and how different financial and organizational arrangements affect health care. While the United States has an excellent health care system in many ways, it also has widespread quality problems, including overuse, misuse, and underuse, which in turn exacerbates health care affordability problems and generates access problems. People with chronic health conditions, low incomes, and lack of health insurance are particularly likely to experience such problems.

The recent IOM report identified a "chasm" between the health care we have and the health care we could have. It also identified that this gap to a large extent springs from two overarching system features:

  • The way we pay for care.
  • The way we structure the organizations that provide it.

To improve quality, providers, purchasers and policymakers need evidence on how different payment methods and organizational designs affect outcomes. Research that provides the rigorous, objective evidence required to understand our current system, to design and evaluate new systems of care and to identify improved methods that better align payment policies with quality improvement goals constitutes the second broad category for AHRQ's Fiscal Year 2002 research grant portfolio. The most important issues to be addressed by such research could include:

  1. How do different payment methodologies and financial incentives affect quality, access and cost of care?
  2. How can payment arrangements be better designed to provide appropriate incentives to both patients and providers and to enhance patient-centered knowledge of and compliance with treatment regimens?
  3. How does consumer decisionmaking influence payment policies?
  4. How do different patterns and levels of market competition affect the quality and cost of care? Of particular interest would be the impact of employer and coalition efforts on the quality and cost-effectiveness of care in the marketplace, the impact of State efforts to monitor and improve access and quality, and the impact of public and private payment changes on the health care safety net.
  5. What organizational structures and processes are most likely to sustain high-quality, efficient health care?

While research in the previous two categories could lead to new knowledge and tools, important questions about how to translate research findings into useful forms for patients and consumers, clinicians and health care delivery systems and policy makers is essential. While many strategies have been developed to translate research into practice, developing new methodologies and evaluating which existing methodologies have the most meaningful impact is a priority for all of AHRQ's research. By translating research into practice, this part of AHRQ's investigator-initiated portfolio could complete the research pipeline and perhaps yield more immediate improvements in Americans' health care. Recent and ongoing research is providing important insights regarding translation of evidence-based programs into practice, most often for individuals with specific clinical conditions (e.g., children with asthma, diabetes), and efforts to assess quality of care now provide both a stimulus for change and benchmarks for improvement.

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Priority 2—The National Healthcare Quality Report + $2,000,000

The Agency's reauthorization calls for the development of a national report on the quality of health care in the United States. In developing this report, the Agency is called on by the legislation to expand the Medical Expenditure Panel Survey (MEPS) to collect information on quality. The Agency also is charged with assuring coordination with the private sector in developing the report. In its report on AHRQ's reauthorization, the Senate Health, Education, Labor, and Pensions Committee provided guidance:

"Beginning in Fiscal Year 2003, the Secretary, acting through the Director, is to submit an annual report on national trends in health care quality, drawing upon the enhanced MEPS survey and other available data. The Committee expects the Agency to use a variety of measures to develop this annual picture of how health care quality is faring. The legislation directs the Agency to take into account any outcomes measurements generally collected by private sector accreditation organizations to assure that the reported information is not inconsistent with what is being collected through other programs. The Committee hopes that this annual report will provide an opportunity for quality performance comparisons."

The reauthorization directs the Agency, beginning in Fiscal Year 2001, to enhance MEPS to provide information on the treatment of common clinical conditions over time for a nationally representative portion of the population. These enhancements have begun and will begin to yield data in late Fiscal Year 2002 and early Fiscal Year 2003, just in time for this report.

Other Agency databases and projects also will contribute to the report. The Healthcare Cost and Utilization Project (HCUP), which currently brings together the hospital inpatient discharge data from 31 States (with another 4 States being added in Fiscal Year 2001) and ambulatory surgery data from 15 States (with two more States being added in Fiscal Year 2001), will provide an important adjunct to MEPS. To increase representativeness and expand capacity for State-level research, the Fiscal Year 2002 request provides for an expansion in the number of States providing inpatient data as well as an increase in the number of States providing ambulatory surgery and emergency department data.

Finally, a third AHRQ project will contribute to this data infrastructure. Results from the Consumer Assessment of Health Plans Survey (CAHPS®) were available to over 90 million Americans in 2000. The Agency funded the creation of a National CAHPS® Benchmarking Database (NCBD) to collect and make available the results of this survey. NCBD contains data from 24 State Medicaid programs and 10 other State initiatives. Data are also available on commercial health plans in 41 States, the District of Columbia, Puerto Rico, and Guam. These include data on health plans offered by the U.S. Office of Personnel Management, and HCFA has included data for all of the Medicare managed care health plans. In all, data are available on over 900 health plans.

In Fiscal Year 2002 the Agency will expand the collection of data using CAHPS to move toward nationally representative estimates of the experiences of care in America, as perceived by the users of care, on such dimensions as satisfaction, whether they were treated with respect, and whether the services provided were timely and appropriate. CAHPS® questionnaire items are also being included in the Medical Expenditure Panel Survey. In addition, the Agency has begun an effort to develop additional CAHPS® modules to specifically address new populations, such as the disabled, and promote consumer assessment at the group practice level and for nursing homes.

Fiscal Year 2002 Request. The Fiscal Year 2002 request includes $2 million over the $2.295 million in Fiscal Year 2001 under AHRQ's Research on Health Care Costs, Quality and Outcomes for continued internal and external development of the NQR. This investment will support the acquisition of relevant non-federal data for the report, data processing and analysis for the first NQR, assessment and development of quality measures for the ongoing improvement of the report, and the design of NQR reporting products. In addition, these funds will be applied to enhancements of HCUP and CAHPS® data-collection efforts at the Agency. These data-collection enhancements foster the development of information on health care disparities, chronic conditions in subpopulations (e.g., children), medical errors, the quality of emergency department services, and the receipt of needed services.

The extensive data development needed for this project requires new ways of partnering with public and private organizations, and new ways of collecting and disseminating data and tools that can be used in tracking care for the public at large as well as for the subgroups particularly at risk of lower quality care. Incorporating databases from the private sector (such as those emerging from the Joint Commission on Accreditation of Healthcare Organizations [JCAHO] on core measures of hospital performance and the National Committee for Quality Assurance [NCQA's] Health Plan Employer Data and Information Set [HEDIS]) into the National Healthcare Quality Report will provide a more robust and in-depth picture of American health care delivery.

Integration of the private-sector data, which will facilitate the ability to take a finer cut at the quality picture and provide State and system-level policymakers the ability to "drill down" from the national picture to their local health care scene, requires an investment to developing the methodology which makes such integration possible. Additional resources will be applied to the acquisition of suitable data sources from the private sector.

An additional $2 million is provided in the MEPS activity for support related to the National Quality Report. Select for more detail.

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Priority 3—Patient Safety Data Development + $3,000,000

The November 1999 report from the Institute of Medicine (IOM), To Err is Human: Building a Safer Health System, estimated that as many as 98,000 Americans die each year as a result of preventable medical errors. The cost associated with these errors in lost income, disability, and health care costs is as much as $29 billion annually.

Studies on medical errors, many of them funded by AHRQ's predecessor, the Agency for Health Care Policy and Research, have shown that adverse events occur to approximately 3-4 percent of patients (Brennan, 1991; Thomas, 1999). A 1995 study estimated that problems related to the use of pharmaceutical drugs account for nearly 10 percent of all hospital admissions and significantly contribute to increased morbidity and mortality in the United States (Bates, 1995). The report concluded that most of these errors are the result of systemic problems rather than poor performance by individual providers.

Research Finding. More than 6 of every 100 patients admitted to the hospital suffer a drug-related injury. Sicker patients with longer hospital stays are more likely than other patients to experience problems from medications, and only a few patient factors (e.g., age, multiple drug therapy, and impaired renal or liver function) increased the risk of suffering from an adverse drug event. This suggests that improving systems by which hospital drugs are ordered, dispensed, and administered rather than targeting individuals who are likely to suffer from a drug-related injury is more apt to succeed in battling this problem.

The IOM report galvanized national action to address the patient safety challenge, and the Agency received $50 million in Fiscal Year 2001 to develop an evidence base for the Agency's approach to reducing medical errors and enhancing patient safety.

The Agency has begun addressing the patient safety challenge through a number of mechanisms including new fundamental research on patient safety, determining the best approaches to patient safety reporting, training patient safety researchers, developing patient safety tools, and disseminating best practices. Fundamental research on patient safety is being initiated through the Fiscal Year 2001 funding of Patient Safety Centers of Excellence. Selected centers will develop a focus on information technology and reporting issues. In addition, centers will work on tool development and provide training opportunities for researchers.

Half of the Fiscal Year 2001 funding is being applied to evaluations and enhancements of existing patient safety reporting systems on the State, organizational, and network levels. This effort will identify candidate systems for the creation of pooled de-identified data that could contribute to a national patient safety database(s). The Agency also provided 1 year of core funding for the development of new patient safety research centers that would create teams of researchers and users.

Fiscal Year 2002 Request. In Fiscal Year 2001, the Agency initiated work with other Federal partners, including HCFA, FDA, and CDC, to further develop a de-identified national patient safety database built off of existing reporting systems. In Fiscal Year 2002, with a request of $3 million, AHRQ plans to continue this effort and to build a unique and powerful resource for lowering reporter burden through the creation of a single reporting interface and for promoting patient safety learning. This clearinghouse of patient safety data will provide a valuable tool for researchers and will be constructed based upon the Agency's model of aggregating State data through its HCUP program. It will also supply important information and new measures for the Agency's National Healthcare Quality Report, which will feature a section on patient safety. In addition, the clearinghouse will provide a source for an ongoing series of quick-turnaround action-oriented newsletters for wide dissemination to the provider community, based on the Aviation Safety Reporting System's "Callback" model.

In addition to the $3 million increase in Fiscal Year 2002, the Agency received $50 million in Fiscal Year 2001 to:

  • Develop an integrated set of activities to design and test best practices for reducing medical errors in multiple settings of care.
  • Develop the science base to inform these efforts, as well as to improve provider training in the reduction of errors.
  • Capitalize on the advances in information technology to translate proven effective strategies into widespread practice.
  • Build the capacity to further reduce errors in the future.

These activities will be ongoing in Fiscal Year 2002 in addition to the work supported by the Fiscal Year 2002 increase of $3,000,000.

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Priority 4—Information Technology + $3,000,000

Fiscal Year 2002 Request for Agency-Related IT Expenses. AHRQ requests $3 million to respond to three new laws and directives focusing on information technology (IT) and security issues:

Workforce Investment Act of 1998. The Workforce Investment Act of 1998 requires Federal agencies to take appropriate steps to ensure that the electronic and information technologies used in Federal programs are accessible to individuals with disabilities to the same extent as those without disabilities. This act mandates strict requirements for any electronic and information technology developed, maintained, procured, or used by Federal agencies. Electronic and information technology is expansively defined. It includes computers (e.g., hardware, software, and accessible data like Web pages), facsimile machines, copiers, telephones, and other equipment used for transmitting, receiving, using, or storing information.

To comply with this Act, AHRQ requests $500,000 to complete the following:

  • Analyze all Agency IT equipment, software, programs, and communications services for compliance with Section 508 of the Rehabilitation Act of 1973.
  • Replace or make compliant IT assets identified as noncompliant with Section 508. For example, the compliance mandate will impact to varying degrees on Agency services such as hardware, software, Intranet, Internet, Extranet, telephones, and other telecommunication services.

Government Paperwork Elimination Act (GPEA). GPEA, signed into law on October 21, 1998, seeks to "preclude agencies or courts from systematically treating electronic documents and signatures less favorably than their paper counterparts," so that citizens can interact with the Federal government electronically. GPEA requires Federal agencies, by October 21, 2003, to provide individuals or entities that deal with agencies the option to submit information or to transact with the Agency electronically, and to maintain records electronically, when practicable. To comply with the 2003 deadline, AHRQ requests $1,100,000 to complete the following:

  • Identify all Agency documents and activities subject to GPEA.
  • Develop Agency GPEA policies.
  • Identify and move critical Agency records from paper format to electronic format.
  • Assess electronic signature and authentication technologies available for use and establish an appropriate implementation scheme.
  • Implement and assess pilot-test program for electronic signature and authentication technology.
  • Perform ongoing activities for GPEA program implementation.

Agency IT Disaster Recovery. AHRQ's IT disaster-recovery program is intended to provide back-up computing facilities for the Executive Office Center computer room in case of major damage or sustained outages.

AHRQ requests $1,400,000 to focus on the following:

  • Develop an IT infrastructure back-up plan.
  • Establish infrastructure specifications and needs.
  • Prepare off-site location for disaster-recovery hardware and software.
  • Procure, install, test, place into service, and maintain disaster back-up hardware, software and telecommunications services.

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Priority 5—The National Healthcare Disparities Report + $1 million

Disparities in health have been documented repeatedly over the last few decades across a broad range of medical conditions and for a wide range of ethnic and racial groups. These differences have been noted in health outcomes such as quality of life and mortality, processes of care such as utilization rates of certain services, quality and appropriateness of care, and the prevalence of certain conditions or diseases. The documentation of these widespread disparities has been an important contribution of outcomes and effectiveness research and health services research.

Nevertheless, these insights have infrequently led to significant improvements in eliminating racial and ethnic health disparities—in part, because the causes of and contributing factors to these differences are inadequately understood.

Disparities persist despite improvements in health for the Nation as a whole. For example, between 1987 and 1995, mortality from ischemic heart disease decreased 20 percent for the overall population but decreased only 13 percent for blacks. As minority populations continue to increase in size and proportion, the health of these groups will increasingly affect the health of the entire Nation. Also, lessons learned from understanding and eliminating disparities and improving the health care of underserved racial and ethnic groups, as well as those of a disadvantaged socioeconomic status, will likely be applicable to the United States population as a whole.

Research Finding. Studies conducted between 1980 and 1998 on access to cancer care show that patients without private insurance received surgery for non-small-cell lung carcinoma less often than privately insured patients.

Economically and socially disadvantaged patients had a lower chance of survival for breast cancer. Minority patients were more likely to be diagnosed at advanced stages of the disease than whites, receive suboptimal cancer treatment, and have lower survival rates.

Physician barriers included screening biases, lack of culturally sensitive resources, time constraints, and conflicting professional recommendations. Medical system barriers included financial disincentives to provide cancer care, inadequate tracking mechanisms, and limited regional resources.

The Agency's recent reauthorization assigned it the task of preparing and publishing an annual report on prevailing disparities in health care delivery, comparing access, use and quality of health care services as they relate to racial/ethic and socioeconomic factors in priority populations. This effort will be implemented in partnership with other Agencies to ensure synergy with existing efforts, including the Agency's National Healthcare Quality Report, Healthy People 2010, and HHS survey integration priorities. This report will provide answers on a national basis to the critical questions about disparities in health care:

  • Are death rates for some inpatient procedures higher for certain racial/ethnic groups than others?
  • Are African-Americans or Hispanics less likely to receive necessary services?
  • Are people without insurance more likely to receive surgery in hospitals with high error rates?

Together, the complementary investments in the National Quality Report and the National Disparities Report will permit the development of a more complete picture of health care in America—who has access when and where, and how good that care is once received.

Research Finding. Patients of various ethnic and racial groups have different attitudes toward primary care physicians. Among different Asian ethnic subgroups, Chinese and Filipino patients appeared less likely to be satisfied with their physicians, while Japanese patients were least likely to say they would recommend their doctor. Latino patients rated physicians' accessibility and technical skills less favorably than did white patients. African-American patients gave physicians' use of the latest technology and of psychosocial and lifestyle health promotion a higher rating than did white patients.

These findings may represent actual differences in quality of care or variations in patient perceptions, expectations, and/or questionnaire response styles.

Fiscal Year 2002 Request. The Fiscal Year 2002 request includes $1 million under AHRQ's Research on Health Care Costs, Quality and Outcomes for continued internal and external development of the National Disparities Report (NDR). This investment will support the acquisition of relevant non-federal data for the report, data processing and analysis for the first NDR, assessment and development of quality measures for the on-going improvement of the report, and the design of NDR reporting products.

The extensive data development needed for this project requires new ways of partnering with public and private organizations, and new ways of collecting and disseminating data and tools that can be used in tracking disparities in care for the public at large as well as for the subgroups particularly at risk. Incorporating databases from the private sector into the National Healthcare Disparity Report will provide a more robust and in-depth picture of disparities in American health care delivery. The integration of the private-sector data requires an investment in developing the methodology that makes such integration possible. Additional resources will be applied to the acquisition of suitable data sources from the private sector.

An additional $1 million is provided in the MEPS activity for support related to the National Disparity Report. Select for more detail.

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Priority 6—Research Management Related to HCQO + $3,600,000

In Fiscal Year 2002, AHRQ requests $3.6 million for research management costs. The largest portion of this increase, $2.0 million, is needed for the increase in GSA rental costs. The remaining $1.7 million will provide for current services including annualization of the Fiscal Year 2001 pay raise, the Fiscal Year 2002 pay raise, and inflation.

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Current as of April 2001


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