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Performance Budget Submission for Congressional Justification

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FY 2004: Research on Health Costs, Quality and Outcomes (HCQO)


Goal 1. Supporting Improvements in Health Outcomes
Goal 2. Strengthening Quality Mesurement and Improvement
Goal 3. Identifying Strategies to Improve Access, Foster Appropriate Use, and Reduce Unnecessary Expenditures
Improving the Health of Priority Populations
Training and Dissemination
Funding Summary
Funding History
Rationale for AHRQ's FY 2004 Request


The purpose of the activities funded under the Research on Health Costs, Quality and Outcomes (HCQO) budget line is to support, conduct and disseminate research to improve the outcomes, quality, cost, use and accessibility of health care. Accordingly, the Agency has three main goals:

  • Goal 1: supporting improvements in health outcomes.
  • Goal 2: strengthening quality measurement and improvement.
  • Goal 3: identifying strategies to improve access, foster appropriate use, and reduce unnecessary expenditures.

In addition to these goals, improving the health of priority populations is another focus of HCQO. The commitment to funding new research, translating research into practice and disseminating new knowledge underlies all HCQO activity.


AHRQ has made important strides toward meeting its strategic goals. This report reviews achievements of the Agency's established programs as well as activities initiated under the Agency's FY 2003 budget.

The first section of this report, Supporting Improvements in Health Outcomes, reviews the Agency's progress in the following research areas:

The second section, Strengthening Quality Measurement and Improvement, provides updates on activities in the following areas:

The third section, Identifying Strategies to Improve Access, Foster Appropriate Use, and Reduce Unnecessary Expenditures, reports on AHRQ projects that address critical policy issues as well as develop data and information for policymakers:

The fourth section, Improving the Health of Priority Populations, outlines AHRQ's efforts and findings on the following issues:

The final section, Training and Dissemination, includes a discussion of AHRQ's efforts to maintain and nurture a cadre of well-trained and talented health services researchers and AHRQ's activities to put the knowledge gained through research into the hands of health care providers.

Goal 1: Supporting Improvements in Health Outcomes

Rapidly rising health care costs, questions about effective medical treatments, and the need for efficient delivery of health care services are the reasons why outcomes research has been one of AHRQ's core activities for over a decade. Patient outcomes research provides evidence about the benefits, risks, and results of treatments that take place in "real world" setting so clinicians and patients can make more informed health care choices. Outcomes research answers a number of very fundamental questions about health care services:

  • What works and doesn't work?
  • Is it having the desired effect?
  • Does it provide value for the resources used?

The answers to these questions form a solid foundation for efforts to improve health care quality and patient safety, enhance access to care, and improve the cost-effectiveness of care.

Outcomes research also looks at differences in care from one part of the country to another and from one population group to another. Repeatedly, studies have documented that therapies as commonplace as hysterectomy and hernia repair are performed much more frequently in some regions than in others, even when there is no difference in the rates of disease.

The results of AHRQ-funded outcomes research—such as the effectiveness of given treatments or clinical intervention strategies—and patient health outcomes measures often serve as the evidences and foundations for the development of various quality indicators and other tools, which are increasingly are being integrated into "report cards" that purchasers and consumers can use to assess the quality of care provided in health plans. For public programs such as Medicaid and Medicare, outcomes research provides policymakers with the tools to evaluate, monitor, and improve the delivery of effective health care services in the most efficient manner. By linking the care people get to the outcomes they experience, outcomes research has become the key to developing cost-effective ways to improve the quality of care.

In 2002, AHRQ's outcomes research portfolio included more than 100 projects that:

  • Addressed a wide range of topics.
  • Focused on disparities based on sex.
  • Ethnicity, age, socio-economic status, and geographic location.
  • Encompassed a number of AHRQ's flagship programs such as the Centers for Education and Research on Therapeutics (CERTs), Evidence-based Practice Centers (EPCs), and the U.S. Preventive Services Task Force (USPSTF).

Hightlights of Outcomes Research

Below are examples of findings from recent AHRQ-supported outcomes studies and projects currently underway.

Women's Health. An AHRQ-sponsored study found that among women with mild to moderate pelvic inflammatory disease (PID), rates of pregnancy, recurrent PID, and chronic pelvic pain were no different for inpatient versus outpatient treatment. Inpatient treatment is 10 times as expensive as outpatient treatment.

Prescription Drugs. An AHRQ study published in the New England Journal of Medicine found that a carefully designed and implemented prescription drug reference-pricing policy reduced overall drug expenditures without any obvious adverse clinical outcomes for the beneficiaries. Reference drug pricing programs work on the principle that if several drugs work equally well for a certain condition, the program will fully fund the drug that costs the least. Patients may choose the more expensive drug but the program will only reimburse people for the cost of the lowest cost reference drug(s). This study, which examined data 2 years before and 1 year after implementation of reference-based pricing policy in the province of British Columbia, focused specifically on a large group of elderly Canadian Pharmacare beneficiaries who took drugs to treat hypertension. These findings are relevant to health care systems' and payors' efforts to use pharmaceuticals cost-effectively.

Heart Disease. AHRQ-supported research found that patients who take beta-blockers (drugs to slow the heart rate and reduce contractions of the heart muscle) prior to bypass surgery appear to have improved survival and fewer complications during and after the procedure. Researchers indicate that up to 1,000 lives potentially could be saved each year by giving patients beta-blockers before bypass surgery.

Diabetes. An AHRQ study found that patients with both adult-onset (type 2) diabetes and other chronic conditions can still achieve good blood sugar control if they receive intensive therapy at a specialty diabetes clinic. Therapy included adding or changing oral medications or adding insulin to the treatment regimen.

Hip Fracture. An AHRQ-supported study found that medical staff in hospital, rehabilitation facilities, and nursing homes could improve patient outcomes for the approximately 350,000 hip fractures that occur annually in the United States by focusing efforts on reducing the risk of complications that often leave patients unable to work or lead to death. Currently, 4 of every 10 patients are unable to walk without total assistance by 6 months after the fracture, and one-fourth of patients die within a year. In addition to pain and suffering, hip fracture and its consequences have a large economic impact, with hospital charges alone totaling roughly $6 billion a year.

Lower respiratory infection. Lower respiratory infection (LRI) is one of the most common causes of death and hospitalization among nursing home residents. Although hospitalization can be lifesaving for the sickest patients, for those who are less ill there is considerable risk of incurring avoidable expense and harm from needless hospitalization. AHRQ-sponsored research studied nursing home residents with LRI and developed a strategy to predict which patients are at highest risk of hospitalization and which could be more effectively treated in the nursing home. Their findings demonstrate that up to 52 percent of nursing home residents with lower respiratory infection are at low risk of mortality and may not require hospital admission (i.e., can be safely treated in the nursing home.)

Organ Donation. Prior to the 1980's, kidney transplants from living donors offered the only hope of recovery for end-stage renal disease patients. However, improved surgical techniques, organ matching, rejection treatment, and organ preservation made kidney transplants from cadaver donors possible in the late 1970's. Although organ donor rates have increased the last 10 years, the supply of cadaver donors remains far short of the demand, and transplant centers are returning to living donations. The goal of this AHRQ-sponsored study is to design a model living-donor transplant program based on an evaluation of transplant center and individual barriers as well as facilitators of living donations.

Stroke. Based on AHRQ's research, Medicare's Peer Review Organizations (PROs) have implemented 73 projects in 42 States to increase anti-clotting therapy for Medicare beneficiaries who have suffered from a stroke. The percentage of Medicare patients discharged on this therapy has increased from 58.4 to 71.1 percent.

Patient Centered Care

It is widely acknowledged that patients should be active in decisionmaking regarding their care and research has shown that this approach yields better outcomes. To empower patients as decisionmakers, both technical care and interpersonal interactions must be centered on the needs and preferences of individual patients. As the recent Institute of Medicine (IOM) report, Bridging the Quality Chasm, stated, we must "modify the care to respond to the person, not the person to the care."

In FY 2002, AHRQ requested applications that focus creating an ideal environment for and tools to promote patient-centered care. This program announcement (PA), cosponsored by the National Institute of Mental Health, focuses on design and evaluation of care processes that empower patients, improve patient-provider interaction, help patients and clinicians navigate through complicated health care systems, and improve access, quality, and outcomes. Below are two examples of research grants funded under this program announcement.

  • "Medical Management of Children with Chronic Conditions" is important because little empirical information exists about what (or who) constitutes a medical home, and the extent to which children with chronic conditions actually have medical homes. This study will focus on caring of children with these health conditions. Medicaid claims data will be used to develop a measure of "medical home" and also to study the relationships between demographic factors, disease severity, and health plan features, and the use of medical homes by children with chronic conditions. Specific aims include developing operational definitions that can be used with claims data to identify a child's "medical home." Also, the kinds of providers that serve as medical homes and determine whether certain kinds of health insurance types promote establishment of a medical home will be examined.
  • "Parent-Initiated Prevention Program" is a randomized controlled trial which tests a computer driven, patient-centered expert system to improve the receipt of evidence-based prevention for pediatric patients. The study will assess the effectiveness of a real time Patient Initiated Prevention Program in changing physicians' delivery of preventive care as well as parental prevention behaviors. Study outcomes include parent-physician communication over preventive health care, parental preventive behaviors, and quality of pediatric care."

Centers for Education and Research on Therapeutics (CERTs)

Patients and caregivers should not have to guess which therapies are best or fear treatment mistakes. This is the basis of AHRQ's Centers for Education and Research on Therapeutics (CERTs) program, which conducts research and provides education to advance the optimal use of drugs, medical devices, and biological products such as vaccines. AHRQ was given authority to support the CERTs initiative under the Food and Drug Modernization Act of 1997. Between 1999 and 2000, AHRQ established seven CERTs centers, each of which focuses on therapies used in a particular population or therapeutic area. In FY 2001 AHRQ's support of the seven CERTs was approximately $4.9 million. In FY 2002 support for CERTs is approximately $5.0 million.

What is the focus of each CERTs Center?

  • Duke University: Approved drugs and therapeutic devices in cardiovascular medicine.
  • University of Arizona: Reduction of drug interactions, particularly in women.
  • University of North Carolina: Rational use of therapeutics in pediatric populations.
  • Vanderbilt University: Prescription medication use in the Medicaid managed care population.
  • HMO Research Network: Use of large managed care databases to study prescribing patterns, dosing outcomes, and policy input.
  • University of Pennsylvania: Antibiotic drug resistance, drug use, and intervention studies.
  • University of Alabama: Therapeutics for musculoskeletal disorders.

Although drugs, medical devices, and biological products improve health for thousands of people, side effects, misuse, and overuse of products can seriously impair the health of many others. The facts are:

  • Underuse. Many patients could benefit from a therapy but do not receive it. This may be through lack of information, oversight, or in the mistaken belief that the therapy will do them harm.
  • Drug/treatment interactions. Studies conducted prior to FDA approval may not test medical products in combination with other therapies often used by the same patients.
  • Off-label use. Once approved, drugs and devices often are used for purposes other than those for which they were approved—sometimes these uses are supported by studies, but not always.
  • Unexpected side-effects. Some side effects of medical products emerge only after they have been approved for sale, when large numbers of people begin to use them.

The CERTs program aims to fill these information gaps by answering important questions that have not been addressed and implementing effective educational interventions for caregivers. The program is also a critical complement to FDA's post-marketing studies. Participants in the CERTs—Federal government agencies, academic organizations, managed are organizations, drug and device companies, practitioners, commercial research groups, and consumer groups, among others—are committed to seeking answers together.

Since its inception in September 1999, the CERTs have developed a portfolio of more than 120 completed and ongoing studies, the results of which address important issues to advance the best use of therapies. Following are examples of how the CERTs seek to improve the Nation's health through the best use of medical therapies:

  • Patients with certain types of heart disease are not taking medicines that may save their lives. Aspirin is inexpensive and available over-the-counter and it greatly reduces the risk of heart attack, stroke, and related death in people with coronary artery disease (CAD). Similarly, beta-blockers, have been shown to help people with congestive heart failure (CHF). Data collected by the Duke University CERT showed that 87 percent of cardiac patients were using aspirin. This reflects, in part, the adoption of the recommendations from the AHRQ-sponsored U.S. Preventive Services Task Force. However, data collected by the Duke University CERT also confirmed that 13 percent of people with CAD were not receiving adequate therapy. The people with CAD who were not taking aspirin were almost twice as likely to die within 1 year as those who were taking aspirin. The news was only slightly better for people with CHF who were not taking a beta-blocker; they had 1.5 times the risk of dying compared with people who were taking the medicine. The Duke CERT is now investigating ways to get life saving medicine to people who need it. Programs to overcome barriers and save lives can be designed once more is understood about why people are not taking these medicines.
  • Monitoring anti-HIV drug levels. The effectiveness of drugs for women and children with HIV depends on the way they take the drugs and how their bodies handle the medicine. The University of North Carolina CERT developed a screening test for kids to measure the levels of anti-HIV drugs called protease inhibitors in the bloodstream. The test will determine whether the level of drugs is too high or too low as a result of the way the drug was taken or absorbed. Research on the screening test had an unexpected, important finding: giving anti-HIV drugs with water to babies can speed the passage of the drugs through babies' systems before they have a chance to work. Giving drugs with infant formula greatly improves results. In another case, the test showed high levels of protease inhibitor in a child whose parent had readjusted the dose. Some patients were not getting their drugs at all. In one case, a child's mother was too ill herself to medicate her child, but the problem was only uncovered by the screening test. The test demonstrated that there might be a big difference between what a doctor prescribes and what is at work in the body. Providing this test to HIV-infected individuals can go a long way in ensuring that people are getting the level of drugs they need. The test also may help reduce the incidence of drug-resistant viruses and the cost of caring for patients with HIV.
  • Medicaid populations. Collectively, the CERTs centers have access to more than 20 unique data sources, representing over 50 million people, which they use to conduct population-based studies. Many of these studies have been conducted within Medicaid populations, including drug effects and use, prior authorization for use of nonsteroidal anti-inflammatory drugs (NSAIDS), prevention of falls, reimbursement for community providers of long-term care, and evaluation of a nursing-home dispensing change. In addition, studies are underway to gather information that Medicaid programs can use to make coverage and other policy decisions such as drug utilization review, economic effects of beta-blocker therapy in heart failure, efficacy and toxicity of drugs used in pediatric AIDS, prevalence of type 2 diabetes mellitus in children, drug interactions, fractures from osteoporosis, and other topics. The Vanderbilt CERT, in particular, has a long history of providing technical assistance to the Tennessee Medicaid program under a contract that has been active since 1972.
  • Rethinking antibiotics before dental treatment. Many doctors prescribe antibiotics before dental treatment to reduce the risk of endocarditis (infection of the heart lining and valves). Because conventional wisdom suggests that patients with heart problems are at risk, this preventive measure has been recommended for more than 45 years. The University of Pennsylvania CERT conducted a study to evaluate and quantify the risk of such infection. They found that the incidence of infection remained the same even after the introduction of widespread antibiotic prophylaxis, and that neither dental work in general, nor any individual procedures, was associated with infective endocarditis, with the possible exception of tooth extraction. The study also determined that flossing daily slightly reduced the risk of infection. Efforts are under way to have these findings incorporated into American Heart Association guidelines. These findings will affect an important source of unnecessary antibiotic use.

Select for Figure 1: Use of Drugs to Treat ADHD and Depression in Youth (14 KB).

Long-term Care (LTC)

AHRQ has a long-standing role in supporting and conducting research to improve the quality of long-term care for the elderly, chronically ill and disabled. In FY 2002, AHRQ committed approximately $7 million in grants for long term care projects. A majority of projects were funded under patient safety solicitations.

Findings from many of these studies will be of direct use to HHS and private sector providers as they seek to improve patient safety and quality of care. Some of the studies are described below.

  • A University of Colorado study is investigating how well report cards and other information strategies help consumers make nursing home choices based on quality.
  • A University of Massachusetts Medical Center study is exploring the capacity of a computer-based clinical decision support system to reduce adverse drug events in nursing homes.
  • A new center on patient safety in long term care at Emory University in Atlanta, GA is studying how to prevent falls and pressure ulcers in nursing homes and assisted living facilities.
  • A new center at the University of South Florida is exploring how to prevent falls in the community.
  • Another study is developing quality indicators for comparing and tracking the quality of assisted living facilities.
  • AHRQ's intramural program is conducting studies of nursing home acquired pneumonia, hospitalization of nursing home residents with pneumonia, inappropriate drug use, falls and fractures, incontinence, changing nursing home staffing, and changing home care expenditures.
  • Other studies are focusing on the non-elderly disabled and include studies of factors affecting functional change across all settings of care.
  • A research study in collaboration with CMS found that chronic conditions such as arthritis and urinary incontinence contribute significantly to poor physical function among women age 65 and older enrolled in Medicare+Choice. Low income and minority women had worse functional status, as a result of differences in chronic disease prevalence, suggesting that improved management of these common chronic conditions can improve functional health outcomes, and prevent disability for all older women while making progress toward eliminating health disparities.

Coordination Across Federal Agencies. AHRQ, working with NCHS, ASPE and CMS, and input from a meeting of residential and community-based long-term care experts:

  • Developed a plan to coordinate long-term care efforts across the Department.
  • Reached consensus on long-term care research needs.

Based on this plan, the HHS Data Council determined that LTC should be a high HHS data priority. AHRQ is making several contributions to this data collection effort:

  • AHRQ is working with NCHS and ASPE on a project to develop a data collection framework for assisted living facilities. This will allow for the expansion of the National Nursing Home Survey to include assisted living facilities. Although assisted living is the fastest growing segment of the long-term care market, no national information is currently available about this segment.
  • Using the MEPS institutional component data from 1996, AHRQ developed a national prescription drug file, which can be used to assess drug prescribing in nursing homes. This file will enable studies of drug complications and outcomes to determine the benefits and negative impacts of prescribing practices in nursing homes.
  • In collaboration with HRSA, AHRQ is housing a senior scholar to study urban and rural differences in home health use and expenditures using MEPS home care data.

Evidence-based Practice Centers (EPCs)

AHRQ's 13 Evidence-based Practice Centers (EPCs) produce evidence reports and technology assessments on clinical and behavioral therapies and technologies that are common, expensive, and significant for Medicare and Medicaid populations. The EPCs systematically review and analyze scientific evidence to develop the reports. During their reviews, the EPCs flag areas where the evidence base is sparse and suggest future research directions.

In 2002, AHRQ awarded 13 new 5-year contracts to continue and expand the work performed by the first group of EPCs initiated in 1997. During the past year AHRQ also formed a partnership with the Office of Medical Applications of Research (OMAR) at the National Institutes of Health (NIH), to include EPC systematic reviews on each clinical condition presented at a Consensus Development Conference. OMAR works closely with the NIH Institutes, Centers and Offices to assess, translate, and disseminate the results of biomedical research that can be used in the delivery of health services. The EPCs will present their topic-specific evidence-based reports to the NIH Consensus Development Conferences to ensure that they have the latest scientific evidence to support their deliberations. These conferences address complex issues of medical importance to health care providers, patients and the general public.

AHRQ funded 16 new evidence topics in 2002, of which 9 of the topics were nominated by private-sector professional societies and providers, and seven of the EPC reports were funded by other Federal agencies. In addition, AHRQ funded an EPC to continue to support the work of the U.S. Preventive Services Task Force, and several EPCs to continue to produce technology assessments requested by CMS.

FY 2002 EPC Evidence Reports and Technology

  • Islet Cell Transplantation for Diabetes.
  • Strategies to Improving Minority Healthcare Quality.
  • Treatment of Dementia.
  • Pharmacological Treatment of Obesity.
  • Community Based Participatory Research.
  • Health Literacy: Impact of Health Outcomes.
  • Effective Payment Strategies to Support Quality-based Purchasing.
  • Biventricular Pacing for Congestive Heart Failure.
  • Economic Incentives: Impact on Use/Outcomes of Preventive Health Services.
  • Crosscutting Quality Measures for Cancer Care.
  • Sexuality and Reproductive Health Following Spinal Cord Injury.
  • Training for Rate Public Health Events: Bioterrorism.
  • Distance Learning Program: Web-based Curriculum for Dentists.
  • Regional Models for Bioterrorism Preparedness.
  • Total Knee Replacement.
  • Efficacy of Behavioral Interventions to Modify Physical Activity.

Since the start of the program in 1997, the EPCs have conducted more than 90 systematic reviews and analyses of the literature on a wide spectrum of topics and published the results and conclusions as evidence reports and technology assessments. Some of these reviews are ongoing, and others have been published. Users include doctors, medical and professional associations, health system managers, researchers, consumer organizations, and policymakers. Public- and private-sector organizations employ the reports as the basis for developing their own clinical guidelines, performance measures, and other quality improvement tools and strategies. The reports and assessments often are used in formulating reimbursement and coverage policies. Examples include:

  • Use of AHRQ evidence reports by the Social Security Administration to determine disability for various conditions, including: end-stage renal disease, infant and childhood impairments, repetitive motion disorders, speech/language disorders, chronic fatigue syndrome, treatment-resistant epilepsy, and multiple sclerosis.
  • Use by the Veteran's Administration of the meta-analysis in Testosterone Suppression: Treatment for Prostate Cancer as part of its continuing medical education program.
  • Development of a practice guideline by the American Academy of Pediatrics (AAP) based on the evidence report on Diagnosis of Attention-Deficit/Hyperactivity Disorder.

Nominations of topics are solicited routinely through notices in the Federal Register and are accepted on an ongoing basis. Professional organizations, health plans, providers, and others who nominate topics are considered partners and agree to use the evidence reports when they are completed. All EPCs collaborate with other medical and research organizations so that a broad range of experts are included in the development process. AHRQ invites comments from interested parties about the EPC program with respect to what has worked well, what has not worked well, and what changes and improvements could be made. AHRQ is also interested in suggestions about new opportunities, such as what steps the Agency can take to encourage more health care organizations and other relevant groups to translate EPC reports into clinical practice guidelines and related products.

EPC Technology Assessment: Actinic Keratoses

CMS revised its Medicare Coverage Issues Manual to include a national coverage policy permitting coverage for the treatment of actinic keratoses (AK), a common skin condition that is often the precursor of skin cancer. The decision to cover the treatment of AKs was based largely on the AHRQ Technology Assessment for Actinic Keratoses Treatment. This assessment suggests that the presence of AKs is associated with the development of squamous cell carcinoma (SCC) more than other factors. SCC has the potential to metastasize and accounts for a large percentage of all non-melanoma skin cancer deaths in the Medicare population.

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