Skip Navigation Archive: U.S. Department of Health and Human Services
Archive: Agency for Healthcare Research Quality
Archive print banner
Performance Budget Submission for Congressional Justification

This information is for reference purposes only. It was current when produced and may now be outdated. Archive material is no longer maintained, and some links may not work. Persons with disabilities having difficulty accessing this information should contact us at: Let us know the nature of the problem, the Web address of what you want, and your contact information.

Please go to for current information.

FY 2005: Research on Health Costs, Quality and Outcomes (HCQO)


Purpose and Method of Operations
Accomplishments and Performance Analysis by Portfolio of Work
Funding Summary
HCQO Funding History
Rationale for AHRQ's FY 2005 Request

Purpose and Method of Operations

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 recently developed four main strategic goal areas:

  • Goal 1: Safety/Quality.
  • Goal 2: Effectiveness.
  • Goal 3: Efficiency.
  • Goal 4: Organizational Excellence.

Over time, AHQR plans to provide detailed information about each strategic plan goal by a standard portfolio of work. The FY 2005 request is AHRQ's first submission using the new strategic goal areas. At this point in time, AHRQ can only provide detailed reporting by one overarching portfolio of work. As the year progresses, AHRQ will move toward providing this information for each strategic plan goal.

Return to HCQO Contents

Accomplishments and Performance Analysis by Portfolio of Work

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 and FY 2004 budget. The information is broken down by the following portfolios of work:

Quality/Safety of Patient Care Portfolio

Reauthorization language in December 1999 states that the Director of AHRQ shall conduct and support research and build private-public partnerships to:

  • Identify the causes of preventable health care errors and patient injury in health care delivery.
  • Develop, demonstrate, and evaluate strategies for reducing errors and improving patient safety.
  • Disseminate such effective strategies throughout the health care industry.

In response, AHRQ established the Center for Quality Improvement and Patient Safety (CQuIPS), concentrating in one organizational unit the responsibility for planning, managing, and directing its patient safety program and addressing each of Congress's concerns.

AHRQ has successfully used existing research structures and networks to implement patient safety research, support the development of new networks, and fund the world's largest portfolio of patient safety research. AHRQ supports a growing network of researchers whose primary interest is in patient safety, and its training grants are expanding that foundation. It is also helping to develop recommendations for safe practices that health care organizations can use to reduce the risk of injury from health care harm and to improve the safety of care. Furthermore, AHRQ has established a successful and active working relationship with a growing international network of patient safety researchers and program personnel.

Our longer term view is to continue to shift research from new development to adoption of effective patient safety practices. We are also investing in the development and implementation of information technology solutions to improve patient safety as well as the training of a cadre of leaders in the Patient Safety Improvement Corps (PSIC) who will serve as critical links in the uptake of important research findings. We are in the process of shifting the focus of our patient safety database activities to creating baselines from which to measure annual and long-term success.

Accomplishments—FY 2001 Patient Safety Investment Portfolio

In FY 2001, AHRQ invested $50 million in new research grants, contracts, and other projects to reduce medical errors and improve patient safety. These projects will address key unanswered questions about when and how errors occur and provide science-based information on what patients, clinicians, hospital leaders, policymakers, and others can do to make the health care system safer. The results of this research will identify improvement strategies that work in hospitals, doctors' offices, nursing homes, and other health care settings across the Nation.

The results of investment in patient safety research are now being incorporated into practice. Below are examples of how this research is being used:

  • AHRQ's Center for Education and Research in Therapeutics (CERTs) in the University of Arizona Health Sciences Center developed a unique educational and research tool at This Web site contains a list of 72 drugs that can cause life-threatening abnormalities in heartbeats, or arrhythmia (abnormal heartbeat). Caregivers around the world can use this online resource to research specific drugs that might pose a risk to their patients, and they can submit clinical cases of drug-induced arrhythmias to the registry. Researchers are using the information submitted to develop profiles of people most at risk for drug-induced arrhythmia and to develop a genetic test that can identify them in advance of treatment.
  • In partnership with the American Hospital Association (AHA) and the American Medical Association (AMA), AHRQ developed a new consumer tips sheet, 5 Steps to Safer Health Care. The posters and fact sheets, available in English and Spanish, offer evidence-based, practical tips on the role that patients can play to help improve the safety of the care that they receive.
  • AHRQ research has provided information about 73 proven patient safety practices to health care administrators, medical directors, health professionals, and others who are responsible for patient safety programs. AHRQ research has also identified 11 other patient safety practices proven to work but not used routinely in the Nation's hospitals and nursing homes. Voluntary Hospitals of America and Premier, Inc. use the information to guide their member hospitals in selecting projects to improve safety. Many chief executive officers, medical directors, and hospital safety officers have reported that they use the information to help them initiate project to improve patient safety. For example, SSM HealthCare System, winner of the 2002 Malcolm Baldrige National Quality Award, used this report as a roadmap to develop their patient safety collaborative.
  • To help patients assess the safety of their care, AHRQ, the Centers for Medicare & Medicaid Services (CMS), and other organizations supported the National Quality Forum (NQF), a not-for-profit membership organization created to develop and implement a national consensus for health care quality measurement and reporting. The NQF developed a list of serious, avoidable, adverse events that are so significant and so preventable that their occurrence should trigger an investigation of the organization in which they occurred. An example of such an event would be surgery on the wrong site. This list is now completed and available to the public. For information on how to obtain a copy of Serious Reportable Events in Healthcare, go to the NQF's Web site and select "Activities/Consensus Reports" to find a description of the report, an executive summary, and ordering information for the full report.
  • AHRQ supported the NQF's effort to develop a list of safe practices proven to be effective in reducing harm to patients. The list, which soon will be available to the public, is a tool to identify and encourage practices to reduce errors and improve care. Hospitals will be encouraged to report on their use of these practices so that patients can determine what hospitals have done to improve safety of care.
  • AHRQ supported the development of a new tool to help hospitals identify important patient safety problems, the Patient Safety Indicators (PSIs). Derived from readily available hospital discharge data, the PSIs and the user-friendly software developed to support their use, are already in use by many institutions.
Accomplishments—Patient Safety Database

On behalf of the HHS Patient Safety Task Force (PSTF), AHRQ signed a contract with The Keveric Company to begin the work to develop a new Patient Safety Database. The mission of the PSTF, which comprises AHRQ, CDC, CMS, and FDA, is to integrate existing data collection on medical errors and adverse events, to coordinate research and analysis efforts, and to collaborate on reducing the occurrence of injuries that result from medical errors. The goal of this project is to reduce regulatory burden and improve communication. In phase 1, Kevric will create Web-based reporting interface for hospital and institutional-based reporting of events to the CDC and FDA.

Accomplishments—Children and Patient Safety

AHRQ and the American Academy of Pediatrics (AAP) announced a partnership to help put valuable information about preventing medical errors into the hands of pediatricians and parents across the country. AHRQ and the AAP are working together to promote a fact sheet called 20 Tips to Help Prevent Medical Errors in Children. It offers evidence-based, practical tips on avoiding medical errors related to prescription medicines, hospital stays, and surgery. AHRQ and AAP distributed copies of the fact sheet to AAP's 57,000 member pediatricians, as well as to groups representing children and parents.

Accomplishments—Morbidity and Mortality Rounds on the Web

AHRQ launched a monthly peer-reviewed, Web-based medical journal that showcases patient safety lessons drawn from actual cases of near misses (medical errors that result in no harm). Called AHRQ WebM&M (Morbidity and Mortality Rounds on the Web), the Web-based journal ( was developed to educate health care providers about medical errors in a blame-free environment. In July of this year, 20,235 unique visitor sessions were held. A total of 3,642 copies of the spotlight cases have been downloaded. The spotlight cases include significant details accompanied by a slide set useful for instruction.

Accomplishments—Medical Errors and Medicare Patients

AHRQ and the National Institute on Aging (NIA) sponsored a study showing that Medicare patients treated in the outpatient setting may suffer as many as 1.9 million drug-related injuries a year because of medical errors or adverse drug reactions not caused by errors. About 180,000 of these injuries are life-threatening or fatal, and more than half are preventable, say the researchers, who based the estimates on a study of over 30,000 Medicare enrollees followed during 1999-2000. Of note, this study was conducted in a private sector health plan with over 20 years experience providing care to Medicare beneficiaries.

FY 2005 PART Review

In FY 2005, OMB conducted a PART review of AHRQ's patient safety program. This review is provided on the following page. The PART analysis revealed the purpose and design of AHRQ's patient safety research portfolio are strong, but overall it lacks measurable performance results. The rating for this program was "adequate."

AHRQ acknowledges that the patient safety portfolio is relatively new and many grants first funded in FY 2001 have just recently completed their award cycle; therefore, identifiable and quantifiable results are not yet available. AHRQ has since adopted new long-term and annual performance goals that more accurately reflect the purpose of patient safety activities.

The FY 2005 request totals $84,000,000, an increase of $4,500,000 over the FY 2004 enacted level. In FY 2005 AHRQ will continue to work with our grantees on research findings from recently ended grants The intent is to replicate, translate, and adopt research findings into real-world practice and assess their impact.

Performance Goals

Select to access Table 6 for performance goals of the Quality/Safety of Patient Care Portfolio.

Return to Accomplishments and Performance Analysis

Data Development Portfolio

Within HCQO, the data development portfolio includes two main components:

Health Care Utilization Program (HCUP)

HCUP is a Federal-State-industry partnership to build a standardized, multi-State health data system. This long-standing collaborative endeavor has built and continues to develop and expand a family of databases and powerful, user-friendly software to enhance the use of administrative data.

The HCUP family of databases currently includes:

HCUP includes data on hospital discharges from participating States, as well as a nationwide sample of discharges from community hospitals. AHRQ has expanded HCUP beyond inpatient hospital settings to include hospital-based ambulatory surgical facilities, and a pilot effort is underway to capture information from emergency department databases.

Data from HCUP have been used to produce reports that answer questions on reasons Americans are hospitalized, how long they stay in the hospital, the procedures they undergo, how specific conditions are treated in hospitals, charges incurred for hospital stays, and resulting outcomes.

AHRQ has made available the Kids' Inpatient Database (KID), the Nation's first comprehensive database on hospital use, charges, and outcomes focused exclusively on children and adolescents. The KID contains 1.9 million pediatric discharges representing 6.7 million pediatric discharges nationwide and data on various hospital characteristics such as region, location (urban/rural), bed size, ownership, teaching status, and children's hospital status.


One of HCUP's goals is to increase the number of States participating in HCUP; 33 States are HCUP partners Four new State partners joined HCUP in FY 2003: Minnesota, Nebraska, Rhode Island, and Vermont. They were selected based on the diversity—in terms of geographic representation and population ethnicity—they bring to the project, along with data quality performance and their ability to facilitate timely processing of data.

The number of States now participating in the State Ambulatory Surgery Databases (SASD), a second group of HCUP databases, increased from 13 in FY 2001 and 15 in FY 2002 to 18 in FY 2003.

The number of States participating in the State Emergency Department Databases (SEDD) also increased from 5 in FY 2001 and 7 in FY 2002 to 9 in FY 2003.

During the past year AHRQ implemented a multifaceted effort to make HCUP data more accessible to researchers and other interested users. HCUP tools include:

  • HCUPnet at HCUPnet is a free, interactive, menu-driven online service that allows easy access to national statistics and trends and selected State statistics about hospital stays. HCUPnet answers questions about conditions treated and procedures performed in hospitals for the population as a whole, as well as for subsets of the population such as children and the elderly. In addition, two new States for a total of 18 States have agreed to include their data in HCUPnet. At 6,000 plus visits a month, HCUPnet is consistently within the Top 10 resources accessed from the AHRQ Web site. The site is updated continuously throughout the year. We also update as States agree to join. (Select for Figure 1, 7 KB.)
  • HCUP Central Distributor. Researchers' access to HCUP data has been facilitated by the creation of a central distribution center for the State-level databases. Now researchers can go one-stop shopping instead of contacting each State on an individual basis. We have increased the number of States providing data to the Central Distributor to 18.
  • HCUP Fact Books. Data from HCUP have been used to produce reports that answer questions on reasons Americans are hospitalized, how long they stay in the hospital, the procedures they undergo, how specific conditions are treated in hospitals, the resulting outcomes, and how hospital care for women differs from care for men. In FY 2003, a new fact book is being developed on potentially avoidable hospitalizations. This fact book will describe ambulatory care sensitive conditions—conditions that evidence suggests may have been avoided through timely and effective ambulatory care. The fact book will use graphs and tables to describe these conditions, including priority conditions such as asthma, diabetes, congestive heart failure, hypertension, and low birth weight infants. In addition, this report will assess quality from the perspective of access to health care services for select subgroups of the U.S. population: children, elderly, women, low-income, and rural residents.

Select for HCUP Fact Books online.

Performance-based Improvements—HCUP

The FY 2004 enacted level provides $2,000,000 for performance-based improvements for HCUP. These funds will allow AHRQ to improve availability of the data itself, make it more usable, and facilitate effective use. By 2010, AHRQ has committed to achieving five outcomes goals for its HCUP and AHRQ Quality Indicators (QI) programs. Specifically, at least 5 organizations will use HCUP databases, products, or tools to improve health care quality for their constituencies by 5 percent as defined by the AHRQ Quality Indicators (e.g., 5 percent reduction in preventable hospitalizations, complication rates, or mortality rates; 5 percent increase in use of superior technology).

Expand and Improve Outpatient Data. Standardized, sophisticated emergency department and other outpatient data collections are precursors to assessing, benchmarking and ultimately improving the quality of health care in these settings. Fewer than half of the States collect statewide emergency department data, and collection of data from most other outpatient data sites is very rare. In FY 2004, the HCUP program will expand and improve this data through several strategies such as organizing workshops for state data organizations, providing technical assistance, and developing and disseminating best practice models for states to use in standardizing, expanding and improving these data.

Make HCUP Data and Quality Indicators (QI) More Usable. Hospitals, states, employers, community groups and others who seek to make quality improvement efforts generally do not have the research staff or analytic capacity to work with raw data and measures. HCUP, in 2004, we will make both the data and the quality measures more usable:

  • For the HCUP data, we will create user-friendly software programs, templates, and analytic tools that states, employers, community groups and others can use to translate HCUP data into meaningful, actionable information. For example, we will develop software and templates for briefs analyzing HCUP data by clinical diagnosis, by geographic area, by special population, by race, etc.
  • For the QIs, we will act on feedback from the early wave of QI users, and incorporate technical enhancements to make the QI software more user-friendly. For example, AHRQ will provide benchmarks for different categories of hospital user groups and payer groups so that key user groups more readily can see how their own performance compares to that of their relevant peer group. AHRQ also will develop hospital report card templates to guide how the QIs are communicated to the public at large as well as to special populations such as the elderly. In addition, AHRQ will develop user friendly software as a companion to the set of QI indicators to facilitate increased use of QIs so that users will no longer be required to purchase SPSS® or SAS® software as currently is the case.

Facilitate Effective Use through Technical Assistance and Outreach. To achieve our quality improvement goals, stakeholders must not only use the HCUP data and Quality Indicators, but use them well and effectively. To this end, the QI program will increase technical assistance to a targeted group of critical QI users, particularly hospitals, state health departments and activist employers. AHRQ will convene series of national and regional workshops for QI users and potential QI users to identify and address implementation issues, instruct on QI use, and take first steps in setting the stage for the 2010 impacts.

Consumer Assessment of Health Plans (CAHPS®)

CAHPS® is an easy-to-use kit of survey and reporting tools that provides reliable information to help consumers and purchasers assess and choose among health plans, providers, hospitals and other health facilities. Since its beginning in 1995, the CAHPS® team has produced survey and reporting products for:

  • Commercial populations (managed care and fee for service plans).
  • Medicare recipients (managed care, fee for service and disenrollees from plans.
  • Children with special health care needs.
  • State Medicaid programs.

CAHPS® will also allow health plans and purchasers to assess and track areas for quality improvement. Information from CAHPS® surveys was available to help more than 123 million Americans with their 2003 health care benefits decisions.

The CAHPS® team and AHRQ work closely with the health care industry and consumers to ensure that the CAHPS® tools are useful to both individual consumers and to employers and other institutional purchasers of health plans. Collaborations include the following:

  • In the past couple of years, the CAHPS® team had worked with the California Health Care Foundation and the Pacific Business Group on Health to develop and test a version of CAHPS through which consumers could rate the care they receive via physicians in group practice. We are currently developing a version of CAHPS® through which individuals can assess care received from individual providers.
  • AHRQ and CMS are collaborating in the development of a CAHPS® survey to obtain consumers' assessments of health care and services received in nursing homes. Survey development and sampling and data collection procedures were completed in FY 2002.
  • In 2002, CMS requested that the CAHPS® team develop and test an instrument through which patients can assess the care they receive in hospitals. Since this standardized tool enables hospital-to-hospital comparisons using the same criteria, CMS plans to publish the results on its Web site to assist people in selecting a high-quality hospital. As of June 2003, the CAHPS® team has developed and cognitively tested a draft survey, sought input about the survey from various stakeholder groups (hospitals, data collection vendors and others) and incorporated changes in the instrument based on feedback from these groups. The instrument is now undergoing pilot testing in three States (New York, Arizona, and Maryland). The CAHPS® team is also beginning to develop and test both text and data displays to be disseminated via CMS's "Medicare Compare" Web site.
  • In 2002, the CAHPS® team, in collaboration with the National Institute on Disability and Rehabilitation Research (NIDRR), CDC, and the National Rehabilitation Hospital Center for Health and Disability Research, began development for a version of CAHPS® to assess care given to people with mobility impairments (PWMI). We have clarified goals for this effort, specified the target audience and spelled out uses for the resulting data. Thus far, we have developed a draft screener through which to identify members of the target population and are searching for sources of data through which to test it. We are also beginning to identify content to guide development of items for the questionnaire itself.
  • At the request of CMS, the CAHPS® team is also working on a questionnaire through which end stage renal disease (ESRD) patients can rate the facilities where they receive dialysis.

In 2002, AHRQ funded three grants submitted under the CAHPS® II request for applications for $2.5 million. CAHPS® II will focus on development and testing of new and more effective ways to report quality data to consumers, patients, caregivers, and purchasers. It will also permit translation of the questionnaires and reports into Spanish and other languages. CAHPS® includes the development of assessment instruments for people with mobility impairments and more refined questionnaire items for people who receive care through preferred provider organizations. The team will also work with caregivers and plans to use CAHPS® data for the purpose of quality improvement. An additional component of CAHPS® II involves close collaboration with CMS and the private sector to develop and implement a single tool to assess and report patient's experiences of hospital care.

Performance-based Improvements—CAHPS®

The FY 2004 enacted level provides $1,000,000 for performance-based improvements for CAHPS®. These funds will address two areas: a program impact evaluation and technical assistance.

Program Impact Evaluation. Since its inception in l997, the CAHPS® project has consistently used public comment and outside expert review to shape the program's development, develop, test, and revise products, and make recommendations regarding the program's direction. There is a need to assess the impact of the program from the perspective of a variety of audiences: consumers, health care providers, and purchasers. Award funds would be used to conduct such an evaluation via a contract with an outside organization experienced in the area of impact evaluation. The final analysis of the evaluation data will be useful in identifying areas of strength, as well as those project components that might need to be revised and/or terminated. Maintenance of this impact evaluation effort could be built into the scope of work for the Survey User Network (SUN) contract, a 5-year contract, currently held by Westat, which provides support and technical assistance to CAHPS® users, including the CAHPS® II grantees.

Technical Assistance. Funds would also be used to enhance the services currently provided by the Survey Users Network (SUN), including the work that will be necessary to formalize the program impact evaluation. Technical assistance needs are expected to increase substantially in FY 2004 due to a new Hospital CAHPS® program and will require the development and dissemination of new products for new sets of audiences, including hospitals and ambulatory care services. These functions will have substantial resource and staffing implications for the support contractor.

Performance Goals

Select to access Table 7 for performance goals of the Data Development Portfolio.

Chronic Care Management Portfolio

In AHRQ's 1999 reauthorization legislation (P.L. 106-129), Congress directed that the Agency produce, on behalf of HHS, an annual report on the state of the Nation's health care quality, beginning in 2003. This first report provides a general picture of the state of health care quality for the entire country. It focuses on a select set of national priority conditions, attached to a limited set of core measures supported by a broad consensus among key stakeholders, and uses data collected at the national and state level from a variety of publicly accessible sources to track those conditions. In so doing, it synthesizes the overwhelming amount of health care quality information regularly reported by the media for policymakers, providers and consumers, consolidating diverse information in one place.

The congressional mandate to produce the National Healthcare Quality Report (NHQR) specified neither which conditions should be included in the report, nor how those conditions should be identified. The AHRQ contracted with the IOM (Institute of Medicine) to create a conceptual framework that would guide the identification and selection of priority conditions. The IOM framework consists of a matrix with the columns as dimensions of care (effectiveness, safety, timeliness, patient centeredness and equity) and the rows as patient needs (staying healthy, getting better, living with illness or disability, and coping with the end of life). AHRQ formed an Interagency Workgroup to populate the framework with priority conditions and with measures of quality for those conditions. The basis for priority conditions in the first NHQR is Healthy People 2010; in addition, where relevant measures used are identical to those used by CMS (e.g., nursing homes, home health, items from CAHPS®) and other accreditation organizations. Priority conditions in the report include: cancer, chronic kidney disease, diabetes, heart disease, HIV/AIDS, maternal and child health, mental illness: depression, respiratory disease, nursing home and home health.


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.

Accomplishments—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.

Accomplishments—National Healthcare Quality Report (NHQR)

On December 22, 2003, AHRQ released the National Healthcare Quality Report (NHQR) and the National Healthcare Disparities Report (NHQR). These two reports represent the first national comprehensive effort to measure the quality of health care in America and differences in access to health care services for priority populations. The reports provide baseline views of the quality of health care and differences in use of the services. Future reports will help the nation make continuous improvements by tracking quality through a consistent set of measures that will be updated as new measures and data become available.

The reports present data on the quality of, and differences in the access to, services for seven clinical conditions, including cancer, diabetes, end-stage renal disease, heart disease, HIV and AIDS, mental health, and respiratory disease. The reports also include data on maternal and child health, nursing home and home health care, and patient safety.

The measures included in the reports provide an important snapshot of the American health care system. The National Healthcare Quality Report offers hopeful signs in many areas. For example:

  • The majority of women are screened for breast cancer (70 percent of women over 40 within the past two years) and cervical cancer (81 percent of women 18 and over within the past three years).
  • Almost 90 percent of in-center kidney dialysis patients get adequate dialysis.
  • Approximately 83 percent of women have prenatal care in their first trimester.
  • Over 80 percent of Medicare enrollees hospitalized with pneumonia get blood cultures before they are given an antibiotic, get their initial antibiotic within 8 hours, and get the type of antibiotics they need consistent with current clinical guidelines.

The report also indicates that greater improvement in health care quality is possible. For example:

  • Rates of children admitted to the hospital for asthma are 29.5 per 10,000.
  • Only about 20 percent of patients prescribed a medication to treat diagnosed depression have at least 3 recommended followup visits to monitor their medication in the 12 weeks after diagnosis.
  • Sixty-two percent of smokers who had a routine office visit reported that their doctors had advised them to quit. At the same time, less than half of acute heart attack patients who smoke are counseled to quit while in the hospital (42 percent).
  • Rates for blood pressure screening are 90 percent, and rates for cholesterol screening in adults 45 or older are more than 80 percent. However, only about 25 percent of people with high blood pressure have it under control.
Performance Goals

Select to access Table 8 for performance goals of the Chronic Care Management Portfolio.

Return to Accomplishments and Performance Analysis
Return to HCQO Contents
Proceed to Next Section


The information on this page is archived and provided for reference purposes only.


AHRQ Advancing Excellence in Health Care