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Perspectives on Chartered Value Exchanges in a Changing Health Care Environment

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Remarks by Carolyn M. Clancy, M.D., Director, Agency for Healthcare Research and Quality (AHRQ)

Learning Network for Chartered Value Exchanges Launch Meeting, Bethesda, MD, February 28, 2008

Good morning everyone, and to the 14 new Chartered Value Exchanges, Welcome!

I believe it was baseball great Yogi Berra who said "I just want to thank everyone for making this day necessary."

I want to thank our first Chartered Value Exchanges for making this day necessary and for taking part in this effort by community-based, multistakeholder collaboratives to develop a patient-focused marketplace for health care.

You are the pioneers of Value-Driven Health Care. Your ongoing commitment to building health care systems in your communities that are based on value will lead to performance information that can be used for encouraging providers to:

  • Improve quality and transparency.
  • Provide consumers with information on the cost and quality of services so they can make information decisions.
  • Promote effective public policies, payment policies, and consumer incentives that reward or foster better provider performance.

We have been working toward this day at the Agency for Healthcare Research and Quality (AHRQ) for about a year and a half (since August 2006),  so we're looking forward to bringing you on board and next steps. We are poised and ready to go.

As a prelude to that, I'm going to talk this morning about what AHRQ does and the Agency's role in this program. I'm also going to talk a little bit about what the research tells us in terms of the status of the U.S. health care system and where we would like to be. In addition, I'm going to discuss your roles and what you bring to the table.  We have allotted time at the end of my address for some discussion with you, and I would urge you to participate.

From the outset, I want to emphasize to everyone involved that this is a collaboration. We are partners in this endeavor. Our success is largely dependent on what we share—and it starts today—so please feel free to ask questions.

A new report this week by the National Health Statistics Group within the Centers for Medicare & Medicaid Services projects that health care spending grew by 6.7 percent in 2007 and reached $2.2 trillion. The report says the 6.7 percent spending increase is expected to remain steady through 2017, at which time the total will be $4.3 trillion annually. Medicaid spending is expected to increase by an average annual rate of 7.9 percent over the same period.

Information from the AHRQ Medical Expenditure Panel Survey, known as MEPS, shows that insurance premiums increased 7.2 percent and employee contributions increased 6 percent from 2004 to 2005, continuing a trend from previous years.

What does this mean?

  • It means that health care spending is expected to outpace economic growth by an average of 1.9 percentage points a year over the next 10 years.
  • It means that costs will continue to outpace the rate of improvement in health care. Research from AHRQ's most recent National Healthcare Quality Report shows that the rate of improvement in the system in 2006 was a modest 3.1 percent.

This is not sustainable, and it's not the worst part. The worst part is we're not delivering $2.2 trillion worth of care. My guess is it's not even close.

I'm going to borrow from a recent story that compared the work we need to do on the health care system to peeling an onion. It said the onion is the right analogy for three reasons:

  • It can make you cry.
  • Every time you pull off a layer you learn more.
  • What you see from the outside is a lot different from what's on the inside.

The impending retirement of 78 million Baby Boomers (2010-2030) will exert tremendous pressure on an already challenged system. If something is not done, a lot of tears will be shed very soon. The average life expectancy of Baby Boomers is 30 years longer than that for people who were born at the turn of the 20th Century. This is evidence of considerable improvement.

We have made strides,  but the pace of improvement is very slow. It's way too slow. Accelerating the pace of improvement is something that the Agency for Healthcare Research and Quality takes very seriously.  Our mission is to improve the quality, safety, efficiency, and effectiveness of health care for all Americans. We do this by supporting independent, user-driven research that is designed to help people and organizations at the Federal, State, and local levels make better decisions about health care. And it has become clear to us that as the complexity of our health care system continues to grow, providers must leverage emerging technologies and other quality enhancement strategies to improve patient safety and health outcomes.

Secretary Leavitt has been very visible and vocal in driving this issue, talking about the need for a sense of urgency, imposing strict deadlines, and working hard to keep this from becoming an academic endeavor. He does this with good reason:  no organization has more at stake in the improvement of health care quality than the Federal Government, the writer of the biggest checks in the health care marketplace. The Secretary is committed to driving the necessary evolution of the system through what he calls the Four Cornerstones of Value-Driven Health Care.  I'm sure he will want to explain all of this when he comes to officially charter  the 14 value exchanges tomorrow morning.

As I mentioned before,  we're behind the curve, but there has been some improvement and we are gaining momentum. To build on these efforts,  we need to move beyond the one-size-fits-all method of care. We need a robust system that includes capacity for rapid translation of beneficial advances or breakthroughs and for identifying and evaluating innovative strategies to improve the quality of care.

We need to analyze our capacity for:

  • Achievability: What can work under ideal circumstances for some people.
  • Reliability: Getting it right for all patients every time—the first time.
  • Quality enhancement: Translating research into improved patient care.

Some of the questions we need to ask:

  • Is clinical research arriving to the bedside as fast as it could?
  • Are we finding innovation in health care?
  • How do we create value?

There are just a few of the areas that we expect to discuss with you as our relationship grows. Of course,  there are many, many more areas and I can't tell you how pleased we are to have such strong organizations among this initial group of Chartered Value Exchanges. There are a multitude of competencies among the group of 75 people who are here representing the 14 Value Exchanges.  We have:

  • Purchasers: employers, employer coalitions, Medicaid Agencies.
  • Consumer Organizations:  Consumer health coalitions, AARP,  the Center for Medicaid Consumers, aging commissions.
  • Health Plans: regional and national commercial plans,  Medicaid health plans.
  • Providers: hospital CEOs,  the American College of Physicians, State Medicaid societies, academic medical centers.
  • State data organizations, quality improvement organizations, health information exchanges.

Eight of the Value Exchanges have a statewide focus, while the other six are more regionally focused. New York and Michigan each host two Value Exchanges. It's also interesting to note the history of the Exchanges. Nine are formal, pre-existing, multistakeholder organizations. Five were formed for the purpose of becoming Chartered Value Exchanges. Four of these five Exchanges represent alliances between previously established, health-related, multistakeholder organizations or coalitions. The fifth is the result of a partnership that includes more than 50 stakeholder groups and organizations that pulled together to become a Chartered Value Exchange.

In terms of readiness for the tasks at hand, 12 of the Exchanges have built, or soon will begin building, a database. Thirteen of the 14 are in States that are hosting a statewide hospital database. Eight have member organizations that are engaged in public reporting of physician and/or hospital data. Eleven reported that one or more of their members have experimented with provider payment incentives. And three Value Exchanges reported that one or more of their members are experimenting with tiering or other consumer incentives.

This is exciting! Who among us would have thought 10 years ago—maybe even 5 years ago—that we would have this kind of collaboration being driven by the Federal Government with this kind of a response from the health care community? All in the name of making quality and cost metrics transparent to all stakeholders, including consumers.

We started more than a year ago soliciting applications for Community Leaders for Value-Driven Health Care. We have since designated more than 100 Community Leaders across the country. You are the first Community Leader organizations to achieve the designation of Chartered Value Exchange. 

And this is just the beginning. We received numerous other applications that were incredibly strong. In fact, 38 were submitted and we look forward to working during the next application period with many of those organizations that were not initially selected.  

The Secretary's vision's remains the same: a future where improved quality of care matches the investment in health care that we make collectively as a Nation and as individuals. And, it will take collaboration and partnership, especially at the local level to make that happen. To help with this and to equip you all to do the real work of making quality in your States and regions a reality, today is the first face-to-face meeting of the AHRQ-sponsored learning network for Chartered Value Exchanges.

The goal of this user-driven network is to provide opportunities for peer-to-peer sharing and for learning from the evidence. This network will also feature tools, access to experts, and a private, Web-based knowledge management system:

  • You will have face-to-face and virtual opportunities to learn from the experiences of the other Exchanges.
  • The network will help us to identify gaps where innovation is needed.
  • We also will be able to identify interventions or tactics that yield the best outcomes and translate those interventions into adaptable change strategies.

Ultimately, users will identify questions that need to be addressed when considering or designing value-driven healthcare strategies. These questions will be used to form the outline for Learning Network technical assistance. Technical assistance content will be driven by activities identified by users as high priority.

The range of topics?

  • Collaborative leadership.
  • Public at-large engagement.
  • Quality and efficiency measurement and improvement.
  • Public reporting.
  • Provider incentives.
  • Consumer incentives.
  • Any number of additional issues that surface as we work together to improve quality and value in health care.

Increasing quality and value in our health care system seems to be a readily attainable goal, especially with all of the resources that are available to us today.

We've got the money to peel away the layers. As I mentioned,  we're spending more than $2 trillion annually. We've got the expertise. The United States has the world's finest physicians, nurses, and other health care workers. And we've got access to the latest tools, with new and better ones being developed all the time.

We need to provide motivation for doctors who may think that for them value-driven health care means more work for less money. We need to figure out how to show the business community more evidence of our pronouncements that a healthier workforce is more efficient and cost-effective. Our patients need to understand how important it is for them to ask questions of their care givers.

This is something that I take personally.  When you consider that the difference can be measured in lives saved how can it not be personal?

We now have patients who have easy and quick access to the same kinds of information that we do. At times, they know about new drugs for treating their conditions before we do. And they have expectations. To me, this spells opportunity.

More work? Possibly, but the important issue here is that this is an opportunity for all of us to work collectively to develop a system that makes the right thing the easy thing to do. And in order to do this, we must take advantage of all available lessons learned—in and outside of the health care system—as we move forward so that we can make the most of this chance to make 21st century health care an information-rich, patient-focused enterprise in a value-driven environment.

We have a great agenda for you over the next 2 days. As I said, Secretary Leavitt will be here tomorrow morning to officially charter the Exchanges. Most of today's sessions are designed to introduce you to a sampling of the resources that will be available to you from AHRQ. We have scheduled an overview of our hospital data resources and tools:  a session about the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) program and another session on consumer engagement resources.

I hope all of you are planning to attend the networking reception at 5 o'clock this afternoon. And tomorrow, most of the focus will be on helping you to engage consumers in your communities.

I would also like to urge you to visit the exhibits, which are in the hallway just outside of this room. You can learn a lot there about AHRQ tools and resources for activities such as data and measurement and quality improvement.

Before I close, I would like to thank all of the people at AHRQ who have worked tirelessly to get us to this day and who will continue working with all of you to ensure the success of the Chartered Value Exchange Program.

Again, thank you very much for your commitment to the vision of value-driven health care.  I am extremely pleased and proud to be a part of this endeavor to shape the future of the U.S. health care system.

Enjoy the meeting.

Current as of February 2008


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