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How Safe Is Our Health Care System?

Using Purchasing Power


Bruce E. Bradley, M.B.A., Director, Managed Care Plans, General Motors Corporation, Detroit, MI.

Janet Olszewski, M.S.W., Director, Quality Improvement and Customer Service Bureau, Michigan Department of Community Health, Lansing, MI.

Bruce Bradley described the Leapfrog Initiative, formed 2 years ago by the Buyers Healthcare Action Group (26 Minneapolis employers), General Electric, General Motors, GTE, Pacific Business Group on Health (34 West Coast employers), and the Office of Personnel Management (liaison) to generate new thinking on value purchasing and to use the leverage of large employers to force quality improvement. New thinking is needed to "leapfrog" a market stalled by:

  • Purchasers who buy based on cost not quality.
  • Health plans that do not let provider quality show through to consumers.
  • Providers who do not see the "business case" for improving quality.
  • Consumers who are not yet in the quality game.

Leapfrog purchaser strategy is an organized effort among major employers to build purchasing principles that strongly reward higher value. Through publicly reporting safety measures to employees, consumers' attention is directed at known safety processes. Principles governing Leapfrog strategies include:

  • Must make sense and be intuitively obvious to nonmedical personnel.
  • Must be easy to understand and explain to the average American.
  • Must make a difference in a measurable period of time.
  • Must have the advantage of righteousness (who would object?).

Following the above principles, three Leapfrog strategies have been developed.

  • Computer physician order entry: This strategy would reduce errors by taking handwriting out of the process. Treatment directions would be entered into an electronic record for others to act upon. The physician data entry system with automated edits would improve accuracy. By December 2002, the strategy calls for 90 percent of nonrural hospitals to have implemented mandatory computer physician order entry linked to prescribing error prevention software. As well, hospitals must demonstrate that software intercepted 50 percent or more of common serious prescribing errors. Successful interception must include acknowledgment by the prescribing physician of the intercept prior to any override.
  • Evidence-based hospital referral: Medical evidence shows that hospitals with high-volume specialty procedures have better outcomes. By December 2002, the strategy requires that 90 percent of nonrural, elective hospitalizations for specific conditions occur in hospitals that meet evidence-based hospital characteristics.
  • Identification of hospitals with staffing that exceeds minimum requirements in intensive care (ICU) units: By December 2002, 90 percent of nonrural network hospitals will ensure that patients who require ICU care are managed by a physician certified in critical care medicine.

Janet Olszewski reviewed the roles played by States in improving patient safety. States are major purchasers when they combine the purchasing conducted for Medicaid, State employees, State programs for the uninsured, Title XXI, Mental Health/Developmental Disabilities, and Corrections. Historically, States have not been aggressive in pooling their purchasing power for many different reasons:

  • Difficulty coordinating across State programs.
  • Mixed roles States play as regulators and purchasers.
  • Reduced flexibility afforded a State given the public oversight of its activities.
  • Federal oversight for many State healthcare programs that are joint Federal/State programs can help/hinder the process.

Michigan collaborates with private purchasers to:

  • Evaluate health plans and produce report cards.
  • Evaluate hospitals and emergency room services.
  • Discuss common concerns.
  • Promote legislation.
  • Try to reduce burden on health plans by collaborating on evaluation efforts.
  • Seek joint quality improvement/disease management initiatives.

Three particular health system changes have been targeted for collaboration to improve patient safety:

  • Evidence-based hospital referral: States can promote this strategy through their certificate of need programs, contract requirements for health plans, or reimbursement policy.
  • Computerized physician order entry system in hospitals: The State's role as regulator allows it to adopt licensure requirements regarding the use of such systems. State payment policies also can support installation of such systems.
  • Changing ICU staffing to include certified physicians: This may be accomplished through regulation or by applying financial incentives for appropriate behavior.

According to Ms. Olszewski, taking any of the above actions may not be easy for States to do, especially alone. Education of political and community leaders regarding the issues of patient safety and what can be done to improve it must happen before any such actions are taken. This is where collaboration with private purchasers is critical. Change always has a negative impact on some part of the system, even when it is designed to improve the overall performance of the system. Nevertheless, States should take on a leadership role on the issue because lives are lost every day and it is too important not to.


Milstein A, Galvin R. White paper on value-based purchasing. 4th draft. 1999 Aug 20; Leapfrog Group,G.M. Corp. Detroit (MI).

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