The Business of Health Care

1. The Business of Health Care Improving Health through Healthcare Policies and Quality Standards

2. The IOM Report Five Years Later:The End of the Beginning Based on a presentation made by Robert M. Wachter, MD Author of “Internal Bleeding” & Professor and Associate Chairman, Department of MedicineUniversity of California, San Francisco Chief of the Medical Service, UCSF Medical Center Presentation made at The Commonwealth Fund Quality Improvement Colloquium Patient Safety Five Years after “To Err Is Human” Washington, D.C. November 4–5, 2004 www.cmwf.org

3. “There is abundant evidence that serious and extensive quality problems exist throughout American medicine.” Institute of Medicine, 1999

4. Evidence 1: Quality of Health Care Delivered to Adults in the US – 2003 RAND Study • Methods • Study of >6700 participants in 12 metropolitan areas • 439 indicators of quality for 30 conditions • Selected Findings: • 46% did not receive recommended care • 11% received potentially harmful care • Only 24% of diabetics received 3 or more glycosylated Hgb tests over two-year period • 65% of hypertensives receive recommended care • Only 45% of persons with MI (myocardial infarction) receive beta-blockers McGlynn et al, N Engl J Med 2003; 348:2635-45

5. Geographic Variations in Medicare Spending & Quality Measure Information Source: Medicare Payment Advisory Commission (MEDPAC) Report to Congress June 2003 Evidence 2

6. Enough to Purchase a Lexus “In some regions of the United States Medicare pays more than twice as much per person for health care as it pays in other regions. For example, age-, sex-, and race-adjusted spending for traditional, fee-for-service (FFS) Medicare in the Miami hospital referral region in 1996 was $8,414–nearly two and a half times the $3,431 spent that year in the Minneapolis region… The difference in lifetime Medicare spending between a typical sixty-five-year-old in Miami and one in Minneapolis is more than $50,000, equivalent to a new Lexus GS 400 with all the trimmings.”

7. But does using more care mean better quality? Not exactly. Higher service use is correlated with lower quality of care ....

8. The Root Causes • Errors flew under the radar screen • The absence of an incentive system • Business, educational, marketing… anything • The bizarre organizational dichotomy of American medicine (doctors – hospitals)

9. How have we done – focus areas for improvement: • Regulations (NCQA & JCAHO) • Reporting Systems • Teamwork Training and Simulation • Clinical Information Technology (May 2004 - appointment of Dr. David Brailer PhD as the first-ever national health information technology czar.) • Malpractice and Other Venues for Accountability • Workforce Issues

10. Competitive Advantage • The healthcare system needs a strong competitor to demonstrate a more quality product, this way other health providers have something to strive toward. • Ex. In the 1970’s the US was producing low quality, and sometimes dangerous cars. Toyota set a standard for inexpensive, safe, reliable, and quality cars. This caused the US auto industry to reexamine their product and make it better.

11. Market Demand and Public Policy • In order to illicit change consumers need to demand regulation of health plans and enact public policy for quality care. • The government is the largest purchaser of health care and can be the most effective catalyst for quality improvement.

12. Strategies for Healthcare Reform • Require that health plans report standardized information on quality of care (report cards) • Push public policy makers and government officials to develop national standards for reporting comparable data. • Encourage consumers to select higher-quality providers and restrict entry of providers that do not meet the national standard. • Make quality improvement a core business strategy.

14. NCQA & JCAHO What is the Joint Commission on Accreditation of Healthcare Organizations JCAHO’s MissionTo continuously improve the safety and quality of care provided to the public through the provision of health care accreditation and related services that support performance improvement in health care organizations.

15. Name, Blame, Shame

19. CABG Mortality By State 1992 Mortality (%) NY Annual Rate of Decline 1987-92 (%)

20. HEDIS 2001-- 52 Measures across 7 Domains • Effectiveness of care (e.g. childhood immunizations, mammography screening, advising patients to quit smoking) • Access (translators, timeliness of prenatal care) • Satisfaction (CAHPS survey) • Health plan stability (practitioner turnover) • Use of services (e.g. well child visits, frequency of selected procedures) • Informed health care choices (e.g. management of menopause) • Health plan descriptive information (e.g. board certification, practitioner compensation)

21. Problems with HEDIS / Report Cards • HEDIS contains no risk adjustment • Incentives to avoid the sick and those of lower socioeconomic status • Quality measures: structure, process, & outcomes. Most report cards focus on process measure.

22. Problems With Report Cards (cont’d) • Information can mislead consumers if it magnifies clinically unimportant differences • Complex patterns of quality data may confuse consumers • Purchasers, providers and consumers often want different information…