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February 2007 — Vol. 85, No. 1 Improving health care qualityBetter for patients — and payers Related articles:
Considering how much Americans pay for health care — nearly $2 trillion, or 16% of the gross domestic product, according to the U.S. Centers for Medicare and Medicaid Services — we must be getting the very best care, right? Not necessarily. “If you go to a doctor, there’s a 45% chance that all the things that should be done for you, aren’t,” says John O’Connell, a health care consultant who is president of the employee benefits division of the C.M. Smith Agency in Glastonbury. O’Connell cites a study noted in Redefining Health Care, a book co-authored by Harvard Business School professor and competitiveness expert Michael Porter. The study, released in 2004 by the RAND Corp., showed that people in all parts of the country were receiving recommended health care only 50% to 60% of the time. Another RAND study, released last May, found that older patients on average received recommended care just 55% of the time. Porter notes, “Throughout the United States, there is a significant gap between best practice and the actual nature of care delivered. Undertreatment, not just overtreatment, is pervasive.” Assuring that people get appropriate medical care, including preventative care, has become one aspect of an urgent quest to improve health care quality. Why the urgency? For one thing, a shocking report in 1999 by the Institute of Medicine (IOM) estimated that 98,000 Americans a year were dying from preventable hospital errors. “That’s more than die from motor vehicle accidents, breast cancer, or AIDS ... Indeed, more people die annually from medication errors than from workplace injuries. Add the financial cost to the human tragedy, and medical error easily rises to the top ranks of urgent, widespread public problems,” stated the IOM. Since then, many hospitals have been addressing that problem. But other issues — such as not enough data on medical outcomes — also affect the quality of care. The cost implication of poor-quality health care has led insurers, employers, medical providers and others to see quality improvement as a crucial strategy in controlling costs and expanding access to insurance coverage. As Porter notes in his book, “... poor quality almost always raises costs through inefficiency, prolonging the need for care, and requiring remedial treatments or surgeries.” Are we getting what we pay for?Considering the huge amount of money being spent on health care, those who pay the tab — mostly, employers and health insurers — now are asking: Are we getting value for our health care dollars? “We need to improve value by driving quality in the delivery of medical care,” says John Rathgeber, CBIA president and CEO. Rathgeber is a member of the Connecticut Health Insurance Policy Council, a coalition of leaders from major business associations, employers, insurers and health care companies, formed in 2006 to recommend ways to improve Connecticut’s health care system. “Connecticut’s health care system is unquestionably one of our nation’s best, but we know it can be even better,” says Mickey Herbert, president of ConnectiCare and co-chair of the council. Improving quality, costs, valueCBIA, the Connecticut council, insurance companies, government agencies and many national organizations all are recommending various strategies for improving health care quality as well as costs. Key recommendations are: 1. Encouraging providers to follow clinical care guidelines and practice “evidence based” medicine. “There are many organizations trying to come up with practice guidelines based on evidence-based medicine,” says O’Connell. “Believe it or not, the VA is now considered the gold standard for evidence-based care.” New standards of care have also emerged from a “100,000 Lives Campaign” launched by the Cambridge, Mass.–based Institute for Healthcare Improvement in response to the IOM’s 1999 survey. More than 3,000 hospitals participated, saving an estimated 122,000 lives in 18 months. The new standards of care are now being used in the institute’s new “5 Million Lives Campaign,” which aims to avoid 5 million incidents of “medical harm” within two years. Another example is a new nonprofit group called PROMETHEUS Payment Inc., which promotes a health care payment system that is based on evidence-based guidelines and whether patients receive the right amount and type of care. “We absolutely have to improve data and technology infrastructure to manage health care costs and quality,” says Bob Patricelli, president and CEO of Women’s Health USA and Evolution Benefits, and co-chair of the Connecticut Health Insurance Policy Council. Computerizing medical records could save $81 billion a year nationwide and improve the quality of medical care, according to a RAND study released in 2005. The study found that electronic medical records systems could save money by reducing redundant care, speeding patient treatment, improving safety and keeping patients healthier. Health information technology includes computerized medical records and many other tools intended to help health professionals and patients. Some of those other tools electronically send prescriptions to pharmacies, check prescriptions for allergies and drug interactions, aid doctors in deciding the best treatment for illnesses, and remind patients about the need for screening or other preventative measures. A 2006 RAND study found that while electronic technology can help improve the quality of care and increase efficiency, most health providers need help in learning how to move from paper records to electronic ones. They may also need a financial incentive. “A major obstacle to investment in health information technology is that those who pay for it don’t necessarily experience the savings,” said Richard Hillestad, a RAND senior management scientist who led the study released in 2005. “We need to find ways to reward health providers who invest in measures that will boost efficiency and promote quality.” 3. Making data on health care quality and costs “transparent” — that is, available to consumers and providers, and encouraging consumers to use it when making health care purchasing decisions. The data can also help providers identify where they need to improve. Although some data of this nature is already available, “fundamental information about health care quality and costs of services is largely unavailable to consumers, to payers and to providers alike. Without this information, it is difficult to make informed choices and seek out the best quality at the most affordable price. This contributes to higher health care costs overall,” notes a statement from the U.S. Department of Health and Human Services (HHS). Enlisting employers in the causeThe HHS has launched an aggressive campaign to get employers nationwide to support health care quality and cost reporting for employees. “If we are going to get a handle on costs — and we must — we first need to know what our costs are and what we are getting for our money,” says HHS Secretary Mike Leavitt. “Our nation’s private employers are the major source of health insurance for Americans, and they can help us provide the information consumers need to achieve better value for their health care dollars.” “We certainly support [information] transparency,” says Alvin Ayers, director of health, wellness and disability benefits for Electric Boat in Groton. “We want our employees to have a good experience with the whole health care process. It’s more than just the quality of the care; one component is the quality of the experience — whether they have to wait hours in the waiting room. If they get frustrated with going to the doctor, they might not bother with getting preventive care. The second component is the quality of the physicians. … You incur unnecessary expenses when employees get misdiagnosed or referred back and forth from one provider to another.” CBIA and several large Connecticut employers have signed statements of support for the HHS initiative. Meanwhile, several national groups representing some of the country’s largest employers have been urging employers to use their purchasing power to get hospitals and other health care providers to improve safety and quality. “The lack of meaningful progress in improving safety and quality in the U.S. health system is frustrating to employers, who can no longer afford to sustain rising and uncontrollable health care costs,” notes Helen Darling, president of the National Business Group on Health. The 2005 National Healthcare Quality Report, released by the HHS Agency for Healthcare Research and Quality (AHRQ), found “modest overall progress in quality of care for Americans,” says AHRQ Director Carolyn Clancy, M.D. “It is clear that the need for action to improve quality of care for all Americans continues to be great.” The National Business Group is urging that employers stop paying providers for “never events” such as surgical or medication errors, and require providers in their network to have a strong commitment to safety and to implement health information technology. Another employer organization, The Leapfrog Group, aims to mobilize employer purchasing power to recognize and reward health care providers that make “great leaps” in health care safety, quality and customer value. Its members (including Connecticut companies such as Boehringer Ingelheim, Aetna, General Electric, Pitney Bowes and United Technologies) base their purchasing decisions on principles that encourage provider quality improvement and consumer involvement. Bridges to Excellence, an employer-sponsored, “value-based” purchasing group, also encourages “significant leaps in the quality of care by recognizing and rewarding health care providers who demonstrate that they deliver safe, timely, effective, efficient and patient-centered care.” The group advocates paying bonuses to physicians who meet standardized performance measures developed by medical experts. Participating Connecticut companies include GE, Xerox, CIGNA and Aetna. Health plans spur improvementsHealth plan companies have been doing their part to promote health care quality, too. As the Connecticut Health Insurance Policy Council notes, “Private sector health plans and insurers have been responsible for developing many innovative benefit programs that have resulted in improving consumer health outcomes through more efficient and effective health care delivery.” Ayers says Electric Boat promotes quality in the delivery and administration of health care “mostly through our insurance carriers. ... We also require our carriers to meet quality standards and performance measurements.” In fact, Americans enrolled in private health plans saw the quality of their health care improve in 2005, according to the National Committee for Quality Assurance. People enrolled in HMOs and point-of-service (POS) plans were especially likely to benefit from quality measurement, says NCQA. Managed care companies originally included in their networks only providers committed to quality and cost-effective care. But insurers now are pressured by the market to have a broad provider network, notes O’Connell, of the C.M. Smith Agency. “Health care companies try to ‘gold star’ the better performers, based on their own data,” he says. More comprehensive data is being compiled by a coalition of employer, consumer and labor organizations called the Consumer-Purchaser Disclosure Project. Part of overall reform effortThe high cost of poor-quality health care has made it a key component of many current health care reform efforts, including those of CBIA and the Connecticut policy council. As the council’s proposal notes, “Any health care reform initiative cannot focus only on cost but must also ask whether we are getting value for our investment in terms of quality of service and good outcomes.” Getting recommended care only 55% of the time is simply unacceptable, both in dollar and human terms.
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