Quality Improvement in Health Care
This article addresses the topic of quality improvement in health care. We begin by looking at the issue of trust and uncertainty in medical practice and then look at the development of outcomes research as the first step in identifying effectiveness in medical care, designing methodologies and measures of health outcome data, and developing quality indicators. A brief review of quality improvement management techniques and their application in health care is presented. The article concludes with an overview of future directions in quality improvement; in particular, the development of medical scorecards and assessment ratings.
Keywords Continuous Quality Improvement; Health Care Quality; HEDIS; Information Asymmetry; Medical Care Effectiveness; Outcomes Research; QIOS; Quality Improvement; Utilization Review
In the beginning, there was only trust — the trust a patient had in his or her physician to professionally and competently diagnose and treat illness (Millenson, 2001). The trust was based on the physician's reputation, word-of-mouth recommendations, and the experience of repeated patient encounters. There was little hard data that patients could rely on to compare physician services. Patients did not have access to the same information that physicians had and therefore did not know what available treatment options there might be, if the option the physician chose was the most appropriate or the most cost effective. In economic terms, this state of imbalance between provider knowledge and patient knowledge is called information asymmetry. The effect of information asymmetry in health care is that the balance of power in the health care market was skewed to providers, i.e. hospitals and physicians, as sellers of health services. One economic outcome of this imbalance is rising costs. Buyers had to pay the price demanded by sellers because buyers lacked information on the best treatment options at what price. Sellers of health care services had a monopoly on information. Another feature of the health care market that contributed to imbalance is that providers based their prices on services provided regardless of the outcome of the service. In other words, if you had a cold and went to see your doctor, you paid the doctor for the visit whether your cold was cured or not.
This era of trust began eroding with the passage of Medicare and Medicaid in 1965. Almost immediately health care costs began to rise. The costs of hospital care climbed seven percent between 1963 and 1966 and jumped 13 percent between 1966 and 1969. Hospital net income increased 76 percent between 1965 and 1969. In this same time period physician fees doubled (Millenson, 2001). One explanation for this meteoric rise was that Medicare and Medicaid reimbursed physicians on the basis of fees deemed "usual, customary, and reasonable." Reimbursement was paid for services rendered, not for treatment outcome. Amendments to the Social Security Act of 1972 gave the federal government the right to disallow costs deemed unnecessary to the "efficient" provision of care (Millenson, 2001). This was the first curb put on Medicare spending. Private commercial health insurers followed suit by adopting similar reimbursement policies. The problem with this policy, however, was in determining what was "efficient." At this point in time, there were no measures in place to define what was efficient. Further, there were no measures or data to determine the outcomes of care — let alone efficiency.
As health care costs continued to rise throughout the 1970s, the pressure to show efficacy and appropriateness of treatment in relation to reimbursement increased. With the advent of managed care payment plans, there was now pressure for hospitals and physician practice groups to show that selected treatments were not just necessary but appropriate and cost effective.
The Road to Quality Improvement
One implication of the widespread use of third-party payors for health care, be it Medicare/Medicaid or employer-paid commercial health insurance is the problem of 'moral hazard.' Moral hazard refers to the behavior of the insured as a result of having access to insurance. In the case of health care, the moral hazard is the overuse of health care services because consumers have little concept of how much their health care costs. Third-party payers, i.e. insurance companies and the government, pay the majority of health care costs.
One solution to the overuse of health care services was the implementation of utilization review. The process of utilization review involves monitoring medical treatments before their execution (pre-authorization) or determination of what procedures will be reimbursed after treatment is delivered. The Health Care Finance Adminsitration (the predecessor to the Centers for Medicare and Medicaid) created a system of Peer Review Organizations that performed regular medical chart audits in hospitals to determine utilization rates and efficacy. Commercial health insurance followed suit; frequently hiring physicians to perform chart reviews for out-patient as well as in-patient treatment. By 1988, a policy of utilization review was adopted by 95 percent of large corporation health plans (Millenson, 2001).
Development of Outcomes Research
Beginning in the early 1980s, research studies examining variation in individual physician practice behavior revealed that variation in practice patterns could be attributed more to geography than individual behavior (AHRQ, 2007). Studies conducted by John Wennberg (1984) found that there were large variations in the frequency of hysterectomies, mastectomies, hemorrhoidectomies, and other common surgical procedures. These findings spawned a new era of research in health care services with an emphasis on treatment outcomes rather than descriptive treatment procedures. Government support for this new direction in research was significant. The Medical Treatment Effectiveness Program (MEDTEP) initiated by the federal Agency for Health Care Policy and Research (now known as the Agency for Healthcare Research and Quality) was launched with an initial appropriation of $6 million in 1989. By 1991, the MEDTEP appropriation grew to $63 million.
Outcomes and effectiveness research focuses on the end results of medical treatment. The end results measured go beyond the descriptive clinical results of treatment. The end results also include patient satisfaction with care provided, impact of insurance coverage and reimbursement policy, and the functional status of the patient following the treatment, i.e. quality of life. As noted in a report by the Foundation for Health Services Research (1994):
"A hallmark of outcomes research is the breadth of issues it addresses. Outcomes research touches all aspects of health care delivery, from the clinical encounter itself to questions of the organization, financing and regulation of the health care system."
An important distinction exists between outcomes research and clinical research trials in identifying treatment effectiveness. Clinical research trials such as those conducted by the National Institutes of Health are conducted in controlled laboratory settings, typically using a homogeneous population and rigorously controlling for all possible variables. Any observed effect in the research subjects, i.e. patients, can then be attributed to treatment effects, given stated statistical confidence. Outcomes research, on the other hand, is conducted using large statistical databases provided by health plans, managed care organizations and Medicare/Medicaid. Medical outcomes are observed in a real-world setting as opposed to a controlled laboratory setting. In addition to database analysis, outcomes research studies may also include patient questionnaires and meta-analysis; an analytical summary of multiple research findings.
According to a report issued by the Foundation for Health Services Research (1994), outcome studies typically report on four areas of analysis.
- The first is identifying variation in care. For example one study found that residents in New Haven are twice as likely as residents in Boston to undergo coronary bypass surgery.
- The second area of analysis compares the effectiveness of various...
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