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No Toyotas In Health Care: Why Medical Care Has Not Evolved To Meet Patients’ Needs Until payment policies reward quality improvement, providers will not place it at the core of their business strategy. by Molly Joel Coye

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ABSTRACT: The incentives and structure of health care in the United States produce exactly what we should expect in the quality of care for chronic disease: highly variable patterns of care and widespread failure to implement evidencebased best practices. The persistent inability of providers to improve patterns of practice is due in part to the lack of a “business case for quality.” Providers cannot anticipate that quality improvements will result in higher prices, increased volume, or decreased costs. However, signs of a business case for quality are emerging, fueled by cost pressures, the increased availability of data, informed consumers, and public- and private-sector purchaser initiatives.

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he structures, incentives, and forc es at work in the U.S. health system produce exactly what we should expect in the quality of care for chronic disease: highly variable patterns of care, widespread failure to implement recognized best practices and standards of care, and the persistent inability of provider systems to achieve substantive changes in patterns of practice. Moreover, after more than two decades of effort to improve clinical care management and to promote the adoption of evidence-based standards, these variations persist.1 As noted in the recent Institute of Medicine (IOM) report, To Err Is Human, “There is abundant evidence that serious and extensive quality problems exist throughout American medicine resulting in harm to many Americans.”2 The health sector has been exceptionally untouched by the transforming principles of quality management that revolutionized manufacturing and service industries in the 1980s. For those sectors, quality management became a core task of executive leadership and Molly Coye is chief executive officer of the Health Technology Center in San Francisco. A physician, she has served as director of the California Department of Health Services and as commissioner of health for the State of New Jersey. H E A L T H

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the defining competency of a successful organization.3 Yet for much of health care, quality management has remained an afterthought, a function held at arm’s length from the core operations and business strategies of hospitals, health plans, and physician organizations. Efforts to reach “industrial-strength” levels of quality improvement in health care appear to have been frustrated, if not stalled, throughout the 1990s. In 1997 the IOM Quality Roundtable concluded that “meeting this challenge demands a readiness to think in radically new ways about how to deliver health care services and how to assess and improve their quality…The only unacceptable alternative is not to change.”4 Subsequently, the Committee on Quality of Health Care in America was convened and charged with taking steps to foster a “threshold improvement” in the quality of care. In its final report, Crossing the Quality Chasm, the committee concluded that “payment policies [must] be aligned to encourage and support quality improvement,” to achieve threshold improvements in quality.5 These changes, the committee believes, will be necessary for the broad-scale adoption and implementation of recommended best practices by delivery systems, health plans, and clinicians. This paper reviews the principal strategies that organized delivery systems have used to advance the quality of care, finding that while each of these strategies is necessary, none has been sufficient to bring about substantial change in clinical practice. I conclude that the strategies have failed, in part, because there has not been a “business case for quality” in health care. In practical terms, this would mean that health care organizations achieving superior quality outcomes could expect to gain a higher price: Purchasers would pay a higher premium and insurers would pay higher fees or capitation rates; market share would shift to higher performers, as purchasers and consumers made choices in response to evidence of better quality; and cost per unit of care would decrease, as quality management narrowed variation and improved predictability and the use of resources. None of these conditions characterizes health care today. The lack of a business case is particularly egregious in the care of chronic conditions, which in the United States account for more than 70 percent of all deaths, 50 percent of total health care costs, and $234 billion in lost productivity each year.6 There are signs, however, that a business case is indeed emerging. This paper describes the additional elements required to drive rapid adoption of industrial-strength quality improvement in clinical care management throughout all of health care.

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Strategies For Improving Care Management

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Health care leaders entered the 1990s with considerable optimism about the potential for quality improvement within and across health plans and delivery systems.7 The strategies they relied upon still appear compelling, logical, and necessary—but insufficient, in an environment that penalizes providers for quality improvement and does not recognize the substantial costs associated with improving care in complex institutions and practices. Here I explore whether the necessary condition pertains, and how it interacts with the sufficient condition of aligned economic incentives. ■ Practice structure. Broad clinical improvement requires that a critical mass of participating physicians in a practice community be committed to understanding their patterns of practice and bringing these patterns into alignment with evidence-based best practices. This requires leadership and a constant flow of information and analyses, as well as mutual support and problem-solving. It is, essentially, a “systems” activity that is difficult to conduct without organizational leadership, support, and infrastructure. In addition to medical groups, independent practice associations (IPAs) and health plans have attempted to provide this type of information and support to physicians and physician organizations. Many physicians who joined medical groups and networks over the past decade expected these structures to enhance the quality as well as the economics of their practices. As group practice has become more prevalent, the average size of the groups is increasing as well.8 These newly aggregated practice settings can provide the scale, incentives, and information platforms to support a more rapid penetration of clinical practice improvements. As described by James Robinson, one of the four main advantages of larger physician organizations is the creation of an organizational context for continuous process innovation.9 Unfortunately, the organizational turmoil that has plagued medical groups and IPAs over the past ten years has undermined the stability needed for improvements in care management. Group- and staff-model health plans and IPAs have done surprisingly little to systematically transfer knowledge or affect behavior among their participating clinicians.10 Almost all of these organizations have independently undertaken quality improvement projects, but these initiatives tend to be limited in scope, duration, and impact, relying on voluntary participation by members. Furthermore, the results of these initiatives are rarely disseminated outside of the group for others to replicate, mostly because of concerns about competitive pressures and antitrust violations. A F F A I R S

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The most extensive initiatives for clinical change have been associated with staff- and group-model health maintenance organizations (HMOs) and large multispecialty group practices, where investments in changing physician patterns of care accrue directly to the benefit of the group or affiliated HMO.11 These larger organizations have the infrastructure and leadership to accumulate and invest modest amounts of capital in the more advanced information technologies necessary to support broad changes in practice patterns. In total, however, these organizations represent fewer than 15 percent of all physicians serving HMO members nationally.12 Most health plans contract with a large number of physicians, but each plan often represents only a fraction of each physician’s total patients and revenue. This fragmentation greatly reduces the plan’s influence over the physician and any incentive for plans to invest in changing physicians’ patterns of care.13 The majority of physicians still practice in groups of three or fewer, and physicians recognize that the IPAs they join for health plan contracting purposes are not sufficiently capitalized to provide the organizational or financial support necessary for substantive practice change. In fact, physicians often choose to join IPAs rather than medical groups to achieve the negotiating leverage of a larger organization, without ceding control over administrative and clinical decisions. ■ Continuous quality improvement. Quality improvement programs are now ubiquitous in delivery systems and medical groups. Although many programs report success on a project-by-project basis—dollars saved, more satisfied patients, and safer care—most undertake only a handful of projects each year.14 Few have deployed quality improvement as a core business strategy to transform care across their institutions. Evidence of continuous quality improvement (CQI) activities is required by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) for hospitals and health plans and the National Committee for Quality Assurance (NCQA) for HMOs. But CQI has been used most frequently to improve administrative procedures or customer service activities; its impact on clinical processes and outcomes has been far more limited.15 It is possible that too much was expected of CQI in health care, as it was introduced. The IOM’s Crossing the Quality Chasm report points out that delivery systems experimenting with substantial quality improvement frequently incur serious financial losses in a reimbursement environment that pays per encounter or per diem, and many have abandoned their efforts as a result.16 Absent incentives forcing health care organizations to improve the quality of care—and thus to transform their culture—CQI remained only a tactic, not a core strategy. Ultimately, neither organized quality H E A L T H

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H E A L T H

improvement efforts by health plans and medical provider groups nor the medical profession’s requirements for physicians have been sufficient to ensure the broad adoption of clinical improvements. ■ Accountability—measures and reporting. Competing on the basis of quality has turned out to be more difficult than anticipated for both plans and physicians. For HMOs, performance monitoring and “report cards” have become pervasive and routinely incorporate at least selected clinical measures of preventive care and chronic disease management.17 HMOs have an advantage over other types of health plans in reporting data, since members, by definition, use a limited network of providers for most if not all services. Less tightly managed delivery systems lack a standardized way of measuring performance. While HMOs are able to provide more feedback about quality performance to practitioners, the lack of risk adjustment and difficulties inherent in “small numbers” (analyzing data on a small number of patients associated with each physician’s practice) undermine the validity and scope of even the best efforts. The majority of the large national HMOs have reported quality performance data to the NCQA over the past three years, but the impact on care management is unclear. Changes in provider networks, membership mix, and providers’ data-reporting capabilities can create fluctuations in health plan performance and can make it difficult to link changes in physicians’ behavior to plans’ participation in NCQA data reporting or improvements in performance. Certainly, it has been difficult to translate NCQA data into consumer pressure for care improvement; as Judith Hibbard’s work suggests, the public considers physicians and hospitals, rather than health plans, principally responsible for quality of care.18 Measuring quality at the provider level will be critical to providing meaningful information to consumers, purchasers, and regulators; it presumably would enable physician organizations, if not individual physicians, to compete on the basis of quality, but formidable challenges arise.19 The Pacific Business Group on Health (PBGH) and other private and public purchaser organizations are beginning to experiment with approaches to monitoring the performance of delivery networks, medical groups, and even individual physicians.20 At this point, however, almost no data on quality performance by medical groups or by independent physicians have been reported to purchasers or the public. Even in the HMO environment, Health Plan Employer Data and Information Set (HEDIS) data are reported for health plans and not for individual physicians or groups. Physicians thus have little motivation to respond to HEDIS pressures, beyond what is required under HMO provider contracts. Further compounding the situation, data reported by insurers to purchasers A F F A I R S

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are largely limited to utilization, access, and cost issues, while data reported to the public address physician or group performance on service issues such as wait times, appointment scheduling, and satisfaction with patient-physician communications. It is little surprise, therefore, that purchasers and the public focus on cost and service issues, respectively, rather than clinical outcomes. â– Information systems and physician profiling. The promise of detailed, accurate, accessible, and useful data on patients and their care has stimulated enormous investment in health care information systems, especially in regions where managed care penetration exceeds 20 percent of the insured population.21 The cost of these systems helped to drive the formation of medical groups and physician practice management (PPM) firms in the 1990s. Physician profiling efforts by groups and PPM firms have involved physicians in unprecedented discussions about their practice patterns and have induced changes in patterns of practice across a wide variety of settings.22 Beginning in 1998, though, this driver of change lost steam, as PPM firms retrenched and point-of-service (POS) managed care products proliferated. For the majority of U.S. physicians, however, hospital-based provider organizations and health plans constitute the only sources of information about their own practice patterns and those of their peers.23 These organizations use customer surveys and claims data to profile network performance and utilization patterns and may distribute limited information directly to individual physicians. But claims data, drawn from billing files, lack key clinical information to establish comparable patient population denominators and timeliness. Claims data may be skewed by contractual relationships and patient preference effects that are difficult to defend when dealing in small numbers. In some areas, capitated medical groups assume responsibility for claims processing and cease reporting detailed encounter data to plans. As a result, health plans in the most heavily penetrated managed care markets are frequently the least capable of generating information for clinical performance profiling. Information systems and physician profiling are simply tools; people and processes are the real change agents. Feedback to individuals and groups of physicians can, when well managed, have a substantial effect on physician behavior, reducing variation and even moving the mean toward standard practices. Nevertheless, the market has not provided incentives for plans and providers to build the leadership and processes to use and improve the claims-based information they hold or to develop clinical information systems that would further enhance the management of care. â–  Physician compensation and financial incentives. Clinical H E A L T H

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quality measures are latecomers to the incentive mix for physicians, at least as far as health plans and purchasers are concerned, and are nonexistent in the fee-for-service (FFS) world.24 In an extensive literature review for the IOM, Adams Dudley and colleagues found that most health plans offer limited or no incentives for quality and that there appears to be no consistent difference between FFS and capitation reimbursement systems with respect to clinical outcomes.25 The differences that could be documented appeared to relate more to benefit design and coverage decisions than to the plans’ capacity to provide different levels of quality of care. The most prevalent forms of physician payment all create perverse behaviors with regard to both the quantity and quality of health services delivered. Robinson suggests that perhaps the answer to this dilemma is a hybrid of the three.26 Incentive systems that simply reward superior performance will not necessarily address the separate issue of poorer performers.27

The Emerging Business Case

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H E A L T H

If there has not been a business case for quality in health care, then it is easier to understand why each of the strategies intended to improve quality has been less effective than anticipated. A business case for quality would require that purchasers, users, and providers recognize and value advancements in quality outcomes. Purchasers and users would reward improvement in outcomes with either greater volume or higher payment. Providers would strive to produce higher-quality care to enhance earnings and to reduce costs. It may be too soon to be discouraged, however. Everett Rogers describes the diffusion of innovations as a progression from innovators, or the first 2.5 percent of a field to adopt the change, to early adopters, the next 15 percent, and so on to full acceptance.28 Once an innovation has been adopted by the first 15–20 percent of a field, it becomes almost unstoppable. Quality management now appears to have passed into the hands of early adopters, heavily concentrated in provider-based HMOs and analogous systems such as the Department of Veterans Affairs (VA), where the contradictory incentives described earlier are at least partially muted.29 A business case for quality appears to be emerging. First, an increasing number of purchasers—private employers, business coalitions, and government purchasers—are attempting to align incentives for providers in support of quality improvement. In most cases, their efforts target volume effects rather than prices—that is, they attempt to encourage consumers to select higher-quality providers or to restrict entry or participation by lower-quality providers.30 The most recent of national private- and public-sector efforts, the A F F A I R S

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Leapfrog initiative, is unique in that it attempts to mobilize the purchasing power of employers to directly address the need for a business case for quality. The NCQA, the Centers for Medicare and Medicaid Services (CMS, formerly HCFA), the Foundation for Accountability (FACCT), and other organizations have focused on improving the communication of information about providers’ quality performance to consumers, to build market pressures for quality improvements and to assist consumer decision making.31 Medicare’s recent moves to reward quality improvement initiatives and to restructure payment to support improved chronic care management are further promising signs.32 Finally, the creation of the National Forum for Health Care Quality Measurement and Reporting in 1999, which is charged with the development of national standards for the reporting of comparable data on clinical quality, suggests that it will be possible to measure quality more consistently in the future.

Additional Requirements For Industrial-Strength Quality Improvement What more will be required to drive industrial-strength quality improvement? At least three factors appear essential. ■ Competitive advantage. As Donald Berwick has pointed out, “Health care is missing a comprehensive example of breakthrough performance…When Detroit began to awake in the mid-1970s to the global competitive threat, American automobile manufacturers… could buy the evidence on how good a car could be; it was called a Toyota. But, so far, health care has no Toyota.”33 In other words, there is not yet a competitor to demonstrate either the nature of the product—industrial-strength quality in health care—or the response of the market to that product. Even without a Toyota at their doorstep, health care organizations might invest in quality management if they believed that it would result in greatly reduced costs. Unfortunately, the savings reported by quality management programs generally come from small studies of the direct costs and savings in limited CQI projects. Few if any CQI projects represent broad programs across multiple diseases and the full spectrum of care. Few include the organizational costs of implementing large-scale change and the net losses incurred when patients are shifted to less complex diagnosis-related groups (DRGs), per diem days are reduced, or office visits are rendered unnecessary. Experience from other industries suggests that the cost reductions generated by reduced variation and improvements in quality could be substantial. But the savings associated with comprehensive, institutionwide improvements in clinical care are still unknown. H E A L T H

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“Ultimately, it may well be that the government as purchaser will be the most effective driver in quality improvement.”

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H E A L T H

In most other industrial sectors, quality improvement became a core business strategy only when all other possible strategies had been exhausted and the industry faced ruination, commonly known as the “burning platform” or a “near-death experience.”34 Despite the turmoil and uncertainty of the past decade, it is, surprisingly, not clear that health care is yet at that point. A few provider-based health plans and provider organizations have recently adopted new business strategies that rely upon quality management to reduce “quality waste” and to produce major savings. The Robert Wood Johnson Foundation recently launched an initiative based at the Institute for Healthcare Improvement, known as Pursuing Perfection, designed to build “Toyotas” in six systems of care across the United States. By modeling broad change across multiple clinical and administrative processes, this initiative may help to determine whether industrial-strength quality improvement can itself create a business case for quality. Together with federal research grants, foundation initiatives such as these are helping to identify the structural changes that will be needed to improve outcomes of care. Ultimately, however, the emergence of a true business case for quality will demand that purchasers and users of health care services value and reward quality improvement. ■ Market demand and public policy. Safety improvement in the auto industry was propelled by consumer outrage, fueled by vivid portrayals of industry arrogance and shoddy design and production. Although most consumers do not yet realize it, they are riding in the health care equivalent of a Corvair. With the release of more information on quality in health care, public attention will be drawn increasingly to the gaps between current clinical practices and recommended, evidence-based standards of care. And the babyboom generation—the most activist consumer cohort in history—will escalate its demands for information, high-quality products, and the redesign of services. The mix of baby boomers aging into their chronic disease years and the rising tide of stories about less-than-optimal care may stimulate demands for regulation and other public policy approaches to accelerating improvements in clinical care. Ultimately, it may well be that the government as purchaser will be the most effective driver in quality improvement. The CMS has joined with the Agency for Healthcare Research and Quality (AHRQ) and the A F F A I R S

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NCQA to produce performance indicators for Medicare and Medicaid managed care plans. The Federal Employees Health Benefits Program (FEHBP) has established standardized benefit packages, require HEDIS reporting, and use financial incentives to encourage employees to enroll in high-performing health plans. The Veterans’ Health Administration has implemented standards of care across large segments of its covered populations. Few health plans and delivery systems will survive without serving Medicare and Medicaid beneficiaries, federal employees, or veterans. Ironically, the government itself may create the business case for quality. ■ Alignment and linked incentives. The complex and extraordinarily contradictory incentives operating within and among health care organizations are so pervasive and pernicious that they boggle the imagination. Within each, attempts to change patterns of care trigger a cascading series of negative and positive incentives, each provoking actions that reinforce or impede the success of the effort.35 Management in the face of conflicting incentives is a major problem in health care. Managed care incentives encourage physicians to cut hospital utilization, while hospital administrators must strive to fill beds to cover fixed costs. Mid-level managers are encouraged to maximize net operating revenues for their units, while clinical care improvements that cut their revenues may yield savings across the larger institution or spectrum of care. The organization and history of delivery systems reinforce these contradictory incentives and add cultural differences to the mix. Clinical leaders (the production function) and business leaders (the management function) of most organizations are parallel but separate. Only in the past several years have clinicians in significant numbers assumed operating responsibilities within health plans, hospitals, and even medical groups. For managers without clinical training, moreover, leadership in clinical quality improvement is often difficult because of physician resistance. As a result, quality improvement programs have been shunted to the clinical side and separated from the “business” of the organization.

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ven absent a business case fo r q uality, some organizations have made remarkable commitments to improving the quality of their clinical care management.36 Many are nonprofit or government organizations that have embarked upon strategies to implement standard practices despite expectations that this may lead to economic difficulties, at least in the short term. An even greater number of health professionals have committed themselves to quality improvement efforts without institutional support. Without rewards or institutional incentives, these individuals and

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teams have responded to an intrinsic motivation to improve care. But incremental efforts will not be enough. Each of the strategies described in this paper will continue to contribute to the improvement of clinical care management, but they are not sufficient to make the deployment of best practices catch fire nationally. A strong business case for quality must be created. Otherwise, quality proponents are left discouraged and frustrated at the apparent unwillingness of their organizations to understand the vast potential for improvement. Based on the evidence of success in other industries, the combination of clinical quality improvement, information systems and feedback, and financial incentives and accountability—if supported by aligned incentives and strong leadership—could produce dramatic improvements. Like everything important and worthwhile, creating and promoting the business case will be difficult. It will not be accomplished without a great deal of pulling—employers and government purchasers must establish thresholds for quality performance that force providers and plans toward standard practices—and a great deal of pushing—leaders in health plans and provider systems must drive their organizations toward core business strategies that unite clinical and financial systems in quality management. With luck, a Toyota will emerge. We could use a shining example of what it means to deliver on the basic promise of medicine: that we will do for our patients what we know we should, and that we have indeed found a way to meld the desire to heal with the ability to improve the overall health care system. This paper was developed as a part of the Robert Wood Johnson Foundation– sponsored project Strategies for Improvement of Clinical Care Management: A Critical Assessment. Karen Hunt, Richard Dixon, and Geneva Jacks participated in the project and contributed to the preparation of this paper. The author also acknowledges the readers of the early drafts, who provided valuable comments and tested this argument against their organizations’ experiences.

NOTES 1. D.M. Berwick, A. Godfrey, and J. Roessner, Curing Healthcare: New Strategies for Quality Improvement (San Francisco: Jossey-Bass, 1990); Institute of Medicine, “Statement on Quality of Care,” National Roundtable on Health Care Quality (Washington: National Academy of Sciences, 1999); and J.E. Wennberg, “Unwarranted Variations and Their Remedies: Findings from the Dartmouth Atlas,” <www.dartmouthatlas.org> (8 August 2001). 2. Institute of Medicine, To Err Is Human: Building a Safer Health System (Washington: National Academy Press, 2000). 3. M. Chassin, “Is Health Care Ready for Six Sigma Quality?” Milbank Quarterly 76, no. 4 (1998): 575–591. 4. M.R. Chassin and R.W. Galvin, “The Urgent Need to Improve Health Care H E A L T H

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5. 6.

7.

8. 9. 10. 11.

12. 13.

14.

15. 16. 17. 18. 19.

20.

Quality: Institute of Medicine National Roundtable on Quality,” Journal of the American Medical Association 280, no. 11 (1998): 1000–1005. IOM, Crossing the Quality Chasm: A New Health System for the Twenty-first Century (Washington: National Academy Press, March 2001). Centers for Disease Control and Prevention, “Chronic Diseases and Their Risk Factors: The Nation’s Leading Causes of Death,” December 1999, <www.gov/ nccdphp/statbook/pdf/cdrf1999.pdf> (9 August 2001); and G.F. Anderson, presentation to the Alliance for Healthcare Reform, Chronic Care 101, Washington, D.C., 26 February 2001. K. Lohr, ed., Medicare: A Strategy for Quality Assurance (Washington: National Academy Press, 1999); M.R. Chassin, “Quality of Care—Time to Act,” Journal of the American Medical Association 266, no. 24 (1991): 3472–3473; M.L. Millenson, “’Miracle and Wonder’: The AMA Embraces Quality Measurement,” Health Affairs (May/June 1997): 183–194; H.S. Luft and M.R Greenlick, “The Contribution of Group and Staff-Model HMOs to American Medicine,” Milbank Quarterly 74, no. 4 (1996): 445–467; and A.M. Epstein, “Rolling Down the Runway: The Challenges Ahead for Quality Report Cards,” Journal of the American Medical Association 279, no. 21 (1998): 1691–1696. Medical Groups in the United States (Chicago: AMA Press, 1999). J.C. Robinson, “Financial Capital and Intellectual Capital in Practice Management,” Health Affairs (July/Aug 1998): 53–74. R. Dixon et al., “Templates for Change: Leading Health Care Organizations Use Similar Strategies to Improve Clinical Care” (Report to the Robert Wood Johnson Foundation, May 2000). S.M. Shortell, C.L. Bennett, and G.R. Byck, “Accelerating the Impact of Continuous Quality Improvement on Clinical Practice: Assessing the Evidence” (Paper prepared for the IOM Conference on Integrating Strategies on Quality Improvement, Washington, D.C., 31 October 1997). InterStudy Competitive Edge: HMO Industry Report and Regional Market Analysis (1997). R.A. Berenson, “Collaboration among Health Plan Market Competitors to Improve Quality” (Paper prepared for the IOM Conference on Collaboration among Competing Health Plans, Washington, D.C., 13 November 1997); and D.A. Blumenthal and C.M. Kilo, “A Report Card on Continuous Quality Improvement,” Milbank Quarterly 76, no. 4 (1998): 625–648. D.M. Berwick, “Continuous Improvement as an Ideal in Health Care,” New England Journal of Medicine 320, no. 1 (1989): 53–56; R.H. Brook, “Managed Care Is Not the Problem, Quality Is,” Journal of the American Medical Association 278, no. 19 (1997): 1612–1614; and S.M. Shortell, C.L. Bennett, and G.R. Byck, “Assessing the Impact of Continuous Quality Improvement on Clinical Practice: What It Will Take to Accelerate Progress,” Milbank Quarterly 76, no. 4 (1998): 593–624. See, for example, M.R. Chassin, R.W. Galvin, and the IOM National Roundtable on Health Care Quality, “The Urgent Need to Improve Health Care Quality,” Journal of the American Medical Association 280, no. 11 (1998): 1000–1005. IOM, Crossing the Quality Chasm. D.M. Eddy, “Performance Measurement: Problems and Solutions,” Health Affairs (July/Aug 1998): 7–25. J.H. Hibbard and J.J. Jewett, “Will Quality Report Cards Help Consumers?” Health Affairs (May/June 1997): 218–228. J.H. Hibbard, P. Slovic, and J.J. Jewett. “Informing Consumer Decisions in Health Care: Implications from Decision-Making Research,” Milbank Quarterly 75, no. 3 (1997): 395–414; and S. Edgman-Levitan and P.D. Cleary, “What Information Do Consumers Want and Need?” Health Affairs (Winter 1996): 42–56. R.S. Galvin, “Are Performance Measures Relevant?” Health Affairs (July/Aug 1998): 31; and J.R. Gabel, K.A. Hunt, and K.M. Hurst, When Employers Choose

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21. 22.

23. 24.

25. 26.

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27. 28. 29. 30. 31. 32.

33. 34. 35. 36.

H E A L T H

Health Plans Do NCQA Accreditation and HEDIS Data Count? Commonwealth Fund Research Report (September 1998), 19–20. T. Field, “Managed Share Networks.” CIO Magazine, 15 June 1997, <www.cio. com/archive/061597/information.htm> (July 2001). T.D. Gotowka, M. Jackson, and D. Aquilina, “Health Data Analysis and Reporting: Organization and System Strategies,” Managed Care Quarterly 1, no. 3 (1993): 26–34; Robinson, “Consolidation of Medical Groups”; E.H. Wagner, B.T. Austin, and M. Von Korff, “Organizing Care for Patients with Chronic Illness,” Milbank Quarterly 74, no. 4 (1996): 511–543; and Luft and Greenlick, “The Contribution of Group and Staff-Model HMOs.” N.A. Hanchack, N. Schlackman, and S. Harmon-Weiss, “U.S. Healthcare’s Quality-Based Compensation Model,” Health Care Financing Review 17, no. 3 (1996): 143–159. In January 2001 the CMS launched fifteen demonstration sites to study strategies for expanding care management to patients with chronic conditions. The demonstration includes enhanced reimbursement for physicians who provide expanded care management services to patients with chronic conditions. R.A. Dudley et al., “The Impact of Financial Incentives on Quality of Health Care,” Milbank Quarterly 16, no. 4 (1998): 649–686. J.C. Robinson, “Theory and Practice in the Design of Physician Payment Incentives,” Milbank Quarterly 79, no. 2 (2001): 149–177. For example, the Leapfrog Initiative has suggested that employers adopt minimum quality performance standards for “market entry,” that is, for hospitals to join contract networks. This may provide a model for addressing the issue of underperforming physicians and medical groups. M. Hewitt, “Interpreting the Volume-Outcome Relationship in the Context of Health Care Quality: Workshop Summary,” 2000, <books.nap.edu/books/ NI000322/html/index.html> (25 July 2001). E.M. Rogers, “Lessons for Guidelines from the Diffusion of Innovations,” Journal on Quality Improvement 21, no. 7 (1995): 324–328. J.K. Iglehart, “Reform of the Veterans Affairs Health Care System,” New England Journal of Medicine 335, no. 18 (1996): 1407–1411. I. Fraser et al., “ The Pursuit of Quality by Business Coalitions: A National Survey,” Health Affairs (Nov/Dec 1999): 158–165. R. Feldman, J. Christianson, and J. Schultz, “Do Consumers Use Information to Choose a Health Care Provider System?” Milbank Quarterly 78, no. 1 (2000): 47–77. In May 2000 the CMS officially launched the Quality Improvement System for Managed Care (QISMC) program for Medicare+Choice (M+C) contractors, requiring each heath plan to provide evidence of improvements in outcomes for at least two new care management programs annually, one developed by the CMS for all plans and an optional initiative designed by the health plan. The M+C organizations are required to provide information annually about the improvements in outcomes for both initiatives. Also see Dudley et al., “The Impact of Financial Incentives.” D.M. Berwick, “As Good as It Should Get: Making Health Care Better in the New Millemmium,” Institute for Healthcare Improvement (1998), <http:// ihi.org/resources/ihipublications/ci0801asgoodas.asp> (10 October 2001). J.P. Womack et al., The Machine That Changed the World (Cambridge: MIT Press, 1990). J.C. Robinson, “Physician Organization in California: Crisis and Opportunity,” Health Affairs (July/Aug 2001): 81–96. B.C. James, Intermountain Health Care Institute for Health Care Delivery Research, Salt Lake City, “Health Care Delivery Systems” (Transcript of congressional testimony, 1 March 1994).

A F F A I R S

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my work article about chronic disease

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