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Study Tells U.S. to Pay More for the Best Medical Care

By Robert Pear

NY Times, October 30, 2002

The National Academy of Sciences said today that Medicare, Medicaid and other government programs should reward high-quality health care by paying higher fees or bonuses to the best doctors, hospitals, nursing homes and health maintenance organizations.

In a report requested by Congress, the academy said that the federal government should establish standard measures of quality, assess the performance of each health care provider and publish comparative data for use by consumers.

The report, by the academy's Institute of Medicine, said that after years of fitful, disjointed efforts, the government must use its leverage as a buyer, regulator and provider of care to upgrade the quality of services received by 100 million Americans in six federal programs.

"The federal government should take full advantage of its influential position to set the quality standard for the entire health care sector," said Dr. Gilbert S. Omenn, professor of medicine and public health at the University of Michigan, who was chairman of the 17-member panel that issued the report.

One way to do this, Dr. Omenn said, is to link pay to performance. Health care providers achieving "exemplary levels of performance," as measured by government criteria, might receive 5 percent to 15 percent more than the standard payments, the panel said.

The academy issues dozens of reports each year, and many generate little response. But the recommendations today are likely to produce results in the near future, because Congress, employers, insurers and many health care providers are receptive.

The Institute of Medicine touched off an immense amount of activity in 1999, when it estimated that 44,000 to 98,000 hospital patients died each year because of medical errors.

Tommy G. Thompson, the secretary of health and human services, welcomed the new report, including its call for standard measures of performance. But he did not say whether he agreed with the proposal to reward high-quality care with higher payments.

In the report, the institute proposed an ambitious schedule:

¶In the next two years, the government should issue standards to evaluate treatment of 15 common health conditions, like diabetes, depression, osteoporosis, asthma, heart disease and stroke.

¶By 2007, doctors, hospitals and other other health care providers in the six federal programs would have to submit data to the government showing how they treat patients with any of the 15 conditions.

¶Starting in 2008, each federal program would publicly report data comparing the quality of care available from health care providers who treat its patients.

The recommendations assume that doctors and other providers will take major strides to computerize medical records, perhaps with tax credits and other federal incentives for the purchase of information technology.

Under the panel's recommendations, Dr. Omenn said, health care providers would have to submit "audited patient-level data," and it makes no sense to cull such information from paper medical records and insurance claim forms.

The six programs in question are Medicare and Medicaid, for the elderly, disabled and poor; the Children's Health Insurance Program; the Defense Department's Tricare program, for military personnel and their dependents; the veterans health program; and the Indian Health Service.

Doctors and hospital executives said they feared that the new reporting requirements would impose costly new administrative burdens. But Dr. Omenn said the proposals could actually reduce the burden by establishing one set of quality measures that would be used by all six programs and perhaps by private insurers as well.

Hospitals and doctors endorse the goal but question some of the details. Elisabeth Belmont, corporate counsel for Maine Health, which operates seven hospitals, a nursing home and a home health agency in Maine, said plaintiffs' lawyers could argue that any deviation from the "minimum standards" constitutes negligence, showing medical malpractice.

Under the panel's recommendations, the government would receive huge amounts of clinical data and would pull it together in one place. "Outsiders should have access to the raw data, provided patient privacy is fully protected," the panel said, adding that the data should be "stripped of identifiers."

But Ms. Belmont said: "It may not be possible to fully deidentify the data. In the computer age, it's often easy to uncover the identity of patients by linking or matching medical information with other databases."

Dr. Yank D. Coble Jr., president of the American Medical Association, said his group supported the development and use of guidelines for the treatment of specific medical conditions. But, Dr. Coble said, consumers and the government must be cautious in measuring a doctor's compliance with such guidelines.

"A doctor may not see enough patients to make the data valid," Dr. Coble said. Dr. Donald M. Berwick, one of the nation's leading experts on the measurement of health care quality, recently endorsed the idea of issuing report cards on providers, including large groups of doctors practicing together. But in an editorial in The Journal of the American Medical Association, Dr. Berwick said that "reporting on individual clinician performance should not be mandatory, except perhaps for specialty surgery," because the sources of data were not reliable enough.

For several years, H.M.O.'s have been required to compile data evaluating the quality of care they provide to Medicare patients. A major theme of the report is that doctors and hospitals in Medicare's traditional fee-for-service program should be just as accountable.

The panel said the government should set "minimum standards for the care provided to patients." Janet M. Corrigan, director of the study, said the same standards should apply to small rural hospitals and major teaching hospitals.

Patients at small hospitals need to know how their care measures up, Ms. Corrigan said, and with new telecommunications technology, they can often be examined and treated by experts at a distant site.

In the Clinton administration, Medicare officials wanted to designate certain hospitals and clinics as "centers of excellence." Doctors and some hospitals resisted the plan, saying it would give a virtual monopoly to the favored providers.

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