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National Academy of Engineering (US) and Institute of Medicine (US) Committee on Engineering and the Health Care System; Reid PP, Compton WD, Grossman JH, et al., editors. Building a Better Delivery System: A New Engineering/Health Care Partnership. Washington (DC): National Academies Press (US); 2005.

Cover of Building a Better Delivery System

Building a Better Delivery System: A New Engineering/Health Care Partnership.

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Political Barriers to Change

Nancy-Ann DeParle

JP Morgan Partners, LLC and The Wharton School

The United States spends more than $200 billion a year to provide guaranteed health care to some 39 million Medicare beneficiaries. The federal government, through Medicare, supplies one-third to one-half the revenues of every hospital in the country and a substantial proportion of the revenues of each and every physician, nursing home, and other health care provider and vendor of every stripe. Medicare is one of—if not the—most popular government programs ever invented, at least among its beneficiaries, if not among hospitals and physicians. So it might be reasonable to think that if the federal government can run such an effective, popular program, it could also lead the charge to reengineer health care delivery systems to promote better quality of care. Reasonable, but naive. I hate to be the skunk at today's party, and no one wants to improve health care quality more than I do. But I guess I am here to provide the realpolitik. Based on my experience as a health-policy official in the federal government, I believe that not only do we have a very long way to go to achieve acceptable levels of clinical quality (as others today have persuasively argued), but also that it will not be easy for the federal government to be involved appropriately in moving the system in the right direction.

We are gathered here under the auspices of the National Academy of Engineering, and I imagine there are some rocket scientists in this room, so I hesitate to say this. But I think it is important to understand that changing health care is not rocket science. It is harder. This morning I will talk about my experiences as a health-policy official in the Clinton administration that have led me, regrettably, to a fairly pessimistic assessment of what we can reasonably expect the government to do in reengineering health care delivery systems to improve the quality of care.

Last October, the Health Care Financing Administration (HCFA) (now the Centers for Medicare and Medicaid Services, or CMS), the agency that administers Medicare, finally published the first state-by-state assessment of the quality of care Medicare provides to beneficiaries (Jencks et al., 2000). I say finally both because it took us a long time to get the sign-offs from the U.S. Department of Health and Human Services and from “down the street” (the way we referred to the White House and the Office of Management and Budget) to release the study and because it had taken Medicare more than 35 years to get around to making this assessment.

To do this first-ever qualitative assessment, we began by assembling a group of experts to decide which areas should be included. The group decided to focus on process measures rather than outcomes, which would be more controversial. According to the clinicians who worked on the study, the measures were very basic; one told me they were practically at the level of washing one's hands before surgery. In other words, all of the measures were supported by clinical consensus, and, in an ideal world, they should all have been at or near 100 percent. The beauty of the study is that it clearly indicates where we are and what needs to be done.

We chose to assess processes in the six most significant areas for Medicare beneficiaries: acute myocardial infarction, heart failure, stroke, pneumonia, breast cancer, and diabetes. For some measures, we did a systematic, random sample of up to 750 patient records in each state; for others we looked at all Medicare claims.

For pneumonia, for example, the study showed that the 39 million Medicare beneficiaries are not getting some of the basic things they need to treat them when they are sick or to prevent them from getting sick. The study focused on errors of omission rather than errors of commission (in this sense, it was slightly different than the focus of To Err Is Human [IOM, 2000], the ground-breaking study documenting 50,000 to 100,000 death annually from preventable medical errors). Overall, it wasn't a very pretty picture. The individual indicators ranged from a low of 11 percent to a high of around 95 percent. Some of the data suggest major problems in medical education and care processes. Practice patterns showed physicians were not providing some very basic treatments in roughly 50 percent of the cases.

The report was published the week I left HCFA, and this timing was not accidental. It required a great deal of effort to get it published, and in fact, I think some of the career clinicians and policy analysts who worked on the assessment and the article we published began to doubt whether it would ever see the light of day. The agency did not publicize it widely, in part because of a concern that the information might make Medicare, or some physicians or hospitals, look bad, and in part because it might be embarrassing to some states. We did not have a political agenda when we undertook the study. We wanted to know where we stood and how effective Medicare was in translating insurance coverage into high quality care so we could assess how well we were doing in purchasing good care on behalf of Medicare beneficiaries and taxpayers.

The silence that greeted our efforts was deafening. I remember that New Jersey ranked near the bottom of the 50 states on an aggregate basis. The day after the data were released, the New Jersey Medical Society held a press conference. Surprisingly, the physicians at the press conference did not question the data or criticize HCFA (a popular pastime). Instead, they said they were concerned and would work to improve the quality of care provided to Medicare beneficiaries in New Jersey, which seems like an entirely proper and laudable reaction. But except for that press conference, I heard nothing about the report. I have since quizzed clinicians in other states—and found, totally unscientifically but, I fear, very reliably, that almost no one had heard of it. In fact, let me see a show of hands in this room of those who have heard about this report. So that is the bad news.

The good news is that just because no one has heard of the report doesn't mean that it won't have an impact. HCFA's plan is for the peer review organizations that conduct quality improvement projects (called “QIOs” or Quality Improvement Organizations) to work with the providers in each state to develop a plan to improve their scores on each of the quality-of-care indicators. Over time, the plan for New Jersey might raise some indicators by 10 or 20 percent, which would make a real difference in the lives of Medicare beneficiaries. That, I think, is the best we can hope for.

Don't get me wrong. I think that result would be terrific. But I think this example illustrates why changing health care is so hard—it is personal, and it challenges people's assumptions, and it forces them to think about things they would prefer not to think about, like what happens when loved ones get sick. It is really difficult to get a consensus about what constitutes quality health care. And I guarantee you, most clinicians believe they are providing high quality care.

Consider an anecdote that illustrates why changing health care is so hard. In the late 1980s and early 1990s, Medicare tried a demonstration program in which we designated “centers of excellence,” which were hospitals that had demonstrated consistently high quality care and good outcomes for certain procedures and were willing to accept a capitated payment and meet other standards. Beneficiaries could still go wherever they wanted to have their cataracts removed or to undergo coronary artery bypass grafting surgery, but they were offered lower copayments if they chose a center of excellence. We wanted to see if giving beneficiaries incentives to choose hospitals that had demonstrated a better quality of care would improve outcomes and save beneficiaries (and Medicare) money.

The results were even better than we expected. The outcomes for patients improved, and Medicare and the beneficiaries saved money. Therefore, we proposed extending the centers of excellence program to include other procedures and make it a permanent feature of Medicare. Great idea, right? Not so fast.

Our proposal was included in several versions of the Balanced Budget Act but was rejected by congressional conferees in the end because of heavy lobbying against it. You might assume, as I did, that the lobbying was on behalf of a group of mediocre hospitals that were threatened by the notion of providing information about outcomes and quality and offering beneficiaries incentives to choose higher quality care. You would be wrong, however. The intense opposition came from one of the premier academic health centers in this country. As it was explained to me, this facility felt it was already considered a center of excellence and did not want Medicare to put its “Good Housekeeping Seal of Approval” on other facilities. Amazing, but not that unusual! It seems that everyone wants a market-based health care system where competition is allowed to drive prices down and quality up—unless it affects them. When there's this much money involved, and when providers view it as a zero-sum game—“if hospital X gets the patients and the money, hospital Y loses”—markets do not (or are not allowed to) function as they are intended to function.

Another reason changing health care is harder than rocket science is that there is no real consensus about its goals or the laws that govern it. When you're faced with a vexing scientific or technical problem, you can go back to first principles, theorems, settled laws, and formulas. There is nothing like that in health care. Other than the vague principle that promoting the public health is a good thing and laws that say certain Americans are entitled to Medicare and Medicaid coverage, there are no rules and no entity with the authority to enforce them.

This may strike you as a strange insight coming from the person who used to run Medicare, the 900-lb. gorilla. And yes, it is true that the government, because Medicare controls about one-third of health care spending, can have a great deal of influence over what happens in health care. But in Medicare's nearly 40-year history, I think our record of using Medicare and its huge dollar impact to affect the quality of the health care delivery system is mixed at best. Medicare has shown that it can set prices. Medicare has shown that it can set minimal conditions of participation (which in some cases are proxies for quality, or at least, in the aggregate, a basis for concern if they are not met). And in recent years, the federal government has shown that it can control waste, fraud, and abuse in Medicare by aggressively (some would say too aggressively) prosecuting and punishing wrongdoers.

What is less clear is whether Congress or the public would tolerate Medicare using its market leverage and its authority to purchase health care for 40 million elderly and disabled people to affect broad changes in the delivery system. I am skeptical that this would be allowed—or for that matter, seriously attempted by any administration. The Clinton administration did make some efforts in this direction, but it was never anything we went to the mat for. When all is said and done, I am not convinced the country is ready to invest in the kind of assessments and distinctions based on quality that would force us to implement the changes we need. Certainly, Congress is not ready to support it. The government is a powerful purchaser and could be a powerful force for change. However, after eight years, I have learned that there is a good deal of opposition in Congress to giving HCFA, or any agency, the kind of authority it needs to make meaningful changes in the way health care is delivered in this country. There are too many entrenched interests, and there is too much money at stake.

Even though this conference is asking the right questions and represents a step in the right direction, except for the adoption of some basic technologies that, despite their widespread adoption in other industries, are not yet widely used in this country, there is no consensus about what the government, or anyone else, should do to improve the quality of health care. For these reasons, I think we need to be realistic about how difficult reengineering health care delivery systems will be and how difficult it will be for the government to play a leadership role.


  1. IOM (Institute of Medicine). To Err Is Human: Building a Safer Health System. In: Kohn LT, Corrigan JM, Donaldson MS, editors. Washington, D.C: National Academy Press; 2000.
  2. Jencks SF, Cuerdon T, Burwen DR, Fleming B, Houck PM, Kussmaul AE, Nilasena DS, Ordin DL, Arday DR. Quality of medical care delivered to Medicare beneficiaries: a profile at state and national levels. Journal of the American Medical Association. 2000;284(13):1670–1676. [PubMed: 11015797]
Copyright © 2005, National Academy of Sciences.
Bookshelf ID: NBK22872


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