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Institute of Medicine (US) Committee to Design a Strategy for Quality Review and Assurance in Medicare; Lohr KN, editor. Medicare: A Strategy for Quality Assurance: Volume 1. Washington (DC): National Academies Press (US); 1990.

Cover of Medicare

Medicare: A Strategy for Quality Assurance: Volume 1.

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1Health, Health Care, and Quality of Care

Good health may be the most valued attribute of life. Daily, we express our concern for others by inquiring about their health and wishing them well. Material concerns are overshadowed when our own health is threatened; good health is recognized as essential for the pursuit of happiness.

Good health is as difficult to define as it is important. It means different things to different people. Health is influenced by many factors, including the genes we inherit, the environment into which we are born, and our own behavior.

The influence of health care is variable. In some cases, it is essential and its effect in preserving or restoring health is dramatic. In others, it has a marginal impact, at least on those attributes of life and health that can be objectively measured. Although health cannot be bought and sold, health care can be and is, with expenditures that are far greater in the United States than in other industrialized nations.

Personally, people in the United States want health care that will maximize their health potential and meet their health goals. Collectively, they want to ensure equitable access to essential health services. These wants, together with the uncertainty about the effectiveness of component health services in preserving or improving health, provide the context for rapidly increasing health care costs and unexplained variations in use of services by different providers for seemingly similar patients.

New policies and programs, implemented to contain costs and manage care, have exacerbated concerns about potential deficiencies in our ability to assure quality (Ellwood, 1988; Health Affairs, 1988; Inquiry, 1988; Roper and Hackbarth, 1988; Berwick, 1989; Generations, 1989). As individuals and as a society we are now challenged to develop and implement an effective and broad-based strategy to assure the quality of the health care provided in this nation. This report of a committee of the Institute of Medicine (IOM) presents such a strategy to assure the quality of care provided to Medicare beneficiaries.

Congress has evidenced concern for quality of care in the Medicare program since its inception in 1965.1 For instance, legislation in the early 1970s, which created Experimental Medical Care Review Organizations and later Professional Standards Review Organizations (PSROs), dealt directly with ensuring that care met professional standards of quality. This concern continued with the passage in 1982 of legislation that created the Utilization and Quality Control Peer Review Organizations program (commonly called the PRO program). Despite these efforts, Medicare quality assurance to date has been insufficient, in large measure because the programs were also heavily charged to control utilization and costs. The congressional mandate for this study reflects both an appreciation of the shortcomings of the current Medicare quality assurance program and apprehension that past and future efforts to curb Medicare expenditures, control use of services, and reform payment mechanisms will have negative effects on the quality of care rendered to the elderly.

Defining health is difficult because of differences in what may be valued and attainable and because of the sometimes tenuous relationship between health services and health outcomes. These are not theoretical issues for those responsible for operating a program to assure quality health care. The process involves eliciting and balancing value judgments, often when legitimate interests are in conflict. Responsibilities are often shared and are therefore ambiguous. Even when the decisions are sound and the appropriate services are delivered with technical proficiency, poor outcomes can occur. Conversely, bad decisions or inept care will not always be followed by poor outcomes. The quality of care cannot necessarily be judged by the outcome for an individual, so accountability is further diffused. These issues must be understood in defining quality health care and designing programs and systems to assure it.

A pragmatic strategy also requires an understanding of the problem to be solved and the potential barriers. How does one define quality of care? What is the health status of the United States citizenry, and what can we infer about the quality of care from that information? Why is quality of health care a public policy issue? This chapter provides a foundation for the committee's strategy by addressing these questions.

DEFINING QUALITY OF HEALTH CARE

In 1974 the IOM published the following statement about quality assurance: “The primary goal of a quality assurance system should be to make health care more effective in bettering the health status and satisfaction of a population, within the resources which society and individuals have chosen to spend for that care” (IOM, 1974, pp. 1–2). Despite the continuing appeal of this statement, it does not define quality of care. Furthermore, some experts assert that strategies for reviewing and assuring quality depend on how quality is defined (Palmer and Adams, 1988).

Through the activities of this study, over 100 definitions of (or sets of parameters to consider in defining) quality of care were collected from the relevant literature. An analysis of existing definitions is beyond the scope of this chapter but is included in Volume II, Chapter 5. We reviewed each definition for the presence or absence of 18 dimensions (Table 1.1). This analysis enabled the committee to develop a sense of the key terms used in a definition by others (such as use of the term “patient”), the more common variations of terms applicable to a given dimension (such as patient versus consumer or client), and the specific combinations of dimensions used in a given definition. From this information and with considerable debate, the committee developed a consensus definition of quality of care.

TABLE 1.1. Dimensions in Definitions of Quality.

TABLE 1.1

Dimensions in Definitions of Quality.

As defined by the committee, quality of care is the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. This definition has the following properties. It

  • includes a measure of scale (…degree to which…);
  • encompasses a wide range of elements of care (…health services…);
  • identifies both individuals and populations as proper targets for quality assurance efforts;
  • is goal-oriented (…increase…desired health outcomes…);
  • recognizes a stochastic (random or probability) attribute of outcome but values the expected net benefit (…increase the likelihood of…);
  • underscores the importance of outcomes and links the process of health care with outcomes (health services…increase…outcomes);
  • highlights the importance of individual patients' and society's preferences and values and implies that those have been elicited (or acknowledged) and taken into account in health care decision making and policymaking (…desired health outcomes…); and
  • underscores the constraints placed on professional performance by the state of technical, medical, and scientific knowledge, implies that that state is dynamic, and implies that the health care provider is responsible for using the best knowledge base available (…consistent with current professional knowledge).

In this definition, the care provided is expected to have a net benefit (to do more good than harm, given the known risk when compared to the next best alternative care). In turn, that benefit is expected to reflect considerations of patient satisfaction and well-being, broad health status or quality-of-life measures, and the processes of patient-provider interaction and decision making. The values of both individuals and society are explicitly to be considered in the goal-setting process. How care is provided should reflect appropriate use of the most current knowledge about scientific, clinical, technical, interpersonal, manual, cognitive, organizational, and management elements of health care.

Elements of the Committee's Definition

In contrast to other common definitions that refer to medical or patient care our definition of quality refers to health services. Health care implies a broad set of services, including acute, chronic, preventive, restorative, and rehabilitative care, which are delivered in many different settings by many different health care providers. This broad dimension is particularly important for the elderly, who often receive a wide range of services from different sources. There is great potential for fragmentation of care unless programs and resources are available and dedicated to assure coordination and continuity. The need for attention to continuity has been greatly heightened by the shifts in settings of care resulting from the Prospective Payment System (PPS) and other cost-containment policies.

Our definition identifies both individuals (but not just “patients”) and populations for three reasons. First, even though traditionally quality assurance has focused on the technical care rendered to individuals (for instance, in medical record review), we believe advances must be made in population-based measures. This is particularly important for assessments of overuse of certain services and of underuse that results from lack of access to the health care system or from less than adequate care for those who do have access to the system. Second, we believe that only by emphasizing both individuals and populations can we underscore the importance of identifying determinants of health and illness. Third, we have described some strategies for assessing and assuring quality of care that can be used more widely than in a single public program.

The committee adopted a broad set of outcome measures to encompass health-related quality-of-life variables, which include physical and social functioning, mental health, and physiologic measures (Lohr, 1988; Kane and Kane, 1989). We also intend to include both patient and provider satisfaction as important elements of the process and the outcomes of care. Provider-patient trust and the art of care emphasize the humaneness with which health care is delivered and contribute to the level of patient satisfaction experienced in the health care encounter; they are thus critical to quality assurance (Davies and Ware, 1988; Cleary and McNeil, 1988).

Although our definition emphasizes outcome measures, it links the processes of health care to outcomes. Interpersonal and technical skills used in health care are important in increasing the likelihood of desired outcomes and decreasing the likelihood of undesired outcomes. In contrast, several definitions reviewed by the committee focused only on process or only on outcomes. Because chance and other factors such as the environment also influence outcomes, our definition focuses on the selection of treatment courses (processes) believed to provide the best possible desired outcome rather than on the frequency of outcomes. In this manner, the committee's definition is consistent with that proposed by Avedis Donabedian (1980), which also emphasizes the expected net benefit attendant on the process of care.

Health care goals may differ for the government, administrators, patients, health care providers, or other parties such as payers. The decision-making process frequently must consider the values of multiple parties before the desired goal is defined.

The lack of professional knowledge of the effectiveness of many technologies and the vast dimensions of medical science yet unexplored limit the achievable level of quality (Brook, 1988; Greenfield, 1988; Roper et al., 1988). Our definition accepts this reality but acknowledges that the information base is dynamic. It also implies that professionals have a responsibility to stay informed about current advances in the technical and scientific knowledge pertinent to their profession (Farber, 1988) rather than adopting an average standard of practice that may fall short of the best wisdom.

Implications of the Committee's Definition

The committee acknowledges limitations in the scope and level of benefits covered in the Medicare program; we also acknowledge that use of the term “health services” in our quality definition could be interpreted as broadening the mission of the Medicare program. This clearly poses a challenge to Medicare and to society. Issues of financing, access, and health care delivery can restrict the capacity for achieving quality care.

After deliberating whether its definition should explicitly incorporate resource constraints, the committee agreed that it should not. (Several existing definitions of quality do reflect considerations of resource availability; a few explicitly state that resource considerations should not be included in defining quality.) The committee decided that quality should not be defined on a sliding scale and that judgments of quality should not fluctuate just because resources are constrained or unavailable. Excluding resource constraints in the definition of quality should enable quality assurance efforts to identify situations in the health care system where quality would be improved if additional resources were available. Responsible parties (individuals, public and private payers, and societal agents) should be able to distinquish quality problems from those arising from resource availability and subsequently be able to make informed decisions about the level of quality that is desired and affordable.

The committee recognizes the implications of excluding explicit consideration of the theoretical and real constraints on what our society can spend on health care. Efficiency in the delivery of services necessary to produce health benefits is important. Equity, too, is important. Delivery of all health services including those that provide only the smallest of benefits to everyone would divert resources from education, housing, or other services that could provide greater benefits to individuals and society. The highest level of quality, as defined by the committee, may not be attainable for everyone; it may not be a societal goal to attempt to achieve the highest level. Such conflicts between individual and societal goals challenge our capacity for collective decision making and action.2

Most of society perceives health care to be different from other goods and services. Many health problems occur beyond the control of individuals, and the consequent need for health care is distributed very unevenly among people. In addition, health care has a symbolic aspect beyond the technical and practical elements; it signifies not only mutual empathy and caring, but mysterious and awesome aspects of curing and healing (President's Commission, 1983).

Health care is frequently delivered in a personal and intimate manner that reflects the social, religious, and ethical values of individuals and society (Fuchs, 1988); thus, health care decision making is not taken lightly. Although health care is typically purchased, a relationship based on mutual trust and confidence between the health care provider and patient (rather than an adversarial attitude of caveat emptor) is believed to contribute greatly to a better “product” or “outcome,” that is, improved health status (Fuchs, 1988).

A quality assurance program has ethical obligations paralleling those of the health care professional: to prevent harms (nonmaleficence), to promote good care (beneficence), and to consider first its clients (fidelity to patients).3 Increasingly, experts point out that physicians in both fee-for-service and prepaid settings are in positions of inherent conflict of interest when their incomes depend on how they execute the duty to beneficence (Povar, 1989). Similar conflicts of interest are perceived to exist in situations when third-party payers, including Medicare, exercise their multiple and perhaps incompatible responsibilities as both prudent purchasers and agents for assuring quality of care. Countervailing forces or conflicts in delivering quality health care exist for other reasons as well: differences among competing values for goods and services (such as health, privacy, financial resources, and assets) held by the same individual or agent, and differences among competing individuals or agents (such as payer, patient, physician, and society) in values held in common as well as disagreed upon (President's Commission, 1983).

As the field of health care advances and the knowledge bases improve on all fronts (scientific, interpersonal, and clinical), the frequency with which ethical and moral dilemmas occur may diminish. Our abilities to identify issues having ethical dimensions will be heightened, and our responses can be more timely. The art of care, the fiduciary relationship between the patient and clinician, their mutual respect for dignity and freedom, and the practice of humanism in health care are important dimensions of quality. Few quality assurance programs acknowledge or address these elements of health care (Nelson, 1989); we believe they should.

HEALTH AND HEALTH CARE IN THE UNITED STATES

Neither a definition of quality of care nor a strategy for quality assurance is particularly useful outside a context. We take the appropriate context to have three major components: (1) the health status of the citizenry, both individually and collectively; (2) the health care system that attempts to meet the needs of that citizenry; and (3) the major policy issues that must be taken into account as one attempts to put a quality assurance program into place.

Health and Illness

In the early nineteenth century, the primary causes of death in this country were infectious diseases (e.g., smallpox, diphtheria, tuberculosis, and pneumonia). With improved nutrition and identification and control of the responsible infectious agents, death rates began to drop, with a corresponding increase in life expectancy. Since that time, disease patterns here (as in all industrial countries) have changed markedly. Today, the leading causes of death are chronic processes, the effects of which occur mainly in older age groups,4 and the trends of declining death rates and increases in life expectancy continue (NCHS, 1988, 1989).

Many observers, however, regard these trends with a mixture of pride and dismay when viewed in a more global context. In 1985, the U.S. infant mortality rate was higher than that of 21 other countries, including several (e.g., Singapore, Spain, Italy, and the German Democratic Republic) that are not as economically developed as the United States (NCHS, 1989). In 1986, the United States ranked nineteenth in life expectancy at birth for males and fourteenth for females, behind such countries as Japan, Sweden, Canada, and Spain (NCHS, forthcoming, Table 20). Life expectancy at age 65 could be seen to be at least partly indicative of the contribution of health care for the elderly. Life expectancy for both males and females ranks considerably higher in international comparisons than rankings at birth. Males rank tenth, and females share the rank of seventh with Australia and the Netherlands, behind such countries as Japan, Switzerland, Canada and Sweden (NCHS, forthcoming, Table 20).

For the elderly population in particular, little is known about the direct relationship of health status to the level of quality of care it receives or the relationship of health status to the burden of harm attributable to quality problems (i.e., frequency and severity of quality problems).5 The traditional measures of patient health and the effectiveness of medical treatments have long been confined to rates of life expectancy, mortality, and morbidity. These measures do not meet today's needs for characterizing the health of the Medicare population in a comprehensive manner because they do not reflect the impact of chronic disease on daily functioning.

Structure of the U.S. Health Care System

The modern American health care system has evolved through several important periods (Torrens, 1978). Beginning with the period of development of the first hospitals and followed with the period establishing the introduction of the scientific method into medicine, the evolution has continued into a current period that is characterized by acknowledgment of limited resources, reorganization of methods for financing and delivery of care, and a greater examination of the respective roles and responsibilities of patients, providers, and society in the protection of health and well-being.

The composition of the U.S. health care delivery system is presently in flux. For example, although the country's acute general hospitals differ dramatically in size and type of services offered, the growth rate in the overall number of facilities and the proportionate profit status of ownership (mainly not-for-profit) were fairly stable over the last two and one-half decades. In the mid-1980s the growth of not-for-profit hospitals and beds began to level off and then decline, whereas the growth of proprietary hospitals and beds continued (NCHS, 1989). More recently, the rate of hospital closures has increased, particularly in rural areas. In addition, an economic environment that now encourages competition for financial resources and patients has led hospitals to become more involved in both vertical and horizontal integration of services. Free-standing surgical and urgent care facilities have multiplied.

The number and size of nursing homes and the number of persons served and visits per person by home health agencies are also increasing (Ruther and Helbing, 1988; NCHS, 1989) although the rate of growth in the use of Medicare home health services has decreased since 1983. The reasons for these increases include the growth and aging of the elderly population and the need for alternatives to inpatient hospital care. The desire to enhance independent functioning and quality of life for the elderly is another factor in the increased use of home care.

Arguably the most important component of the health care system is the training, supply, and distribution of health care personnel. Even though the number of persons employed in the health care industry has grown dramatically, the shortage of personnel in many areas continues to be severe. For example, the shortage of registered nurses is widespread and of a magnitude sufficient to affect quality of care (Aiken and Mullinix, 1987; Iglehart, 1987; Secretary's Commission on Nursing, 1988; Aiken, 1989; Hinshaw, 1989; Minnick, 1989; Wilensky, 1989). The implications of the nursing shortage and shortages of other types of allied health professionals (IOM, 1988a) are considered ominous for the nation's ability to preserve high quality care in general and for the elderly in particular, since the elderly are the major consumers of care rendered in hospitals, nursing homes, and the home.

Growth in physician manpower has been uneven over at least the last two decades as a result partly of shifting levels of financing for undergraduate medical education and partly of inconsistent projections of the country's need for physicians. On the surface the number of physicians available to serve the elderly appears to be adequate. However, the relative proportions of primary care physicians and specialists is markedly skewed toward specialists, and some experts believe that many physicians lack an adequate appreciation of the complexities of caring for elderly patients. In addition, some observers fear that present (or at least future) levels of Medicare reimbursement will induce some physicians to restrict their Medicare practices and thus reduce the pool of physicians available to provide care to the growing elderly population. Finally, some experts argue that greater numbers of physicians (by themselves) may not improve quality; instead, more benefit might be expected from improving the services that physicians supply (Perrin and Valvona, 1986).

If the past predicts the future, the U.S. health care system is certain to be characterized by continual and occasionally unpredictable patterns of change. Severe economic constraints, the aging of the population, and the appearance of serious sociomedical problems such as substance abuse (Harwood et al., 1984; Blendon and Donelan, 1989) and AIDS (IOM, 1986a, 1988b; Nichols, 1989) will all drastically affect both supply and demand for services. The system is likely to move into a period of retrenchment and unstable developments in financing, structure, and manpower. All these factors will generate health policy issues even beyond those most salient today for the quality of health care.

Major Health Policy Issues with Implications for Quality of Care

Health Care Expenditures

The dominant health policy issue of the past 15 years has been the upward spiral of health care expenditures, both in the nation as a whole and in the Medicare program. In 1965, national health care expenditures were $41.9 billion, or 5.9 percent of the U.S. Gross National Product (GNP). In 1987, health care expenditures stood at $500.3 billion, or 11.1 percent of GNP (Division of National Cost Estimates, 1987). Health care spending will be an estimated $647 billion in 1990. Although a variety of payment and financing systems exists in the nation, none seems protected from the upward spiral of expenditures.

Medicare expenditures have also risen dramatically over the last several decades. In 1970, Medicare spending amounted to $7.3 billion, rising to $35 billion in 1980 and to $81.6 billion in 1987 (Long and Welch, 1988). It is estimated to reach $114 billion in 1990. The United States spends a higher percentage of its Gross Domestic Product (GDP) on health care than most other countries in the Organization for Economic Cooperation and Development (OECD). For example, in 1986, the United States spent 11.1 percent of its GDP on health care, which was almost 52 percent higher than the OECD mean of 7.3 percent (Schieber and Poullier, 1988).

Past efforts to control rising expenditures have taken many forms, such as price controls and Medicare's PPS. Their effect on the quality of care is generally unknown. Most evidence to date suggests that the fears about potential impacts of Medicare PPS on quality (Lohr et al., 1985) have not been borne out (ProPAC, 1988, 1989; Kahn et al., 1989), but some signs about excessively shortened hospital stays are disturbing (Fitzgerald et al., 1987, 1988).

The interest in quality of care must be viewed in a larger social and economic context. On the one hand are the staggering reality of a federal budget deficit created during the 1980s (now conservatively estimated at over $135 billion), a growing desire to protect the 35 million persons who are uninsured for health care (most of whom are not elderly), and much discontent about numerous other components of the social fabric (housing and the homeless, education and literacy, and the pervasiveness of illegal drugs). On the other hand are the increasing need for care by a growing elderly population and the concomitant pressure to broaden the benefits within the Medicare program, as seen most recently in the debates about the Medicare Catastrophic Coverage Act of 1988 and about expanded coverage for long term care.

Access to Services

Germane to any discussion of health policy are the twin issues of geographic and financial access to services. Persons in need of care are forced on occasion to forgo treatment because they live in areas that are underserved by medical practitioners or otherwise face limited access to health care institutions and technologies; this is particularly evident in rural areas and inner cities. Gaps in coverage, restrictions on the use of needed services, inconsistencies in the application of reimbursement policies, and cost-sharing can all be obstacles to the receipt of appropriate levels of care.

Settings of Care

Changes in the settings of care, such as the shift of some types of surgery to the ambulatory setting and the growth of home care, produce uncertainty about quality and continuity of care. These changes complicate quality assurance efforts because needed data systems may be lacking for these nontraditional settings. Ensuring high quality in the diagnosis and treatment of mental health problems, conditions recognized as important health issues for the elderly, is difficult because they, too, often fall outside the usual practice domains (Brook et al., 1982).

Integration of Financing and Delivery of Services

The strong trends toward the integration of financing and delivery of services and the growth of for-profit enterprise in health care (IOM, 1986b) have serious implications for quality of care. Prospective payment systems, capitated programs, and many other payment methodologies put providers at financial risk. Price competition among providers and insurers is vigorous, and competition for market share is being pursued through overt marketing to consumers and employees to an unprecedented degree. These developments, it is feared, lead to conflicts within, or erosion of, the traditional physician-patient relationship. Others perceive these trends as obstacles to providing continuity of care; instead of increasing the choices, these developments limit the choices of providers available to consumers.

Utilization Management and Utilization Review

Utilization management encompasses efforts to monitor the appropriateness of treatment and treatment sites to control unnecessary utilization6 without jeopardizing individuals' equitable access to needed medical care. Integrating utilization management with other strategies for balancing cost, quality, and access should improve the effectiveness and efficiency of the health care system (Gray and Field, 1989), but overly aggressive, poorly understood, or badly administered efforts may prove detrimental by imposing harmful confusion or delay on patients and by taking practitioner time away from patient care. Because the private sector has been much more aggressive about installing utilization management requirements in health care plans for the nonelderly than has the government for Medicare (Brown et al., 1989; MBGH, 1989), the potential net impact of greater utilization management efforts on the elderly remains to be determined.

Growing use of utilization management techniques by third-party payers to reduce costs of health care by decreasing (presumably) unnecessary or inappropriate services places pressure on quality assurance programs to ensure that decisions resulting from such techniques do not affect quality negatively. Quality assurance programs frequently are jointly responsible for utilization management and utilization review, and they often view their efforts as one branch of the overall responsibility to balance concerns about cost, access, and quality (Gray and Field, 1989).7 Utilization management and utilization review increasingly evaluate the need for a health care service in addition to the more traditional review of the appropriateness of setting and length of stay. The very recent push to develop practice guidelines, which would then be used in utilization management programs, is evidence of the concern about overuse of inappropriate and unnecessary services and hence about quality of care.

Operational links between the structures of quality assurance and utilization management and review need to be more clearly defined in a number of areas. These include consistency in clinical guidelines and criteria for making prospective decisions about care; consistency in guidelines and criteria in retrospective review of care; methods (both informal and formal) for resolving disagreements about the level of quality of care in those situations when the utilization and the quality programs yield conflicting findings; and procedures for sharing information between the two efforts.

Medicare's Physician Payment System

Reform of the physician payment system for Medicare has emerged recently as a contentious issue (PPRC, 1988, 1989). Expenditures for physician services have grown significantly over the years, increasing the financial burden on both beneficiaries and the taxpayers. In addition, increases in physician charges, the unwillingness of some physicians to accept Medicare assignment, and the impact on beneficiary out-of-pocket expenditures (in terms of copayments and extra billing) raise concern about diminished access to quality care for Medicare beneficiaries who, under the constraints of limited financial resources, avoid seeking services that may not be reimbursed.

Summary

The current revolution in the organization and financing of health services is unprecedented in this country and without parallel elsewhere. It calls for imaginative and carefully constructed approaches to quality review and assurance. These should cover a comprehensive range of services; evaluate complex health care organizations involving widely varying institutions and providers; be sensitive to the availability of appropriate health services; monitor the appropriate use of services and counter both underuse and overuse; and be reasonable in the resource use they entail. With that goal in mind, we examine the question of quality of health care as a public policy issue.

QUALITY OF HEALTH CARE AS A PUBLIC POLICY ISSUE

Burden of Harm of Poor Quality

The elderly are usually quite satisfied with their own medical care and the health care providers with whom they interact, although they may express dissatisfaction about access or financial barriers to care. Despite this positive view, a large body of literature documents specific areas of deficiencies in quality in all parts of the health sector—what we have called the burden of harm of quality problems. Some of these deficiencies relate to poor technical and interpersonal skills or judgment in the delivery of appropriate services, some to the overuse of unnecessary and inappropriate services, and some to underuse of needed services by those receiving some care and by those having difficulty obtaining access to the health care system.

Both the types of quality problems and the level of quality may vary considerably across geographic areas, among beneficiaries, and among individual and institutional health care providers. The use of health care services varies greatly even across small geographic areas of the country in ways for which we cannot fully account. The effectiveness and the outcomes of that care may also vary greatly. Chapter 7 provides a more detailed discussion on quality problems and the burden of harm.

Assuring Quality: A Professional and a Public Responsibility

As we increase our knowledge and understanding of the complexities of good health care, we also increase the quantity of factors that apparently impinge on the quality of health care. Furthermore, advances in health care are accompanied by a corresponding increase in our expectations for even better quality of care.

No single party or individual can be held accountable for all that happens in health care; the factors are too diverse and diffuse. Patients have different preferences, needs, and capacities. Numerous providers render care in thousands of delivery settings. Interventions of vast number occur over both short and long time frames. Finally, a multiplicity of outcomes can occur with only fuzzy and wavering lines to distinguish causal relationships from chance occurrences.

The lack of a single point of accountability can be perceived as both a blessing and a misfortune. The opportunities for improving health care singly and through cooperative ventures are almost unlimited. Conversely, lack of a single point of accountability creates an environment conducive to shifting or shirking responsibility. Helping to focus on the appropriate points of accountability in the system should be the aim of a successful quality assurance program.

Professional Responsibilities

Through the activities of the study (public hearing testimony, the focus groups, and the site visits), we heard almost without exception that the single party most responsible for quality care is the party closest to the point of delivery of care, that is, the professional care provider. Historically professionalism has been relied on as the primary quality assurance mechanism (Donabedian, 1988a, 1988b). It is realized in numerous ways: explicit professional codes of ethics; the unstated contract between patients (or society) and health care professionals sealed with the practitioner's obligations to competence, integrity, and humaneness;8 and even the impetus behind the several federal peer-review programs. Quality assurance is imbedded in what is referred to as the most fundamental safeguard of quality, that of self-governance and virtuous behavior on the part of individuals and organizations (Pellegrino, 1977; Farber, 1988; Vladeck, 1988).

Regulatory efforts have attempted to take advantage of and support the drive for professionalism, but at times regulatory agents have been perceived as being hostile and even actively detrimental to professionalism. The idea of professionalism clashes fundamentally with those of competition and market forces and with the adversarial atmosphere entailed in malpractice litigation. Some professionals perceive that the foundation of the provider-patient relationship is eroding as a result of these other forces (Blendon, 1988; Eisenberg and Kabcenell, 1988; Goldsmith, 1988; Nelson, 1989).

Nevertheless, professional self-examination has facilitated the development of standards and criteria and of efforts at continuing professional growth. In the broader institutional or corporate provider sense, professionalism supports participation in voluntary accreditation programs such as those of the Joint Commission for Accreditation of Healthcare Organizations. It also fosters implementation of internal quality assurance programs, in particular those based upon the continuous quality improvement model.9

Public Sector Responsibilities and Regulation

Because several factors and parties contribute to health care, it is not surprising to find countervailing forces at work within the environment in which health care is delivered. The health of individuals has important implications for the health of the community; in some circumstances the natural balancing of these countervailing forces has not brought the level of health care desired. Thus, government bodies have assumed some responsibility to monitor the quality of health care and to direct or control some of the forces thought to influence the quality of health care.10

For almost a century, quality of health care has been a public concern. Only recently have private market forces and competition been seen to have a valid role in ensuring the quality of health care, and many health care providers remain skeptical about any positive impact on quality within a heavily emphasized cost competitive environment. Traditionally, public policy has used regulations and legislation to exert external controls on the health care industry. These range from licensing professionals and certifying facilities (mainly with the intent of assuring at least a minimal level of quality) to controlling expansion of providers and services through health planning and certificate of need, invoking explicit cost and utilization controls, and mandating quality assurance efforts in the publicly financed health programs. Other public policy efforts directed toward improving access to quality care include programs such as educational assistance for residency training programs and the National Health Service Corps to improve the distribution of providers. The responsibility of the Health Care Financing Administration (HCFA) for the quality of care rendered to Medicare beneficiaries is fundamentally a regulatory issue, although in recent years quality assurance activities have taken on a competitive marketplace orientation.

The health care industry is among the most regulated industries in this country. According to Vladeck (1988, p. 100), “Concern…for the quality of health care services has led to external controls in the United States that are more extensive, more intrusive, and more complex than they are elsewhere in the world.” None of these regulatory controls has provided a completely satisfactory approach to assuring the quality of health care in this country, yet none has ever been completely abandoned, for reasons partly related to the “public good” aspects of health care.

Health Care as a Public Good

Perhaps more important than the actual (and extensive) involvement of governmental bodies in health care is the perception of health care as a public responsibility, indeed, a public good.11 Members of our society widely believe that an adequate level of medical care should be available to the poor and elderly, if not all citizens (Enthoven, 1988; Estes, 1988; Fuchs, 1988; Goldsmith, 1988; Arnold, 1989; Leader and Moon, 1989).

One simple aspect of health care as a public good is the gathering and dissemination of information. In the case of quality assurance, this includes information about the effectiveness and appropriateness of medical practices. As stated by Roper et al. (1988, p. 1197), “the benefit of better information accrues to the public at large, not just to those collecting it, [and] the market system may not ensure adequate investment in the necessary research and data collection.”

The rationale of viewing health care as a public good, although not a Constitution-backed entitlement or right, is similar to the thinking behind any other public good. The health of individuals affects the health of the community at large; clear distinctions are not easily made between public health and private medicine. Changes in the health status of the community have a domino effect on various sectors of our society and economy.

Other Forces for Quality Assurance

Market Forces and Competition

The last decade or two has seen growing support for the notion that the untrammeled exercise of market forces and competition would serve patients' interests more fully than does health care regulation. The movement toward release of provider-specific information, such as HCFA's publications of hospital-specific mortality rates, is a manifestation of this idea (Brinkley, 1986; Bowen and Roper, 1987).

In an ideal market,12 competition among health care providers in response to the consumer demand will work to improve the quality of health care, largely by eliminating so-called outliers but possibly also by rewarding good performers by, say, increasing their volume of patients. This tenet is viable only to the extent that someone—patients, outside evaluators, the clinician community itself—can recognize good and bad care. A competitive environment should support good information flow and should value personal choices and preferences. When competitive markets fail, as is often held to be the case in health care, consumers may be at risk of both overuse and underuse. An ideal environment should also permit relatively easy movement of providers (i.e., suppliers) into and out of the market. All these characteristics of a market are assumed to lead to better levels of quality than do purely regulatory mechanisms;13 none has yet been shown to do so.

Malpractice and Risk Management

Ours is a society that values individual choice, rests its economy on capitalistic principles of competition, uses regulatory methods to place basic (or entry) controls on the health care industry, supports a health delivery system that is decentralized, pluralistic, and fragmented, and uses the courts to resolve both the most trivial and the most complex of social and political issues. It is thus not surprising that patients resort to private legal means, largely that of malpractice suits, when they believe that quality of care has fallen demonstrably below acceptable levels.

The malpractice issue presents very difficult problems for society and for the medical and provider community (Schwartz and Komesar, 1978; OTA, 1988; Hatlie, 1989; Hiatt et al., 1989).14 At the level of individual practitioners, physicians are widely believed to practice defensive medicine (erring in favor of doing more, rather than less) as a protection against possible malpractice claims should anything go amiss in the care of patients.

Some institutions have incorporated risk management programs into their quality assurance structure in an effort to harness the forces of professionalism, competition, and malpractice in a more mutually supportive way.15 Some malpractice insurers also offer incentives in the form of lower premiums for organizations that have an effective risk management program in place (GAO, 1989).

Value Purchasing

Perhaps more a hybrid than a separate and unique force are the joint efforts of purchasers, providers, and consumers to promote the idea of value or quality within the context of cost.16 As the environment for health care delivery has become more competitive, the call for accountability in both the economic and quality spheres is dispersed among many more parties than was true a decade or two ago. Providers see the responsibility for quality assurance shifting away from them and a growing involvement by purchasers and consumers. By contrast, providers and consumers (frequently through unions) are assuming some of the responsibility for cost containment heretofore assumed by private third-party payers, by employers, and, in the case of Medicare, by the federal government. Coalitions developing between payers and capitated prepayment health care systems are attempting to promote quality and contain cost. The need for large corporations and self-insured groups to reduce their health care expenditures while retaining some confidence that quality of care will not be harmed may produce an impetus for quality assurance that will far exceed the pressures already discussed.

Successful value purchasing depends on access to useful information; inability to judge the reliability, validity, or relevance of available information on quality of care limits the potential of value purchasing. The movement toward population-based outcome measurements may help address some of these problems.

Decision Making and Population-Based Outcomes

Utilization management, practice guidelines, more competition, more regulation in health care, and so forth can all be seen as manifestations of a perceived need for better decision making on the part of purchasers, providers, and patients. Interest and research in population-based outcomes and the potential use of such measures in improving decision making have increased (Tarlov et al., 1989). One very significant dimension to current research into patient outcomes is patient preferences and values (sometimes denoted “utilities”); this links the patient-provider decision-making process with outcome measures (Greenfield, 1988).

Informed decision making involves numerous parties with different capacities for using different types of information. Accountability must be accompanied by access to information; such information must be in the public domain. Meaningful information must provide insight to those parties struggling with the cost-related issues of health care; decision makers need to know the value of health care rather than keep separate “balance sheets” on cost and quality. A focus on decision making promotes the strategy of using information to improve quality overall rather than simply to isolate and punish outliers. Finally, as a unifying factor such a focus on decision making helps bridge the conflicting elements of professionalism, regulation, competition, malpractice, and value purchasing.

SUMMARY

The committee identified critical dimensions of quality of care and adopted the following definition: quality of care is “the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.”

We briefly reviewed the United States health care system and the health status of the population to provide a broader context for the recommendations made in this report. We also discussed several factors that affect the quality of care and promote or retard effective quality assurance, such as rising health care expenditures, geographic and financial access, changes and shifts in settings of care, integration of financing and delivery of services, cost-control and utilization management efforts, and Medicare payment systems. Quality of health care is a transcendent public policy issue. The availability and use of meaningful information for decision making by purchasers, providers, and patients will affect the success in balancing the forces of professionalism, regulation, market forces and competition, malpractice and risk management, and value purchasing in a manner that improves quality overall.

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Footnotes

1. Chapter 4 describes the Medicare program in more detail, and Chapter 6 covers Medicare's peer review and quality assurance efforts.

2. The situation characterized by unlimited access to common constrained resources with decreasing nontransferable marginal benefits to individual consumers has been called the “tragedy of the commons.” Pursuit of individual interests will impoverish all in the absence of collective decision making and action (Hardin, 1968; Hiatt, 1975).

3. The independent literatures on bioethics and on quality of care are extensive; the literature on the intersection of the two fields is sparse. Three recent works in this area are McCullough, 1988; Whiteneck, 1988; and Povar, 1989.

4. Other conditions are much more important for specific population groups other than the elderly. For instance, acquired immune deficiency syndrome (AIDS) affects young to middle-aged adults and, increasingly, infants born to affected mothers; homicides, suicides, and accidents affect young males more than persons in other age or sex groups. These epidemiologic and medical developments are beyond the scope of this study.

5. We return to a more complete description of the health status of the elderly in Chapter 3, and Chapter 7 discusses quality problems and the burden of harm.

6. The IOM defines utilization management as techniques used by or on behalf of purchasers of health benefits to manage health care costs by influencing patient care decision making through case-by-case assessments of the appropriateness of care before it is given (Gray and Field, 1989). Prior review techniques used include pre-admission review, admission review, continued-stay review, discharge planning, and second opinion programs; the other major effort of utilization management is to conduct focused high-cost case management. Both of these efforts rely on case-by-case assessments of care. Generally, utilization management is distinguished from utilization review, which is conducted after care has been rendered (although sometimes before it is reimbursed).

7. In hospitals at least, no clear pattern emerges for lumping or splitting quality assurance and utilization review, utilization management, or risk management. In data obtained through a survey of several hospital systems, we observed many different combinations of these activities, from separate offices responsible for each task to a single unit responsible for all of them. At one hospital included in our site visits, the quality assurance activity was subsumed in the utilization review unit; the notion that it should engage in direct actions intended to assess and improve quality of care was not an important part of that unit's responsibilities. Thus, although in theory utilization review and management can be viewed as an integral part of quality assurance, the provider community in practice does not necessarily see it that way.

8. This is sometimes termed a fiduciary responsibility of professionals to their patients, in explicit contradistinction to a contractual relationship. Hence, the term contract here is not meant to be taken literally.

9. Chapter 2 discusses the quality improvement model. Chapters 5 and 10 provide more detailed discussion of voluntary accreditation through the Joint Commission and quality-of-care criteria, respectively.

10. The use of external regulatory efforts as one of the mechanisms for assuring quality is discussed more fully in Chapters 5, 6, and 9.

11. Public good can be taken as synonymous with public welfare, common good, social good, public interest, and similar ideas. It has a more specific meaning drawn from the field of economics (Eckaus, 1972; Musgrave and Musgrave, 1976)—namely, goods consumed collectively with a joint or societal use or where one person's use does not in theory prevent any other person's use, in contrast to a private good where consumption is exclusive and benefits are internalized. The arguments put forth in this section can be understood in either the broader or the narrower context.

12. A complete discussion of the topics of competition and market economies is beyond the scope of this study. The simple assumptions of an ideal market include notions of perfect information, homogeneous products, large numbers of suppliers and customers (here, professionals and patients), and free entry of competitors into the marketplace. None of these assumptions holds for health care (Weisbrod, 1983; Lohr, 1986). Information in health is never perfect or complete, and patients do not and cannot learn quickly or at low cost what they may need to know about providers. The products—the processes and the out-comes—cannot be totally homogeneous, because they apply to unique individuals. Although the numbers of suppliers and customers may be large (except in situations of scarcity, such as rural areas), the free entry of competing suppliers is not a sustainable notion because of professional (guild), regulatory, and cost barriers.

13. The debates about the relative merits of regulation and competition are sharp and likely to continue. For key discussions of these issues, see Dallek, 1986; Blendon, 1988; Brook and Kosecoff, 1988; Enthoven, 1988; Enthoven and Kronick, 1988; Estes, 1988; Fuchs, 1988; Ginsburg and Hammons, 1988; Goldsmith, 1988; Iglehart, 1988; McEachern, 1988; Shortell and Hughes, 1988; Rubin and Blehart, 1989; and Smith, 1989.

14. Chapters 7 and 9 briefly discuss malpractice issues in a quality assurance context.

15. Generic or occurrence screens, which are now widely used in quality assurance programs in hospitals and which are discussed more fully in Chapters 6, 9, and 10, are a product of a large study of malpractice cases, the California Medical Insurance Feasibility Study (Mills, 1977).

16. A number of innovative projects are underway through the value purchasing efforts of business, health, and consumer coalitions. These include the “Buy Right” effort of the Center for Policy Studies (Iglehart, 1988), efforts of the Health Care Purchasers Association of Seattle (Castell, 1988), and a recent project of the Midwest Business Group on Health (MBGH, 1989). A large body of literature is emerging on value purchasing and the shifting and sharing of responsibilities and risks, including New York Business Group on Health, Inc., 1987; Ellwood, 1988; Enthoven, 1988; Fuchs, 1988; Iglehart, 1988; Eisenberg, 1989; and McLaughlin et al., 1989.

Copyright © 1990 by the National Academy of Sciences.
Bookshelf ID: NBK235460

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