Donabedian's structure process outcome paradigm

2 2 6

Learning Objectives

Price is what you pay. Value is what you get.

—Warren Buffett

Knowing is not enough; we must apply. Willing is not enough; we must do.

—Johann Wolfgang von Goethe

After you have studied this chapter, you should be able to

➤➤ analyze➤and➤discuss➤the➤evolution➤of➤quality➤in➤healthcare;

➤➤ discuss➤a➤range➤of➤approaches➤to➤the➤implementation➤of➤a➤total➤quality➤program➤in➤a➤

healthcare➤organization,➤including➤Donabedian’s➤model➤of➤structure,➤process,➤and➤outcomes;

➤➤ articulate➤the➤concept➤of➤value➤and➤discuss➤performance➤measures➤that➤are➤important➤in➤

healthcare➤organizations;

➤➤ define➤pay➤for➤performance➤and➤discuss➤some➤of➤the➤current➤initiatives➤in➤healthcare➤

reimbursement;➤and

➤➤ demonstrate➤the➤ability➤to➤link➤quality,➤efficiency,➤and➤financial➤decision➤making➤in➤an➤

organization’s➤strategic➤plan.

C H A P T E R 1 2

PAY FOR PERFORMANCE AND THE HEALTHCARE VALUE PARADIGM Debra A. Harrison

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C h a p t e r ➤ 1 2 : ➤ P a y ➤ f o r ➤ P e r f o r m a n c e ➤ a n d ➤ t h e ➤ H e a l t h c a r e ➤ V a l u e ➤ P a r a d i g m➤ 2 2 7

IntroductIon tHe value frontIer

In 1973, President Richard Nixon signed the Health Maintenance Organization Act, which was intended to create incentives for healthcare organizations to offer services for a prepaid healthcare premium. This healthcare arrangement posed two questions: Would healthcare organizations offer quality care at a reasonable cost after having received the premiums from the patients enrolled in the system up front? And how would the value of this new prepaid care be measured?

How has the US healthcare system addressed these questions? A paradigm shift from the efficiency frontier to a value frontier is occurring in healthcare. The value frontier is a benchmark that takes into account not only efficiency but also quality. Organizations on the value frontier are considered “best in class,” and their levels of performance become models for improved performance in healthcare organizations everywhere. A healthcare organization is efficient if it has achieved an optimal fit between its structural characteristics and its processes. Even when an optimal fit is achieved, however, the healthcare organization struggles to maintain that fit because the healthcare environment is dynamic and requires organizations to make changes on a continuous basis.

tHe cost of QualIty

US healthcare spending grew 3.6 percent in 2013, reaching $2.9 trillion, or $9,255 per person. Health spending accounted for 17.9 percent of the nation’s gross domestic product (CMS 2014c). Health spending increased by 5 percent in 2014, compared to 3.6 percent in 2013, marking the biggest jump since before the recession (Tozzi 2015). How to provide access to affordable healthcare is an ongoing philosophical discussion in modern medicine. In healthy industries, competition is not based on cost but on value, which is the level of consumer benefit received per dollar spent. In mathematical terms, value (V) = Q/C, where quality (Q) represents clinical outcomes, safety, and patient satisfaction and cost (C) represents the cost of care over time. Where value rules, innovation is rewarded, providers prosper, and efficiency increases. Value-based systems motivate providers to benchmark

Value frontier

Organizations➤that➤

create➤the➤highest➤

value➤in➤healthcare.➤

Value

Level➤of➤consumer➤

benefit➤received➤per➤

dollar➤spent.➤

Key terms and concepts

➤➤ Donabedian➤framework

➤➤ Leapfrog➤Group

➤➤ Nurse-sensitive➤patient➤outcomes

➤➤ Pay-for-performance➤program

➤➤ Quality

➤➤ Therapeutic➤alliance

➤➤ Value

➤➤ Value➤frontier

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E s s e n t i a l s ➤ o f ➤ S t r a t e g i c ➤ P l a n n i n g ➤ i n ➤ H e a l t h c a r e2 2 8

their value performance measures to improve processes of care and to meet patients’ needs and expectations (Blumenthal and Stremikis 2013).

Discussion of healthcare quality is important as healthcare evolves and experiences technological advances that result in increased cost yet potentially improved value. We must consider whether increased costs limit access to healthcare (i.e., only those who can afford it have access), and we must also keep in mind the return on investment for the price of technology.

According to The Commonwealth Fund (see Highlight 12.1), waste and medical errors account for $100 billion of US healthcare expenses and may cost 150,000 lives annually. To encourage quality improvement and more efficient delivery of healthcare services, the government, insurance companies, and other groups implement pay-for- performance (P4P) programs, which offer financial incentives to physicians, hospitals, and other healthcare providers in exchange for meeting certain performance targets. P4P initiatives can also reduce the payments providers receive if they commit medical errors, have poor outcomes, or incur excessive costs.

An awareness of P4P offerings is important in strategic planning. To maximize an organization’s income and improve quality and efficiency in the delivery of care, strategic

Pay-for-performance

(P4P) program

Initiative➤implemented➤

by➤the➤government,➤

insurance➤companies,➤

and➤other➤groups➤

to➤reward➤providers➤

for➤meeting➤certain➤

performance➤targets➤

in➤the➤delivery➤of➤

healthcare➤services.

HIGHLIGHT 12.1 The Commonwealth Fund

The➤Commonwealth➤Fund➤is➤a➤private➤institution➤whose➤goal➤is➤to➤improve➤access➤to➤

care,➤quality➤of➤care,➤and➤efficiency➤of➤care➤in➤the➤United➤States.➤The➤Commonwealth➤

Fund➤is➤especially➤interested➤in➤helping➤vulnerable➤people➤receive➤better➤care:➤the➤low-

income➤population,➤the➤uninsured,➤minorities,➤young➤children,➤and➤the➤elderly.

To➤achieve➤these➤goals,➤The➤Commonwealth➤Fund➤supports➤independent➤research➤

on➤how➤care➤could➤be➤improved.➤For➤example,➤The➤Commonwealth➤Fund➤has➤published➤

reports➤on➤such➤topics➤as➤asthma➤outcomes➤in➤minority➤children➤and➤reasons➤for➤patient➤

readmission➤to➤hospitals➤after➤discharge.➤It➤also➤publishes➤reports➤to➤inform➤the➤public,➤

such➤as➤its➤analysis➤of➤the➤different➤healthcare➤reform➤bills➤proposed➤by➤the➤US➤House➤of➤

Representatives➤and➤Senate➤in➤late➤2009.➤Many➤of➤its➤publications➤provide➤information➤

and➤statistics➤about➤the➤current➤state➤of➤healthcare➤in➤the➤United➤States.

Financed➤by➤individuals➤and➤organizations➤that➤support➤its➤mission,➤The➤Common-

wealth➤Fund➤grants➤money➤to➤tax-exempt➤organizations➤and➤public➤agencies➤to➤improve➤

the➤provision➤of➤healthcare➤and➤to➤study➤and➤recommend➤policy➤changes➤that➤will➤im-

prove➤the➤healthcare➤system.➤For➤example,➤some➤of➤its➤grants➤support➤programs➤that➤

study➤the➤future➤of➤Medicare➤and➤the➤care➤of➤frail,➤elderly➤adults.

*

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planners incorporate objectives into the strategic plan that are geared toward achieving P4P performance targets.

medIcare pay-for-performance InItIatIves The Affordable Care Act (ACA) was signed into law as Public Law 111-148 on March 23, 2010. The legislation is commonly called “Obamacare” because it was signed by President Obama and because the act is a product of the healthcare reform agenda of the Democratic 111th Congress and the Obama administration. The ACA is often contested, though its constitutionality was upheld by the US Supreme Court in 2012 and supported by the public with the reelection of President Obama in 2012. Title III of the ACA mandated a financial reward to improve quality, safety, and the patient experience for Medicare patients, an initiative called value-based purchasing (VBP). It began in 2013 with reimbursements for patient discharges on or after October 1, 2012 (Piper 2013). The Centers for Medicare & Medicaid Services (CMS) automatically withholds a hospital’s Medicare payments by a specified percentage each year (see Exhibit 12.1), and hospitals can earn back that per- centage if they adopt quality processes and achieve certain patient satisfaction scores. Each year, the percentage of the withholding increases and the metrics change. The intent of the law is that the program be budget neutral, meaning that organizations performing in the bottom 10 percent lose the Medicare payment reduction and the top 10 percent receive the Medicare payment incentive.

As of 2015, the metrics in the incentive program included outcomes and efficiency of care. The payment is broken down as follows: clinical processes of care (20 percent), patient experience (30 percent), outcomes (30 percent), and efficiency of care (20 percent) (AHC Media 2014). See Exhibit 12.2 for a complete list of measures in the VBP initiative.

exHIbIt 12.1 Medicare Payment Reductions for Hospitals 2013 1%

2014 1.25%

2015 1.5%

2016 1.75%

2017+ 2%

Year Reduction*

*➤Of➤the➤base➤operating➤diagnosis-related➤group➤payments➤

Source:➤Data➤from➤CMS➤(2014b).

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E s s e n t i a l s ➤ o f ➤ S t r a t e g i c ➤ P l a n n i n g ➤ i n ➤ H e a l t h c a r e2 3 0

Previously, payment was based on clinical processes (70 percent) and patient experience (30 percent). This change reflects CMS’s shift in priorities, toward outcomes rather than processes. In addition, CMS measures of efficiency now include a cost metric. This metric is called the Medicare Spending per Beneficiary (MSPB) and is defined as the average Medicare Part A and B spending per patient from 3 days prior to admission to 30 days after discharge (Chen and Ackerly 2014). The MSPB encompasses the continuum of care and prevents cost shifting to healthcare providers outside of the hospital.

From the patient’s perspective, the concept of “paying for value” includes high- quality healthcare at a reasonable price—hence the term value based. The quality of care is high when it provides excellent outcomes, patient-centric care, and high levels of patient satisfaction. VBP also means efficient care, which will require physicians to limit the number

exHIbIt 12.2 Hospital Value-

Based Purchasing Program Measures,

2016

Clinical Process of Care Domain

Fibrinolytic therapy received within 30 minutes of hospital arrival

Influenza immunization

Initial antibiotic selection for community-acquired pneumonia in immunocompetent patients

Prophylactic antibiotic selection for surgical patients

Prophylactic antibiotics discontinued within 24 hours after surgery

Urinary catheter removed on postoperative day 1 or postoperative day 2

Surgery patients on beta-blocker therapy prior to arrival who received a beta-blocker during the perioperative period

Surgery patients received appropriate venous thromboembolism prophylaxis within 24 hours prior to surgery to 24 hours after surgery

Patient Experience of Care Domain

Hospital Consumer Assessment of Healthcare Providers and Systems survey

Outcomes Domain

Catheter-associated urinary tract infection

Central line–associated bloodstream infection

Acute myocardial infarction 30-day mortality rate

Heart failure 30-day mortality rate

Pneumonia 30-day mortality rate

Complication/patient safety for selected indicators (composite)

Surgical-site infection: Colon and abdominal hysterectomy

Efficiency Domain

Medicare spending per beneficiary

Source:➤Data➤from➤CMS➤(2014b).

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of tests they order that do not improve morbidity or mortality. These initiatives will also mandate that physicians provide care based on clinical protocols that were developed using evidence-based research and approved by the appropriate professional association for the clinical area in which these protocols are to be used. These quality measures are increasingly being developed jointly by private healthcare organizations and government institutions, such as the Agency for Healthcare Research and Quality (AHRQ). Hospital-specific per- formance is publicly reported on CMS’s Hospital Compare website.

Although there was much attention to the VBP program in the 2010s, CMS has always supported initiatives to improve the quality of care in physicians’ offices, ambula- tory surgery centers, hospitals, nursing homes, and home health care agencies. The basis of CMS’s recent P4P initiatives is a collaboration with providers to ensure that valid measures are used to achieve improved quality. CMS has explored P4P initiatives in nursing home care, home health care, dialysis, and coordination of care for patients with chronic illnesses. These initiatives include the Hospital Quality Initiative in 2002, the Premier Hospital Quality Incentive in 2003, the Physician Group Practice Demonstration in 2005, the Care Management Performance Demonstration in 2007, the Medicare Health Support Chronic Disease Pilot in 2008, and the Care Management for High-Cost Beneficiaries Demon- stration in 2005–2012. Hospitals that submitted the required data received full Medicare diagnosis-related group (DRG) payments. (See Highlight 12.2 for a discussion of DRGs.)

Linking the reporting of hospital quality data with P4P is an effective strategy for improving the US healthcare system. Such a program will provide financial incentives to organizations that invest in quality improvement. Quality measures improved from 2005 to 2010 for acute myocardial infarction, heart failure, and pneumonia, and racial and ethnic equity increased (Trivedi et al. 2014). However, VBP may not appear to correlate directly with improved quality and patient safety (Spaulding, Zhao, and Haley 2014). Transparency of data and improved processes may have affected outcomes more than a system of reward and punishment. In any case, quality in the United States has been positively affected.

addItIonal InItIatIves In pay for performance commercIal payer InItIatIves

CMS is not the only entity offering P4P incentives. US health plans and other payers are also developing P4P programs to improve the quality of care and minimize future cost increases. In 2009, more than 250 private P4P programs existed across the nation, half of those programs targeting hospital care (Cauchi, King, and Yondorf 2010). One of the largest and longest-running private sector P4P programs is the California Pay for Perfor- mance Program, which is managed by the Integrated Health Association (headquartered in Oakland, California). It was founded in 2001 as a physician incentive program and has focused on measures related to improving quality performance by physician groups. Start- ing in 2014, it began to include value-based cost measures (James 2012).

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leapfrog group

The Leapfrog Group, a purchaser founded in 2000, represents many of the nation’s larg- est corporations and public agencies that buy health benefits on behalf of their enrollees. The mission of the Leapfrog Group is to use employer purchasing power to improve the quality, efficiency, and affordability of US healthcare. Representing both private and public sector employers, Leapfrog represents more than 34 million Americans and tens of billions in healthcare expenditure (Leapfrog Group 2015a). Though the number of companies it represents has remained at about 60, its publication of hospital safety scores has been increasingly visible in the media since 2010. The twice-a-year results are cited in the Wall Street Journal, USA Today, and AARP The Magazine.

Leapfrog’s hospital reporting initiative, implemented in 2001, assesses hospital performance on the basis of quality and safety measures developed by the National Quality Forum (NQF). Hospitals that meet or exceed NQF’s benchmarks have been successful in reducing medical mistakes. Hospitals that participate receive a Hospital Safety Score of A, B, C, D, or F based on their ability to prevent errors, accidents, injuries, and infections. The Hospital Safety Score is calculated by top patient-safety experts and is peer reviewed,

Leapfrog Group

Independent➤

healthcare➤purchaser,➤

founded➤by➤major➤

employers,➤that➤uses➤

purchasing➤power➤to➤

improve➤the➤quality➤

and➤efficiency➤of➤US➤

healthcare➤services.

HIGHLIGHT 12.2 Diagnosis-Related Groups

DRGs➤are➤a➤patient➤classification➤scheme➤used➤by➤hospitals➤to➤identify➤the➤diseases➤

they➤treat.➤Each➤disease➤is➤grouped➤with➤similar➤diseases➤and➤assigned➤a➤code➤so➤that➤

physicians,➤billing➤departments,➤and➤payers➤(particularly➤Medicare)➤can➤easily➤identify➤

the➤diagnosis.➤Assigned➤to➤each➤code➤is➤an➤amount➤of➤money➤the➤payer➤will➤reimburse➤

a➤provider➤for➤treatment➤of➤that➤diagnosis.➤The➤amount➤of➤reimbursement➤is➤based➤on➤

the➤average➤cost➤of➤providing➤care➤for➤that➤illness➤and➤includes➤the➤cost➤of➤in-hospital➤

nursing➤care,➤room➤and➤board,➤diagnostic➤treatments,➤and➤any➤other➤routine➤treatments➤

that➤might➤be➤necessary➤for➤that➤illness➤while➤a➤patient➤is➤in➤the➤hospital.➤The➤payment➤

does➤not➤include➤the➤physician’s➤fees.

Hospitals➤ receive➤money➤ from➤Medicare➤over➤and➤above➤the➤DRG➤payment.➤The➤

amount➤is➤augmented➤by➤payments➤added➤to➤the➤base➤rate.➤For➤instance,➤if➤the➤hospital➤

treats➤a➤high➤percentage➤of➤low-income➤patients,➤it➤receives➤an➤add-on➤applied➤to➤the➤

DRG-adjusted➤base➤rate.➤If➤the➤hospital➤is➤an➤approved➤teaching➤hospital➤and➤a➤training➤

site➤for➤medical➤students,➤it➤receives➤an➤add-on➤for➤each➤case.➤

The➤DRG➤system➤was➤developed➤in➤the➤1980s➤to➤control➤costs➤and➤motivate➤hospi-

tals➤to➤provide➤care➤more➤efficiently.➤The➤hospital➤is➤paid➤a➤predetermined➤rate,➤so➤it➤will➤

try➤not➤to➤spend➤more➤than➤that➤rate➤in➤treating➤the➤patient.➤DRGs,➤about➤500➤in➤all,➤are➤

updated➤yearly➤by➤CMS➤(2014a).

*

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fully transparent, and free to the public. As part of this recognition program, the Leapfrog Group posts participating hospitals’ scores on its website for use by employers and consum- ers. In 2015, approximately 2,500 hospitals participated. Of those, 31 percent had an A, 28 percent a B, 34 percent a C, and 6 percent a D; only 20 hospitals, or less than 1 percent, had an F (Leapfrog Group 2015b).

Leapfrog is focused on four major “leaps” to make healthcare safer: computerized physician order entry, evidence-based hospital referral, intensive care units staffed with physician specialists, and hospitals’ progress on eight NQF benchmarks (called Safe Prac- tices). A complete list of measures and scoring methodologies is available on the Leapfrog website (www.leapfroggroup.org).

Members of the Leapfrog Group (2015b) agree to educate their employees about patient safety and hospital quality, encourage their employees to seek care from hospitals that meet Leapfrog’s safety standards, and base their purchase of healthcare on principles that encourage quality improvement among providers and consumer involvement in healthcare decision making. Such actions have been highly effective in moving patients to healthcare providers that meet Leapfrog’s standards. Everyone benefits: Patients are steered to safer hospitals and, as a result, hospitals receive more business. Conversely, Leapfrog removes hospitals from its register of approved providers if their quality and safety scores decline.

pHysIcIans’ attItudes regardIng pay for performance Many physicians express a lack of trust in health plan and government initiatives impos- ing change. However, one of the first national surveys on physicians’ attitudes about P4P, completed in 2005, found that 75 percent of responding physicians supported financial incentives for improved quality when the measures they were required to report were deemed “accurate” by an authority on those measures. A much smaller percentage of physicians supported public reporting for medical group quality performance (Casalino et al. 2007).

A systematic review of provider attitudes and P4P indicated that healthcare provid- ers still have a low level of awareness about P4P and have serious concerns that P4P may have unintended consequences. They also believe that additional resources will be needed to provide adequate quality indicators and implementation of P4P. The findings of the study underscore the importance of provider education and of providing technical support to reduce provider burden. Developing more accurate quality measures to minimize any unintended consequences is also important (Lee, Lee, and Jo 2012).

IncorporatIng pay for performance Into a strategIc plan Current and past P4P initiatives have focused on improving quality and reducing costs— two key factors in gaining a competitive advantage. Therefore, hospital planners should incorporate P4P initiatives into the strategic plan. Strategic planners should routinely monitor their CMS Hospital Compare quality scores to raise them to the level of CMS’s

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http://www.leapfroggroup.org
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P4P incentives. If their scores are already at that level, they should focus on driving them up further to maximize rewards and reimbursement; the higher the quality, the greater the reward. Planners need to allocate money to invest in programs and new technology that will help the hospital increase its quality scores. In areas where quality is poor and unlikely to change, the strategic planner should consider closing the service so that patient safety is not jeopardized and the hospital is less likely to incur malpractice suits.

Mayo Clinic is an outstanding example of an organization that has incorporated P4P into its strategic planning process. It routinely evaluates new business initiatives that could enhance the quality of care it provides. Demonstrating its ability to prepare for the future well in advance, Mayo even benchmarks its quality and efficiency performance against P4P standards that have been developed but are not scheduled to be implemented until several years from now.

donabedIan and QualIty

Avedis Donabedian (1966), a physician considered the father of quality assurance in health- care, defined quality as a reflection of the goals and values currently adhered to in the medical care system and the society in which it exists. This definition signifies that no one common criterion exists on which to measure healthcare quality. For this reason, he introduced the Donabedian framework, a model for evaluating the quality of medical care based on three criteria: structure, process, and outcomes.

Structure includes the environment in which healthcare is delivered, the instruments and equipment providers use, administrative processes, the qualifications of the medical staff, and the fiscal organization of the institution. Access to care may also be considered part of the structure component.

Process considers how care is delivered. For example, healthcare quality could be evaluated according to the appropriateness and completeness of information obtained through review of a patient’s clinical history, physical examinations, and diagnostic tests; the provider’s explanation of and reason for her diagnosis and recommended therapy; the physician’s technical competence in performing diagnostic and therapeutic procedures, including surgery; evidence of preventive management in health and illness; coordination and continuity of care; and acceptability of the care to the patient (Donabedian 1966). By studying the process indicators of quality, judgments can be made whether medicine was practiced appropriately and addressed the patient’s needs.

Outcomes, the most discussed measure of quality, include recovery, restoration of function, and survival. These quality indicators are some of the most frequently reported and widely understood. Other outcome indicators are patient satisfaction, physical dis- ability, and rehabilitation. Although the latter are more complicated to assess, they remain the ultimate validation of healthcare quality (Donabedian 1966).

Quality

Standard➤of➤healthcare➤

provision➤that➤reflects➤

the➤goals➤and➤values➤

currently➤adhered➤to➤

in➤the➤medical➤care➤

system➤and➤the➤society➤

in➤which➤it➤exists.

Donabedian framework

Model➤for➤evaluating➤

the➤quality➤of➤medical➤

care➤based➤on➤three➤

criteria:➤structure,➤

process,➤and➤outcomes.➤

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In 2014, scholars examined whether the VBP performance scoring system correlates with hospital-acquired conditions needing quality improvement (Spaulding, Zhao, and Haley 2014). They reported that while the VBP measures are covering process, structure, and outcomes, these measures do not correlate with an improvement in hospital-acquired conditions. This result could mean that we are not measuring the correct processes, or that the outcome measurements do not reflect the quality we are trying to achieve. Which is more important—promoting an incentive system that lacks a clear indication of the outcomes that health systems should be measuring, or changing the process measures to ensure that the outcomes organizations care about are actually being measured (Spaulding, Zhao, and Haley 2014)? Future healthcare leaders must answer this interesting question.

The three pillars of structure, process, and outcomes need to be addressed collec- tively to achieve optimum quality of care. As described above, each aspect influences the others. For example, a patient with a broken bone needs access to a qualified physician and an appropriate facility for treatment, and the care he receives should meet preestablished standards. A positive outcome of healing with no complications after treatment is expected but should also be measured. If that outcome is not achieved, then an examination of the structure (qualifications and experience of the physician and facility) and process (were standards followed?) is needed. If any one of these aspects is lacking, the others are nega- tively affected and optimum quality is not achieved.

defInIng QualIty

No single definition of healthcare quality exists, nor is there a single method of measuring quality in healthcare. Numerous judgments of its meaning, measurement, and value have been made. As a result, quality is difficult to define, measure, and apply in a health services setting. While scholars agree on some of the underlying quality issues in healthcare, they dif- fer dramatically in their ideas about where these issues stem from and how to address them.

Access to healthcare for all Americans is paramount in the quality literature. The ACA was more about access and insurance reform than healthcare reform. Among other concerns, the law addresses having enough physicians for consumers, particularly in rural areas. Before any discussion about quality, physicians and hospital beds must be adequate to people’s need for care.

The consumer’s ability to choose a physician or care setting is another focal point. The rise of health maintenance organizations (HMOs) in the 1990s, with their limited network plans, left some consumers worried about choice. However, millions of people enroll in high- quality managed care plans such as Kaiser Permanente, which limit customers to physicians employed by these companies. Patients do not complain about a restrictive network when they always have first-rate providers. The ACA insurance exchange program gives consumers choices along a range of plans, from bronze, with a narrow network and lower premiums, and

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the platinum plan, with a broader network and higher premiums. Some insurance plans could offer narrow networks with poor-quality providers, but healthcare planners need to ensure that Americans receive high-quality care despite choosing a narrow network (Emanuel 2014).

comparatIve outcomes

In the early 1900s, Dr. Ernest Codman, a pioneer surgeon and advocate of healthcare reform, researched healthcare quality by measuring quality outcomes. His end results theory advocated measuring patient care to assess hospital efficiency and to identify clinical errors or problems. The American College of Surgeons adopted his theory as a minimum qual- ity standard. On the basis of this theory, the college created the Hospital Standardization Program, which later evolved into the Joint Commission on Accreditation of Healthcare Organizations (now simply The Joint Commission). Codman also believed in public report- ing of quality, a concept first taking hold today, a century later. The American Hospital Association also has encouraged providers to establish quality assurance programs to audit outcomes of care. The most comprehensive evaluation of hospital quality today is the CMS Hospital Compare report, which assesses hospital quality performance, measures changes in quality over time, and evaluates the patient experience.

The initial purpose of measuring the quality of healthcare outcomes and processes was to help patients make informed healthcare decisions. While research shows that Americans rate quality as the most important factor when choosing a health plan, studies also show that most do not understand their options well enough to make an informed choice. However, today’s consumer is becoming more informed and considers the advantages and risks of recommended treatments. Healthcare organizations must understand, define, and measure quality of care as well as gather data from the patient’s perspective for use in patient decision making. While patient satisfaction is not the only indicator of quality care, it is a significant goal. Providers could achieve exemplary clinical outcomes but have negative patient satisfaction scores if they have poor interpersonal skills or lack sensitivity to cultural differences among their patients.

Public and private groups, such as the National Committee for Quality Assurance (NCQA), have developed tools for measuring and reporting healthcare quality. The Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS; see Highlight 12.3) and the Healthcare Effectiveness Data and Information Set (HEDIS; see Highlight 12.4) are two examples. Many hospitals use HCAHPS to assess patient satisfaction and HEDIS to measure clinical performance in the outpatient setting.

QualIty metrIcs growIng demand for QualIty-related data

Demand for quantitative data on healthcare quality is growing. P4P programs use these data to recommend quality measures, design financial incentives, and create measurement systems. As with Leapfrog, some payers are using clinical quality measures while negotiating

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contracts and designing benefits to adjust patient cost sharing and direct patients toward higher-performing hospitals (Carrier and Cross 2013). Because chronic conditions account for 86 percent of medical costs, payers stress the importance of gathering data on chronic care. They also stress the importance of using quality measures based on peer-reviewed national standards of care. Because analysis of quality data can take more than a year, there may be delays in reporting hospital quality and paying timely P4P bonuses (CDC 2015).

However, while reporting requirements and transparency efforts have proliferated over the past 20 years, employers often find it difficult to determine what hospital quality measures are important, how to interpret and use quality information in a meaningful way,

HIGHLIGHT 12.3 Hospital Consumer Assessment of Healthcare Providers and Systems

HCAHPS➤(typically➤pronounced➤“H-Caps”)➤is➤a➤survey➤used➤to➤measure➤patient➤experi-

ences➤with➤healthcare➤providers.➤Use➤of➤this➤standardized➤survey➤allows➤patient➤ex-

periences➤to➤be➤compared➤with➤those➤of➤other➤patients➤across➤the➤United➤States.➤All➤

patients➤are➤asked➤the➤same➤questions,➤and➤all➤results➤are➤measured➤according➤to➤the➤

same➤rating➤scale.➤Without➤a➤standardized➤survey,➤comparisons➤of➤quality➤of➤care➤would➤

be➤inaccurate.➤

The➤survey➤focuses➤on➤several➤areas:

•➤ How➤well➤nurses➤communicated➤with➤patients

•➤ How➤well➤doctors➤communicated➤with➤patients

•➤ How➤responsive➤hospital➤staff➤were➤to➤patients’➤needs

•➤ How➤well➤caregivers➤managed➤patients’➤pain

•➤ How➤well➤caregivers➤explained➤patients’➤medications➤to➤them

•➤ How➤clean➤and➤quiet➤the➤hospital➤was

•➤ How➤well➤the➤caregivers➤gave➤discharge➤instructions

•➤ Overall➤satisfaction➤rating➤of➤their➤hospital➤stay➤

CMS➤implemented➤the➤HCAHPS➤survey➤in➤October➤2006,➤and➤the➤first➤public➤report-

ing➤of➤HCAHPS➤results➤occurred➤in➤March➤2008.➤The➤survey,➤its➤methodology,➤and➤the➤

results➤it➤produces➤are➤in➤the➤public➤domain➤and➤can➤be➤found➤on➤the➤Hospital➤Compare➤

website.➤Since➤July➤2007,➤hospitals➤receiving➤Medicare➤payments➤must➤collect➤and➤sub-

mit➤HCAHPS➤data➤to➤receive➤their➤full➤annual➤payment.➤The➤ACA➤requires➤HCAHPS➤to➤be➤

included➤among➤the➤measures➤used➤to➤calculate➤value-based➤incentive➤payments➤in➤the➤

VBP➤program.➤

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and how to present useful information to their consumers (Carrier and Cross 2013). Use of consistent sources with transparency of measurement methods is important in developing a quality improvement plan.

As discussed previously, many public reports are using data from CMS’s Hospital Compare website (www.hospitalcompare.hhs.gov). This website has a consumer orientation, providing information on how well hospitals provide recommended care to their patients. Hospital Compare allows the public to select up to three hospitals to compare quality measures related to heart attack, heart failure, pneumonia, surgery, and other conditions. These measures are organized by

HIGHLIGHT 12.4 Healthcare Effectiveness Data and Information Set

In➤1991,➤NCQA➤created➤the➤HMO➤Employer➤Data➤and➤Information➤Set➤to➤help➤measure➤

the➤quality➤of➤care➤at➤healthcare➤institutions.➤HEDIS➤has➤undergone➤four➤name➤changes➤

while➤maintaining➤the➤same➤acronym;➤the➤name➤was➤changed➤to➤Healthcare➤Effective-

ness➤Data➤and➤Information➤Set➤in➤2007.

According➤to➤NCQA➤(2014),➤90➤percent➤of➤health➤plans➤use➤HEDIS➤to➤monitor➤quality.➤

HEDIS➤consists➤of➤81➤measures➤across➤five➤domains➤of➤care:➤

1.➤ Effectiveness➤of➤care

2.➤ Access➤to➤and➤availability➤of➤care

3.➤ Experience➤of➤care

4.➤ Utilization➤and➤relative➤resource➤use

5.➤ Health➤plan➤descriptive➤information

Healthcare➤institutions➤are➤evaluated➤on➤how➤well➤they➤perform➤on➤the➤81➤measures.➤

Examples➤include➤asthma➤medication➤use,➤persistence➤of➤beta-blocker➤treatment➤after➤

a➤heart➤attack,➤control➤of➤high➤blood➤pressure,➤comprehensive➤diabetes➤care,➤breast➤

cancer➤screening,➤antidepressant➤medication➤management,➤childhood➤and➤adolescent➤

immunization➤status,➤and➤childhood➤and➤adult➤weight➤or➤body➤mass➤index➤assessment➤

(NCQA➤2014).➤NCQA➤collects➤the➤data➤from➤healthcare➤organizations➤and➤uses➤them➤to➤

calculate➤national➤benchmarks➤and➤set➤standards➤for➤NCQA➤accreditation.

HEDIS➤is➤used➤by➤employers➤and➤consumers➤to➤compare➤health➤plans➤and➤identify➤

those➤most➤appropriate➤for➤their➤needs.➤Because➤the➤measures➤reported➤to➤HEDIS➤are➤

specific➤(all➤organizations➤report➤the➤same➤measurements),➤healthcare➤organizations➤

across➤the➤nation➤can➤be➤easily➤compared.

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http://www.hospitalcompare.hhs.gov
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◆ patient survey results;

◆ timely and effective care;

◆ readmissions, complications, and deaths;

◆ use of medical imaging;

◆ linking quality to payment; and

◆ Medicare volume.

The demand for data has pushed the implementation of electronic health records (EHRs), and meaningful use initiatives have furthered that effort. Hospitals must plan for the resources required to meet these demands. Clinicians will complain that “it’s not good enough that I document it; I need to document it someplace where we can capture it for reporting” (Eisenberg et al. 2014). To minimize the burden on clinicians, a combination of clinical knowledge and technological expertise is required to implement manually intensive steps so that hospitals can begin to use EHR-specific quality measures (Amster et al. 2014).

agency for HealtHcare researcH and QualIty

AHRQ, whose mission is to produce evidence that helps make healthcare safer and higher quality—as well as more accessible, equitable, and affordable—is a division of the US Depart- ment of Health and Human Services (HHS). The agency also works with HHS and other industry partners to make sure that the evidence is understood and used (Kronick 2015). Its programs and software are free and publicly available for download on the AHRQ website (www.ahrq.gov). The Inpatient Quality Indicators are part of a set of software modules of AHRQ quality indicators developed by the Stanford University–University of California, San Francisco, Evidence-Based Practice Center and the University of California, Davis, under a contract with AHRQ. The Inpatient Quality Indicators were originally released in 2002. Hospital administrative data related to mortality, utilization, and volume reflect quality of care inside hospitals. AHRQ collects data on inpatient mortality for certain procedures and medical conditions; utilization of procedures for which there are questions of overuse, underuse, and misuse; and volume of procedures for which some evidence suggests that a higher volume of procedures is associated with lower mortality (AHRQ 2015).

patIent safety

The Institute of Medicine (IOM) report To Err Is Human: Building a Safer Health System, published in 1999, described the problems surrounding patient safety. The report listed

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http://www.ahrq.gov
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six aims designed to improve safety. Healthcare must be (1) safe, (2) effective, (3) patient centered, (4) timely, (5) efficient, and (6) equitable. These six aims underscore the fact that healthcare is a service delivered to a patient who is also the customer. While some of the IOM aims (such as safety, effectiveness, and fiscal efficiency of services) can be statisti- cally measured on the basis of mortality and morbidity rates, other factors (such as patient centeredness, timeliness, and equitability) are best evaluated through research and patient satisfaction surveys. The Joint Commission publishes National Patient Safety Goals that it expects hospitals to address when pursuing accreditation (see Highlight 12.5).

otHer QualIty consIderatIons worKforce

An unintended consequence of an emphasis on quality is a rise in the cost of nursing ser- vices and ancillary staff. Studies have shown that patient outcomes improve with increased patient-to-nurse ratios (Spaulding, Zhao, and Haley 2014). Hospitals with poor nurse staff- ing (more than four patients per nurse) have higher rates of risk-adjusted 30-day mortality and failure to rescue in surgical patients (Wiltse Nicely, Sloane, and Aiken 2012). Each additional patient added to a nurse assignment results in a 7 percent increase in mortality (Aiken et al. 2002). Studies have shown that nursing retention is an important factor in maintaining a skilled nursing staff (Harrison and Ledbetter 2014).

Healthcare is a labor-intensive field. Healthcare organizations require a well-designed infrastructure for supporting nurses and other staff to maximize quality outcomes. But proper staffing may come at a price that is contrary to maintaining a lower expense base. How do

HIGHLIGHT 12.5 National Patient Safety Goals, 2015

1.➤ Improve➤the➤accuracy➤of➤patient➤identification

2.➤ Improve➤the➤effectiveness➤of➤communication➤among➤caregivers

3.➤ Improve➤the➤safety➤of➤medication➤use

4.➤ Reduce➤the➤harm➤associated➤with➤clinical➤alarm➤systems

5.➤ Reduce➤the➤risk➤of➤healthcare-associated➤infections

6.➤ Identify➤safety➤risks➤inherent➤in➤the➤patient➤population

7.➤ Use➤the➤Universal➤Protocol➤for➤preventing➤wrong-site,➤wrong-procedure,➤and➤

wrong-person➤surgery➤

Source:➤Data➤from➤The➤Joint➤Commission➤(2014).

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healthcare leaders find the balance between quality and appropriate staffing? Research on workforce issues can help organizations determine the number of staff members, mix of expertise, and level of experience necessary to providing optimal care.

magnet recognItIon

The American Nurses Credentialing Center (ANCC) is the sponsor of the Magnet Recogni- tion Program, which recognizes healthcare organizations for quality patient care, nursing excellence, and innovations in professional nursing practice (see Highlight 12.6). Studies have shown that organizations that pursue or achieve Magnet recognition have improved patient outcomes, patient satisfaction, and nurse satisfaction. Approximately 7 percent of all hospitals in the United States have achieved ANCC Magnet Recognition status (ANCC 2015). Organizations may consider achieving Magnet status to be a strategic goal in improving nurse-sensitive patient outcomes—patient outcomes that improve if there is a greater quantity or better quality of nursing care (e.g., pressure ulcers, falls, intravenous infiltrations).

patIent engagement

Research suggests that empowering patients to actively process information, to decide how that information personally affects them, and then to act on those decisions is a key driver behind healthcare improvement and cost reduction (Hibbard, Greene, and Overton 2013). A therapeutic alliance is a partnership between patient and providers that involves collaboration and negotiation to arrive at mutual goals.

Nurse-sensitive

patient outcomes

Changes➤in➤health➤

status➤that➤are➤

dependent➤on➤nursing➤

interventions.➤

Therapeutic alliance

Partnership➤between➤

patient➤and➤providers➤

that➤involves➤

collaboration➤and➤

negotiation➤to➤arrive➤at➤

mutual➤goals.

HIGHLIGHT 12.6 Magnet Recognition Program Model Components

•➤ Transformational➤leadership

•➤ Structural➤empowerment

•➤ Exemplary➤professional➤practice

•➤ New➤knowledge,➤innovations,➤and➤improvements

•➤ Empirical➤outcomes➤

Source:➤Data➤from➤ANCC➤(2015).