Statement of the American College of Physicians Before the Senate Labor and Human Resources Committee

May 20, 1997

Federal Initiatives on Quality of Care

Testimony of William A. Reynolds, MD, FACP, President
The American College of Physicians

Good morning. My name is Dr. William Reynolds. I am a general internist from Missoula, Montana and President of the American College of Physicians (ACP), the nation's largest medical specialty society whose 100,000 members practice internal medicine and its subspecialties.

Mr. Chairman, thank you for holding this hearing and for introducing legislation on quality of care. All too often, debates about health system reform turn into discussions solely about costs. While financial issues are important, we must not lose sight of our commitment to provide patients with high quality care.

Before addressing the important topic of this hearing—how to ensure that people who have insurance receive high quality care—we would be remiss if we forgot that a large, and growing number of Americans are uninsured. They either have no access to care, or receive fragmented care in clinics or emergency rooms. The literature has shown that the uninsured have poorer health outcomes and receive lower quality care than those with insurance.

I will now turn to the subject of this hearing. It is clear the public is concerned about the quality of care they are receiving. They suspect that health plans and providers have financial incentives to deny care. As a result, anxiety and distrust have entered into the physician-patient relationship. The public policy response has been legislation governing what are deemed to be particularly outrageous practices that lead to reduced quality. While well-intentioned, this approach will lead the country toward a "Baskin Robbins" health care system, where a certain medical condition will be the "flavor of the month" and therefore in need of statutory protection.

In contrast, the College recommends a systematic approach to assuring quality that blends market forces with appropriate standards. This means a commitment to a multi-pronged strategy whose components are: facilitating beneficiary choice; developing appropriate measures to evaluate quality; identifying and disseminating information about best practices; liability reform; and implementing proper quality assurance mechanisms.

The College believes that these elements must be included in quality assurance legislation, and is pleased that many of them are included in legislation before this Committee, particularly the separate bills sponsored by the Chairman and Senator Kennedy.

Cost is still the paramount consideration when choosing a health plan. In most areas, the market still responds most directly to price. While price will always be an important factor, it is the ACP's belief that we should take steps to encourage health plans to compete on the basis of the quality of care they provide.

Health plans should be required to disclose all necessary information to enable a potential enrollee to make an informed choice.

One of the best ways to encourage quality-based competition is to ensure that potential enrollees have access to key information about health plans. This will help them choose the plan that meets their needs and help them access necessary care once enrolled. Despite the efforts of some purchasers, a recent survey found that only 31% of large corporate purchasers give employees information about a plan's accreditation status and only 25% provide information about overall health plan performance.

The ACP believes that health plans should be required to disclose all necessary information to enable an informed choice, including information about access to care (including availability of specialists and out of network providers), benefits, and cost sharing requirements. Plans should also disclose whether they provide participating providers with any financial incentives, as well as enrollee and physician disenrollment rates. This information should be provided to all prospective enrollees in a standardized, easy-to-understand format. The legislation sponsored by the Chairman and Senator Kennedy contain these critical requirements.

Moreover, as recommended by the Institute of Medicine, the College supports the development of a consumer-oriented information infrastructure for Medicare beneficiaries to provide information and track complaints, grievances, and appeals should be developed.

Standardization of data and the use of more accurate and valid performance measures is necessary to evaluate quality and facilitate comparisons among competing health plans.

A related issue is how to accurately measure the quality of care patients receive and thereby facilitate comparisons among plans. This requires valid performance measures. Although the science of developing accurate quality indicators is in its infancy, there has been significant progress. The Health Plan Employer Data and Information Set (HEDIS) and the measures developed by the Foundation for Accountability (FAcct) are steps in the right direction. The Joint Commission's initiative to identify valid measures and incorporate them into the accreditation process is also a significant development.

However, much more work needs to be done. Most physicians in practice today are being judged by so-called "report cards" that use measures that are not valid indicators of quality. Issues such as the scientific rigor of a measure's development process and the use of claims data which may be inaccurate or biased raise questions about their validity. In addition, many measures focus strictly on utilization rather than outcomes, while others are not adjusted to reflect the health status of that physician's patients.

The ACP recommends that performance measures used by health plans meet at least four basic criteria: they are important to the population cared for by the plan (i.e., a Medicare risk plan should measure care on conditions and issues important to the elderly); a better "score" on the measure reflects a real improvement in care; the measure is derived from a scientifically rigorous process; and if physicians will be held accountable for performance, the measure must evaluate processes and outcomes that are within the physician's control.

The College also recommends that health plans be required to survey participating physicians to assess their satisfaction and opinions about the quality of care provided under that plan. If these surveys are done correctly, the information they contain can provide enrollees and providers with useful information about a health plan.

In addition, while many health plans currently gather and report patient satisfaction data—and pending legislation would mandate these activities—it is important to remember that this information can be inaccurate. A recent Wall Street Journal article pointed out that while these surveys are popular, their results can easily be manipulated to achieve desired goals. Like clinical measures of quality, these data are also subject to bias and therefore must be adjusted for demographic characteristics such as age, gender, and health status. Moreover, health plans do not have uniform data requirements. Thus, physicians that participate in a variety of plans, each with its own data requirements and collection methods, face an onerous burden. Anecdotal information also indicates that the reports generated from performance measures are at times inaccurate. Standardization of data collected from physicians, as well as a uniform data gathering process is necessary. The College stands ready to work with the Chairman, Senator Kennedy, and other Committee members to develop proposals that address this issue.

The College recommends increased funding for outcomes research and the creation of Quality Improvement Foundations to identify successful clinical practices and disseminate that information to physicians and their patients.

If we expect plans to compete on quality, it is critical to identify best practices and disseminate that information to physicians and their patients. Currently, there are tremendous variations in the use of services across the country. Compounding the problem of variations in care is that little is known about the relative effectiveness of many treatments. As a result, health costs could be higher than necessary since enrollees may be receiving treatment in high cost ways that are no more effective than less expensive ones. Moreover, patients may not be receiving the best care, or may be getting treatments where the risks exceed the benefits.

The College recommends increased funding for outcomes research to provide the scientific basis for coverage decisions as well as physician and patient education initiatives about best practices and effective treatments. Specifically, the ACP urges an increase in funding for the Agency for Health Care Policy and Research (AHCPR), the federal agency that spearheads these projects.

In addition, the College endorses the creation of non-profit organizations known as Quality Improvement Foundations (QIFs), a network of organizations responsible for promoting quality improvement activities throughout the country. As a private, educational organization, a QIF's mission includes: identifying and disseminating information to physicians about best practices; monitoring and profiling the quality of health care; supporting outcomes research; and educating consumers on issues of medical effectiveness. By identifying clinical successes and providing educational feedback to physicians, QIFs hold the promise of helping doctors identify appropriate care and thereby reduce costs and improve outcomes. Providing patients and physicians with information about the effects of different treatments will lead to informed decision-making between doctors and their patients, which will encourage the appropriate use and supply of technology, diminish regional variations in care, and the correlating cost and quality concerns.

Similar organizations already exist. For example, the role of the QIF is consistent with the new mission of the Quality Improvement Organizations (formerly Peer Review Organizations) operating in the Medicare program.

We were pleased to see that the Chairman's legislation, while not endorsing QIFs per se, requires the new Federal Health Quality Council to carry out many of these activities. We would be happy to work with you to identify an appropriate entity to perform these functions.

Given the paucity of outcomes data available and the inconsistency of funding for the AHCPR, the work of the QIFs becomes even more critical. Since they can improve the quality and cost effectiveness of treatment provided by health plans, it seems appropriate for plans to financially support QIFs. This is consistent with current law which requires managed care plans participating in Medicare to pay a fee used to fund the quality assurance activities of the local Quality Improvement Organization.

Medical liability reform—particularly testing of enterprise liability concepts and changes to ERISA—will help improve the quality of care.

Liability reform is another key to improving quality. If we want physicians to learn from their mistakes and those of their colleagues to prevent re-occurrence, it is essential to reduce their liability burden.

Among its many flaws, the existing system is an inadequate quality assurance system. Rather than improvements in care, it promotes fear, distrust and defensive medicine. We need a liability system that not only compensates injured persons, but also provides incentives for health plans and organizations to take responsibility for improving care.

The College proposes testing enterprise liability concepts, which assign liability to the institution or organization where the alleged error occurred. This will provide organizations with the incentive to implement Continuous Quality Improvement and other techniques that have been shown to improve care across an entire delivery system. Under the same rationale, as these demonstration projects are being developed, Congress should amend the Employee Retirement Income Security Act (ERISA), a federal law governing health benefits plans, which has been used by health plans to avoid liability regarding their treatment and benefit decisions.

Appropriate quality assurance mechanisms are necessary.

Even with a developing market based on quality, appropriate quality assurance mechanisms are needed to protect patients. These include accreditation requirements, as well as access to appeals and grievance procedures. In addition, so-called "gag rules", which inhibit the free flow of information between physician and patient, and therefore inherently decrease quality of care, should be prohibited.

Support for Pending Legislation

While this Committee has before it many bills addressing quality of care, I would like to take this opportunity to briefly comment on the separate bills introduced by the Chairman and the ranking member, Senator Kennedy.

The College supports your bill, Mr. Chairman. By creating a process to certify or accredit health plans, a requirement for collecting and reporting performance measures, providing financial incentives to plans to reach quality improvement targets, and the dissemination of comparative information, the legislation creates an infrastructure to improve the quality of health care provided through the Federal government agencies.

Senator Kennedy's bill also contains many provisions supported by the College. Specifically, the bill's standards for utilization review criteria, prohibitions of "gag clauses", grievance and appeals procedures and disclosure of information to potential enrollees are important.

However, since both bills require the collection and reporting of enrollee satisfaction data, the College would respectfully recommend adding provisions in both bills that require the collection and reporting of data on physician satisfaction. Moreover, the ACP encourages you to include provisions that will simplify information requirements and reviews of physicians so they are not subject to multiple reviews and requests. The California Cooperative Healthcare Reporting Initiative (CCHRI) is a successful model that merits further examination.

Conclusion

In sum, the American College of Physicians is pleased that you are giving quality of care issues the attention they deserve. We as physicians and you as policy makers share the responsibility for making sure that patients receive the best possible care.

Thank you for the opportunity to testify today. I would be pleased to answer any questions you have.

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