10: Quality of Health Care

Each year in the United States, millions of people visit hospitals, physicians, and other caregivers and receive medical care of superb quality. But that’s not the whole story. Some patients’ interactions with the health care system fall short (Institute of Medicine, 1999, 2001) and widespread quality improvement has proven elusive (Chassin & Loeb, 2011).

At the beginning of the 21st century, an estimated 32,000 people died in US hospitals each year as a result of preventable medical errors (Zahn & Miller, 2003). A 2013 study suggests that the actual number is higher (James, 2013). The rate of patient harms caused by care delivered in hospitals did not change from 2002 through 2007 (Landrigan et al., 2010).

In addition, an estimated 57,000 people in the United States died because they were not receiving appropriate health care—in most cases, because common medical conditions such as high blood pressure or elevated cholesterol are not adequately controlled (National Committee for Quality Assurance, 2010). Hospitals vary greatly in their risk-adjusted mortality rates for Medicare patients; during 2009 to 2012, risk-adjusted deaths from heart failure and pneumonia were three times higher for lower-quality compared with higher-quality hospitals (Medicare Hospital Quality Chartbook, 2013). A previous study showed that if low-quality hospitals reduced mortality rates to the level of high-quality hospitals, 17,000 to 21,000 fewer deaths per year would have occurred (Schoen et al., 2006).

Fatal medication errors among outpatients doubled between 1983 and 1993 (Phillips et al., 1998). Prescribing errors occur in 7.6% of outpatient prescriptions (Gandhi et al., 2005), which amounts to 228 million errors in 2004. In 2007, about 25% of elderly patients received high-risk medications (Zhang et al., 2010). Diagnostic error rates are around 10% for a variety of medical conditions (Wachter, 2010). In some primary care practices, patients are not informed about abnormal laboratory results more than 20% of the time (Casalino et al., 2009).

Two million lives would have been saved in 2006 if preventive services had been regularly delivered to the entire population (Maciosek et al., 2010). Only 50% of people with hypertension are adequately treated (Egan, 2010) and 43% of people with diabetes are inadequately controlled (Cheung et al., 2009). Racial and ethnic minority patients experience an inferior quality of care compared with white patients (Agency for Healthcare Research and Quality, 2015).

A recent article (Chassin and Loeb, 2011) summarized that “Health care quality and safety today are best characterized as showing pockets of excellence on specific measures or in particular services at individual health care facilities … The pockets of excellence mentioned above coexist with enormously variable performance across the delivery system. Along with some progress, we are experiencing an epidemic of serious and preventable adverse events … The risk of harmful error in health care may be increasing. As new devices, equipment, procedures, and drugs are added to our therapeutic arsenal, the complexity of delivering effective care increases. Complexity greatly increases the likelihood of error, especially in systems that perform at low levels of reliability.”

A prominent Institute of Medicine report (2001) concluded that between what we know and what we do lies not just a gap, but a chasm. Quality problems have been categorized as overuse, underuse, and misuse (Chassin et al., 1998). We will first examine the factors contributing to poor quality and then explore what can be done to elevate all health care to the highest possible level.

What is high-quality health care? It is care that assists healthy people to stay healthy, cures acute illnesses, and allows chronically ill people to live as long and fulfilling a life as possible. What are the components of high-quality health care? (Table 10-1)

Adequate Access to Care

To receive quality care, people must have access to care. People with reduced access to care suffer worse health outcomes in comparison to those enjoying full access—the quality problem of underuse (see Chapter 3). Quality requires equality (Schiff et al., 1994).

Adequate Scientific Knowledge

A body of knowledge must exist that informs physicians what to do for the patient’s problem. If clear scientific knowledge fails to distinguish between effective and ineffective or harmful care, quality may be compromised. During the 1960s, medical science taught that estrogen replacement, without the administration of progestins, was safe. Sadly, cases of uterine cancer caused by estrogen replacement did not show up until many years later. Brigitte Levy’s physician followed the standard of care for his day, but the medical profession as a whole was relying on inadequate scientific knowledge. Treatments of uncertain safety and efficacy may cause harm and cost billions of dollars each year.

Competent Health Care Providers

The provider must have the skills to diagnose problems and choose appropriate treatments. An inadequate level of competence resulted in poor quality care for Ms. Yu.

The Harvard Medical Practice study reviewed 30,000 medical records in 51 hospitals in New York State in 1984 (Studdert et al., 2004). The study found that in approximately 4% of hospital admissions, the patient experienced a medical injury (i.e., a medical problem caused by the management of a disease rather than by the disease itself); this is the quality problem of misuse. A more recent study placed the percent of hospital patients experiencing a medical injury at 13.8% (Meurer et al., 2006). Medical injuries can be classified as negligent or not negligent.

Medical negligence is defined as failure to meet the standard of practice of an average qualified physician practicing in the same specialty. Jack’s drug reaction must be considered negligence, while Mack’s was not. Of the medical injuries discovered in the Harvard study, 28% were because of negligence. In those injuries that led to death, 51% involved negligence. The most common injuries were drug reactions (19%) and wound infections (14%). Eight percent of injuries involved failure to diagnose a condition, of which 75% were negligent. Seventy percent of patients suffering all forms of medical injury recovered completely in 6 months or less, but 47% of patients in whom a diagnosis was missed suffered serious disabilities (Brennan et al., 1991; Leape et al., 1991).

Negligence cannot be equated with incompetence. Any good health care professional may have a mental lapse, may be overtired after a long night in the intensive care unit, or may have failed to learn an important new research finding.

Money and Quality of Care

No one can know what motivated the physician to send Ms. Brown home instead of to an emergency department when unstable coronary heart disease was one possible diagnosis (underuse); nor can one guess what led the fee-for-service cardiologist to perform an invasive coronary angiogram of questionable appropriateness on Mr. Fung (overuse). One factor that bears close attention is the impact of financial considerations on the quantity (and thus the quality) of medical care (Relman, 2007). As noted in Chapter 4, fee-for-service reimbursement encourages physicians to perform more services, whereas capitation payment rewards those who perform fewer services.

More than 40 years ago, Bunker (1970) found that the United States performed twice the number of surgical procedures per capita than Great Britain. He postulated that this difference could be accounted for by the greater number of surgeons per capita in the United States and concluded that “the method of payment appears to play an important, if unmeasured, part.” Most surgeons in the United States are compensated by fee-for-service, whereas most in Great Britain are paid a salary. From 8% to 86% of surgeries—depending on the type—have been found to be unnecessary and have caused substantial avoidable death and disability (Leape, 1992). An analysis of the National Practitioner Data Base suggests that 10% to 20% of all surgeries in several specialties are unnecessary (Eisler & Hansen, 2013). As an example, spinal fusion surgery increased by 77% from 1996 to 2001, though little evidence supports this procedure in many cases. From 2002 to 2007, Medicare patients undergoing surgery for lumbar spinal stenosis experienced a doubling of complex rather than simple operations resulting in a major increase in surgical complications, rehospitalizations, and costs. Rates of reoperation (because of worsening pain) are high. Payment for this procedure is greater than that provided for most other procedures performed by orthopedists and neurosurgeons (Deyo et al., 2004 and 2010).

Relman (2007) writes about the commercialization of medicine: “The introduction of new technology in the hands of specialists, expanded insurance coverage, and unregulated fee-for-service payments all combined to rapidly increase the flow of money into the health care system, and thus sowed the seeds of a new, profit-driven industry.”

During the 1980s, many physicians formed partnerships and joint ventures, giving them part ownership in laboratories, MRI scanners, and outpatient surgicenters. By 1990, 93% of diagnostic imaging facilities, 76% of ambulatory surgery centers, and 60% of clinical laboratories in Florida were owned wholly or in part by physicians. The rates of use for MRI and CT scans were higher for physician-owned compared with nonphysician-owned facilities (Mitchell & Scott, 1992). In a national study, physicians who received payment for performing x-rays and sonograms within their own offices obtained these examinations four times as often as physicians who referred the examinations to radiologists and received no payment for the studies (Hillman et al., 1990).

Profitable diagnostic, imaging, and surgical procedures have rapidly migrated from the hospital to free-standing physician-owned ambulatory surgery centers, endoscopy centers, and imaging centers, with rapid increases in the number of tests and procedures performed (Berenson et al., 2006). The number of CT scans performed for Medicare patients increased by 65% from 2000 to 2005; during those years, the number of MRI scans jumped by 94% (Bodenheimer et al., 2007). The number of CT scans was growing by more than 10% per year, increasing patients’ risk of radiation-related cancer (Smith-Bindman, 2010). A significant association exists between surgeon ownership of ambulatory surgery centers and a higher volume of surgeries; surgery volume increases immediately following surgeons’ acquisition of the surgicenter (Hollingsworth et al., 2010).

Moving to the other side of the overuse—underuse spectrum, payment by capitation, or salaried employment by a for-profit business, may create a climate hostile to the provision of adequate services. In the 1970s, a series of HMOs called prepaid health plans (PHPs) sprang up to provide care to California Medicaid patients. The quality of care in several PHPs became a major scandal in California. At one PHP, administrators wrote a message to health care providers: “Do as little as you possibly can for the PHP patient,” and charts audited by the California Health Department revealed many instances of undertreatment. The PHPs received a lump sum for each patient enrolled, meaning that the lower the cost of the services actually provided, the greater the PHP’s profits (US Senate, 1975). More recent approaches to capitation payment have attempted to mitigate incentives for undertreatment by requiring providers to achieve quality of care targets and risk-adjusting capitation payments, with payments for patients at greater risk for needing medical services higher than payments for low-risk patients. The quantity and quality of medical care are inextricably interrelated. Too much or too little can be injurious. The research of Fisher et al. (2003) has shown that similar populations in different geographic areas have widely varying rates of surgeries and days in the hospital, with no consistent difference in clinical outcomes between those in high-use and low-use areas.

Health Care Systems and Quality of Care

Health care institutions must be well organized, with an adequate, competent staff. Shelley Rush was a superb nurse, but understaffing caused her to make a serious error. The book Curing Health Care by Berwick et al. (1990) opens with a heartbreaking case:

This patient may have had perfect access to care for an illness whose treatment is scientifically proved; she may have seen a physician who knew how to make the diagnosis and deliver the appropriate treatment; and yet the quality of her care was disastrously deficient. Dozens of people and hundreds of processes influence the care of one person with one illness. In her case, one person—perhaps a file clerk with a near-perfect record in handling thousands of radiology reports—lost control of one report, and the physician’s office had no system to monitor whether or not x-ray reports had been received. The result was the most tragic of quality failures—the unnecessary death of a young person.

How health care systems and institutions are organized has a major impact on health care outcomes. For example, large multispecialty group practices in 22 metropolitan areas have better-quality measures at lower cost than dispersed physician practices in those areas (Weeks et al., 2009). Nurse understaffing is associated with higher hospital mortality rates (Needleman et al., 2011). Studies have shown that hospitals with more RN staffing have lower surgical complication rates (Kovner & Gergen, 1998) and lower mortality rates (Aiken et al., 2002).

Quality of care must be viewed in the context of regional systems of care (see Chapter 6), not simply within each health care institution. In one study, 27% of deaths related to coronary artery bypass graft (CABG) surgery at low-volume hospitals might have been prevented by referral of those patients to hospitals performing a higher volume of those surgeries (Dudley et al., 2000). Hospitals performing more surgical procedures have lower mortality rates for that surgical procedure (Gonzalez et al., 2014). Quality improves with the experience of those providing the care (Kizer, 2003; Peterson et al., 2004). Had Mr. Hart been told the relative surgical mortality rates at University Hospital, which performed 500 cardiac surgeries each year, and at Neighborhood Hospital, he would have chosen to be transferred 30 miles down the road. Not only does the volume of surgeries in a hospital matter; equally important is the volume of surgeries performed by the specific surgeon (Birkmeyer et al., 2003).

In the late 1980s, Dr. Donald Berwick (1989) and others realized that quality of care is not simply a question of whether or not a physician or other caregiver is competent. If poorly organized, the complex systems within and among medical institutions can thwart the best efforts of professionals to deliver high-quality care.

The Components of Quality: Summary

Good-quality care can be compromised at a number of steps along the way.

The Institute of Medicine, in its influential 2001 report Crossing the Quality Chasm, conceptualized six core dimensions of quality: safe, effective, patient-centered, timely, efficient, and equitable. These dimensions, defined in greater detail in Table 10-2, are consistent with the components of quality discussed earlier.

Traditionally, quality assurance has focused on individual caregivers and institutions in a “bad apple” approach that relies heavily on sanctions. More recently, quality has been viewed through the lens of the continuous quality improvement (CQI) model that seeks to enhance the clinical performance of all systems of care, not just the outliers with poor quality of care. The move to a CQI model has required development of more formalized standards of care that can be used as benchmarks for measuring quality, and more systematic collection of data to measure overall performance and not just performance in isolated cases (Table 10-2).

Traditional Quality Assurance: Licensure, Accreditation, and Peer Review

Traditionally, the health care system has placed great reliance on educational institutions and licensing and accrediting agencies to ensure the competence of individuals and institutions in health care. Health care professionals undergo rigorous training and pass special licensing examinations intended to ensure that caregivers have at least a basic level of knowledge and competence. However, clinicians may have been competent practitioners at the time they took their examinations, but their skills lapsed or they developed impairment from alcohol or drug use, depression, or other conditions (Leape & Fromson, 2006).

Many organizations that confer specialty board certification require physicians to pass examinations on a periodic basis and perform systematic quality reviews of their own clinical practices to maintain active specialty certification. However, while some hospitals may require active specialty certification for a physician to be granted privileges to practice in the hospital, certification is not required for medical licensure.

The traditional approach to quality assurance has also relied heavily on peer pressure within hospitals, HMOs, and the medical community at large. Peer review, which has been part of medicine for decades, is the evaluation by health care practitioners of the appropriateness and quality of services performed by other practitioners, usually in the same specialty. Medicare anointed the Joint Commission on Accreditation of Hospitals (now named the Joint Commission) with the authority to terminate hospitals from the Medicare program if quality of care was found to be deficient. The Joint Commission requires hospital medical staff to set up peer review committees for the purpose of maintaining quality of care.

The Joint Commission uses criteria of structure, process, and outcome to assess quality of care. Structural criteria include such factors as whether the emergency department defibrillator works properly. Process criteria include whether medical records are completed in a timely manner, or if the credentials committee keeps minutes of its meetings. Outcomes include such measures as mortality rates for surgical procedures, proportions of deaths that are preventable, and rates of adverse drug reactions and wound infections. Medicare also contracts with quality improvement organizations (QIOs) to promote better quality of care among physicians caring for Medicare beneficiaries.

The traditional quality assurance strategies of licensing and peer review have not been effective tools for improving quality. Peer review often adheres to the theory of bad apples, attempting to discipline physicians (to remove them from the apple barrel) for mistakes rather than to improve their practice through education. The physician who caused Ms. Lopez’s preventable death responded to peer criticism by blaming the nurse rather than learning from the mistake. With the hundreds of decisions physicians make each day, often in time-constrained situations, serious errors are relatively common in medical practice. One-third of physicians surveyed in 2009 did not agree with disclosing serious errors to patients and 20% had not disclosed errors to their patients (Iezzoni et al., 2012).

Even if sanctions against the truly bad apples had more teeth, these measures would not solve the quality problem. Removing the incontrovertibly bad apples from the barrel does not address all the quality problems that emanate from competent caregivers who are not performing optimally. Health care systems do need to forcefully sanction caregivers who, despite efforts at remediation, cannot operate at a basic standard of acceptable practice. But measures are also needed to “shift the curve” of overall clinical practice to a higher level of quality, not just to trim off the poor-quality outliers.

Peer reviewers frequently disagree as to whether the quality of care in particular cases is adequate or not (Laffel & Berwick, 1993). Because of these limitations, efforts are underway to formalize standards of care using clinical practice guidelines and to move from individual case review to more systematic monitoring of overall practice patterns (Table 10-3).

Clinical Practice Guidelines

For many conditions, there is a better and a worse way to make a diagnosis and prescribe treatment. Physicians may not be aware of the better way because of gaps in training, limited experience, or insufficient time or motivation to learn new techniques. For these problems, clinical practice guidelines can be helpful in improving quality of care. In 1989, Congress established the Agency for Health Care Policy and Research, now called the Agency for Healthcare Research and Quality (AHRQ), to support and disseminate evidence-based practice guidelines, among other tasks. Practice guidelines make specific recommendations to physicians on how to treat clinical conditions such as diabetes, osteoporosis, urinary incontinence, or cataracts.

More than 2,700 guidelines exist; written by dozens of organizations including specialty societies and commercial companies. The U.S. Preventive Services Task Force and other respected professional organizations issue widely accepted guidelines based on a rigorous and objective review of scientific evidence. However, many guidelines are unreliable and tainted by monetary interests (Graham et al., 2011). Nearly 90% of clinical practice guideline authors in one survey had ties to the pharmaceutical industry, a bias often not disclosed to readers of the guidelines (Shaneyfelt & Centor, 2009). For example, 8 of the 15 members of the panel recommending new cholesterol guidelines in 2013—which increased the number of people who would be taking statin drugs-–had industry ties (Ioannidis, 2014). Moreover, clinical practice guidelines developed based on research on a narrowly defined population, such as nonelderly patients with a single chronic condition, may not be applicable to different patient populations, such as elderly patients with multiple diseases (Boyd et al., 2005).

Practice guidelines are not appropriate for many clinical situations. Uncertainty pervades clinical medicine, and practice guidelines are applicable only for those cases in which we enjoy “islands of knowledge in our seas of ignorance.” Practice guidelines can assist but not replace clinical judgment in the quest for high-quality care.

Even when guidelines have been defined, patient preferences vary markedly. Some, like Mr. Urrutia, want prostate surgery, even though it is not needed; others, like Mr. Chin, have strong indications for surgery but do not want it. Practice guidelines must take into account not only scientific data, but also patient preferences (O’Connor et al., 2007).

Do practice guidelines in themselves improve quality of care? The evidence is murky (Djulbegovic & Guyatt, 2014). However, guidelines can be an important foundation for more comprehensive quality improvement strategies, such as computer systems to remind physicians when patients are in need of certain services according to a guideline (e.g., a reminder system about women due for a mammogram) or having trusted colleagues (“opinion leaders”) or visiting experts (“academic detailing”) conduct small group sessions with clinicians to review and reinforce practice guidelines (Bodenheimer & Grumbach, 2007).

Measuring Practice Patterns

A central tenet of the CQI approach is the need to systematically monitor how well individual caregivers, institutions, and organizations are performing. Two types of indicators used to evaluate clinical performance are process measures and outcome measures. Process of care refers to the types of services delivered by caregivers. Examples are prescribing aspirin to patients with coronary heart disease, or turning immobile patients in hospital beds on a regular schedule to prevent bed sores. Outcomes—e.g., death, symptoms, mental health, physical functioning, laboratory studies, and health status—are the gold standard for measuring quality. However, outcomes (particularly those dealing with quality of life) may be difficult to measure. More easily counted outcomes such as mortality may be rare events, and therefore uninformative for evaluating quality of care for many conditions that are not immediately life-threatening. Also, outcomes may be heavily influenced by the underlying severity of illness and related patient characteristics, and not just by the quality of health care that patients received (King et al., 2016). When measuring patient outcomes, it is necessary to “risk adjust” these outcome measurements for differences in the underlying characteristics of different groups of patients. Because of these challenges in using outcomes as measures to monitor quality of care, process measures are more commonly used. For process measures to be valid indicators of quality, there must be solid research demonstrating that the processes do in fact influence patient outcomes.

The contemporary approach to quality monitoring moves beyond examining a few isolated cases toward measuring processes or outcomes for a large population of patients. For example, a traditional peer review approach is to review every case of a patient who dies during surgery. Reviewing an individual case may help a surgeon and the operating team understand where errors may have occurred—a process known as “root cause” analysis. However, it does not indicate whether the case represented an aberrant bad outcome for a surgeon or team that usually has good surgical outcomes, or whether the case is indicative of more widespread problems. To answer these questions requires examining data on all the patients operated on by the surgeon and the operating team to measure the overall rate of surgical complications, and having some benchmark data that indicate whether this rate is higher than expected for similar types of patients.

Many practice organizations, from small groups of office-based physicians to huge, vertically integrated HMOs are starting to monitor patterns of care and provide feedback on this care to physicians and other staff in these organizations. A typical example of this practice profiling is measuring the rate at which diabetic patients receive recommended services, such as annual eye examinations, periodic testing of HbA_1c levels, and evaluation of kidney function. Diabetes process of care profiles demonstrate which clinicians are providing high quality care and which would benefit from improvement advice; and indicate what systematic reforms would improve care, such as health coaching for diabetic patients in poor control (Bodenheimer & Grumbach, 2007).

Continuous Quality Improvement

Maximizing excellence for individual health care professionals is only one ingredient in the recipe for high-quality health care. Improving institutions is the other, through CQI techniques. CQI involves the identification of concrete problems and the formation of interdisciplinary teams to gather data and propose and implement solutions to the problems.

Such successes only dot, but do not yet dominate, the health care quality landscape (Solberg, 2007). The Institute for Healthcare Improvement (IHI) has led efforts to spread CQI efforts by sponsoring “collaboratives” to assist institutions and groups of institutions to improve health care outcomes and access while ideally reducing costs. Hundreds of health care organizations have participated in collaboratives concerned with such topics as improving the care of chronic illness, reducing waiting times, improving care at the end of life, and reducing adverse drug events. Collaboratives involve learning sessions during which teams from various institutions meet and discuss the application of a rapid change methodology within institutions. Some of IHI’s successes have taken place in the area of chronic disease, with a variety of institutions—from large integrated delivery systems to tiny rural community health centers—implementing the chronic care model to improve outcomes for conditions such as diabetes, asthma, and congestive heart failure (Bodenheimer et al., 2002). Collaboratives that assist institutions to implement the chronic care model have shown modest improvement in patient outcomes compared with controls (Vargas et al., 2007). In the area of patient safety, in 2004, IHI launched the 100,000 Lives Campaign (www.ihi.org) to reduce mortality rates in hospitals, followed by a 5 Million Lives Campaign between 2006 and 2008; more than 4,000 hospitals in the United States participated in these campaigns. There is evidence that these campaigns have contributed to reductions in hospital mortality, (Berwick et al., 2006; Wachter & Pronovost, 2006).

Computerized Information Systems

The advent of computerized information systems has created opportunities to improve care and to monitor the process and outcomes of care for entire populations. Electronic medical records can create lists of patients who are overdue for services needed for preventive care or the management of chronic illness and can generate reminder prompts for physicians and patients (Baron, 2007). Computerized physician order entry (CPOE) systems can alert the physician about inappropriate medication doses or medications to which the patient is known to be allergic (Kaushal et al., 2003). However, studies on the impact of electronic medical records on quality are mixed; without transformation of practice organization, the electronic medical record by itself is of limited utility (McCullough et al., 2013).

Public Reporting of Quality

The CQI approach emphasizes systematic monitoring of care to provide internal feedback to clinicians and health organizations to spur improved processes of care. A different approach to monitoring quality of care is to direct this information to the public. This approach views public release of systematic measurements of quality of care—commonly referred to as health care “report cards”—as a tool to empower health care consumers to select higher-quality caregivers and institutions. The Centers for Medicare and Medicaid Services sponsors the Physician Compare website, which publishes quality-of-care measures for physician groups and will soon include quality data on individual physicians (www.medicare.gov/find-a-doctor/provider-search.aspx). The Healthcare Effectiveness Data and Information Set (HEDIS), developed by the National Committee for Quality Assurance (NCQA), a private organization controlled by large HMOs and large employers, tracks many performance indicators at the level of health insurance plans, making it less useful to consumers, physicians, and hospitals and potentially more useful to employers deciding which health plans to offer to their employees. Some states issue report cards on hospital quality, with some also including physician performance. Advocates of this approach argue that armed with this information, patients and health care purchasers will make more informed decisions and preferentially seek out health care organizations with better report card grades.

An important experiment in individual physician report cards was initiated by the New York State Department of Health in 1990. The department released data on risk-adjusted mortality rates for coronary bypass surgery performed at each hospital in the state, and in 1992, mortality rates were also published for each cardiac surgeon. Each year’s list was big news and highly controversial. However, difficulties in measurement were highlighted by the fact that within 1 year, 46% of the surgeons had moved from one-half of the ranked list to the other half.

Several fascinating results came of this project: (1) Patients did not switch from hospitals with high mortality rates to those with lower mortality rates. (2) With the release of each report, one in five bottom quartile surgeons relocated or ceased practicing. (3) In 4 years, overall risk-adjusted coronary artery bypass mortality dropped by 41% in New York State. Mortality for this operation also dropped in states without report cards, but not as much. (4) Some surgeons, worried about the report cards, may have elected not to operate on the most risky patients in order to improve their report card ranking. It is possible that the reduction in surgical mortality in part resulted from withholding surgery for the sickest patients. The New York State experiment had less effect on changing the market decisions of patients and purchasers than on motivating quality improvements in hospitals that had poor surgical outcomes (Marshall et al., 2000; Jha & Epstein, 2006). Similarly, public reporting of diabetes measures can stimulate physicians to improve their care (Smith et al., 2012). In general, public reporting is associated with quality improvement but does not necessarily drive patients to higher-quality health care providers (Agency for Healthcare Research and Quality, 2012). Despite resources such as HEDIS report cards on health plan quality, few employers use quality data when selecting health plans for their employees; cost is the driving factor in most employer decisions (Galvin & Delbanco, 2005).

Report cards are based on a philosophy that says “if you can’t count it, you can’t improve it.” Albert Einstein expressed an alternative philosophy that might illuminate the report card enterprise: “Not everything that can be counted counts, and not everything that counts can be counted.” Increasingly, the focus on quality is switching to a focus on value, with value referring to quality divided by cost. Thus an increase in a quality measure associated with a growth in cost may not improve value, where improved quality with a stable or reduced cost increases value (Owens et al., 2011).

Pay for Reporting

In 2003, Medicare initiated public reporting for hospitals, focusing on risk-adjusted quality of care for heart attacks, heart failure, and pneumonia. More recently, surgical care and other measures have been added (www.hospitalcompare.hhs.gov). This Hospital Quality Initiative is voluntary, but nonparticipating hospitals receive a reduction in their Medicare payments. One might say that the program is in essence no-pay for no-reporting. Hospital quality has improved for some measures that are reported (Chassin et al., 2010), but hospitals focus their quality activities on the specific measures prescribed by the program, at times to the detriment of other quality activities (Pham et al., 2006).

In 2007, Medicare began the Physician Quality Reporting System, under which physicians who report certain quality measures received a small increase in their Medicare fees. Medicare plans to use these data to rate individual physician quality on the Physician Compare website. In 2015, the pay for reporting incentive shifted to a penalty such that physicians not reporting their measures are subject to a Medicare fee reduction (Findlay, 2014).

Pay for Performance

Pay for performance (P4P) goes one step beyond pay for reporting; physicians or hospitals receive more money if their quality measures exceed certain benchmarks or if the measures improve from year to year (Epstein et al., 2004). One of the oldest P4P programs is the Integrated Healthcare Association (IHA) program in California. IHA, representing employers, health plans, health systems and physician groups, launched the program in 2002 with a set of uniform performance measures including clinical care, patient satisfaction, use of information technology, and health care costs. In 2014, seven health plans and nearly 200 physician organizations—involving 35,000 physicians and 9 million patients—participated in the IHA program. From 2004 to 2013, physician organizations received about $500 million in performance-based payments (Integrated Healthcare Association, 2014).

The IHA program is unique for two reasons: All major health plans collaborated in choosing the measures upon which performance bonuses are based, and most physicians in California belong to a large medical group or independent practice association (see Chapter 6). If only one health plan sets up a P4P program with physicians, there may not be enough patients from that health plan to accurately measure the physician’s quality; with all health plans participating, a substantial portion of a physician’s patient panel is included in the measures. If P4P targets individual physicians rather than larger physician organizations, the small numbers of patients may distort the results. The ability of the California experience to aggregate a large number of patients allows for more accurate performance evaluation.

In 2003, Medicare launched the Premier Hospital Quality Incentive Demonstration, a P4P program for 266 hospitals around the country to test the extent to which financial bonuses would improve the quality of care provided to Medicare patients with certain conditions, including acute myocardial infarction, heart failure, and pneumonia. For the first 3 years, Premier hospitals improved quality more than similar non-Premier hospitals, but during the next 3 years, there were no significant differences in improvement. Moreover, during the second 3 years the lowest performing hospitals failed to improve (Ryan et al., 2012). In another P4P program, mandatory for most acute hospitals, Medicare reduces payments for hospitals with excessive rates of readmission.

A P4P program described as “an initiative to improve the quality of primary care that is the boldest such proposal attempted anywhere in the world” was launched in the United Kingdom in 2004 (Roland & Campbell, 2014). This program is described in Chapter 14.

Some authors urge caution, pointing out that P4P programs could encourage physicians and hospitals to avoid high-risk patients in order to keep their performance scores up (McMahon et al., 2007). Another difficulty is that many patients see a large number of physicians in a given year, making it impossible to determine which physician should receive a performance bonus (Pham et al., 2007). Moreover, P4P programs could increase disparities in quality by preferentially rewarding physicians and hospitals caring for higher-income patients and having greater resources available to invest in quality improvement, and penalizing those institutions and physicians attending to more vulnerable populations in resource-poor environments (Casalino et al., 2007).

Financially Neutral Clinical Decision Making

The quest for quality care encompasses a search for a financial structure that does not reward over- or undertreatment and that separates physicians’ personal incomes from their clinical decisions. Balanced incentives (see Chapter 4), combining elements of capitation or salary and fee-for-service, may have the best chance of minimizing the payment–treatment nexus (Robinson, 1999), encouraging physicians to do more of what is truly beneficial for patients while not inducing inappropriate and harmful services. Completely financially neutral decision making will always be an ideal and not a reality.

A peculiar set of institutions called the malpractice liability system forms an important part of US health care (Sage & Kersh, 2006; Mello et al., 2014). The goals of the malpractice system are twofold: To financially compensate people who in the course of seeking medical care have suffered medical injuries and to prevent physicians and other health care personnel from negligently causing harm to their patients.

The malpractice system has scored miserably on both counts. According to the Harvard Medical Practice Study, only 2% of patients who suffer from medical negligence file malpractice claims that would allow them to receive compensation, meaning that the malpractice system fails in its first goal. Moreover, the system does not deal with 98% of negligent acts performed by physicians, making it difficult to attain its second goal. More recent research has confirmed the findings of the Harvard study (Sage & Kersh, 2006, Mello et al., 2014).

On the other hand, as many as 40% of malpractice claims do not involve true medical errors (Studdert et al., 2006), with an even smaller proportion representing actual negligence. Nonetheless, one-quarter of these inappropriate claims result in the patient receiving monetary compensation. Overall, for every dollar in compensation received by patients in malpractice awards, legal costs and fees come to consume 40 to 60 cents (Shepherd, 2013).

The malpractice system has serious negative side effects on medical practice (Localio et al., 1991).

1. The system assumes that punishment, which usually involves physicians paying large amounts of money to a malpractice insurer plus enduring the overwhelming stress of a malpractice jury trial, is a reasonable method for improving the quality of medical care. Berwick’s (1989) analysis of the Theory of Bad Apples suggests that fear of a lawsuit closes physicians’ minds to improvement and leads to unnecessary and costly diagnostic testing (Carrier et al., 2013). The entire atmosphere created by malpractice litigation clouds a clear analytic assessment of quality.

2. The system is wasteful, with a huge portion of malpractice insurance premiums spent on lawyers, court costs, and insurance overhead almost as costly as payments to patients (Mello et al., 2010). Many claims have no merit but wreak unnecessary stress upon physicians, who on average spend nearly 11% of their career with an unresolved malpractice claim (Seabury et al., 2013). Patients granted malpractice award payments sometimes experienced no negligent care, and patients subjected to negligent care often receive no malpractice payments (Brennan et al., 1996). Total costs of the malpractice system came to $55.6 billion in 2008, 2.4% of total national health spending (Mello et al., 2010).

3. The system is based on the assumption that trial by jury is the best method of determining whether there has been negligence, a questionable assumption.

4. People with lower incomes generally receive smaller awards (because wages lost from a medical injury are lower) and are therefore less attractive to lawyers, who are paid as a percentage of the award. Accordingly, low-income patients, who suffer more medical injury, are less likely than wealthier people to file malpractice claims (McClellan et al., 2012).

In summary, the malpractice system is burdened with expensive, unfounded litigation that harasses physicians who have done nothing wrong, while failing to discipline or educate most physicians committing actual medical negligence and to compensate most true victims of negligence.

A number of proposals have been made for malpractice reform (Mello et al., 2014).

Tort Reform

Medical malpractice fits into the larger legal field of torts (wrongful acts or injuries done willfully or negligently). Tort reforms limit the amount of compensation that plaintiffs may recover and place caps on attorneys’ fees. Thirty states have enacted tort reforms, which have reduced claims payments by 20% to 30% and may have contributed to slowing the growth of malpractice insurance premiums. However, caps on awards can be unfair to patients, limiting payments to those with the worst injuries (Mello et al., 2014; Localio, 2010) (Table 10-4).

Alternative Dispute Resolution

These programs would substitute mediation, arbitration, or private negotiated settlements for jury trials in the case of medical injury. Alternatives to the jury trial could bring more compensation to injured parties by reducing legal costs and might shift the dispute settlement to a more scientific, less emotional theater.

No-Fault Malpractice Reform

Proposals have been made to switch compensation for medical injury from the tort system to a no-fault plan (Squires, 2012). Under no-fault malpractice, a panel of experts would examine claims and compensate patients suffering medical injury whether or not the injury was caused by negligence. Without costly lawyers’ fees and jury trials, overhead costs would drop dramatically, more people would be compensated, and claims would be resolved more quickly. In addition, the no-fault approach might allow physicians to be more inclined to openly discuss medical errors for the purpose of correcting them. This reform has been implemented in other nations but not in the United States (Studdert et al., 2004; Mello et al., 2014).

Enterprise Liability

Enterprise liability is a proposal to make health care institutions—primarily hospitals and HMOs—responsible for compensating medical injuries (Studdert et al., 2004; Sage & Kersh, 2006; Chan, 2010). As with no-fault proposals, patients suffering medical injury would be compensated whether or not the injury is negligent. Enterprise liability improves upon the no-fault concept by making institutions pay higher insurance premiums if they are the site of more medical injuries (whether caused by system failure or physician error). Hospitals and HMOs would have a financial incentive to improve the quality of care.

Each year people in the United States make more than 1 billion visits to physicians’ offices and spend more than 100 million days in acute care hospitals. While quality of care provided during most of these encounters is excellent, the goal of the health care system should be to deliver high-quality care every day to every patient. This goal presents an unending challenge to each health caregiver and health care institution. Health professionals make hundreds of decisions each day, including which questions to ask in the patient history, which parts of the body to examine in the physical examination, which laboratory tests and x-rays to order and how urgently, which diagnoses to entertain, which treatments to offer, when to have the patient return for follow-up, and whether other clinicians need to be consulted. It is humanly impossible to make all of these decisions correctly every day. For health care to be of high quality, mistakes should be minimized, mistakes with serious consequences should be avoided, and systems should be in place that reduce, detect, and correct errors to the greatest extent possible. Even when all decisions are technically accurate, if caregivers are insensitive or fail to provide the patient with a full range of informed choices, quality is impaired.

For the clinician, each decision that influences quality of care may be simple, but the sum total of all decisions of all caregivers impacting on a patient’s illness makes the achievement of high-quality care elusive. To safeguard quality of care, laws and regulations are needed, including standards for health professional education, rules for licensure, boards with the authority to discipline clear violators, and measurement to inform institutions, practitioners, and patients about the quality of their care. Improvement of health care quality cannot solely rely on regulators in Washington, DC, in state capitals, or across town; it must come from within each institution, whether a huge academic center, a community hospital, or a small medical office.