EXECUTIVE SUMMARY

This policy report of the American Medical Peer Review Association (AMPRA) recommends the establishment of a National Quality Management Program (NQMP) to complement any health reform legislation enacted by Congress. The program's mission would be to preserve and improve the quality of health care for all Americans. Special attention would be focused on identifying barriers to access and underuse of appropriate services as health reform legislation encourages the spread of prepaid systems of health care delivery.

A National Quality Management Program would be responsible for the following functions: Consumer Protection To safeguard against health care delivery of potential harm to patient health and welfare, the NQMP would establish:

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An independent quality monitoring system that holds plans accountable for improved performance; Authority by regulatory bodies to penalize consistently poor quality care;

A consumer complaint and appeals system;

A licensing and accreditation system for health plans, institutional providers and medical professionals. Quality Improvement -- To ensure the diffusion and transfer of new medical knowledge and to share comparative performance information among competing health care plans and participating providers, the NQMP would establish:

A community-based feedback and education program that creates a safe environment for provider self-examination and acts a catalyst for quality improvement at all levels in the delivery system. Informed Consumer Choice - To ensure that consumer selection of competing health plans is guided by objective and scientifically-based measures and to ensure that consumers have adequate information in making treatment decisions, the NQMP would establish:

Comparative performance reports on health plan price, quality, service and consumer satisfaction; A community-based information resource on treatment alternatives.

These important functions would be distributed within a federal, state, and local framework that take advantage of existing organizational structures, require a minimal degree of additional bureaucracy and insist upon coordination and active communication among all entities.

The Federal Government would be responsible for establishing a national health care information database, setting quality standards and performance expectations based on emerging medical knowledge, and monitoring the impact of the delivery system on the quality of care, particularly for the most vulnerable populations. Participating federal entities would include:

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A national network of state-based, independent Health Quality Foundations;
State-based Data Networks.

State Government would take the lead role in the administrative and regulatory oversight of the health care delivery system. Participating state entities would include:

Value purchasing and the provision of high quality health care services would be the responsibility of the Local Marketplace. Local entities would include:

Health and Corporate Alliances, responsible for organizing the consumer choice function and negotiating health plan contracts on the basis of quality:

Health Plans and Participating Providers, accountable for the improved health status of their enrolled population.

HEALTH REFORM AND THE QUALITY IMPERATIVE
An AMPRA Policy Report

INTRODUCTION

The prospect for enactment of comprehensive health care reform has never been better. The
emerging constellation of public opinion, motivated legislators, and an ambitious Clinton
Administration augurs for a lively national debate on the topic. Not only is there consensus
on the need for comprehensive reform, but there is also significant bipartisan support for
some version of the "managed competition" approach, first articulated by the Jackson Hole
Group, championed by President Clinton during his
campaign and then drafted into proposed legislation by the
Administration and other lawmakers. This model
envisions a medical marketplace dominated by prepaid
health plans competing on the basis of price, quality,
service, and consumer satisfaction.

"Nevertheless, it is quality and the public's perception of whether or not it will be jeopardized under the new plan, that will help decide the fate of health reform legislation."

The success of any health care reform agenda rests on its
ability to master the basics: cost, access, and quality.
Incentives and controls must be designed that can tame rising costs and provide universal
coverage while preserving and improving quality of care. The public discussion of the
problem has been lopsided. The cost of health care has become a huge concern as it
consumes an ever larger share of the gross domestic product with no real abatement in sight.
The perception of unfairness regarding inadequate access to care and coverage has also
grown dramatically as recession robbed millions of middle class Americans of their
job-related health benefits. Quality -- for those who do have adequate coverage -- has been
a relative non-issue in the public debate over health care reform.

Nevertheless, it is quality and the public's perception of whether or not it will be jeopardized under the new plan, that will help decide the fate of health reform legislation. Health Maintenance Organizations (HMOs), which would be encouraged as the dominant delivery system under managed competition, have not been preferred by most consumers of health care in most parts of the country, despite their lower out-of-pocket costs, and efforts to be consumer-responsive. Persistent fears about undertreatment and the incentives inherent in pre-payment to cut costs at the high end have frightened many into opting for more expensive fee-for-service alternatives that allow patients more direct control over their choice of physicians, and preserving what they perceive as a wider range of treatment options in the case of serious illness.

The various legislative proposals for health care reform based on managed competition share a collective weakness: the inadequacy of provisions to ensure quality under the powerful new incentives it gives providers to curb expenditures. In fact, nowhere is there to be found a structure capable of performing basic, ongoing, independent quality monitoring that would logically seem to be at the heart of any quality program. The Institute of Medicine (IOM) in a recent policy pronouncement articulated the need succinctly:

"... the paradigm shift calls for health plans to provide medical services to a population in the face of stringent resource constraints, and the incentive will likely be to underserve people. These changes make monitoring the quality of care imperative, especially for the sickest individuals and other at-risk populations."

"Effective quality assurance and improvement must complement vigorous cost containment and expanded access -- it is the essential third component of a sound health care system."

The purpose of this document is to examine the basic elements of the managed competition bills in Congress and to propose a National Quality Management Program that is accountable, dedicated, efficient, effective, and logically organized across federal, state and local jurisdictions. It is critical that quality and consumer protection be built into the system from the outset. Effective quality assurance and improvement must complement vigorous cost containment and expanded access --- it is the essential third component of a sound health care system.