Updated at 5:30 p.m. on Nov. 23 to reflect continuing legislation.
Measuring quality of care would quantify how well health care payment and delivery systems perform, with the goal of increasing competition and refocusing providers' efforts on what works best.
Measuring the quality of health care is not a novel idea; in fact, hospitals have been doing it for about a century. Empirics such as morbidity and mortality rates, internal and external peer reviews, and other measures of quality are of long-standing importance to the medical community. Over time, traditional metrics have worked to increase the quality of health care in America -- albeit at a glacial pace, according to Ernest Moy, a medical officer with the Agency for Healthcare and Research Quality.
But now, measuring health care is in the midst of a renaissance. The United States' proportion of health care spending to GDP is projected to reach 20 percent by 2020. That, coupled with the claim by some experts that about 30 percent of health care spending is wasted on ineffective medical treatments every year, has placed a renewed emphasis on measuring quality as a way to drive down costs while improving outcomes.
The rationale is simple: Improvements made in measuring quality of care -- i.e. identifying which treatment works best for which patients -- will eliminate the widespread use of ineffective tests and procedures. In addition, publicly reporting these measures will increase competition among doctors, hospitals and health care providers to strive for higher quality of care measures.
"Doctors are very competitive," Moy said. "They don't like to be on the bottom."
One of the first pieces of legislation to link health care payments to quality of care was the Medicare Act of 2003, which required hospitals receiving Medicare payments to report data on a number of quality measures. Quality-of-care measures were addressed again in the 2006 Tax Relief and Health Care Act. This law created the Physician Quality Reporting Initiative, a program that pays physicians who voluntarily provide data on more than 150 quality measures for treatment given to Medicare patients. PQRI payments are set to expire in 2010.
While the bill seemed to be a step forward at the time, some observers believe it doesn't go far enough.
"Measuring quality of care isn't the goal in and of itself," said Fred Ralston, chairman of the Health and Public Policy Committee at the American College of Physicians. "The whole point of measuring quality is to get you somewhere better than you were before."
From the Congressional Budget Office's 2008 report: "Because any cost-saving benefits of research would occur after the spending on that research, the net effect on mandatory spending resulting from increased funding for research and reductions in federal spending for health benefits would thus be an increase of $490 million over 5 years and $1.1 billion over 10 years. By the end of the 10-year period, however, the annual reduction in health care spending is estimated to be slightly larger than the increased spending on research."
Both House and Senate bills call on hospitals to report measurable quality data, which could be the basis for bonuses or reductions in payments.
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