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64–043—PDF 2009

S. HRG. 111–848 

WHAT IS HEALTH CARE QUALITY 

AND WHO DECIDES? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH CARE 

OF THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

MARCH 18, 2009 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

CHUCK GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

RUSSELL SULLIVAN, Staff Director 

KOLAN DAVIS, Republican Staff Director and Chief Counsel 

SUBCOMMITTEE ON HEALTH CARE

JOHN D. ROCKEFELLER IV, West Virginia, Chairman 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

(II) 

C O N T E N T S 

OPENING STATEMENT 

Page 

Rockefeller, Hon. John D., IV, a U.S. Senator from West Virginia, chairman, 

Subcommittee on Health, Committee on Finance ............................................. 1 

WITNESSES 

James, Brent C., M.D., MStat, chief quality officer and executive director, 

Institute for Healthcare Delivery Research, Intermountain Healthcare, Salt 

Lake City, UT ....................................................................................................... 2 

Clancy, Carolyn, M.D., Director, Agency for Healthcare Research and Quality, 

Department of Health and Human Services, Rockville, MD ............................ 10 

Kanof, Marjorie, M.D., MPH, Managing Director, Health Care, Government 

Accountability Office, Washington, DC .............................................................. 13 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Clancy, Carolyn, M.D.: 

Testimony .......................................................................................................... 10 

Prepared statement .......................................................................................... 25 

Enzi, Hon. Michael B.: 

Prepared statement .......................................................................................... 34 

Hatch, Hon. Orrin G.: 

Prepared statement .......................................................................................... 35 

James, Brent C., M.D., MStat: 

Testimony .......................................................................................................... 2 

Prepared statement .......................................................................................... 37 

Kanof, Marjorie, M.D., MPH: 

Testimony .......................................................................................................... 13 

Prepared statement .......................................................................................... 44 

Rockefeller, Hon. John D., IV: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 61 

COMMUNICATIONS

American Health Care Association (AHCA) and National Center for Assisted 

Living (NCAL) ...................................................................................................... 65 

American Health Quality Association .................................................................... 69 

American Medical Association ................................................................................ 76 

Society of Thoracic Surgeons .................................................................................. 83 

(III) 

(1) 

WHAT IS HEALTH CARE QUALITY 

AND WHO DECIDES? 

WEDNESDAY, MARCH 18, 2009 

U.S. SENATE, 

SUBCOMMITTEE ON HEALTH CARE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 3:35 p.m., in 

room SD–215, Dirksen Senate Office Building, Hon. John D. Rockefeller IV (chairman of the subcommittee) presiding. 

Present: Senators Nelson, Carper, and Hatch. 

Also present: Democratic Staff: Jocelyn Moore, Legislative Assistant, Health; and Kate Gross, Legislative Assistant, Health Reform. 

Republican Staff: Patricia deLoatche, Health Policy Director. 

OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 

A U.S. SENATOR FROM WEST VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON HEALTH, COMMITTEE ON FINANCE 

Senator ROCKEFELLER. All I can say is that it was not my fault 

that we had about 41⁄2 hours of someone who would cast their 

12,000th vote, people giving speeches. I totally apologize. I am totally embarrassed. I probably should resign from the Senate, but 

I am not going to because I love it. 

So I am going to speed this up. Somebody had to catch a plane, 

or is it already gone? What time is it? Four o’clock? Lots of time. 

Senator Nelson, welcome. We are all thrilled to be here. I have 

been wanting to be here now for about an hour and 5 minutes. 

Senator Hatch, as I understand it, is not going to be here. He is 

on his way? All right. Good. 

We want to thank you all for your patience. Have you been fed 

brownies, Coca-Cola, various things? 

We have very experienced, knowledgeable witnesses with us 

today. I am going to ask that my full statement be put in the 

record. Bill Nelson did not want to hear the whole thing. 

[The prepared statement of Senator Rockefeller appears in the 

appendix.] 

Senator ROCKEFELLER. First, we have Dr. Carolyn Clancy, who 

is Director of the Agency for Healthcare Research and Quality, or 

AHRQ. I love this. When you add up all the private and the public 

quality measurement things, I really do not want to get into that. 

I do not know how they work together. My guess is, they do not. 

Thank you for being here, Dr. Clancy. Where is Dr. Clancy? Over 

there. 

2 

Second, Dr. Brent James, joining us from Senator Hatch’s home 

State, Salt Lake City, UT, to be exact. Dr. James is chief quality 

officer and executive director of the Institute for Healthcare Delivery Research at Intermountain Healthcare. Welcome, Dr. James. 

Thank you for the following 20 minutes. 

Last, but not least, we have Dr. Marjorie Kanof. Dr. Kanof is the 

Managing Director of Health Care at the Government Accountability Office. Thank you for your being here. 

You have statements to make, and we have questions to ask. I 

mean, lots of good questions. This is really good. I am just angry 

that we had four totally useless votes on the floor of the Senate. 

Dr. James has to leave. You should go first. 

Dr. JAMES. I will. 

STATEMENT OF BRENT C. JAMES, M.D., MStat, CHIEF QUALITY 

OFFICER AND EXECUTIVE DIRECTOR, INSTITUTE FOR 

HEALTHCARE DELIVERY RESEARCH, INTERMOUNTAIN 

HEALTHCARE, SALT LAKE CITY, UT 

Dr. JAMES. Well, Mr. Chairman, thanks for the opportunity to 

share some of the background science, as well as applied experience around the measurement and management of quality and 

health care delivery. 

I am a member of the National Academy of Sciences Institute of 

Medicine, where I have served on a number of committees addressing health care quality issues. I hold medical informatics and 

quality-related faculty appointments at a number of universities. 

But most important, as you mentioned, I serve as the chief quality 

officer at Intermountain Healthcare, where we have been trying to 

apply these principles for the last 20 years, at the front line, where 

the rubber hits the road. 

Intermountain is a not-for-profit system of 23 hospitals, more 

than 100 outpatient clinics, and a health insurance plan. We supply more than half of all care delivered in the State of Utah. We 

supply tertiary-level services to 7 surrounding States. The short 

version of our mission statement is—we actually use this internally—the best medical result at the lowest necessary cost. 

We have been identified by external evaluators as one of the 

highest quality, most efficient care delivery organizations in the 

United States. Frankly, we stack up well against other countries 

as a system. For example, the Dartmouth Atlas recently asserted 

that, if the rest of the country delivered the same care that is found 

at Intermountain, national Medicare costs would fall by more than 

30 percent, and clinical outcomes would significantly improve. 

We entered on this course in the late 1980s when we encountered the work of Dr. W. Edwards Deming. Dr. Deming called it 

quality improvement. We were one of the first adopters of clinical 

quality improvement, though, in the United States and in the 

world. We had many, many early successes around single projects. 

In 1996, though, we launched a major internal strategic initiative 

to make clinical quality our core business strategy. I believe we 

were probably the first in the world to try that based off of those 

industrial models. It was based around Dr. Deming’s key teaching. 

We were able to prove that in most, but not all, circumstances, improvements in quality of clinical outcomes reduced the cost of care 

3 

delivery, very significantly, as it turns out. We validated that at a 

project level, but we had not been able to deploy it broadly. The 

strategic initiative was to make it core business so we could deploy 

it broadly. 

Now, the center of that strategic transformation was measurement systems. Again, we relied on Deming’s model. A careful analysis showed that about 104 key clinical work processes, inpatient 

and outpatient settings, drawn from more than 1,400—so less than 

10 percent—accounted for just under 95 percent of all the care we 

delivered, concentrated massively. We, therefore, attacked those 

problems in size order. 

Now, in case people miss it, there is a recommendation in that 

statement: that you go after the big guys first, biggest to smallest, 

so you achieve the most benefit for the largest number of patients 

in the least amount of time. For each clinical topic, we applied a 

rigorous methodology first laid out by the National Quality Forum 

Strategic Framework Board—truth in advertising: I served on that 

group—to help generate the science behind it. 

It supplied a scientific discipline, a method, for figuring out what 

measures you would use as opposed to a political consensus approach, which is, frankly, what we have used in most other areas 

within the country. That is very often based upon available data 

as opposed to the actual data you need. 

As we applied the methodology in size order, we discovered a 

very interesting fact. Our existing data systems, which were stateof-the-art by any measure, were missing about one-third to one-half 

of the critical data elements you need to actually manage clinical 

care and measure its impact and supply accountability at higher 

levels within the system. 

Those existing data systems I am talking about are the same 

ones that we rely upon as a country. But now today, in essentially 

any care delivery organization, they are the foundation for most of 

the measures that we are using across the country at a national 

level. 

Now, we use that data system as we created it to generate reports that compared providers—physicians, care delivery groups, 

hospitals, regions—within our system. We compared people to their 

peers, and we found outliers. 

However, when we tracked the outlier points back to their root 

causes, more than half the time the source of those unanticipated 

defects was in the data system, not in the clinical practice. It turns 

out that this is a well-established principle and quality theory. It 

is called ‘‘gauge’’ theory, that the measurement system itself is the 

source of variability, and it recommends that you build feedback 

loops in your data systems. So you run them, identify outliers, 

track them down. 

Over a period of time, we use it to clean up the data systems. 

Unfortunately, that very well-established principle from other industries is not being widely applied in health care today. We assume at some level that the data systems are sufficient and adequate, when in fact they are not. 

Well, having built those systems, I can report today that about 

80 percent of all the care delivered within Intermountain is documented on our tuned-up measurement system as a complete set of 

4 

clinical service, cost process, and outcome measures. We have used 

that system to drive very significant improvements in clinical outcomes on a broad scale. 

I wish I had the time. I have over 100 beautiful examples of 

fewer deaths. 

Senator ROCKEFELLER. Give one. 

Dr. JAMES. Pardon me? 

Senator ROCKEFELLER. Give one. 

Dr. JAMES. One of the more recent ones. We reduced the mortality rate after AMI by about half—acute myocardial infarction, 

heart attacks—by better delivery and rapid intervention for someone with a blocked artery in the heart. We got better sugar controls 

in surgery. We were one of the first groups to drop mortality rates 

in open heart surgery by about half with better sugar control. 

Senator ROCKEFELLER. I would say that is pretty dramatic. 

Dr. JAMES. So, it is lives saved. One of the ways, as we said, is 

we measure our successes in lives saved. We think that we have 

taken about $100 million out of the cost of operations at Intermountain, and, believe it or not, that is a small down payment on 

the potential. We just submitted a major article in the research literature. 

We estimate that over 50 percent of all health expenditures in 

health care today, rigorous method, is technically waste. If you use 

a quality model, it is, in theory, at least, extractable. That $100 

million, for us, is just a down payment on applying those methods, 

pulling that money back out for more useful purposes. 

Now, you need to know that our experience is not unique. Other 

care delivery groups are driving similar improvements on a broad 

scale. It does require a team-based approach, a certain amount of 

intellectual, organizational, and financial capitalization. As a result, it is a phenomenon of organized care. It arises from accountable integrated care delivery systems and group practices, not from 

solo practice. There is a message in there, too. 

My main purpose today, though, is to point out the design principles of quality measurement: they drive success, they are very 

well understood, and it seems to me they ought to be the foundation for how we proceed with national measurement of quality as 

well. Those principles are very well understood in other industries. 

They are just not widely applied in health care, a big opportunity. 

Frankly, most of our national measurement efforts have missed 

them along the way. 

For those of us working at the front line where the rubber hits 

the road, we greatly need better information about best care delivery processes. The Agency for Health Care Research and Quality 

is the primary Federal resource assigned to that task. Carolyn and 

her people have provided absolutely critical leadership. We need to 

do a lot more, frankly. 

As part of that assignment, we need to move quality measurement much closer to the front line of care. A principle: if I build 

data systems to manage care at the bedside, I can roll up data and 

get the accountability measures we need for a country very accurately. When I impose them top-down, the opposite is not true. 

Nearly always, those measures are not sufficient or properly defined to use for bedside care management, and they actively comVerDate Nov 24 2008 15:38 Feb 15, 2011 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 R:\DOCS\64043.000 TIMD
5 

pete with front-line resources. We now have some good documented 

examples where those methods have damaged clinical quality at 

the front line. I see that at Intermountain on a fairly regular basis. 

The idea that we design from the bottom up, build a system to 

improve care, and from that get the accountability and transparency we need as a country—we have the infrastructure. People 

seated at this table understand how to advance that, but it seems 

to me to be an opportunity not to be missed as we talk about 

health care reform in this country. 

With that, Mr. Chairman, thank you. Senator Hatch, thanks for 

inviting me. 

[The prepared statement of Dr. James appears in the appendix.] 

Senator ROCKEFELLER. And Senator Hatch, you should say something. 

Senator HATCH. Well, I would be very happy to. I have to say, 

I know Dr. James has to catch a plane. But let me just say, I have 

more confidence in him than any other person in this country, and 

really worldwide, in being able to handle the matters that he handles every day for Intermountain Healthcare, which is respected 

worldwide. I just felt like it was very important for us to build a 

record. You have never disappointed me in being able to talk about 

what we need to do in these areas, so I am very appreciative of you 

coming. Hopefully we can get everybody to listen to you. 

Senator ROCKEFELLER. What I would like to do, with the permission of the other two witnesses, is to get a few questions to Dr. 

James. That seems fair, don’t you think? 

Dr. CLANCY. Absolutely. We are fine. 

Senator ROCKEFELLER. It is the good thing to do. 

It is absolutely extraordinary to me, if you go through all of the 

public and then the private quality measurement groups—I mean, 

there have to be 15 of them. The Institute of Medicine had a particular definition of quality which I like a lot. They said, ‘‘The degree to which health services for individuals and populations increase the likelihood of a desired health outcome and are consistent 

with current professional knowledge.’’ I like that. Anyway, there 

are endless numbers of people who work on this. Some were invented by Congress, some invented themselves, some are private. 

They are all trying to do their best work. 

So I guess my first question to you, Dr. James, is, how in heaven’s name—and you mentioned that, if you want to start from the 

top down, the first thing that came into my head was Medicare. 

You do Medicare, and then almost everybody else is bound to follow 

at some point. 

How do you take all these Federal agencies, Agency for Health 

Research, the AHRQ, the CDC, CMS, FDA, HRSA, and the VA, 

which is a huge player in all of this—how do you take these various entities and bring any sense of coordination to them, or is that 

just something that a government bureaucrat would want to do, 

but actually is not necessary? I think it is necessary. 

Dr. JAMES. It falls into two categories. Some of them, like AHRQ, 

mostly supply critical information to us about best care. That is 

their role. They do it very, very well. Frankly, they need to do a 

lot more, but it is hugely useful when they do. CDC, largely the 

same. There is another group of entities that imposes measures 

6 

upon it. The last count that I did, there are over 1,600 from a list 

of about 30 different—I am including States—agencies. It is a fairly 

large effort just to meet the reporting needs. I am a little bit jaded 

about this, but, so far as I can tell, it produces almost no result. 

Believe it or not, I regard myself—one of my roles within Intermountain is to somehow administratively stand between that and 

my front-line teams so that they can get to the business of improving health care. Do you see what I mean? There is a growing 

ground-swell, though, of people who are generating—I think of it 

as a bottom-up change. In fact, real health reform is happening 

right now in the hospitals and clinics across this country at a pretty good clip. 

The medical profession, the nursing profession, have decided to 

move to a team-based model of care. It is a sea change. It is the 

first big change we have had like this in the professions in 100 

years, and it is profound, way past the tipping point, good evidence 

of it. It ties very heavily to our electronic medical records. I believe 

that this activity should support that effort, or interdigitate with 

it closely. 

Senator ROCKEFELLER. All right. You mentioned—and then I will 

turn it to Senator Hatch and then Senator Carper—you did not use 

the word ‘‘rogue data,’’ but you implied, sort of, data outside—— 

Dr. JAMES. Yes. 

Senator ROCKEFELLER. Which messes up what the data really is. 

What did you mean by that? 

Dr. JAMES. The best illustration I have is, some measurement 

systems happen after the fact. So we are investing a substantial 

amount of money in reviewing charts after discharge to produce 

measures for consumption by someone outside of our system. It is 

not at all clear how it is used. It is mostly pro forma, it is required, 

so you produce the data. 

The data that I generate, you imbed into the actual processes of 

care. When you design for process management, it is the sort of information that a physician or nurse has to have to deliver best care 

to this individual patient right this minute. Because you imbed it, 

it does not feel like a data burden. It is stuff you are using anyway. 

It’s just that you organize it, you automate it, you standardize it 

to some degree. It is the lifeblood. 

Senator ROCKEFELLER. So you are saying, if you try to spread 

data, based upon an individual case that you are working on, 

across too large a population, it is going to get skewed? 

Dr. JAMES. Well, it is not so much that as where it is collected. 

If I collect it at the bedside, I get accurate data. I get very timely 

data. I can roll it up into those national reports. Its direct application is to manage and improve care at the bedside. The trouble is, 

when they mandate them from top down, it does not match. It does 

not match what I need to build into that front-line work process. 

You see what I mean? 

Senator ROCKEFELLER. I do. Well, not entirely. But you have to 

catch your plane, and Senator Hatch and Senator Carper have 

questions for you. 

Senator HATCH. Well, let me just ask you this regarding quality. 

One point I always raise about Utah is that our State has some of 

the lowest reimbursement rates in the country for health care, and 

7 

yet we have some of the best health care outcomes. Now, can you 

take a few minutes to discuss Utah’s experience, and do you believe 

that Utah’s experience could be replicated on a national level? If 

so, how do you recommend that we go about achieving it? 

Dr. JAMES. Senator Hatch, it is not just that it can be replicated, 

one level of it is being replicated. We have a number of close partners. It is organized care delivery, it is Mayo Clinic, it is Dartmouth, it is Geisinger Clinic, it is Kaiser, who are a group who are 

applying these methods on an increasingly broad scale and showing 

similar results, not just in Utah but across the United States. The 

principle, I think, is demonstrated at this point and moving ahead 

fairly vigorously, frankly. It rationalizes electronic medical records 

in ways we have not seen before. 

One of the key principles, Deming’s core idea, is that, as you improve quality, it should cause your cost of operations to drop. I 

think we validated that. It does not happen every time, but it happens a lot. Again, our best estimate is that the size of the opportunity is over 50 percent of the total spent against a $2.4-trillion 

budget, frankly, a real up-side to that whole thing. The theory is 

complex, but not that bad. You see this burgeoning movement that 

is making it happen. 

What I would ask is that we do not suppress that movement. 

That is where the real reform will come from, right there. It is happening. There are ways that you could really enhance it, by the 

way. For example, to align payment so that you actually—currently 

when we make a major improvement, and I can show you many examples, usually we produce windfall savings for a purchaser and 

are very often financially punished for delivering better care at a 

lower cost. That would be about three quarters of these projects 

that fall into that category. We need to fix that so that I align financial incentives to my appropriate professional incentives for 

best patient care. 

Senator HATCH. That is really good. I would like to just move to 

waste in our health care system. I understand that you believe that 

over 50 percent of health care expenditures are wasteful. Could you 

expand on that a little bit? 

Dr. JAMES. We had a nice little grant from AHRQ where we tried 

to build models for using quality tools to estimate total waste in 

care delivery. I am actually quite proud of the model. I think it is 

the best that has been developed to date. We could not get estimates in every category, so this is quite conservative. 

We first examined care that never should have been delivered, 

where the risks to the patient outweighed any potential benefit. 

There is a substantial amount of that in health care today. Perhaps 

the best group in estimating that is the Dartmouth group. We took 

a middle level of where you do process management, we took a 

lower level where we directly measured waste of front-line staff. 

We found about 14 percent of all care at that top layer should 

never have been delivered—over-use. We thought that we should 

act to eliminate that. The middle layer, we could not come up with 

a well-organized system for. We have saved it for later. That is why 

this estimate is conservative. The lower level in the controlled 

chaos that is care delivery, we found between 20 and 70 percent 

waste. 

8 

At an individual worker level, we think it averaged about 35 percent across the entire care delivery system. We measured it at 

three major institutions. It would have the net impact, if we could 

somehow do this for nurses, of roughly increasing nurse staffing by 

50 percent without hiring a single additional individual. 

When you synthesize those together, that is the beauty of the 

model, the actual number that we plan to publish is 44 percent. 

The real numbers suggested 55, but we were being academically 

conservative. The nice thing about using quality models to do that, 

Senator Hatch, is it gives you the direct tools to attack it. That is 

different from other waste models that have been created in the 

past. 

Senator HATCH. That is great. Just one last question. Intermountain has had a series of notable successes in documenting better patient outcomes associated with lower health care delivery 

costs. Could you tell us what role CMS and JCAHO outcome measures played in that work? 

Dr. JAMES. The Joint Commission on Accreditation of Healthcare 

Organizations is changing its role under the leadership of Dr. Mark 

Chassin. Dr. Chassin has a new vision that I think is extremely encouraging. He came out of a similar role to mine, and he understands it intimately. Frankly, the current CMS measures have 

been a major impediment for me. The reason is, they were incomplete. They were missing major measures. You have to understand, 

for at least three of their measures, much of the research upon 

which the CMS measures were built came out of our groups—we 

are a major contributor to it—but they had incomplete data sets 

and they got the definitions wrong in terms of how you define it 

at the front line. 

I found myself in the difficult position of either downgrading the 

measures, and I was not willing to do that because it would have 

damaged our ability to actually deliver high-quality care, or building on an additional expense after the fact to pull those measures 

out of charts. That is what we did, but it required resources. We 

saw that demand for resources directly compete against our improvement work back at the bedside. I personally believed that it 

was a matter of CMS not being careful enough about how they developed the measures. 

As Dr. Chassin has so clearly shown, if you develop them correctly, then this discordance need not be. My challenge for CMS 

was: do it right. Do it so that we can actually manage at the front 

line and build from that bottom-up, as opposed to a top-down, 

measurement system. It is not that it is not a good idea. It is. It 

is just, the competence with which we put the system together. 

Senator HATCH. Well, I appreciate it. 

Senator ROCKEFELLER. Dr. James, I have a great answer for you 

for your problem, but that would mean I would have to interrupt 

Senator Carper, and I cannot do that, and you have to leave in 4 

minutes. [Laughter.] 

Senator CARPER. Dr. James, welcome. And Dr. Kanof. 

Dr. Clancy, great to see you. All of your friends and admirers in 

Delaware send their best, and our thanks for the great support 

that you and your colleagues have provided for the Delaware 

Health Information Network. We are spending up our utility, 

9 

thanks in no small part to your help. We have connected a lot of 

doctors’ offices, our hospitals, labs, and so forth. 

We are incentivizing the creation of electronic health records in 

our State, and we think we are among the leading States in this 

regard, and we are hopeful to be able to harness the money in the 

stimulus package, health information technology money. But thank 

you. Were it not for your strong support and that of Tommy 

Thompson and Mike Leavitt, we would not be where we are. So I 

just wanted to start by saying a real special thank you. 

Dr. James, I was talking recently with a fellow who runs a big 

utility company out in California, PG&E. They used to make 

money almost exclusively there by selling more electricity, more 

natural gas. That was where most utilities made money. If you 

want to make more money, sell more natural gas, more electricity. 

Then they figured out—at least in California now, and then they 

started doing it in other places—that it is possible to be a utility 

and to make more money not by selling more gas and electricity, 

but actually by selling less and empowering your customers to use 

less. We sort of changed the economic incentives for them and now 

they are doing wonderful things to help capture that low-hanging 

fruit to reduce consumption of gas and electricity in California and 

other places. 

It seems to me, with respect to health care, especially with a feefor-service approach, we pretty much do what we used to do with 

utilities. We say, in order to make more money, you have to treat 

more patients, maybe for shorter periods of time. You have to perform more procedures, more tests, and so forth. We have to find a 

way to incentivize a different kind of behavior. 

I think there is actually a pretty good analogy between the utility industry and the provision of health care. Take my example and 

sort of carry on, if you will, to a more logical conclusion with your 

experience in Utah. 

Dr. JAMES. I could not agree with you more. For example, we just 

ran a project initially at American Fork Hospital, a little level-5 

community hospital with a big birthing service. They get what are 

technically term infants, 33 weeks gestational age or older, that develop something called Respiratory Distress Syndrome. The way we 

have traditionally managed them is, you stick them on a mechanical ventilator in an ICU at great expense. It is what you might call 

‘‘tough love.’’ It is not that easy on the kids, frankly. 

We had a team who came up with a bright idea. It is called 

Nasal Continuous Positive Airway Pressure, or Nasal CPAP. You 

know those machines we use for sleep apnea that you plug into 

someone’s nose? It turns out that, if you use one in a neonate, you 

can keep their lungs inflated, which is the key factor: a little oxygen, something called surfactant. 

We went from 78 percent of those infants being transferred to 

the ICU to 18 percent being transferred. They were all going to live 

anyway, but we still saw it as a major improvement in care. Well, 

I tracked the exact financials. The income to the hospital went up 

by about $550,000 to our little American Fork Hospital. The trouble is, the income to our newborn ICU—we own that, too—fell by 

about $950,000 with this shift. 

10 

We came out, when you added it all up, about $330,000 in the 

red. It was reducing the volume of care. The way to say it, you realize, I get paid to harm my patients. You understand that? In the 

current system, I am actively financially encouraged to harm my 

patients, and I am financially penalized when I stop doing harm 

by figuring out a clever way. 

Well, Intermountain, that mission statement I talked about, we 

really mean it. We are deploying it system-wide. We know that we 

are taking a tens of millions of dollars’ hit. Frankly, a lot of this 

is commercial insurance, not much labor and delivery and Medicare, needless to say. It means that we are out with our commercial purchasers, saying, we saved you. We lost $330,000, but our 

billings to you dropped by about $1 million, just American Fork 

Hospital, just the one. We need part of that money. Make us whole, 

help us with the project, we all come out ahead. I need somebody 

at CMS who will negotiate the same way, who will see it in the 

same way. 

Senator CARPER. I see. 

Senator ROCKEFELLER. I am going to have a much better solution 

for you, but you are going to be on your way to the airport. [Laughter.] 

Dr. JAMES. Promises, promises. 

Senator ROCKEFELLER. But you really should go. I mean, I do not 

know what time your plane is, but they said you had to leave at 

4. It is after 4. 

Dr. JAMES. 5:10. 

Senator ROCKEFELLER. 5:10? 

Dr. JAMES. Yes. 

Senator ROCKEFELLER. This is a bad traffic time. 

Dr. JAMES. Yes, I know. So, can I say thank you very much? 

Senator ROCKEFELLER. Yes, you can. And will somebody make 

sure that he gets out all right? All right. 

Now, going back to the regular order. That would be Dr. Carolyn 

Clancy. She has already been praised, so I will not bother to do 

that again. 

Dr. CLANCY. Thank you. 

Senator ROCKEFELLER. Please. We would welcome your testimony. 

STATEMENT OF CAROLYN CLANCY, M.D., DIRECTOR, AGENCY 

FOR HEALTHCARE RESEARCH AND QUALITY, DEPARTMENT 

OF HEALTH AND HUMAN SERVICES, ROCKVILLE, MD 

Dr. CLANCY. Mr. Chairman, thanks for the opportunity to address the subcommittee on the very timely and important issue of 

health care quality. I have asked for my full statement to be part 

of the record. 

Senator ROCKEFELLER. Absolutely. 

[The prepared statement of Dr. Clancy appears in the appendix.] 

Dr. CLANCY. As one of 12 independent agencies in HHS, the mission of the Agency for Healthcare Research and Quality, or AHRQ, 

is to improve the quality, safety, efficiency, and effectiveness of 

health care for all Americans. So the title of this hearing is, ‘‘What 

is Quality?’’ I love the IOM definition too, but the sort of commonVerDate Nov 24 2008 15:38 Feb 15, 2011 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 R:\DOCS\64043.000 TIMD
11 

sense definition I use all the time is, it is the right care, for the 

right patient, at the right time, every time. 

Unfortunately for our health care system right now, that is a 

stretch goal. This is borne out and shown every year in data from 

AHRQ’s annual National Healthcare Quality Report. What we have 

seen is that the quality of health care overall has improved by 1.5 

percent per year. 

Now, in some areas—and I disagree with Dr. James a little bit 

here—where public reporting has been required, or certainly encouraged by CMS, we have seen some bigger improvements. So 

care overall for patients with heart attacks has improved about 15 

percent, but in most cases the pace is pretty glacial. 

We have also seen some progress in reducing disparities in 

care—for example, reduced disparities in childhood vaccinations— 

but we also have a Disparities Report that is a companion to the 

Quality Report, and it shows that most disparities in health care 

quality and access are either staying the same or actually getting 

worse. 

So one of your Senate colleagues asked me once why the hospitals in his State were not doing better, which I thought was a 

very basic and pretty profound question. So what I told him at the 

time, I thought, was that they do not know how, nobody is making 

them, and the incentives are not steep enough to make a difference. 

So I think it is fair to say, building on what Senator Carper said 

a moment ago, that we are still in an environment where many 

CEOs lie awake at night worrying about their financial bottom 

line, but not the quality bottom line. For them, there is not yet an 

established link between the two. We very much need to establish 

and reinforce that link so that quality becomes the guiding principle for all of health care. 

Now, I do think there is good news. There are many, many organizations, but they are starting to work together much more effectively, so we are not starting from scratch. The foundation we have 

now is strong public/private partnerships and collaboration. It includes an increasing amount of good information on quality that 

consumers, clinicians, and others can use to make informed health 

care decisions. This includes information on individuals’ experiences as they navigate the health care system. 

CMS Hospital Compare is a good example. It helps people pick 

a hospital based on some information about clinical performance, 

as well as patient perspectives on their experience. That comes out 

of an AHRQ survey. 

We also have seen very recently a huge surge in enthusiasm 

from physicians, nurses, hospitals, and others, trying to improve 

health care quality, and, tapping into that, I think the potential is 

almost limitless. They are coming together, both within organizations and within communities. AHRQ has helped set up a number 

of community quality collaboratives in a whole variety of States, including Massachusetts, Oregon, New York, Utah, Maine, Kansas, 

and Nevada. They have not gotten to West Virginia yet, but we are 

open for their application. 

Now, the less good news in all of this is that we do not always 

do what we know. We could greatly improve quality by impleVerDate Nov 24 2008 15:38 Feb 15, 2011 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 R:\DOCS\64043.000 TIMD
12 

menting the research findings, tools, and best practices that we already know. So I think they actually need to shift from asking, 

what is quality, to asking the question, how do we make it better, 

how do we improve quality? I do not want to imply that people are 

not doing anything. 

In fact, doctors, nurses, hospitals, et cetera are working very, 

very hard. But we still have a system that makes implementing 

that not so easy. Brent James and Intermountain are way, way 

ahead of the curve and we can learn a lot from them, but most 

other organizations are not quite so far along. Our infrastructure 

is pretty fragile. The processes are laborious and often not as effective as they should be. In short, we do not make it easy to do the 

right thing. 

So I am really pleased that the American Recovery and Reinvestment Act includes significant investments in health IT, comparative effectiveness research, and prevention, all of which have incredible potential to improve the infrastructure, capacity, and quality of our health care system. The Recovery Act will provide a huge 

boost for our efforts because it will help us expand that foundation 

and our knowledge base. 

What I would like to do is just close on what I think are three 

near-term high opportunities for improving quality of care where 

we can, and should, see dramatic improvements. One is improving 

care for people with chronic illnesses. Because of all our successes 

in biomedical science, we now have increased—dramatically increased—life expectancy because we have effective treatment for 

diseases that were previously lethal, and we have seen a corresponding increase in the proportion of Americans with chronic illnesses. 

If you look at the 20 percent of people who incur about 72 percent of the expenditures, addressing their needs, most of those people have multiple chronic illnesses. The quality reporting you have 

heard about has been very effective at publicizing and motivating 

improvements in those processes that are under the direct control 

of a clinician or health care organization, so it reminds me to order 

the tests to check diabetes, cardiac risk factors, and so forth. 

Where we have not seen improvements is in the outcomes. Part 

of that is because the real improvement takes place after the patient leaves the office, so we have to figure out how to make more 

effective partnerships between clinical care and community resources and partners. 

The second big opportunity is improving care for America’s children. As you know, the recent reauthorization of CHIP provides a 

terrific high-impact opportunity. We think the provisions and resources in that act for quality are very important because many 

low-income children move frequently between Medicaid, CHIP, private coverage, and then no coverage, and because a focus on children has not been a part of all these organizations you have been 

reading about. So we are really excited about working closely with 

CMS, States, and all stakeholders on these initiatives to assure 

that all children receive the highest possible quality care. 

The third issue is reducing disparities. Every report on quality 

has two major findings; it does not matter what the condition or 

where it was done. The first finding is a substantial gap between 

13 

best possible care and actual care. The second finding is a larger 

gap for people who are members of racial or ethnic minority 

groups, who are poor, who have limited education, or who live in 

remote or rural areas. 

The tools and data needed to improve quality can be used simultaneously to close those gaps. In some instances, a focused approach to quality improvement overall has closed the gaps. In other 

areas, we are going to need to figure out how to close those gaps 

more effectively for those population subgroups. But I think the 

bottom line is, in looking at improvements in health care, we can 

be equal and excellent, too. 

So we have begun to make progress. We know a lot of what to 

do, and we now have to work together to put it into action. Thank 

you. 

Senator ROCKEFELLER. Thank you. Right on time. 

Dr. Kanof? 

STATEMENT OF MARJORIE KANOF, M.D., MPH, MANAGING 

DIRECTOR, HEALTH CARE, GOVERNMENT ACCOUNTABILITY 

OFFICE, WASHINGTON, DC 

Dr. KANOF. Mr. Chairman, Mr. Hatch, I am pleased to be here 

today, too, as you discuss health care quality. I actually was going 

to begin my opening remarks with the IOM definition, so I will 

take it one step further. 

Senator ROCKEFELLER. But you agree that hers was better? 

Dr. KANOF. I like hers. I think, actually, Dr. Clancy’s is the right 

one when you are sitting and taking care of a patient, so maybe 

it could be the new Hippocratic Oath. 

But the IOM also identified six dimensions of quality that I think 

are also important for us to focus on. They include safe, effective, 

patient-centered, timely, efficient, and equitable health care. 

My remarks today are actually going to focus on healthcareassociated infections, HAIs, which I think illustrate all of these dimensions. According to the CDC, HAIs are infections that patients 

acquire while receiving treatment for other conditions, and are estimated to be one of the top 10 causes of death in the United States. 

The most common HAIs are urinary tract infections, surgical site 

infections, ventilator-associated pneumonias, and bloodstream infections. 

Our March 2008 report found that the Federal Government had 

undertaken a number of activities to address the problems of HAIs. 

My comments today are going to focus on three of these activities. 

We reported that CDC issued 13 guidelines for hospitals on infection control and prevention that contained approximately 1,200 recommended practices; 500 of these were strongly recommended. Although most of the practices were sorted on the basis of the 

strength of the scientific evidence, other factors that actually 

AHRQ had noted, such as cost or organizational obstacles, were not 

taken into account. In addition, activities across HHS to promote 

implementation of these practices were not guided by a department-level prioritization. 

We also found that CMS required infection control standards for 

hospitals that described the fundamental components of an infection control program, but generally did not require hospitals to 

14 

implement the recommended practices and CDC guidelines, such as 

practices for hand-washing. We did acknowledge that it was difficult to require recommended practices of over 500 without prioritization. 

Lastly, we reported that HHS programs have databases for 

HAIs, but they are very limited in the scope of the information collected, and more importantly, there is lack of integration across the 

programs’ databases, which was impeding combining the information to better understand the extent of HAIs and to measure 

progress in reducing HAIs. For example, there is no linkage between one database on surgical processes which would tell you 

when antibiotics were given and another on surgical infection 

rates, even though they cover some of the same patients. 

We concluded that HHS leadership was not effectively leveraging 

their resources to reduce HAIs, and that no one within the Office 

of the Secretary was responsible for coordinating infection control 

activities across HHS. 

We made two recommendations that, if implemented, could help 

HHS be more effective in reducing HAIs. First, we recommended 

that the Secretary identify priorities among the CDC’s recommended practices and determine ways to promote their implementation, such as by incorporating the practices into CMS’s Conditions of Participation for Hospitals. In comments on our draft, 

CMS said that it welcomed the chance to work with CDC on this 

matter. 

Second, we recommended that the Secretary establish greater 

consistency and compatibility of the data across HHS to increase 

the information available, including reliable national estimates of 

the major types of HAIs. Such estimates could help benchmark the 

individual hospitals to gauge their performance and design targeted interventions. HHS, in comments on our draft report, agreed 

with this recommendation. 

After our report was published, HHS actually established a steering committee for the prevention of healthcare-associated infections 

that included senior-level representatives of HHS to develop their 

action plan. This plan consists of several strategies, including identification of priorities from among the 1,200 recommended practices 

and plans to coordinate data across HHS. 

The plan was released in early January of 2009 for public comment, and it has still remained open for public comment. Today it 

remains uncertain, however, when, or if, the new administration 

will choose to implement this plan to reduce the serious problem 

of HAIs. We urge the Department to remain committed to this important effort that will improve the quality of care. 

Mr. Chairman, Mr. Hatch, this concludes my remarks. 

Senator ROCKEFELLER. Thank you very much. Thank you very, 

very much. 

[The prepared statement of Dr. Kanof appears in the appendix.] 

Senator ROCKEFELLER. Everybody is all enthused about HIT, 

that it is the solution to everything. Just get the information. What 

I think I have heard from all three of you is that it can be misleading and that, as you said, a patient treated for something overlaps with a patient being treated for something else, and those two 

things are merged and it becomes health information technology, 

15 

and it is not necessarily useful. Data is a magic word in this country because we are sort of all pseudo-engineers, and anything that 

is data, we go by. 

Now, my question is about establishing benchmarks. You have a 

lot of entities that are seemingly tasked with establishing quality 

benchmarks—the National Committee on Hospital Insurance, National Quality Forum. I mentioned new ones—the Hospital Quality 

Alliance, the Joint Commission, the Physicians Consortium for Performance Improvement. All of these groups are trying to move towards better delivery of health care. 

My question is, between the private, where the government may 

not have, obviously, responsibility, and all the government agencies 

working on this, nothing ultimately works in this country. We discovered this, Senator Hatch and I, in intelligence. Our intelligence 

collection was stove-piped. I mean, there were 18 folks, different 

agencies out there who were all collecting intelligence, and they refused to share it with each other for all kinds of various reasons, 

or less excusable than I would imagine among hospitals, but maybe 

pretty dangerous, too. 

So we created something called the Director of National Intelligence. Everyone said, oh, that is just an easy answer to a complicated problem. Well, it was for the first 4 years, but now that 

person is establishing himself, in this case, and is forcing people to 

collaborate and to share, forcing them to, thus taking people out of 

their comfort zones into discomfort zones, where they could be embarrassed by what somebody else, collecting on the same subject, 

might say, which to me is the way the world ought to work. 

So my question basically is, whose responsibility is it to generate 

the necessary information to establish benchmarks of care and 

whose responsibility is it to measure and report an individual physician’s performance on such benchmarks, if there is an answer to 

that? 

Dr. CLANCY. Right now, what we have seen is it is very easy to 

make measures. What is much harder is to put them into practice, 

as you say, in a way that works for the front lines of care, as we 

have said. There are a number of groups that do create measures 

now, and the National Quality Forum sort of certifies, if you will, 

that they are valid and scientific by bringing together all stakeholders, both technical experts as well as patients, to say, is this 

what we care about and think is important? Of all the things we 

could measure, are these the most important items, and so forth? 

They also look at, how easy is it to put it into care? In our health 

care system, the Federal Government has a very important leadership and coordination role, but obviously delivery for the most part 

is handled by the private sector, not altogether, but for large parts 

of what gets delivered in health care. It is, indeed, the private sector, so you have to have a way for the public and private sectors 

to work together. 

In the past few years, the reason we could have Hospital Compare was because hospitals and other stakeholders, including doctors, nurses, patients, and so forth, came together to say, we think 

this is important. We cannot do the whole ball of wax all at once, 

but we are going to start with 10 and we are going to keep on 

building that out. I think it is a very good model. 

16 

I think what we have to figure out how to do is to create an organic connection between those measures and what needs to get 

done in everyday care. The danger that you heard from Dr. James 

is that, if the data collection is too slow, and too laborious, and too 

far away, most people do not see that as connected to their day 

jobs. 

In his system, what you have heard about is a system where, indeed, the measures are built from people’s day jobs. I think that 

we can get there with measures, but it is, by definition, a multisector challenge. 

Senator ROCKEFELLER. Just a bit impinging on Senator Hatch’s 

time, I am not sure that can be an excuse. In other words, Dr. 

James’s is a self-enclosed system, sort of a perfect system, as Senator Hatch explained to me. But that is not the country. 

Dr. CLANCY. Absolutely. 

Senator ROCKEFELLER. And we have to deal with the country. So 

you have to go to the taking care of the individual patient, to the 

next step up. How is it going to affect other departments within 

that same enclosed hospital system? I saw this at Johns Hopkins, 

when they were going crazy because the accreditation teams were 

all arriving and everybody was stopping doing everything they 

were doing, and doctors and nurses were scrubbing floors and windows and everything. I said, wait a second. This is the best hospital 

in the world, I think—I hope, because I was there—and why are 

they doing this? So, it is very complicated. But at the root, there 

has to be somebody who says, not an organic connection, but this 

is what you have to do. 

Dr. CLANCY. Yes. 

Senator ROCKEFELLER. And maybe it is not perfect at first, just 

like the DNI solution was not perfect at first. But it began to push. 

And it is not perfect yet, but it is still pushing, and people are beginning to cooperate, even the FBI is beginning to cooperate. They 

could not even talk to the CIA until we passed a law after 9/11. 

It was quite embarrassing for us. 

But somebody, some agency, somebody—I am not trying to take 

turf away from anybody, except that I really am—has to be responsible for this. I have a solution for it, but I do not want to put it 

out quite yet. I would like to have your response. 

Dr. CLANCY. I think that the Federal Government has to insist 

on quality of care, period. They pay for more than half of the care 

that is provided in this country. I think they can also provide leadership to bring the private sector along. 

Senator ROCKEFELLER. Who in the Federal Government? 

Dr. CLANCY. HHS. The Secretary of Health and Human Services 

has that responsibility. 

Senator ROCKEFELLER. But he has all those 15 groups underneath him. 

Dr. CLANCY. CMS, clearly, has a huge role. But you want CMS, 

or any payer, to be using measures that the profession believes are 

valid and consistent with science, as the Institute of Medicine has 

said, and that the people whom we are serving think are important. So you do want that input from all stakeholders. Otherwise 

we would just have accountants tell us what was important in 

17 

health care quality. I do not think any of us would want that for 

ourselves. 

So, clearly, the payment function has to be tightly linked to quality, but you also want the scientific functions of HHS to be brought 

to bear—the newest knowledge from NIH, AHRQ, CDC, and so 

forth—so that the measures and tools are kept as up-to-date as 

possible. 

Dr. KANOF. And I just want to add that, while the importance 

of the specific quality measures is valid—but going back to what 

Dr. James talked about, our own report, and the Dartmouth—there 

is a lot of important information that we get on a fairly regular 

real-time basis from CMS claims information that can be used to 

do hospital profiling, physician profiling, and can give real-time 

feedback loops to both providers and hospitals in terms of a comparison. That is just an important factor that one should not forget 

about in terms of, do we have the data and can we use the data. 

Senator ROCKEFELLER. I am way over my time. 

Doctor—Senator Hatch? I said ‘‘Dr. Hatch.’’ [Laughter.] 

Senator HATCH. Well, thank you, Mr. Chairman. 

I know that Senator Rockefeller has touched on this already, but 

let me just ask a question. As I reviewed the material for the hearing, I too was puzzled by the apparent lack of coordination among 

Federal agencies responsible for quality. 

Do you both agree with that assessment? 

Dr. KANOF. I think that is actually one of our major findings in 

our March report. 

Senator HATCH. In addition, it appears that these Federal agencies do not collaborate with the private entities responsible for developing and reviewing quality standards. 

Dr. CLANCY. That I would disagree with. Actually, we work very 

closely with those who develop the quality standards and the Quality Forum, and so forth. In fact, the Quality Forum is now doing 

a lot of their work under a contract from HHS. 

Senator HATCH. All right. Can we improve that situation? Because we have another impression on that. 

Dr. CLANCY. Sure. We would be happy to provide additional information 

Senator HATCH. Sure. I was also surprised to learn that there is 

not a Federal entity responsible for collecting quality standards 

across the country. Or is there? 

Dr. CLANCY. We have a clearinghouse of quality measures on the 

web, the National Quality Measures Clearinghouse. What it does 

is collect measures that have been certified as valid in reflecting 

current science so that you can choose. It does not say, these are 

the ones that you need to use. In essence, CMS has done that 

through the success of incentive programs that they have implemented. 

Dr. KANOF. But to get to Dr. James’s point, there are many 

different systems out there in the Federal Government, asking for 

different information. 

Senator HATCH. Do you believe that such a national entity that 

I have just suggested could be, or should be, created? Is it even 

necessary, since quality standards may vary across geographic 

areas? 

18 

Dr. CLANCY. My own view is that you want a common set of 

goals for the Nation. How you are going to get there? As Senator 

Rockefeller talked about, the whole country is going to look a whole 

lot different at Intermountain than it is going to look in parts of 

West Virginia, or southern Florida, or pick your community. I do 

not think you want anyone prescribing how to improve, but I think 

a clear set of national goals for where we are investing in health 

care nationally makes a lot of sense. 

Senator HATCH. All right. 

Are there ways to improve or leverage existing national studies, 

data sets, or registries to gather information that would allow us 

to draw conclusions about the comparative effectiveness of the 

treatments for various diseases, conditions, or disorders? 

Dr. KANOF. We actually think that the CMS database can be 

mined for that, and the Dartmouth research group has clearly demonstrated that in their work, now almost 2 years ago, where they 

looked at the cardiac and some surgical outcomes, comparing Minnesota versus Florida. Using the CMS data, the risk adjustment 

was the same, the outcomes were the same, but yet in Minnesota 

the beneficiaries received fewer services than in Florida. So, we believe the data are there. 

Dr. CLANCY. Well, I guess I would, with due respect, say that 

those billing claims can be used to ask very important questions, 

and the Dartmouth group does really terrific work, makes us say, 

what is going on here? What it does not tell you is how to change 

what is happening in one community to look like a better community. For that, you need more clinical detail. A lot of the work of 

what AHRQ does is exactly taking advantage of those existing data 

sources, including claims, but also including the kinds of data that 

doctors get together and collect themselves. 

The Society for Thoracic Surgeons, for example, has been doing 

this for about 20 years, and they have learned a whole lot. Probably the best project that we ever funded was connected to Dartmouth, where they actually got all the cardiac surgeons in northern 

New England, three States, had them work together, initially on 

bypass surgery, but then they started looking at other procedures. 

What they were able to do was dramatically reduce mortality 

and improve their processes through a process of learning. When 

the project was over—this was really good—the hospital started 

paying dues to actually keep this going. Since that time, it has only 

grown. So the people know now about the benefits of alternative 

intervention: should I have bypass surgery, should I have a stent, 

what will happen to me if I go one way or another? That is the 

comparative effectiveness that you talked about, Senator Hatch. 

We are going to have a huge opportunity to do a lot more of that 

with the Recovery Act. 

Senator HATCH. All right. 

Dr. Clancy, does AHRQ interact with the National Quality 

Forum? Does it collaborate with the National Quality Forum, and 

are there any joint projects that AHRQ and the National Quality 

Forum work together on? 

Dr. CLANCY. We work very closely with the National Quality 

Forum. Probably the most specific example of one of many projects 

that we are working on with them is trying to make sure that elecVerDate Nov 24 2008 15:38 Feb 15, 2011 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 R:\DOCS\64043.000 TIMD
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tronic health records and health IT—everyone is excited about 

health IT—can support assessing and improving quality of care in 

the way that all of you are very interested in. 

Senator HATCH. Dr. Kanof, with regard to GAO findings on 

hospital-acquired infections, how do we know how to prioritize recommended practices, especially when the Centers for Disease Control and Prevention have almost, if I recall it correctly, 1,200 recommended practices? 

Dr. KANOF. Well, actually, there has been some movement along 

that line. We had recommended that HHS take the lead, and, as 

I mentioned, HHS actually has, in the Office of the Secretary, 

brought together representatives from all of the disciplines within 

organizations within HHS. They have actually done a prioritization 

of identifying what should be some preventive guidelines that 

should be implemented. The logic goes—as, again, Dr. James 

said—to prioritize what are the most common. So they have at 

least taken the initiative to say, what are the most common causes 

of HAIs, and let us work on those. 

Senator HATCH. Thank you. 

Dr. CLANCY. I just would add, just for the record, that the 2008 

report from GAO did prompt a lot of serious internal collaboration 

at HHS, and we are continuing to move forward. So I think Dr. 

Kanof had some potential doubts about whether we had lost our 

steam. From my colleagues and others across the Department, I 

can assure you that this remains a very high priority. 

Senator HATCH. Thank you. 

Senator ROCKEFELLER. Thoracic surgeons, lower back pain, Resource-Based Relative Value Scale. Who made the most noise to try 

to derail that? It was the lower back pain doctors. Why do I say 

that? Because there has been tremendous emphasis from all three 

of you actually, but you two in particular, on CMS. I have not 

heard the word ‘‘MedPAC’’ once. 

Now, my theory, which the late Dr. James never got to hear, is 

that one of our problems around here is that we let lobbyists, doctors’ groups, Congressman, political pressure—lower back pain 

being the best example of that—it basically virtually derailed something. We let them make too many decisions. There is something 

called expertise. Expertise can be very quickly turned into highly 

sophisticated data if the political process is not involved, either 

medical or congressional. 

My approach would be to take MedPAC, which now has terrific 

people—and has over the years—give them a whole lot of money 

for research, and give them power, of which they have none whatsoever. CMS, which is the complaint—if you had to ask me, who 

would I choose to complain about, it would be CMS. I consider 

them the disbursers of payments, not the judges of quality. 

You take a MedPAC and you give them the money and the time 

to go from the nuance of the valleys of Utah—you have valleys? 

Senator HATCH. Yes. 

Senator ROCKEFELLER. You have valleys; to the mountains, to 

Dr. James’s system. Go all around the country, and they can dissect health care. 

Now, they have something at their disposal which others do not, 

and that is, they have the ability to reimburse physicians and hosVerDate Nov 24 2008 15:38 Feb 15, 2011 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 R:\DOCS\64043.000 TIMD
20 

pitals, particularly, obviously, related to Medicare-type things. But 

I have always believed—no one will ever talk me out of it—what 

happens in Medicare eventually happens elsewhere in medicine because it is so huge. 

I like this idea very much. I like it because it takes doctor 

groups. I mean, at the end of the Clinton health care, and I was 

very heavily involved in that, there were 14,000 lobbyists in Washington, DC. Obviously the thoracic surgeons had them. 

Do you remember the fight between the psychiatrists and the 

psychologists that went on for 10 years? The psychiatrists were 

saying that the psychologists should not be reimbursed by Medicare, absent 1 year post-college work, and could not prescribe medicine. There are so many examples of that, where people are paid, 

and now they are much more sophisticated, much better educated, 

as are members of Congress, because their staffs are so much more 

educated in health care. 

So to me, one of the things you do is you remove false potential 

for data from the system and you leave it up—I would not call it 

a BRAC commission because I do not want a military comparison, 

but you leave it up to experts. You give experts the money, the 

time, and the freedom to go county by county, hospital by hospital, 

to whatever minutiae you want, and they have the power of reimbursement. It is just that nobody pays any attention. Reimbursement, if you talk about incentivizing medicine, is about the most 

powerful incentive I can think of. 

Now, you cannot equate reimbursement directly to quality because there are some children or adults who will go to a properly 

reimbursed physician and will not accept the quality or will not follow through on the quality in their own personal lives, so-called 

personal responsibility-type things. But I honestly believe, and I 

would just ask your reaction to this; you both have observed Washington for a long time. This place just is overwhelmed with lobbyists. I think there are something like 20,000 now. They each represent durable medical equipment, oxygen tanks, or whatever it is. 

But boy, do they push for their product! 

Now, how can you possibly talk to me about a system of quality 

when you have that kind of activity? It ought to be professionalized. So then how do you professionalize? I cannot come up with 

a perfect answer. That is the best I can do so far. But you take it 

out of the hands of Congress. I do not say out of the hands of Senator Hatch or myself, because we are clean and mean and lean. 

Senator HATCH. Especially him. [Laughter.] 

Senator ROCKEFELLER. But that is not the way it works in the 

rest of it. I have seen the deals that were cut. I actually moderated 

that psychiatrists / psychologists thing. But it is not pretty. It is not 

quality. It is not American medicine the way it ought to be. 

Just respond to the fact of removal of politics and Congress and 

the power of reimbursement based upon a set of criteria which does 

not yet properly include, in my own definition, quality, but which 

might be the first step to that, other than what Dr. James is doing. 

Dr. CLANCY. Well, there are a couple of points that you have 

made that I think are incredibly important. One is a focus on 

science and expertise. Medicine is a highly technical business, and 

you would like to know that people providing care have access to 

21 

the best information so that all patients, no matter where you live, 

get terrifically good care. So I think that is a very, very important 

theme. 

You have also talked about making this a congressional commission. I will note that in the early 1970s this idea came up. As I recall the history, it was a little bit derailed by Watergate. I learned 

this just a couple of years ago. Congress went home, and that was 

the end of that idea. But it was around the time of the HMO Act. 

I think the idea of having that independent source of expertise 

has a lot to do with the mission of AHRQ. I do not know that I 

think there is such a place as a politically insulated place that can 

never, ever be pressured, because people care a lot about health 

care quality. 

Senator ROCKEFELLER. It is pretty hard to push Gail Wilensky 

around, and she is a Republican, and I think she is terrific, and 

so is Senator Hatch. 

Dr. CLANCY. I would agree with you in that assessment. 

Senator ROCKEFELLER. And it is pretty hard to push Stuart Altman around, and he is a Democrat. 

I mean, look. I do not know exactly who all the folks are on it 

now, because I have looked at the list and there are not enough familiar names. But you get a group which is completely dedicated 

to proper levels of reimbursement, which is the best incentive thing 

you have going. I still cannot make the direct connection between 

that and quality. And that is a failing on my part, but I am working on it. I just think, in medicine, with public dollars, you have 

to do that. 

Dr. CLANCY. Well, you and Senator Carper, I think, both pointed 

out that, right now, we pay for volume. 

Senator ROCKEFELLER. Correct. 

Dr. CLANCY. If you do more stuff, we pay more money. 

Senator ROCKEFELLER. Yes. 

Dr. CLANCY. As opposed to quality or value. 

Senator ROCKEFELLER. Everybody has to have an MRI. 

Dr. CLANCY. So clearly, reimbursement is a huge part of getting 

us to the other place. But I would hate us to lose the professional 

incentives where doctors’ board certification is linked to how they 

are improving quality, which we have started to see in the past few 

years, or other regulations. 

I mean, there are some things that are not about how much you 

are paying for services, but you want very specific features of facilities and so forth, to know that there are enough nurses. I think the 

other question really is, how do you put a system in place so that 

you know that in every corner of West Virginia there is the capacity to improve quality? 

I cannot quite get my head around a Washington, DC-based organization literally going around and providing that kind of technical assistance. The QIOs do some of that. Clearly, I think we 

probably need more technical assistance. I think this answer of 

‘‘they do not know how’’ is actually important. 

Senator ROCKEFELLER. But they could reach into those groups. 

Dr. CLANCY. Yes. 

Senator ROCKEFELLER. You see, it is the question of who has the 

authority. I am looking for something. And I apologize to the good 

22 

Senator. I have talked for 12 minutes, for heaven’s sake. I am looking for somebody who can lead this effort. I do not think it is going 

to happen haphazardly. I will guarantee you, intelligence sharing 

will not happen haphazardly. I will never forget when Dick 

Darman, who was Reagan’s OMB guy, came before the Senate Finance Committee. He disappeared for a week, and his assignment 

was to talk about, what is the effect of the cost of health care— 

you will remember this—— 

Senator HATCH. I do. 

Senator ROCKEFELLER [continuing]. The cost of health care on 

the GDP. He said, by X year—we probably have already passed 

it—it is going to be 36 percent. He was ashen white during his 

presentation. Or maybe he just had not slept for a week, I do not 

know. But, I mean, it told me a great deal, that here was an OMB 

director who could not make the system work. 

Dr. KANOF. Well, Senator Rockefeller, I am very glad you think 

so highly of MedPAC, since it is GAO that has the role of appointing the commissioners. 

Senator ROCKEFELLER. Now, no turf here. No turf. 

Dr. KANOF. Right. No. I think, though, that there is a lot that 

MedPAC can do, and has done. It is more a question of, how do 

you take what they have recommended and get that implemented? 

So they have studied and made recommendations about quality, 

and they are very concerned about the lack of—— 

Senator ROCKEFELLER. They do not have the money to do that. 

Dr. KANOF. Right. There is a lack of linkage between quality and 

payment. But they have made recommendations to Congress and 

to CMS in terms of stepping back and thinking how to restructure 

payment reform so that you are not in a fee-for-service world and 

you are not paying the physicians and hospitals separately. 

Senator ROCKEFELLER. It could be the end of fee-for-service medicine. I do not doubt that. But I am saying, give them the money. 

I cannot complete my sentence entirely to connect it to quality. But 

it strikes me that, if you do not want people turning away Medicare patients because they say they are not getting reimbursed 

properly, which could be, in many cases, phony and just a reason 

to complain or not to see people, or it could be real depending upon 

where you are, which doctors you are talking about. 

And I am not just talking about doctors and hospitals. I am talking about systems of people. I am talking about the entire health 

care system. I am looking for—I do not want to say a general, but 

I am looking for somebody who could be over the top of this and 

make sure that all of these various agencies somehow come together, that the best parts of them are taken out and given to 

something like MedPAC, which is greatly expanded in authority, 

power, research, money, et cetera, et cetera, give them some time. 

To me, they are a lot better deal than having Congress do it, and 

having politics do it. I have not answered the quality question. I 

am working on that. We will do that at our next meeting. 

Dr. KANOF. I think you will make headway on the quality when 

we reform payment so that there is a better link between the quality and payment, just like Dr. James explained to you. 

Senator ROCKEFELLER. I think I have certainly taken up my time 

here. 

23 

Senator HATCH. Well, we have brought Dr. James back a number 

of times, and almost everybody recognizes him as one of the real 

authorities. Too bad he wants to only live in Utah, because he 

would make a great deal of difference back here. I want to express 

my personal gratitude to both of you. I thought this has been a 

very interesting hearing, and you are both very enlightening people. 

I want to thank the chairman for holding this hearing. 

Senator ROCKEFELLER. He is ending the hearing. 

Senator HATCH. The chairman takes a very great interest in 

health care. We have worked together on a lot of things, and I expect that we will be working together, if we can come together on, 

really, health care for everybody. Hopefully we can do that. But it 

is one of the most difficult things in the world if we do not find 

some way of containing costs, and yet upping quality. I do not 

think they are inconsistent, those two goals. 

Dr. CLANCY. They are not. 

Senator HATCH. I think we can do it. I think we can do it with 

your help, and the help of others. So I just want to personally tell 

you I have enjoyed listening to you and appreciate having both of 

you here. 

Senator ROCKEFELLER. We have a whole separate subcommittee 

hearing coming up on cost containment. 

Dr. CLANCY. Great. 

Senator ROCKEFELLER. I mean, this is just quality. Then we have 

others coming up, and we have full committee hearings on subjects. 

Then we have White House meetings, and we have something 

called the Board of Directors, which strikes me as an anomaly. It 

is actually the Gang of Nine that Senator Hatch and I are on that 

is trying to figure out what to do with health care reform. We have 

a President who has said, here is $634 billion, and that is more 

than you ever had for health care in your entire life. Let me see 

what you can do with it. If it is not particularly good, I have some 

ideas of my own. I happen to agree with many of his ideas. 

So, having said that, the hearing is adjourned, with great thanks 

to both of you. 

[Whereupon, at 4:48 p.m., the hearing was concluded.] 

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