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58–445—PDF 2008

S. HRG. 110–1080

IMPROVING HEALTH CARE QUALITY:

AN INTEGRAL STEP TOWARD HEALTH REFORM

HEARING

BEFORE THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

SEPTEMBER 9, 2008

(

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

KEN SALAZAR, Colorado

CHUCK GRASSLEY, Iowa

ORRIN G. HATCH, Utah

OLYMPIA J. SNOWE, Maine

JON KYL, Arizona

GORDON SMITH, Oregon

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

PAT ROBERTS, Kansas

JOHN ENSIGN, Nevada

JOHN E. SUNUNU, New Hampshire

RUSSELL SULLIVAN, Staff Director

KOLAN DAVIS, Republican Staff Director and Chief Counsel

(II)

C O N T E N T S

OPENING STATEMENTS

Page

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee

on Finance ............................................................................................................ 1

Grassley, Hon. Chuck, a U.S. Senator from Iowa ................................................. 3

WITNESSES

Lee, Peter, J.D., executive director of national health policy, Pacific Business

Group on Health, San Francisco, CA ................................................................. 4

Nussbaum, Samuel, M.D., executive vice president for clinical health policy

and chief medical officer, WellPoint, Inc., Indianapolis, IN ............................. 6

Schoen, Gregory, M.D., regional medical director, Fairview Northland Health

Services, Princeton, MN ...................................................................................... 8

Weiss, Kevin, M.D., president and CEO, American Board of Medical Specialties, Evanston, IL ................................................................................................. 10

Roper, William, M.D., MPH, dean, University of North Carolina School of

Medicine; and vice chancellor for medical affairs and CEO, University of

North Carolina Health Care System, Chapel Hill, NC ..................................... 12

ALPHABETICAL LISTING AND APPENDIX MATERIAL

Baucus, Hon. Max:

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

Grassley, Hon. Chuck:

Opening statement ........................................................................................... 3

Lee, Peter, J.D.:

Testimony .......................................................................................................... 4

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

Nussbaum, Samuel, M.D.:

Testimony .......................................................................................................... 6

Prepared statement .......................................................................................... 45

Roper, William, M.D., MPH:

Testimony .......................................................................................................... 12

Prepared statement .......................................................................................... 70

Schoen, Gregory, M.D.:

Testimony .......................................................................................................... 8

Prepared statement .......................................................................................... 75

Weiss, Kevin, M.D.:

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

Prepared statement .......................................................................................... 81

COMMUNICATIONS

American Academy of Pediatrics ............................................................................ 89

National Association of Children’s Hospitals ........................................................ 96

(III)

(1)

IMPROVING HEALTH CARE QUALITY: AN

INTEGRAL STEP TOWARD HEALTH REFORM

TUESDAY, SEPTEMBER 9, 2008

U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC.

The hearing was convened, pursuant to notice, at 10:05 a.m., in

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus

(chairman of the committee) presiding.

Present: Senators Lincoln, Wyden, Salazar, Grassley, Snowe,

Bunning, and Crapo.

Also present: Democratic Staff: Bill Dauster, Deputy Staff Director and General Counsel; Elizabeth Fowler, Senior Counsel to the

Chairman and Chief Health Counsel; Billy Wynne, Health Counsel;

and Neleen Eisinger, Professional Staff. Republican Staff: Mark

Hayes, Health Policy Director and Chief Health Counsel; Michael

Park, Health Policy Counsel; Susan Walden, Health Policy Counsel; Kristin Bass, Health Policy Advisor; and Lyndsey Arnold, Intern.

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE

The CHAIRMAN. The committee will come to order.

Aldous Huxley once cynically wrote, ‘‘The quality of moral behavior varies in inverse ratio to the number of human beings involved.’’ Today we focus on the quality of health care, and, even

though a lot of human beings are involved, we will look for ways

to improve its quality.

As we have been exploring ways to improve the health care system, we have been hearing about a 3-pronged approach: controlling

health care costs, expanding access to care, and improving quality.

Over the last few months, the Finance Committee has held a series of hearings on health reform. Previous hearings have explored

ways to control health care costs and ways to expand access to

care. Before the end of the month, we will hold two more health

reform hearings.

Today we will look at quality. Today, our health care system does

a poor job of encouraging and rewarding quality. Medicare awards

health care providers based on the volume of services that they

provide. The more patients they see, the more revenue they bring

in. That is regardless of the quality of care.

Most policy experts and health care providers recognize that we

need to shift our focus onto quality. We need to encourage better

patient outcomes. This effort would improve the health and lonVerDate 11-MAY-2000 14:32 Oct 08, 2010 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 58445.000 TIMD PsN: TIMD
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gevity of patients, and improving patient outcomes should also help

to reduce costs and reign in health care spending. Health care

spending has been growing at roughly 7 percent a year, the overall

economy has been growing at less than 5 percent a year, and general inflation has been rising at less than 2.5 percent a year.

With health care costs growing this quickly, we simply cannot afford to continue paying for inappropriate or inadequate medical

care. We need to encourage high-quality and high-value care, and

we need to reward health care providers who deliver it.

We have made some progress. Over the last few years, Medicare

has encouraged hospitals to track and report on a variety of clinical

activities that have been shown to improve quality and outcomes.

For example, do heart attack patients consistently receive aspirin

when they arrive at the hospital? Medicare pays hospitals more if

they measure and report these activities.

We have also tried some other approaches. For example, the

Medicare Hospital Quality Incentive demonstration program goes

beyond just paying for reporting. This program links Medicare payments to hospitals’ actual performance on a variety of clinical and

quality measures.

This nationwide demonstration program has involved more than

250 hospitals. The program has shown that focusing on quality results in marked improvements for patients suffering from heart attack, heart failure, or pneumonia, and for those undergoing hip or

knee replacements.

Similar efforts are also under way to encourage doctors to track

and report quality and clinical improvement activities. For Medicare, we have worked to establish the Physician Quality Reporting

Initiatives, or PQRI. This program asks doctors to report back to

Medicare on their compliance with a standard set of quality measures. Doctors who participate in this program get a 2-percent bonus

payment from Medicare. This program has focused its quality improvement efforts on improving treatment for high-cost chronic conditions.

The private sector has also worked on quality improvement, and

employers as purchasers of health care have begun working on

health plans and health care providers to encourage higher quality

for their health care dollar.

We have made some progress, but we need to do more, much

more, to encourage and reward quality health care services. Today

we will hear from a private health plan, a purchaser, a hospital,

a physician, and a policy expert. Each of the witnesses has been

on the cutting edge of quality improvement efforts.

We will get their perspectives on how we can transform our

health care system into one that encourages and rewards highvalue and high-quality health care. Improving health care quality

is an integral part of health reform, and I look forward to hearing

from each of our witnesses on this important topic.

Speaking about our Constitution, Benjamin Franklin once optimistically wrote: ‘‘Wisdom is the specific quality of the legislator,

grows out of a member of the body, and is made up of the portions

of sense and knowledge which each member brings to it.’’

So I hope that the Congress can bring some wisdom to the health

care debate, and I hope that each member will bring large portions

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of sense and knowledge. I hope that, through this effort, we can

help improve the quality of health care and, thereby, the quality

of people’s lives.

Senator Grassley?

OPENING STATEMENT OF HON. CHUCK GRASSLEY,

A U.S. SENATOR FROM IOWA

Senator GRASSLEY. Thank you, Senator Baucus. To our panel,

thank you for coming. I know a lot of you have come a long way.

Thank you very much for sharing your expertise with the Congress

on this very important subject of examination of health care quality, which is the third of the themes that we have been discussing

this year in this committee on reforming health care.

In the report, ‘‘Crossing the Quality Chasm,’’ the Institute of

Medicine said that, ‘‘Between the health care we have now and the

care we should have lies not just a gap, but a chasm.’’

Now, I know that there are dedicated providers who work hard

day in and day out to provide high-quality care, but not all providers are at this level. There is a recent Dartmouth University

study that shows that. There are wide geographic variations in the

quality of care. So the challenge is, how do we work to make sure

that all providers give the right care, and at the right time?

A fundamental building block to meeting this challenge is performance measurement. After all, how can we improve quality if we

cannot measure what that quality is in the first place?

I am pleased to see the dedication that many are giving to current efforts to measure quality performance. This is, of course, a

substantial undertaking. But the end result will enable us to draw

an apples-to-apples comparison between providers based upon quality. In Medicare, we have added financial incentives for a number

of providers to participate in these performance measurements.

Hospitals, home health agencies, and physicians currently receive

some form of payment incentive for reporting quality measures.

But, of course, this is just a first step. If we are able to figure

out who is or is not passing muster, we have to devise a system

to encourage everyone to become high-quality performers. The way

Medicare currently pays for health care certainly does not provide

these incentives to improved quality. Today, poor-quality providers

get paid the same as high-quality providers, and in some instances

the poor-quality provider gets paid even more.

In fact, the current system encourages a high volume of services

instead of quality. It is just, of course, disgraceful that Medicare rewards poor quality care in many cases, and, because many private

health plans follow Medicare’s lead in how they pay providers,

these flaws in the Medicare system spread throughout the entire

system, and that further compounds that problem.

Congress then needs to make changing the way Medicare pays

for high-quality care a priority, and then insurers need to change

their incentives as well. We need incentives for quality instead of

quantity. Value-based purchasing would provide the right incentives. High-quality providers should be financially rewarded, while

poor-quality providers are encouraged to do better. Payment systems that reward quality have been tested both in Medicare and

in the commercial market and they have shown promising results.

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Senator Baucus and I convened a roundtable discussion earlier

this year on Medicare hospital value-based purchasing. There was

overall support for such a concept, and I will look forward to working with my chairman and other committee members, and, of

course, stakeholders to make this a reality.

Today we are very fortunate to have many of the major health

system stakeholders here to talk about how to improve quality of

care that hospitals and doctors provide. I will look forward to hearing their perspectives. I am even more interested in learning how

we can all work together to improve quality because, if there is one

message we heard loud and clear at the roundtable, a roundtable

on value-based purchasing, it is that we all must work together to

improve quality in our health care system.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Senator.

I would now like to welcome our witnesses. First we hear from

Mr. Peter Lee, who is the executive director of national health policy for Pacific Business Group on Health. Second, Dr. Samuel

Nussbaum, executive vice president of clinical policy and the chief

medical officer of WellPoint. Third is Dr. Gregory Schoen, the regional medical director of Fairview Northland Health Services in

Minnesota. Our fourth witness is Dr. Kevin Weiss, who is president

and CEO of the American Board of Medical Specialties. Finally, we

will hear from Dr. William Roper—good to see you again, Bill—

dean of the University of North Carolina School of Medicine, and

vice chancellor for medical affairs and CEO of the University of

North Carolina Health Care System.

A reminder to all of you, your written statements will all be included in the record, and we ask each of you to limit your oral remarks, please, to 5 minutes.

Mr. Lee, why don’t you proceed?

STATEMENT OF PETER LEE, J.D., EXECUTIVE DIRECTOR OF

NATIONAL HEALTH POLICY, PACIFIC BUSINESS GROUP ON

HEALTH, SAN FRANCISCO, CA

Mr. LEE. Thank you very much. Good morning, Chairman Baucus, Senator Grassley, and members of the committee. It is a pleasure to be here. I am Peter Lee, the executive director of national

health policy for the Pacific Business Group on Health, and I appreciate the chance to talk with you today about how the Federal

Government, and Medicare in particular, can join with leading employers, labor groups, consumer organizations, and providers to

measure and reward quality and cost efficiency to foster improvement in a very troubled health care system.

As the debate on how best to reform our broken health care system continues, virtually all agree that we have a current system

that covers too few, costs too much, and does not deliver consistently high quality. Without ensuring quality, access to care may be

meaningless. Without addressing costs, care will remain inaccessible to many Americans.

For employers that PBGH represents and for many consumers,

we face premiums that have increased over 125 percent in the last

8 years alone. What that means for many small businesses is they

are being driven out of the health insurance market entirely. For

5

large businesses, they’re becoming less competitive internationally.

What that means, as they are facing foreign competition, is it adds

impetus to, in essence, the last thing we want to be exporting,

which is American jobs.

The good news is, and it is reflected by this hearing today, that

there is agreement across the political spectrum and the range of

stakeholders that we have to have a reform that addresses not just

coverage, but also improving quality and cost effectiveness. The

good news, as you will hear from the panelists here today, is that

there are real solutions we can work with.

I do need to note though, as we look at quality, we do need to

remember when we seek to expand coverage, that we do that in a

way that does not just shift costs. Too often we look at coverage

as an issue that just gets individuals into public programs that

then result in cost shift to the private sector, so the fewer employers and individuals that have private coverage are picking up more

of the bill for the public sector, and that is something I want to

keep in front of the committee and in front of Congress.

The problem with cost shifting, though, underscores why we

must improve coverage and go beyond that to, first, measure performance; second, use that information so consumers/patients can

make better choices; third, change payments to providers and provide incentives to consumers to reward quality; and finally, promote reengineering in care. The starting point for that reform has

to be in understanding what works and who’s doing the job right.

I am going to make a number of specific recommendations relative to Medicare and the Federal Government. My written testimony goes into more detail. But, first, I note that Medicare needs

to make routinely available Medicare claims data to qualified quality reporting organizations such that employer-sponsored and individually sponsored health benefits plans can lower premiums by

using aggregated claims data across multiple beneficiaries.

Second, we need a national initiative to measure and compare

the effectiveness of drugs, devices, and procedures that includes

formal economic analysis and that is trusted by all stakeholders, is

rigorous and transparent, and we need to improve the quality and

value of care by making sure those results are used by public and

private plans in benefit design, payment, and patient decision support.

The second major area after we measure performance is, we need

to get that information into the consumers’/patients’ hands. The

Federal role here needs to be, in particular, to make sure that valid

information is available to be used by a whole range of stakeholders, whether that be consumer organizations, health plans, or

private groups.

Next, we need to align payments to providers and provide incentives for patients to foster better care. There are, as we have heard,

literally hundreds of payment reform pilots going on around the

country, but, if we do not have Medicare join with private payers,

this will not make a difference. We need to design payment systems that reward providers, building on many of the good efforts

that we have heard discussed by Senators Baucus and Grassley

that have been launched in Medicare to build on the efforts to reward quality on both the clinician and facility fronts.

6

Part of that effort, though, needs to be rebalancing the payment

equation to better compensate providers that engage in preventive

care and primary care. I would specifically encourage this committee to look at MedPAC’s recommendation to establish a budgetneutral payment adjustment that would shift support for preventive and primary care. This is the right thing to do, because we

need to send the message to today’s and tomorrow’s physicians that

we are going to reward primary care.

Also as part of that rebalancing, we need to have Congress relook at how CMS establishes the relative value assessment within

Medicare. Currently, that is far too centered around the physician

perspective. That rebalancing needs to be done from a patient perspective, anchored in patients’ views and payers’ views.

Finally, I would just note—and I look forward to hearing questions from the members of the committee—that the Federal Government needs to promote markets, both directly as a purchaser

and by supporting information every American needs to make better choices.

As I have noted, Medicare and the Federal Government can take

leadership by making comparative information available to all

Americans, by rebalancing Medicare payments to reward primary

care and to support reengineering, and by establishing a new payment review process that is physician-informed, but patientcentered. These three steps, along with many others, will move us

toward a health care system that is patient-centered and sustainable. Thank you very much, and I look forward to your questions.

The CHAIRMAN. Thank you, Mr. Lee.

[The prepared statement of Mr. Lee appears in the appendix.]

The CHAIRMAN. Dr. Nussbaum?

STATEMENT OF SAMUEL NUSSBAUM, M.D., EXECUTIVE VICE

PRESIDENT FOR CLINICAL HEALTH POLICY AND CHIEF

MEDICAL OFFICER, WELLPOINT, INC., INDIANAPOLIS, IN

Dr. NUSSBAUM. Chairman Baucus, Senator Grassley, and distinguished members of the committee, I am Sam Nussbaum, executive

vice president and chief medical officer of WellPoint. It is an honor

and a privilege to appear before you to discuss how WellPoint is

advancing health care quality and safety in the United States.

At a time of breathtaking advances in biology and medical

science, the U.S. health care system has not kept pace. By most

measures of public health and health care quality, the U.S. lags

many European nations. And while the health benefits industry

has been a lightening rod for concerns of rising health care costs

and for access for affordable coverage, we know there is no single

cause or cure for our Nation’s health care challenge. What we do

know is our reliance on increased spending to improve quality has

failed us, and so we must fundamentally shift by investing to drive

better outcomes to improve safety and to provide greater value.

The health insurance industry is undergoing a transformation,

unnoticed by many, to drive quality outcomes, evidence-based medicine, and health improvement. With over 35 million members and

another 60 million Americans touched by our subsidiary companies, WellPoint’s capability and responsibility to positively impact

health care are great.

7

I would like to focus my remarks today on five elements of our

quality strategy: (1) determine what works in health care through

comparative effectiveness and outcomes research; (2) promote quality through innovative payment models for physicians and hospitals; (3) enable informed decision-making through the use of

health information technology; (4) improve the health of our members and communities; and (5) improve pharmaceutical and health

care safety.

Imagine, if you will, a day when a health plan uses a vast

amount of claims, pharmacy, and laboratory information to determine what works in health care. Today, WellPoint is conducting

clinical outcomes and comparative effectiveness research to determine how drugs work outside of the clinical trial and in the realworld setting.

For example, our research found that 63 percent of our members

with high cholesterol could be effectively treated with generic

statins, and we found that, even in our insured population, racial

and ethnic disparities exist, with insured African American women

diagnosed at a later stage of breast cancer and less likely to receive

state-of-the-art therapy.

Imagine a day, if you will, when the health plan provides you information to help you improve your health care and save money,

suggestions that are tailored to your specific needs. Today we are

providing our members, including Federal employees, with clear,

actionable messages regarding health improvement and member

cost-saving opportunities. We have seen a 10-percent improvement

in care guideline compliance.

Imagine being diagnosed with a chronic illness and finding that

your health plan has already developed a suite of specific programs

for your condition based on the latest clinical evidence, with a

nurse available 24 hours a day and a health plan that is helping

your physician manage your care regarding sharing information directly.

We are using that health information strategy in Kettering

Health System in Dayton, OH, working with General Motors to

combine all of this clinical data in an integrated health record that

is improving health care for 10,000 members. These results indicate a 7.4-percent reduction in medical trend and higher quality for

individuals with chronic illness.

Imagine a day when physicians and hospitals are paid in part

based on clinical quality. Today, WellPoint’s pay-for-performance

programs assess physicians and hospitals on quality indicators and

reward them for better health outcomes, for better patient safety,

and for member satisfaction.

Imagine a day when health plans work with Federal agencies

and academic experts to improve drug safety. Our WellPoint Safety

Sentinel System monitors a 35-million member database and identifies drug events in near real-time, and we are working with the

FDA, the CDC, and academic experts to evaluate therapies after a

drug is approved and is in clinical use.

To impact health, however, we must transform clinical evidence

into clinical action. We can work together to improve health care

quality and the performance of our health system. So I would like

8

to close by highlighting what we believe Congress can do to advance these goals.

(1) Support recommendations for establishment of a National

Clinical Effectiveness Assessment Program. This is the theme reflected in the Comparative Effectiveness Research Act of 2008

sponsored by you, Senator Baucus, and Senator Conrad.

(2) Continue to create incentives for the adoption of e-prescribing

and health information technology. We appreciate the incentives

created last year for e-prescribing in Medicare, thanks to the leadership shown by many members of this committee.

(3) Deploy innovative payment methodologies in Federal programs that reward quality and improved outcomes.

(4) Partner with WellPoint and other health plans on national

drug, vaccine, and health care safety initiatives.

I have shared a vision of a health care day that is already dawning. I commit to you that our company has the passion for health

improvement, the vision, and the resolve to positively impact the

health of our Nation.

Mr. Chairman, Senator Grassley, and distinguished members of

the committee, thank you again for the opportunity to speak before

you today. I welcome questions that you may have.

The CHAIRMAN. Thank you, Dr. Nussbaum, for that vision. We

appreciate it very much.

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

The CHAIRMAN. Next is Dr. Gregory Schoen.

STATEMENT OF GREGORY SCHOEN, M.D., REGIONAL MEDICAL

DIRECTOR, FAIRVIEW NORTHLAND HEALTH SERVICES,

PRINCETON, MN

Dr. SCHOEN. Chairman Baucus, Ranking Member Grassley, and

other members, on behalf of Fairview Northland Medical Center,

my name is Greg Schoen. I am a practicing family physician. Our

facility is about 50 miles north of the Minneapolis–St. Paul area,

and we have a 54-bed hospital. As such, I am standing before you

representing rural America and the challenges of health care today.

Fairview Northland is one of 250 participants in the Hospital

Quality Incentive Demonstration Project which was launched in

2003 as a joint effort by Premier Health Care Alliance and CMS.

The project provides incentives to hospitals that successfully use

evidence-based, widely accepted clinical treatments with measurable outcomes in five specific areas: acute myocardial infarction,

chronic heart failure, pneumonia, total hip and knee replacement,

and coronary artery bypass grafting.

Our hospital chose to participate in the HQID project, knowing

that improving quality is the right thing to do for our patients. We

believe that a model where we can align financial incentives will

be an effective way in pushing quality to a higher level, and have

demonstrated that in this project. Pay-for-performance is an engine

for improvement and can be a framework for fundamental transformation of health care.

The HQID project was a catalyst for our quality improvement in

our hospital. For years we had been dabbling in quality improvement, but, once incentives became part of the picture, we found

9

that we went under a cultural transformation: the board, the administration, and the entire medical staff became actively engaged

in moving quality to a higher level. It created a focus in our organization that had not existed previously.

It allowed us to stay ahead of the curve by participating in the

project in the sense that we understood that ultimately quality

would become part of payment through CMS, and other payers

would soon follow. Comparing measurable outcomes is a strong

motivator for hospitals and physicians to improve quality—not that

we are comparing and keeping score, but learning from each other.

Finally, pay-for-performance does result in other measurable outcomes besides those that are being focused on for showing improvement, and as such we have found improvements in patient and employee satisfaction, as well as other clinical measures.

The pay-for-performance can, and does, work in small rural hospitals. Our facility is a good example of that. In year 1 of the program, we were in the bottom decile, or 10 percent, of the country

in performance across the five measures in which we participate.

However, by gathering our staff together and developing protocols

and processes, we were able to improve in year 2 to the upper 20

percent for acute MI, heart failure, and pneumonia, and in year 3

we had moved into the top 30 percent in our performance in hip

and knee surgeries. We have been able to sustain our gains in all

of the other areas as well.

There are advantages to being a small hospital, in that small

medical staffs and small hospital staffs are able to quickly get their

arms around the issues at hand and create protocols and processes

to improve outcomes. It also, within the HQID project, was demonstrated that that was not just our experience. The experience of

other small hospitals participating was that they were able to

achieve improvement at a greater pace than the non-rural hospitals.

We also face many challenges as a small hospital. The inpatient

volumes are such that, in any subset of these populations, one outcome measure can seriously affect the outcomes of your performance in that particular measure. It also is the case that we have

small, scarce resources in our facilities, that multiple tasks need to

be performed by our staff, by our physicians, and that the attention

to detail that is required for performance takes time and has to

come from some other activities.

So, as we look forward to designing a pay-for-performance measure for how we reimburse for health care, we welcome the concept

of being paid for quality. For far too long, we have been paid for

simply just services rendered and not the outcomes and the quality

in which those services are delivered.

However, we think there are some issues that need to have close

attention as we move forward. There needs to be a minimum

threshold of quality for outcomes for which there is a financial incentive. If we do not have a minimum threshold, the expectation

of receiving care safely across the country does not exist. Hospitals

performing below this minimum should not initially be penalized,

but should be supported with tools from those hospitals that have

success so that they can learn and gain knowledge through other

ways rather than recreating that work from the ground up.

10

Special considerations need to be given to hospitals with small

numbers so that those single items that fall out do not create a

common-cause variation that denies them payments. Also, we

would prefer the carrot approach of encouraging performance as

the appropriate way to go, but we realize that penalties may be

necessary.

We believe that there is a call to standardize the measures. As

a small rural hospital, HQID and CMS provide measures, but we

have multiple private payers who ask us to do their outcomes

measures as well. We believe that gathering all those subsets together so that we can focus our attention on the same outcomes

will get us to a better place more quickly.

Lastly, we recommend that the organizations who assure alignment between physician and hospital measures put these measures

into pilot programs and testing before they become part of a public

program.

In closing, the pay-for-performance system needs to be structured

to incent quality improvement in every hospital in the country. Patients, regardless of where they are in America, should be assured

that they will receive a consistent level of care.

Thank you. I look forward to questions.

The CHAIRMAN. Thank you, Dr. Schoen, very much.

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

The CHAIRMAN. Dr. Weiss?

STATEMENT OF KEVIN WEISS, M.D., PRESIDENT AND CEO,

AMERICAN BOARD OF MEDICAL SPECIALTIES, EVANSTON, IL

Dr. WEISS. Thank you so much, Chairman Baucus, Senator

Grassley, and members of the Senate Finance Committee, for the

ability to testify on health care quality.

My name is Kevin Weiss. I am a physician, board certified in internal medicine. I actually had the privilege of being one of the

members of the Institute of Medicine Chasm Report committee,

and have sat on performance measurement committees that include NQF, AQA, PCPI, NCQA—pretty much the round of major

quality organizations.

But I come to you here as president and CEO of the American

Board of Medical Specialties, ABMS. ABMS is an independent nonprofit organization which, for 75 years, has been assisting 24 medical specialties in developing the standards used to certify physicians. ABMS’s reach is broad and deep. There are over 700,000

U.S. physicians, both doctors of medicine and osteopathy, who hold

a certificate by one or more of our boards. The standards that we

set are used by almost all medical residency training programs and

physician practices of just about every size and scope and every

reach in the country.

The profession’s investment in board certification is approximately $150 million a year, paid by physician fees, which represent

about 85 percent of the physicians’ workforce, who voluntarily go

through a certification process as evidence of their support. We

work in the public’s interest in that we set standards to assure the

patients and their families about the competency of physicians. A

national survey suggested over 90 percent of the public uses board

certification as a way to choose a physician.

11

Please note that earlier I said that we are supported by physician fees, not dues. We are not a member organization, nor do we

accept support from the pharmaceutical or medical device industries in order to set our standards. We maintain our independence

solely for setting standards and not physician payment.

In short, ABMS boards are private-sector oversight organizations

that are very similar in mission to the National Committee on

Quality Assurance and the Joint Commission.

We embrace a new definition of professional accountability that

includes not only quality for patient care but also recognizes that

physicians have a role in maintaining and reducing health care

costs.

In my testimony today I hope to inform the committee on three

issues: first, that we believe that no single strategy is sufficient to

support our health care system; second, we believe that the best

model of physician accountability rests both on physician performance measurement and other assessment processes; and third, that

we have to align the public sector with the private sector initiatives

more strongly to get the most change in our system.

Let me provide some brief details on each issue. First, we believe

that multiple strategies are needed and that there are distinct and

potential complementary rules for regulation of the market through

pay-for-performance and through performance reporting and professional accountability.

Most physicians in practice are imbued with a deep sense of professional want and desire to provide the best care for their patients. Incentive-based programs tap into motivation that is extrinsic to the profession and thereby, while they ultimately will be successful, cannot do the whole job. The certification boards demonstrated that, with trustable, actionable data, physicians will voluntarily commit to improving their knowledge and their care delivery, thereby tapping into their intrinsic professional motivation,

and it is these two that we have to bring together, extrinsic and

intrinsic motivation, to accelerate change.

The second issue is, the best model for physician accountability

will have to go beyond just performance measurement. Now, the

tools that ABMS boards use to assess physicians are multifaceted,

and I respect the fact that one of the cornerstones of them is performance measurement. Many aspects of clinical competency do not

lend themselves to representation by performance measurement

alone. For example, we have some excellent nationally endorsed

performance measurement tools, looking at diabetes care, breast

cancer screening, tobacco cessation. We have some great measures,

and those measures will effect change. However, those are for common illnesses. Many of the illnesses that patients seek care for

from doctors are not common: thyroid disease, viral meningitis,

rheumatoid arthritis—important illnesses if you are a patient with

these conditions, but the science of performance measurement cannot quite get to the level of those kind of quality questions.

So we need to have other measures and other assessment tools.

The board has used things such as secure book exams, closed-book

exams, to test medical knowledge and expertise. They look at clinical judgment through low- and high-fidelity simulation exercises,

similar in context to that which pilots use in terms of maintaining

12

and demonstrating their skills. They require lifelong professional

self-assessment and feedback, and expectations for practice-based,

not just measurement, but improvement.

Our last issue is that the public and private sector need to align

themselves better for physician accountability. Out of a desire to

reduce wasteful and redundant data collection, ABMS boards have

begun to align our assessment methods with those of the private

health plans, hospitals, CMS, and other emerging forces such as

NQF and the Health Care Quality Alliances.

ABMS boards are helping facilitate reporting clinical data

through CMS as part of your PQRI process. ABMS boards are developing new kinds of partnerships, and we are beginning to

launch a new activity this year with the National Quality Forum.

We have been serving on the NQF’s National Priorities Partnership, which my colleague, Dr. Bill Roper, will be discussing next in

more detail.

In summary, professional accountability—and the public-facing

values it embodies—offers proven mechanisms to connect to the

heart of a doctor’s professional obligation to engage in improving

care. Then perhaps, by bringing to bear the professional obligation

along with the market-based incentives Congress can offer through

CMS and other governmental health care programs, along with private sector efforts at performance improvement incentives, we

know that what we all would like to see is possible, and that is

that our patients and public deserve the best possible, lowest price

of care.

Thanks so much.

The CHAIRMAN. Thank you, Doctor, very much.

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

The CHAIRMAN. Now, our final witness is Dr. Bill Roper.

STATEMENT OF WILLIAM ROPER, M.D., MPH, DEAN, UNIVERSITY OF NORTH CAROLINA SCHOOL OF MEDICINE; AND VICE

CHANCELLOR FOR MEDICAL AFFAIRS AND CEO, UNIVERSITY OF NORTH CAROLINA HEALTH CARE SYSTEM, CHAPEL

HILL, NC

Dr. ROPER. Thank you, sir. Thank you, Mr. Chairman, members

of the committee. It is an honor to appear before you and to discuss

this important matter of health care quality. I had the privilege

some years ago of appearing often before this committee, and it is

a delight to be back.

As health care reform efforts take shape, we have an important

opportunity to advance the quality agenda as an integral part of

addressing cost containment and coverage. As your committee

hearings imply, these are three important things that are surely

interrelated. I urge you and others to continue to consider them in

that fashion.

Others have talked about the important notion of measuring and

reporting results on health care quality. That is a powerful notion

that has enormous potential for improving what we do in health

care. It is important that it be done right, that we have quality information about quality. In short, quality does not happen in a vacuum and cannot be accomplished alone. To be truly successful, all

parts of the system—providers, insurers, health plans, purchasers,

13

consumers, and government agencies—all must work together in

this effort.

I am here today representing the National Quality Forum, which

is working in partnership with CMS, the Quality Alliances, and

others. NQF was founded in 1999. We now have more than 375

members representing virtually every part of the health care system, and we have a 3-part mission to improve the quality of American health care by: first, setting national priorities and goals for

performance improvement; two, endorsing consensus standards for

measuring and reporting results on performance; and three, promoting the attainment of national goals through education and outreach programs.

The health care measurement sets which we have today provide,

I think, an adequate starting point from which to jump-start payfor-performance and public reporting. But it is important for us to

chart an evolutionary course out into the future for measures that

will be used by both public and private purchasers and other stakeholders in the near future.

When an educated consumer buys a car, the decision is based not

just on the cost of the vehicle, but on quality and value. In a similar way, we need to focus on the entire health care experience and

say ahead of time what it is we are trying to achieve, and then

measure results to decide whether we have, indeed, achieved what

we set out to accomplish.

In particular, we need to focus on managing an illness over time

and across settings. We need to do, as many others have said, align

payment with quality so these are not viewed in isolation. We need

to build high-performing health care organizations. We need new

organizational models that integrate the delivery of health care

services in a way that is good for patients and their families. I have

had the privilege of working on this issue for more than 2 decades

from Washington, and now at the local level.

Both national policy and local practice are important to this

issue. As you have heard from others, we need a long-term, sustained commitment to improving health care quality. This is not

something that is going to be done tomorrow, or next year, or really

ever be finished. It is a permanent way of thinking about and

working on what we do for our patients.

Again, as you have heard from others, we need a broad partnership that brings all parties at interest to the table and works on

this in an integrated fashion. It is a privilege to be with you, and

I look forward to answering your questions.

Thank you.

The CHAIRMAN. Thank you, Dr. Roper, very much.

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

The CHAIRMAN. I would like to start with you, Dr. Schoen. Often

we hear that rural hospitals are at a disadvantage compared with

larger hospitals, basically because they do not have the infrastructure or the capital needed to address a new requirement, and whatnot.

As I understand it, you are basically saying that there are some

advantages to being a smaller hospital, because you are able to

work together better. But, as you worked on the efforts to improve

quality, performing your HQID, just tell us again what worked for

14

a small hospital and what the problems are facing a small hospital,

and what advice do you have for other hospitals generally, and

maybe specifically for smaller hospitals?

Dr. SCHOEN. I think the first challenge we had was the notion

of trying to create systems that worked for us, and where were we

going to get the support and the staff from? Basically, you need a

commitment to say, we have people whom we know their job is to

do this or this, but we need to pull them off-line for a period of

time to focus on making these changes. I think what you find when

you do that is there are other operational inefficiencies that you

learn how to improve in other areas so you can free up that time

so that you can focus on the efforts that are important and appropriate.

So, during this course of time, there was a huge cost commitment

in terms of human resources and development of protocols and

processes and workflows that we put effort into. But on the back

end of that, the improved results in patient quality have benefitted

us greatly. I believe that it is a matter of resolve. Instead of saying

we cannot because we are small and we do not have the resources,

it is taking a look at, what other things really are not critical that

we do not have——

The CHAIRMAN. So a lot of it was just a question of attitude.

Dr. SCHOEN. Very much.

The CHAIRMAN. That is, this is something we are going to do.

Dr. SCHOEN. On the other hand, there may be hospitals that are

so small that they would greatly learn from collaboration with

other hospitals so that they do not have to reinvent the wheel, so

to speak.

The CHAIRMAN. And the staff at the hospital felt this was working, they joined in?

Dr. SCHOEN. Absolutely. It became a team effort across the entire

organization. Once you get the board and the administration supporting it and the medical staff supporting it, it is easy to gather

and get momentum.

The CHAIRMAN. Well then, why could other hospitals not do the

same, basically?

Dr. SCHOEN. Again, I think it is a matter of resolve and commitment, to say this is a focus that we believe in and a direction we

want to move in. It is transforming your organization from one that

simply provides a service to one that wants to provide the highest

quality of care.

The CHAIRMAN. And what could we do here in the Congress,

what could CMS do, to help this effort?

Dr. SCHOEN. I think if we are looking at a program that rewards,

we have to make sure that—for instance, in the project, we are

looking at the top 2 deciles being rewarded. I think a minimum

threshold of performance needs to be available. If all the country,

through improved quality, crosses that threshold, the reimbursements should support all hospitals, not just those in a certain subset.

The CHAIRMAN. Could you discuss that threshold again, please?

How you arrived at that number and why it is so important.

Dr. SCHOEN. Rather than specifically determining what the number is, I think, as you mentioned earlier in your opening stateVerDate 11-MAY-2000 14:32 Oct 08, 2010 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 58445.000 TIMD PsN: TIMD
15

ments, a patient with acute heart attack should get an aspirin,

should get a beta-blocker, should have ACE inhibitors, and all the

appropriate levels of care that we know are evidence-based.

If those things are not happening, how do we help those hospitals in order to provide that level of care and have protocols and

processes in place to ensure it happens for every patient across the

country, regardless of time of day or who the doctor is on call at

the time?

The CHAIRMAN. And your thoughts on the relative value of carrots and sticks that encourage hospitals to undertake these efforts?

Dr. SCHOEN. Physicians, by and large, and hospital systems are

motivated by an incentive to pull them forward. I do think there

is, as in everything in life, a subset of folks that kind of needs a

little stick approach to move them forward.

The CHAIRMAN. Let me ask Dr. Weiss, how do we better align

public and private incentives here? How do we go about doing this?

Dr. WEISS. There are probably several ways to begin the process.

The first is a voluntary mechanism, sort of the encouragement side,

the major initiatives now that are coming out of Congress through

CMS and what is happening in the health plans and their physician accountability, and then at least at the physician level, what

is happening through this voluntary process, this board certification process. We are all working hard, but relatively independently at this.

There is no great convening force to try to say, what should this

implementation look like? Right now, the Quality Alliances help

with that. NQF has been extremely helpful in setting common endorsed measures. But to create those incentives, we have to have

a convening and an endorsement process, I think a signal from

Congress to say that this is important in a way that means that

there is a sustainable interest, to say we need to have a single set

of measures and whatever we can do to help facilitate that. What

we need to do is ask the question of not just measures, but what

other things do we need to drill down on in terms of physician accountability.

The CHAIRMAN. Yes. But how do we make this happen, frankly?

Dr. WEISS. Step one. In terms of performance measurement, we

need to find ways to have one set of performance measurements

that are acceptable across CMS, the health plans, and the boards.

We do not have that yet. In order to make that happen, we have

to set the table right to get that.

The CHAIRMAN. My time has expired. I just think we have to figure out ways. We rely upon a lot of you, your advice, in how we

make that alignment happen.

Senator Grassley?

Senator GRASSLEY. Dr. Schoen, your discussion that you had

with Senator Baucus was something I wanted to discuss with you.

You have gone over most of what I wanted to do. But since your

hospital is similar to many of the hospitals that we have in my

State of Iowa, I would ask you to zero in just a little bit on whether

or not your experience from your point of view was typical of how

you think a nationwide roll-out of value-based purchasing would

occur, or did you get a lot of special outside help and resources

from the demonstration?

16

Dr. SCHOEN. Although we are part of a larger health care system,

and although Premier had services available to us, most of the

work was simply done internally with folks rolling up their sleeves.

We had gone through and done a lot of quality training. We had

people in our facility who were quality experts, but we were not

moving the dial in the fashion that we wanted.

So when there was an incentive in terms of reimbursement that

came along, that became a much larger motivating factor for us to

move forward. And again, then the administration and the board

really put the focus on us improving from where we were. In year

1, we thought we were doing well. We did not do well at all. That

completely changed the focus of the organization for the next year.

Senator GRASSLEY. And with good results ensuing?

Dr. SCHOEN. We have had very good results, and we have been

able to sustain that, simply by changing our focus, our structure,

and our commitment to quality.

Senator GRASSLEY. All right.

I am going to ask Mr. Lee and Dr. Nussbaum the next question.

WellPoint’s plan insures 35 million people. Dr. Lee, the Pacific

Business Group on Health’s members cover more than 3 million.

You both note the importance of incentives to reward quality for

both physicians and for hospitals. Can the private sector take the

lead by itself in changing health care provider reimbursement to be

based on quality and outcomes or must Medicare take a leading

role?

Mr. LEE. Senator, I think it is absolutely clear and imperative

that Medicare takes a lead in partnership with the private sector.

As you noted in your opening remarks, the private payers very,

very often follow Medicare. Medicare sets the standard that then

ripples throughout the entire system. I think we need to have

rapid-cycle payment demonstrations that do not have Medicare out

there on its own, but have Medicare working with private sector

initiatives so we do not have 120 different payment pilots scattered

around the country, but we have issues where Medicare is working

in conjunction with the private sector. But, if the private sector

alone is trying to do this, it will not make the difference. Medicare

has to lead, working with the private sector.

Senator GRASSLEY. And from your point of view, Dr. Nussbaum?

Dr. NUSSBAUM. Senator Grassley, I think our experience at

WellPoint, which is the largest experience with pay-for-performance, shows that coming together, all of the health insurers, with

Medicare, measuring the same quality performance measures and

outcomes, can make a difference.

In California, where Peter is from, an organization called IHA

has actually convened all the health plans to promote the same

quality measurement and performance measurement for physician

groups. And, while we may have variation in the incentives that we

pay, WellPoint has paid over $60 million to those physicians, and

we are showing improved quality of care.

So, we need to experiment, we need to see what works in care.

It is not only about pay-for-performance, it is about advanced medical home and other innovative payment models. But working with

Medicare, coming up with a common platform, we can drive even

faster and greater improvement in quality.

17

Senator GRASSLEY. I do not have time for all of you to answer

the last question. I was hoping I would have time. But let me ask

you, some of you who feel confident answering this—a couple of

you, maybe—are economic incentives the best way to improve quality, or does simply finding out that one’s quality of care is substandard provide enough incentive to improve it? Go ahead.

Dr. WEISS. You know, I have to look back over the past week.

A family member of mine was having some chest pain and was rapidly assessed and put in the hospital, and was given a cardiac catheterization. Thank goodness, everything was fine. But looking back

on it, I asked my family member, what was that experience like,

and what about your chest pain? They said, well, the doctor did the

catheterization, walked in, walked out, and did not say a word. He

said my heart was fine and left the room. I said, that is unacceptable.

Now, performance measurement is not going to get that, because

technically the doctor did just fine. The profession should not accept that. That is the problem. So, financial incentives are not

going to get to that level, so we have to work with some realignment of expectations of professional values here. That is what I

was speaking to earlier about the intrinsic motivation. But, in

order to do that, in response to Senator Baucus’s earlier question,

we have to force the alignment.

Right now, I would say, as one partner in that, and that is the

boards, we have to try to find a way to have CMS listen to what

we are trying to do so we can work with them. So far, we are having a hard time finding that pathway. We are beginning to find a

pathway with the health plans, but if we do not have easy pathways and expectations set by Congress to say that these are not

good enough professional expectations, the boards cannot come in

and help.

Dr. ROPER. Senator, if I may, I agree with what Dr. Weiss said

about the importance of the professional role in this agenda, but

I would also say we very much need to have greater financial incentives to focus on quality. Otherwise, I believe—and this comes

from experience—the rest of the system will simply not pay enough

attention to this. Indeed, if I can be a bit more plain-spoken, I

think my colleagues at CMS have not been sufficiently farreaching, as far as the amount of money put at risk, for health care

quality. We need to push that agenda farther, faster than we have

in the past.

Dr. NUSSBAUM. Senator Grassley, we know that health care is 50

percent good, 50 percent high quality. It is not only pay-forperformance. That is a component. But I believe we have to provide

doctors near real-time information on gaps in care, ways that they

can achieve near-perfect care for chronic illness for their patients.

That is an example of investment in health information technology

and other strategies that will allow physicians to get to that promised land of near 100-percent high-quality care.

The CHAIRMAN. Thank you, Senator.

Senator Wyden?

Senator WYDEN. Thank you, Mr. Chairman.

Gentlemen, whenever there is a discussion of quality in American health care there are loads of detailed debate about what qualVerDate 11-MAY-2000 14:32 Oct 08, 2010 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 58445.000 TIMD PsN: TIMD
18

ity means for doctors, for hospitals, for insurance companies, for

employers, for just about everybody except the patient. The patient

is pretty much an after-thought. That is why, in my view, we have

this problem where it is easier for a consumer to get information

about a microwave or a dishwasher than it is to get information

about the quality of health care.

Now, in the Healthy Americans Act, the legislation that I and a

number of colleagues on this committee have authored—we have

eight Democrats, eight Republicans—we try to put the patient in

charge in terms of this debate about quality. For example, we create a website where it would be possible for patients all across the

country to get information about the quality of services in their

area.

So what I would like to do, for purposes of starting this morning,

is use an example and get your thoughts about how we could further involve the patient in driving this quality debate.

Dr. Jack Wennberg of Dartmouth, who is really renowned in this

field, has talked at some length about the abuse of discretionary

surgery. What could be done—and maybe I will start with you, Dr.

Roper; it is always good to have you—to get information to patients

in a user-friendly way that would allow them to drive a quality

agenda where the country could deal with this problem of the

abuse of discretionary surgery, which, I think all would agree, is

certainly central to getting good quality?

Dr. ROPER. Thank you, sir. Of course, as you say, it is so very

important that we design a health care system that is patientcentered, and it needs to include this notion of patients getting the

information they need to make decisions about their care. As Dr.

Wennberg himself has pioneered over the years, one of the techniques to that end is using educational videos and other ways of

explaining to patients the different paths that they might choose,

along with their physicians and others, for their care. He has done

that most particularly around prostate surgery, and in other areas

as well.

The challenge in all of this is, while patients need to be much

better informed than they are, in the most critical moments of

decision-making, many people—myself included, and I am sure my

family included—will often say, doctor, just tell me what I should

do.

So it is finding the balance between deeply informing patients,

which we must do, and having physicians and other leaders in the

health care system exercising the professional excellence that has

already been talked about, and bringing that together to benefit patients. We can do a much better job than we have done. As you

said, we have all sorts of information tools available to aid our decision-making in other parts of our lives, and we ought to have them

in health care as well.

Senator WYDEN. Other thoughts? Doctor?

Dr. WEISS. I think, as Dr. Roper suggested, the performance

measurements, again, will get you part of the way there. They are

a necessary piece of this, to say, is a doctor doing much more surgery than you would expect him to do. But this really rests at the

heart of the judgment, the clinical judgment of, did I talk to the

patient, did I listen to what they were saying, am I making the

19

best decision that they would like, and trying to understand it from

the patient’s perspective? Dr. Wennberg and his colleagues have

done a beautiful job of creating a science around that, as well as

colleagues of his in Boston.

I think that that leads to a different type of an assessment.

When I speak to my colleagues at the Board of Surgery, what they

say is, we want to work on, how do we assess clinical judgment and

the risk-taking behavior of physicians? Those are a set of different

tools that need to be applied in looking at physician accountability.

Simulation. What if you have a patient who is——

Senator WYDEN. But how do you get that to the patient and the

consumer? That is my question. Even in this response, you are focusing on the providers. I want to hear about how that becomes

friendly to the patient.

Dr. WEISS. What we are doing now in the boards is, for the first

time in their 75-year history, we are looking at the CAHPS (Consumer Assessment of Healthcare Providers and Systems), this consumer assessment of health care. Next week, our board is going to

be voting to implement a CAHPS program. Part of that is public

reporting of the results of the communications. In your last visit,

did your doctor treat you with respect? Did the doctor seem to understand what you were saying?

You have to not only assess it, but then make some of that available to the public in a way that the public can easily absorb. We

have to build this into our assessment processes. It just has to happen. But in addition to that, we have to make sure that physicians

have the skills to do it and expectations of what those thresholds

should look like.

The CHAIRMAN. Thank you. Very briefly, because we are out of

time.

Dr. NUSSBAUM. Senator Wyden, there is a 5-fold difference in the

use of surgical procedures. This involves patient-informed decisionmaking. Patients need to be given the options. It needs to be presented to them in a way that they can understand the different

outcomes for them. This can be done on the web, this can be done

with care coaches and care guidance. It involves professionals and

doctors, but most of all it means giving them the options of what

the science shows and how to make the best choice for their individual needs.

The CHAIRMAN. Thank you, Senator.

Senator Bunning?

Senator BUNNING. Thank you, Mr. Chairman.

Dr. Schoen, it sounds like your hospital has embraced participating in CMS’s demonstration and improving quality. You mentioned the fact—or maybe you did not, but someone else did—that

maybe they are not paying enough.

Dr. SCHOEN. If we are simply to look at the dollars and cents applied during the 3 years of our involvement in the project, we have

probably, in human resources, applied about $160,000 to the efforts. Our reimbursements to date have been more in the $40,000

range.

Now, we believe that——

Senator BUNNING. In other words, you believe that government’s

participation in finding out how to better serve the sick and those

20

who need your services is not equal to the amount that you are

participating in?

Dr. SCHOEN. At this point, on a pure dollars and cents measure,

the answer would be no. I think what we need to look at is

functionality long-term, and what our outcomes do in terms of

making patients healthy.

Senator BUNNING. Where are we in that respect? Where are we

in outcomes and functionality? In other words, are you succeeding

without the money or are you just giving it a half-way effort? What

is it?

Dr. SCHOEN. No. I believe we are giving it a full effort, and I believe we have made a commitment. As such, when we look at budgetary crises—we are in that budget mode at this time of year—we

have to make decisions on what services or what things we cannot

provide and what things we have to continue to fund. We believe

that funding quality, even though the reimbursement may not particularly match to that, is still critical. In fact, it may be unethical

to withdraw services that we know are providing a higher level of

care. So, we look for other areas with inefficiencies where there

might be opportunities to improve them.

Senator BUNNING. Is there something other than dollars that we

can do, that this committee can do? What?

Dr. SCHOEN. I think, again, if we can align the focus on quality

so that we are not dealing with multiple private payers and CMS

setting different structures for us to have to be accountable to, we

can fine-tune our resources and make them more effective and efficient. I think there are some limited outcomes measures. As I mentioned before, the studies do show that, if you improve in these

areas, other areas tend to follow suit because of the change in the

culture of the organization.

Senator BUNNING. Dr. Roper, you said one option to reforming

the health care system was to move from a fee-for-service system

to one that pays doctors or hospitals a bundled payment for managing chronic conditions.

Dr. ROPER. Yes, sir.

Senator BUNNING. In your testimony, you mentioned one medical

center. Is it Geisinger?

Dr. ROPER. Geisinger. Yes, sir.

Senator BUNNING. Geisinger Medical Center, that actually already does this. Do you know if health plans have been excited

about this option and how it has worked for that medical center?

Dr. ROPER. Sure, Senator. A number of efforts in the past, and

in the present, center around this notion of bringing payment together in a more bundled fashion to pay for integrated care. That

is a powerful idea that has the potential to really transform the

way we deliver health care services. Unfortunately, we continue in

many parts of our system, especially in the Medicare program, to

pay in separate amounts on a fee-for-service basis.

Senator BUNNING. You know what?

Dr. ROPER. Yes, sir?

Senator BUNNING. Talk to the doctors and hospitals about that,

because they are pretty adamant about their money.

Dr. ROPER. Yes, I know. I am a physician myself, and I run a

hospital, or several hospitals, and I do understand the point you

21

are making. It is where we must go if we are going to transform

things.

May I add one other point, Senator?

Senator BUNNING. Certainly.

Dr. ROPER. As you were saying in your colloquy with Dr. Schoen,

what he said is, we need to align everybody together and not have

disparate, separate measures of quality. I would say that even

more strongly. I think that is the single thing that is holding us

back in the quality effort, because we are still, in many respects,

in the Chairman Mao ‘‘Let a Thousand Flowers Bloom’’ phase of

quality. Instead, we need to come up with a single integrated national strategy for quality improvement.

Senator BUNNING. We are having a heck of a time deciding how

to do that. That is why we are asking you five people here how to

do that.

Dr. ROPER. And, if I could betray my bias, I chair the board of

the National Quality Forum, and we believe bringing folks together

around a table, both public and private, consumer and purchaser,

provider, everybody else to come up with a single strategy is what

we must do.

Senator BUNNING. Thank you.

The CHAIRMAN. Thank you, Senator.

Senator Snowe?

Senator SNOWE. Thank you, Mr. Chairman.

I think what is indeed troubling is the fact that there are so

many standardized practices that have been proven to be effective,

yet have not been translated into actual practice, at least not uniformly. For example, you mentioned aspirin and beta-blockers

when someone has chest pain. These are not cutting-edge recommendations, these are ones that have been there for the better

part of 20 years.

So what is the issue here? What is the problem in translating

these standardized best practices into uniformity across the country? For example, Dr. Wilensky, when she was here in July, talked

about developing a Center for Comparative Alternative Treatments. I think that is important. But we also should be evaluating

these standards and why they are not translating into actual practice, which I think obviously the American consumer deserves.

Dr. Roper?

Dr. ROPER. Yes, ma’am. This is a point I made earlier, Senator.

Of course this is a complicated matter, but I would urge us to focus

on the simple powerful idea that you put forward. That is, we need

to come to agreement on what works for patients and then put in

place incentives to accomplish that. We are beginning to do that.

In my institution, the University of North Carolina Health Care

System, we now have millions of dollars at risk in our payments

based on whether or not we achieve those outcomes, like whether

we have given the right medication to patients at the right time,

and whether we have prevented infections as we should in cases,

et cetera, et cetera, et cetera.

So what I do as dean of the medical school and CEO of the

health care system is bring people together and say, folks, failure

is just not an option. We have to hit these numbers. We have to

produce these results. If it means hiring some more nurses and

22

some more doctors and whatever else, we have to do those things.

That is a much different world than it was just a few years ago

when ‘‘quality’’ was a committee that met on Tuesday afternoon. It

was viewed as somebody else’s problem. Now it is everybody’s problem, including our board, who are putting pressure on me as CEO

to get this done.

In stressing finance and the dollars, I do not want to overlook

the professional role in this that Dr. Weiss, importantly, causes us

to pay attention to. But dollars make it possible for us to do these

things for patients, and if those dollars are at risk we will pay attention.

Senator SNOWE. Dr. Weiss?

Dr. WEISS. And I have to say, it is not just the professional role,

it has to be the professional role with some teeth. I am reminded

of the fact that, through PQRI, the average physician gets a few

thousand dollars or more, and that is an incentive from Congress

to say, focus on these measures. Then that same physician spends

a few thousand dollars or more to pay us, the boards, to say, please

make sure that I am at the quality that you want. Those are running independently to some degree right now, and we are trying to

find alignment. If there is endorsement from you, encouragement

from you in Congress to CMS that it is time for the boards and

CMS to find a good common solution and to work hand-in-glove, we

are willing to do that, and it costs you nothing.

The CHAIRMAN. But do all of you agree with that basic statement

that Dr. Weiss just mentioned? Do you all agree?

Dr. NUSSBAUM. I do not disagree, Senator Baucus, but I think

what is so vital is that, today, doctors know the answer to what

works. Senator Snowe, they know the best treatments for asthma,

the best treatments for heart disease, but they are not applying

them. It is not only about payment. That is a piece of it. It is about

professionalism.

But most importantly, it is at the point of care, making sure

those gaps, those quality defects, are addressed. Payment is a piece

of it. Quality measure is essential, but it has to go beyond that. I

think, unless we can create an integrated care platform at that moment with information, with monitoring, with reward, to be sure,

our American community is not going to get the best care that the

best science can produce today.

The CHAIRMAN. All right. I am sorry, Senator. I took some of

your time. Go ahead. Go ahead.

Senator SNOWE. No. Thank you, Mr. Chairman.

Then I guess the point is, can we set standards for best practices? I mean, I think that really is the issue as well. I mean, it

seems to me that we ought to be able to do that.

Dr. ROPER. We surely can, Senator. That is being done right now.

Senator SNOWE. But on a uniform basis?

Dr. ROPER. Yes, ma’am. Again, the role of the National Quality

Forum is to work with all the parties and interests, to get the physicians and others who are standard-setters to come together, and

then through a consensus process, get agreement across the spectrum—payers, providers, consumers, government, and so on—on a

single set of measures. It is the single set that is so very important.

Senator SNOWE. Thank you.

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The CHAIRMAN. Thank you, Senator.

Senator Salazar?

Senator SALAZAR. Thank you very much, Chairman Baucus.

Over the August break, I had the opportunity of sponsoring some

31 health care hearings around the State of Colorado, and I did it,

frankly, because of your leadership and your desire to focus on this

issue. Everywhere that I went around Colorado, I found that everybody had the same conclusion, that we have a health care system

that is very broken and that there is a lot of work that has to be

done, that we cannot, at this point, measure outcomes, and consumers who are out purchasing health care or health care insurance really do not know what it is they are purchasing. It is a basketful of confusion out there among the 325 million Americans, the

5 million that I represent in my State.

So I think, Chairman Baucus, you taking the leadership role in

trying to move us forward in dealing with health care reform as we

anticipate the time after this election when we will be able to put

our arms around it, I think, is tremendously foresightful and something that I very much look forward to working with you on.

I want to ask a question of the panelists. I want to just go down

the row, the same question to each of you, and have each of you

respond to it within 30 seconds, since that is about how much time

I have.

It has to do with how we will measure the value and the quality

and effectiveness of two aspects of health care. The first is prevention, where I think there is uniform agreement that we have to do

a lot more. How do we standardize, by some way of our Federal

legislation here, something that would help us bring about the kind

of prevention in our population that we all, I think, agree needs to

happen, whether it is cardiac conditions, diabetes, those sorts of

things? So, the prevention side.

Second of all, quality of care in the end of lifetime, those last 2

years of life. I think we all know the statistics: 75, 80 percent of

all health care dollars spent on any of us are spent in those last

2 years of life. How do we bring the quality of health care standards into play in those last 2 years of life to try to become better

in terms of how we are treating people in those end-of-life times?

Mr. Lee, let me start with you and then we will come across the

doctors. Each of you have about 30 seconds. Prevention and end of

life.

Mr. LEE. The first thing I would note is, as Dr. Roper noted, the

National Quality Forum is sponsoring an effort called the National

Priority Partnership effort, which is a collaborative effort identifying eight areas of national priority, and you have pinpointed two

of them, one being promoting prevention and wellness, the other

addressing end of life. We are meeting later this week to have recommendations coming out in November on those areas, as well as

six others, on what to measure and the actions to be taken.

Senator SALAZAR. So how soon will that be done, Mr. Lee?

Mr. LEE. The national report will be issued in November. We will

be meeting again next week. But we are hopeful that that report

for the National Priority Partnership will inform your deliberations. I would use my 30 seconds to plug that effort, because again,

we go into a lot of detail with a collaborative——

24

Senator SALAZAR. Thank you very much. I am sure the members

of the committee very much look forward to seeing that report and

reviewing that report.

Dr. Nussbaum?

Dr. NUSSBAUM. We agree on preventive measures. There are

many national organizations that have promulgated and looked at

the value of those measures. They just have to be implemented.

Health plans——

Senator SALAZAR. How do you do that?

Dr. NUSSBAUM [continuing]. Have covered preventive measures

and need to make sure that everyone, particularly children, get

those measures.

Regarding the end-of-life issues, we need to make sure, when we

have the magnificent advances in biology that can make a difference in outcomes of care for cancer and other chronic illnesses,

that we apply them. But when there is no hope in science and care,

we have to bring all of the compassion and knowledge to again

allow families and their loved ones to make thoughtful decisions

that are compassionate about end of life.

Senator SALAZAR. All right.

Dr. Schoen?

Dr. SCHOEN. Thank you, Senator Salazar. I believe that physicians are not the owners of preventive care. I think they need to

be the drivers of it, but studies have shown that, if you have 20

patients in a day to be seen, all of the preventive care items being

addressed during the course of the day would consume the entire

8 hours and you would not deal with why the patient came in the

first place. Use of electronic medical records has enabled us to set

triggers in place for health maintenance alerts so that we have

staff, whether it is rooming staff, scheduling staff, tell a patient,

you are due for a mammogram, or you have not had this vaccine,

and schedule it.

Senator SALAZAR. All right.

Dr. SCHOEN. We need to be allowed to off-load that from our

work.

Senator SALAZAR. Dr. Weiss?

Dr. WEISS. I think you have heard a great amount on the preventive measure side. We are well on our way, and I think at this

point we need to go from just developing the measures to setting

the standards, and that requires a very healthy public discussion.

End of life is a different issue and it is extremely complex, as you

all know. But coming back to Senator Wyden’s version of thinking

about this, so much of it is technology-driven and so little of it is

listening to the patients and patients’ needs at the end of life. We

do not have a good set of tools, and performance measurements are

not going to give us the tools of, let us say, how well do we listen?

So we need to develop those assessment tools to see if the physician

and others in the health care provider community are listening,

and then make that available.

Senator SALAZAR. All right. Thank you.

Mr. Chairman, may I have 30 seconds for Dr. Roper?

The CHAIRMAN. Absolutely.

Dr. ROPER. Everything that they have said, I agree with. We

simply have to move beyond platitudes and saying how much we

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care about prevention and end-of-life care and make it real. I think

the priorities project that Peter mentioned is altogether important.

At the end of the day, if CMS and private payers put their money

at risk to say these things are important to us, if you the Congress

say these things are important to us, it will happen.

Senator SALAZAR. All right. Thank you very much.

The CHAIRMAN. Thank you.

Senator Lincoln?

Senator LINCOLN. Thanks, Mr. Chairman.

As has been demonstrated, there are so many questions and so

little time, so we will throw them out at you.

Just quickly, Dr. Schoen, thanks for bringing to this conversation

the experiences with the value-based purchasing and the Premier

demonstration in Minnesota. I think you had some of that in your

testimony. This may have already been covered by our chairman

because he shares my desire to look out for our rural areas. I was

extremely impressed. I toured one of the three demonstration

projects in my State of Arkansas that was in the value-based pilot

project, and it seemed like there were great results that were coming from that purchasing to date.

We know, however, that for some hospitals, especially in rural

areas or in under-served areas, the concept can be a little harder

on them than others. What do you recommend that we take from

what we have learned from small hospitals like yours and ours to

ensure that the hospitals in these areas have the resources and the

will to be able to be successful under those types of programs? Is

there anything you have learned that you want to share with us

there?

Dr. SCHOEN. Yes. The Minnesota CIO comes out to each of the

hospitals and facilities in the State and does a little performance

evaluation. We had the good fortune of them coming to us and saying, you have done some really good things, what tools can we take

from you to share with other hospitals who are not doing as well?

So there already is an avenue there for us. We do not know where

the hospitals are that are not doing well, but somebody does. Being

able to share that information collaboratively, I think, makes

sense. We need to collaborate more than we need to compete on

quality and safety.

Senator LINCOLN. Well, hopefully that information will be there

for us. I know, in visiting with my hospitals and seeing what they

have gained, their excitement of being able to produce greater quality, greater services, reducing their costs and other things, are very

important. But there are also smaller hospitals out there that are

scared to death about whether or not they are going to have the

resources to make those investments if they are asked to meet

those qualifications in the same amount of time. So, hopefully we

can gain from that information and really use it, because it does

sound like a really good program, and it has certainly been beneficial to a lot.

Dr. Nussbaum, you mentioned your work done in health disparities and how that can help improve quality. Maybe you can share

some more of your work in that area with us, also, the way that

insurers are talking about health IT as the answer to health care.

You have mentioned an awful lot of what more we can do there.

26

There is a great deal of discussion, though, even with CBO, about

whether there will be economic savings from e-prescribing and

health IT. I would just remind everybody that we still have tremendous difficulties getting CBO to show savings from things like

health IT, chronic care coordination, which I am a huge advocate

for.

These are areas where we are hoping that—Peter Orszag is supposed to produce a report this year that will help us with some options on how we use those things to be able to show the savings.

I do not know. There is an Ohio pilot. What are some of the economic impacts that you have had there, if any, that would really

help us prove that these are good directions to go and that there

is proof of these types of efforts?

Dr. NUSSBAUM. Thank you, Senator Lincoln. Thank you for your

advocacy of both health IT and quality improvement in addressing

health disparities. On the e-prescribing front, let me give one specific example. We have found that we can increase generic use rate

by several percent. That alone, for us, pays for e-prescribing, and

that is why we make it available to doctors for free. We have had

an opportunity to sit with Peter Orszag and his colleagues at

CBO——

Senator LINCOLN. Good.

Dr. NUSSBAUM [continuing]. And show him those specific examples. In addition, that did not even get at the patient safety and

the reduced hospitalizations.

Regarding health inequalities, as a Nation, first of all, this is not

acceptable for us to continue to have racial and ethnic health disparities. I mentioned the studies that we have been involved in in

terms of care for women with breast cancer, but it goes vastly beyond that.

For health plans, most of us do not have access to race and ethnicity data. We do certainly at our Medicaid and Medicare programs. But I think the first way to identify and deal with health

disparities is to measure, to recognize, to bring about culturally

sensitive programs that can address the needs of Latino or African

American or Pacific Rim nations, because the very essence of how

those populations respond to health care needs is very different.

But we are not going to address health care quality, I agree with

you, unless we can close this disparity. There are many, many programs that can be tailored, care and disease management, that can

get us there.

Senator LINCOLN. Thank you.

The CHAIRMAN. Thank you, Senator.

I think there is general agreement that we have to move much

more toward quality reporting, and there are a lot of problems. We

talked a little bit about the public/private aspect. I remember you,

Dr. Schoen, mentioned that it is a little bit confusing at your hospital; you have CMS and Medicare, and then you have the private

requirements as well.

So my question is, what does it take for you, Dr. Roper and others who are working on this, to get together here to help force the

issue? In your last statement, Dr. Roper, you said, well, if Congress

wants it, or you implied, that the community needs some direction

27

from Congress. If that is true, what kind of congressional direction

makes the most sense?

I am one who believes in benchmarks, standards, data, and

dates, and all that kind of thing to measure progress and see how

far we are moving along. You mentioned a little bit about the platitudes. I think there are platitudes, but I know people are wrestling

with this and trying to figure out what is best, not moving too

quickly, but the goal here is to move quickly enough.

So what can we in the Congress do generally to help move this

along and get so there is more alignment, get the standards together better, and so forth? Dr. Roper?

Dr. ROPER. If I may begin, sir. Thanks for the question. It is the

right one. My comment about platitudes is not meant to say that

this is easy.

The CHAIRMAN. Right.

Dr. ROPER. It is just, we need some clarity and force behind it,

though.

The CHAIRMAN. Correct.

Dr. ROPER. I would say what you can do, in part, you have already done. In recent time, the Congress has passed legislation authorizing CMS to make a sizeable grant to an organization that

might well look a lot like the National Qualify Forum to fund efforts to set national priorities and goals and to underpin the effort

to have unified measures and so on, so we thank you for that. That

grant has yet to be awarded, and we look forward to working with

CMS to that end.

A second thing you can do is encourage this secretary and this

CMS administrator, and whoever will occupy those jobs in 2009

and beyond, to make this a priority and push us all aggressively.

My day job is running a large integrated academic health care system, and we have to be pushed, otherwise we will find other things

to occupy our time.

The CHAIRMAN. So how do we best push you?

Dr. ROPER. By saying that more than a percentage point or so

of our payments are to be at risk for achieving the national priorities and goals. I would dramatically increase the amount of money

at risk, and that is a signal that is powerful. I know in several of

my comments I come back to the money, but I think that is the

thing that will do it.

On information technology, Senator Lincoln and others talked

about the value of health IT. It is surely a powerful, but largely

unrealized, promise. What I would urge you to do is to push CMS

and HHS to say, providers just have to have an electronic health

care system and to establish a date certain for getting the job done.

If a doctor or hospital cannot get it together by that time, they

should not be allowed to participate in the Medicare program. I realize that by even saying those words, the people behind me are

squirming in their seats. But without that kind of vigorous push

by the folks who are here in Washington and leading the effort, it

is not going to happen on anything like the time table it should.

The CHAIRMAN. I appreciate that.

Other comments? Yes, Mr. Lee?

Mr. LEE. Yes, if I could.

The CHAIRMAN. I will give each of you a chance to respond.

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Mr. LEE. I would largely pile on to Dr. Roper. But the main thing

is, measurement is critical, but money drives the system. We have

a system that rewards quantity, not quality, that rewards error,

not high performance. The steps that have been taken have been

important steps, but we need to increase the percentage that is rewarding better quality and rewarding use of information.

I think the important thing you did with e-prescribing is, it is not

just a matter of having it, but using it. When we think about and

look at payment systems, you need to be, I respectfully suggest,

pushing Medicare to change payments. We need to step back in a

big way and say fee-for-service does not reward the right thing.

So changing the percentage, but also changing and paying for

episodes, paying for medical homes. Those directions are the right

things to be doing, but it needs to be speeded up with rapid-cycle

testing so we are not looking at 15-year demonstrations that we

learn about in 2040; rather, we are putting in place systems in 3

years that are changing payment.

The CHAIRMAN. All right.

Dr. Nussbaum?

Dr. NUSSBAUM. You have heard a lot of performance measurement, Chairman Baucus. We agree on performance measurement.

Two of us sit with Dr. Roper on the National Quality Forum, so I

think we have made great strides in that arena. I think the area

that we need to look at is different payment models for Medicare.

Let me give a very specific example. Today, after you hospitalize

a Medicare beneficiary, you have almost a 20 percent likelihood of

being rehospitalized within 30 days. So think of the devastating

health consequences and the cost of that rehospitalization. Studies

at CMS show that almost half of those Medicare beneficiaries have

had no care in that 30-day interval, no claims. That is an example

where a payment for coordinated care for a chronic illness can

make a difference.

Second, there are two areas in which science has led to accelerating health care costs. This is good cost. It is good cost to have

new biological therapies that save lives or new advanced imaging

techniques, such as PET scans, but they are not used wisely. We

have actual measures that all would agree on on how to use those

therapies. CMS needs to drive a better use and better management

of those very expensive therapies.

Lastly, we can identify gaps in care where care is not of the

standard that we all want to receive. Claims information, as well

as clinical data, can be used to guide the patient, the Medicare beneficiary, to guide doctors to close that gap in care. An innovative

payment model girds all of those, but there needs to be foundational changes in those other three areas to make a difference.

The CHAIRMAN. All right.

Dr. ROPER. Senator, let me rudely add one thing that I neglected

to add that you can do, and I would urge you, please, to do. That

is to appropriate adequate funding to the Federal agency that is responsible for this, the Agency for Health Care Research and Quality. Dr. Carolyn Clancy and her colleagues are doing great work,

but it is way under-funded, and I urge you to do that.

The CHAIRMAN. All right.

29

Anyone else on what Congress can, and should, do to speed this

along?

Dr. SCHOEN. One thing I would state is that there is no way that

you can go from a low level of performance to a high one without

some initial costs that are not going to be long-term. So the fundamental understanding that we have to fund that start-up cost to

get over the hump to better quality, I think, is a piece of what has

to be in the improvement process. That might be in paying people

who have the knowledge or are the experts to go and teach those

who are not.

The CHAIRMAN. All right.

Dr. Weiss?

Dr. WEISS. I just want to echo Dr. Roper’s comment about

AHCRQ as a vehicle within the government that is under-funded

and needs to be helped. But I do not know that I have the wisdom

to understand exactly how much more money is needed.

The CHAIRMAN. And not only money, but what can we do? What

can Congress do to move this along aggressively?

Dr. WEISS. Exactly. So I do not know that more money is going

to answer the quality problem. You have three major, and a number of smaller oversight bodies in the public sector. You have the

Joint Commission, NCQA, and the boards that are not necessarily

fully aligned with each other or with Congress. That does not cost

money to create that alignment. It creates a will. To bring those

to bear in a different and new way may be a nice, new opportunity.

The CHAIRMAN. But basically do you agree with Dr. Roper that

more dollars have to be at risk here, both public and private, with

respect to quality?

Dr. WEISS. I have to say that, from the board’s perspective, we

are not about changing quality for dollars, we are about quality for

quality and professional accountability.

The CHAIRMAN. But you need dollars to make it happen.

Dr. WEISS. I am reminded of what my colleague and friend, Dr.

Don Berwick says. The U.S. is the only system that has the most

expensive health care, that is 5 times as expensive as the most expensive health care. I hope it is Dr. Berwick, and that I got it right

there. We have a very expensive health care system. I do not know

how much more money it is going to take to make it better. I actually think it takes professional accountability and more oversight

that will help, in a positive way, to bring us forward in addition

to the other things going on.

The CHAIRMAN. The theory is, it will bring down costs in other

areas.

Dr. WEISS. It will, at minimum, help slow the costs and reduce

the unnecessary work going on.

The CHAIRMAN. All right.

I have to leave here. I will turn the gavel over to Senator Lincoln. Senator Wyden is next, but Senator Lincoln, you are in charge

here.

Senator LINCOLN. Thank you, Mr. Chairman. Be careful what

you wish for. [Laughter.]

Senator WYDEN. Thank you to all my chairmen.

Dr. Nussbaum, I have come to the conclusion that the private insurance model as it is set up today does not do enough to promote

30

quality and value. Now, some people say, well, that is an argument

for getting rid of private insurance. I do not buy that idea either.

So, 16 of us in the Senate, with the Healthy Americans Act, have

been looking at a very different private insurance model so that,

in effect, companies would have to take all comers and that there

would be a new focus on competition based on quality, price, and

benefits.

But, for purposes of my question now, I want to get a sense

about whether you agree with part of what concerns me. Today, if

you are a private insurance company and you want to do a terrific

job, for example, say, in treating chronic disease or diabetes, and

you go out and market, for example, we want all those folks to

come to us, what will happen is, you will get a whole lot of sick

people. Even if you are very good at treating them, your costs will

go up. The healthy people will get angry and they will say, gosh,

we are not sticking around here, we are going to somebody else

who is better at shedding risk and not doing so much of this goodquality stuff in terms of treating people who are sick.

Do you share some of that concern in terms of the way the model

is set up today?

Dr. NUSSBAUM. Senator Wyden, you are asking such an important question. Let me respond to key elements of it. First of all, I

applaud your bipartisan efforts to transform much of health care.

Look where you have focused that is so positive: delivery system

reform, disease management, preventive care, the medical home.

Those are all elements that we can all embrace.

Where we have a foundational issue, is that 155 million Americans today have their health care through the insurance model,

and I think that is a strong foundation. The issue that you speak

to, though, is very real. In our own company, 1 percent of our members drives 28 percent of all costs; 5 percent drives 54 percent. So,

health care costs are highly concentrated, and those individuals

have significant medical needs and chronic illnesses.

We have a commitment to maintaining the health of the members, 50 percent of our members, of our insured, who use very few

health care resources, so we are driven, we are motivated to promote preventive services. And, for the very same reasons of making

people’s outcomes of care better, we invest mightily in disease management programs. I had the privilege to be president of the Disease Management Association several years ago and believe deeply

in those programs to both improve health outcomes and contain

cost for those with chronic illness. An insurance company like ours

is motivated to do both.

The risk, of course, that you speak about is, what do you do for

people in the individual market? If you are in an employer-based

system, we and our insurance peers take everyone. So, if you work

for General Motors, whether you have complex illnesses or not, we

take care of you and manage health needs.

But in the individual market, the issue that you are addressing

is that of, how do you then cover someone who already has a preexisting condition? That is one that we need to figure out—how to

bring those people into coverage, whether it is high-risk pools that

certain States have, or actually insurance companies being rewarded for improving the outcomes and the cost of care that——

31

Senator WYDEN. The point, though, with respect to my question

is, you are suggesting, gosh, if you are in an employer-based system, everything is pretty much all right. What we are seeing is, for

example, most people in the employer-based system do not even

have a choice. Most people are not like members of Congress; Senator Lincoln and I have loads of choices. So that is one of the

things we do in the Healthy Americans Act, is we make sure that

everybody has a whole array of private choices. They can choose

WellPoint, they can choose Kaiser, whatever.

So I am going to want to have your thoughts further with respect

to the model because, under our legislation, 250 million people are

going to be getting coverage in the private sector, basically everybody other than those on Medicare or in the military. So this is an

opportunity for the private sector to both do good and do well.

But I think there are going to have to be some changes in this

model because, as I look at that model today, if you do gangbusters

work—and I commend you, because you have taken on a variety

of these quality initiatives—at some point the healthy people are

going to get pretty unhappy because their costs are going to go up,

and that is going to have to be dealt with.

Dr. NUSSBAUM. Senator Wyden, if I may add one comment—and

I would be delighted to carry on this dialogue. But what is interesting is, we have worked with employer groups—and Peter Lee

can speak to this even better—and we are finding that working on

workplace wellness, health improvement activities, is really making a difference. I think that is a model for the new insurance vision, the new health benefits vision of the future. It is actually to

be on-site as we are, with wellness and health programs that can

take advantage of the employer model that we are speaking about.

Senator WYDEN. We think all of that is very valid, and that is

one of the reasons why not only do we keep the current parts of

tax law that reward employers for prevention and wellness, we actually expand on them because we say, for example, that the employees who enroll kids in anti-obesity programs, they would get rewarded. It still leaves us, however, with this question of a model

that at some point, based under today’s system, puts a lot more

emphasis on shedding risk than it does on promoting quality.

I think, Dr. Weiss, I am going to see if you would like to add

something.

Dr. WEISS. I am in agreement, in principle, with you. I have to

say though, again, from the perspective of, how do we make a

change to make it make sense, that we have to look for where

there is excess use in the system, unnecessary misadventures within health care. So we have to look both at the financing mechanism, but also at the quality. There are dollars to be saved if we

start to drill down on this accountability, this professional accountability agenda.

Senator WYDEN. No question about it.

Chair Lincoln, thank you.

Senator LINCOLN. Thank you.

Well, I have just a few more questions myself, so I hope you all

will be patient. But we do appreciate both your professional view

in terms of how we deal with the system, but also as clinicians—

at least four of you, and certainly Mr. Lee from his background—

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so we appreciate it and hope that we will be able to call on you

in the future. We are all very proud that Chairman Baucus and

Senator Grassley have made this a real priority for us, certainly in

the first 18 months of the next session, to really focus in on how

it is that we put our health care services and our health care delivery systems on the right track in this country.

So just to touch on a few things. Dr. Weiss, we have talked a little bit about paying for quality initiatives. I know Senator Snowe

brought up process measures like aspirin and beta-blockers and

what have you. I guess, when it comes to developing quality measures based on outcome, however, in an effort to reduce hospital readmissions, reduce hospital payment rates, not paying all when a

patient is to return, things get a little bit trickier. I am married

to a physician who has both been in research and academia, as well

as a clinician.

I also know, myself, that when the physician says to me, maybe

you ought to get a little more exercise or push away from the table,

or whatever, some of the things that we get told, not just those

common-sense type things, but you need to take this medicine 3

times a day, you need to get into a therapy program, you need to

do a lot of other things. There are a lot of physicians who are

alarmed about pay-for-performance initiatives when they factor in

that patient compliance. So how do we take into account that many

patients, especially in the Medicare population, with multiple

chronic conditions, which we have talked about at one time—we

may measure process or outcome for one condition in general, but

how do we take into account all of those types of things?

Dr. WEISS. Well, I think that we have to move towards outcome

measurement, and I think many of my colleagues, if not all of them

at the table, would agree that that is the direction we have to rapidly go to. It is not going to be an easy journey for the chronic conditions where so much of it is a balance between medications and

diagnostic and therapeutic ways that are imperfect, so you are not

going to get the perfect outcome for every patient, and so how do

you deal with that? I think that a good starting place that is understated is on the surgical side. My surgical colleagues and the surgical boards are very focused on saying we need to assess surgical

outcomes and find ways to do that as part of board evaluation.

The difficulty is, we do not have the IT structure to help support

that, so this is where working with any efforts that Congress can

have to advance IT so that we can extract out what happens at the

end of a surgical procedure and then carry that forward 30, 60 days

and see what kind of complications, that is probably the easiest—

and it is not an easy place, but probably the easiest—place to start

to get a whole robust set of outcome measurements that have

meaning to the public.

Senator LINCOLN. So I am assuming you are suggesting that, as

opposed to what MedPAC put forward, which was reducing hospital

reimbursement rates for hospital readmissions and some of the

other more——

Dr. WEISS. From the board’s perspective, it is not about the payment side, it is about the quality/safety side. So, it is about the outcomes. It is about what happens to a patient at 30, 60, 90 days,

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6 months, a year into post-surgical care. It is about a 12-month

cycle of——

Senator LINCOLN. Which goes back to what Dr. Nussbaum was

saying, which is, we could get greater savings for minimal expenditures in terms of covering those patients after they leave the hospital, whether it is through home health, telecommuting-type monitoring, and other things like that where we get a bigger bang for

our buck and probably save dollars in the long run, particularly

with minimizing readmissions.

Dr. WEISS. Absolutely.

Senator LINCOLN. Dr. Roper, when it comes to quality measures

and public reporting, we all know the devil is kind of out there in

those details. The medical processes, procedures, administrations

are extremely complex. I guess I know, having toured so many of

my hospitals and talked to other medical providers, hopefully you

can give us, maybe, some examples from your experience of some

of the challenges or what we have learned not to do as we develop

and reform quality measures and reporting initiatives? Is there any

one specific example that comes to mind? Maybe you have already

mentioned it and I missed it.

Dr. ROPER. Thank you, ma’am. The one thing I would say is, it

is important that the measures begin with health professionals who

have deep knowledge of the condition or issue that is being measured, and then that the measure be tested and vetted by all the

various parties at interest in a consensus fashion so that we have

a single measure that everybody can agree on that is then used for

the multiple purposes that we have been talking about.

The opposite of that, if I could just make my point in contrast,

would be for some folks who do not know anything about clinical

medicine to try to come up with the measures. Or another thing

not to do is to have competing measures developed by wellintentioned people, but who are——

Senator LINCOLN. Right. And you have said that before. I guess

what I was hoping you would say is that you cannot put that information out there in a vacuum if you have, particularly individuals

and patients, who have multiple chronic issues.

Dr. ROPER. Right.

Senator LINCOLN. I mean, measuring the quality of one practice

on one condition or one chronic disease without putting it in the

arena of all of the other chronic diseases that are—I mean, just

from my own personal experience with my father, who had the

onset of Alzheimer’s quite at an early age, it was a long journey

we traveled.

But as he aged with different chronic diseases, until we were

able to get to the Center on Aging where we had one professional

who was kind of managing all of those chronic diseases, we were

not getting the results or the quality out of the treatment for one

specific one because we then would end up with another problem

and it would exacerbate the problem we had tried to fix.

Dr. ROPER. Sure. You raise a whole bunch of very important

issues, and I can just respond. It is very important that quality

measures be appropriately adjusted for co-morbidities, that is,

other illnesses that a person might have, and that we do severity

adjustment so that we are truly comparing appropriately. AdditionVerDate 11-MAY-2000 14:32 Oct 08, 2010 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 58445.000 TIMD PsN: TIMD
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ally, your question makes the point that we need multidisciplinary

care that is brought together in an integrated fashion for caring for

people across a continuum of time and settings, particularly folks

with chronic illnesses.

Senator LINCOLN. Well, I have three last questions I would like

to just get out, and, if you want to answer them, that is great. I

am the last one here.

Mr. Lee, this may be something you might be able to respond to.

What are other countries’ approaches? Are we looking at those? Are

we using information that other countries are gaining from their

types of approaches to quality measures and other things like that?

Dr. Nussbaum, you mentioned, when discussing with Senator

Wyden, about information and how important information is to patients, having those choices, having that information and choices.

I do not disagree with that, but I think we also have to take into

consideration, after going through the new Part D with Medicare—

I represent a State that ranks 48th in the country in terms of income, which means I have a disproportionate share of low-income

seniors who are disproportionately in rural areas, which means

they are harder to serve.

When the answer came to them, go to the Internet for information or call an 800 number, it was useless. It is the same thing

with hospice, for instance. Until the hospice representative comes

to your home, you do not realize, and information that is presented

to you does not really give you the value and the quality that

comes from that service as opposed to the person.

That is when it does go to money, unfortunately, because to have

enough people who can really translate what the care and the quality of the care is when you bring those different services to bear,

is really important when you are dealing with a population that

does not use the Internet, that is intimidated by a 35-, 45-minute

wait on an 800 number, and who may not be able to interpret the

information when you give it to them over the phone or over the

computer screen.

And then the last thing is, which nobody else brought up, does

malpractice play a role in any of the types of over-use? I mean, we

have a lot of great technology out there. Does it play any role at

all? So, those are my last three questions.

Dr. SCHOEN. As a practicing physician, I am faced every day with

patients who want tests that I believe are unnecessary. They want

levels of care that are known to be unsuccessful. As a primary care

physician, if that is my patient, I am able to have a conversation

and come to an outcome that I think is appropriate. If it is not my

patient, if they are interfacing with another physician or going to

an urgent care or an emergency room, there is not that relationship

and the trust that the information they are getting is helpful to

them.

So, yes, I believe a lot of physicians do order things that they believe are not going to really change the outcome of the patients’

care, but out of some relative fear of what the patient might do if

they happen to be that exception. So, I do think that plays a role.

As far as the information piece, I think it is a huge responsibility

to provide that information. Right now, we get paid for patients

who come to our clinic, who come to our emergency room, who get

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hospitalized. We need to figure out ways of paying for care that

goes beyond that, that pays for patient management, case management, those types of things so we can get that information out to

people.

Senator LINCOLN. Right. You mentioned that earlier.

Mr. LEE. If I could, Senator. To your question about international

comparisons, I think we do have a lot to learn from other countries.

We had better learn from them, given how relatively little they are

spending for better outcomes. I will give you two examples. One,

first in the area of measurement, which we have talked a lot about,

is England, Germany, France all have institutes that are looking

at comparative effectiveness.

It is an area that we are looking at in this country. We do not

have one place to look to as a Nation to see which devices, drugs,

treatments make more sense, are more effective, and then can use

that in terms of payment design, et cetera. It is called NICE in

England, but Germany and France have them as well.

But also on measurement, I think your questions about measurement really go to this issue. England is measuring patient-reported

outcomes, functional status. After you have a cataract procedure,

can you see better? That is an example of measuring recently that

is part of PQRI, but those are the sorts of measures that patients

will respond to. So I think we have a lot to learn in looking at functional status: hip surgery, can you walk better in 6 months, in a

year? We heard some of the notes about those.

So there are lessons to be learned about measurement, though in

many ways we are out front on some of those elements. But there

are also lessons learned around payment. I think that we see that,

in most of the European countries, there is a lot more focus on payment and reward for primary care.

France has instituted, in the last 2 years, in essence what I

would call a medical home payment system. For everyone in

France who has what they call ‘‘ailment of long duration’’—we call

it a ‘‘chronic illness’’—they actually have a medical home where

their primary care doctor has a payment to do management, as

well as fee-for-service compensation above that. I think we have a

lot to learn to make sure that we are having care coordination done

right, rewarding primary care, and rewarding integration. We are

seeing that being done in France, Germany, and England.

Senator LINCOLN. Thanks.

Dr. NUSSBAUM. Just to add to Peter Lee’s comments, the United

Kingdom has really transformed its National Health Service to put

much more focus on quality improvement and care coordination by

its primary care doctor so, in addition to the National Institute for

Clinical Excellence, NICE, that looks at comparative effectiveness,

we can look at those models of care.

To your second point, and your very compelling statement that

seniors living in rural areas without the sophisticated clinical

knowledge or tools to explore the Internet, I think this is about

both human and humane engagement. For example, at our company we have 4,000 health professionals, largely nurses, many of

them who serve as care advocates.

They are care advocates for seniors and others who really need

guidance for their health care needs, who work with their doctors,

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who can take the time, even though much of it is telephonic, to

translate better outcomes of care and identify resources in the community. It is not only acceptable to have these services available

telephonically, it is really, for senior populations, for Medicaid populations, about feet on the street. It is about much of rural health

care focusing on community services and clinics and other resources that can complement that of the physician health professional.

Senator LINCOLN. And I do not disagree with you, because I have

sat there with them, those advanced practice nurses, who were

watching screens of maybe 30 or 40 individuals who had been either released from the hospital after a bout with one of their chronic diseases, and they watch their vitals and they call them: Ms.

Smith, your blood pressure is up, or whatever. It is enormously engaging and very helpful and it gets at that problem of having to

come in, or go back to the hospital, or whatever.

But the problem is, we are not training enough people to put out

there for those types of things. That is the other kind of unfortunate part of it. We kind of all have to walk and chew gum up here.

We cannot just look to you all for the solutions, but we are going

to also have to be incentivizing the training of these types of people

to be able to implement it.

Dr. WEISS. So I think that there is very clear message from the

international environment. There was a nice paper written recently

and published in The Annals of Internal Medicine, reminding us

that the countries that are seemingly doing much better in outcomes have a clearer and stronger primary care infrastructure. It

is a workforce issue, it is a payment issue, and it supersedes the

quality issue by itself by a long shot.

Senator LINCOLN. But it is troubling because we use ‘‘primary

care’’ as the terminology, whereas, I think people identify more

with ‘‘medical home’’ because it is a home where you go, and then

that home sends you to the more specialized care, as opposed to

primary care, people think, well, I can only go to him if I have a

cold or if I have a minor illness. I have to go somewhere else for

more serious issues. Maybe it is in our terminology. That is something we need to look at, so that people better understand what the

emphasis is on.

Dr. ROPER. The only thing I can add is to say thank you for your

careful and nuanced questions, and those of the rest of the committee. This hearing today is important. The fact that quality is

now beginning to be seen as one of the three legs of the stool, so

to speak, and not just an after-thought that occasionally we give

platitudes to, is very heartening. I urge you to keep pushing us.

Senator LINCOLN. Oh, we will. We promise you that. But thank

you so much for being here and for sharing with us. I hope you

know that we will be calling.

I always stay until the last, because 5 minutes is never enough

for me. So, thank you all.

The committee is adjourned.

[Whereupon, at 11:58 a.m., the hearing was concluded.]

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