2. Productivity and Quality

This page contains additional references for Chapter 2 of Responding to Healthcare Reform: A Strategy Guide for Heatlhcare Leaders.  The most current additions are at the top of the page.  It also includes the annotated references from the book and their associated hyperlinks.

Current References

Shortell, Stephen M.; Rundall, Thomas G.; Hsu, John.  “Improving Patient Care by Linking Evidence-Based Medicine and Evidence-Based Management.” JAMA. ;, 2007, 298, 6, 673-676

Introduction: Not until about 100 years ago could a typical patient expect to benefit from the medical care provided by a typical physician. Today most patients benefit from medical care, but all patients could benefit more if clinicians routinely provided care consistent with the latest scientific knowledge. One report suggests that only 55% of US adults receive care consistent with current recommendations:  1 In 2001, the Institute of Medicine concluded that a chasm lies “between the healthcare we have and the healthcare we should have:  2.  Moreover, the results of efforts to improve medical quality have been modest and uneven to date.

Auerbach,A. ; Bertko,J.; Brownlee,S.; Casalino,L.P. et. al “Toward a 21st-century health care system: recommendations for health care reform.”  Ann.Intern.Med., 2009, 150, 7, 493-495,

Abstract: The coverage, cost, and quality problems of the U.S. health care system are evident. Sustainable health care reform must go beyond financing expanded access to care to substantially changing the organization and delivery of care. The FRESH-Thinking Project (www.fresh-thinking.org) held a series of workshops during which physicians, health policy experts, health insurance executives, business leaders, hospital administrators, economists, and others who represent diverse perspectives came together. This group agreed that the following 8 recommendations are fundamental to successful reform: 1. Replace the current fee-for-service payment system with a payment system that encourages and rewards innovation in the efficient delivery of quality care. The new payment system should invest in the development of outcome measures to guide payment. 2. Establish a securely funded, independent agency to sponsor and evaluate research on the comparative effectiveness of drugs, devices, and other medical interventions. 3. Simplify and rationalize federal and state laws and regulations to facilitate organizational innovation, support care coordination, and streamline financial and administrative functions. 4. Develop a health information technology infrastructure with national standards of interoperability to promote data exchange. 5. Create a national health database with the participation of all payers, delivery systems, and others who own health care data. Agree on methods to make de-identified information from this database on clinical interventions, patient outcomes, and costs available to researchers. 6. Identify revenue sources, including a cap on the tax exclusion of employer-based health insurance, to subsidize health care coverage with the goal of insuring all Americans. 7. Create state or regional insurance exchanges to pool risk, so that Americans without access to employer-based or other group insurance could obtain a standard benefits package through these exchanges. Employers should also be allowed to participate in these exchanges for their employees’ coverage. 8. Create a health coverage board with broad stakeholder representation to determine and periodically update the affordable standard benefit package available through state or regional insurance exchanges.

Asplin,Brent R. “Value-Based Purchasing and Hospital Admissions: Doing the Right Thing Isn’t Easy Annals.Emerg.Medicine., 2010, 56, 3, 258-260

Intro: David Walker is the former Comptroller General of the United States and head of the Government Accountability Office. He knows numbers. His recent description of the long-term fiscal health of the federal government reads like a terminal diagnosis.1 Walker is particularly concerned about long-term structural deficits in the federal budget—the underfunded promises of entitlement programs such as Social Security and Medicare. Much has been said about the financial problems of Social Security. Under current law, the Social Security program is underfunded by $7.7 trillion, which is a daunting number, considering the federal debt is already more than $13.1 trillion.2 Unfortunately, Social Security is in great fiscal shape compared with Medicare. The current Medicare program is underfunded by a mind-boggling $38 trillion during the coming decades.1 That’s $38 trillion of unfunded promises in a program that is widely criticized by providers for failing to cover the cost of care.

Bodenheimer,Thomas; West,David.  “Low-Cost Lessons from Grand Junction, Colorado.”  N.Engl.J.Med., 2010, 363, 15, 1391-1393

Intro: In August 2009, President Barack Obama traveled to Grand Junction, Colorado, touting that community’s health care system as a model for the provision of low-cost, high-quality care. According to the Dartmouth Atlas of Health Care, average per capita Medicare spending in Grand Junction was $6,599 in 2007 — 24% lower than the national average and 60% below high-cost Miami. In 2005, Grand Junction had only 60% as many coronary-artery bypass surgeries in its Medicare population as the national average, 55% as many inpatient coronary angiography procedures, and 61% as many inpatient days during the last 2 years of life. Moreover, Grand Junction scored above the national average on a number of measurements of preventive care, diabetes, asthma, and other quality metrics.

Cortese,Denis A.; Korsmo,Jeffrey O. “Putting U.S. Health Care on the Right Track.” N.Engl.J.Med., 2009, 361, 14, 1326-1327

Intro: Americans do not consistently receive high-value health care. Collectively, our country spends more on health care than any other nation, but our people do not receive the best outcomes, safety, service, or access in return. Although some organizations, regions, and states deliver high-quality, affordable care, many do not. It’s time to make high-value health care the norm in the United States. To reach that goal, we must hold physicians and other providers accountable for providing high-value health care, defined in terms of both quality and cost: value=quality÷cost. In this equation, quality includes clinical outcomes, safety, and patient-reported satisfaction, and cost encompasses the cost of care over time. Outcomes for hospital care, procedures, and chronic conditions can be assessed with the use of such measures as hospital admissions, emergency department visits, unplanned readmissions, death rates, postoperative complications, missed days of school or work, measures of organ function, and scores on general health surveys. Safety can be evaluated by means of such measures as central-line infection rates, medication errors, and postoperative complications. And patient satisfaction can be quantified with tools like those used by the National Research Corporation’s Healthcare Market Guide. Performance data are available from such respected sources as the Agency for Healthcare Research and Quality, the National Quality Forum, the Leapfrog Group, the AQA Alliance, the University HealthSystem Consortium, the Medicare Provider Analysis and Review File, and the Commonwealth Fund. Regional Medicare spending data from the Centers for Medicare and Medicaid Services (CMS) or from the Dartmouth Atlas of Health Care could provide the equation’s denominator.

Cutler,David. “How Health Care Reform Must Bend The Cost Curve.”  Health Affairs., 2010, 29, 6, 1131-1135

Abstract: The true measure of health care reform’s success is whether it drives down medical costs over the long term. The Patient Protection and Affordable Care Act has several features designed to modernize the delivery of services and thus ensure a more efficient, more effective, and less expensive health care system. These features include bundling medical services into larger payment groups, using value-based purchasing, and improving care coordination. These changes could spark a productivity revolution in health care that would make it much more affordable and simultaneously increase the quality of care. The success of these efforts at controlling long-run cost growth will require activism from the government and the private sector.

Guterman, Stuart; Davis, Karen; Schoenbaum, Stephen; Shih, Anthony.  “Using Medicare Payment Policy To Transform The Health System: A Framework For Improving Performance.”  Health Affairs (Published online), 2009, 28, no. 2, 238-250

Abstract: As the largest payer for health services in the United States, Medicare has the potential to use its payment policies to stimulate change in the organization of care to improve quality and mitigate cost growth. This paper proposes a framework in which Medicare would offer an array of new bundled payment options for physician group practices, hospitals, and delivery systems, with incentives to encourage greater integration in the organization of health care delivery and the provision of more coordinated care to beneficiaries. These changes could also serve as a model for other payers to improve quality and efficiency throughout the health system.

Haywood,T. “The cost of confusion: healthcare reform and value-based purchasing.” Healthcare Financial .Management, 2010, 64, 10, 44-48,

Abstract: Title III of the Affordable Care Act presents two types of opportunities: those whose outcomes pose some uncertainties and those whose outcomes are well known. Accountable care organizations (ACOs) represent an uncertain opportunity, and although they may prove to be a worthwhile pursuit, focus on ACOs should generally not take precedence over more pressing concerns, such as impending loss of Medicare revenue. Value-based purchasing represents an opportunity that, if missed, would likely result in a revenue loss.

Holmboe,Eric S. ; Arnold,Gerald K.; Weng,Weifeng; Lipner,Rebecca. ” Current Yardsticks May Be Inadequate For Measuring Quality Improvements From The Medical Home.”  Health Affairs., 2010, 29, 5, 859-866

Abstract: Health reform legislation grants authority for patient-centered medical home pilot projects to test changes in the way primary care is provided. There is concern that using a measurement tool to qualify medical homes that is solely based on the presence or absence of “system elements” may miss the point conceptually and lead physicians astray in attempts to transform their entire practices. To find out whether and how practice characteristics explain health care quality, we examined risk-adjusted composite measures of quality for common chronic and acute care conditions and preventive care from 202 general internists working primarily in small primary care office settings. We found that current conceptions and measures of what constitutes “successful” practice systems and care are incomplete, and have limited associations with measures of health care quality. Future research should explore more fully the issues around physician competence, including competence in systems and quality improvement; the interactive nature of clinical practice; and other important system elements not captured by current tools.

Luft,H.S.”Economic incentives to promote innovation in healthcare delivery.”  Clin.Orthop.Relat.Res., 2009, 467, 10, 2497-2505,

Abstract: Economics influences how medical care is delivered, organized, and progresses. Fee-for-service payment encourages delivery of services. Fee-for-individual-service, however, offers no incentives for clinicians to efficiently organize the care their patients need. Global capitation provides such incentives; it works well in highly integrated practices but not for independent practitioners. The failures of utilization management in the 1990s demonstrated the need for a third alternative to better align incentives, such as bundling payment for an episode of care. Building on Medicare’s approach to hospital payment, one can define expanded diagnosis-related groups that include all hospital, physician, and other costs during the stay and appropriate preadmission and postdischarge periods. Physicians and hospitals voluntarily forming a new entity (a care delivery team) would receive such bundled payments along with complete flexibility in allocating the funds. Modifications to gainsharing and antikickback rules, as well as reforms to malpractice liability laws, will facilitate the functioning of the care delivery teams. The implicit financial incentives encourage efficient care for the patient; the episode focus will facilitate measuring patient outcomes. Payment can be based on the resources used by those care delivery teams achieving superior outcomes, thereby fostering innovation improving outcomes and reducing waste.

McClellan,Mark; McKethan,Aaron N.; Lewis,Julie L.; Roski,Joachim; Fisher,Elliott S. “A National Strategy To Put Accountable Care Into Practice.” Health Affairs., 2010, 29, 5, 982-990

Abstract: The concept of accountable care organizations (ACOs) has been set forth in recently enacted national health reform legislation as a strategy to address current shortcomings in the U.S. health care system. This paper focuses on implementation issues related to these organizations, building on some initial examples. We seek to clarify definitions and key principles, provide an update on implementation in the context of other reforms, and address emerging issues that will affect the organizations’ success. Finally, building on the initial experience of several organizations that are implementing accountable care and complementary reforms, we propose a national strategy to identify and expand successful approaches to accountable care implementation.

Paulus, Ronald A.; Davis, Karen; Steele, Glenn D.  “Continuous Innovation In Health Care: Implications Of The Geisinger Experience.”  Health Affairs, 2008, 27, no. 5, 1235-1245

Abstract: To achieve the diverse health care goals of the United States, health care value must increase. The capacity to create value through innovation is facilitated by an integrated delivery system focused on creating value, measuring innovation returns, and receiving market rewards. This paper describes the Geisinger Health System’s innovation strategy for care model redesign. Geisinger’s clinical leadership, dedicated innovation team, electronic health information systems, and financial incentive alignment each contribute to its innovation record. Although Geisinger’s characteristics raise serious questions about broad applicability to nonintegrated health care organizations, its experience can provide useful insights for health system reform.

Porter,Michael E. “A Strategy for Health Care Reform — Toward a Value-Based System.”  N.Engl.J.Med., 2009, 361, 2, 109-112

Intro: Despite many waves of debate and piecemeal reforms, the U.S. health care system remains largely the same as it was decades ago. We have seen no convincing approach to changing the unsustainable trajectory of the system, much less to offsetting the rising costs of an aging population and new medical advances. Today there is a new openness to changing a system that all agree is broken. What we need now is a clear national strategy that sets forth a comprehensive vision for the kind of health care system we want to achieve and a path for getting there. The central focus must be on increasing value for patients — the health outcomes achieved per dollar spent.1 Good outcomes that are achieved efficiently are the goal, not the false “savings” from cost shifting and restricted services. Indeed, the only way to truly contain costs in health care is to improve outcomes: in a value-based system, achieving and maintaining good health is inherently less costly than dealing with poor health.

Rosenthal, Meredith B., PhD ; Landon, Bruce E., MD et. al “Employers’ Use of Value-Based Purchasing Strategies.”  JAMA, 2007, 298, 19, 2281-2288

Abstract: CONTEXT: Value-based purchasing by employers has often been portrayed as the lynchpin to quality improvement in a market-based health care system. Although a small group of the largest national employers has been actively engaged in promoting quality measurement, reporting, and pay for performance, it is unknown whether these ideas have significantly permeated employer-sponsored health benefit purchasing. OBJECTIVE: To provide systematic descriptions and analyses of value-based purchasing and related efforts to improve quality of care by health care purchasers. DESIGN, SETTING, AND PARTICIPANTS: We conducted telephone interviews with executives at 609 of the largest employers across 41 US markets between July 2005 and March 2006. The 41 randomly selected markets have at least 100,000 persons enrolled in health maintenance organizations, include approximately 91% of individuals enrolled in health maintenance organizations nationally, and represent roughly 78% of the US metropolitan population. Using the Dun & Bradstreet database of US employers, we identified the 26 largest firms in each market. Firms ranged in size from 60 to 250,000 employees. MAIN OUTCOME MEASURE: The degree to which value-based purchasing and related strategies are reported being used by employers. Percentages were weighted by number of employees. RESULTS: Of 1041 companies contacted, 609 employer representatives completed the survey (response rate, 64%). A large percentage of surveyed executives reported that they examine health plan quality data (269 respondents; 65% [95% confidence interval {CI}, 57%-74%]; P<.001), but few reported using it for performance rewards (49 respondents; 17% [95% CI, 7%-27%]; P=.008) or to influence employees (71 respondents; 23% [95% CI, 13%-33%]). Physician quality information is even less commonly examined (71 respondents; 16% [95% CI, 9%-23%]) or used by employers to reward performance (8 respondents; 2% [95% CI, 0%-3%]) or influence employee choice of providers (34 respondents; 8% [95% CI, 3%-12%]). CONCLUSION: Surveyed employers as a whole do not appear to be individually implementing incentives and programs in line with value-based purchasing ideals.

Shortell, Stephen M. ; Rundall, Thomas G. ; Hsu, John. “Improving Patient Care by Linking Evidence-Based Medicine and Evidence-Based Management.” JAMA. ;, 2007, 298, 6, 673-676
Intro: Not unitl about 100 years ago could a typical patient expect to benefit from the medical care provided by a typical physician. Today most patients benefit from medical care, but all patients could benefit more if clinicians routinely provided care consistent with the latest scientific knowledge. One report suggests that only 55% of US adults receive care consistent with current recommendations.1 In 2001, the Institute of Medicine concluded that a chasm lies “between the healthcare we have and the healthcare we should have.”2 Moreover, the results of efforts to improve medical quality have been modest and uneven to date.3

Two components are necessary to improve the quality of medical care: advances in evidence-based medicine (EBM), which identify the clinical practices leading to better care, ie, the content of providing care,4 and knowledge of how to put this content into routine practice. These advances in evidence-based management (EBMgt) identify the organizational strategies, structures, and change management practices that enable physicians and other health care professionals to provide evidence-based care, ie, the context of providing care.5 Until both components are in place— identifying the best content (ie, EBM) and applying it within effective organizational contexts (ie, EBMgt)—consistent, sustainable improvement in the quality

Tompkins, Christopher P.; Higgins, Aparna R.; Ritter, Grant. A.  “Measuring Outcomes And Efficiency In Medicare Value-Based Purchasing.” Health Affairs (Published online), 2009, 28, no. 2, w251-w261

Abstract: The Medicare program may soon adopt value-based purchasing (VBP), in which hospitals could receive incentives that are conditional on meeting specified performance objectives. The authors advocate for a market-oriented framework and direct measures of system-level value that are focused on better outcomes and lower total cost of care. They present a multidimensional framework for measuring outcomes of care and a method to adjust incentive payments based on efficiency. Incremental reforms based on VBP could provoke transformational changes in total patient care by linking payments to value related to the whole patient experience, recognizing shared accountability among providers.

Annotated References from Responding to Reform

Caldwell, C., T. Faulker, and K. Stuenkel. 2010. “Aggressive Cost Reduction: Taking Lean to the Next Level.” Presentation at the 2010 Congress on Healthcare Leadership, March 24. 
One of the primary tools for productivity improvement is “Lean Six Sigma.”  The presentation by Caldwell and colleagues showed impressive results.  The Floyd Medical Center in Northwest Georgia saved $7,599,508 in annual operating costs through the execution of over 650 lean projects in two-and-a-half years. Mr. Caldwell indicated that in his experience as a consultant, savings accrue from reducing these areas of waste.

Waste Type Improvement Impact
Staffing not matched to demand 41%
Over inventory/supplies 20%
Materials and information movement 15%
Redundancy /Overprocessing 10%
Overcorrection/Inspection 6%
Motion 5%
Waiting 1%
Total 100%


Centers for Medicare & Medicaid Services (CMS). 2011. “Educational Resources.” [Online information; retrieved 1/3/11.] https://www.cms.gov/PQRI/30_EducationalResources.asp
CMS provides a both overviews and educational resources for the Physician Quality Reporting System. Eligible professionals are encouraged to contact their professional organizations for additional information and tools that will facilitate participation in the Physician Quality Reporting System. 

 Dartmouth Atlas. 2007. “Preference Sensitive Care.” A Dartmouth Atlas Project Topic Brief. [Online report; published 1/15/07.] www.dartmouthatlas.org/downloads/reports/preference_sensitive.pdf 
Researchers at Dartmouth University have done extensive research in the geographic variation in the provision of “preference sensitive care.”  They state:

Preference-sensitive care comprises treatments that involve significant tradeoffs affecting the patient’s quality and/or length of life. Decisions about these interventions—whether to have them or not, which ones to have—ought to reflect patients’ personal values and preferences, and ought to be made only after patients have enough information to make an informed choice. Sometimes, as with the options for treating early stage breast cancer, the scientific evidence on the main outcome—survival—is quite good; other times, as with treatment options following prostate cancer, the evidence is much weaker.

[Institute of Medicine (IOM). 2001. Crossing the Quality Chasm: A New Health System for the 21st Century. Washington, DC: National Academies Press.
The Institute of Medicine first addressed these issues in Crossing the Quality Chasm.  The premise of this landmark study is that there is a chasm between what we know is good medical practice and the way medicine is actually practiced in the United States:

McLaughlin, D., and J. Hays. 2008. Healthcare Operations Management. Chicago: Health Administration Press.
Healthcare Operations Management provides an in depth examination of contemporary business tools that can be used to improve quality and productivity.

Quality Net. 2011. “Surgical Care Improvement Project.” [Online information; retrieved 1/3/11.] www.qualitynet.org/dcs/ContentServer?c=MQParents&pagename=Medqic%2FContent%2FParentShellTemplate&cid=1137346750659&parentName=TopicCat
The Surgical Care Improvement Project (SCIP) is a national quality partnership of organizations focused on improving surgical care by significantly reducing surgical complications. The goal of this unique partnership is to reduce the incidence of surgical complications nationally by 25 percent by the year 2010. 

US Department of Health and Human Services. 2011. “HHS Action Plan to Prevent Healthcare Associated Infections: Incentives and Oversight.” [Online information; retrieved 1/3/11.] http://www.hhs.gov/ash/initiatives/hai/incentives.html
The Centers for Medicare and Medicaid Services (CMS) has a variety of tools to encourage the prevention of healthcare-associated infections (HAIs). These tools include regulatory oversight, financial incentives, transparency and associated incentives, or some combination of these. Within each of these broad categories are a number of initiatives to combat HAIs, and DHHS website describes the various ways these tools and initiatives support efforts to prevent infections. 

Wennberg, D., D. Berkson, and B. Rider. 2008. “Addressing Overuse, Underuse and Misuse of Care.” Healthcare Executive 23 (4): 8.
This article reports on the survey by the Dartmouth Institute for Health Policy and Clinical Practice which shows that geography plays a significant role in determining the quality, quantity, and cost of healthcare in the United States. The survey provides the factors that affect variations in practice, which include differences in the way physicians and other caregivers make diagnosis and treatment decisions and measures on the supply side such as the number of physicians, and the availability of hospital beds and imaging technology.

Comments are closed.