House Committee on Ways and Means

Statement of Kenneth Kizer, M.D., President and Chief Executive Officer, National Quality Forum

Testimony Before the Subcommittee on Health
of the House Committee on Ways and Means

March 15, 2005

Good morning. I am pleased to appear before you today to comment on measuring physician quality and efficiency of care for Medicare beneficiaries. I commend Chairwoman Johnson for holding this hearing; the subject is most timely.

In the time that I have this morning I would like to do three things. First, I would like to briefly describe the role of the National Quality Forum as it relates to the subject of this hearing. Second, I would like to recount some lessons that I have learned over the years regarding physician behavior and improving physician quality of care. And third, I would like to offer some personal thoughts about Medicare’s potential to drive improved quality and efficiency of care. 

First, on behalf of the approximately 260 organizations that belong to the National Quality Forum (see attached member list), I am happy to tell you that we currently have underway a major project to identify performance measures that can be used to assess physician quality and efficiency of care. I expect the first set of these measures will be ready for implementation by October of this year, if not sooner.

Before saying more about this particular effort directed toward identifying physician-related quality indicators, I should take a moment to make sure that the Committee understands the role that the National Quality Forum (NQF) plays today in healthcare quality improvement.

The National Quality Forum (NQF) is a not-for-profit membership organization created in 1999 to standardize national performance measures and quality indicators for healthcare; to develop a national strategy for healthcare quality measurement and reporting; to serve as an “honest broker” for convening multidisciplinary, multi-stakeholder groups to work on healthcare quality issues; and to do other things, as needed, to drive healthcare quality improvement.  It was established pursuant to a recommendation of the President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry.  The Commission recommended that such a Forum needed to exist where both the private and public sectors and all healthcare stakeholders (i.e., consumers, purchasers, providers, researchers and manufacturers, etc.) could come together to achieve accord about a coherent way to improve the quality of American healthcare.

The NQF is a voluntary consensus standards setting body as specified by the National Technology and Transfer Advancement Act of 1995 and OMB Circular A-119 (1998). The NQF use a formal Consensus Development Process (copy attached) that resembles federal rulemaking in a number of ways, and is more explicit than many other consensus processes used by voluntary consensus standards setting bodies – e.g., that used by the American National Standards Institute (ANSI). The performance measures endorsed via the CDP can be used for both public reporting and accountability purposes or for internal quality improvement activities.

Among the work the NQF has done to date has been to endorse performance measures in the areas of acute hospital care, nursing homes, home health, diabetes, nursing-sensitive care, and cardiac surgery.  Other projects are underway to address cancer, deep vein thrombosis, and ambulatory care. In addition, we have endorsed a set of Serious Reportable Events in Healthcare, which serves as the basis of state-based mandatory adverse event reporting initiatives, and Safe Practices for Better Healthcare, a set of 30 practices that, if universally utilized in all applicable settings, would substantially reduce the risk of medical error. These 30 practices provide a clear roadmap for what needs to be done now to improve the safety of healthcare.

Of probable particular interest to the Subcommittee is our project on ambulatory care performance measures – i.e., performance measures for physician offices. The NQF is currently engaged in Phase II of the ambulatory care performance measures project. 

Phase I consisted of a Robert Wood Johnson Foundation-funded effort to identify 10 priority areas for which standardized performance measures for outpatient care should be sought.  These areas are:  patient experience with care, coordination of care, asthma, prevention (primary and secondary, including immunization), medication management, heart disease, diabetes, hypertension, depression, and obesity. 

In Phase II, the NQF seeks consensus on ambulatory care performance measures in these priority areas by expedited consideration of an existing array of more than 100 performance measures that have been developed by the American Medical Association’s Physician Consortium for Performance Improvement, the Centers for Medicare and Medicaid Services’ Doctor’s Office Quality Project, and the National Committee on Quality Assurance.  This work is funded by the Robert Wood Johnson Foundation and CMS.  We expect to achieve consensus on an initial set of physician office performance measures later this year. We will then embark on Phase III of the project, during which we will endorse a more complete set of ambulatory care measures.

The second topic I want to comment on this morning is changing physician behavior and, in particular, improving the quality and efficiency of physician-related care. I base my comments on my personal experience as a practicing physician, my experience as the director of the largest Medicaid program in the nation, and my experience being the CEO of the largest healthcare system in the United States, in which capacity I oversaw the care provided by more than 20,000 physicians and during which time I engaged them in a major quality improvement effort that is often used today as an example of radical organizational change.

I would make two sets of observations regarding changing physician behavior.

First, to be successful at changing physician behavior the prescription for change should entail three elements: (1) a change that is clinically the right thing to do – i.e., it is good for patient care; (2) a way to make the practicing physician’s life easier; and (3) rewards or incentives that are meaningful to the physician. In most cases, rewards and incentives will be financial, but in some settings they may be time to do research or time to do teaching or other such activity. Today, one of the most effective ways to make the practicing physician’s life easier is to reduce the amount of paperwork that he or she has to complete in order to get paid. It is also worth noting that, in general, physicians respond much more favorably to positive rewards than to negative or punitive incentives.

Second, similar to the above but viewed through a somewhat different lens, the three most powerful change levers for effecting physician behavior today are: (1) performance measurement and public reporting; (2) modernization of information management; and (3) alignment of financial incentives with desired improvements in quality and efficiency – what is often called payment for performance.

From my experience at the VA I can attest to how powerful is performance measurement and public reporting as a change lever for physicians. As I believe the Committee is aware, the veterans health care system underwent a major transformation in the latter half of the 1990s, and today the VA outperforms Medicare on essentially all standardized quality indicators. Much of that change was accomplished by implementing a performance measurement system in which standardized measures of quality were regularly assessed and the results made available for everyone to see. In this case, no changes in physician payment were associated with performance measurement.

Modernization of information management, and especially use of an electronic health record, is an important change lever in so far as it is a critical enabler or facilitator of quality improvement. Basically, it provides an easy and reliable means to document and assess performance

And lastly in this triad, while pay for performance is still in its infancy as a common method of payment for healthcare, conceptually it makes sense – as opposed to the current payment system in which one gets paid for the number of units of service delivered regardless of whether the service is truly needed or whether it is provided in a quality manner. Quite simply, if you want higher quality and more efficient physician services, then payment needs to be aligned in a predictable way with this goal.

Finally, I would like to conclude these comments with a few personal reflections about Medicare’s potential to drive improved quality and efficiency of care. I would preface these comments by noting that the human and financial costs of medical error and substandard care have been exhaustively documented in recent years, and American healthcare truly faces a quality crisis today. At the same time, a robust inventory of performance measures and standards for quality improvement have been developed, and the repertoire continues to grow. The main problem is getting these performance measures and quality standards used. In this regard, the two most important players are physicians and payers, with Medicare being the single largest payer. Medicare has a unique opportunity to address the crisis of quality through its payment mechanisms.

The Centers for Medicare and Medicaid Services has taken significant steps toward operationalizing a quality strategy based on performance measurement and incentives. The agency’s publication of performance data on nursing homes and home health agencies has heightened public awareness of the value of information on quality and has alerted the provider community that it has a critically important role to play in adopting best practices and improving patient safety. While information on hospital and physician performance may be more difficult to collect and organize, the CMS plans to extend the consumer information campaign to hospitals and in the meantime has launched a breakthrough demonstration project with Premier, Inc., a national alliance of nonprofit hospitals, to pay quality improvement incentive bonuses for Medicare patients at participating institutions. CMS has more recently announced plans for applying this concept to a number of large physician group practices. While applauding these milestones, when measured against the magnitude of the problem, these efforts have barely begun to achieve critical mass and momentum.

The performance measures available today may not be perfect and do not address all the areas needed; however, they are more than good enough to be used to accelerate the drive for quality improvement. My recommendation to the Committee is that payment for performance should become a top national priority and that Medicare should lead in this area, greatly expanding payment for performance programs for both hospitals and physicians. Not only would this have a positive effect in driving quality improvement, but it would also stimulate similar efforts by private payers, just as Medicare’s adoption of prospective payment for hospitals did 20 years ago.

That, Madam Chair, concludes my comments this morning. Thank you for the opportunity to share my views with the Committee. I would be happy to answer any questions or clarify any of the points made here this morning.