7 quality improvement

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AHM Medical Management: Quality Improvement

Objectives

After completing the lesson Quality Improvement , you should be able to:

Identify the major components of the performance improvement cycle

Describe how health plans use benchmarking to guide quality improvement activities

Identify the goals of member education and outreach programs

Describe the techniques health plans use to improve providers' ability to work within thehealthcare system

Describe three tools health plans can use to support provider decision making andimprove clinical performance

Introduction

In the lessonQuality Assessment, we discussed the relationship between quality and performanceand described some of the approaches health plans can take to assess existing performance levels.

In this lesson, we will describe some of the strategies and tools health plans can use to improveperformance. Because performance has a direct effect on outcomes, these tools also help healthplans improve the quality of their services.

Performance Improvement

Performance improvement is based on making changes to existing structures and processes that

will lead to changes in outcomes. In order to ensure that performance improvement activities

produce desired results, changes to structures and processes must be carefully planned,communicated, implemented, documented, and evaluated. The components of the performanceimprovement cycle are illustrated in Figure 3C-1.


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Planning for Change

Change is a complex process that can take a variety of forms. Change that occurs randomly isreferred to ashaphazard change. It can be caused by chance or by benign neglect. Because it is

uncontrolled, its results are unpredictable. The dramatic increases in healthcare costs that canarise when consumers and healthcare organizations fail to recognize the consequences of

unlimited utilization is an example of a haphazard change.

Reacti ve changeoccurs when situations become unmanageable and some form of immediate

action is necessary. Reactive change is controlled, but it is rarely planned. It can lead to positiveor negative results; however, these results are usually situational. Reactive change also has alikelihood of producing unintended results. The introduction of preauthorization as an attempt to

control overuse of services is a form of reactive change.

The changes that performance improvement programs generate are planned changes. Planned

changeis deliberate, controlled, collaborative, and proactive. It involves the time and effort of allmembers of the organization. In planning performance improvements, health plans must make thefollowing strategic decisions:

Which of the critical services and processes identified during performance assessment

should be targeted for improvement What the desired outcomes of proposed changes are and how they will be measured What actions are most likely to produce desired outcomes

Identifying Targets for Quality Improvement

As we discussed in the lesson Quality Management, health plans offer a wide range of clinicaland administrative services to their customers. Any of these services can serve as targets for

quality improvement. However, because resources are limited, health plans typically direct their


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efforts toward those services that are most in need of improvement or that offer the greatestopportunity for development.

Defining Desired Outcomes

Outcomes guide the activities included in a performance-based QI program and turn randommotion into directed change. It is important to recognize that the outcomes set by improvement

plans are the results the health plan hopes to achieve as a result of changes to existing structuresor processes rather than the results that are expected when a particular procedure is performed.For example, patients who undergo surgical procedures often experience pain or discomfort

following surgery. Providers manage post-surgical pain by administering pain medication (aclinical process). The expected outcome of this process is a reduction in the level of pain thepatient experiences. An action plan designed to improve pain management processes might

modify the way medication is delivered by allowing patients to self-administer pain medication.The desired outcome of this intervention might be to increase patient comfort, reduce recovery

time, or improve efficiency.

Expected outcomes can be anticipated. Health plans must carefully define desired outcomes sothat they are

Specific: each outcome defines a single result

Measurable: outcomes must be expressed in objective, quantifiable terms Appropriate: outcomes must be directly related to identified critical processes Realistic: outcomes must be achievable within the context of given patient health states,

treatment options, and resources

Desired outcomes must also be achievable within the time frame established in the plan.

Designing Interventions

Once desired outcomes have been defined, the health plan must decide what actions it will

undertake to achieve those outcomes. Each service a health plan offers consists of its ownstructures and processes, and performance improvement efforts can address either or both of thesedimensions. For example, an important goal of a health plan's QI program might be to improve

plan members' access to care. The health plan could change structures related to access bymodifying the size and/or composition of the provider network. The health plan could changeprocesses by modifying authorization and referral procedures. Both of these approaches are likely

to have an effect on access. The health plan's task is to determine which kinds of changes are

likely to be most effective in producing desired results.

Health plans communicate proposed changes to appropriate individuals or groups in the form ofaction statements. A sample action statement appears in Figure 3C-2. The "who" element of thestatement identifies the individual or group responsible for taking action. The "will do" element

identifies the type of change that the proposed action will generate. The change should bedescribed in terms of results-increase, decrease, maintain, expand-rather than processes-define,evaluate, design. The "what" element describes the specific target of improvement efforts, and

"when or by how much" establishes the timetable for or desired level of improvement. Actionscan be carried out by individual providers, work groups, or departments.


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Extensive planning frequently raises objections. Some organizations argue that because planningis focused on future activities, it is based on speculation rather than fact. They also argue that theyare too busy dealing with today's activities to devote time and energy to tomorrow. In addition,

planning runs counter to the emphasis among many organizations on getting things done.

These objections are more than offset by the following benefits that result from careful planning:

Planning directs an organization's activities by establishing performance goals

Planning controls and limits an organization's efforts and expenditures by focusingattention on specific tasks

Planning establishes a system of responsibility and accountability for organizational

performance Planning provides management with an organized approach to complex problems and

opportunities

Planning maximizes the effectiveness and efficiency of organizational activities Planning facilitates collaboration, creativity, and participation across all levels of the

organization

Planning minimizes unintended results

Communicating Change

Communication is the process by which the health plan transfers information and results upward,

downward, and horizontally through the organization to its internal customers and outward to itsexternal customers. Each of these audiences has its own information needs that define the contentand format of performance communication.

Performance information can be presented verbally or in writing. It can be limited to briefsummaries of important facts and figures or it can include detailed descriptions of programdesign, methodology, and outcomes. It can be presented informally in conversations with ormemos to individuals or work groups or formally in performance reports delivered to

management and governing boards.

Performance communication also serves a variety of purposes. Informational performance reportstransfer facts and figures for use in decision making. They are produced for individuals andgroups who need information on a routine basis. The reports that health plans submit to internalboards and committees, such as the QM committee or the pharmacy and therapeutics committee,

are informational reports. Persuasive communication is intended to generate changes in attitudethat will lead to changes in behavior. This is especially important in communicating performance


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information where the goal is to change behavior in order to achieve better outcomes.Recognition communication, which acknowledges achievements rather than problems or

opportunities, provides motivation for continued growth and development.

Effective communication of performance information benefits all of its users. For patients and

their families, performance information helps define and support healthcare expectations. Forproviders, information leads to improved guidelines for medical practice. For purchasers, itdemonstrates health plan value. For health plans, it provides protection against liability.

Implementing Change

In order to turn intention into action and link structures and processes to outcomes, health plans

must implement the programs they plan. Compared to planning, implementation is a relativelysimple process accomplished when responsible parties complete assigned tasks in a specified timeframe. The activities, timetables, and accountabilities associated with performance improvement

plans are embedded in the plans themselves.

Implementation of a performance improvement plan depends on who is accountable for

delivering the service and whether the service is patient-focused, provider-focused, oradministrative. We will describe some of the specific tools that health plans use for performanceimprovement later in this lesson.

Patient-Focused Action Plans

Although patient behavior is outside the health plan's control, it is influenced by the health plan's

actions. Patient-focused plans, therefore, are designed to augment the activities of providers and

administrative staff and improve overall service outcomes. Strategies such as member outreachand patient education programs are designed to improve outcomes by helping plan members

Assume responsibility for their own health Feel more satisfied with the healthcare services they receive

Obtain better care

Appropriately trained and educated patients can help manage minor problems and keep themfrom becoming major problems.

Provider-focused action plans address the performance problems and opportunities of theproviders and staff who deliver healthcare services. Clinical practice guidelines (CPGs), provider

profiles, and peer reviews are examples of tools that health plans can use to guide providerperformance and improve patient outcomes.

Health plan management identifies areas for improvement or development, defines outcomes, andnegotiates incentives. Providers then implement the recommended actions. Outcomes arereviewed periodically by management or a panel of professionals

Administrative action plans

Administrative action plans are used when performance problems or opportunities are related to

the way the organization itself operates. For example, low rates for cholesterol screening among


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patients at risk for coronary artery disease can be caused by a variety of factors. If inadequatestaffing or a lack of equipment are contributing factors, an administrative action plan may be

necessary.

Administrative action plans allow the health plan to:

Integrate service across all levels of the organization

Coordinate management activities Improve resource allocation and utilization

It is the responsibility of the health plan to create an environment in which quality improvementactivities can occur.

Documenting Change

A health plan's improvement plan provides evidence of its intent to improve performance in keyareas. Documentation provides evidence that the health plan has translated its intentions into

actions. It also provides evidence of the health plan's progress toward achieving desiredoutcomes.

Accrediting agencies and regulatory bodies require a health plan to provide documentation ofthree major components of performance improvement: performance assessment, program

planning, and program evaluation. During performance assessment, the health plan collects asignificant amount of information about its customers and its services. This information providesa written record of the health plan's activities and their impact on each of the organization's

customer groups.

The health plan also documents the methods it uses to collect and analyze performance data.Documentation of data collection and analysis provides evidence of the health plan's efforts tomeasure and monitor performance. It also supports the health plan's performance improvementefforts by identifying variance and measuring progress.

Documentation of program planning is contained in the health plan's action plans. These plans

provide written evidence of the organization's intent to take action. They document the servicesand processes that are of greatest concern, the interventions the health plan intends to implement,and the individuals or groups responsible for taking action. They also document expected and

desired results.

Program evaluation is documented by additional data collection and analysis designed to measurethe health plan's progress toward its performance goals. This documentation is recorded onprogress reports that describe program status and track changes in that status over time. Prepared

concurrently, progress reports describe how an action plan is progressing; retrospective reportsdescribe end results.

Evaluating Change

All improvement plans require follow-up evaluation to determine how successful the plans are inachieving stated goals. Evaluation can be conducted concurrently or retrospectively. Concurrentevaluation is conducted as the plan is being carried out and allows the health plan to check the

progress of its improvement plans against interim benchmarks. Retrospective evaluation is


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conducted after all planned interventions are completed and allows the health plan to measureoutcomes.

Evaluation can also be formative or summative. Formative evaluationfocuses on specificactivities and assesses the relative importance of those activities to the plan as a whole.

Summati ve evalu ationfocuses on outcomes and assesses how effective actions are in achievingdesired results.

The overall purpose of evaluation is to allow the health plan to make judgments about the valueof its performance improvement program. Value, in this context, refers to the efficiency and

effectiveness of improvement activities. Efficiency is the relationship between what theorganization puts into an improvement plan and what it gets out of the plan. Effectiveness is thedegree to which the health plan is doing the right things and doing them right. In other words, did

the planned improvements work? Effectiveness is measured by reviewing outcomes to determine(1) the accuracy or appropriateness of improvement strategies, that is, the "fit" between the

problem or opportunity and the strategy used to address it; and (2) the adequacy of resourcesallocated to the strategy.

The effectiveness of an action plan is typically measured retrospectively, after planned actions are

completed. Results of this retrospective analysis are then compared to the initial results and targetresults for a given indicator to determine the degree of progress or improvement. Evaluation ofplan effectiveness typically produces one of the three following results:

The plan achieved the desired outcomes. This result is achieved when predetermined

problems have been resolved or opportunities have been exploited, and when re -measurement data are comparable to plan goals. Successful interventions are measuredperiodically to determine that improvement is maintained.

The plan did not achieve the desired outcomes, but it did make significant progresstoward those outcomes. This result occurs when re-measurement data indicate forwardbut incomplete movement toward predefined goals. Management typically responds tothis result by conducting a process review or formative evaluation of the goals, outcomes,

interventions, resources, and timetables outlined in the plan to determine what additionalchanges are necessary. Plan elements are then revised as needed.

The plan did not achieve the desired outcomes and is unlikely to do so under currentconditions. In this case, re-measurement data are not significantly different from initialdata and may even indicate regression. This situation requires both summative andformative evaluation to determine if the health plan can revise its current plan or if it

must abandon the plan and develop a new one.

Data Collection and Analysis

We described the importance of data collection and analysis for quality assessment in the lessonQuality Assessment. Data collection and analysis are also important in evaluating qualityimprovement. The data that are collected and the methods that are used to collect and analyzedata for quality improvement purposes, however, are different than those used for quality

assurance. Figure 3C-3 summarizes these differences.

QA data describe the current state of various structures, processes, and outcomes. By describingthe status of structures, processes, and outcomes before and after a change has been implemented,QI data describe the progress the health plan has made toward achieving its goals.


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Data collection for QA is primarily a reactive process designed to verify that the health plan'soperations meet expectations. Data collection for QI is a proactive process intended to

Verify that programs are proceeding as planned

Identify opportunities for improvement Provide a rationale for decisions regarding resource allocation Support the development of reliable performance outcomes

QA data collection focuses on providing sufficient objective data for evaluating currentperformance. QI data collection procedures are designed to achieve the following goals:To provide the health plan with accurate data on which to base future decisions. In the

healthcare setting, where resources are often limited, data accuracy is critical. Poordecisions can lead to wasted time, misspent funds, poor utilization, and inadequate orexcessive spending. They can also lead to the creation of inappropriate standards.

To avoid using measurement results for punitive purposes. It is important to focus qualityimprovement on fixing the problem rather than on fixing blame. Data collection methods


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that are "safe" from punitive applications foster organizational cooperation and dataaccuracy by eliminating fear of repercussion.

To provide the health plan with a global picture of improvement opportunities by

identifying all of the organizational areas that affect or are affected by key processes andoutcomes.

To confirm desired outcomes. By collecting data before and after an improvement plan

has been implemented, the health plan can determine the degree of improvement itsprograms achieve.

To demonstrate sustained improvement. Quality improvement is an ongoing process that

requires collecting data at regular intervals to track and describe trends or variations inresults.

Evaluators analyze quality assessment data in order to determine the degree of variance between

the organization's current performance and established standards. Health plans analyze qualityimprovement data in order to determine the cause of variance. Performance variance can be

classified as either common cause variance or special cause variance.

Common cause varianceconsists of minor variations in performance that occur regardless ofhow good a healthcare system or provider is. In some cases, common cause variance is imbeddedin the system and can be linked to specific factors such as employee skill levels or equipment

capabilities. Changes in these factors can create changes in performance that cannot be correctedby modifying processes.

For example, a health plan's customer service staff might be capable of answering 2,000 calls perday at a rate of less than 30 seconds per call. If the call volume rises above 2,000, answer time

will also increase. Variance, in this case, is linked to system capabilities rather than serviceprocesses. In other cases, common cause variance may occur entirely by chance. In our earlierexample, variance in the number of calls answered per day would occur by chance if a largenumber of staff members were out sick at the same time. Because common cause variance is

often impossible to control, it is generally tolerated.

Special cause var ianceoccurs when systems and processes break down-for example, whenstaffing levels are inadequate or when employees make errors or equipment malfunctions. Specialcause variance is generally easier to detect than is common cause variance. It is also easier to

correct.

Data analysis for QA focuses on measuring current levels of performance without makingrecommendations for action. Because it is used to describe current performance, it provides a"snapshot" of performance at a particular time. Analysis of QI data is based on judgments about

whether performance after a change in structure or process is better than performance before thechange. In addition, because improvement program evaluation involves repeated measurementand analysis, it creates a kind of moving picture of the health plan's performance improvementactivities.

Strategies and Tools for Improving Quality

Health plans can use a variety of strategies to improve the quality of their services. Strategies can

be designed to improve services or they can be designed to improve the way those services are


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delivered. They can be directed toward customers, providers, or the health plan itself. In all cases,the health plan's efforts are guided by the outcomes it hopes to achieve.

Benchmarking

Quality standards such as the ones described in the lesson Quality Assessmentoffer health plansand their constituents a valuable method of assessing the quality of the health plan's

administrative and healthcare services. One of the most effective methods of planning andimplementing changes that will lead to quality improvement is benchmarking. The benchmarkingprocess consists of two parts: (1) describing a benchmark, or highest achieved level of

performance, against which a health plan's performance can be compared; and (2) identifying theactions the health plan can or should take to arrive at that benchmark.

Fast Definition

Benchmarkingis the comparison of a health plan's clinical and operational practices or outcomesto those of other organizations with the goal of identifying the practices that lead to the bestoutcomes and implementing those practices to achieve overall quality improvement.1

Establishing Benchmarks

Benchmarks identify "best of class" performance. They are similar to both standards and goals;

however, unlike standards, which typically define the level of performance a health plan mustachieve, and goals, which express the level of performance the organization hopes to achieve,benchmarks describe the highest level of performance that has been achieved. To better

understand this relationship, consider the example of board certification as a measure of provider

quality. A health plan might be subject to external standards that require a minimum percentageof providers to be board certified. As part of its strategic planning process, the health plan mightset a goal for board certification of physicians that is higher than the minimum percentage cited in

the standard. A benchmark percentage for board certification would put both the external standardand the health plan's internal goal in perspective by describing the best level of performance thathas been achieved by a recognized industry leader.

Identifying Best Practices

Traditionally, benchmarking for managed healthcare organizations has relied on cost-center data

to identify those practices that lead to the lowest overall cost. The process has been fairly simpleto implement because cost-center data is easy to collect from patient billing and budget records.

At the clinical level, benchmarking has focused on utilization data drawn from such sources asinternal physician profiles, diagnosis and treatment reference books, commercial data services,and professional peer review associations. The usefulness of cost-based benchmarking, however,has been somewhat limited by the following conditions:

Although cost-based benchmarking identifies which areas of a health plan perform betteror worse than comparable areas in other organizations, it does not reveal how or why

performance levels are different. Elements assigned to cost centers tend to vary from organization to organization. For

example, some health plans assign costs for such services as utilization review and

quality improvement to clinical cost centers; others assign these costs to administrativedepartments.


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Supply costs are difficult to compare. Some health plans include all supply costs relatedto a particular procedure to a single cost center, whereas other health plans divide those

costs among several cost centers. Similarly, supplies may be included in separate

department inventories or in a centralized organizational inventory. Patient billing records are not always an accurate measure of the cost of a procedure. In

order to be complete and current, procedure costs should include not only the cost of care

but the cost of key supplies such as needles, syringes, or swabs. These supply costs arenot typically charged to patients or itemized on bills.

The emphasis on quality care has shifted the focus of benchmarking from identifying lowest costpractices to identifying best practices. In the context of medical care,best practicesare actual

practices, in use by qualified providers following the latest treatment modalities, that produce thebest measurable results on a given dimension. The premise behind a best practices approach isthat there is no reason for a health plan or a provider to "reinvent the wheel." Best practices can

serve as models of care for others to follow.

A best practices approach to benchmarking benefits all of the members of the health plan system.

Clinicians have traditionally relied on personal experience, role models, and journal articles todevelop practice patterns, and many have resisted changes mandated by financial managers intenton reducing costs. Best practices allow practitioners to

See how their practice patterns compare to patterns with proven, measurable results

Use proven patterns in their own practices to emulate best results Obtain information about treatment or practice decisions for illnesses and injuries with

which they may not be familiar

Best practices, therefore, can help patients receive the most appropriate care from the outset and

help health plans operate most efficiently.

At the organization level, best practices provide managers with an incentive to change operationsbased on ideas and practices that are proven effective. Insight 3C-1 illustrates how benchmarkingresults also help dispel some of the more prevalent misconceptions among healthcare executives.


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Sources of Comparative Data

Health plans can obtain comparative performance data from a number of sources. Earlier in thissection, we mentioned some of the sources health plans use to gather comparative data aboutphysician practices. Health plans can develop an even more precise picture of practice patterns by

analyzing information provided by the cur r ent procedural term in ology (CPT) coding system,which is a method developed by the American Medical Association that allows physicians to

accurately describe and bill for treatments and procedures.

CPT codes provide complete lists of supplies used for specific procedures, using descriptors that

are clinically meaningful. As a result, they provide a much more accurate account of procedurecosts than do patient billing records. CPT codes also have advantages overdiagnosis-relatedgroups (DRGs), which are classifications developed originally for Medicare and now used by

commercial health plans to determine payment for inpatient hospital services based on a patient'sprincipal diagnosis, secondary diagnosis, surgical procedures, age, gender, and presence ofcomplications. 2 Unlike DRGs, CPT codes describe individual procedures, cover outpatient

procedures and treatments as well as inpatient services, and reflect the physician's perspective.Because CPT codes are standardized descriptions, they also provide a means of comparingphysician practices across different healthcare organizations. When physicians compare the items

they use for a particular CPT-coded procedure with those used by other physicians for the sameprocedure, the need for change can be compelling.


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Health plans can also obtain comparative data from government and commercial sources. In1979, the Department of Health and Human Services (HHS) published its first national agenda

for improving health and preventing disease in the form ofH ealthy People. In 1990, HHS

publishedHealthy People 2000, which included 319 objectives organized into 22 priority areasand focused on increasing years of healthy life, reducing disparities in health among differentpopulation groups, and achieving access to preventive health services.3 To date, 47 states, the

District of Columbia, and Guam have developed their own Healthy People plans. Healthy People2010was launched on January 25, 2000, and includes health indicators related to (1) healthdeterminants and outcomes, (2) life course determinants, and (3) prevention. 4

In 1997, NCQA began offering benchmarking information in the form ofQu ali ty Compass, a

national database of HEDIS data and accreditation information collected from over 300 healthplans nationwide.Quality Compassallows NCQA to report regional and national averages and toidentify benchmarks. The public disclosure portion of the database provides regional and national

comparisons of plans on eight clinical and preventive measures, including Caesarian-section

rates, breast cancer screening, and beta-blocker treatment.

Purchasers can use these reports to analyze and compare the performance of individual healthplans in order to make value-based decisions about health coverage. They can also use theinformation to generate report cards that employees and other consumers can use to assess plan-

specific performance on key quality issues. Health plans can use the data to compare their ownperformance with that of other plans. Industry analysts considerQuality Compassdata a majorstep toward holding healthcare systems publicly accountable for the quality of their services.

Regulatory boards, professional societies, provider organizations, commercial organizations, and

state and national health departments offer health plans additional sources of benchmarking data.For example, the U.S. Centers for Disease Control and Prevention maintain the National

Nosocomial Infection Surveillance (NNIS) System, a national database of information reportedvoluntarily by nearly 300 U.S. hospitals regarding the incidence of infections acquired inhospitals. Researchers use the database to develop baseline infection rates that can be used tocompare performance levels among participating hospitals. CMS maintains an equally extensivedatabase of administrative healthcare information that can be used for quality improvement

activities.

Member Education Programs

Traditionally, healthcare services were the exclusive domain of providers. Providers diagnosedpatients' medical conditions, prescribed treatment, defined desired outcomes, and evaluatedpatients' progress. Patients, for the most part, simply followed doctors' orders. Today, these roles

are changing. Patients are taking an active part in determining the course and outcome of theirmedical care. The increased participation of patients in making healthcare decisions has comeabout primarily as a result of member education programs that are designed to improve healthcareoutcomes. These programs provide patients with the information they need to better understand

and manage their health.

Health plans use a variety of methods to deliver educational information to patients and theirfamilies. Providers are a primary source of information. For example, PCPs routinely discusspreventive measures such as weight loss, exercise, or substance abuse programs, diagnoses, and

treatment programs with their patients during regular office visits. Pharmacists provide


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educational information about drug usage and interactions when they fill prescriptions. Hospitalpersonnel instruct families on how to care for patients following discharge.

Printed materials provide additional information. The format and content of printed materialsdepend on their source and intended use. Providers often produce and distribute printed materials

to support verbal instructions. For example, a patient who has a cut sutured in a doctor's office orhospital emergency department often receives printed instructions on how to clean and bandagethe wound, how to detect adverse reactions, and when to return for follow-up treatment.

Brochures produced by outside sources such as medical associations, research organizations, orpharmaceutical companies provide information about specific medical conditions. Brochurestypically provide detailed information on the following topics:

Onset and progression of the disease state

Populations at risk for developing the disease Risk factors associated with the disease Available treatment options and their expected outcomes Commonly prescribed medications

Steps patients can take to manage their health status, including nutrition, exerciseprograms, and life style/behavioral changes

Evidence shows that member education programs contribute to better outcomes. For example, ayear-long study of health plan members enrolled in a program designed to educate patients on the

benefits of using ACE inhibitors for treating congestive heart failure (CHF) showed a 58 percentdecrease in hospital days, a 60 percent drop in hospital admissions, and a 78 percent reduction inhospital costs. In addition, patient quality of life improved 15 percent and the mortality rate

dropped 15 percent. Pharmacy costs associated with treatment increased by 68 percent, or$243,000, but total savings from the program were nearly $9.3 million. 5 Member education

programs such as this one augment provider services by encouraging patient input.

Outreach programs educate plan members about how the health plan works and about healthissues such as preventive care recommendations and techniques for managing chronic disease. Byproactively providing information about issues important to plan members, these programs helpprevent problems and complaints and improve customer satisfaction.

Most outreach programs consist of information packages that are sent out to plan members upon

enrollment in the plan. These packages typically contain

Patient identification cards A description of plan benefits An updated provider directory

Directions on how to use the plan, access services, and obtain authorizations An outline of patient rights and responsibilities

Information packages also describe the plan's system for resolving complaints. A clearunderstanding of grievance procedures is becoming increasingly important as the healthcareindustry responds to new state and federal regulations.

Some plans also conduct telephone-based outreach programs. Telephone outreach is particularly

valuable during enrollment surges. Personal contact with new patients entering the system helps


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disseminate plan information quickly and reduces confusion that might otherwise lead tocomplaints.

Provider Orientation and Education

Health plans can improve provider performance in two ways: by improving providers' ability towork within the health plan environment and by improving the way providers make decisions on

behalf of their patients. Health plans typically address health plan performance through providerorientation and education efforts.

Although provider orientation and education programs are primarily network management tools,health plans also use them to establish performance expectations. Provider orientationprograms

communicate operational aspects of the provider contract to new providers. Orientation typicallyoccurs before providers begin delivering services to health plan members and covers thefollowing topics:

Health plan administrative requirements Member identification and eligibility verification

Plan benefits and member copayment requirements Referral authorization and other UM processes Claims processing and reimbursement

Member rights and responsibilities Provider rights and responsibilities

Orientation programs typically do not cover specific quality and performance guidelines, but theydo describe requirements such as credentialing, scope of services, and peer review that are

directly related to the health plan's quality and performance management programs.

Providers also receive a copy of the health plan's provider manual during orientation. In addition

to reinforcing contractual provisions, the provider manual demonstrates the health plan'scompliance with accrediting agency standards concerning provider performance.

Health plans provide continuing education and support in the following forms:

Regular training sessions for providers and staff Provider newsletters

Contacts with provider relations staff Periodic provider meetings

Online information

These tools help reduce confusion about ongoing administrative functions related to patient care.

They also provide a means of addressing problems and questions that providers may have aboutthe health plan.

Health plans, insurance carriers, and pharmaceutical companies have also begun experimentingwith ways to assist providers with some of the nonclinical aspects of patient care such as patient-provider communication. Evidence shows that improved communication skills contribute to

better outcomes for patients, providers, and health plans. Patients tend to be more satisfied withproviders who communicate effectively. Patient satisfaction, in turn, tends to lead to better


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compliance with treatment programs and lifestyle recommendations, lower turnover among bothpatients and providers, and fewer lawsuits against health plans.

Provider Profiling

One important tool health plans use to support provider decision making is provider profiling.Provider profilinginvolves collecting and analyzing information about the practice patterns of

individual providers. Profiling is used during credentialing and recredentialing to help determinehow well a provider meets health plan standards. It is also an important part of a health plan'sperformance measurement and improvement efforts.

Health plans create provider profiles by gathering detailed information related to the following

performance measures:

Quality of care Outcomes Patient satisfaction Resource utilization

Cost-effectiveness Compliance with plan policies and protocols

Claims and encounter reports yield information about the number and type of services deliveredby the provider to plan members. UM and QM reports provide additional information about the

costs and outcomes of those services. Complaints and office surveys provide information aboutplan members' satisfaction with providers. Together, these data provide a cumulative picture of aprovider's performance.

Once provider data have been collected, they are analyzed to establish the provider's level ofperformance. Results are presented in the form of outcomes and rates or measures of resource use

during a defined period of time for a defined population. For example, a PCP profile mightpresent information about the average lead time required to schedule a routine physicalexamination, the number of referrals the PCP made within and outside the plan network, the

extent of the PCP's compliance with practice guidelines, and the level of member satisfactionwith the PCP. In order for information to be comparable for all providers, results should beadjusted to reflect differences in risk. The risk adjustment process is described in the lesson,

Quality Assessment.

Results can be used to describe the provider's current level of performance or they can be

compared with profiles of other similar providers or with benchmarks to identify the provider'sstrengths and weaknesses. Figure 3C-4 provides an example of a profile developed for a

particular diagnosis. Results are then communicated back to the individual provider by a healthplan medical director.

Because profiles focus on patterns of care rather than on specific clinical decisions, they provide avaluable measure of the overall quality of a provider's performance. Because they combineoutcome and utilization information, profiles provide a broad measure of a provider's

effectiveness and efficiency. Because individual profiles can be compared to peer profiles orbenchmarks, they are also useful in identifying areas needing improvement or development.


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In addition, profiles offer health plans a means of establishing a provider's value to the

organization by identifying outliers and high-value providers. Outliers are those providers whouse medical resources at a much higher or lower rate or in a manner noticeably different than

other similar providers. High-value providersare providers who consistently deliver qualitymedical care in a cost-effective manner.

Providers also benefit from profiling. Providers can use profiles to negotiate higherreimbursement rates. For example, some health plans offer higher capitation rates to PCPs who

can demonstrate exceptional rates for preventive services. Providers can also use profile results tomonitor and improve their practice patterns.

Provider profiles have limitations as well. Although a profile provides insight into the quality andcost of services that the provider delivers to plan members, that picture does not extend beyond

the plan. It is virtually impossible for the health plan to gauge the provider's total performance.Profiles can also expose the health plan to legal risks if they are used for purposes other thaneducation and performance improvement.

Peer Review

In the lessonQuality Assessment, we described the use of outcome measures to evaluate specificclinical processes. These measures assess both the provider's skill in performing procedures and

the effectiveness of those procedures in achieving desired outcomes. In order to develop acomplete measure of a provider's performance, the health plan also needs to evaluate theappropriateness of a provider's healthcare decisions. Appropriateness is an indication of the extent

to which the expected benefits of diagnostic or treatment measures exceed expected risks. Health

plans typically obtain information about the appropriateness of patient care through a peer reviewprocess. Peer review discussions are designed to provide confidentiality and, in some states, to

provide freedom from legal discovery.

A health plan can assemble peer review panels from its own network providers, or it can contract

with outside peer review organizations to conduct periodic quality reviews. A peer revieworganization (PRO)is a physician-sponsored entity responsible for reviewing the appropriatenessand medical necessity of medical services ordered or furnished by practitioners in order to

maintain quality of care.

During peer review, panel members analyze the healthcare services furnished by a provider toplan members. Although most peer review is conducted retrospectively, panels can also be


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convened to assess the appropriateness of care before it is delivered. Peer review can focus on asingle case or episode of care, or it can be applied to an entire program of care. Most often, peer

review focuses on high-risk, problem-prone, and high-cost services.

Clinical findings from the review are compared to standards to establish a measure of overall

quality. Problems or deficiencies that are discovered by the review commonly serve as a basis forperformance improvement. They also serve as a learning tool for the members of the group.

Peer review is required under the Health Care Quality Improvement Program (HCQIP) forservices furnished to Medicare and Medicaid beneficiaries enrolled in health plans. For services

furnished to commercial plan members, provider participation in the peer review process isdetermined by the health plan. In some plans, participation in peer review is required; in others,participation is voluntary.

In order to encourage voluntary participation in peer review, health plans have taken steps to

support full disclosure and fair evaluation of medical information. One of these steps is to basepeer review programs on well-defined principles and standards. Figure 3C-5 describes some ofthese principles. Health plans also follow established procedures for protecting the confidentialityof any medical information collected and used during the peer review process. In some cases,

protection is mandated by federal law. For example, the Health Care Quality Improvement Act(HCQIA) mandates protection for participants from suits and from discovery for the documentsgenerated by the peer review process. Most states have also enacted statutes governing the

production and use of medical information. The protection offered by these statutes ranges fromabsolute immunity to some form of qualified immunity for actions taken in good faith.


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The guarantees health plans have been able to grant to participants are critical to the success ofthe peer review process, where the disclosure of errors in professional judgment may have

significant economic and career consequences for providers. Those guarantees, however, may no

longer be available. In June 1999, the Supreme Court issued a decision allowing individuals tosubpoena peer review records for federal lawsuits

6. This decision is likely to have a significant

effect on the strategies that health plans use to measure, monitor, and improve the clinical

performance of their providers.

Clinical Practice Guidelines

As you recall from the lesson Clinical Practice Management, health plans develop clinicalpractice guidelines (CPGs) in order to help providers consistently deliver medical services thatwill improve the health status of plan members. Although CPGs are an important aspect of a

health plan's clinical practice management policy, they are also valuable tools for improvingprovider performance. By following approaches that have been proven to be successful and by

decreasing inappropriate variations in patient care, providers should be able to achieve the best,most cost-effective patient outcomes possible.

Research seems to support this position. For example, a recent analysis of published studies

related to guideline use showed that "the introduction of clinical guidelines led to measurableimprovement in clinical care processes."7 Unfortunately, CPGs are not widely accepted byproviders.

Providers' willingness to adopt CPGs is affected by a variety of internal and external barriers.

Internal barriers are related to a provider's knowledge, attitudes, and experience and includesuch factors as:

Lack of awareness. The number of organizations conducting research into theeffectiveness of specific treatment options for specified medical conditions has increased

dramatically in recent years. The number of guidelines based on results of that researchhas also increased. Although some of these guidelines-for example immunizationguidelines and recommendations for infant sleeping positions-are widely recognized byproviders, many more are unknown to a significant number of practitioners.

Lack of familiarity. Knowing that guidelines exist does not guarantee that providers arefamiliar with or can correctly apply guideline recommendations as part of their dailypractice.

Lack of agreement. Providers have traditionally based their treatment decisions on theirown past experience or on the experiences of other providers with whom they arefamiliar. The concept of practice guidelines often runs counter to this decision process.

Because practice guidelines provide a standardized approach to treating typical patients,they often conflict with provider autonomy and clinical judgment regarding individualpatients as well.

Lack of confidence. In order to initiate and sustain the activities recommended in

practice guidelines, providers must be confident that they can actually perform theactivities and that the activities will lead to positive outcomes. For example, although

most providers agree with guidelines recommending that patients be counseled to stopsmoking, many fail to provide counseling during office visits because they do not believetheir efforts will be successful. Physicians also need to know when not to followguidelines; for example, when there are contraindications to a proposed protocol.


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Lack of motivation. Established providers often have a long history of practice patternsassociated with particular medical conditions. In order to adopt new patterns, providers

must be willing to expend the energy necessary to overcome the inertia of past behavior

patterns.

External barriers are created by such factors as:

Patient preferences. Patients can feel strongly about the need for or appropriateness ofparticular procedures or treatment options. In some cases, personal preferences can leadpatients to refuse appropriate procedures, especially if they consider those procedures

embarrassing or offensive. In other cases, personal preferences can result in requests forinappropriate services. Providers often find it difficult to reconcile these patientpreferences with guideline recommendations.

Guideline characteristics. Providers tend to consider guidelines in general asinconvenient or difficult to use, especially if they require eliminating established

behaviors. This attitude is due, in part, to the fact that guidelines are often based on studypopulations that are different from most providers' patient populations. Because

guidelines are designed to be applicable to a wide range of providers and settings, theyare frequently "encyclopedic, equivocal, and not executable at the local level8."

Environmental constraints. Even providers who are willing to accept guideline

recommendations may be unable to carry them out because of environmental factors thatare beyond their control. Limited time, inadequate technology or resources, insufficientstaff, increased practice costs, limited referral privileges, lack of tools such as flow sheets

and reminder cards to effectively implement guidelines, and increased liability can allcontribute to a provider's inability to adhere to guidelines.

One of the ways health plans can overcome these obstacles is to focus CPGs on clinical

conditions that providers consider most important, that they encounter most frequently, or forwhich there is substantial agreement as to what constitutes appropriate treatment. Health planscan accomplish this task by gathering information from resources that providers know andrespect; working with other health plans in the region, state, or locality to develop guidelines thatare consistent across health plans and relevant to the needs of member populations; and recruiting

opinion leaders that providers trust to assist with disseminating guidelines.

Health plans can also improve provider acceptance of CPGs by including providers in guidelinedevelopment. Flexibility and autonomy are important issues for most providers. Health plans cansupport flexibility by allowing providers some freedom to customize guidelines according to the

needs of their patients and the medical practice conventions in their areas. Keeping guidelinescurrent with medical literature can provide additional support. Health plans can support provider

autonomy by presenting CPGs as decision support tools rather than as requirements. Thisapproach allows physicians to vary from guidelines as long as they can document a sound clinicalreason for the variance.

A third step health plans can take to improve adoption of CPGs is to simplify programimplementation. For example, health plans can divide complex or lengthy guidelines into

interrelated modules to facilitate understanding and usage. Health plans can introduce CPGsgradually into the provider community and allow providers to experiment with recommendedinnovations on a trial basis. Health plans can make CPGs available in an interactive computerizedformat that automatically adjusts to specific clinical circumstances and providing preprinted

orders that are consistent with CPGs for common health problems. Health plans can provide


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physicians with a method for identifying the patients to which guidelines apply. In addition,health plans can provide guidelines for patient as well as provider use. All of these efforts are

likely to make the process more "user friendly."

Because demonstrated success is often the best incentive to change provider behavior, health

plans should also measure and report improvements in outcomes that result from the use of CPGs.

Conclusion

In recent years, health plans, accrediting agencies, governments, and purchasers have dedicatedtime and resources to developing programs to measure, evaluate, and improve the quality ofhealthcare services within the health plan environment. The goal of these programs has been to

make useful information about quality available to purchasers and consumers.

Quality management programs such as those described in this lesson have made a significantcontribution to health plans' efforts to balance the quality and cost of healthcare services. Theprocess, however, is still evolving. As more and better information becomes available, theimportance of quality management is certain to increase.

Endnotes

1. Academy for Healthcare Management, Managed Healthcare: An Introduction, 2nd

edition (Washington, DC: Academy for Healthcare Management, 1999), 8-17.

2. Academy for Healthcare Management, Network Management in Health Plans(Washington, DC: Academy for Healthcare Management, 1999), 3-16.

3. "Healthy People 2010 Fact Sheet,"

4. Leading Health Indicators for Healthy People 2010: Final Report, ed. Carole A. Chrvalaand Roger J. Bulger (Washington, DC: National Academy Press, 1999),

http://www.nap.edu/html/healthy3/(1 June 2000).

5. "Burrows v. Redbud," 1998 U.S. District Court (187 F.R.D. 606), LEXIS 22728; 1998U.S. District Court (187 F.R.D. 606), LEXIS 22541; 1998 U.S. Appeals Court, LEXIS29537.

6. Stanley Goldfarb, M.D., "The Utility of Decision Support, Clinical Guidelines, andFinancial Incentives as Tools to Achieve Improved Clinical Performance," Healthcare

Leadership Review (June 1999): 7.

7. Susan D. Horn, "Clinical Practice Improvement: A Data-Driven Methodology forImproving Patient Care," Journal of Clinical Outcomes Management 6, 3 (March 1999):32.

7 quality improvement

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