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Testimony on the President's FY 1988 Budget Request for the AHCPR by Clifton R.Gaus, Sc.D.
U.S. Department of Health and Human Services

Before the House Appropriations Committee, Subcommittee on Labor, Health and Human Services, Education and Related Agencies
February 11, 1997

Good afternoon Mr. Chairman and Members of the Subcommittee. I am here for the third and last time as AHCPR's Administrator to present the President's budget request for the Agency.

First, though, I would like to take a few moments to talk about the changes that have taken place in the way we do business, changes driven by the revolution that has made managed care the dominant form of health care in the country today.

The year 1996 will be remembered as one of the most challenging -- and productive -- in the seven-year history of the Agency for Health Care Policy and Research. Despite the challenges we have faced, AHCPR strengthened its position as the lead Federal agency for health services research and as a resource for the public and private sectors for science-based information.

We have done this in two ways. First, in order to fulfill the agency's mission of generating and disseminating information that improves the health of Americans, we tailored our research goals to address explicitly the myriad of changes affecting the health care system. AHCPR's research goals are to determine what works best in clinical practice; encourage the cost-effective use of health care resources; help consumers make more informed choices; and measure and improve the quality of care.

Second, in working toward these goals, we adopted two main strategies: reemphasizing our customer focus to ensure support for the highest priority research, and aggressively pursuing partnerships to maximize potential for rapid implementation of new scientific evidence to improve care.


Our customers, whom I call the five "P's" (patients/consumers, providers, plans, purchasers, and policy-makers), have distinct needs, but the challenges they face overlap. To provide the information and data they need to improve the quality and value of health care services, we strengthened our position as "science partner" with the health care industry.

The area of quality provides a perfect illustration of our role as a science-partner. Private market forces have transformed our Nation's health care system, resulting in the reduction in the rate of increase of health care expenditures. This reduction in expenditures has raised questions about the effect on the quality and appropriateness of health care. But the central question is: how can we measure the quality of patient care in a way that all of us can understand and that those who deliver care will agree is a fair and valid approach?

For example, there may be 38 approaches for measuring the quality of patient care for congestive heart failure, but are all of them equally valid? Do they actually measure what they claim to measure? And how can physicians even find out all of the alternative measures that have been developed and compare them?

To respond to this need, AHCPR released CONQUEST -- the Computerized Needs-Oriented Quality Measure Evaluation System, developed by the Harvard School of Public Health. This tool, the first of its kind, was designed to make it easier for our customers to identify, choose and use clinical performance measures most appropriate for their needs. These measures are the core of clinical quality improvement because they assess: the appropriateness and effectiveness of care; the timeliness and safety of services provided; and whether the care provided results in the best outcome that can be expected for that patient's condition. CONQUEST includes information on 53 measure sets developed by a variety of Federal agencies, accrediting organizations, associations, and private sector organizations.

CONQUEST also helped identify where new performance measures are needed. In particular, we learned that there are few good measures appropriate for children; the chronically ill; or assessing care provided to the disabled or mobility impaired. To address these needs, we will continue to sponsor research to develop and test new quality of care measures through the Expansion of the Quality Measures project, or Q-Span, a research effort to support development and testing of new performance measures for specific conditions such as hip fracture and asthma.

Recognizing the important role that the private sector can and must play in this area, AHCPR is working with the Joint Commission on Accreditation of Healthcare Organizations, the National Committee for Quality Assurance, and the Foundation for Accountability in the development of a public-private partnership to foster the development of a Quality Measurement Network (QMNet). QMNet will be a dynamic network of developers and users of measures. This network will add new quality measures and clinical information as they become available, as well as develop and test new ways to disseminate information on clinical quality measures, including: evaluating ways to make CONQUEST more user-friendly to a wider range of audiences; providing technical assistance to users; and using a variety of communication channels (phone, Internet, mail) to bring users together to share measures and information on quality. The goal is to create a comprehensive, publicly accessible and user-friendly quality measurement resource with far more detailed and comprehensive information on a wider range of clinical performance measure. Better measures, and better data on clinical performance are the best way to target improvements in health care and measure success in meeting those goals.


I'm also pleased to report that work on our Evidence-based Practice Centers, first announced last year, is well underway. Our Agency no longer develops clinical practice guidelines. In another example of our science partnerships, AHCPR now works closely with the private sector by responding to their requests for the scientific evidence they need to develop their own quality improvement strategies. The Evidence-based Practice Initiative will support a three-part strategy incorporating Evidence-based Practice Centers, a National Guideline Clearinghouse, and research and evaluation.

Evidence-based Practice Centers. Established at existing academic centers, these AHCPR-sponsored centers will give medical groups, health plans, purchasing organizations, states, and others, the scientific foundation they need to develop clinical performance measures and other tools to improve the quality of health care services.

There are thousands of clinical studies published every year. Many offer contradictory findings on the same condition or medical procedure. Just as you and I are confused when contradictory press releases on improved health advise us both to abstain from alcohol use and to drink a glass of red wine daily, so too can physicians be confused by the vast amount of sometimes contradictory information available to them. Few clinician groups, hospitals, or health plans have the time or resources to review each article and evaluate and compare the appropriateness, clinical relevance, and strength of its findings. The EPCs will provide that service to them.

The Evidence-based Practice Centers (EPCs) will review and synthesize the relevant scientific literature, and develop meta-analyses, evidence tables, and other products on topics submitted by public- and private-sector organizations. The Centers will work closely with these organizations to ensure that the materials developed meets their needs. AHCPR also will disseminate the information widely to the medical community as a whole. The positive response of the medical community to this initiative is clear: the American College of Cardiology and the American Academy of Pediatrics have already asked AHCPR to develop two evidence-based reports. These reports will serve as the prototypes for the future work of the centers.

National Guideline Clearinghouse. Discussions are currently underway with the American Medical Association and the American Association of Health Plans to develop with AHCPR a national on-line clearinghouse of existing public and private-sector clinical practice guidelines. This will allow all clinicians, provider groups, health plans and systems to obtain information on about major published guidelines. The clearinghouse will include information gaining access to the guidelines; summaries, with full text when available; and annotations that will permit users to compare the process by which each guideline was developed and the extent to which recommendations of guidelines on the same topic differ.

Research and Evaluation. AHCPR will continue its program of research and evaluation activities on the development and implementation of quality improvement initiatives. Emphasis will be placed on working collaboratively with health plans and provider groups.

In combination, these components of AHCPR's Evidence-based Practice Initiative will help to ensure that organizations working to improve the quality of health care will have access to the information they need.


In the past two years, we have strengthened our commitment to meeting the needs of the patient and the consumer. We want consumers to make informed decisions about their own personal health and to select the highest quality and most appropriate health care services. For a market-based system to work, consumers need timely, easily understandable, and reliable information.

Nearly three-quarters of Americans covered by employer-based health insurance were enrolled in managed care plans at the end of 1995, compared with only one-half in 1993. To aid consumers in selecting high quality health plans and services, AHCPR supports the Consumer Assessments of Health Plans Study, or CAHPS. CAHPS will develop and test questionnaires and reporting formats that can be used by public- and private-sector organizations to conduct surveys of their members. These organizations can use the results to provide prospective enrollees with the information and data they need to select high quality health plans and services.

The managed care explosion is not limited to the private sector. Federal programs, such as Medicare and Medicaid, also are turning to managed care to contain health costs and get better value. CAHPS includes an agreement with the Health Care Financing Administration for a module specifically developed for Medicare beneficiaries. CAHPS will provide Medicare beneficiaries enrolled in managed care organizations the information needed to make an informed decision in selecting high quality health plans and services.

FY 1998 Budget Request

Now I will turn to our plans for the future. The FY 1998 Budget Request is $149 million, an increase of $5.5 million over the FY 1997 level. This increase allows us to fund the Quality and Cost Effectiveness of Clinical Care Initiative and to fully fund our commitments.

I am particularly excited about our research in the area of quality. We have focused on quality for the FY 1998 budget as we work to further the progress we have made in enhancing the quality of heath care services. Over the past two years, we have emerged as the center of a broad public and private effort to define, measure, and improve the quality of care. In fact, Secretary Shalala has designated AHCPR as the lead agency in the Department's new initiative to "Improve Health Care Quality."

The Quality and Cost Effectiveness Initiative will focus on developing knowledge, tools and approaches to improve the quality of clinical care. This initiative has two components.

The first component of this initiative is focused on outcomes, effectiveness, and cost-effectiveness research. We will increase scientific knowledge by supporting outcomes, effectiveness and cost-effectiveness research on conditions that are: common, costly, and associated with substantial variation in practice; and research that is identified by out customers, for which the evidence base is incomplete or controversial. Some areas are emerging where additional research is needed, including Hormone Replacement Therapy, Alzheimer's Disease, common orthopedic conditions, and clinical conditions, such as asthma and diabetes, that are common in children and adolescents.

As I mentioned earlier, research on quality and cost effectiveness also plays a crucial role in the continuing effort to decrease expenditures for the Medicare program, while providing quality health care. A recent publication of an AHCPR-supported patient outcomes research team outlined a simple and accurate method to predict which patients with pneumonia may be treated at home rather than in a hospital. The prediction method could help reduce the over $4 billion spend annually for inpatient care.

Additionally, the results of one of AHCPR's pharmaceutical outcomes studies have shown that elderly patients who receive beta blockers following heart attack are 43 percent less likely to die in the first two years following the attack than patients who do not receive the drug. This study showed that the under use of beta blockers in this population leads to an increased rate of hospitalization and mortality. These are only two examples of quality and outcomes research conducted by AHCPR that helps to reduce Medicare cost and improve quality of care.

The second component of this initiative is on quality measurement and improvement and clinical performance measures. The demand for accountability by purchasers and consumers requires reliable and usable clinical performance measures to assess and improve the quality of care. In addition, as purchasers move toward direct contracting with providers, the need for scientifically sound measures at this level, and not at the health plan level, becomes acute. Since an expanded knowledge base and tools for clinical improvement are necessary but not sufficient to change practice, studies that assess the effectiveness of strategies to implement these interventions in actual practice must also be conducted.


I also can report to you that the Medical Expenditure Panel Survey continues to be one of our highest priorities in FY 1998. A total of $36.3 million is provided for MEPS. Over the course of the spring, MEPS data will be used to evaluate the impact of: growing enrollment in managed care; enrollment in different types of managed care; changes in how chronic care and disability are managed and financed; changes in employer-supported health insurance; and changes in Federal and State policy.

The current data, gathered through in-person interviews with 13,500 families, is of vital importance to managing the Nation's health care costs. In FY 1998, we will conduct interviews with approximately 3,000 facilities, 20,000 office- based providers, and more than 500 home health providers. In addition, the MEPS Insurance Component conducted in FY 1998 will consist of interviews with more that 40,000 employers and 1,000 insurance carriers.

MEPS data -- not available from any other surveys supported by the Federal government or the private sector -- is essential for analyzing issues such as insurance portability, access to health care, spending by different population groups, and changes in overall health care financing and delivery. Additionally, the National Nursing Home Expenditure Survey will provide calendar year expenditure estimates for nursing home care for persons residing in a nursing home anytime during 1996. The survey will not only provide expenditure estimates by sources of payment, the survey estimates changes in sources of payment, including Medicaid, over the year. These data are only the tip of the iceberg. Over time, MEPS will provide more comprehensive data for public and private sector decision makers, more efficiently, and assure a better return on the Federal Government's investment.


MEPS was also a logical first step towards AHCPR's implementation of the Government Performance and Results Act of 1993. GPRA requires that all Federal agencies build strategic planning and evaluation into management and development of their programs, something AHCPR had done informally and formally for many years. Although the process of developing formal program effectiveness measures for all of AHCPR's programs is still underway, for the FY 1998 budget, AHCPR has developed a pilot performance plan for MEPS.

The main performance goal for MEPS is to have the raw data from the surveys available in March, 1997 for the initial development of preliminary analytical files. This goal is important to the success of the program. MEPS, when it replaced the National Medical Expenditure Survey, was designed to provide more timely data at a lower cost per year of data. AHCPR also will assess performance indicators such as the turnaround time for providing data for outside use, cost of collecting the data, new types of data not previously available, and rate of requests for public use tapes.

We believe that these goals and measures will allow AHCPR to provide a complete picture of MEPS' performance and program effectiveness, and we plan to develop similar performance plans for other AHCPR programs.


In conclusion Mr. Chairman, the health care marketplace continues to change at a rapid rate, and timely and accurate information from AHCPR-supported research is critical to maintaining high quality health care for all Americans.

Approval of AHCPR's budget request for FY 1998 will ensure that unbiased, reliable information on the cost-effectiveness of treatments for specific conditions, as well as strategies to translate the best science into routine practice, are implemented and result in high-quality care at an affordable cost.

An investment in AHCPR's research today can lead to cost savings in the future. The results of our research will help national, State, and local policy makers to increase the value of their expenditures on health care. AHCPR's research has already lead to reductions in costs for the Medicare program.

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