FY 2005 Budget in Brief

Agency for Health Research and Quality

On this page:
Agency for Health Research and Quality
Health Costs, Quality, and Outcomes
Medical Expenditure Panel Surveys (MEPS)

The FY 2005 request for AHRQ provides a total program level of $304 million, the same as FY 2004.  This request reflects priority of a continued focus on improving patient safety and reducing medical errors, through the implementation of targeted efforts to make safety-improving technologies available to hospitals and health systems.

AHRQ conducts and sponsors health services research to inform decision-making and improve clinical care and the organization and financing of health care.  AHRQ evaluates both clinical services and the system in which these services are provided.  This work contributes not only to improved clinical care, but also to more cost-effective care.  In FY 2004 and FY 2005, AHRQ supports the translation of research into measurable improvements in the care Americans receive.  AHRQ has forged cooperative relationships with major health care organizations to ensure that research funded by the Agency is implemented by the major players in the health system. The agency's research agenda is broad and spans from medical informatics to long-term care; from pharmaceutical outcomes to prevention to responses to bioterrorism.

Health Costs, Quality, and Outcomes

The President's Budget will continue to support improvements through research on the cost effectiveness and quality of health care by providing a total of $246 million.  Within this total funding, spending on patient safety efforts will increase from $80 million to $84 million.

Patient Safety:  Of the total $84 million, $50 million again will be made available for health system-based information technology investments designed to enhance patient safety, with an emphasis on small community and rural hospitals and systems and the importance of partnerships across communities.

Information technology has the potential to improve the quality, safety and efficiency of health care by helping health care professionals make the best decisions and by assuring that those decisions are implemented as intended. These investments will continue to encourage uptake of technologies such as computerized physician order entry, computer monitoring for potential adverse drug events, automated medication dispensing, computerized reminder systems to improve compliance with guidelines, handheld devices for prescription information, computerized patient records, and patient-centered computerized support groups.  The first awards for implementation of these technologies will be made in summer 2004.  AHRQ will provide up to 50 percent of the total project costs, up to $500,000 per year per project.

Adoption of information technology applications requires the development of a business case for these tools.  Working with public and private partners, AHRQ will help use  data from hospital IT investment demonstrations to help spread proven technology through the healthcare system.

AHRQ will continue to invest $10 million on the development of clinical terminology, messaging standards, and other tools needed to accelerate the use of cost-effective healthcare information technology.  AHRQ will fund research to identify barriers and practical solutions to the development and use of health information systems to support quality improvements and patient safety, since one major obstacle is the lack of clinical terminology and messaging standards that support interoperability.  These priority projects will support patient safety in the U.S., develop a common vision for health information technology and standards across the health care spectrum, and promote and accelerate efforts needed to make that vision a reality in the U.S.

The remaining $24 million in AHRQ's patient safety budget supports a variety of activities.  AHRQ will continue to work collaboratively with the Centers for Disease Control and Prevention, the Food and Drug Administration, and the Centers for Medicare & Medicaid Services, to develop a common Web interface for medical providers that will both enhance the usefulness of adverse event information and reduce reporting burden for their partners in the health care community.  This streamlined reporting system will integrate data from such systems as the National Healthcare Safety Network operated by CDC as well as the reporting systems for drugs, biologics, vaccines, and medical devices operated by FDA.

This past year, AHRQ launched a monthly, peer-reviewed, Web-based medical journal that showcases patient safety lessons drawn from actual cases of near-errors.  Morbidity and Mortality Rounds on the Web helps to educate providers about ways to prevent errors, in a blame-free environment.  AHRQ has also been working with external partners such as the American Academy of Pediatrics to put together a fact sheet for pediatricians and parents of children: "20 Tips to Help Prevent Medical Errors in Children."  Finally, AHRQ will continue a number of research grants and contracts designed to understand how technologies, workforce, and organizational structure affect patient safety, as well as a program to train safety experts to assist States and local healthcare organizations in developing a safety focus.

Research and Dissemination Activities Outside Patient Safety:   In FY 2005, AHRQ will invest $162 million in research and dissemination activities in prevention, acute-and long-term care, pharmaceutical outcomes, informatics, and other areas to support the quality of health care. The FY 2005 budget enables AHRQ to renew several grant programs that help support the health care quality infrastructure. These include Building Research Infrastructure & Capacity Program (BRIC), Minority Research Infrastructure Support Program (M-RISP), Centers for Education and Research on Therapeutics (CERTs) program, and Practice-Based Research Networks (PBRNs).  In addition, AHRQ will fund $6 million in new grants and contracts for Research Empowering America's Changing Healthcare System (REACHES). These grants and contracts will expand work in the area of adopting research findings in real-world settings, assessing their impact and generalizability, and promoting rapid uptake of successful efforts.

A number of AHRQ efforts are oriented toward making research findings accessible. For example, in the CERTs program, studies are underway to gather information that Medicaid programs can use to make coverage and other policy decisions such as drug utilization review, economic effects of beta-blocker therapy in heart failure, and prevalence of type 2 diabetes mellitus in children.  Under its Evidence-based Practice Program, AHRQ is developing scientific information for other agencies and organizations on which to base clinical guidelines, performance measures, and other quality improvement tools.  For example, this past year, AHRQ's Minnesota-based Evidence based Practice Center (EPC) set out to review medical literature to answer questions such as: What are the current indications for, and outcomes from, primary total knee replacement?  What factors explain disparities in the utilization of total knee replacement in different populations?

AHRQ will also continue to chair the U.S. Preventive Services Task Force.  The USPSTF has issued clinical recommendations on colorectal cancer, breast cancer, osteoporosis, hormone replacement therapy, depression, and aspirin chemoprevention for patients at risk for heart disease.

Medical Expenditure Panel Surveys (MEPS)

The FY 2004 budget for MEPS includes a request for $53 million, the same as the FY 2004 level.  MEPS is the collection of detailed, national data on the health care services Americans use, how much they cost, and who pays for them.    It is the only national source of visit-level information on medical expenditures.  MEPS to continue to inform a better understanding of the quality of care the typical patient receives, and of disparities in the care delivered.  MEPS data are critical for tracking the impact of Federal and State programs, including the State Children's Health Insurance Program (SCHIP), Medicare and Medicaid.  One of the agency's recent accomplishments is the publication of two first-ever two reports, required by the agency's 1999 reauthorization, that represent the first national comprehensive effort to measure the quality of health care in America and differences in access to health care services for priority populations.

National Reports on Quality and Disparities in Health Care:  The National Healthcare Quality Report includes information on patient assessment of health care quality, clinical quality measures of common health care services, and performance measures related to outcomes of acute and chronic disease.

The second report – the National Healthcare Disparities Report – highlights populations that are at high risk for differences in care.  These populations include the elderly, people in inner-city and rural areas, women, children, minorities, low-income groups, and individuals with special health care needs.  The NHDR was developed in partnership with other HHS agencies to ensure synergy with existing efforts.

The first editions of both reports are available on a new Web site, www.qualitytools.ahrq.gov.  In addition, the site serves as a Web-based clearinghouse by providing information for health care providers, health plans, policymakers, purchasers, patients and consumers to take effective steps to improve quality.  Both the NHQR and the NHDR will be released annually.  AHRQ has budgeted $3 million in FY 2005 for these projects.

In FY 2005, AHRQ will be fully funded through inter-agency transfers of evaluation funds.

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