Reprinted from JAMA The Journal of the American Medical Association September 14, 1994, Volume 272 Copyright 1994, American Medical Association.
From the Division of General Medicine/Primary Care, Cook County Hospital, Chicago, Ill (Dr Schiff); the Division of General Internal Medicine and the Institute for Health Policy Studies, San Francisco General Hospital, University of California-San Francisco (Dr Bindman); and the Department of Health Policy and Management, Harvard School of Public Health, Boston, Mass (Dr Brennan). Dr Bindman is a Robert Wood Johnson General Physician Faculty Scholar.
A complete list of the members of the working group that drafted this report, which was then reviewed and endorsed by Physicians for a National Health Program, a national organization representing more than 6000 physicians, appears at the end of this article.
Reprint requests to Physicians for a National Health Program, 29 E. Madison St., Suite 1412, Chicago, IL 60602 (Dr Schiff).
MANY MISCONSTRUE US health system reform options by presuming that "trade-offs" are needed to counter-balance the competing goals of increasing access, containing costs, and preserving quality.1, 2 Standing as an apparent paradox to this zero-sum equation are countries such as Canada that ensure access to all at a cost 40% per capita less, with satisfaction and outcomes as good as or better than those in the United States.3, 4 While the efficiencies of a single-payer universal program are widely acknowledged to facilitate simultaneous cost control and universal access, lingering concerns about quality have blunted support for this approach.
Quality is of paramount importance to Americans. Opponents of reform appeal to fears of diminished quality, warning of waiting lists, rationing, and "government control."5 Missing from more narrow discussions of the accuracy of such charges is a broader exploration of the quality implications of a universal health care program. Conversely, advocates of national health insurance have failed to emphasize quality issues as key criteria for reform,6 often assuming that we have "the best medical services in the world."7 They portray reform primarily as extending the benefits of private insurance to those currently uninsured, with safeguards added to pre- serve quality.
We disagree with both views. It is unthinkable to label our current system as "highest quality" given its frequent failure to provide such basic services as immunizations or prenatal, primary, and preventive care. Moreover, there is growing concern about quality problems with the care that is provided. Quality problems in the current system include denial of care, discrimination,8 disparities, geographic maldistribution,9 lack of continuity, lack of primary care,10 inadequate or lack of prenatal care,11 failure to provide beneficial prevention,12 substandard/incompetent providers,13 declining patient satisfaction and impersonal care,14,15 iatrogenesis (negligent adverse events),16 diagnostic errors,17 unnecessary procedures/surgery,18 sub-optimal medication prescribing/usage,19 and neglect of quality-of-life/psychosocial issues.20 Our "highest-quality" complacency is especially challenged by insights from two seemingly disparate sources: (1) epidemiologic research based on financial claims databases and (2) industrial quality improvement concepts pioneered in Japan. These two sources converge around the concept of "variations," illuminating widespread differences in clinical practice, further challenging the cost-access-quality trade-off assumption. Data and insights from these two new paradigms demonstrate that better care will actually cost less once improvements are made in care processes and clinical decision making.21,22
The health system must work better to extend access and to control costs. In this article, we argue that a single-payer national health program provides a better framework for improving quality. First, we briefly review requirements for quality care. Then, we propose 10 principles that should be integral to reform strategies to augment quality. We contrast our approach with the current managed competition strategy,23 showing how a single-payer system is more likely to facilitate these 10 interrelated quality features.
WHAT IS QUALITY? HOW CAN IT BE MEASURED?
High-quality care should result in improved health for individuals and the entire community. It depends on knowledgeable, caring providers who have a thorough understanding of preventive, diagnostic, and therapeutic strategies and the link between their application and improved health outcomes. Such strategies need to be applied with the highest technical skill and carried out in a humane, culturally sensitive, and coordinated manner. Quality will suffer when any of these components is lacking.
There is no single gold standard measurement of health care quality; its assessment requires multiple perspectives. The care provided to the population as a whole as well as to individual patients should be evaluated because critical quality issues may affect individuals who do not have access to medical services. Viewpoints of providers, patients, family members, and the community must be incorporated. Evaluated services should not be limited to medical care but should also include related services, such as nursing services, social services, and community education. To judge quality, we need a lengthened time frame that allows not only for examination of longer-term impacts but also for changes over time in what is considered good care. Finally, quality should be judged in the context of costs, because when equally good care is provided at a lower cost, more resources are available for other services.
Although consensus has emerged around many of these precepts,24,25 there is disappointment over the extent to which their fragmented application has actually improved care.26,27 This meagerness of demonstrated benefit is especially worrisome given providers' frustration with the time and administrative burdens imposed by current oversight measures. Promising efforts to operationalize these precepts on a larger scale (ie, Agency for Health Care Policy and Research, the Joint Commission on Accreditation of Healthcare Organizations' Agenda for Change, and Medicare's Quality Improvement Initiative)28 will continue to have limited success if not linked to more fundamental changes in health care finance and delivery. This will require health system reform based on the application of quality assurance tools and insights, guided by the principles outlined below.
TEN PRINCIPLES FOR IMPROVED QUALITY
1. There is a profound and inseparable relationship between access and quality: universal insurance coverage is a prerequisite for quality care. Because quality must be population based, traditional definitions of quality should be broadened to include the gravest of quality deficits-denial of care.28 The most important prerequisite for access is health insurance. To delay universal coverage for years, as projected in the Clinton plan and various congressional health proposals, means the continuation of compromised quality for millions of people.
Growing evidence from large observational studies underscores this strong relationship between quality and access/ insurance status:
This profound connection between quality and access extends far beyond simply underserving the uninsured. Access problems threaten quality for those with insurance who encounter delays and overcrowding in emergency departments overflowing with patients lacking primary care.34 For the insured, limitations on benefits, including financial barriers (such as co-payments, restrictions in coverage, and rationing via administrative obstacles), increasingly obstruct care.35 Most important, quality is distorted when ability and willingness to pay become the criteria for determining which services are provided. Marginally effective or even harmful treatments for the well-insured affluent take priority over more needed and appropriate services.36
2. The best guarantor of universal high-quality care is a unified system that does not treat patients differently based on employment, financial status, or source of payment. This principle embodies Eddy's health care "golden rule": If a service is necessary for oneself, it is necessary for others.37 We reject the notion that different people are entitled to a different quality of care.
The quality-impairing consequences of separate classes of insurance are illustrated by Medicaid, whose recipients, though "insured," are often refused care or provided substandard treatment.38 For many medical services, access for Medicaid patients is little better than for the uninsured (D. U. Himmelstein and S. Woolhandler, unpublished tabulations from the 1987 National Medical Expenditures Survey). Similarly, universally available lowest-tier coverage, such as that proposed under managed competition, with more or better services only for those able to afford to upgrade their benefits, violates this principle and would perpetuate inequalities in health care.
The equality principle is a prerequisite to grapple meaningfully with ways to control marginally effective expensive interventions. Otherwise, limits based on ability to pay are, by definition, discrimination against the poor.39
Under a multitiered system, patients and providers internalize an "everyone for himself or herself' ethic, eroding incentives for improving the system overall.40 A cohesive system based on fairness and equality could harness each citizen's desires for quality care to drive system quality upward. It would promote mechanisms for individual complaints to be linked to system-wide improvement rather than dissipated as special privileges. It would ensure that the quality of the basic plan is high enough to be acceptable to all citizens. Proposals that allow individual or corporate "opting out" of publicly defined benefit packages erode this quality-enhancing covenant. Hence, a single program not only minimizes discrimination against the vulnerable but also promotes improvement overall.
3. Continuity of primary care is needed to overcome fragmentation and overspecialization among health care practitioners and institutions. Patients need care coordinated by the primary care provider of their choice. Whether evaluating a confused elderly patient or discontinuing aggressive care to a patient with emphysema, a continuing physician-patient relationship is the essential foundation that allows physicians to practice conservative, sensitive, appropriate, cost-effective medicine. Competitive models that encourage patients to switch among competing plans discourage ongoing relationships.41 Competition also blunts incentives for prevention because the resulting savings are likely to accrue long after the patient has switched to a rival plan.
As practitioners, we do quality work when patients can trust that we will be available with the time, independent judgment, and familiarity with their problems to give them skillful personal attention. Cost-containment efforts designed to limit utilization have counterproductively undermined this primary caring role. Erecting financial barriers to discourage contact, penalizing the primary practitioner for ordering tests and consultations, and intrusive utilization review measures have contributed to growing dissatisfaction with primary care practice.42,43
4. A standardized confidential electronic medical record and resulting database are key to supporting clinical practice and creating the information infrastructure needed to improve care overall. Information technology should allow us to zoom in to focus on the microdetails of why a particular clinical decision was made, as well as give a macro-overview of disease patterns in populations. Its memory should permit panning backward and forward in time, seeing our own patients' past histories, as well as aggregating data to project disease natural history and response to interventions.
Unfortunately, implementation of medical computing has been driven by insurance/billing imperatives, often ignoring information needs for improved patient care. The Institute of Medicine Committee on Improving the Medical Record has documented the ways that paper-based medical records and computerized laboratory and claims data fail to coalesce into integrated patient care records, capable not only of storing patient data but also of improving the quality of care.44 Consider routine yet currently difficult clinical decisions, such as whether a patient's wound requires a tetanus shot, or a positive syphilis serology result requires treatment, or a decreased hematocrit requires further workup. Computer technology should permit us to track patients over time across multiple sites and support higher-quality clinical decision making. Its potential for real-time reminders, prescribing, and bibliographic assistance is vast but unrealized.44, 45
Realizing the computer's quality support potential hinges on strong guarantees of personal data confidentiality,44 uniformity and integrity of data systems, availability of aggregate data in the public domain,46 and minimization of costs, especially for software development and data acquisition. Creating national standards for protection of patients' privacy is one of the most important issues that health system reform must address, yet prospects for federal leadership appear to be confused and uncertain.47, 48 The United States lags behind other countries in developing a secure clinical information infrastructure because it lacks a unified approach. No public entity has sufficient scope or authority to spearhead this project.49
Despite a lengthy section on information automation, the Clinton proposal perpetuates the primacy of financial data to the neglect of clinical information by calling for computerized billing but not computerized patient care records.50 Furthermore, managed competition compromises this crucial tool for advancing the public's health by fragmenting information among competing health plans and creates incentives for distortion (ie, "diagnosis creep") that arise when data are linked to financial rewards.51
5. Health care delivery must be guided by the precepts of continuous quality improvement (CQI). Improved data combined with statistical thinking permit a more scientific practice of medicine. Five ideas are basic to CQI22, 52, 53:
Current widespread endorsement of CQI belies a continuing focus on external inspection, short-term financial gain as the measure of success, inefficient cost-control measures, and disruptions of physicians' relationships with patients and colleagues as employers and insurers seek the lowest price (New York Times. January 24, 1993:1).22, 41, 43, 54 Under our current system, each insurer must protect its financial stake through these shortsighted measures that disrupt overall quality. Well situated to exercise such undesirable options, insurers cannot risk the long-term commitments to patients and providers, plus loss of management prerogatives, inherent in the five elements of CQI.
Improving individual providers' care can best be accomplished via supporting their ability to practice quality care coupled with pooled outcomes data and patient feedback. This contrasts to the current punitive, exclusionary, and competitive approaches. The thrust of CQI is to improve the norm of performance rather than to merely identify outliers. Where individual competence and performance deficiencies do exist, they must be conscientiously evaluated and definitively resolved. Continuous quality improvement creates a climate and provides tools to accomplish this more fairly and constructively.
6. New forums for enhanced public accountability are needed to improve clinical quality, to address and prevent malpractice, and to engage practitioners in partnerships with their peers and patients to guide and evaluate care. Patients' and practitioners' mutual de- sire to redress and prevent suboptimal medical outcomes should make them natural allies. Instead, we are witnessing growing antagonisms. The narrow emphasis on antagonistic all-or-none approaches, such as lawsuits, or exiting one plan for another, constrains consumers from maximally exercising choices, sharing in decision making, and being genuinely involved in oversight and helping to pre- vent malpractice.
The Harvard Malpractice Study demonstrated that one in 25 hospitalized patients suffered a disabling iatrogenic injury, one quarter of these as a result of negligence.16 Reconciling consumers' legitimate demands to improve this performance with the need to protect confidentiality, the need to nurture candid professional introspection, and the cur- rent inadequacy of outcomes data for judging quality55 poses difficult challenges. This requires trust and cooperation. Although we believe that a no-fault approach to malpractice is most consistent with the logic of CQI (which seeks prevention over blame) and universal coverage (which would already provide lifetime health benefits for iatrogenic injuries, thus obviating the need to sue for such benefits), additional research is needed on questions of deterrence and effectiveness.
Just as the concept of informed con- sent was once foreign, today's physicians are unaccustomed to thinking constructively about creating a health sphere in which difficult issues and alternatives are openly discussed. Gathering data about care practices and turning those data into information to be shared with peers and the public must become a key ethical duty.46, 66, 57 New vistas for more public yet scientific and collegial oversight include designing and evaluating practice guidelines58; evaluation of patient satisfaction, complaint, and outcomes data, such as delayed or missed diagnoses59; ombudsman programs; alternative ways to adjudicate malpractice allegations16; interactive decision-making computer technology60; and more meaningful regulatory activities.61-64
In the event of a medical mishap or untimely death, patients or relatives want an explanation and an opportunity to ask questions and receive full and honest answers, things we often fail to provide.65 For centuries, the autopsy has fulfilled an important "convening" function for the profession to engage such questions and admit mistakes (unfortunately this valuable tool is increasingly neglected).66 Practice databases may facilitate an analogous convening forum for bringing together the profession and the public to examine our record, thereby fulfilling our obligations for expanded public accountability.
7. Financial neutrality of medical decision making is essential to reconcile distorting influences of physician payment mechanisms with ubiquitous uncertainties in clinical medicine. Payment incentives may distort the quality of medical services. Fee-for-service favors excessive use of services, while capitation payment may encourage undertreatment.54, 67 To lessen this tendency for physician payment to distort treatment decisions, we must strive to remove personal financial considerations from clinical decision making.
Self-referral by physicians to medical facilities from which they profit is a particularly egregious example of a financial incentive distorting a physician's practice. Physician ownership of diagnostic imaging centers is associated with a referral rate four times that of their noninvesting physician colleagues.68 Similarly deplorable are managed care arrangements that directly tie physicians' incomes to withholding referrals for diagnostic tests, specialty consultation, or hospitalization. These arrangements create an unacceptable conflict between a patient's welfare and a physician's financial interest. Even not-for- profit physician networks, portrayed by Clinton plan advocates as alternatives to insurance company or managed care inducements,69 perpetuate this conflict of interest when they make providers assume "financial risk" for their patients.
Physicians do need to make more cost-conscious and cost-efficient decisions. However, we reject approaches that expect improved decision making to derive from tinkering with physician rewards. The problem is not insufficient motivation; it is uncertainty which, as many have noted, is ubiquitous in medicine.70 Financial incentives to manipulate physicians to do more or less conceal rather than address our clinical knowledge deficits. Physicians respond best to efforts, based on their intrinsic values, that motivate and involve them directly in improving patient care. Even when forced to choose between maximizing patient outcomes over their own financial gain, physicians typically choose to improve care.71
We recognize that financial neutrality is an ideal. No payment mechanism completely eliminates the influence of payment on treatment. For example, while payment by salary separates day-to-day clinical decisions from financial considerations, it can encourage undertreatment or the avoidance of more complex patients who require expensive care. The current British approach, capitation supplemented with added fees for preventive services and complex cases, illustrates one possible alternative.72 Such arrangements at least channel incentives toward mutually agreed on positive objectives rather than creating conflicts and lack of trust that poison provider-patient relationships.
8. Emphasis should shift from micromanagement of providers' practices to macroallocation decisions. Public control over expenditures can improve quality by promoting regionalization, coordination, and prevention. The uncontrolled proliferation and duplication of expensive technology in our present system, considered by some the sine qua non of US high-quality care, both adds to cost and detracts from quality.
For example, because we have too many mammography machines, each is underutilized. This doubles the cost of each test. As a result, many women cannot afford screening. Thus, because we have too many mammography machines, we have too little breast cancer screening.73
For technically complex procedures, an inverse relationship between volume and mortality rates has generally been observed.74 Yet, in the RAND appropriateness study, one fourth of the surgeons performing carotid endarterectomies did only one such procedure per year (on Medicare patients). Three of four surgeons performed fewer than 10 endarterectomies - the average annual number performed by these surgeons was 3.4, a number most would consider too few to maintain proficiency.75
Hospitals compete for patients by establishing competing specialized services rather than cooperating to establish one high-quality unit. Two decades of "regional planning" requiring certification for more costly capital expenditures have shown that, absent more direct financial control of capital allocations, such regulatory efforts have not succeeded.76
Reorientation toward macroallocation broadens quality horizons in many ways. Establishing "fences" that prospectively define available resources means that less energy and money are wasted micro- managing each decision, and more energy is directed toward overall quality.77 A child scolded to clean his plate because there are children starving in Africa may reasonably question the logic. Refusing intensive care unit treatment to an elderly patient because the resources could be better used for prenatal care is similarly hard to justify if we lack a structure to redirect the resources.78 Global budgets allow managerial energies to be redirected away from maximizing revenue, improving market share and expansion, toward improving quality.
Competition gurus rely on report cards to allow marketplace choices to drive competition toward better quality. They overestimate the precision of measurements at the level of the individual provider or health plan (New York Times. March 31, 1994:A1, A11)79 as well as the higher "leverage" potential of coordinated system improvement. Because existing measures lack precision, cost may end up being the only "objective" measure. Berwick80 has argued that quality needs to be induced rather than selected. Measuring performance ought to be aimed more at improving quality than at lubricating competition. Such improvement requires leadership committed to improving each component of the system as well coordinating its various elements.
9. Quality requires prevention. Prevention means looking beyond medical treatment of sick individuals to community-based public health efforts to prevent disease, improve functioning and well-being, and reduce health disparities. These simple goals, articulated in Healthy People 2000,81 remain elusive. Nine preventable diseases are responsible for more than half of the deaths in the United States, yet less than 3% of health care spending is directed toward prevention.82
Private health insurance attaches funding only to individual patients and thus separates the funding role and control from that of representing broader societal interests.83 Insurance companies discovered risk factors, such as hypertension,84 yet they used this insight primarily to exclude high-risk individuals. This fragmenting of the community places both sick people and the social causes of disease outside the boundaries of medical care. Although rhetorically "prevention is cheaper than cure," many preventive measures probably increase costs.85 This, combined with high patient turnover rates and short-term financial orientation, gives private insurers little incentive to invest in prevention.
Health care financing should facilitate problem solving at the community level. Community-based approaches to health promotion rest on the premise that enduring changes result from community-wide changes in attitudes and behaviors as well as ensuring a healthy environment.86, 87 Stores that refuse to sell tobacco to minors and promote low-fat foods, schools that teach avoidance of human immunodeficiency virus infection, and a health department that can guarantee clean air and water have a more vital role in ensuring health than does private health insurance. According to Enthoven,88 the originator of managed competition, its "goal is to divide providers in each community into competing economic units." Capitation payments to competing providers, in theory designed to motivate prevention, thus fracture the community and make community-based interventions more difficult because no provider has a population-based purview.
10. Affordability is a quality issue. Effective cost control is needed to en- sure availability of quality health care both to individuals and the nation. Good-quality care should not mean expensive care; if it does, it will not be available to most citizens. Flawed cost control reduces quality in many ways. It diverts resources from legitimate health needs, increases iatrogenic risks, and leads to financial barriers to care. These harmful impacts derive both from failure to contain costs and "side effects" of ill-conceived cost-control measures.
Despite multiple cost-control measures during the past two decades, costs continue to escalate. These measures have failed to slow growth of administrative costs, improve efficiency, curb ineffective or marginally effective services, or rein in excessive managerial or professional salaries or profits.89, 90 Moreover, many cost-control initiatives have encouraged providers to discriminate against less profitable patients and increase their focus on fiscal rather than clinical goals.
The most prevalent approach to containing costs has been patient "cost sharing." Financial barriers have serious quality-impairing potential unless they are adjusted to patients' need for care and ability to pay .91,92 It is impossible to erect a barrier high enough to discourage unnecessary care, low enough that needed care is not deterred, and simultaneously adjusted to a patient's discretionary income. Donabedian91 argues that "even if such adjustments were made, financial barriers would remain too blunt an instrument for assuring a precise calibration of care to need." The RAND Health Insurance experiment confirmed this, finding that "changing economic incentives can alter the amount of care consumed, but implementing such incentives appears to increase or decrease proportionately both appropriate and inappropriate use."46
Private insurers and employers have regularly sought cheaper care and to avoid paying beneficiaries' bills, but have rarely advocated better-quality care for patients.93 Health reformers in the United States should heed lessons learned in other industries. An obsession with cutting costs rather than with quality leads to both suboptimal quality and higher costs. Systems based on trust and common purpose achieve far more than those based on barriers and competition. In addition, solutions that tamper with a system, increasing complexity, are inferior to those that simplify the way a job is done.52
Health-financing reform provides a pivotal opportunity to improve the quality of health care. We believe that a single-payer national health program provides the most effective framework for implementing the quality-enhancing principles discussed above.
A managed competition strategy, such as that proposed by the Clinton administration and debated in Congress, while designed to provide universal access, has not demonstrated an ability to contain cost and creates a complex structure with separate and unequal multitiered care. Eschewing the easily enforceable budgetary constraints of the single-payer approach necessitates reliance on potentially damaging financial incentives, wasteful micromanagement, and complicated budgetary regulation to minimize spending. Accountability, achievable only if patients are maximally empowered and involved, is structurally nurtured by an open and publicly controlled funding process and impeded under managed competition by multiple intermediaries between providers and patients. Effective implementation of computers in clinical medicine would be retarded by pecuniary interests favoring proprietary data and incompatible software formats and enhanced by public development, ownership, and standards. Global budgeting facilitates directing national resources based on the needs derived from these epidemiologic data, whereas competition ensures that resource allocation will depend on profitability.
No amount of regulation and oversight can breathe quality into a system that is not based on caring professionals working for patients.26 There is little empirical evidence that report cards and regulatory constraints can reliably separate "good" from "bad" care. The technical capabilities of such measures are too imprecise, and incentives for gaming are too great (New York Times. March 31, 1994:A1, A11).66, 79, 94 Such measures encourage mindless efforts to meet concrete, but in many cases tangential, criteria while emphasizing sanctions and policing, which run counter to the CQI principles that empower workers to think innovatively about processes. Regulation cannot revitalize a system controlled by financial institutions driven by fiscal incentives that reward both efficiency and fraud, quality care as well as neglect of patients' problems. More regulatory and administrative 'overhead does mean less time and resources for patient care.
A single-payer system is not a panacea for resolving these problems. What it does offer is a framework for collectively engaging these issues in a fair, cohesive, and effective fashion. The 10 principles outlined above, while neither a detailed blueprint of how a US single-payer system would work nor a point-by-point critique of alternate reform proposals, suggest that important opportunities to improve quality would be compromised were the United States to settle for a managed competition approach.
Rather than being a code word for the status quo, quality must become a pivotal guide for change. A unified system emphasizing cooperation, democratic accountability, and explicit planning is preferable to a fragmented approach with accountability abdicated to success or failure in the market and planning forsaken in favor of resource allocation based on profitability. Only this preferred approach to system redesign can lead us to a qualitatively better system, one that instills a sense of ownership and pride in its patients and providers.
We thank Ann McKinnon for editing assistance. The 18 members of the working group that drafted this report were as follows: Dr Schiff (chair), Dr Bindman, Thomas Bodenheimer, MD, MPH, Dr Brennan, Carolyn Clancy, MD, Oliver Fein, MD, Ida Hellander, MD, David U. Himmelstein, MD, Linda R. Murray, MD, MPH, T. Donald Rucker, PhD, Ron Sable, MD (deceased), Jeffrey Scavorn, MD, Ronald Shansky, MD, Ellen Shaffer, MPH, David Slobodkin, MD, MPH, Steve Tarzynski, MD, MPH, Steffie Woolhandler,MD, MPH, and Quentin D. Young, MD.
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