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Measuring the Value of Mark McClellan

By John Reichard, CQ HealthBeat Editor

October 13, 2006 -- In the last speech of a tenure marked by a focus on improving the value of Medicare spending, CMS Administrator Mark B. McClellan took stock this week of the recent proliferation of public–private efforts to develop quality-of-care measures—and promised much more to come. Those measures eventually might be as much a part of his legacy as his efforts in overseeing the implementation of the Medicare prescription drug benefit, or so he hopes.

Reporters and politicians grumbled during McClellan's tenure about his penchant for enumerating the dry details of dozen of policies and for dodging many more questions than his predecessors to stay out of political trouble with his bosses. Yet he connected strongly with wonkier audiences who appreciated his mastery of the technical details involved in developing complex new programs to promote the quality and efficiency of care.

McClellan's farewell speech Thursday to professionals involved in the technical aspects of improving quality of care drew a standing ovation, and his Sept. 25 address to information technology professionals was greeted with similarly strong emotion.

Behind the dry detail was a vision of health care that had bipartisan appeal despite its private sector focus, because it embraced quality improvement rather than budget cuts as a tactic to cope with rising spending—at least in the Medicare program. Revisions to Medicaid championed by McClellan drew much harsher criticism from groups who lobby for broader government funding to increase access to health care.

More than implementing the Medicare prescription drug benefit, McClellan cited his efforts to improve quality of care as his biggest accomplishment at Centers for Medicare and Medicaid Services. "What's more important for the program is . . . moving away from a focus on just paying bills," he told a breakfast meeting of reporters on Friday, his last day on the job.

"If we want to get the best possible care for our beneficiaries at the lowest possible cost to them and the taxpayers, we've got to be more proactive in supporting quality care and paying for what we want," he said.

McClellan defined that objective as "better-coordinated, prevention-oriented, personalized care at a lower overall cost." The goal is critical for the entire health care system, he said. "We've got to keep in this kind of direction to have a sustainable, innovative, and affordable health care system."

Public–private alliances have sprung up in recent months to develop a variety of measures, the outgrowth of a voluntary consensus development process that had its origins in the Clinton administration.

That process is poised to expand sharply in coming years under initiatives undertaken by the Bush administration. By bringing together consumers, providers, insurers, as well as government and business health care buyers in a voluntary effort to reach consensus on quality-of-care measures, the process, led by the public–private National Quality Forum, so far has avoided the political gridlock that easily could befall efforts to reshape U.S. health care.

"Thanks to your efforts, we have been able to make a lot of progress and we are on the cusp of much more," McClellan told a meeting sponsored by the forum Thursday.

The Hospital Quality Alliance already has developed measures to assess quality in Medicare, and the Ambulatory Care Quality Alliance has developed such measures for physician care, which are expected to be the basis of a pay-for-performance system. Similar alliances have been formed for pharmacy care, kidney care, and cancer care, McClellan noted.

And a joint committee of the hospital and ambulatory care alliances—called the Quality Alliance Steering Committee—is developing a plan for implementing the measures around the country through local "collaboratives" that bring together Medicare, Medicaid, private insurers, consumers, providers, and employers.

Initial plans announced last March call for six pilot projects that for the first time combine government and commercial insurance data to report on the quality and efficiency of local physician practices. After visiting the six sites, which build on existing local quality measurement collaboratives, Department of Health and Human Services Secretary Michael O. Leavitt announced that the number of projects would be expanded to 60 sites around the U.S. The current six sites are in California, Indiana, Massachusetts, Minnesota, Wisconsin, and the Phoenix region.

The effort will allow local consumers and employers to use the data to select providers and the providers themselves to establish benchmarks to improve care in the local region. McClellan said Thursday that the "Quality Improvement Organizations" that contract with Medicare will work with the local projects to assist efforts by physicians to improve care broadly in the local community.

McClellan said the eventual goal is for the 60 local collaboratives to use more sophisticated "episode-based measures" to find higher quality care and root out inefficiency.

Current measures assess care provided by one element of the health care system, such as the doctor's office or the hospital, but not the whole spectrum of care a patient receives when going through treatment for a particular condition—such as a heart attack.

What patients really care about is the cost and quality of care they receive throughout the whole spectrum of treatment, not just a piece of it, McClellan said. "The hospital staff, the surgeon, the rehab staff, we want to promote all of them working together, not just doing well on each of their individual measures."

That kind of measure could be key to wringing inefficiency out of the U.S. health system, Dartmouth researcher Elliott Fisher told the same audience. Fisher is famous for his involvement in research suggesting that regions of the country with far higher per capita costs of treating Medicare patients show no advantages in quality of care—in fact outcomes may be worse, he says.

About half of the higher expense can be explained by "capacity"—the fact that a region has larger supplies of certain services and providers, he says. But different "clinical cultures" from one medical center to another, for example, also explain cost variations. He argues that "organizational accountability" for long-term costs and quality is key to improving efficiency.

While McClellan appears to have done much to create the framework for such measures, whether his work will lead to a more efficient system remains to be seen, of course. Critics contend that the private plans he touts as a tool for better-coordinated, more efficient care are overpaid relative to traditional Medicare.

And much work remains to be done to create the system of quality-based payment that he has espoused. Congress, for example, has yet to pass legislation that would block Medicare payment cuts to physicians next year and to lay the foundation for payments based on quality of care.

But McClellan expressed confidence Friday that Congress will act. "This is a very serious issue, and Congress is going to revisit this I think in the lame-duck session," he said. "Our staff is working very closely with staff on the Hill on technical issues involving how you can move to a better payment system."

And after directing the implementation of the drug benefit and other parts of the massive Medicare overhaul law (PL 108-173), McClellan's own efficiency is an unquestioned part of his legacy. But even the seemingly tireless McClellan finally showed signs of fatigue on Friday. Asked how he planned to celebrate the completion of his tenure Friday evening, McClellan said, "I'll probably just go home and collapse."

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