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AMERICAN JOURNAL OF MEDICAL QUALITY
Copyright ©1996 by American College of Medical Quality
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Vol. 11, No.1
Spring 1996
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Pennsylvania Health Care Cost Containment Council-The Role of a State Health Care Agency in an Evolving Health Care Market
Carl A. Sirio, M.D., Ernest J. Sessa and James L. McGee, M.B.A., C.E.B.S.
Supported in part by the Department of Anesthesiology and Critical
Care Medicine, University of Pittsburgh, Pittsburgh, P A.
"It is the purpose of this legislation to promote the public interest by encouraging the development of competitive health care services in which health care costs are contained and to assure that all citizens have access to quality health care . ... It is further the intent of this act to facilitate the continuing provision of quality, cost-effective health services throughout the Commonwealth by providing current, accurate data and information to the purchasers and consumers of health care on both cost and quality of health care services and to public officials for the purpose of determining health-related programs and policies and to assure access to health care services" (1).
Periodic scrutiny of a public agency charged with assessing the performance of health care institutions serves several important goals. These include: a review of the agency's mission within the authority vested to it, evaluation of current goals and projects intended to meet the legislative mandate, reflection on both successes and failures; elaboration of new plans, an increase in agency visibility with state legislative and executive leaders as well as constituent groups, and reinvigorating and motivating staff.
The initial legislative authority establishing the Pennsylvania Health Care Cost Containment Council (PHC4)
in 1986 included a "sunset" provision which terminated the organization after 6 years unless specifically reauthorize by the Pennsylvania legislature. After reauthorization by the legislature in July 1993 (2), Council members wanted to reexamine the direction of the agency in a health care delivery environment that had changed dramatically since the initial enabling legislation was signed in 1986.
Most notably, the health care community began to align itself with the view of business and labor interests, that reliable public outcome data could guide health care quality initiatives, and that these initiatives could also serve as one of many brakes on health care inflation. Some Council members were concerned that the activities of PHC4, viewed by many as a leader in this field, might not be keeping pace with changes in the industry.
The process of internal assessment and reevaluation for PHC4 began with the formation of several special task forces including the Future Directions Task Force in 1994 (3). One recommendation of that Task force was for PHC4 to sponsor a national symposium on outcomes and quality assessment to inform Council members and policy makers about tools designed to
assess and measme outcomes as well as current initiatives to evaluate health systems performance in Pennsylvania and around the country. The symposium had several goals. These included: focusing on long-term goals for data reporting in an evolving health care market, evaluating the state of the art of health assessment tools, reviewing the leadership role of the Council within the state and the nation regarding public accountability for health services outcomes, and reinvigorating the Council to continue to reshape and refocus
its activities.
Immediately after the national symposium, the Council members met to begin the task of evaluation and planning, building on the enthusiasm generated by the panel discussions and plenary lectures. A consensus emerged on several issues. PHC4 had retained its preeminent status as a role model for public reporting on health outcomes. Nevertheless, there was value in increasing short-term resources devoted to further defining plans for ongoing and future initiatives. New methods of organizing and delivering health services required a broader range of outcome assessment approaches. The Council members wanted to define a role in the evolving field of health plan reporting that built on its unique capabilities and experience. No single method was discovered as the best approach to evaluating health care during the evolution of managed care.
Since 1986 the relationship between the Council and the health care provider community had become less adversarial and more cooperative. As a result, the Council members agreed informally that the hospital and medical communIties should participate more activity in the Council's leadership and decision making. This should improve communIcation and avoid the occasionally acrimonious encounters the Council experienced in its early years. The Council concluded that it could respond to the needs and challenges presented by a changing health care delivery environment without modifying its statutory authority.
A Strategic Planning Committee was formed with four subcommittees designed to address the health information needs of purchasers, providers, third party payers, and state government as well as the role of PHC4 in meeting these requirements. The final committee report would be designed to guide the direction and speed with which PHC4 embarked on new inItiatives.
After independent deliberations, the four broad constituent groups represented by the subcommittees agreed to the following:
- PHC4 should continue to increase the timeliness of the data in order to make them more useful for users
- PHC4 should define a role in the evaluation of managed care plans in both the private and public sectors. This activity should complement the activities of other groups. The Council could explore the potential to serve as an auditing body for self-reported performance indicators
- PHC4 should not abandon current activities but refocus ongoing initiatives to meet the growing
needs of data users, most specifically health care providers and purchasers
- PHC4 could improve the depth of outcomes reports by leveraging the data collected by others or by developing collaborative outcomes projects with business coalitions, state agencies, and third party payers
- PHC4 should expand the use of small area analysis to uncover the differences in utilization of services across the Commonwealth
- PHC4 should participate in and support activities to develop health information networks which would facilitate the flow of health information important to the conduct of Council activities
- PHC4 should continue to evaluate the ability to report health cost and payment data
- PHC4 should enhance educational and marketing programs to facilitate the use of Council reports for health purchasing.
State agencies other than the Department of Health were not significant users of Council data. The Committee, with representatives from both the legislature and the governor's office, viewed the development of closer working relationships with other state departments and agencies as critical to the future success of PHC4.
State government is the largest purchaser of health services in the Commonwealth of Pennsylvania. Outlays for health care total approximately $450 million dollars for state employees, retirees, and dependents and $6.5 billion dollars through the Department of Welfare for the state's portion of Medicaid benefits. Medicaid benefits currently serve approximately 1.7 million individuals. Questions regarding the relationship between clinical outcomes and cost are becoming paramount in the evaluation of the Medicaid program as it moves aggressively into managed care contract arrangements with providers. An opportunity exists for PHC4 to become a resource for the other state agencies in the evaluation of health care outcomes.
One collaborative project that grew out of these discussions is a joint effort between the Department of Health and the Council to report on hospital and county rates for cesarean sections and vaginal births after delivery. Each agency contributed data, and reports were tailored to meet the needs of each agencies constituency.
ACUTE MYOCARDIAL INFARCTION REPORT
In 1992, PHC4 produced its first statewide report on outcomes for coronary artery bypass surgery (CABG), which focused on the performance of both hospitals
and individual physicians (4-7). The CABG reports were a successful attempt to better understand the implications on patient outcome for a complicated disease process. The CABG reports were also a model approach for other diseases when assessing patient outcomes attributable to individual physicians and hospitals.
The physician communality had many concerns about the Council's first CABG report. However, through a process of deliberate collaboration a mutual respect emerged. The medical community was able to contribute to the process of developing the risk adjustment model and outcomes reporting through various technical advisory groups. When the Council began to consider a second physician level report, the physician and hospital community stepped forward with the recommendation to analyze outcomes for patients admitted for acute myocardial infarction (AMI). AMI was selected for several reasons. There is a high prevalence of coronary artery disease in the population as indicated by the high incidence of acute hospitalization for AMI. There is also high mortality and morbidity associated with AMI in both the working and retirement age populations. The direct and indirect cost of heart attack and chest pain in 1996 is estimated at $66 billion per year nationwide by the American Heart Association (8). The report will also use small area analysis to analyze variation in rates of utilization of services.
The risk adjustment model for reporting outcomes of care for patients admitted for AMI reflects a recognition that care in complex disease states is no longer dependent on an individual physician or hospital. The modeling used to predict outcomes for patients with AMI reflects the interdependence of physician groups and the relationship between hospitals providing basic and advanced cardiologic capabilities. .
The insights provided by this detailed analysis can form the basis for informed policy making regarding the most effective methods for triaging and caring for those with AMI. Tracking performance over time will provide valuable feedback to clinicians as well as private and public policy decision makers.
MANAGED CARE OUTCOMES REPORTING
One result of the strategic planning process was a consensus that the Council needs to develop the capability to provide meaningful information in the evolving managed care marketplace. Despite a growing recognition of the need to report outcomes of care by managed care systems, considerable debate exists within the Council about the appropriate definition of managed care. Should managed care include any program with constraints on access to services, or should it be restricted to licensed health maintenance organizations
(HMOs) and preferred provider organizations?
The rapidly changing delivery system will create obstacles to consistent reporting of outcomes by payer type as health care payment plans grow, evolve, merge, or disappear. Although the legislative authority of the Council describes HMOs as data sources, there will be considerable resistance if the Council were to impose additional reporting burdens on those organizations. The Council will face the challenge of accessing data which other organizations consider proprietary in nature. Managed care reporting demands integrating data across sites of care and over time and, subsequently, merging it with population and enrollment data. The challenge for the Council is to build on its capabilities of reporting on outcomes in the acute hospital setting and make it relevant to managed care. Although from the Council's perspective this is obvious, managed care reporting has focused on process measures (immunization rates, cancer screening rates) or public health out comes (functional status, survival rates). Given existing resource constraints the Council will need to carefully consider the type of outcome information it creates in order to limit duplication with other, ongoing data collection and reporting.
An important step for the Council in moving toward the capability for reporting outcomes under managed health care delivery is its current effort to collect outpatient surgery data and use this effort as a platform to reengineer the collection of data. The Council envisions a more automated data collection process which will allow institutional data sources to transmit data electronically and to receive and transmit data correcUon reports. Before the Council can begin to expand the collection of data to other data sources, it will need to demonstrate the capability to collect timely and accurate data from its current data sources.
CONCLUSION
As originally envisioned, PHC4 was designed to provide information that would allow health care purchasers to make informed, sound, and timely contracting decisions. A more efficient health care market would be a check on health-related costs. To date, the information of the Council has resulted in a small number of well focused efforts by businesses and labor within the state. This is most clearly represented by the activities of a company like the Hershey Foods Corporation which designed a health care network using the outcome data generated by the Council (9). The greatest impact of the Council seems to be with the providers of health care. With little fanfare providers have been
led to thoughtful evaluation of services provided by those most able to modify behavior and change practice within health care institutions.
Pennsylvania, through the actions of PHC4, continues to lead the country in public outcomes reporting. The Council was created in 1986 to serve the needs of health care purchasers. The provider community initially resisted efforts to report publicly on health care outcomes. In the intervening years they have bought into the process, and their acceptance of and participation in the Council has created an environment in which sophisticated approaches to the design and analysis of complex questions can occur. This collaboration will enrich the Council's activities as it pursues an expanded agenda including an assessment of the impact of managed care, the provision of outpatient services, and improved methods for providing information on the true cost of care. The tension will continue to exist between the needs of health purchasers and those of the providers. The purchasers want timely information which is easy to understand. Provider want accurate data and a credible methodology which will provide genuine feedback to the clinical process that serves to stimulate quality improvement efforts. It is this creative tension that will continue to lead to innovative public reporting which will benefit all of the stakeholders in the health care delivery system.
The Council continues to face important challenges. To date, outcomes reporting has focused on the acute hospital setting, primarily hospital mortality. Public reporting of longer term outcomes, such as functional states and patient satisfaction, are scant. There are difficult methodological issues, but they should be investigated by the Council. Such public information would
maintain the Council's leadership role and would provide insight into the long term value provided by acute health care services. The Council must find innovative methods to facilitate and improve the understanding of the health care delivery system within Pennsylvania in an environment in which state governments are facing difficult budget issues. The Council will continue to face the competing demands to produce technically robust analyses while providing information and education to a diverse set of constituents with varying degrees of expertise in their interpretive skills. PHC4 has built a solid foundation with the support of all of the major stakeholders and should continue to move into new areas of analysis and expand on its prior work to develop new outcome reporting strategies.
References
1. Pennsylvania P.L. 408, No. 89, June 1986.
2. Pennsylvania P.L.146, No. 34, June 1993.
3.Minutes of the Pennsylvania Health Care Cost Containment Council, December 2, 1993.
4. The Pennsylvania Health Care Cost Containment Council. Coronary Artery Bypass Graft Surgery: A Technical Report, Vol. I, November 1992.
5. The Pennsylvania Health Care Cost Containment Council. Coronary Artery Bypass Graft Surgery: A Technical Report, VoL II, February 1994.
6. The Pennsylvania Health Care Cost Containment Council. Coronary Artery Bypass Gmit Surgery: A Technical Report, Vol. Ill, December 1994.
7.The Pennsylvania Health Care Cost Containment Council. Coronary Artery Bypass Gmft Surgery: A Technical Report, Vol. IV, June 1995.
8.Focus on Heart Attack (reporting year 1993), Pennsylvania Health Care Cost Containment Council, Harrisburg, PA, 1996.
9.Akroyd T, Bomberger D, Hamory B, et at. Data Initiatives: Building a Managed Care Network. Am J Med Qual 1996;1l:S22-S25.
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