The True Usefulness of Quality Reporting Is Misunderstood

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Last week I wrote about how cost sharing is misunderstood. This week I’ll continue in the same vein and talk about the same thing but related to quality measurement and reporting.

Quality measurement and reporting is becoming a pretty big thing. Just look at all the different Medicare programs (the big ones being MIPS and APMs) trying to achieve this thing they call “value-based purchasing” (which, in their estimation, seems to mean pretty much anything other than straight fee-for-service reimbursements). These programs involve lots of quality reporting requirements, and then compensation is directly tied to those quality metrics, usually through bonuses for high performers.

But this is the wrong way to use quality metrics.

Before I explain why I believe this is the wrong way, I need to clarify what my goal is with healthcare reform. I am interested in improving the value (Value = Quality / Price) our healthcare system delivers.

This is usually the part where people say, “If you want to improve value, you’ll make a lot more progress by preventing people from getting sick in the first place, so you should focus your efforts on public health initiatives!” Or, others will say, “You need to work on getting more people access to the healthcare system. Solve this issue first, then you can figure out how to improve the system’s value!”

I agree that those are very important issues. And I believe we need to work on both of them as well as this one of improving the value the system delivers at the same time. So I’ll keep writing about these things and figuring out how to fix our healthcare system in all these ways.

Anyway, let’s think about what is going on when a provider does a great job and has really high quality metrics and gets paid bonuses (say, 5% or so on top of what Medicare would otherwise have paid them) as a reward.

If our goal is to improve value, what we’ve just done is taken the higher-value providers and increased their price, which means their value has dropped back down to everyone else’s. Sure, this incentive has gotten us better quality for more money, and yeah eventually we’ll probably have higher quality overall, but it’s going to be at the cost of a lot of consternation of providers as we repeatedly take away their quality bonuses when we raise standards. Overall, this quality bonuses idea is just a frustrating and generally ineffective way to improve value. But I understand why it’s so popular–it’s an obvious way to encourage value.

Is there an alternative? Of course. We need to find some way to reward providers for providing extra quality. But how we do that, that’s the question.

What if we could find a way to get more patients to choose those higher-value providers? This would reward them with more profit, and now the providers with lower value are losing out on money because they’re losing market share. There would be no administrators at fault when a provider makes less money. No top-down program decisions to blame. PLUS, more patients would be getting higher-quality care immediately. That’s a pretty great system.

So, instead of using quality reporting to give administratively determined bonuses, we need to use them to help patients identify the best-quality providers so they can choose to receive care from them. This would involve measuring very different quality metrics–ones that patients actually care about.

Can we do it? I believe we can. There’s a lot to how we could make this happen, and I’ll talk more about that next week.

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