The Cost of Quality: An Academic Health Center's Annual Costs for Its Quality and Patient Safety Infrastructure.

BACKGROUND: In the United States, regulatory bodies, state licensing boards, hospital accreditation organizations, and medical specialty boards have increased their demands for data, public reporting, and improvement. Survey research suggests that as much as $15 billion is spent on reporting quality measures, but those costs, as well as those associated with improvement, have not been sufficiently characterized. A study was conducted to examine, in detail, the costs incurred by one health care organization-an academic health center (AHC) with employed physicians-in responding to quality and safety requirements. METHODS: To identify annual costs associated with an AHC's quality and safety infrastructure, a conceptual model was developed for organizing costs into four domains-Measurement and Reporting, Safety, Quality Improvement, and Training and Communication. In an inventory approach, a purpose-specific instrument was used to aggregate and sort costs; clinicians and administrators were asked to identify all domain activities and the associated full-time equivalents and other direct costs (labor and nonlabor) allocated to each activity. RESULTS: For this AHC, nearly $30 million of direct costs-more than 1.1% of net patient service revenue-were incurred to maintain the quality infrastructure. Approximately 81.6% of the costs were associated with mandates by regulators, accreditors, and payers-49.8% of which supported required public reporting. CONCLUSION: Indisputable good for patients and providers has resulted from organizational investments in quality and safety. But policy makers must be cognizant of potential trade-offs and explicitly recognize the incremental costs of additional measurement, improvement, and mandated reporting in their decision making.

Identifying Poor-Performing Hospitals in the Medicare Hospital-Acquired Condition Reduction Program: An Assessment of Reliability.

Centers for Medicare and Medicaid Services (CMS) estimated that Medicare's Hospital-Acquired Condition Reduction Program (HAC-RP) would reduce hospital payments by $364 million in fiscal year 2016. Although observers have questioned the validity of certain HAC-RP measures, less attention has been paid to the determination of low-performing hospitals (bottom quartile) and the reliability of penalty assignment. This study used publicly available data from CMS's Hospital Compare to simulate the consistency of hospitals' scores and the assignment of penalties under repeated measurement with no change in each hospital's underlying quality. The simulation showed that 64.0% of all hospitals and 40.6% of hospitals subject to payment penalty are statistically significantly different from the penalty threshold at the 95% confidence level. The proportion of hospitals statistically different from the threshold showed significant variation by ownership status, teaching status, bed size, and other factors. The simulation further showed that due only to chance, 18.0% of penalized hospitals would escape penalty on repeated measurement. Policymakers should consider alterations to the HAC-RP to improve its reliability.

Complication Rates, Hospital Size, and Bias in the CMS Hospital-Acquired Condition Reduction Program.

In 2016, Medicare's Hospital-Acquired Condition Reduction Program (HAC-RP) will reduce hospital payments by $364 million. Although observers have questioned the validity of certain HAC-RP measures, less attention has been paid to the determination of low-performing hospitals (bottom quartile) and the assignment of penalties. This study investigated possible bias in the HAC-RP by simulating hospitals' likelihood of being in the worst-performing quartile for 8 patient safety measures, assuming identical expected complication rates across hospitals. Simulated likelihood of being a poor performer varied with hospital size. This relationship depended on the measure's complication rate. For 3 of 8 measures examined, the equal-quality simulation identified poor performers similarly to empirical data (c-statistic approximately 0.7 or higher) and explained most of the variation in empirical performance by size (Efron's R2 > 0.85). The Centers for Medicare & Medicaid Services could address potential bias in the HAC-RP by stratifying by hospital size or using a broader "all-harm" measure.

Setting quality and safety priorities in a target-rich environment: an academic medical center's challenge.

Hospitals are continually challenged to provide safer and higher-quality patient care despite resource constraints. With an ever-increasing range of quality and safety targets at the national, state, and local levels, prioritization is crucial in effective institutional quality goal setting and resource allocation.Organizational goal-setting theory is a performance improvement methodology with strong results across many industries. The authors describe a structured goal-setting process they have established at Massachusetts General Hospital for setting annual institutional quality and safety goals. Begun in 2008, this process has been conducted on an annual basis. Quality and safety data are gathered from many sources, both internal and external to the hospital. These data are collated and classified, and multiple approaches are used to identify the most pressing quality issues facing the institution. The conclusions are subject to stringent internal review, and then the top quality goals of the institution are chosen. Specific tactical initiatives and executive owners are assigned to each goal, and metrics are selected to track performance. A reporting tool based on these tactics and metrics is used to deliver progress updates to senior hospital leadership.The hospital has experienced excellent results and strong organizational buy-in using this effective, low-cost, and replicable goal-setting process. It has led to improvements in structural, process, and outcomes aspects of quality.

Restructuring within an academic health center to support quality and safety: the development of the Center for Quality and Safety at the Massachusetts General Hospital.

Recent focus on the need to improve the quality and safety of health care has created new challenges for academic health centers (AHCs). Whereas previously quality was largely assumed, today it is increasingly quantifiable and requires organized systems for improvement. Traditional structures and cultures within AHCs, although well suited to the tripartite missions of teaching, research, and clinical care, are not easily adaptable to the tasks of measuring, reporting, and improving quality. Here, the authors use a case study of Massachusetts General Hospital's efforts to restructure quality and safety to illustrate the value of beginning with a focus on organizational culture, using a systematic process of engaging clinical leadership, developing an organizational framework dependent on proven business principles, leveraging focus events, and maintaining executive dedication to execution of the initiative. The case provides a generalizable example for AHCs of how applying explicit management design can foster robust organizational change with relatively modest incremental financial resources.