Outcomes management: buying value and cutting costs; when healthcare becomes less like roulette, efficiency and effectiveness can be rewarded - includes related information on software and Continuous Quality Improvement - Cover Story

Business & Health, March, 1991 by Pamela Taulbee

Emphasis on partnerships

Collaboration is the key to "Value Improvement Partnerships," which the Midwest Business Group on Health says can be a catalyst for national health system reform at the community level. Jim Mortimer, president of MBGH, says the Cleveland project is a data-heavy approach to improving the quality of health care purchases. "The approach we take in value managed care purchasing uses data but emphasizes partnerships as a primary vehicle," he explains.

In 1988, MBGH was granted $600,000 by the John A. Hartford Foundation, a philanthropic organization, to develop the partnerships in three sites: Kingsport, Tenn., Milwaukee, and Chicago. The first demonstration project, to be completed this year, involves quality improvement teams in Kingsport that are evaluating alternatives to readmission for respiratory illness, a clinical area with particularly high inpatient costs.

Rob Johnson, benefits associate at Eastman Chemical, a chemical manufacturer with 11,500 employees in Kingsport, is chair of the quality improvement partnership there. "We really haven't yet used outcomes to try to purchase health care," he says. "Our emphasis is to try to improve the process and thus improve the outcomes. While some folks are dwelling on outcomes to try to find the best providers, in this community we're trying to improve the processes of all the providers, rather than find the bad guys and shoot them."

Heritage IPA, a member of the partnership team, used Medis-Groups to complete a project defining protocols for post-operative gallbladder removal. The software evaluated length of stay, severity of illness, resource use and outcomes. That information was combined with clinical data such as what kind of drain was used, when the change was made from IV antibiotics to oral, and other critical incidents.

The nurses and physicians on the quality improvement team then came to a consensus on what protocol resulted in the best outcome.

Data is a tool, but rather than using data as a quality assessment on which payment incentives are based, it is used to sort out areas needing quality improvement, and those areas are tackled by quality improvement teams that develop, implement and monitor techniques for improving quality. The concept is based on W. Edwards Deming's continuous quality improvement theory. (See box.)

"We have groups of employers working in partnership with providers in quality improvement councils at the community level to find areas where the clinical and administrative processes in health care can be impoved," says Mortimer. "Outcomes data are useful in identifying areas where there is an opportunity for improvement, and helpful in measuring the improvement that's achieved by the quality improvement teams."

While many hospitals across the country have taken it upon themselves to adopt Deming's quality improvement concepts, Mortimer says the MBGH believes employers can motivate more hospitals to do so. In these projects, he says, "the employers make it happen. They take the initiative in creating the partnership they supply education and staff to facilitate quality improvement teams. They help set the policy for the partnership and they can also link the partnership to other systems in the community, such as those involved in economic development."