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Perspectives in Biology and Medicine 46.1 (2003) 55-68

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Does Medicare Care about Quality?

David A. Hyman

[Medicare] is an open-ended defined-benefit program . . . there is no practical means [for program administrators] to . . . assess the medical and economic merits of these services.

—U. Reinhardt (1995)

MEDICARE IS A PROGRAM AND NOT A PERSON , so it is hard to know how it can "care" about anything. Once such philosophical (and pedantic) objections are assumed away, harder positive and normative questions arise. Who must demonstrate the requisite amount of care? Is it legislators, acting in their bud-getary capacity, their oversight role, or both? Is it Congressional staffers, to whom legislators look for technical assistance? Is it the Centers for Medicare and Medicaid Services (CMS), which administers the program? Is it the intermediaries and carriers, who handle the actual processing of claims? Is it the Office of the Inspector General of the Department of Health and Human Services, charged with assessing program integrity? Is it quality improvement organizations (QIOs), 1 who perform utilization review for the Medicare program on a contractual basis? Is it the front-line providers, who are paid by the program? Is it taxpayers, who ultimately foot the bill for the program? Is it the beneficiaries who receive the services? [End Page 55]

Second, what counts as caring about quality? Is it being generally aware that there is a quality problem? Is it funding a research program to quantify the magnitude of the quality problem? Is it developing and implementing a plan to address the quality problem, regardless of the substantive content of the plan? Or, must one come up with a sensible and cost-effective plan, and then implement it appropriately?

Third, what counts as quality? Is the issue a professional one, answerable only by reference to professional norms and standards? Is it a legal question, answerable by reference to statutes and contracts? Is it an issue of personal preferences, answerable only by program beneficiaries? Is it a moral issue, answerable by reference to principles of justice and fairness? Does the inquiry involve only medical services as such, or does it include issues of service quality and convenience? Is the inquiry limited to services that are covered by Medicare, or does it include an assessment of Medicare's coverage design? For example, does the failure to cover prescription drugs and long-term care indicate there is a quality problem with Medicare?

These questions are not exhaustive, but they provide some hint of the complexities associated with the seemingly straightforward inquiry, "Does Medicare care about quality?" This article sketches out some preliminary responses to this complex question. In brief, although Medicare cares about quality, it doesn't care about it nearly as much as it should. The proof of this claim is in the pudding: the quality of care provided to Medicare beneficiaries varies widely, from extremely good to alarmingly bad. Although the CMS has taken some steps to address these quality problems, design and political considerations make it extremely difficult for the CMS to make sustained headway against them. To be sure, Medicare's performance must be assessed against the benchmark of other payers—who haven't cared nearly enough about quality either.

Medicare's Failure to Address Quality

Americans have a high degree of confidence in their personal physicians, although they are less impressed with the overall performance of the health care system (Dranove 2000). This confidence is often misplaced. As a recent review noted:

there are large gaps between the care people should receive and the care they do receive. This is true for all three types of care—preventive, acute, and chronic—whether one goes for a check-up, a sore throat, or diabetic care. It is true whether one looks at overuse or underuse. It is true in different types of health care facilities and for different types of health insurance. It is true for all age groups, from children to the elderly. And it is true whether one is looking at
the whole country or a single city. . . . A simple average...


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