The 8 Dimensions of Quality

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High-quality care recently has become more than an ethical responsibility of providers. New laws link Medicare payment to quality reporting, and new programs offer financial rewards for meeting certain standards of care. Healthcare administrators and consumers have ready access to a plethora of metrics purporting to interpret the quality of care that a hospital or physician provides.

But what exactly do these quality-related laws and metrics measure—and who is the ultimate judge of quality: patients, physicians, administrators, or the government? Which quality metrics need the most attention? And what is the ROI of programs designed to improve quality of care?

Healthcare quality has many dimensions, including reporting, documentation, quantity of or access to care, patient satisfaction, reputation, clinical processes, utilization review, and medical necessity determinations. By taking a close look at quality-of-care laws and metrics and how they relate to these eight dimensions of quality, healthcare professionals can better strategize how to achieve and maintain high-quality care.

The Quality of Reporting

Section 501(b) of the Medicare Modernization Act of 2003, as implemented by the Reporting Hospital Quality Data for Annual Payment Update program, reduces Medicare payment to hospitals that fail to submit quality data on a set of predetermined indicators that relate to the quality of care provided by the hospital in inpatient settings. The Centers for Medicare and Medicaid Services recently announced that 99 percent of U.S. hospitals have chosen to report quality data, which now consist of 21 measures (see page 116 for a list of these measures). Although reporting is voluntary, those inpatient acute care hospitals that do not report on these measures in FY07 will see a 2 percent reduction in their annual Medicare fee schedule update, a much greater impact than last year’s 0.4 percentage point reduction.

CMS has launched a web site ( to publicize these quality indicators. The web site provides comparative data on eight measures relating to heart attack care, four measures relating to heart failure care, and five measures relating to pneumonia care. For example, any consumer can access one indicator of the quality of heart failure care via the CMS web site: “Percent of Heart Failure Patients Given Angiotensin Converting Enzyme Inhibitor or Angiotensin Receptor Blockers for Left Ventricular Systolic Dysfunction.” As originally implemented in the starter set, this quality indicator measured only the administration of ACE inhibitors. However, CMS later revised the quality indicator to include ARBs as acceptable alternatives to ACE inhibitors based on accumulated clinical evidence.

But comparisons of a single quality indicator on the CMS web site can yield surprising and misleading results. Let’s use the quality indicator cited above as an example, comparing three of the hospitals that U.S. News and World Report named to its “America’s Best Hospitals” list in 2006 (University of Chicago Hospitals, Johns Hopkins Hospital, and St. Joseph’s Hospital in Atlanta) with an inner-city hospital in the same respective city. The University of Illinois Hospital reported that 98 percent of heart failure patients were given ACE inhibitors or ARBs, near the benchmark of 100 percent, while the esteemed University of Chicago Hospitals reported only 78 percent compliance on the same quality measure, below state and national averages. Likewise, Bon Secours Hospital in Baltimore outperformed Johns Hopkins Hospital, the number-one rated hospital in the country according to U.S. News & World Report, on this quality measure. Grady Memorial Hospital, a public hospital in downtown Atlanta, reported 87 percent compliance versus 70 percent compliance at St. Joseph’s Hospital, a hospital renowned for its heart programs.

What conclusions can be drawn from these comparisons? This quality indicator measures only the administration of one type of drug (ACE inhibitor or ARB) to heart failure patients. We do not know whether the patient received any other drugs appropriate for the patient. We know nothing about the outcome of the patient’s hospital stay. The data are also more than one year old, covering the period from January 2005 through December 2005. It would be unfair to judge quality based on this one indicator, yet this is the type of comparative data available to consumers. A hospital may lose patients if it appears to perform poorly on any of these publicized quality indicators.

Quality of Documentation

A key issue in healthcare quality is the accuracy of documentation in patient medical records. The CMS quality indicators are derived from information reflected in patient medical records. Physicians are busy saving lives, providing higher volumes of patient care for increasingly less pay. They are often distracted from the task of thoroughly documenting each patient’s condition and care. As a result, the documentation may not accurately reflect the acuity of illness served and the extent of care provided. Poor documentation may be the underlying cause of poor performance in quality measures, and may also negatively affect the provider’s ability to receive the appropriate payment for services rendered. Additionally, there is the risk that when patients’ medical records are incomplete, they might receive inappropriate care.

CMS is implementing a severity-adjusted diagnosis-related group system for Medicare payment in FY08 that will magnify the impact of documentation on both quality and payment. The underlying clinical principle of the new system is that the severity of illness of a patient is highly dependent on the patient’s underlying problem, and that a high severity of illness is usually characterized by multiple serious diseases or illnesses. The determination of the severity of illness is disease-specific. For example, an infection is considered more significant for an immune-suppressed patient than for a patient with a closed arm fracture. High severity of illness is primarily determined by the interaction of multiple diseases. Patients with multiple comorbid conditions involving multiple organ systems are assigned to the higher severity-of-illness subclasses.

The severity-adjusted DRG system subdivides the base DRGs by adding four severity-of-illness subclasses to each DRG, indicating minor, moderate, major, or extreme severity of illness. Providers must document all comorbid conditions and complications to justify a higher severity of illness under the new system. More accurate and complete documentation of severity of illness will improve payment under the new system and will provide better insight into quality of care. For example, a provider serving more severely ill patients will likely experience a higher mortality rate, yet still may be providing high-quality care.

The Quality of Quantity

The Department of Veterans Affairs has been recognized as a leader in improving healthcare quality based on several different metrics. In one national study, researchers for the RAND Corporation found that a sample of 596 VA patients were more likely than a sample of 992 non-VA patients to receive recommended care. Based on 294 health indicators in 15 categories of care, the study found VA patients received about two-thirds of the care recommended by national standards, compared with about half in the non-VA sample. The VA performed consistently better across the spectrum of care, including screening, diagnosis, treatment, and follow-up. The only exception to this pattern was care for acute conditions, for which the two samples were similar.

This study is really measuring the quantity of recommended care, not the quality of care. VA patients have a clear economic advantage in acquiring recommended care because the federal government provides funding with no deductibles and minimal copays. Many non-VA patients have no health insurance, and even those patients with private insurance are deterred from receiving all recommended care by significant deductibles and copays.

Quality of Patient Satisfaction

In another survey known as the American Consumer Satisfaction Index, the VA healthcare system has outranked the private sector for customer satisfaction for six consecutive years. ACSI is based on econometric modeling of data obtained from telephone interviews and scored on a 100-point scale. In the 2005 survey, the VA received a rating of 83 for inpatient care and 80 for outpatient care. In comparison, a similar survey of patients receiving private care rated their satisfaction at 73 for inpatient care and 75 for outpatient care. Veterans also give VA physicians and nurses high ACSI ratings for responsiveness (83), courtesy (90), and respect and dignity afforded patients (91).

Fred Lee, author of If Disney Ran Your Hospital: 9½ Things You Would Do Differently, asserts that the display of compassion is what makes the difference in patient satisfaction. According to Lee, compassion goes beyond common courtesy; it means service to the patient that demonstrates genuine concern. Treating each patient with authentic compassion and providing personalized care translates into patient loyalty.

CMS plans to implement the Hospital Consumer Assessment of Healthcare Providers and Systems survey of inpatient perceptions of their hospital experiences on a voluntary basis, with the intention that the survey results will become a publicly reported performance measure in FY08. The survey, also known as Hospital CAHPS, is designed to make “apples to apples” comparisons of patients’ perspectives on hospital care, including communications with physicians and nurses, responsiveness of hospital staff, cleanliness and quietness of the hospital, pain control, communication about medicines, and discharge information.

Quality of Reputation

While patient satisfaction is undoubtedly important, patients are not well equipped to judge the quality of their care in a medical sense. Medical peers are better situated to assess medical quality. A variety of rather unscientific approaches are employed to measure provider- focused assessments of healthcare quality.

For example, U.S. News & World Report uses a three-part process for ranking hospitals, giving one-third weight to scores for reputation based on random surveys of physicians. If physicians say the hospital is high quality, it must be high quality. Other metrics contributing to the U.S. News & World Report rankings are severity-adjusted mortality rates, nurse-patient ratios, and availability of key technologies.

Quality of Clinical Processes

The Joint Commission on Accreditation of Healthcare Organizations publishes standardized hospital performance data through its web site at The data posted are based on well-established clinical guidelines and, in their current form, have been standardized in coordination with CMS and display information on the same indicators available at In contrast to the CMS web site, JCAHO awards pluses and minuses for performance on a collection of process-related indicators relating to care for heart attack, heart failure, and pneumonia.

But like the CMS web site for quality reporting, performance data reported on JCAHO’s web site also can be surprising or misleading. For example, although the University of Illinois Hospital received a high score on the single indicator for patients given ACE inhibitors or ARBs, the hospital’s overall JCAHO rating for heart failure care received a minus rating because of an extremely low score on the indicator for discharge instructions (percentage of patients given information about their condition and care when they leave the hospital).

Quality of Utilization Review

Another peer-focused dimension of healthcare quality is the utilization review function. Federal statutes require hospitals participating in Medicare to implement utilization review plans providing for review of medical necessity and efficiency on a sample basis by a committee of two or more physicians. Hospital administrators must rely on physicians for assessing this dimension of quality.

Ineffective utilization review can lead to a quality disaster, as demonstrated by the infamous case of Tenet’s Redding, Calif., hospital. The problem surfaced when a minister had heart bypass surgery at Redding Medical Center, a surgery that six other physicians later evaluated as medically unnecessary. When the minister’s complaints to hospital administration were ignored, the minister complained to the federal government. Tenet ultimately settled a case with the federal government for $54 million and separately provided a settlement fund of $395 million for the approximately 750 other plaintiffs who also alleged they received medically unnecessary procedures at the hospital.

In this case, utilization review failed because the two biggest admitters to the hospital controlled the utilization review committee. Smaller hospitals in particular must be vigilant in overseeing the utilization review process to ensure the physician committee is functioning effectively.

Quality of Medical Necessity Determinations

Lack of medical necessity is a leading cause of improper payments in the Medicare system. Federal statutes prohibit providers from seeking payment for services that are not medically necessary. Although the law does not specify the process for making determinations of medical necessity, Medicare fiscal intermediaries frequently refer to InterQual criteria for making determinations of medical necessity.

InterQual criteria are a set of measurable, clinical indicators, as well as diagnostic and therapeutic services, that reflect a patient’s need for hospitalization. Developed over the past 30 years, the criteria are grouped into 14 body systems, with three sets of criteria for each body system: intensity of service, severity of illness, and discharge screens. Providers use intensity/severity/discharge level of care criteria to determine the appropriateness of admission and to manage financial risk based on definite clinical parameters. With the aging baby boomer population and increasing financial pressures facing American healthcare organizations, the threshold decision of medical necessity will be a critical component of healthcare quality.

Time to Take a Closer Look

Healthcare quality has many dimensions, and each of these dimensions affect providers financially, whether through reduced payments, severity adjusted DRGs, malpractice liability, or consumer demand. Which of these dimensions requires the most attention? By taking a close look at quality-related laws and metrics and keeping abreast of trends in these areas, healthcare leaders can determine the right focus and approach for their organizations.

Note: HFMA originally published this article here.