Supplements and Featured Publications
The Quality Enterprise—What Is It, Where Is It Going, and How Will It Be Impacted by Healthcare Reform?
Volume 19
Issue 9 Suppl

Module 1: The Environment


This module reviews “the quality enterprise”—what that term means, the key players, and the implications for healthcare reform.

The quality enterprise and healthcare reform are closely linked. Although there has long been interest in healthcare quality, the topic has now come to the forefront, as ever-increasing healthcare costs have outstripped inflation and wage growth. Although Americans pay more for healthcare, they do not receive better healthcare in return.

The current system is flawed. Greater specialization and complexity have led to inefficiencies—including lack of communication and information sharing across healthcare silos and settings, and avoidable medical errors—that potentially increase costs and may harm patients. The traditional fee-for-service (FFS) model incentivizes and rewards quantity of services rather than quality. Moreover, this flawed system must accommodate the impending surge of demand from the aging baby boomer population.

Clearly, fundamental reform is necessary. The FFS model must be supplanted by a value-based model that incentivizes and rewards quality. To that end, various reform efforts have been undertaken in the public and private sectors.

Once voluntary, quality improvement is now mandated under the Patient Protection and Affordable Care Act (PPACA). The PPACA imposes requirements and offers incentives for value-based approaches, interoperable electronic medical records (EMRs), health information technology (HIT), comparative effectiveness research (CER), and public reporting of quality measures. Quality improvement efforts will therefore accelerate under the PPACA.

The quality enterprise, which centers on defining, measuring, and rewarding quality care, plays an integral role in achieving the transition to value- and quality-based models.

What Is Quality in Healthcare?

The panel considered how to define “quality” in healthcare.

IOM Definition of Quality

The degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.

To define quality, Ms O’Kane distills a simple question from the Institute of Medicine (IOM) definition: “Does an action, intervention, or treatment improve health?” Answering this question requires analysis and measurement, because under the PPACA the question will become: “If something improves health, are you doing it? If it does not, why are you doing it?”

Consumers typically perceive quality differently. They focus on getting better, rather than the process of getting better. “Sick patients want to go to the doctor or the hospital and get better,” said Dr Salgo.

What Is the Quality Enterprise?

Consumers may focus on getting better, but getting better (an outcome) is intertwined with the process of getting better. “Outcomes depend on process,” said Ms James. Exploring the “process” can help to further define the quality enterprise.

The process of delivering good outcomes involves all stakeholders, and they must coordinate and collaborate. However, aligning multiple constituents with divergent definitions of quality and divergent goals presents a major obstacle to reform.

Current Professional Knowledge: Demands and Challenges

The IOM’s principle of “current professional knowledge” fits squarely into the quality enterprise. It implies that the best medical science should be applied in practicing medicine and delivering healthcare.

This principle is also relevant to consumers. According to research, patients want to be guided toward quality by medical experts. Those experts therefore need access to the latest information about what works best, and must stay current.

Staying current is a daunting task. Medical information proliferates; journals publish thousands of reports each month. Consumers expect their doctors to absorb all of this information and explain it to them, and these demands have been folded into the definition of quality.

There are other “professional knowledge” impediments to quality. First, the reservoir of current knowledge, although substantial, is incomplete: for many conditions, consensus treatment standards do not exist. Second, the quality enterprise calls for collaboration, but each specialty tends to hoard its own knowledge.

The Quality Enterprise


“Quality enterprise” means the totality of the various inputs and constituents throughout the healthcare spectrum that are involved in delivering and improving evidence-based care. The quality enterprise embraces transparency and accountability to provide safe, effective, patient-centered care efficiently, equitably, and in a timely manner.

Players and Stakeholders

  • Physicians
  • Nurses
  • Pharmacists
  • Technicians
  • Patient transport
  • Patients/consumers and their families
  • Office and hospital executives and staff
  • Payers (public/private insurers)
  • Pharmaceutical/biotech/device manufacturers
  • Pharmacy benefit managers
  • Distributors/supply chain
  • Professional/accrediting organizations
  • Government policy makers, agencies, and regulators

Main Functions

  • Setting priorities. In 2008, the National Priorities Partnership set 6 priorities for achieving high-value healthcare:

  1. Patient and family engagement
  2. Population health
  3. Safety/reducing errors
  4. Coordinating care
  5. Palliative/end-of-life care
  6. Eliminating overuse

  • Delivery and payment reform

— Value-based and performance-based payment and purchasing programs

  • Measuring performance, including using CER/HIT, to:

— Pursue evidence-based practice translatable across disciplines, settings, and geographic regions

— Develop performance measures that can be used to hold organizations/providers accountable and improve quality

— Gather and analyze data/gauge outcomes

  • Public reporting of performance
  • Educating and training the workforce

— Undergraduate/graduate courses and degrees

— Lifelong skills: continuing medical education, communication/ dispute resolution/cultural competence

Quality Healthcare: Patient Centered, but Population Oriented

The quality enterprise superimposes a “think globally, act locally” mind-set. Outcomes data are crucial on both fronts. “Population outcomes reveal what really works,” said Ms James. Physicians, in turn, can apply that information to discern what will work for individual patients.

However, an inherent tension exists between delivering high-quality care to a particular patient and larger population considerations. While doctors want to help their patients get better regardless of the cost, payers worry about unrestrained spending. In effect, physicians are pressured to simultaneously consider the needs of individual patients and the larger needs of society.

The Quality Enterprise and Medical Errors

Medical errors are directly linked with outcomes, and therefore quality of care. Reducing the incidence of errors is integral to the quality enterprise.

What Are Medical Errors?

Medical errors include:

• Using the wrong treatment or intervention (eg, wrong-site surgery).

• Inappropriately or improperly using the intended or correct treatment (eg, creating an adverse reaction by using incompatible drugs).

The following cascade depicts the link between preventable errors and quality: Increased healthcare complexity and specialization leads to clinicians working in silos, which leads to lack of coordination and information being hoarded, not shared, which leads to compromised communication and gaps between silos that breed errors; errors in turn harm patients, leading to poor outcomes and lower-quality care. This dysfunction can cause harm to the patient at the point of care, even if each individual clinician is doing their job.

EMRs should help mitigate silo-driven impediments, and by extension, help reduce the incidence of errors. “EMRs give each clinician access to the thinking, notes, and actions of others,” said Dr Weissberg. On the other hand, EMR technology is not fully evolved: EMRs can be difficult to decipher, and can have information gaps that are costly to fix.

The Importance of Measuring Performance

A familiar adage holds that measuring performance is a predicate to improving it. Therefore, performance measurement is elemental to the quality enterprise. This principle and related concerns can be illustrated through the example of diabetes care.

Evidence-based standards exist for treating diabetes. Controlling blood sugar is known to be essential: failing to do so leads to heart disease, blindness, and kidney failure. However, proper treatment and proper performance involve more than giving patients insulin.

Measuring performance implies fixed goal posts; however, in this reform environment, the goal posts move as evidence evolves. For example, the National Committee for Quality Assurance (NCQA) changed the blood sugar measure for patients with diabetes to include new exclusions when evidence showed that under the previous measure, complications might outweigh benefits for certain patients.

The diabetes example also highlights the difference between process measures and outcomes measures. Diabetes care measures are predominantly process-based. However, as previously suggested, developing outcomes-based measures would lead to better outcomes for patients.

The complexities of diabetes highlight the challenge of treating patients with multiple comorbidities. Treating each illness in isolation increases the risk of over-treatment and harm to the patient. Eventually, the quality enterprise will lead to melded guidelines for multi-morbid patients.

Having described the need for and the benefits of measuring performance, the panel offered some examples of quality standards. They include:

  • Adoption of evidence-based practices and guidelines.
  • Coordination of care from the primary care physician to care settings, and between settings.
  • Completion of certain patient safety training.
  • Use of pre-surgical checklists.

Ms James noted that preventive care performance measures, although often ignored, should be considered as important as those for chronic illnesses.

The overarching challenge in measuring quality is “factoring everything into a laundry list for an insurer or a practitioner— a Gordian knot,” said Dr Salgo.

Public Reporting of Quality

Another building block of the quality enterprise is public reporting of performance; however, many clinicians resist the idea of public reporting.

This resistance might be assuaged by reporting on organizations rather than individuals. Healthcare organizations succeed or fail as a team, and their performance should be rated as a team.

The Link Between Quality and Appropriateness of Care

“Appropriate care” for a patient means an intervention that should be done, and is therefore aligned with quality care.

Some specialty societies, including the American College of Radiology, have published evidence-based appropriateness guidelines. As of June 2012, the ACR Appropriateness Criteria cover 180 topics for imaging tests, with more than 850 variants.

The problem, noted Dr Weissberg, is that although some actions are clearly inappropriate and some actions are clearly appropriate, there is a big gray zone.

Perspectives of Key Players in the Quality Enterprise

As previously stated, the quality enterprise entails a concerted, unified effort by all healthcare constituents and stakeholders; however, there are sizable obstacles to cohesion. The perspectives of certain key players further illuminate those obstacles.

  • Patients. Patients want to get better and want to trust their doctor, but are trapped in a bewildering system.
  • Payers. Health plans and governments pay the bills. Inappropriate care drives up costs and harms patients.
  • Physicians. Physicians are committed to their patients’ health, but have to earn a living. As healthcare reform nudges out the FFS model, physicians will struggle to align both imperatives.
  • Employers. Employers want their employees healthy, present, and productive. On the other hand, they struggle with soaring benefit costs and need a business case for reform.
  • Pharmaceutical manufacturers. Although some assert that manufacturers care only about profits, ineffective drugs are not profitable. Manufacturers therefore have a vested interest in quality.

Linking Healthcare Reform and the Quality Enterprise

Next, participants discussed the link between healthcare reform and the quality enterprise. Systemic reform connects to, and ultimately progresses to, healthcare quality and the quality enterprise. Notable commitments, transitions to quality, and innovations are evident in the public and private sectors, and additional innovations are forthcoming.

The Public Sector

The public sector has increasingly embraced the quality agenda over the past 10 years, well before the introduction of the PPACA. For example, the Medicare program and many state Medicaid programs require accreditation, measure quality, and impose criteria for board certification. Medicare has a star rating system to recognize and reward quality. The PPACA positions the federal government to “drive healthcare quality and become the dominant value-based payer,” said Dr Weissberg. Given the PPACA mandate, the CMS Innovation Center is boldly moving forward.

The Private Sector

In the private sector, also well before the PPACA, some quality- centered players have acted assertively to improve healthcare delivery and payment. For example, Kaiser Permanente and Humana, despite different structures and approaches, have been recognized for innovations and improvements along the lines of those promoted by the quality enterprise.

Further sectorwide innovation is under way, some of it accelerated by the Health Information Technology for Economic and Clinical Health Act, which is part of the American Recovery and Reinvestment Act (ARRA) of 2009 and requires phased-in adoption and “meaningful use” of electronic health record (EHR) technology.

Streams of Innovation

Innovation has flowed, and will flow, from diverse areas. In some markets, business coalitions drive progress. In others, health plans lead the charge. In many areas, Medicare has taken the lead. The mandates in the PPACA will drive even more, and more rapid, innovation.


Early, voluntary healthcare reform efforts, although important and commendable, were episodic, confined to specific organizations, and thus localized. The advent of the PPACA has brought about a dramatic, national sea change. Given the disparate interests, definitions, and approaches of the stakeholders, the resulting turbulence is perhaps not surprising.

However, these disparities can be reconciled, and over time aligned, around common themes in the legislation and through the quality enterprise framework. “We used to debate ‘the cost-quality tradeoff,’” said Ms O’Kane. “But it now seems possible—through this reform platform—to have high-quality care at a manageable cost.”Author affiliations: Humana Inc, Louisville, KY (MGJ); National Committee for Quality Assurance, Washington, DC (MEO); Cardiothoracic Intensive Care Unit and Surgical Intensive Care Unit, Columbia University College of Physicians and Surgeons, New York, NY (PS); Kaiser Permanente, Oakland, CA (JW).

Funding source: This information contained in this publication was sponsored by GlaxoSmithKline (GSK). GSK reviewed the content of this publication for compliance with its own policies; GSK played no role in the selection or content of the material that appears here.

Author disclosures: Ms James reports employment, meeting/conference attendance, and stock ownership with Humana Inc. Dr Weissberg reports employment with Kaiser Permanente and board membership with Archimedes and Avivia Health. Dr Weissberg has also disclosed ownership of various stocks; information on file at the office of The American Journal of Managed Care, Plainsboro, NJ. Ms O’Kane and Dr Salgo report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this supplement.REFERENCES

ACR appropriateness criteria. American College of Radiology website. Accessed August 26, 2012.

Crossing the quality chasm: the IOM health care quality initiative. Institute of Medicine website. Accessed August 25, 2012.

Doing What Counts for Patient Safety: Federal Actions to Reduce Medical Errors and Their Impact: Report of the Quality Interagency Coordination Task Force (QuIC) to the President. February 2000.

Kohn LT, Corrigan J, Donaldson MS, eds. To Err is Human: Building a Safer Health System. Washington DC: National Academies Press; 2000.

Medication errors. US Food and Drug Administration website. Accessed August 25, 2012.

National Priorities Partnership. National Priorities and Goals: Aligning Our Efforts to Transform America’s Healthcare. Washington, DC: National Quality Forum; 2008.

20 tips to help prevent medical errors. Agency for Healthcare Research and Quality website. Accessed August 25, 2012.

Valuck T. Applying Measures to Improve Quality: Health Reform Implications for Performance Measurement, Public Reporting, and Payment Incentives. NAPH Fall Conference; November 9, 2010.

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