Performance Improvement 1996. Health Care Financing Administration


MISSION: To promote the timely delivery of appropriate, quality health care to the Nation's aged, disabled, and poor through administration of the Medicare and Medicaid programs.

HCFA Evaluation Program

The research arm of HCFA, the Office of Research and Demonstrations (ORD), performs and supports research and demonstration projects (through intramural studies, contracts, and grants) to develop and implement new health care financing policies and to provide information on the impact of HCFA's programs. The scope of ORD's activities embraces all areas of health care: costs, access, quality, service delivery models, and financing approaches. ORD's research responsibilities include evaluations of the ongoing Medicare and Medicaid programs and of demonstration projects testing new health care financing and delivery approaches. These projects address four major themes:

  • Monitoring and Evaluating Health System Performance. HCFA's research program produces information and descriptive statistics on the infrastructure of the health system, on populations of health care users, and on service and expenditure patterns; examines differences in costs, quality, and access to care; and assesses the effects of HCFA programs on beneficiary health status.
  • Improving Health Care Financing and Delivery Models. HCFA performs research and demonstrations to develop and test new payment and delivery models intended to increase the efficiency and effectiveness of Medicare. ORD's evaluations of these demonstration projects provide policymakers with information about their impact.
  • Meeting the Needs of Vulnerable Populations. HCFA's evaluation program includes studies to examine the factors affecting access to health care delivery, as well as evaluations of demonstration projects that test new financing and delivery systems to improve access to cost-efficient and appropriate health services for vulnerable populations.
  • Providing Information To Improve Consumer Choice and Health Status. Improving beneficiaries' knowledge and ability to make informed health care choices, both in the health plans they select and in the services they use, is part of HCFA's commitment to improve communication of information to beneficiaries. ORD examines variations in the use of services and treatments and the impact of new information tools and technologies in making health care decisions and improving beneficiaries' health status.

Summary of Fiscal 1995 HCFA Evaluations

During fiscal 1995, HCFA completed three major evaluations.

"Monitoring the Impact of Medicare Physician Payment Reform on Utilization and Access" represents a combination of a wide series of intramural and extramural projects and results in an annual report to Congress. This annual report was initiated when the new Medicare fee schedule for physician services was implemented to track the changes that might be caused by such a major shift in the Medicare payment approach. The fiscal 1995 report indicates that the new payment system has produced the kinds of shifts in payments that were anticipated. There are continuing indications that many vulnerable population groups face barriers to care; additional understanding of these barriers is needed to improve access to care.

The "Medical Participating Heart Bypass Center Demonstration Evaluation" covers the first 3 years of a demonstration carried out at seven hospitals across the United States. Its findings support the feasibility of an all-inclusive negotiated bundled payment arrangement for heart bypass surgery at high- volume hospitals. This evaluation focused on the assessment of surgical appropriateness, quality of care, hospital and Medicare program savings, and patient satisfaction.

Finally, an evaluation of the Rural Health Care Transition Grant Program produced information for an annual report to Congress on this HCFA grant program for rural hospitals. The report describes the new awards made in fiscal 1994, the characteristics of grantees compared with earlier cohorts, and the impacts of the grants on the hospitals and their communities.

HCFA Evaluations in Progress

ORD currently supports 39 evaluation projects in progress. These projects provide information for continued monitoring of the Medicare and Medicaid programs and assess the impacts of HCFA's Medicare and Medicaid demonstration projects. In-progress evaluations that are scheduled to be completed in fiscal 1996 include examinations of Medicaid program initiatives such as 1915(b) waivers and Community-Supported Living Arrangements and evaluations of the following several demonstration projects:

  • The Medicare cataract surgery alternate payment demonstration.
  • The Medicare case management demonstrations.
  • The Medicaid uninsured demonstrations.
  • The Medicare Alzheimer's disease demonstration.

HCFA's evaluations in progress that are scheduled for completion in later years include evaluations of State health reform demonstrations, including Oregon and Tennessee, and of the following ongoing demonstrations:

  • The program for all-inclusive care for the elderly demonstration.
  • The Medicare home health agency prospective payment demonstration.
  • The nursing home case-mix and quality demonstration.
  • The drug utilization review demonstration.

New Directions for HCFA Evaluations

As the U.S. health care system continuously changes, there is a clear need for the development, design, and testing of new ways to monitor and evaluate the performance of the system. It is important that monitoring and evaluation efforts for the Medicare and Medicaid programs include a number of critical dimensions to provide an understanding, on an ongoing basis, of how well these programs are performing in terms of access to care, quality, efficiency, costs, and beneficiary satisfaction. ORD is working to develop a comprehensive monitoring and evaluation plan for systematically examining the Medicare and Medicaid programs. It also will continue to work to develop a wider array of evaluation and measurement tools. Evaluation activities will continue to examine specific policy issues within the HCFA programs. For example, as Medicare and Medicaid continue to pursue managed care options, ongoing work will examine the cost-effectiveness and quality of and beneficiary satisfaction with managed care. HCFA also plans to carry out projects to monitor and compare the health status and/or health risk behaviors of beneficiaries in various delivery systems and how these change over time.

Finally, as HCFA develops and implements new high-priority demonstrations that will test new payment and health care delivery models for the future, it will continue to evaluate these programs and provide information to policymakers about the impacts of these alternatives. The new projects include the Medicare Choices Demonstrations, which will test the feasibility and desirability of new types of managed care plans for Medicare; demonstrations of Medicare payment for telemedicine services in rural areas; Operation Restore Trust, which is demonstrating improved methods for investigation and prosecution of health care fraud and abuse; a demonstration of Centers for Excellence that replace separate fee-for-service payments with capitated payments for the entire medical costs associated with certain expensive medical/surgical procedures; a competitive pricing demonstration to evaluate an array of cost-saving approaches of paying for managed care; and the continued monitoring and evaluation of State health reform demonstrations.