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.
The research arm of the Health Care Financing Administration (HCFA), the Office of Research and Demonstrations (ORD), performs and supports research and demonstration projects (through intramural studies, contracts, grants, and waivers) 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: Access, Quality, Program Efficiency, and Costs--HCFA's research program produces information and descriptive statistics on the infrastructure of the health system, on populations of health care users, and 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 Mechanisms: Current Programs and New 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 research and evaluation program includes projects that develop new approaches to improve access to cost-efficient and appropriate health services for vulnerable populations.
- 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 improving 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 Year 1996 Evaluations
During FY 1996, HCFA completed 10 evaluations:
Evaluation of the Ventilator-Dependent Unit Demonstration looked at the cost of the service for patients who are being weaned from ventilators, which often exceeds the present-day payment system under prospective payment. The project evaluated four demonstration sites that provided care for chronic ventilator-dependent patients. The evaluation comprised three major components: case studies of the demonstration sites, including a comparison of Medicare reimbursement for patient care under the Tax Equity and Fiscal Responsibility Act (TEFRA) compared with reimbursement for the same care under the prospective payment system rules; outcome measures such as comparing the utilization of services, patient health, hospital charges, and Medicare expenditures for individuals admitted to demonstration sites and for patients selected to serve as a control group; and estimation of the effects of implementing a national ventilator-dependent unit program, under TEFRA reimbursement, on utilization and Medicare expenditures.
Evaluation of the Arizona Health Care Cost-Containment System looked at the continuing operation of the Arizona Health Care Cost-Containment System (AHCCCS), with particular emphasis on the implementation and operation of the Arizona Long-Term Care System (ALTCS), a new component of AHCCCS, which began in December1988. AHCCCS is a unique, State-sponsored capitation demonstration that provides public assistance medical care to residents of Arizona who are eligible for Aid to Families with Dependent Children and Supplemental Security Income cash payments. The major research questions included the following:
- Does competitive bidding and selective contracting result in a lower per unit long-term care service cost?
- How effective is the preadmission screening instrument used by ALTCS in identifying individuals who are at risk of being institutionalized?
- Can home- and community-based services be substituted for long-term institutional care for individuals who pass preadmission screening, and are those services less expensive than institutional care?
- Does case management of long-term care services result in lower cost and better coordination of care?
- What are the effects of capitating long-term care services?
- Is the ALTCS more cost-effective than a comparable State's fee-for-service long-term care program?
The results of the quality-of-care analysis indicate that ALTCS nursing home residents are more likely to experience a decubitus ulcer, a fever, or a catheter insertion than nursing home residents covered by NewMexico Medicaid, suggesting a lower quality of care for ALTCS nursing home residents than for those in NewMexico. However, the lack of pre-ALTCS data precluded an analysis of the improvements in quality since ALTCS began. The cost of the ALTCS program during its first 3years was somewhat less than the cost of a traditional program in Arizona (6percent in FY 1990; 13 percent in FY 1991). The AHCCCS acute care program cost also continued to be less costly than of a traditional fee-for-service program.
Assessment of the Impact of Medicaid Drug Rebate Policy on Expenditures, Utilization, and Access used decomposition analysis to determine the change in total drug expenditures before and after implementation of the Medicaid drug rebate program. The role of covered population changes, intensity (utilization rate) changes, changes in efficiency (drug product prices), changes in dispensing fees, changes in rebates, and administrative costs were evaluated. The impact on recipient access was assessed by constructing a person-level file of prescription drug claims, both pre- and post-Omnibus Budget Reconciliation Actof1990 (the legislation that mandated the drug rebate program). During the first two fiscal years the drug rebate amounts accrued were 10.3 percent of the total Medicaid drug expenditures.
Sustainable Support System for Telemedicine Research and Evaluation created an ongoing mechanism by which the cost, effectiveness, and utility of telemedicine services could be systematically evaluated. This was done through formation of a Clinical Telemedicine Cooperative Group, which was modeled after a successful cooperative multicentered research organization. Its functions included (1) providing operational and statistical support for telemedicine research and evaluation; (2) maintaining a communication system to link geographically distant telemedicine projects to share information and perform telemedicine research; (3) creating easily adaptable electronic data collection and tabulation instruments for use in telemedicine research; and (4) building a comprehensive on-line telemedicine information clearinghouse for gathering, storing, and disseminating information about the utility, effectiveness, and suitability of telemedicine for a broad range of medical and social applications.
Evaluation of the Home Health Agency Prospective Payment Demonstration examined the first phase of a program designed to test the effectiveness of using prospective payment methods to reimburse Medicare-certified home health agencies. In this demonstration a per-visit payment method that sets a separate payment rate for each of six types of home health visits (skilled nursing, home health aide, physical therapy, occupational therapy, speech therapy, and medical social services) was tested. The study looked at the effects of this payment method on agency operations, service quality, and expenditures. It also analyzed the relationship between patient characteristics and the cost and utilization of home health services. The findings suggested that demonstration sites had not decreased their cost per visit, had increased their total revenues and net revenues, or had altered their behavior in ways that affect the quality of home health care.
Evaluating the Effects of Physician Payment Reform on Access: Time Series Analyses of Hospitalizations for Ambulatory-Care Sensitive Conditions looked at the effects of physician payment reform (PPR) on access to care in the Medicare population by studying patterns of hospitalization for ambulatory-care sensitive (ASC) conditions. This project analyzed the trend in rates of hospitalization for selected ASC conditions to see whether there is a discontinuity in the time series associated with the implementation of PPR. Analyses were compiled for the trend in hospitalizations for one ASC condition, congestive heart failure (CHF). No significant discontinuity was found in hospitalizations for CHF with the implementation of PPR.
Effects of Predetermined Payment Rates for Home Health Care is a study of the Home Health Per-Visit Prospective Payment Demonstration that pays home health care agencies a prospectively set rate for home health visits, thus providing an incentive to these agencies to control their costs of delivering Medicare home health visits. The study shows that this incentive was largely overwhelmed by the current home health care environment, which is characterized by diversity, change, and competitive pressures. Nonetheless, the opportunity to earn a profit and the increased possibility of losses may have slightly increased the level of attention agencies gave to cutting costs. Prospective rate setting had no discernable effect on the number of visits provided by agencies or on patients' other Medicare costs, quality of care, access to care, or use of services not covered by medicare.
Trends in Access to Health Care Services for Selected Segments of the Medicare Population were developed for the years prior to, during, and after implementation of PPR. The focus was on vulnerable subgroups of the Medicare population, such as persons with low income, persons without supplemental medical insurance, and persons with acute and chronic conditions. Geographic differences also were examined. These trend data were derived from the National Health Interview Survey (NHIS) conducted by the National Center for Health Statistics. The years 1984, 1986, 1989, 1990, and 1991 were used to develop pre-PPR baseline data. The years 1992 and 1993 were used to develop post-PPR data. Pre- and post-PPR data from the NHIS showed that health insurance and health status are both important determinants of the use of physician services.
Assessment of the Impact of Pharmacy Benefit Managers looked at companies that apply managed care principles to prescription drug programs. Their objective is to ensure optimal and cost-effective drug prescribing and use. The project characterized these firms, compared the costs and quality of care (pharmacy benefits) in Medicaid programs versus pharmacy benefit managed care for the privately insured and for Medicaid enrollees in managed care. The project found that these firms did provide both administrative functions and drug use control, that they were dispersed throughout the country and covered substantial numbers of beneficiaries, that this aspect of the health care industry is complex and rapidly changing, and that they offer various programs (e.g., Medicaid, extensive provider networks, favorable market reimbursement rates for pharmacies, and sophisticated claims processing and data management systems).
The Evaluation of Medicare SELECT Amendments looked at a pilot Medicare supplemental insurance product under which full Medigap benefits are paid only when services are provided by the plan's provider network. Case studies were conducted. The analytical portion of the project compared cost and use of Medicare and supplemental services, selection effects, beneficiary satisfaction, and physician practice patterns with other Medigap options.
Evaluations in Progress
ORD currently supports 32 evaluation projects in progress, 24 of which are scheduled to be completed in FY 1997. 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.
Results from the following evaluations are expected in FY 1997.
The Evaluation of Medicare SELECT looks at a pilot Medicare supplemental insurance product under which full Medigap benefits are paid only when services are provided by the plan's provider network. Case studies are being conducted. The analytical portion of the project will compare cost and use of Medicare and supplemental services, selection effects, beneficiary satisfaction, and physician practice patterns with other Medigap options.
The Evaluation of the Medicare Case Management Demonstrations studies the appropriateness of providing case management services to beneficiaries with catastrophic illnesses and high medical costs. It will test case management as a way of controlling costs in the fee-for-service sector.
The Medicare Participating Heart Bypass Center Demonstration Extended Evaluation continues to study the feasibility of a negotiated all-inclusive pricing arrangement for coronary artery bypass graft surgery while maintaining high quality care. The project will look for any net cost savings to the Medicare program, any volume increases at the demonstration sites, the aspects of the demonstration that were attractive to beneficiaries and referring physicians, and whether the quality of care at the sites was equivalent to that provided prior to the demonstration.
Monitoring and Evaluation of the Medicare Cataract Surgery Alternate Payment Demonstration assists HCFA in tracking this set of demonstrations, which test the feasibility of an all-inclusive negotiated (bundled) price for cataract surgery. The price covers the physician, facility, and intraocular lens costs. The analysis portion of the project tests whether there were any net savings to the Medicare program, changes in the use of services included and excluded from the bundle, beneficiary satisfaction, and quality of care.
In the Impact of the Medicare Fee Schedule on Access to Physician Services, HCFA is evaluating the effect of the physician fee schedule on the beneficiary's access to care. Six different strata of beneficiaries are selected based on the relative size of the payment change under the fee schedule compared to the earlier payment scheme. The project is examining use of services, outcomes of services, and the change in the beneficiary's financial liability.
The Evaluation and Technical Assistance of the Medicare Alzheimer's Disease Demonstration assists with HCFA's projects that provide comprehensive in-home and community-based services to beneficiaries who have dementia. Two different models of care are involved in the demonstration, differing by the intensity of the case management and the amount of service costs covered each month. The analytical portion of the contract is attempting to identify the factors associated with cost-effectiveness, the services that appear to affect the health status and functioning of the patients, the effects on the caregiver (burden and stress), and whether the provision of the additional home care services delay or prevent institutionalization.
In later years, the following Medicare projects are expected to be completed.
The Evaluation of HMO Outlier Demonstration that examining the Outlier Pool Demonstration that is under way in the Seattle area. Participating plans are paid 97 percent of the adjusted average per capita cost, with 2 percent of the payments going into a pool. Plans with a higher than average incidence of high-cost cases will receive more from the pool than they paid in, and those with a lower incidence will receive less.
The Evaluation of the Medicare Choice Demonstration assesses the feasibility and desirability of new types of managed care plans for Medicare. These plans can be integrated delivery systems and preferred provider organizations.
The Medicare HMO Evaluation updates the findings of an earlier study of Medicare risk health maintenance organizations. That study found that 5.7 percent more was paid for plan enrollees than would have been spent under fee-for-service. The current study looks at disenrollment, beneficiary satisfaction, quality of care, and selection and savings.
HCFA is experimenting with paying skilled nursing facilities on a prospective basis. Currently, such facilities are reimbursed on a retrospective cost basis. This demonstration uses a case-mix classification, called Resource Utilization Groups, to classify patients. The Evaluation of the Nursing Home Case-Mix and Quality Demonstration seeks to estimate specific behavioral responses to the prospective payment and to test hypotheses about aspects of such responses. The main goal of the project is to estimate the effects on the health and functioning of the nursing home residents, their length of stay, and use of health care services; on the behavior of the facilities; and on the level and composition of Medicare expenditures.
The following Medicaid-related evaluations are scheduled for completion in FY 1997.
The State of Delaware is experimenting with its Medicaid program under the assumption that by enrolling children into a managed-care system, they will reap the benefits of a higher level of coordinated care while benefiting from lowered costs. The Evaluation of the Demonstration Entitled Delaware Health Care Partnership for Children is examining this real-time test of the hypothesis.
The Evaluation of Medicaid-Managed Care Programs With 1915(b) Waivers will provide information on the extent to which various features of the waiver projects contribute to the ability of the Medicaid program to deliver cost-effective care to eligible populations.
The Evaluation of the Utah Prepaid Mental Health Plan: Coordinated Care Systems as Alternatives to Traditional Fee for Service looks at Utah's project which has three mental health centers providing mental health services to all Medicaid beneficiaries in their catchment areas (these areas include over 50 percent of all Utah Medicaid beneficiaries). The State hopes this program will control the cost inflation and improve patient outcomes.
The Evaluation of the Iowa Implementation of Ambulatory Patient Groups (APG's) studies a Medicaid outpatient prospective payment system that groups patients for payment purposes rather than paying on a cost basis. It involves a case study on Iowa's implementation of the APG system and an analysis of the reimbursement methodology.
The Comparative Study of the Use of Early and Periodic Screening, Detection, and Treatment and Other Preventive and Curative Health Care Services by Children Enrolled in Medicaid is examining the effects of the 1989 changes to this portion of the program. It is looking at the process of providing health services and the appropriateness of expenditures for services in four States. It compares Medicaid children with other Medicaid-enrolled children in the same State who are not receiving these services, with emphasis on preventive services. Using national survey data, it also compares Medicaid-enrolled children with non-Medicaid-enrolled children, insured and uninsured, on the use of and expenditure for preventive and other health services.
The Evaluation of the Demonstration for Improving Access to Care for Pregnant Substance Abusers is assessing the effectiveness of projects that improve outreach and assessment; expand, integrate and coordinate program services; and improve client case management. The evaluator will look at access to prenatal care, substance abuse treatment services, and other relevant services. It will assess the effects of services on the health of the drug-addicted pregnant women, any prevention of reduction or short-term impairments to their infants, and the impact on birth outcomes.
The Evaluation of the Medicaid Uninsured Demonstrations covers projects in Maine, South Carolina, and Washington State. They test the effects of extending Medicaid coverage to low-income families. The evaluator will look at the ability of the programs to enroll significant numbers of eligible persons, the conditions under which these persons are willing to participate, the program's ability to induce adequate numbers of providers to participate, the effect on service utilization and health outcomes, their cost-effectiveness, and the extent to which these demonstrations' interventions could be applied nationally.
The Examination of the Medicaid Expansions for Children will use enrollment and expenditure trends to ascertain the impact of the 1989 program changes. It will look the penetration of the target population, and the impact of State policies (and the eligibility group) on enrollment, expenditures, and utilization of services.
The Department is required to report to Congress on the relative quality of care in the Medicaid program. HCFA's Medicaid Quality of Care Study examines the necessity, appropriateness, and effectiveness of selected medical treatments and surgical procedures for Medicaid patients. It is assessing the variation in the rate of performance of selected treatments and procedures on Medicaid beneficiaries for small areas within and among States. It is determining underutilized, medically necessary treatments and procedures for which failure to furnish them could have an adverse effect on their health status.
The Community-Supported Living Arrangements Program: Process Evaluation is designed to test the effectiveness of developing a continuum of care concept as an alternative to the Medicaid-funded residential services provided to individuals with mental retardation and related conditions. The program serves individuals who are living in the community--either independently, with their families, or in homes with three or fewer other individuals receiving the same services.
The Project Demonstrating and Evaluating Alternative Methods to Assure and Enhance the Quality of Long-Term Care Services for Persons With Developmental Disabilities Through Performance-Based Contracts With Service Providers tries to determine whether and how well the implementation of new approaches to quality assurance, with outcome-based definitions and measures of quality, will replace input and process measures of quality in this population group.
In addition, HCFA has other major Medicaid evaluations whose results are anticipated in several years.
HCFA is sponsoring a wide variety of waiver-based demonstrations that give States the opportunity to experiment with their Medicaid programs. As these demonstrations are begun, HCFA undertakes examinations of their impact. The Evaluation of the Oregon Medicaid Demonstration, the Evaluation of the State Medicaid Reform Demonstrations (in Hawaii, Rhode Island, and Tennessee), and the Evaluation of the State Medicaid Reform Demonstrations (in Ohio and Minnesota), are three such projects. More will be started as more State demonstrations are begun.
The Drug Utilization Review Evaluation is looking at the impacts of retrospective and prospective review, which include the payment of pharmacists for cognitive services. Data from demonstrations in Iowa and Washington State and information from programs in other States serve as the basis for this study. Maryland and Georgia will serve as coexperimental and comparison States.
Other Health Financing Policy and Demonstration Evaluation Projects
In 1977 Congress authorized a new type of provider--the rural health clinic. A rural health clinic must be located in a rural health professional shortage area, medically underserved area, or governor-designated shortage area, and must make use of mid-level practitioners. Rural health clinics are reimbursed on a cost-basis by the Medicare and Medicaid programs. Their numbers have been growing at a relatively rapid rate. The Evaluation of Rural Health Clinics examines the reasons for this growth, the impact on access to care for these rural populations, and the costs to the Federal Government and the States.
Evaluation of the Essential Access Community Hospital/Rural Primary Care Hospital Program examines the development, implementation, and early operating experiences of this program. Known as EACH/RPCH, the program is supposed to assist States in maintaining access to health care services in rural areas. This is done through the development of rural health plans, establishment of rural health networks, and creation of a limited service alternative for communities that can no longer support a full-service hospital.
The Evaluation of the Community Nursing Organization Demonstration looks at a set of projects mandated in 1987. The legislation directs projects in four or more sites to test a capitated, nurse-managed system of care. The two fundamental elements of these demonstrations are capitation payment and nurse case management. They are designed to promote timely and appropriate use of community health services and to reduce the use of costly acute-care services.
The Evaluation of the Program of All-Inclusive Care for the Elderly Demonstration, known as PACE, examines the replicates of a unique model of managed care service delivery for very frail community-dwelling elderly, most of whom are dually eligible for Medicare and Medicaid coverage and all of whom are assessed as being eligible for nursing home placement. The core services include adult day health care and multidisciplinary team care management through which all health and long-term care services are arranged. The evaluator is looking at the demonstration sites before and after assumption of financial risk to see if the replicates are cost effective relative to the current Medicare and Medicaid services. They are also looking at the decision to enroll to understand how PACE enrollees differ from the eligible beneficiaries who choose not to enroll.
The Inspector General of the Department is conducting a demonstration of improved methods for investigating and prosecuting fraud and abuse. The Evaluation of the Effectiveness of the Operation Restore Trust Demonstrations will determine whether the more concentrated effort rendered through the demonstration's partnership model has a relatively greater impact on industry fraudulent behavior.
The Evaluation of the Impact of Health Plan Report Cards on Consumer Knowledge, Attitudes, and Choice in a Managed Competition Setting seeks to determine whether the dissemination of information about health plans to consumers (who choose health plans within a managed-care competition framework) will influence their knowledge of plan characteristics, attitudes toward the plans, or choice of plan.
New Directions for Evaluation
As the U.S. health care system continuously changes, there is a clear need for developing, designing, and testing new ways to monitor and evaluate its performance. It is important that monitoring and evaluation efforts for the Medicare and Medicaid programs include a number of critical dimensions (access to care, quality, efficiency, costs, and beneficiary satisfaction) to provide an understanding, on an ongoing basis, of how well the programs are performing. ORD is working to develop a comprehensive monitoring and evaluation plan for systematically examining the Medicare and Medicaid programs.
HCFA also will continue to develop a wider array of evaluation and measurement tools. The agency's 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 of, quality of, and beneficiary satisfaction with managed care. HCFA plans to carry out projects to monitor and compare the health status 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, the agency will evaluate these programs and provide information to policymakers about the impacts of these alternatives.