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Margaret E. O'Kane sees the drive for health care quality as a rigorous and demanding, yet extremely worthwhile journey.

As president of the Washington-based National Committee for Quality Assurance, she is passionate about the NCQA's mission to build a quality health care delivery system. Ms. Kane blends that passion with the realization that the organization doesn't have all of the answers and cannot act alone.

The NCQA traces its roots to an HMO trade association -- the Group Health Assn. of America, which later became the American Assn. of Health Plans. Ms. O'Kane joined the GHAA in 1986 to work on quality issues and realized that a major quality initiative could not be conducted in the context of an industry trade association. She told GHAA leaders, "If we do it effectively, it will alienate the members, and if we don't do it effectively, we won't have any credibility." Looking back, she said, "Even if we did do it effectively, there was still going to be a credibility issue because we were under the organization."

The NCQA received a grant from the Robert Wood Johnson Foundation, enabling it to become independent in 1989. Ms. O'Kane became its president in 1990.

The private non-profit organization is dedicated to assessing and reporting on the quality of managed care plans through numerous programs, including its HMO accreditation program, its advancement of the Health Plan Employer Data and Information Set standardized performance measures and its Quality Compass database that compiles HEDIS data and accreditation information. More than half of the HMOs in the nation are currently involved in the NCQA accreditation process. The organization recently released its first annual "State of Managed Care Quality Report."

Ms. O'Kane, 50, has an extensive health care background that includes working as a hospital respiratory therapist and serving as director of quality management for a large HMO.

She shared her perspective on health care quality with Managing Editor Roseanne White.

What has the NCQA learned about health care data collection over the past five years?

It's very complicated. The quality of the data is an issue, and we have an audit product that we're launching now to address quality issues. It's very difficult for plans to gather the data.

It's truly amazing that a system that spends $1 trillion a year hasn't been made to show how it's doing or what it's doing. So it's difficult, but it's also extremely compelling and what we're learning from it is very important.

We believe that performance-driven evaluation is the future of health care accreditation. So, we will be working on a project to integrate HEDIS into our accreditation program. More and more in the future, performance will be driving accreditation. That's going to be a very long-term project, but we're starting on it this year. We think it's going to change the model for accreditation -- and it should.

So how will accreditation be integrated with the performance data?

At this point, accreditation is a very meaningful review of systems, how the health plan operates and so forth. We get a richness of information that we don't get through HEDIS data. But on the other hand, the performance information that we get is also extremely valuable and it does speak more directly to the concerns of many in the purchasing community about how the plan is doing.

So we think that putting these things together, which has always been our ultimate purpose, will make for a much stronger evaluation process that will really drive improved health care in this country.

Have health care buyers become savvier about using the data?

We're all learning what the data means. For example, we're all learning that there are geographic variations in performance, so that where you wind up in performance on a particular measure is a function not only of how effectively you're performing as a health plan but also how the underlying medical care system in the community is working. So I think that adds a dimension to this. It's a little more complicated than what we were saying.

If the performance numbers were randomly distributed around the country and there weren't geographic variations, we could say, "OK, this is acceptable and this is unacceptable." It looks like we're going to have to do some geographic adjustments in order to make it a fair comparison.

Without standardized performance evaluation, we just don't know where we are. The employers that have the technical competence and the dedicated staff to really work with these numbers are learning as we all are how to use them more effectively. But our concern really is that so much of the market consists of small employers that really don't have the time or the resources to use these numbers effectively, and they can't go out and hire an expensive consulting firm. So that's one of the compelling arguments for making this a user-friendly product. And it won't just be an accreditation system, but it will be more information on how the plan does in particular areas.

What are the pitfalls for buyers and providers of having too many different sources of data collection and evaluation?

I think that the pitfalls are terrible. The reason HEDIS actually got off the ground is because people understood that if you didn't get everybody on the same page what you had was a Tower of Babel effect. If you have too many measures, first of all the plans can't report all the measures so they will start to pick and choose, and it'll fragment the market. When you fragment the market, you don't have enough plans reporting on any particular measure to know what the norms are and what they ought to be.

It's not as though we feel HEDIS is the be all or end all of performance measurement. It's clearly in its early stages. We are trying to work with the Foundation for Accountability and others that are going to try to advance the state of the art. Unless we have a standardized core set of measures, I think we'll be back where we were pre-1993, before people were using HEDIS, where it was kind of all over the place and where you don't know what the numbers mean.

So will there be a HEDIS update in 1998? What can we expect from that?

Incremental change, really not dramatic change. There was, of course, a big jump between HEDIS 2.5 and HEDIS 3.0. It takes a while for the plans to be able to establish the systems and collect the data effectively. The cost burden of collecting HEDIS 3.0 is about double that of collecting HEDIS 2.5, because there's more of a need to go to medical records. We weren't able to really say much about how the client did when the people got sick, and now we're starting to move into that area.

What is your response to HMO executives who have said that the need to offer the services necessary to win accreditation is a factor in rate increases?

We believe very strongly in the quality-enhancing effects of our standards and being quality driven. I can't say it doesn't cost more. And I think we should all be very concerned that we've developed an accountability system for HMOs that's pretty good -- it's not perfect and it's going to be evolving -- but we have many other types of health plans out there, including plans that are called managed care, that aren't being held accountable. So we worry that having one segment of the market accountable puts them at an unfair disadvantage if it does drive up their costs for maintaining these systems and having a quality-driven managed care product. We think that the policy world ought to be thinking hard about how to hold all health plans accountable for quality.

As president of a group whose mission is to foster ongoing quality improvement in health care, what is your reaction to what some observers call a managed care backlash?

Well, I think it's not surprising that there's a backlash because of the enormity of the changes that have gone on. When you try to rein in an industry that has never been accountable and that spends $1 trillion a year in a very unorganized way, it causes a lot of changes.

Patients are suspicious I think, of a lot of what managed care plans have done. Some physicians are losing income. There are plenty of legitimate gripes that physicians have with managed care organizations, as well.

I think that in some ways the industry needs to woo patients more effectively. I think there's been a general feeling that the purchaser is the customer and the consumer is not. I think everybody is understanding now that that's no longer an acceptable strategy. If you can't ultimately convince the consumers, the patients, of the value of what you're doing, then you've got a problem.

I think managed care needs to show its quality-enhancing face to its patients. I think that's happening in some plans, where people get a card when they need a mammogram or a child needs his or her shots.

A lot of what people experience in managed care is "No, you can't have that service" or "If you need this service you have to come in here and get this form." There have been a lot of perceived barriers created by managed care without adequate explanation of why the barriers are necessary; sometimes the barriers frankly aren't.

Anytime you're just fundamentally changing the relationships the way managed care has done you can expect a backlash -- especially in something as personal as health care. I think it's the Marcus Welby paradigm people have in their heads about health care, even though I don't think it ever existed. And, there's a sort of general anti-corporate sentiment in the country. I think a lot of people feel that they're losing control over many aspects of their lives. So this sort of plays into that general feeling of powerlessness and frustration as well.

What about your relationship with the American Assn. of Health Plans?

We have a cordial relationship. They, of course, are very helpful in getting comments on the various changes we make. We don't always agree. Their job is different from our job. We feel our constituency is the public, and they see their constituency as health plans. So it's really appropriate that we aren't in lock step.

Give us an update on some of the NCQA's other efforts.

We've done a lot of work to try to understand how consumers want information -- what's the best way to present it to them. We've done a bunch of projects, including one in Colorado working with a business coalition that's getting performance information, and several report card projects with other groups.

We formed measurement advisory panels, trying to bring more of the research clinical community into the process of developing measures both to improve the quality of the measures and to generate more support for them. It's important to get clinical leaders who are publishing state of the art articles to help us.

We have a program with the American Diabetes Assn. that involves a list of quality measures for diabetes care that the physician evaluates his or her performance against, and if they pass they get a provider recognition certificate.

Subsequent to that, we've been working with the Health Care Financing Administration, FAACT and the ADA on the Diabetes Quality Improvement Project, to develop some other performance and outcome measures for diabetes care.

What have been the NCQA's major 1997 accomplishments?

One thing is we've really made some great progress with our turnaround times in our accreditation reports. We basically rewrote our standards and we have scoring guidelines. As a result, it's much easier for our surveyors to write the reports, and we've cut the turnaround time to 106 days. So that's been a big breakthrough.

Because of the complexity of our process, our reports used to be about 80 pages long with a lot of written prose, and you can imagine it would be very difficult to write that. Not only that, but the writers have been synthesizing huge amounts of documentation from health plans. What we've done is we've standardized the scoring and made the rules very specific, and we also have developed tools where the surveyors can just fill in the information and they don't have to write volumes. That's really had a good impact on the speed with which the reports are produced.

The plans tell us, "We got everybody really excited about meeting the NCQA standards and then we wait six months for the report and everybody loses their momentum." It's been an issue we've been struggling with for three years, and this is the coming to fruition of about two years of hard work by the accreditation staff and a scoring task force.

What will top the NCQA's 1998 priority list?

Integration as well developing a more flexible evaluation process that we can use for PPOs, PSOs and other forms of managed care that are becoming so prominent in the marketplace.

How do you define value in health care?

Value is the amount of improved health that you get for a given expenditure of dollars.

That contains within it the seeds of a complete transformation of the paradigm of health care -- from one that is sickness-driven and that is absent in the wellness phases of a person's life and just sort of jumps into the breach when care is needed; and even then doesn't provide it in any kind of reliable way.

What we are seeking to move toward is a system that keeps people well, that finds disease early, that manages disease effectively and that minimizes the bad impact of disease and hopefully that also makes the end of life a more benign process.

What else would you like buyers to know?

My message to buyers is that they are the linchpin in this whole agenda, and if they are not buying on value, the whole thing falls apart. I think there's a general sense in the health plan community that many buyers are still buying on price, and as long as that's happening it's very frightening to go into a completely price-driven managed care world. I am optimistic that if we can make the information more user friendly then consumers will demand more quality, so it will be harder to buy on price.