Appendix I. An Illustrative Funding Example
When Congress mandated the production of the national healthcare reports in 1999, it did not provide dedicated
funding to the Agency for Healthcare Research and Quality (AHRQ) for this purpose. Currently, the report-related
effort is funded within AHRQ at an annual cost of approximately $3.7-$4.0 million. The Future Directions committee
has recommended numerous improvements to the NHQR, NHDR, and their related products. The committee
is cognizant of federal fiscal restraint and exercised diligence when weighing recommendations that would require
additional funding. The committee concluded, however, that monitoring health care quality and disparities is an
essential part of improving the Nation's health care system, and that such monitoring should be done well. Therefore,
the committee recommends (in Chapter 7) that although some of its recommendations can be implemented
with existing funds, additional funds are needed to support the expanded activities in this report. Although the
committee was not tasked with providing specific budgetary amounts, in this appendix, the committee provides
one illustrative example of how its recommendations might be funded.
To implement the improvements for the NHQR, NHDR, and related products, the committee's illustrative
funding scenario proposes a $5.5 million increase in AHRQ funds (Table I-1).
The committee recognizes that this
would be a substantial increase over current funding, but discusses how this increase would be used to transform
the report products, engage national and state policy makers and other actors, strengthen performance metrics,
improve data, and support the processes the committee has described.
The committee provides this estimate to convey the scale of the overall increase thought necessary. The committee
developed this estimate by considering the major tasks to be accomplished and assessing the potential costs
based on AHRQ's current expenditures and the committee's own experience with activities of a similar scope. An
increase of this amount would give AHRQ a total budget of approximately $9.5 million for report-related activities.
In the fiscal year (FY) 2009 omnibus appropriations bill, AHRQ's budget was $372 million, and the request for AHRQ in FY
2010 is the same. Thus, an increase in funding for AHRQ of this amount represents about a 1.5 percent increase
in the overall AHRQ budget.
The speed of implementation will determine if all funds enumerated in the proposed example would be
required in the initial year, and progress on activities thereafter would determine whether each increase would
be required annually and indefinitely. As an example, the National Advisory Council for Healthcare Research
and Quality (NAC) Technical Advisory Subcommittee for Measure Selection might complete the bulk of the
prioritization analyses on measures within a couple of years calling for less frequent meetings and/or the sub-committee may benefit from prioritization analyses conducted by other funded groups such as the National
Quality Forum and thus may require less funding to contract for services.
In calendar year 2010, with a modest increase in staffing and resources ($750,000), AHRQ could include
numerous upgrades in the 2010 NHQR, NHDR, and State Snapshots (which would be released in early 2011).
While a major portion of this may go toward reconfiguring the reports themselves in the initial year, in subsequent
years, a greater portion would be available for data acquisition and analysis, including substate analyses and more
in-depth analyses related to priority populations. AHRQ at present spends about $1.6 million of its $3.7-$4.0 million
budget on data acquisition and analysis.1 Another $1.25 million may be required for upgrades to Web-based
resources, additional products, and enhanced dissemination activities.
It is estimated that $1 million would be required to staff the Technical Advisory Subcommittee for Measure
Selection within the existing structure of AHRQ's NAC. As indicated in Chapter 7, this technical advisory subcommittee
should be established in calendar year 2010 to begin planning for the assessment of measures. In
addition, AHRQ may need additional funds ($1 million) specifically dedicated to hiring staff or for contracting
for the systematic review and analyses required to apply quantitative techniques to assess how much closing gaps
in performance would benefit the overall health of the nation and of specific population groups. Funds should be
dedicated to measure and data source development; the $1 million suggested is a relatively small investment given
the costs of developing data systems, and the committee discusses in Chapter 7 the need for multiple partners
to support the development of the health care data infrastructure. Finally, $500,000 may be needed by AHRQ to
ensure an adequate evaluation of report-related efforts.
1 Personal communication, Ernest Moy, Agency for Healthcare Research and Quality, November 8, 2009.
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