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Improving the Health and Health Care of Older Americans

A Report of the AHRQ Task Force on Aging (continued)

Aligning Incentives to Promote Efficiency, Access, and Quality

The behavior of providers and patients may also be influenced by economic factors. Providers not only are concerned with improving the health of patients, but also must consider the costs and revenue from that care. Changes in both the manner in which public health programs reimburse providers (e.g., prospective versus retrospective reimbursement) and the way that health systems compensate clinicians and other caregivers (e.g., incentives to refer to specialists or for care in a hospital setting) create financial incentives that affect the amount, cost, and quality of care.

In addition, characteristics of the health care marketplace (e.g., the degree of competitiveness, the proportion of profit versus nonprofit organizations) may also affect the quality of health care. Patients also respond to financial incentives they face, making health care decisions within the context of their economic status and their out-of-pocket costs of care. Together, these incentives can differentially affect health care costs, access, and quality of care overall and for population subgroups.

Improving our understanding of the complexities of the health care system is crucial for cost-effective improvement of the health of older people. While some studies have investigated the impacts of financial incentives, relatively few studies have been designed to look at the full effects of such incentives on an elderly population that uses a wide range of services. Studies that investigate the effects of financial incentives on resource allocation, utilization of services, access to care, and, ultimately, the quality of care and health outcomes of older people are particularly needed.

One of the key changes in the health care system related to financial incentives is the growth in prospective payment and capitation. While prospective payment has been used by Medicare since 1983 for hospital stays, it is becoming increasingly used by other insurers and in other settings as managed care has become more prevalent. Prospective payment and/or capitation are being introduced for the disabled, for nursing home care, and for home care for Medicaid and Medicare populations; consequently, it has influenced the health care delivery system used by most older people.

Relatively little is known about the effects of introducing prospective payment systems on the health of these populations. On one hand, prospective payment or capitation may increase incentives to provide preventive care, to move people to lower levels of care, and to keep costs low. On the other hand, there may be disincentives to provide high-quality care. There are many remaining questions about the best way to construct incentives. One prime example is how to adjust reimbursement for health risks to avoid selection problems. As care moves away from the hospital setting, the impact on other forms of care (e.g., nursing home care and home care) and on the overall level of quality needs to be investigated.

There is debate about how to balance the goals of reduced cost and increased access and quality. How can we foster the positive effects of a competitive market place, and when are regulations best used to improve incentives when the "market does not work? Report cards are an example of a strategy to help make the market work better by providing information about quality, but these efforts are fledgling and adequate quality measures are only beginning to be developed. There is also a longstanding debate as to whether nursing home quality would be improved more if resources were spent on increased nursing home quality regulations and enforcement efforts or improved reimbursement methods. Research is needed to evaluate approaches to improving quality incentives for all types of care, which include both reimbursement and regulatory alternatives.

Among nursing homes, prospective payment incentives also have begun to change the structure of health care markets. The incentive to discharge people to lower levels of care has resulted in the rapid growth in subacute care in nursing homes and in home care, for example. The need to contract with hospital and managed care systems to capture this market has resulted in an increase in both vertical and horizontal integration of nursing homes into long-term care systems with many facilities and many levels of care. The large increase in outpatient care has been a parallel change. The implications of these changes in the health care system on access and quality for older people need to be evaluated.

An additional concern is that the current system of financing of care for older people is fragmented. Medicare is the main program for acute care, whereas Medicaid is the main public program for long-term care. Medicare, Medicaid, and State and local programs all have different reimbursement and eligibility rules resulting in conflicting goals, cost shifting, and other counterproductive incentives. One group that merits special attention is the population that is dually eligible for Medicare and Medicaid.

In 1995, an estimated 6 million dual-eligible beneficiaries accounted for about 30 percent of Medicare spending and 35 percent of Medicaid spending, although they represented only 16 percent of the Medicare population and 17 percent of the Medicaid population. They generally require a wide range of services, including primary, chronic, and long-term care. It would be difficult to coordinate care for this group in general, but the perverse incentives created by fragmented reimbursement may result in lower quality and higher costs for a population who are intensive users of care.

As financial incentives evolve and continue to be focused on cost savings, there are additional concerns about the long-run effects on innovation and health care technology. One impact of a very price-competitive environment may be fewer resources made available for investments in new technologies that are quality enhancing rather than cost saving. Research needs to consider the implications of changing financial incentives for the health of future generations of older people as well as implications for the current generation.

Improving Access to Care and Reducing Health Disparities

Improving access. Gaps exist in our knowledge of how to best assure access to effective care for older people. Older people have to clear a series of access hurdles to achieve optimal health outcomes. First, they must enter the health care system (primary access) and then they must negotiate its structural barriers (secondary access). Once these hurdles are cleared, the health outcomes for this population are contingent upon the ability of the providers and of the system to understand and address specific needs. This third hurdle is called "tertiary access." There are many factors that influence access to needed services. They include insurance status and covered benefits, financial resources, characteristics of the site of care, patient characteristics (cognitive function, health beliefs, preferences), as well as availability of transportation, social supports, and community services. In addition, this vulnerable population subgroup has special needs not necessarily addressed in routine practice.

Physician knowledge of geriatric practice and physician-patient communication are important mediators of the impact of access on outcomes. Failure of physicians to recognize functional limitations amenable to intervention among their patients may impede access to potentially beneficial services, despite patient access to physician visits. Market and policy changes can have a large impact on access to care for older people. Important issues that can impact on access are managed care growth, coverage decisions, and health system and health plan consolidation and integration. Studies are needed to assess how to best address these barriers at practice, policy, and plan levels for diverse groups of older people.

Reducing disparities. Few studies have focused on successful interventions aimed at reducing well-documented disparities in health status, access, use of services, and health outcomes by gender, race/ethnicity, and socioeconomic status among the elderly. In addition, limited health literacy has been identified as a major barrier to optimizing health outcomes among the elderly. Research is needed on how to promote informed decisionmaking and best communicate complicated clinical regimens to individuals with limited health literacy. Finally, the contribution of agism as a barrier to quality care needs to be assessed.

Selected recent grants in the Agency's portfolio related to aging are listed in Appendix A.

Building a Research Infrastructure

Responding to Data Needs

Data needs arise from the research and policy questions that are being asked. The changing long-term care marketplace, changing financial incentives, and increasing concerns about access, quality, and cost of care contribute to the need for data to answer the many priority research and policy questions that affect older people. We need data on costs, expenditures, and outcomes of care, and we need to be able to link patient, provider, and market characteristics so that all factors can be analyzed.

The Agency has contributed significantly to the development of data for research with major investments in the 1987 National Medical Expenditure Survey (NMES) and more recently in the Medical Expenditure Panel Survey (MEPS). These are nationally representative samples of people in the community. These surveys have been used to study insurance coverage, access, expenditures, use, and outcomes.

AHRQ also maintains the Healthcare Cost and Utilization Project (HCUP), which is a family of administrative, longitudinal databases and related software developed in partnership with States and State hospital associations for research on hospital utilization, access, charges, quality, and outcomes. It is used to describe patterns of care for uncommon as well as common diseases, analyze infrequently performed hospital procedures, and study the care of population subgroups such as minorities, children, women, senior citizens, and the uninsured.

MEPS and HCUP provide the foundation for research on access, use, cost, and quality of care for older people. Improvements of these data are an ongoing process. The Task Force supports improvements that enhance the capacity to do health services research for older people. In addition, the Task Force believes it is necessary to periodically increase the sample size of older people to enable the analysis of key subgroups of older people so that variation in access, cost, and outcomes can be studied. We support the administration of self-administered questionnaire in MEPS to obtain improve mental and physical health measures and expansions of the HCUP data beyond hospital discharge information. The expansion of HCUP to other care settings, including emergency care and ambulatory settings, also will provide additional insights into the use of health services by older people.

We also need to analyze data (clinical and administrative) from all types of health care systems so that we can assess the impacts of changing financial incentives and changes in the quality and cost of care. Efforts by the Agency to develop additional databases such as the Integrated Delivery System Research Network or practice networks should include the capacity to answer important questions related to the health of older people. The Agency should also explore ways to facilitate access to data at other Federal and State agencies, such as State Medicaid data, to better understand the needs of the dually eligible.

Although data collection efforts for MEPS and HCUP are ongoing, the collection of long-term care data has been periodic. People in long-term care settings were included in 1987 and 1996. The 1996 MEPS Nursing Home Component provides information on heath status, use, cost, and outcomes, as well as information on facility characteristics that can be linked with patient characteristics. This survey includes followup information for an enhanced set of health measures to allow analyses of a larger number of resident outcomes.

The Agency is currently planning the next long-term care data effort. A joint 2001 proposal between the Center for Cost and Financing Studies (CCFS) and the Center for Organization and Delivery Studies (CODS) would explore new ways to periodically use survey and administrative data to assess long-term care use, cost, quality, and outcomes. Options include enhancing the Medicare Current Beneficiary Survey administered by HCFA, the National Nursing Home Survey administered by the National Center for Health Statistics (NCHS), and exploring ways to cost-efficiently use existing administrative data. An expert meeting jointly sponsored by CCFS and CODS in October 1999 included discussions of the data needs and options associated with monitoring the quality, outcomes, use, and cost of long-term care. The goal is to develop data that can be used to measure outcomes of care, use, and cost.

The continuing development of quality measures for the elderly would also support the agency's ongoing work on the National Health Care Quality Report. Periodic collection of these data would allow the Agency to monitor the changing use, costs, and quality of care for the long-term care population. The Task Force worked with CCFS staff to help develop future plans for a long-term care survey that would be integrated with other Federal surveys to facilitate the Agency's ability to monitor cost, access, and health and functioning of the elderly population.

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Training Health Services Researchers

The Agency already supports aging-related health services research training via a number of mechanisms and we recommend continuation of these efforts. Specifically, AHRQ supports the predoctoral and postdoctoral training of approximately 150 students annually through National Research Service Award institutional training grants (T32 awards). AHRQ currently funds more than 20 academic institutions that support students to develop research careers in the systematic examination of the organization, provision, and/or financing of health care. In addition, AHRQ funds individual grants to conduct dissertation research projects for approximately 25 predoctoral students annually through small grant awards. At the postdoctoral level, individual fellowships are awarded to provide an opportunity to gain additional research training in a structured environment. A number of these individual grants and institutional programs have a focus on aging issues. (Access Appendix B for details.)

Recently, the Office of Research Review, Education, and Policy (ORREP) has developed two career development program announcements: the Independent Scientist Award (K02) and the Mentored Clinical Scientist Development Award (K08). These individual grants provide support for the research career development of new investigators; currently, the Agency is funding 16 investigators on career awards. Both of these solicitations include older adults as one of the Agency's priority populations of interest.

In fiscal year (FY) 2000, AHRQ co-sponsored (with the National Institutes of Health) a program announcement soliciting applications to fund predoctoral fellowships for minority students. These awards are designed to enhance racial and ethnic diversity among newly developing health care researchers. In summer 2000, AHRQ launched its newly developed Kerr White Visiting Scholars Program, a new initiative to provide a unique opportunity for health care researchers to work with Agency staff on site at AHRQ for 1 to 2 years. The Agency also supports a summer internship program in which undergraduate and graduate level students spend 2 to 4 months at AHRQ. Each of these programs can provide career development opportunities for individuals focusing on aging issues.

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Task Force Recommendations for Agency Action

What follows is an action plan highlighting six areas where AHRQ can make an important contribution to addressing the challenges outlined in this report and ultimately to improving the health of older people.6 AHRQ should do the following:

1. Designate Older Adults as a Priority Population

Caring for older persons involves clinical complexities that are difficult for families, clinicians, plans, and purchasers to address. Issues include a need to coordinate an array of preventive, acute, chronic, rehabilitative, and long-term care services. Also problematic is the current financing of care for older persons, which is fragmented and lacks adequate incentives for improved models of care.

The complex constellation of issues confronting the older population argues for a targeted focus on aging issues. AHRQ and the field of health services research are well suited to playing a leadership role in aging research because the issues benefit from a multidisciplinary focus and the field's emphasis on outcomes and effectiveness and on quality and quality measurement. To be fully effective and assure that the Agency's efforts are additive and not duplicative, AHRQ will need to work closely with other agencies and organizations in areas of common interest and concern.

2. Undertake a Major Initiative to Improve the Health and Health Care of Older Americans

The growing need for a more effective and responsive system merits specifically targeted research approaches. There is a particular need for research on cost-effective care for older persons. AHRQ should sponsor research that:

  • Increases our knowledge about cost-effective interventions to improve the health and functioning of older people.
  • Identifies strategies to assure that evidence-based, cost-effective research findings which show positive results are implemented in everyday practice.
  • Improve outcome measures to assure that we can identify changes in quality when they occur.
  • Develops and assesses interventions to reduce health disparities in an increasingly diverse older population.

3. Continue a Dialogue with Stakeholders, Researchers, and Other Federal Agencies to Further Develop an Agenda for Aging Research

The Task Force has held meetings with representatives of other Federal agencies, foundations, and consumer organizations interested and involved in activities aimed at improving the health of older Americans. We have begun dialogues with others. Over the next year the Agency should:

  • Continue formal and informal dialogues to inform agenda setting and avoid duplication of efforts.
  • Hold an expert meeting focused on research needs for improving the functioning of the elderly.
  • Sponsor a state-of-the-art and agenda setting conference on the effectiveness of interventions that maximize function in the elderly.
  • Develop a forum for long-term planning to anticipate future challenges, such as a better educated cohort of older people, and wider use of the Internet for health information and communication.

4. Build an Infrastructure to Foster the Successful Implementation of Task Force Recommendations

The Task Force should continue to be a forum for discussion of intramural and extramural efforts and coordination with other activities related to aging research and policy. In addition, AHRQ should continue to expand its internal capacity in health services research related to aging.

Data (clinical and administrative) need to be analyzed from all types of health care systems so that we can assess the impacts of changing financial incentives and changes in the quality and cost of care. Efforts by the Agency to develop additional databases should include the capacity to answer important questions related to the health of older people. The Agency should explore ways to facilitate access to data from other Federal and State agencies, such as State Medicaid data, to better understand the needs of the dually eligible.

Data quality and availability should be further developed by:

  • Enhancing the capacity of AHRQ databases (MEPS and HCUP) to answer critical questions related to health care delivery as well as to monitor the health status and function of older adults.
  • Exploring more collaborative research arrangements with HCFA and facilitating access to HCFA's administrative and survey data (e.g., Medicare Current Beneficiary Survey, Health of Seniors, Medicare Consumer Assessment of Health Plans [CAHPS®], Outcome and Assessment Information Set [OASIS], Minimum Data Set).
  • Coordinating with the National Health Care Quality Report project to assure that measures appropriate for the elderly are included.

AHRQ should develop partnerships to enhance research, data and measures development by:

  • Coordinating efforts with other Federal agencies (e.g., HCFA, AoA, ASPE, NIA, NCHS, Centers for Disease Control & Prevention [CDC], VA) as well as consumer and professional organizations and private foundations (e.g., Robert Wood Johnson Foundation, Hartford Foundation, Commonwealth Fund) to leverage resources for research, data and measures development, and dissemination.
  • Playing an active role in the Federal Interagency Forum on Aging-Related Statistics involving both data and research staff.
  • Discussing inclusion of a focus on the prevention of functional decline in the elderly as a topic with the U.S. Preventive Services Task Force.
  • Further exploring partnerships for dissemination with professional organizations (e.g., American Geriatric Society) and consumer organizations (e.g., AARP).
  • Exploring partnerships with Medicare managed care organizations for collaboration on analyses of clinical and administrative data.

5. Build the Foundation for Making Aging Health Services Research a Long-term Priority in its Current Research Initiatives

AHRQ's extramural research initiatives should, when appropriate, solicit research that addresses key questions specific of the needs to of older people. The Agency should also assure that selection of topics for the Evidence-based Practice Centers considers important health issues for the elderly population (e.g. geriatric assessment in clinical practice).

6. Promote Awareness of Past Agency Accomplishments and Current and Future Activities in Aging-Related Research

Activities to be undertaken to achieve this step include:

  • Developing products on aging-related preventive, acute, and chronic care research supported or conducted by AHRQ as companion to the Program Note, AHCPR Research on Long-term Care.
  • Including on AHRQ's Web page a separate section that focuses on aging-related agency activities and products.
  • Developing and implementing an aging seminar series that features intramural and extramural research that is advertised to the broader community.

6 In the time since the Task Force on Aging submitted its original report, AHRQ has implemented projects and activities that address many of the Task Force recommendations. Select to access Appendix C for a list of some of these projects.

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Page last reviewed May 2001
Internet Citation: Improving the Health and Health Care of Older Americans: A Report of the AHRQ Task Force on Aging (continued). May 2001. Agency for Healthcare Research and Quality, Rockville, MD.