Monday, 24 August 2015 23:57

Why VBP Needs CQI (and Vice Versa)

Written by

p nathanson“CQI (continuous quality improvement) IS DEAD!” screams the all-caps title of an Aug. 8, 2015 post in the Health Care Executives Network discussion group on LinkedIn. The poster, who describes himself as an “author and consultant to the healthcare industry,” acknowledges that “incremental change predicated upon statistical models is, of course, a needed skill.” But he has bad news for CEOs: “Your legion of six sigma black belts has about as much utility in the battle to transform healthcare as a conventional army does when fighting ISIS.”

What is needed, the post says, is “bold innovation,” described as  “separating oneself from the pack and doing the unexpected in your market; convincing your board to take risks rather than playing it safe … it’s about hiring people who aren’t merely custodial administrators … but will constantly challenge the status quo.”

Over the week and a half after it was published, this post garnered 264 “likes” and 189 comments, almost all of most of them positive or downright laudatory. That’s unfortunate. The poster and all those who agree with him apparently misunderstand both CQI and the nature of the “battle to transform healthcare.”

First, if there really are CEOs out there who are relying on CQI to keep afloat in the age of accountability, then yes, they certainly should stop doing that and start planning for volume-to-value instead. But do you know of any CEOs who use CQI as a business strategy? And is the problem really that CEOs are not innovating?  


In fact, surveys show that only a minority of CEOs don’t have some kind of a value-based purchasing (VBP)/population health management strategy in place: buying practices, accepting some form of risk, acquiring other entities or being acquired, affiliating across the care spectrum, starting urgent care or outpatient services, etc. The real problem may be just the reverse: CEOs with innovative strategies who haven’t thought nearly enough about the infrastructure and other resources needed to support such a strategy, including a strong CQI capability. No doubt in this group of bold but resource-short innovators are many of the CEOs whose Medicare accountable care organizations (ACOs) last year saved no money, or didn’t save enough to qualify for a bonus. And, no doubt, also within the group are many of the CEOs whose ACOs haven’t progressed far enough after three years to move to Stage 2 status and accept a bit of downside risk.

Why is a robust CQI capability important for VBP? Let’s define our terms. CQI is much more than the bundle of experts and esoteric techniques suggested by the poster. It’s a discipline that tells us that if we want to improve any area in healthcare delivery, we must understand the process or processes that allow for the delivery of the care, identify process issues that are causing suboptimal results, make changes that address those issues, measure the impact of our changes, continue to make changes until performance meets expectations, and begin the cycle again should performance degrade or expectations change. Expertise in CQI technique is valuable, but the most important requisite for CQI success is the full support and participation of the process owners themselves.

If we use that definition, VBP itself becomes nothing more or less than a series of CQI challenges. Let’s look, for example, at one of the 2015 ACO performance measures, ACO 9: Ambulatory Sensitive Conditions Admissions: Chronic Obstructive Pulmonary Disease (COPD) or Asthma in Older Adults. For each ACO, an “expected discharges” for COPD or asthma for adults over 40 is computed based on the disease burden of the asthma/COPD population for which the ACO is responsible. The performance score on the measure is determined by comparing the actual number of discharges with the expected discharges over the measurement period. This measure, like ACO 10, a companion measure for heart failure, is an indicator not of hospital performance, but of the performance of the ACO in keeping patients out of the hospital who wouldn’t be there if they had access to physician care, if physicians followed practice guidelines, and/or if they themselves did what their physicians told them to do.

If you are affiliated with an ACO and your performance isn’t good on ACO 9, what do you have to do to improve it? First, you need to understand how well physicians are managing their ACO COPD and asthma patients, including such factors as: 

  • What percentage of patients is admitted because of non-adherence to the treatment regimen?
  • Why do they say they are noncompliant?
  • Where are physician offices compared to where the patients live, and what transportation is available for patients who don’t live close to the offices?
  • What other factors – cultural, neighborhood, work-related, family – might exist for patients making appointments and taking their medicine?
  • Does each respiratory patient have a customized treatment plan that the patient and any involved caregivers understand and have agreed to?
  • How much education do physician practices provide about how patients can avoid triggers and other causes of attacks?
  • How good is the support staff at educating patients about using inhalers and other medications properly (studies show that more than half of respiratory patients using inhalers use them incorrectly)?

Once you’ve understood the root causes of the ACO’s excess COPD and asthma admissions, you can take action to address the causes. You may have to add or move physician offices, provide transportation for poor or incapacitated patients, add caregivers who are fluent in another language, educate your physicians and PAs and MAs in best practices, or begin a home-visit program for refractory patients. You may bring in a program like Walgreen’s WellTransitions, through which a pharmacist works directly with hospital staff on medication reconciliation, education, take-home prescription fulfillment, and follow-up for patients about to be discharged. You’ll watch the results in terms of admissions, and keep trying until admissions come down.

 In other words, you will be practicing CQI. VBP needs CQI because there is no other way that providers can meet customer requirements. But – and here is the “vice versa” in the article’s title – CQI also needs VBP.

CQI has been associated with a number of solid successes in healthcare, particularly in improving hospital processes that don’t involve physicians directly: outpatient registration, admissions, supply chain, revenue cycle, nursing productivity, etc. But over the years it has been notably less successful in fostering improvements that require physicians to change their practice styles, whether in their offices or in the hospital. “Getting physician buy-in” is always the last module of CQI training, and clinical care delivery has always been the last area that most organizations committed to CQI try to tackle.

Why has this been so? Because in the fee-for-service world, physicians don’t have time to do things that they don’t get paid for, and until recently, payors have been reluctant to pay them for activities that improve processes. But VBP is changing that. 

  • ACOs align incentives for physicians and hospitals so that the more efficient the systems across the continuum of care are, the more everyone benefits financially. Physicians involved in ACOs have “skin in the game” when it comes to hospital efficiency, care management, and care coordination as never before – and those activities almost always require process improvement.
  • Patient-centered medical homes pay physicians a management fee for a patient-centric style of care that requires them to listen to and learn from their patient “customers” and make changes in their practice delivery processes in ways they never expected.
  • CQI practitioners know that the first place to look in any process – be it manufacturing ball bearings or making hamburgers or caring for patients – is in the handoffs between sub-processes. VBP has shown a bright light on handoffs in healthcare, and Medicare now will pay physicians explicitly for transition care management.

In short, the LinkedIn poster who says CQI is dead is dead wrong. CQI is alive and well, and an integral part of the value-to-volume transition.

About the Author

Philip Nathanson is the president of Nathanson Consulting LLC. Phil has held quality leadership positions at CMS, Aetna, and NCQA. His consulting clients include hospital systems, HIM firms and biotech companies. His articles on quality and healthcare management have appeared in Becker’s Hospital Review, H&HN Online, Topics in Healthcare Financing, and other journals.

Contact the Author

This email address is being protected from spambots. You need JavaScript enabled to view it.

Comment on This Article

This email address is being protected from spambots. You need JavaScript enabled to view it.

Last modified on Wednesday, 26 August 2015 07:53

Philip Nathanson is the President of Nathanson Consulting LLC.  Phil has held quality leadership positions at CMS, Aetna, and NCQA. His consulting clients include hospital systems, HIM firms and biotech companies. His articles on quality and healthcare management have appeared in Becker’s Hospital Review, H&HN Online, Topics in Healthcare Financing and other journals.