Should we have confidence if a physician is accredited? A study of the relative impacts of accreditation and insurance payments on quality of care in the Philippines

Abstract

It is unclear whether health provider accreditation ensures or promotes quality of care. Using baseline data from the Quality Improvement Demonstration Study (QIDS) in the Philippines we measured the quality of pediatric care provided by private and public doctors working at the district hospital level in the country's central region. We found that national level accreditation by a national insurance program influences quality of care. However, our data also show that insurance payments have a similar, strong impact on quality of care. These results suggest that accreditation alone may not be sufficient to promote high quality of care. Further improvements may be achieved with properly monitored and well-designed payment or incentive schemes.

Introduction

This paper examines the effectiveness of accreditation to ensure or promote the quality of inpatient, pediatric care. We specifically go beyond earlier work to ask whether accreditation by a national health insurance program can support a higher quality standard among public and private providers for selected high prevalence conditions (diarrhea, pneumonia, and dermatitis) in patients under 5 years old. We also examine the usefulness of an alternative policy handle, insurance payments, in encouraging high quality of care.

An important characteristic of health care markets is the presence of information asymmetry, where health providers have more information than consumers concerning the state of health, the technology needed to address an illness, and the potential outcomes of services provided (Arrow, 1963). Moreover, when health providers act as “less than perfect agents” of consumers (Pauly, 1980), over and underprovision, as well as variations in quality, become a health concern.

Institutional mechanisms have evolved in response to these problems. Licensing laws, for example, are meant to limit the range of alternative quality levels (Arrow, 1963) and reduce quality uncertainty (Akerlof, 1970). While licensing is required by the state, accreditation is typically voluntary, a requirement for participation in certain programs of care, and focuses on quality standards that exceed those of licensing. Moreover, some form of self-selection is expected – health care providers who have the capacity to meet higher-than-minimum quality standards are likely to apply and ultimately qualify for accreditation.

Accreditation is expected to minimize variations in medical practice, eliminate medically inappropriate care, and control costs (Shin, 1995, Viswanathan and Salmon, 2000). By subjecting health care organizations to a formal process that makes them meet predetermined standards, accreditation is also presumed to address the possibility that quality is underprovided (Akerlof, 1970).

Despite this widely held practice, it remains unclear if accreditation is an effective quality screen for patients, payers, or policymakers. Donabedian (2005), citing evidence as far back as 1964 on New York hospitals, writes that accreditation “does not appear, in and of itself, to be related to quality of care.” Some studies have suggested that the impact of accreditation on quality is somewhat weak (Chen et al., 2003, Donabedian, 2005, Kumaranayake et al., 2000, Salmon et al., 2003). Accreditation, by its very nature, does not measure the interaction between the provider and the patient and focuses instead on the structural elements of care (Peabody, Gertler, & Leibowitz, 1998). This limitation has prompted accrediting bodies to begin moving beyond structures-based standards and towards the inclusion of process and outcomes-based performance standards. Still, progress in this area has been limited primarily by the challenge of accurately measuring outcomes and resistance from facilities to measure items other than simple structural inputs (Bodenheimer, 1999).

Besides “rules” – which apart from licensing and accreditation include treatment protocols, practice guidelines, and utilization reviews – incentives are yet another set of instruments for quality promotion (Hillman, 1991). Typically financial in nature, incentives follow a reward and penalty system for certain clinical decisions. While they are embedded in all types of provider payment, it is managed care incentives that are useful for purposes of quality assurance. When care is unmanaged, as in the traditional fee-for-service system, the incentive is strongest for cost expansion and unlikely for quality improvement (Dudley et al., 1998, McGlynn, 2004, Miller and Luft, 2002). As care is increasingly managed financially, this raises the issue of how well incentives address patient well-being.

Recently, there has been increased interest in the use of financial rewards for quality (Epstein, Lee, & Hamel, 2004). A basis for this interest is the growing body of evidence that pay-for-performance can be effective in improving quality (Campbell et al., 2007, Lindenauer et al., 2007, Petersen et al., 2006). As seen most frequently in the United States, a growing number of pay-for-performance programs are adding payment incentives on top of exiting accreditation requirements, making it all the more important to consider them in conjunction with one another.