Peer Review Organizations

Abstract

The Health Care Financing Administration has contracted with 54 peer review organizations (PROs) to monitor hospital use and quality of care for Medicare patients. PROs promised reductions in readmissions, in "unnecessary" admissions or invasive procedures, and in "avoidable" mortality and morbidity. A review of contract summaries for 49 PROs revealed wide variations in reduction targets. In attempting to meet their goals, PROs will encounter numerous potential pitfalls, including inaccurate and incomplete discharge data, inadequate descriptors for the variety of patients and physicians' management plans, honest differences in judgments about patient care, and limited research on the criteria used to set their reduction targets as well as the means to accomplish them. Despite having more explicit quality-of-care objectives, PROs, like PSROs (professional standards review organizations) before them, are more likely to be seen as agents of cost containment than of quality assurance. Both their credibility and their effectiveness might be enhanced if an expert panel of clinicians and health services researchers were established to help them set and achieve reasonable objectives for quality of care.