Lack of performance measures hampers Medicare

The Center for Medicare and Medicaid Services (CMS) lacks a performance-based culture critical to making improvements to the program, according to a recent General Accounting Office report. Few senior CMS managers reported being held accountable for achieving results, according to the report, "Medicare Management: CMS Faces Challenges to Sustain Progress and Address Weaknesses," (GAO-01-817). In a May survey of federal managers, GAO found that CMS ranked second-lowest in terms of managerial accountability in four areas: output, efficiency, quality and outcome measures. "Measuring performance in assessing a program's efforts to achieve its goals is essential to fostering a performance-based culture and managing for results," GAO said. In recent attempts to improve program management, CMS Deputy Administrator Ruben King-Shaw was tapped as chief operating officer. He's responsible for day-to-day management and is based in the agency's Baltimore headquarters. In previous administrations, the deputy was based in Washington. Agency officials also launched an ambitious plan to realign some agency functions. The goal is to make CMS more responsive to beneficiaries and health care officials. While critical of the management culture, GAO was quick to point out that CMS is often pulled in several different directions and that its administrative budget has remained flat while program responsibilities have grown. In fiscal 2000, Medicare's operating budget accounted for less than 2 percent of program outlays. Overall, CMS is expected to pay out nearly $400 billion this year in benefits to the poor and elderly. Meanwhile, its administrative budget barely tops $2 billion. Limited resources have hindered CMS' ability to improve its work in such areas as improving nursing home quality, contractor oversight and its claims administration. GAO is not the first to draw attention to the agency's stretched resources. Last May, four former agency chiefs urged Congress to increase the agency's administrative budget. Congressional staff from both the House and Senate agreed with GAO that CMS needs better management. Policy debates about Medicare reform, such as adding a prescription drug benefit, make it imperative that the agency improves its management performance. Without it, Medicare reforms could overwhelm the agency, they said.
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