Justification of Budget Estimates for Appropriations Committees, Fiscal Year 2004

Mission Statement

The Agency for Healthcare Research and Quality's mission is to improve the outcomes and quality of health care services, reduce its costs, address patient safety, and broaden access to effective services, through the establishment of a broad base of scientific research and through the promotion of improvements in clinical and health system practices, including the prevention of diseases and other health conditions.

The Agency promotes health care quality improvement by conducting and supporting health services research that develops and presents scientific evidence regarding all aspects of health care. Health services research addresses issues of "organization, delivery, financing, utilization, patient and provider behavior, quality, outcomes, effectiveness and cost. It evaluates both clinical services and the system in which these services are provided. It provides information about the cost of care, as well as its effectiveness, outcomes, efficiency, and quality. It includes studies of the structure, process, and effects of health services for individuals and populations. It addresses both basic and applied research questions, including fundamental aspects of both individual and system behavior and the application of interventions in practice settings."1

The strategic plan serves as the road map for AHRQ activities. AHRQ has identified three strategic goals, each of which will contribute to improving the quality of health care for all Americans:

1. Eisenberg JM. Health Services Research in a Market-Oriented Health Care System. Health Affairs, Vol. 17, No. 1:98-108, 1998.

Return to Contents

Summary of FY 2004 Request

The FY 2004 budget for AHRQ includes an increase of $29 million, for a total of $279 million. Within this amount, the request provides $84 million for a variety of patient safety activities, including $50 million to initiate a Patient Safety Hospital Information Technology (IT) initiative. This initiative will support a variety of activities aimed at improving health care quality and patient safety by promoting and accelerating the development, adoption and diffusion of IT in health care, including an emphasis on small community and rural hospitals.

AHRQ is proud to have played a role in helping consumers of health care make informed choices when deciding what hospital would provide the highest quality of care for their particular health care needs. The U.S. hospital industry recently announced that it will establish a system that will help patients make decisions about where to seek care by allowing them to compare individual hospital's performance with others. Hospital performance will be based on nationally recognized performance indicators—many that are based on research supported by AHRQ. AHRQ is currently working with experts in the health care industry to develop a standardized patient experience survey to allow for comparison of patient experiences at different hospitals.

For example, AHRQ is continuing to make significant strides in helping to improve the quality of health care that Americans receive. For example, the American Academy of Pediatrics joined AHRQ in developing 20 tips for parents to avoid medical errors in their children's care. In 1999, the Institute of Medicine had estimated that as many as 98,000 Americans die each year as a result of a medical error. Research has also shown that one in six children will be the victim of a medical error. AHRQ's and AAP's promotion of the 20 Tips to Help Prevent Medical Errors in Children is just one step in AHRQ's larger investment to find ways to prevent medical errors. This partnership has put valuable information about preventing medical errors into the hands of pediatricians and parents across the country.

Despite these gains, however, the health care system is facing a number of critical challenges, including:

The FY 2004 request enables AHRQ to support research initiatives that help health care providers, hospital and health care system leaders, and policymakers address these challenges and produce measurable quality improvement in the health care system. AHRQ's core mission is to ensure that the discoveries of health research are translated into practice to directly benefit people. In the FY 2004 request, the Agency has identified priority areas that deserve a fresh and prominent focus because of the substantial benefits such efforts will yield.

FY 2004 Budget Policy

The FY 2004 request of $279,000,000 reflects an increase of $29,000,000 from the FY 2003 President's budget level. This request allows AHRQ to support ongoing efforts to improve the quality, safety, outcomes, access to and cost and utilization of health care services.

Specifically, this increase will:

The $29,000,000 increase is described here AHRQ's budget activities:

Select for details of the FY 2004 request, by budget activity.

Difference Between FY 2003 and FY 2004 Funding Levels for Selected Activities

  HCQO MEPS Program
Research and Training Grants
   (Noncompeting Grants)
   (New Grants)
     (New Patient Safety Grants)
     (New Non-Patient Safety Grants)

$0 $0 +$13,424,000

Non-MEPS Research Contracts and IAAs
   (Patient Safety Contracts)
   (Non-Patient Safety Contracts)
$0 $0 +$13,576,000
MEPS +$2,000,000 +$0 $0 +$2,000,000
Research Management +$0 $0 $0 +$0
Total Change +$29,000,000 +$0 +$0 +$29,000,000

Secretarial Initiatives

At the requested level, AHRQ's programs will make important contributions to the Secretarial and Presidential Initiatives on improving the quality and safety of health care, costs, use and access to health care. AHRQ has worked closely with the Department's Research Coordination Council, Data Council and the Assistant Secretary for Planning and Evaluation (ASPE) so that investments in FY 2004 can be leveraged with the investments of other OPDIVs to achieve maximum impact.

Patient Safety Hospital Information Technology

Improving Patient Care and Safety Through the Use of Technology ($49,886,000 in patient safety grants, an increase of $46,886,000 over the FY 2003 President's budget)

In FY 2004, AHRQ is requesting an additional $49,886,000 for a Patient Safety Hospital Information Technology (IT) program that will support a variety of activities aimed at improving health care quality and patient safety by promoting and accelerating the development, adoption and diffusion of IT in a variety of important health care settings. This initiative will include a special focus on small and rural hospitals, which will help assure that these hospitals can implement and use IT that can improve patient safety and quality of care. Funds will also be used to support innovative research and demonstration projects that will improve patient safety and quality of care in a wide variety of health care settings.

Realizing the Ppossibilities of 21st-Century Health Care

Improving Patient Care and Safety Through the Use of Technology ($12,000,000 in patient safety contracts)

In FY 2004 AHRQ requests $12,000,000 to accelerate the adoption and use of information technology to support health care quality and patient safety. Specifically, funds will be used to provide support for data standards development, evaluation and adoption of information standards and technology to support patient safety in the United States.

In addition, AHRQ will utilize its new Patient Safety Improvement Corps, experts working with State health departments to expand State and local capacity to use existing knowledge to identify and eliminate threats to patient safety, to specifically apply IT for patient safety improvement.

Mechanism Discussion. The FY 2004 research portfolio for AHRQ is as follows:

Information Technology

AHRQ's FY 2004 President's budget includes funding to support Departmental efforts to improve the HHS Information Technology Enterprise Infrastructure. The request includes funds to support an enterprise approach to investing in key information technology infrastructure such as security and network modernization. These investments will enable HHS programs to carry-out their missions more securely and at a lower cost. Agency funds will be combined with resources in the Information Technology Security and Innovation Fund to promote collaboration in planning and project management and to achieve common goals such as secure and reliable communication and lower costs for the purchase and maintenance of hardware and software. In addition, AHRQ is participating in consolidation of IT infrastructure support staff service across eight smaller DHHS Operating Divisions.

Unified Financial Management System

The Unified Financial Management System (UFMS) will be implemented to replace five legacy accounting systems currently used across the Operating Divisions. The UFMS will integrate the Department's financial management structure and provide HHS leaders with a more timely and coordinated view of critical financial management information. It will also promote the consolidation of accounting operations and thereby reduce substantially the cost of providing accounting service throughout HHS. Similarly, UFMS, by generating timely, reliable, and consistent financial information, will enable Agencies and program administrators to make more timely and informed decisions regarding their operations. AHRQ requests $490,000 to support this effort in FY 2004.

President's Management Agenda

AHRQ's FY 2004 budget supports the President's Management Agenda and includes efficiencies from consolidating administrative functions, organizational delayering to speed decision making processes, competitive sourcing, implementation of effective workforce planning and human capital management strategies, and adoption of other economies and efficiencies in administrative operations.

Research Coordination Council

AHRQ staff fully participated in the Research Coordination Council (RCC) workgroups that reviewed the FY 2004 research budget requests submitted by the agencies and assisted in the development of findings and recommendations for consideration by the Secretary's budget Council. The purpose of these workgroups is to identify ways to increase the efficient use of existing resources by identifying opportunities to collaborate with other Agencies. The following are some examples of how AHRQ contributed to the RCC:

AHRQ has a long history of developing partnerships and collaborations with a variety of HHS organizations, other components of the Federal government, State and local governments and private-sector organizations, all of whom help us to achieve our goals. AHRQ will continue to work with the RCC as we begin to implement the FY 2004 budget. In addition, AHRQ will strengthen and build upon these partnerships as it moves to implement its FY 2004 budget request.

Research, Demonstration and Evaluation Activities

The following table summarizes FY 2004 Research, Demonstration and Evaluation (RD&E) activities. These activities align with the Secretary's and President's priority areas and were included in AHRQ's RCC discussions.

Research Priority FY 2004
Budget Request
($ in 000s)
I. Working Toward Independence $0
II. Rallying the Armies of Compassion $0
III. No Child Left Behind $0
IV. Promoting Active Aging and Improving Long-Term Care $11,600*
V. Protecting and Empowering Specific Populations $3,900
VI. Helping the Uninsured and Increasing Access to Health Insurance $51,400*
VII. Realizing the Possibilities of 21st Century Health Care $127,600**
VIII. Ensuring Our Homeland is Prepared to Respond to Health Emergencies  
IX. Understanding Health Differences and Disparities—Closing the Gaps $29,000
X. Preventing Disease, Illness, and Injury $20,700
XI. Agency-specific Priorities $26,020
Total RD&E $280,220

* Includes data development—MEPS; HCUP.
** Includes $84 Million in patient safety.

Return to Contents

How AHRQ's Research Helps People

AHRQ's mission, health care improvement through research, means that the work of research is not completed with the publication of findings in a research journal. While an important measure of the quality and productivity of the research enterprise, the number of publications found in the leading research journals cannot solely measure the full value of research. To be successful in fulfilling AHRQ's mission, research must be used to improve the day-to-day functioning of the U.S. health care system, and more specifically, help people. The results of research must be placed in the hands of those who can put it to practical use and produce even safer and more effective, and cost-effective health care.

Across the Nation, policymakers, consumers, patients and providers of care are making better-informed, cost-effective health care decisions and are receiving higher quality care thanks to AHRQ-supported research. The following are just a few examples of the health services research AHRQ has sponsored and how the results of that research have been put into practice by policymakers and those who make purchasing decisions, patients and consumers and providers of care.

Policymakers And Healthcare Systems Use AHRQ Research to Prepare for Bioterrorism Events

AHRQ is supporting a number of research projects that examine the clinical training and ability of front-line medical staff—including primary care providers, emergency departments, and hospitals—to detect and respond to a bioterrorist threat. Other projects assess and improve linkages between the health system, local and state public health departments, and emergency preparedness units.

Public Health Systems and Hospitals Can Be Prepared for a Bioterrorism Event by Using Tools Developed by AHRQ

AHRQ is providing support in a number of ways to assess and improve the U.S. health care system's capacity to respond to possible incidents of bioterrorism. For example, AHRQ supported research at the University of Maryland that developed a questionnaire that can help you to assess the current level of preparedness of your hospital or health system and your capacity to respond to bioterrorist attacks. This questionnaire has already been requested and shared with the Department of Defense (DoD). It intends to have Military Treatment Facilities use this questionnaire to assess their current bioterrorism response readiness.

In collaboration with the New York City Department of Health and the Mayor's Office of Emergency Management, AHRQ's Integrated Delivery System Research Network based at the Weill Medical College of Cornell University, developed a computer simulation model for citywide response planning for bioterrorist attacks. This project will implement the New York Public Health System (NYPHS) surge capacity information system as a regional model for New York State. It will also examine the effect on a potential bioterrorist event on NYPHS cost outcomes, and staffing, and establish data systems and readiness measures. This model for mass prophylaxis in the event of a bioterrorist attack was validated by a live exercise, Operation Tripod, in May 2002, which was funded by the Department of Justice (DoJ). The model continues to be expanded to address issues of mass smallpox vaccination and has been incorporated into the national smallpox vaccination plan.

Health Care Providers Are Better Prepared To Identify Potentially Dangerous Biological Agents Because of Training Programs Developed by AHRQ

AHRQ supported research at the University of Alabama at Birmingham and Research Triangle Institute, which developed training modules to teach health professionals how to address varied biological agents, including pathogens that are rarely seen in the United States. The biological agents covered on the Web site are anthrax, smallpox, botulism, tularemia, viral hemorrhagic fever, and plagues. The Web site also includes modules designed specifically for emergency room physicians, radiologists, pathologists, nurses and other health care professionals. To date, 1,232 doctors and nurses have completed bioterrorism training and earned continuing education credits through the Web site.

Patients Get Better and Safer Care Because of Research Sponsored by AHRQ

AHRQ's research impacts many facets of the health care system. The Agency's goal is to translate its research into useful activities that can be used in everyday medical practice. The following is a simulated scenario of a patient utilizing health care services and how AHRQ's research plays a role in her care.

Katie, who is 7 years old, goes to her pediatrician's office because of severe congestion, which is giving her a headache and making it difficult for her to breathe. The pediatrician diagnoses her with acute sinusitis. The pediatrician decides to give her an antibiotic to treat the sinusitis. He bases his treatment decision, in part, on an American Academy of Pediatrics (AAP) clinical practice guideline on diagnosing and treating sinusitis in children, which is based on research supported by AHRQ. The pediatrician examines Katie.

Katie's mother takes the doctor's prescription and can't understand his writing. She asks if he could print the prescription so that she can understand what the drug is that Katie will be receiving. She also reminds the doctor that Katie is allergic to penicillin. She remembers to raise these issues with the doctor from reading AHRQ's 20 Tips to Help Prevent Medical Errors in Children, which was available in the waiting room.

The pharmacist fills Katie's prescription.Katie and her mother go to the pharmacy to pick up Katie's prescription. When Katie's mother picks up the prescription she asks the pharmacists if this is the medicine that her child's doctor prescribed. A study by the Massachusetts College of Pharmacy and Allied Health Sciences found that 88 percent of medicine errors involved the wrong drug or the wrong dose. Katie's mother also asks the pharmacists for written information about possible side effects that the medicine could cause. Related research has shown that written information about medicines can help people recognize problem side effects—yet it is not routinely provided to patients and families.

The antibiotic that Katie is to receive is in liquid form. Katie's mother asks the pharmacists for the best device to measure the medicine. Research shows that many people do not understand the right way to measure liquid medicines. For example, many use household teaspoons, which often do not hold a true teaspoon of liquid. Special devices, like marked oral syringes, help people to measure the right dose. Being told how to use the devices helps even more.


Photos courtesy of the Indian Health Service/U.S. Department of Health and Human Services.

These safety tips, which are all included in AHRQ's 20 Tips to Help Prevent Medical Errors in Children, show that parents who are more involved with their child's care tend to get better results. In many instances, their involvement can prevent injury or death.

Helping Health Care Professionals Reduce Medical Mistakes

To date, AHRQ research has given information on about 73 proven patient safety practices to health care administrators, medical directors, health professionals, and others responsible for patient safety programs. Of those practices, AHRQ research identified 11 highly effective patient safety practices proven to work but not used routinely in the Nation's hospitals and nursing homes. Voluntary Hospitals of America, a nationwide network of 2,220 community-owned health care organizations and their affiliated physicians and Premier, Inc., affiliated with more than 1,800 hospital facilities in 50 States, use the information to guide their member hospitals in selecting projects to improve safety. Many chief executive officers, medical directors, and hospital safety officers have reported that they use the information to help them initiate projects to improve patient safety.

Helping the U.S. Army Improve Quality of Care

The U.S. Army is using the findings from AHRQ's research on depression as one of its sources for its VA/ DoD Depression Guideline Implementation Pilot Project. A number of Army military training facility sites from around the country were selected to participate in this project. The project sites include Walter Reed Army Medical Center, Tripler Army Medical Center, DeWitt Army Community Hospital, Fort Belvoir, Ireland Army Community Hospital, Fort Knox, and Madigan Army Center.

The intent is to use the VA/DoD Depression Guideline Implementation Project Program to make improvements and eventually implement an Army system-wide program to help improve the quality of patient care for depression.

"The use of the AHRQ [research] on depression and the provider and patient tools developed from the research have been very cost-effective for the Federal government, as the DoD does not have to reinvent the wheel."

—Lieutenant Colonel Kathryn Dolter, U.S. Army

Helping Hospitals Reduce Costs

Findings from a randomized controlled trial funded by AHRQ that evaluated the effects of a computerized order entry system on reducing the costs of health care led to Wishard Memorial Hospital in Indiana adopting the system for use throughout its inpatient departments. The hospital also designated the system as the only acceptable means for writing orders in its emergency room, medical center's subspecialty clinics, and its affiliated outpatient primary care practice.

The study found that patients of physicians using computer workstations to order tests and medications had 13 percent lower charges and substantially shorter lengths of stay. Findings also indicated that the time from admissions to nurse documentation of giving the first dose of a drug was 30 minutes among patients with computer orders, compared to 6 hours among patients with paper orders.

"I am convinced that the main reason why the system has been so widely accepted by the administration is because research showed that it saved money and improved quality of care."

—Lisa Harris, Medical Director of Indiana University Medical Group-Primary Care and Chief of Medicine at Wishard Hospital.

Research on Information Technology Funded Today will Improve the Health Care of Tomorrow

In FY 2000-02, AHRQ funded studies designed to improve the safety, quality and efficiency of health care through the use of information technology. As these projects are completed, AHRQ will work its vast network of public and private sector partners to widely disseminate and implement the findings to the benefit of all Americans. Examples of studies which will be completed shortly include:

Return to Contents

Budget Activities

All of AHRQ's funding is managed and appropriated in the following three budget activities:

  1. Health Care Costs, Quality, and Outcomes (HCQO).
  2. Medical Expenditure Panel Survey (MEPS).
  3. Program Support.

Health Care Costs, Quality, and Outcomes (HCQO)

The purpose of the Research on Health Care Costs, Quality and Outcomes activity is to support and conduct research that improves the outcomes, quality, cost, use and accessibility of health care. Accordingly, the Agency has identified three strategic plan goals that feed into this budget activity:

  1. Supporting improvements in health outcomes.
  2. Strengthening quality measurement and improvement.
  3. Identifying strategies to improve access, foster appropriate use, and reduce unnecessary expenditures.

The key themes throughout all three goals are to fund new research and to translate research into practice. In addition, AHRQ also has strengthened its commitment to support research that will improve health care for vulnerable populations. Lastly, AHRQ has enhanced specific activities that support all of our strategic goals.

For details from the justification, select Research on Health Costs, Quality, and Outcomes.

Medical Expenditure Panel Survey (MEPS)

The objectives of AHRQ's Medical Expenditure Panel Survey are to provide public and private sector decisionmakers with the ability to:

These objectives are accomplished through the fielding of the Medical Expenditure Panel Survey. MEPS is an interrelated series of surveys that replaces the National Medical Expenditure Survey (NMES). MEPS not only updates information that was last collected more than a decade ago in fiscal year 1987, but also provides more timely data, at a lower cost per year of data, through the move to an ongoing data collection effort.

For details, select Medical Expenditure Panel Survey.

Program Support

Program Support provides support for the overall direction and management of the AHRQ. This includes the formulation of policies and program objectives; and administrative management and services activities.

For details from the justification, select Program Support.

Return to Contents

Current as of February 2003

Internet Citation:

Justification for Budget Estimates for Appropriations Committees, Fiscal Year 2004. February 2003. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/about/cj2004/cjweb04.htm

Return to Mission & Budget
About AHRQ
Agency for Healthcare Research and Quality
Department of Health and Human Services