DR. HENRY KRAKAUER, one of the developers of Medicare's assessment system, agrees. "Outcomes reseach is the next stage in the evolution of medicine," says Krakauer, now a medical school professor at the Uniformed Services University in Bethesda, Md.. "It can predict outcomes in terms of mortality, morbidity {complications}, and disability. The consumer will be able to make more informed decisions because he will know what the probability is that a treatment will help."

Dr. [Alan Brewster], MediQual's vice-chairman, dismisses these objections. The effects of poor treatment of the oldest patients, Brewster says, usually also show up across all age groups. A hospital losing a cancer patient in a hip operation should question why it exposed the patient to the risk of surgery. (However, MediQual is now collecting data separately on cancer patients when they are treated for another condition.)

Instead of comparing hospitals and doctors, some systems look at different treatments for the same condition. This is the approach of the federal Agency for Health Care Policy and Research in Rockville, Md. With a $120-million annual budget, the 2-year-old agency has launched about 50 outcomes studies to determine the most effective treatments for conditions like stroke, heart disease, and diabetes - ailments prevalent among the Medicare population. The goal is to show what treatments work best, improve care, and, hopefully, save money.