Transformation of Health System Needed to Improve Care and Reduce Costs

Institute of Medicine
The National Academies, September 6, 2012

America’s health care system has become too complex and costly to continue business as usual, says a new report from the Institute of Medicine (Best Care at Lower Cost: The Path to Continuously Learning Health Care in America).

The costs of the system’s current inefficiency underscore the urgent need for a systemwide transformation. The committee calculated that about 30 percent of health spending in 2009 — roughly $750 billion — was wasted on unnecessary services, excessive administrative costs, fraud, and other problems. Moreover, inefficiencies cause needless suffering.  By one estimate, roughly 75,000 deaths might have been averted in 2005 if every state had delivered care at the quality level of the best performing state.

“The threats to Americans’ health and economic security are clear and compelling, and it’s time to get all hands on deck,” said committee chair Mark D. Smith, president and CEO, California HealthCare Foundation, Oakland. “Our health care system lags in its ability to adapt, affordably meet patients’ needs, and consistently achieve better outcomes. But we have the know-how and technology to make substantial improvement on costs and quality. Our report offers the vision and road map to create a learning health care system that will provide higher quality and greater value.”


Best Care at Lower Cost: The Path to Continuously Learning Health Care in America

Institute of Medicine


Recommendation 1: The Digital Infrastructure
Improve the capacity to capture clinical, care delivery process, and financial data for better care, system improvement, and the generation of new knowledge.

Recommendation 2: The Data Utility
Streamline and revise research regulations to improve care, promote the capture of clinical data, and generate knowledge.

Recommendation 3: Clinical Decision Support
Accelerate integration of the best clinical knowledge into care decisions.

Recommendation 4: Patient-Centered Care
Involve patients and families in decisions regarding health and health care, tailored to fit their preferences.

Recommendation 5: Community Links
Promote community-clinical partnerships and services aimed at managing and improving health at the community level.

Recommendation 6: Care Continuity
Improve coordination and communication within and across organizations.

Recommendation 7: Optimized Operations
Continuously improve health care operations to reduce waste, streamline care delivery, and focus on activities that improve patient health.

Recommendation 8: Financial Incentives
Structure payment to reward continuous learning and improvement in the provision of best care at lower cost.

Recommendation 9: Performance Transparency
Increase transparency on health care system performance.

Recommendation 10: Broad Leadership
Expand commitment to the goals of a continuously learning health care system.

Best Care at Lower Cost: The Path to Continuously Learning Health Care in America (Full report – 360 pages):

On release yesterday of the Institute of Medicine’s new report, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” headlines throughout the nation proclaimed that the U.S. health system wastes about $765 billion a year. The articles reported that the Institute of Medicine has recommended an overhaul to recover this waste. So what is it that they recommend?

When you read their ten recommendations listed above, it is difficult to come to any other conclusion than that the efforts to produce this 360 page report have resulted in not much more than, well… platitudes.

The report does list strategies for each of the ten recommendations, but, perhaps oversimplified, much of it depends on information technology and really offers little hope that most of this waste could be recovered.

Instead of stumbling along towards trying to achieve a “learning health care system,” we should first adopt a single payer national health program. We would then have an efficient infrastructure to which the recommended strategies that are potentially beneficial could be applied.