The Arkansas Innovation

By Ezekiel J. Emanuel
The New York Times, September 5, 2012
(Arkansas) is moving toward ending “fee-for-service” payments, in which each procedure a patient undergoes for a single medical condition is billed separately. Instead, the costs of all the hospitalizations, office visits, tests and treatments will be rolled into one “episode-based” or “bundled” payment.
This is how it will work: Medicaid and private insurers will identify the doctor or hospital who is primarily responsible for the patient’s care — the “quarterback,” as Andrew Allison, the state’s Medicaid director, put it. The quarterback will be reimbursed for the total cost of an episode of care — a hip or knee replacement; treatment for an upper respiratory infection or congestive heart failure; or perinatal care (the baby’s delivery, as well as some care before and after).
The quarterbacks will also be responsible for the cost and quality of the services provided to their patients, and will receive quarterly reports on those metrics from the state (for Medicaid patients) or private insurers. If they have delivered good care based on agreed-upon standards, and if their billings come in lower than the agreed-upon level, they can keep a portion of the difference. If their billings come in above an acceptable level — usually because they have ordered too many unnecessary tests, office visits or inappropriate treatments — they will have to pay money back to the state or insurer.
Still, it will be a challenge. Bundled payments for hip and knee replacements, which have similar costs for all patients, have been previously tested. But for other conditions, not every patient’s needs are the same. Some pregnant women are healthy while others have diabetes. The state and insurers will have to provide “risk adjustment” payments — in which providers are reimbursed more for treating sicker patients — and some patients with especially complicated illnesses may need to be excluded from the bundling system.
Even some low-cost conditions, like upper respiratory infections, are treated at widely varying costs, mainly because physicians prescribe different tests, numbers of office visits and medications.
But this is exactly what the new program will work to change, by providing standards for appropriate care linked to the costs of treatment and the quality of the doctor’s performance compared with that of other doctors.
http://opinionator.blogs.nytimes.com/2012/09/05/the-arkansas-innovation/

And…

Is ‘Bundled’ Medical Care a Good Idea?

Letters, The New York Times, September 12, 2012
Despite Ezekiel J. Emanuel’s implication, Arkansas isn’t the only state to plan to substitute “bundled” medical payments for fee-for-service. Vermont, Massachusetts and Oregon have similar intentions. But without basic changes in the organization and delivery of care, it is doubtful that “bundled” payments can be successfully distributed among all the providers of care.
A stifling supervisory bureaucracy interfering with medical care and endless disputes among providers and between providers and payers are almost certain to develop. Physicians are unlikely to accept such an arrangement, and nothing can succeed without their agreement.
Eventually, they will accept a different health system in which a single public payer guarantees comprehensive care for all, and pays accountable multispecialty physician groups not by reimbursement for specific services but through prepaid budgets on a per capita basis.
Arnold S. Relman
Cambridge, Mass., Sept. 7, 2012
The writer, professor emeritus of medicine and social medicine at Harvard Medical School, is a former editor in chief of The New England Journal of Medicine.
http://www.nytimes.com/2012/09/13/opinion/is-bundled-medical-care-a-good-idea.html?ref=opinion

What a simple idea. Instead of paying a fee for each itemized service – a payment model that supposedly encourages the delivery of excess services – a lump (bundled) fee would be paid for each episode of care. That episode might be as simple as a common cold, or as complex as extensive, prolonged care of a major trauma victim. But because of the single fee no excessive services would be provided, so the theory goes.
This does bring up a few questions. How many distinct episodes of care are there? How is each one defined? How is an appropriate bundled fee determined for each of these episodes? Which individuals and entities would share in each fee? Would the various providers be bundled together just as the fee for each episode of care is bundled? How many variations of bundled providers would you have? How many bundled groups would each individual provider belong to? How complex would the administrative task be to distribute the bundled fee within the bundled group of providers? Could an accountable care organization (ACO) serve as a single bundled group of providers that could care for each and every episode of care? Would each ACO include providers of tertiary services such as advanced cardiac or oncological surgeries? Would each ACO want to contract for bundled payments for common colds and other brief, single contact services? Would one ACO be the only bundled entity in a community, or could the community support multiple competing ACOs? Could the community support providers outside of the ACO and how would they be bundled? Would each payer – Medicare, Medicaid, and a multitude of private insurers – contract separately with each bundled group of providers for each separate episode of care? If instead the bundled payments were standardized, then why would you want the inefficiency of multiple payers when a single payer would simplify at least that part of the process? But then, why make it this complicated in the first place?
Arnold Relman is right. The bundling concept adds much more administrative complexity to a health care system that already has the world’s worst administrative excesses. Instead of playing more games with a dysfunctional, fragmented financing system, we should convert to a single payer national health program. Under such a system costs can be budgeted – whether it’s through global budgets for hospitals, capitation payments for integrated multispecialty physician groups, physician-hospital organizations, community health centers, or through fee-for-service when appropriate such as for solo, rural practices.
Our own public administrators of an improved Medicare for all would be free to cooperate with the health care professionals and institutions to establish the best payment arrangements to see that everyone receives the highest quality of care under a system that would provide the nation with greatest health care value attainable. One giant bundle for all of us.

By Carmen DeNavas-Walt, Bernadette D. Proctor, Jessica C. Smith
United States Census Bureau, September 2012

Health Insurance Coverage – 2011

48.6 million or 15.7% – people without health insurance
• 7.0 million – children under 18 uninsured

193.7 million or 63.9% – people covered by private health insurance
• 170.1 million or 55.1% – people covered by employment-based insurance

99.5 million or 32.2% – people covered by government health insurance
• 50.8 million or 16.5% – people covered by Medicaid
• 46.9 million or 15.2% – people covered by Medicare

Poverty

9.5 million or 11.8% – families living in poverty
• 31.2% – families with a female householder living in poverty

Income Inequality

Income inequality also increased between 2010 and 2011 when measured by shares of aggregate household income received by quintiles. The aggregate share of income declined for the middle and fourth quintiles. The share of aggregate income increased 1.6 percent for the highest quintile and within the highest quintile, the share of aggregate income for the top 5 percent increased 4.9 percent. The changes in the shares of aggregate income for the lowest two quintiles were not statistically significant.

http://www.census.gov/prod/2012pubs/p60-243.pdf

Comment:

By Don McCanne, MD

The numbers of uninsured decreased from 50.0 million in 2010 to 48.6 million in 2011. That might be good news for the net 1.4 million newly insured, but it is terrible news for the 48.6 million who remain without health insurance.

These numbers, of course, are transitional since new private coverage through the state insurance exchanges and the greater expansion of coverage under Medicaid will not take place until 2014. Even then, the new coverage will be either with private underinsurance plans (low actuarial value and inadequate subsidies) or with the chronically underfunded Medicaid program, with even greater impairment of health care access likely. Worse, 30 million will still have no coverage at all (CBO).

Perhaps even more shocking is that 31.2% of families with a female householder live in poverty – right here in the United States!

And income inequality? The aggregate share of household income has decreased for the middle and fourth quintiles. The middle class is being wiped out!

Of course we knew all this. So why aren’t we doing something about it? Howling in the wind doesn’t seem to be getting us very far.

Income, Poverty, and Health Insurance Coverage in the United States: 2011

By Carmen DeNavas-Walt, Bernadette D. Proctor, Jessica C. Smith
United States Census Bureau, September 2012
Health Insurance Coverage – 2011
48.6 million or 15.7% – people without health insurance
• 7.0 million – children under 18 uninsured
193.7 million or 63.9% – people covered by private health insurance
• 170.1 million or 55.1% – people covered by employment-based insurance
99.5 million or 32.2% – people covered by government health insurance
• 50.8 million or 16.5% – people covered by Medicaid
• 46.9 million or 15.2% – people covered by Medicare
Poverty
9.5 million or 11.8% – families living in poverty
• 31.2% – families with a female householder living in poverty
Income Inequality
Income inequality also increased between 2010 and 2011 when measured by shares of aggregate household income received by quintiles. The aggregate share of income declined for the middle and fourth quintiles. The share of aggregate income increased 1.6 percent for the highest quintile and within the highest quintile, the share of aggregate income for the top 5 percent increased 4.9 percent. The changes in the shares of aggregate income for the lowest two quintiles were not statistically significant.
http://www.census.gov/prod/2012pubs/p60-243.pdf

The numbers of uninsured decreased from 50.0 million in 2010 to 48.6 million in 2011. That might be good news for the net 1.4 million newly insured, but it is terrible news for the 48.6 million who remain without health insurance.
These numbers, of course, are transitional since new private coverage through the state insurance exchanges and the greater expansion of coverage under Medicaid will not take place until 2014. Even then, the new coverage will be either with private underinsurance plans (low actuarial value and inadequate subsidies) or with the chronically underfunded Medicaid program, with even greater impairment of health care access likely. Worse, 30 million will still have no coverage at all (CBO).
Perhaps even more shocking is that 31.2% of families with a female householder live in poverty – right here in the United States!
And income inequality? The aggregate share of household income has decreased for the middle and fourth quintiles. The middle class is being wiped out!
Of course we knew all this. So why aren’t we doing something about it? Howling in the wind doesn’t seem to be getting us very far.

By Meghan McCarthy
NationalJournal, September 10, 2012

President Obama has seized on Republican proposals to overhaul Medicare as a top campaign issue, saying that the GOP plan to add a private insurance option would end seniors’ guarantee of government health care. But behind the election-season politics, influential experts who have advised Obama on health care are open to a future for Medicare that includes competition among private insurance plans.

In e-mail exchanges with the staff of the White House-appointed  fiscal commission  that were obtained by National Journal, David Cutler and Jonathan Gruber, who have both advised Obama, gave qualified support to a Medicare voucher plan offered by Ryan and former Clinton budget director Alice Rivlin in talks to reduce the deficit.

Cutler and Gruber are both hot shots of the health economics world. Cutler is a professor at Harvard, Gruber at MIT. Both advised Obama on health care in the 2008 campaign, and both had major roles in helping develop Democrats’ 2010 health care law. When they offer counsel, the White House is listening.

Cutler now says he was only proposing an idea for Medicare if insurance exchanges are “shown to work well for the non-elderly population,” by getting people into good plans and lowering costs.

Gruber also said he approved of the Ryan-Rivlin plan in 2010 e-mails to fiscal-commission staff, as long as the insurance market reforms of the Democrats’ health care law are kept in place.

Gruber now says that economists don’t know enough yet to move the majority of Medicare enrollees into private-insurance plans.  As part of the effort to expand coverage to the uninsured, President Obama’s health care law would establish insurance exchanges for people younger than 65 to buy private health care. Gruber said that this is a better way of testing out new approaches, adding that it would be “stupid” to experiment first on the older and sicker Medicare population.

“We are getting better, but we are not quite there yet,” Gruber said in an interview. “But premium support is ultimately where we need to be.”

There are three key problems that still must be worked out, Gruber said. First, policymakers have to figure out how to keep insurance companies from cherry-picking healthy people and essentially forcing the sickest patients on to traditional Medicare, which would drain the program of money. Second, policymakers must find a way to make sure insurance companies design benefits so they are easy-to-understand for beneficiaries, and don’t trick seniors into buying more expensive plans that aren’t suitable for them. Third, they have to figure out just how quickly government checks for seniors to buy coverage could grow.

Still, Gruber said he could see Medicare becoming a premium-support-style plan within a five-year timetable, after the Affordable Care Act’s health insurance exchanges start enrolling an estimated 30 million people into insurance plans in 2014.

http://www.nationaljournal.com/healthcare/mixed-obama-message-on-medicare–20120910

Comment: 

By Don McCanne, MD

So Obama advisor, MIT Professor Jonathan Gruber, says, “premium support is ultimately where we need to be.” In other words, we should replace the traditional Medicare program with vouchers that would be used to purchase private plans. Let’s look at the three problems which he says must first be addressed.

He says that policymakers must figure out how to keep insurance companies from insuring the healthy and sending the sick to the traditional government program. Actually that is only one behavior that private insurers engage in to enhance their success as private businesses. They are always going to do everything that they can to maximize revenues and minimize spending, as any reasonable business would do. The drive for profits for passive investors is not in itself inherently evil, except when it is applied to our health care system. Manipulating sick patients for the prime purpose of generating profits is immoral. Investor-owned insurance companies need to be removed from our health care system.

Gruber also says that we have to figure out “just how quickly government checks for seniors to buy coverage could grow” under premium support. This is a problem inherent with government vouchers that cover only a part of the costs. Instead of directing efforts to control total health care costs, government stewards tend to control just the government spending, passively shifting the costs of health care inflation onto the patients. The financial burden on individuals is already too great, and this would make it even worse.

More subtle, but perhaps even more important, Gruber says that the design of insurance products should be easy to understand so that seniors are not tricked into buying “more expensive plans that aren’t suitable for them.” This statement represents one of the great fallacies of private health insurance markets, that somehow there is an insurance product that is just right for you wherein you will not have to pay for benefits that you’ll never use.

There are two problems with this. The obvious one is that future health care needs cannot be predicted. Major acute disorders or the future onset of chronic disease are unknowns. Plans need to be comprehensive to insure against these potential losses, even if you hope that you won’t ever need to use the coverage that is providing you security, though you probably will someday.

The other problem is that an ideal insurance system pools all risks and funds the risk pool equitably. It is less expensive because of the much greater administrative efficiency of a universal risk pool. It also eliminates financial barriers to appropriate health care. Maybe males don’t want maternity benefits. Maybe females don’t want coverage for prostate cancer. Maybe young adults don’t want coverage for cataracts. Maybe the elderly don’t want coverage for organ transplants. Maybe children don’t want coverage for vaccines, even of their parents want them to have it.

The point is that when you start designing plans for different populations – “only the coverage you need” – you break up the universal risk pool and introduce many of the inequities and inefficiencies that characterize our current dysfunctional financing system. The administrative inefficiencies of buying “only what you need” increases costs over the entire system and redistributes those costs inequitably.

There is no substitute for establishing a single universal risk pool, funding the pool equitably based on ability to pay, and using the pool to fund health care based on medical need. And that, in a nutshell, is what a single payer national health program does.

Mixed Message From Obama Advisers on Medicare

By Meghan McCarthy
NationalJournal, September 10, 2012
President Obama has seized on Republican proposals to overhaul Medicare as a top campaign issue, saying that the GOP plan to add a private insurance option would end seniors’ guarantee of government health care. But behind the election-season politics, influential experts who have advised Obama on health care are open to a future for Medicare that includes competition among private insurance plans.
In e-mail exchanges with the staff of the White House-appointed  fiscal commission  that were obtained by National Journal, David Cutler and Jonathan Gruber, who have both advised Obama, gave qualified support to a Medicare voucher plan offered by Ryan and former Clinton budget director Alice Rivlin in talks to reduce the deficit.
Cutler and Gruber are both hot shots of the health economics world. Cutler is a professor at Harvard, Gruber at MIT. Both advised Obama on health care in the 2008 campaign, and both had major roles in helping develop Democrats’ 2010 health care law. When they offer counsel, the White House is listening.
Cutler now says he was only proposing an idea for Medicare if insurance exchanges are “shown to work well for the non-elderly population,” by getting people into good plans and lowering costs.
Gruber also said he approved of the Ryan-Rivlin plan in 2010 e-mails to fiscal-commission staff, as long as the insurance market reforms of the Democrats’ health care law are kept in place.
Gruber now says that economists don’t know enough yet to move the majority of Medicare enrollees into private-insurance plans.  As part of the effort to expand coverage to the uninsured, President Obama’s health care law would establish insurance exchanges for people younger than 65 to buy private health care. Gruber said that this is a better way of testing out new approaches, adding that it would be “stupid” to experiment first on the older and sicker Medicare population.
“We are getting better, but we are not quite there yet,” Gruber said in an interview. “But premium support is ultimately where we need to be.”
There are three key problems that still must be worked out, Gruber said. First, policymakers have to figure out how to keep insurance companies from cherry-picking healthy people and essentially forcing the sickest patients on to traditional Medicare, which would drain the program of money. Second, policymakers must find a way to make sure insurance companies design benefits so they are easy-to-understand for beneficiaries, and don’t trick seniors into buying more expensive plans that aren’t suitable for them. Third, they have to figure out just how quickly government checks for seniors to buy coverage could grow.
Still, Gruber said he could see Medicare becoming a premium-support-style plan within a five-year timetable, after the Affordable Care Act’s health insurance exchanges start enrolling an estimated 30 million people into insurance plans in 2014.
http://www.nationaljournal.com/healthcare/mixed-obama-message-on-medicare–20120910

So Obama advisor, MIT Professor Jonathan Gruber, says, “premium support is ultimately where we need to be.” In other words, we should replace the traditional Medicare program with vouchers that would be used to purchase private plans. Let’s look at the three problems which he says must first be addressed.
He says that policymakers must figure out how to keep insurance companies from insuring the healthy and sending the sick to the traditional government program. Actually that is only one behavior that private insurers engage in to enhance their success as private businesses. They are always going to do everything that they can to maximize revenues and minimize spending, as any reasonable business would do. The drive for profits for passive investors is not in itself inherently evil, except when it is applied to our health care system. Manipulating sick patients for the prime purpose of generating profits is immoral. Investor-owned insurance companies need to be removed from our health care system.
Gruber also says that we have to figure out “just how quickly government checks for seniors to buy coverage could grow” under premium support. This is a problem inherent with government vouchers that cover only a part of the costs. Instead of directing efforts to control total health care costs, government stewards tend to control just the government spending, passively shifting the costs of health care inflation onto the patients. The financial burden on individuals is already too great, and this would make it even worse.
More subtle, but perhaps even more important, Gruber says that the design of insurance products should be easy to understand so that seniors are not tricked into buying “more expensive plans that aren’t suitable for them.” This statement represents one of the great fallacies of private health insurance markets, that somehow there is an insurance product that is just right for you wherein you will not have to pay for benefits that you’ll never use.
There are two problems with this. The obvious one is that future health care needs cannot be predicted. Major acute disorders or the future onset of chronic disease are unknowns. Plans need to be comprehensive to insure against these potential losses, even if you hope that you won’t ever need to use the coverage that is providing you security, though you probably will someday.
The other problem is that an ideal insurance system pools all risks and funds the risk pool equitably. It is less expensive because of the much greater administrative efficiency of a universal risk pool. It also eliminates financial barriers to appropriate health care. Maybe males don’t want maternity benefits. Maybe females don’t want coverage for prostate cancer. Maybe young adults don’t want coverage for cataracts. Maybe the elderly don’t want coverage for organ transplants. Maybe children don’t want coverage for vaccines, even of their parents want them to have it.
The point is that when you start designing plans for different populations – “only the coverage you need” – you break up the universal risk pool and introduce many of the inequities and inefficiencies that characterize our current dysfunctional financing system. The administrative inefficiencies of buying “only what you need” increases costs over the entire system and redistributes those costs inequitably.
There is no substitute for establishing a single universal risk pool, funding the pool equitably based on ability to pay, and using the pool to fund health care based on medical need. And that, in a nutshell, is what a single payer national health program does.

Obama More Flexible on Medicare Than Rhetoric Suggests

By Margot Sanger-Katz
NationalJournal, September 8, 2012
In his convention speech in Charlotte, President Obama vowed to block the Republican Medicare reform plan because “no American should ever have to spend their golden years at the mercy of insurance companies.”
But back in Washington, his Health and Human Services Department is launching a pilot program that would shift up to 2 million of the poorest and most-vulnerable seniors out of the federal Medicare program and into private health insurance plans overseen by the states.
The administration has accepted applications from 18 states to participate in the program, which would give states money to purchase managed-care plans for people who are either disabled or poor enough to qualify for both Medicare and Medicaid.
Obama’s 2010 health reform law allows experimentation in delivering health care at lower cost through demonstration projects. Many states would like permission to shift their entire population of so-called dual-eligible beneficiaries into the new plans. HHS has indicated that it will enroll about 2 million beneficiaries, out of about 7 million who qualify for full benefits from both government health programs.
California is already counting on more than $500 million in budget savings from its own program this year.
Potential cost savings are a big incentive for states. Patients who qualify for both federal health programs are a costly population and include many who need nursing-home care or other expensive services. About 40 percent of Medicaid’s costs go toward patients who are also eligible for Medicare. Advocates of the pilot program also say it could lead to better coordination of care for patients who often struggle to navigate the two different programs.
To get approval, states must guarantee that both Medicare and Medicaid would save money. They must also agree to accept a fixed payment to cover all care for each patient. While rules say the private plans must cover all standard Medicare benefits, they also waive many Medicare rules and leave insurer selection to the states.
Still, there is powerful opposition to the pilots among doctors, hospitals, nursing homes, patient groups, and key lawmakers, including Sen. Jay Rockefeller, D-W.Va., who wrote the provision in the health law that created the office in charge of the pilot program.
“I urge you to take immediate steps to halt this initiative as currently structured and to take the time necessary to develop a well-designed and thoroughly evaluated care coordination model for dual eligibles that meets the standards outlined in the law,” Rockefeller wrote in a letter to HHS.
The Medicare Payment Advisory Commission, a group of experts who advise Congress on Medicare policy, has also weighed in with an 11-page letter to HHS, warning that the speed and scope of the program raised questions about whether patients would receive the care they need.
The managed-care industry is gearing up for the expansion. Three large insurers have purchased companies that insure Medicaid beneficiaries. For years, states have been moving Medicaid patients into managed-care plans, with mixed results. But this pilot represents a new market: It is the first large program that would pool Medicare and Medicaid benefits in a single, state-administered plan.
“The problem with this population is that all the strategies that the health plans have been used to using historically are going to backfire,” said Chris Duff, executive director of the Disability Practice Institute, an umbrella organization for small programs that provide coordinated care to dual-eligibles. He warned that slashing provider rates, limiting visits, and using other conventional cost-control measures could lead to expensive hospitalizations for frail dual-eligible patients.
But the states are enthusiastic about the pilot programs and believe they will be able to provide better care at lower cost.
http://www.nationaljournal.com/healthcare/obama-more-flexible-on-medicare-than-rhetoric-suggests-20120908

And…

Assessing the Quality of California Dual Eligible Demonstration Health Plans

National Senior Citizens Law Center
May 2012
California has proposed a three-year demonstration project to enroll individuals dually eligible for Medicare and Medi-Cal (dual eligibles) into managed care. An analysis of both Medicare and Medi-Cal quality ratings for the eight health plans selected by the California Department of Health Care Services (DHCS) for the first phase of the project raises cause for concern.
Approved health plans in participating counties would be responsible for providing enrolled dual eligibles with all Medicare and Medi-Cal benefits and services, including all needed medical care, long-term services and supports, and behavioral health care, beginning in January 2013.
According to a DHCS report assessing the quality of health plans in the Medi-Cal Managed Care (MCMC) Program, seven of the eight plans received a global health plan rating of 1 out of 5 stars.
Looking at Medicare evaluations, two of the plans selected have received a notice of non-compliance from the Medicare program. One of those has been marked as a low-performing plan for three consecutive years and is at risk for termination of its Medicare contract. Another plan was recently sanctioned by Medicare as a result of beneficiary access problems. Medicare continues to restrict enrollment of dual eligibles into that plan. All eight proposed demonstration plans were found to be low-performing on a least one composite Medicare quality measure.
http://dualsdemoadvocacy.org/wp-content/uploads/2012/02/Plan-Ratings-Report-May-2012.pdf

President Obama is currently campaigning against the Republican proposal to privatize Medicare through a voucher program that would move Medicare patients into private plans. Yet, based on provisions in the Affordable Care Act, the administration is moving Medicare patients whose coverage also is supplemented with Medicaid (dual eligibles) into private managed care plans.
California has been a leader in health care financing innovations. Look at the head start that they have on this program. Seven of the eight plans they have selected to initiate the program have a global health plan rating of only 1 star out of 5!
These plans greatly limit patients’ choices of their providers and will undoubtedly impair access by eliminating choices of most other health care providers within the state. Having to transfer buses three times when you are very ill can make you question whether you have the access that the state has promised to you. And quality ratings? Forget it.
These low-income patients, under the law, have more coverage than do traditional Medicare patients… more, but worse. We can do far better. We can improve Medicare so that it includes the additional benefits provided by Medicaid. Then you wouldn’t need a special “dual eligible” program.
If the improved Medicare program included everyone, then you wouldn’t have to herd patients into inferior managed care programs just to save money (precisely what this new dual eligible program is designed to do). As a beneficent public monopsony, the improved Medicare program would save us all money while being in a position to demand quality throughout the health care delivery system. We couldn’t ask for more – for all of us!

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.”

http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=13444

And…

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

Institute of Medicine

Recommendations

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.

http://www.iom.edu/~/media/Files/Report%20Files/2012/Best-Care/Best%20Care%20at%20Lower%20Cost_Recs.pdf

Best Care at Lower Cost: The Path to Continuously Learning Health Care in America (Full report – 360 pages):
http://books.nap.edu/openbook.php?record_id=13444

Comment:

By Don McCanne, MD

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.