a health care system that frequently falls short in its ability to translate knowledge into practice, and to apply new technology safely and appropriately. During the last decade alone, more than 70 publications in leading peer-reviewed journals have documented serious quality shortcomings (see Appendix A). The performance of the health care system varies considerably. It may be exemplary, but often is not, and millions of Americans fail to receive effective care. If the health care system cannot consistently deliver today’s science and technology, we may conclude that it is even less prepared to respond to the extraordinary scientific advances that will surely emerge during the first half of the 21st century. And finally, more than 40 million Americans remain without health insurance, deprived of critically important access to basic care (U.S. Census Bureau, 2000).

The health care system as currently structured does not, as a whole, make the best use of its resources. There is little doubt that the aging population and increased patient demand for new services, technologies, and drugs are contributing to the steady increase in health care expenditures, but so, too, is waste. Many types of medical errors result in the subsequent need for additional health care services to treat patients who have been harmed (Institute of Medicine, 2000b). A highly fragmented delivery system that largely lacks even rudimentary clinical information capabilities results in poorly designed care processes characterized by unnecessary duplication of services and long waiting times and delays. And there is substantial evidence documenting overuse of many services—services for which the potential risk of harm outweighs the potential benefits (Chassin et al., 1998; Schuster et al., 1998).

What is perhaps most disturbing is the absence of real progress toward restructuring health care systems to address both quality and cost concerns, or toward applying advances in information technology to improve administrative and clinical processes. Despite the efforts of many talented leaders and dedicated professionals, the last quarter of the 20th century might best be described as the “era of Brownian motion in health care.” Mergers, acquisitions, and affiliations have been commonplace within the health plan, hospital, and physician practice sectors (Colby, 1997). Yet all this organizational turmoil has resulted in little change in the way health care is delivered. Some of the new arrangements have failed following disappointing results. Leaders of health care institutions are under extraordinary pressure, trying on the one hand to strategically reposition their organizations for the future, and on the other to respond to today’s challenges, such as reductions in third-party payments (Guterman, 1998), shortfalls in nurse staffing (Egger, 2000), and growing numbers of uninsured patients seeking uncompensated care (Institute of Medicine, 2000a).

For several decades, the needs of the American public have been shifting from predominantly acute, episodic care to care for chronic conditions. Chronic conditions are now the leading cause of illness, disability, and death; they affect almost half of the U.S. population and account for the majority of health care



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