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Discussion DR. CORRIGAN: Thank you very much, Don, for that wonderful overview of the Chasm report and for giving us all a good sense of how much better the health care system can be and really needs to be in the future a real vision of where we want to be 5 or 10 years out. And thank you very much, Allen, for a response from the front lines of how the reactions to this report have been and also for giving us a very real sense that there is tremendous leadership out there to act on some of the tough recommendations in this report. We are running a little bit over- time here tonight, but we would like to take a few minutes for questions from the audience. DR. GOLD: I am Marcia Gold, Mathematica Policy Research. One of the questions I had listening to Allen, was whether your point would be: nice try, great academic report, or no way would we be able to do this in the real world. I guess the question I have is whether in fact that is the case? It sounds like this is appealing, but when I hear what you talked about, this involves fundamental changes in the health care system. Don, because Allen has had his chance to talk, what do you see as the chal- lenges in an environment like California? Clearly it is attractive, but how much of it is attractive because it sounds good versus how much can you really do? And where are the places that you move that strategically can have an effect? DR. BERWICK: I don't know. The closer you get to the patient, the more sense the report makes. That is my view. I think people who look at 32

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DISCUSSION 33 what we did, and I must include the members of the committee who rep- resented a wide spectrum of players, want the care system to look like we said. There is very little dispute about that. The closer you get to where Allen does his work, the policy level in finance, the more disconnection there is. It is as if, despite superb leadership from people like Allen, the environment in which we try to do our work has become less and less mindful of the work itself. One of Allen's slides showed the kind of defect we live with. For example, he showed you that I don't remember the term used in the slide, but it is like medical loss ratio we actually have a financing system which seeks systematically to offer a service to people who need it the least. And if you are at the people-end of that story, it doesn't make any sense. So yes, the changes needed are big, but the gap is so big that I think the will may be there to try something. I think Allen has got it exactly right when he focuses in on the chronic illness story. The real shift here is from a system originally configured, not well but adequately, to take care of people who get sick and then get better, to a population now where 70 percent of the expenditure in Allen's budget is for people who have ill- nesses that are not going to go away. We have a system that cannot reach them, cannot help them. We all know it. Allen knows it. Maybe there is will enough to make it right. I don't know. DR. FEEZOR: First, Don, I think you are right. One of the things I was a little bit bothered by was when I saw the note that a majority of people who are in that chronically ill group prefer the passive form, prefer to be treated and be a passive patient as opposed to at least a knowledgeable partner in their care. I think that gives me a little pause. But, Marsha, I am desperately concerned that employment-based cov- erage, as we know it, is going to fade away very fast, and my fear is that the timing here will be that we will be departing, we the employment- based, will be departing at precisely the time when there is at least a sense of vision and in fact some opportunities, and quite honestly a bit of a blueprint to go forward in terms of where to go. DR. BERWICK: That worries me, too. That is the best I have ever heard it said, Allen, that we are just about to move to passing on to the individual patient problems that aggregated intelligent purchasers are now able to solve, just at a time when we have a plan for what that pur- chasing should look like. So I am very doubtful that if we just pass the buck out to the periphery, an invisible hand will make this happen. I don't think it will.

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34 CROSSING THE QUALITY CHASM DR. FEEZOR: And I can tell you, not a two-week period goes by that I don't have a new e-health enterprise. Many times I think people have just put it together on a laptop as they have flown in to talk to me. But one way or the other, it is some sort of an enabler for an individual to be able to design their own network, design their own benefit plan, and parcel out their own dollars. I guess I am enough of an old liberal I don't know whether you can use that term anymore to say that I get very concerned about that. Yet the one thing I felt more comforted by, and to me it is moving light years, Don, is maybe seeing a health care system that is in fact patient-centric, if you will. I am a little easier at that transition, which I think is going to happen, and I think it is going to happen very fast in employment-based coverage. DR. CORRIGAN: I might add the one comment that I have heard a lot, about the report, that as people look at the demographic trends pro- jected there, there is increased realization that the design of the current health care system is really a misfit for the needs of the population and that will only grow worse over the next 5 to 10 to 20 years. So we have to deal with it now or we can deal with it later. Other questions? DR. FEEZOR: lust one other observation I missed, which is more calPERS-centric. One of the downsides of employment-based coverage that we are finding is to make any benefit change or innovation. Let's say I come up with a great design that moves us to a more efficient reimburse- ment of chronic care. You are absolutely right. About 60 percent of my exposure is now and will be those 15 conditions. Because it is employ- ment-based and because it is seen by at least in mine, which is 60 per- cent union membership as a take-away, it makes even more and more hurdles to get a benefit design in. Having said that, it also provides an excellent opportunity in some additional audiences to help me educate and move to a more motivated and educated patient. But in the short run it is a tremendous barrier that, at least in a heavily unionized arena be- cause it is so much a Dart of the bargaining table, any design that is not accepted is considered a take-away. MR. KNUTSON: I am Jim Knutson from Aircraft Gear Corporation. I just wondered, as we are talking about promoting change and looking at a new system, if the choice of the 15 conditions, focusing on them first, was maybe a tipping point, may be creating a tipping point for change? I wonder if you could comment on that. DR. BERWICK: If we understand the demographic shift from acute

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DISCUSSION 35 to chronic illness and the inadequacy of the system to face chronic illness, a natural question arises, which is what are the illnesses? It turns out that the burden in society of chronic illness is very highly concentrated in a relatively small number of diagnoses or conditions. So by listing as many as 15, we will actually be tackling more than the majority of the disease burden in the country, trying to make it more evidence-based and more patient-centered. I must say there are many people on the committee who are a little nervous about defining the task as taking care of a disease better, because in a patient-centered system, the patient who has both acute illnesses and multiple chronic illnesses and other life circumstances needs to be, as we say, treated as the only patient. So I think we look at it like a way station. If we can get care of diabetes and chronic heart disease and cancer and 12 other conditions straight, we would be making a big step forward. DR. COHEN: Tordan Cohen, AAMC. You mentioned an obvious fact that maybe the government is the big purchaser of health care in this coun- try. To the extent that our financing system is misaligned with the kind of outcomes that the Chasm report is pointing us towards, what is the pros- pect of getting Medicare, for example, to do some real demonstration projects, to finance some options to try to get us moving in this direction? DR. FEEZOR: I have enough trouble speaking for calPERS. I don't know if I want to speak for HCFA. But one of the problems this year, due to some plant selections, a hundred thousand people will be going to open enrollment, three times the number we have ever had. My guess is that HCFA would probably be open to at least experimenting with some dem- onstration grants. I am just not sure of what bridge gets us there, at least from the payer's standpoint. As I said, I even started calling some of my benefit consultants, asking: "What kind of design change would I have to make to really do a better job of taking care of reimbursing, for what I call, relational or longer term commitments?" The best they came up with was a product where in fact we would pay on a three-year cap when I say cap, I mean a significant cap say for diabetics to be treated by a particu- lar medical group that serves a lot of our area. And we would say, okay, we will pay you for three years. Here is the amount of money we will put up for that and that way you take care of everything. DR. BERWICK: I think in the framing that it is very important that there is a current state, a future state, and a transitional state. It is easy to imagine the benefits of where we want to get. It is a little harder to imag- ine how to get there. I totally agree with you. I have had the great privilege this year of working a lot in the NHS in

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36 CROSSING THE QUALITY CHASM the UK and in Sweden, which are essentially single-payer systems. You can have a rational conversation with people who are deciding what should happen in the configuration of the care system. And it is a dream relative to the United States. The transitional moments there are political, but rationally political. You can sit down with the minister of health or with the prime minister and ask: "How about going this way?" And they may say: "Okay." And you can begin something. In the United States we cannot. So absent that plan, about which I would shoot myself in the foot by saying what I think, I don't think the committee believes and correct me if I am wrong, lanes that there is a known solution of what the payment configuration ought to look like, or indeed what the tort system ought to look like, to support the kinds of changes we are talking about. As a scien- tist, I see no other recommendation that there ought to be social demon- strations, encouraging calPERS or HCFA or Medicaid or anybody the State of Iowa anybody to take a shot at it, to try to construct a two-year or two-year trial to figure out what the payment system ought to look like to encourage much more rational evidence-based care. DR. SHINE: As you point out, there is a committee chaired by Gil Omen that is responding to a congressionally mandated study to look at quality programs in HCFA, DOD, and DA. We intend to look at some of these issues in terms of the nature of the program and what some of the opportunities are to do exactly what you are talking about.