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Overview Gail L. Warden Good evening, and thank you all for being here. As Dr. Fineberg said, we are on a fast track and have put in a lot of time and effort in the last three or four months to get to where we are tonight. The format tonight is fairly straightforward. I am going to give a very brief overview of the project. I'll then call on each of the panelists in turn to speak on a specific aspect of the report, followed by questions and dis- cussion. The first three slides outline the charge to the committee given by Secretary Thompson. He is very concerned about what he calls a crisis on the challenges facing health care and is particularly concerned about the underlying factors that are causing the system failures: namely, the lack of an information technology infrastructure; excessive cost of administra- tion and regulation; and the burden of malpractice liability. During Secretary Thompson's initial discussion with the committee, the basic feeling was that some radical and bold solutions must be devel- oped, and that they should be implemented at the state level before they are generalized to the entire country. In doing so, we need to articulate what we will learn and how the outcome of each demonstration project or family of demonstration projects will continue to address the crisis. Whereas perhaps 10 years ago we were handed a prescription on how to reform the health care system, this is more of a bottom-up, intricate kind of approach by which we learn and evaluate. We talked about the time frame and concluded that we really couldn't outline a time frame, because what we were doing had to be useful in the short term as we got the project started. What we would learn from the short term obviously would have to be useful in both the intermediate and the long term. By 2005, we hope to see some change in health care 4

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OVERVIEW 5 delivery and by 2010, to see a major revamping of health care delivery in this country. Secretary Thompson suggested that we needed to experiment with statewide information systems, alternatives to the tort liability system, reorganization to reduce administrative costs and attrition and benefits of service delivery that reward a population level focus, as well as innova- tions that improve efficiency and quality of care through all their reim- bursement mechanisms. All of those issues are addressed in the discus- sion you will hear tonight. One of the first things we did when we gathered at Woods Hole was to spend a considerable amount of time developing criteria by which we would evaluate potential candidates for the demonstration projects. The initial criteria were several pages long, as it turned out. We narrowed it down to two families of products: 1) criteria related to intended results, which would improve health status, improve systems, reduce waste, and be a stimulus for continuing innovation and 2) criteria related to success- ful implementation, because the projects were not going to be of any use if they couldn't be successfully implemented. If the projects were to be implemented, they had to resonate with the public and with policy makers and needed a broad base of support. They had to address the barriers that exist in the health care system and they had to build on existing competency. As we began to describe the projects, there were some key character- istics that became a theme throughout the report. It became clear that most of the projects are state or community based. Many involve private and public partnerships. In their own way, they all address critical aspects of the health system, coverage, benefits, payment, liability, and the theme of information technology as a critical component. Each of these topics is woven through each aspect of the report, as well as having a separate section on information technology. The important thing is to not think about each of these different sections whether it be about chronic care or primary care or state benefits in coverage or tort liability or information technology as silos, but to think of them as a package. If they fit together and you are able to make the demonstrations work across the country, then the package has the synergy that could result in substantial reform. We are proposing a large number of projects: 10 to 12 chronic care demonstrations in 10 to 12 communities; primary care demonstrations in 40 different practice settings; information and communications technol- ogy demonstrations in 8 or 10 states; health insurance coverage proposals in 3 to 5 states; and liability in 4 to 5 states. This is a very ambitious ap- proach, but if we are going to get the type of spread we think is necessary, each project has to be done at many of different sites and we have to learn from each other in those different sites.