• Team learning—a process of using and enhancing the capabilities of individuals within the system, including ongoing dialogue, to achieve the shared vision.

Effective learning organizations also have strong leaders involved in creating the guiding ideals of the system, committing to and managing the shared vision, and helping to empower the individuals in the system. It is important for the Centers for Medicare and Medicaid Services (CMS) to assume this leadership role in the initiation of a successful learning system within a pay-for-performance program in Medicare.

All of the elements of a good learning organization also depend on an ongoing dialogue among the members of the organization. Such a dialogue includes continuous examination and reflection, as practiced commonly in the rapid-cycle improvement approach espoused by Shewhart and Deming (Value Based Management.net, 2006). In this approach, a group or individual learns about the consequences of an action and then responds to those results to improve the system (commonly known as a PDCA or PDSA cycle: Plan-Do-Check/Study-Act). This cycle involves planning a small change in a process, executing the change, studying the results, and ultimately taking action to react to the results. In a pay-for-performance program, this type of cycle could be used continuously to improve the program and react immediately to any consequences detected—either to expand upon a change that produces benefits or curtail a change that produces adverse effects.

Many others have studied the important elements of learning organizations that can help achieve continuous improvement (Garvin, 1993; Senge, 1996; Ferlie and Shortell, 2001; Frankl and Gibbons-Carr, 2001; Garcarz and Chambers, 2003; Rushmer et al., 2004). In the United Kingdom, Garcarz and colleagues (2003) developed a toolkit for creating a learning organization. Box 6-1 presents a list of the factors they identified as necessary for effective learning.

While many theories and perspectives exist as to what makes a learning system successful, there are certain overlapping elements CMS should consider when designing a pay-for-performance program in Medicare: providing strong leadership; developing a shared vision; creating an environment that allows for learning from experience (including mistakes); and, especially, considering the program as a whole, including the interactions among all individual elements.


Performance Measurement

The first report in the Pathways series, Performance Measurement: Accelerating Improvement (IOM, 2006b), proposed an aggressive agenda for

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