50 percent lower than the national average. Toussaint posits that a system redesign process grounded in continuous improvement methodology could enhance the value of care delivered to patients and be a complementary or additional tool to the realigned incentives of the bundled payment reforms previously discussed.

Drawing on the work of the Medicare Payment Advisory Commission (MedPAC), Mark E. Miller describes Medicare’s fee-for-service (FFS) as creating separate payment “silos” (e.g., inpatient hospitals, physicians, post-acute care providers) and failing to encourage coordination among providers within a silo or across silos. When discussing evidence demonstrating that care coordination can improve quality, he suggests that Medicare must develop new payment methods that will reward efficient use of its limited resources and encourage the effective integration of care, such as reducing preventable hospital readmissions, increasing the use of bundled payments, and holding accountable care organizations (ACOs) responsible for the cost and quality of the care that their patients receive. Building on these ideas, Harold S. Luft of the Palo Alto Medical Foundation Research Institute outlines alternatives to the current system that could facilitate coordination of inpatient and similar interventional care and both coordination and effective management of ongoing chronic care. Focusing on proposals for medical homes, bundling, and evidence-based practice, he explains that these initiatives align incentives for value-enhancing care and facilitate the development and spread of the information needed by clinicians to deliver that care. Unlike global capitation, however, they retain aspects of fee-for-service where that payment approach is not problematic, thus reducing opposition from those resistant to change, avoiding the productivity problems faced in large organizations, allowing their application in communities in which highly integrated systems either may be infeasible or are an antitrust concern, and engendering flexibility as medical technology and knowledge change.

Andrew M. Wiesenthal explores the potential for increased use of electronic health records (EHRs), coupled with effective, standards-based health information exchanges (HIEs), surmising that together they could counteract the powerful forces contributing to poor integration. Promoting EHR deployment and meaningful use is an appropriate first step for the country to take followed closely by targeting improved outcomes in chronic diseases, he elaborates. He estimates that improving system integration at an appropriate regional level will likely require 5 to 10 years once the work has started. National integration would be much more difficult and lengthier, and largely unneeded by most patients. He identifies the business and public health communities as crucial cofactors for this effort. At the same time, if integration is to be achieved, he asserts that regulatory and competitive barriers, along with patient fears of data misuse, must be addressed.

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