that, at a minimum, CMS have access to information that could help it to work with the rest of the health care industry to meet those objectives.

Key policy perspectives such as moving toward what the Institute of Medicine calls a learning health care system⁴ have to be addressed by CMS, since federal programs are of such scale that CMS’s efforts will have significant impact on moving the nation as a whole forward. Indeed, evidence exists that improved quality performance can mitigate costs while also improving outcomes.⁵ Although fundamental public policy issues with respect to health care reform, safety and quality enhancement, cost management, and the appropriate federal role in these matters are being debated (issues that are beyond the scope of this report), it is inarguable that CMS must not only ensure the appropriateness of its direct outlays but also support, both proactively and reactively, efforts to reduce costs in the health care system as a whole. No matter what payment models it operates under now or in the future, CMS will have to be able to both fulfill its fiduciary responsibility and ensure that eligible people are receiving appropriate care.

What planning must CMS embrace to fulfill these responsibilities? Central to the effort is that CMS develop a vision of its role in modern health care and strategies for realizing it—an overall strategy for CMS as a whole, along with a strategic technology plan for comprehensive, incremental development of effective information systems, and strategies for quickly addressing near-term issues.

MOTIVATING MODERNIZATION AND TRANSFORMATION AT CMS

For the purposes of this report the terms “modernization” and “transformation” refer to two ends of a spectrum of possible transitions for components and subcomponents of an information system. Modernization refers to modest or evolutionary transitions; transformation refers to significant or revolutionary transitions. Use of the term “modernize” or

⁴ A system that is “designed to generate and apply the best evidence for the collaborative healthcare choices of each patient and provider; to drive the process of discovery as a natural outgrowth of patient care; and to ensure innovation, quality, safety, and value in health care.” See Institute of Medicine, 2011, Digital Infrastructure for the Learning Health System, Washington, D.C.: The National Academies Press, p. 2.

⁵ See, for instance, B.L. Hall et al., 2009, “Does Surgical Quality Improve in the American College of Surgeons National Surgical Quality Improvement Program?,” Annals of Surgery 250:363-376; J.B. Dimick et al., 2004, “Hospital Costs Associated with Surgical Complications: A Report from the Private-Sector National Surgical Quality Improvement Program,” Journal of the American College of Surgeons 199(4):531-537.