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4
Imperative: Capturing Opportunities
from Technology, Industry, and Policy
Carolyn Thornton was at home baking on Thanksgiving day when
her heart palpitations, which she had been experiencing for some
time, suddenly got worse. A visit to her doctor confirmed that Car-
olyn had myocarditis and congestive heart failure. But Carolyn’s
treatment would be different from that of other patients with her
condition. After being discharged from the hospital, Carolyn was
enrolled in Partners HealthCare’s Connected Cardiac Care pro-
gram, a home monitoring and education program for patients at
risk for hospitalization. Each morning, patients in the program use
home telemonitoring technology to take their own weight, blood
pressure, pulse, and oxygen levels and answer questions about their
symptoms. The data from these tests are sent to a telemonitoring
nurse, who reviews patients’ vitals and takes appropriate follow-up
steps for out-of-parameter readings, including calling the patient
or coordinating care with the patient’s care team (Partners Health-
Care Center for Connected Health, 2012). These prompt inter-
ventions can often help avoid unplanned hospital admissions—to
date, the Connected Cardiac Care program has achieved a 51
percent reduction in heart failure readmissions (Cosgrove et al.,
2012). Telemonitoring nurses also guide patients through struc-
tured heart failure education sessions to help make them aware of
the impact of their daily behaviors on their condition and to help
them develop new self-management skills (Partners HealthCare
Center for Connected Health, 2012). The program illustrates how
111
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112 BEST CARE AT LOWER COST
new remote monitoring and connectivity capabilities can help pa-
tients like Carolyn and others monitor and manage complex health
conditions.
Although the challenges of complexity and value confronting U.S.
health care today are formidable, opportunities exist to mold the system
into one characterized by continuous learning and improvement. Advances
have made vast computational power affordable and widely available,
while improvements in connectivity have allowed information to be acces-
sible in real time virtually anywhere. Progress in these areas has the poten-
tial to improve health care by increasing the reach of research knowledge,
providing access to clinical records when and where needed, and assisting
patients and providers in managing chronic diseases. Another area of op-
portunity lies with the human and organizational capabilities developed by
diverse industries to improve safety, quality, reliability, and value; many of
these capabilities can be adapted to health care settings to improve perfor-
mance. Finally, recent changes in health policies present opportunities that
can be leveraged to promote the growth of a learning health care system.
Together, these opportunities can operate synergistically to enable more
transformative change than can be accomplished with any of them individu-
ally. The path toward a more effective and efficient health care system will
not be an easy one, but recent advances demonstrate the real potential for
the necessary transformation.
THE DIGITAL INFRASTRUCTURE:
COMPUTING, THE INTERNET, AND MOBILE TECHNOLOGIES
The past several decades have seen remarkable advances in technology,
from personal computers, to cellular phones, to portable music players. The
first mainframe computer offering a magnetic hard drive, the IBM RAMAC
305, was introduced in 1956, weighed a full ton, cost $250,000-$300,000
a year to lease in today’s dollars, and stored less than 5 megabytes (Lesser
and Haanstra, 1957; Levy, 2006). The price and capacity of computer stor-
age have changed dramatically since then: in 2011, one could purchase a
32 gigabyte microSD card for $40,1 which could store almost 7,000 times
more information than the IBM RAMAC 305 at almost a thousandth of the
price. One could also buy a disk drive capable of storing all of the world’s
music for only $600 (Manyika et al., 2011). And computer processing
speed has grown by an average rate of 60 percent per year over the past
several decades (Hilbert and López, 2011).
1 ased
B on searches of major vendors.
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CAPTURING OPPPORTUNITIES 113
Advanced technologies that rely on this computing power have become
widespread. In the United States, 85 percent of adults own a cellphone, al-
most half own a digital music player, and 76 percent own a laptop or desk-
top computer (Zickuhr, 2011). The ability to generate, communicate, share,
and access information has also been revolutionized by the rapid growth
of digital networks. The Internet pervades modern life, allowing for quick
access to multiple sources of information and rapid communication. The
number of Americans with access to the Internet grew from 14 percent in
1995 to almost 80 percent in 2011 (Pew Internet & American Life Project,
2011). The Internet has given rise to new ways to connect with others, such
as through social networking sites. These sites are now pervasive, being
used by 65 percent of Internet users as of 2011 (Purcell, 2011).
In recent years, connectivity has become mobile and ubiquitous. Since
the turn of the century, the capacity to share information across telecom-
munications networks has grown by an average of 30 percent per year
(Hilbert and López, 2011). With the rise of tablets and smartphones that
offer Internet connectivity and additional applications, mobile devices have
become more sophisticated and have gained greater functionality. It is esti-
mated that by 2020, 10 billion such mobile Internet-connected devices will
be in use (Huberty et al., 2011).
These advances have dramatically changed numerous sectors of the
U.S. economy, and even society more broadly. Companies have developed
new ways to streamline their work processes, share information within
their organizations, and analyze trends and knowledge (see Box 4-1 for an
example). Individuals now have a wealth of information at their fingertips,
with the ability to learn about almost any new topic in seconds.
While technologies and communications have led to widespread soci-
etal changes, these capacities are still relatively early in their development
in the health care arena, and there is substantial room for progress and
improvements as technologies are implemented in the field. One way digital
connectivity can lead to better performance in health care is by ensuring
that clinical information for a given patient is available when and where
it is needed. The infrastructure for this type of connectivity, however, is
largely lacking. As of 2011, only 34 percent of office-based physicians used
a basic electronic health record system (although projections are for 90 per-
cent to have access by 2019) (Congressional Budget Office, 2009; Hsiao et
al., 2011), and only 18 percent of hospitals had a basic system (DesRoches
et al., 2012). Thus, substantial opportunities exist to improve the safety
and efficiency of medical care by promoting greater use of digital records.
Once in place, these systems create the potential for advanced uses of clini-
cal data to improve outcomes (see Box 4-2 for an example). For instance,
they allow providers to analyze their patient populations and identify those
who may benefit from preventive care or other proactive clinical services.
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114 BEST CARE AT LOWER COST
BOX 4-1
Using Data to Transform Business Practices
The explosion of data, along with new mechanisms for mining the data for in-
sights, has transformed many businesses. One business that has made extensive
use of this new opportunity is Ceasars Entertainment, which has focused on using
data to improve its customer retention. These data originate from the company’s
loyalty program, Total Rewards, which has generated a customer information
database that grew to more than 40 million members in 2010. The data, tracked
by each customer’s Total Rewards card, range from the total number of visits cus-
tomers have made to a particular casino, to their buffet activity, to the amount of
money they win or lose on an average visit. When it appears that customers may
be frustrated in their experience, the company’s analysis allows the Total Rewards
staff to make data-supported decisions on the timing, type, and magnitude of pro-
motional offers that have the highest likelihood of bringing those customers back.
By tracking these offers and customers’ subsequent visits, the company is able
to monitor the success of the predictions. Through the use of evidence to predict
the most effective offer for each customer, the company can ensure that a high
proportion of customers will be enticed to return, which translates to guaranteed
revenue for the business.
SOURCES: Greenfeld, 2010; National Public Radio, 2011.
Several early results have been promising, with digital records encouraging
greater adherence to national best practices and leading to improvements
in health outcomes (Cebul et al., 2011; Friedberg et al., 2009).
Increasing the diffusion of a digital infrastructure that supports health
care processes and access to information provides the necessary founda-
tion for a continuously improving, learning health care system (President’s
Information Technology Advisory Committee, 2001, 2004). Using this
infrastructure, the system can capture and use knowledge from clinical
care in real time. However, the sheer scale and complexity of the digital
health infrastructure, including legacy systems, new electronic health re-
cord systems, financial data systems, and other data sources, necessitate
conceptualizing this infrastructure in a new way. As noted in the Institute
of Medicine (IOM) publication Digital Infrastructure for the Learning
Health System, managing this complex technological resource effectively
will require allowing local users of the data maximum flexibility, minimiz-
ing the number of standards necessary, and promoting adaptability and
incremental innovation. Achieving this vision will require addressing a
number of challenges, including the need for interoperability (see Chap-
ter 6), supportive care processes (see Chapter 9), governance, the building
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CAPTURING OPPPORTUNITIES 115
of trust among clinicians and patients, and patient and public engagement
(see Chapter 7) (IOM, 2011).
Improved connectivity increases patients’ access to clinical knowledge—
from guidelines, to clinical research results, to peer support—and may im-
prove their engagement in their care. The fact that 80 percent of Internet
users now look for health information online, making this the third most
popular Internet activity, demonstrates that individuals are interested in
obtaining more health care information (Fox, 2011a,b). Patients also are
increasingly interested in finding information that is customized to their
particular circumstances and that relates to the experiences of similar pa-
tients (Fox, 2011b).
Likewise, these technologies can help clinicians access clinical evidence,
as well as additional information about their patients. Several examples
exist of initiatives, such as the National Library of Medicine’s MedlinePlus
Connect and Kaiser Permanente’s Clinical Library, aimed at seamlessly
inte rating clinical information with an electronic medical record. Evidence
g
indicates that clinicians already have started to take advantage of these
BOX 4-2
Gleaning Real-Time Insights from Clinical Data
Although there has been an increase in the clinical knowledge being pro-
duced (see Chapter 2), the necessary evidence is lacking in many areas. How-
ever, the increased use of electronic medical records provides an opportunity to
expand the evidence base on which clinicians can draw, especially in the absence
of published data. For example, a group of pediatricians was treating a 13-year-
old girl with systemic lupus erythematosus (SLE). Her autoimmune disease was
complicated by conditions that put her at risk for blood clots, and her physicians
considered the administration of an anticoagulant as a preventive measure. How-
ever, the physicians could not find any evidence (either peer-reviewed literature
or expert opinion) pertaining to the patient’s situation. Given the need to make a
decision quickly, they reviewed the medical records from their institution, collating
the records of 98 other pediatric SLE cases handled by their division in the past
5 years. Based on these data, they conducted a cohort review and ascertained
that children with similar complicating conditions had been more likely to develop
blood clots. They then recommended anticoagulant use within 24 hours of the
patient’s admission. The patient did not develop blood clots or experience any
anticoagulant-related complications. Although this form of data review does not
eliminate more extensive clinical research protocols, the data in the electronic
medical records allowed a real-time clinical decision to be made based on the best
available data, an approach that holds promise for larger-scale use.
SOURCE: Frankovich et al., 2011.
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116 BEST CARE AT LOWER COST
types of resources. In a 2010 survey, 86 percent of physicians reported us-
ing the Internet to gather health, medical, or prescription drug information
(Dolan, 2010). Moreover, new digital data systems can automatically apply
clinical knowledge to patient situations and flag potential problems. For
example, computerized physician order entry (CPOE) systems can highlight
patients’ allergies to medications or potential interactions between different
prescriptions, as well as ensure that medications are delivered more reliably.
Although there are benefits and drawbacks to any technology, studies have
found that using such electronic systems can potentially improve safety.
One study found a 41 percent reduction in potential adverse drug events
following the implementation of a CPOE system, while another found that
overall medication error rates dropped by 81 percent (Bates et al., 1998,
1999; Potts et al., 2004). Further improvements may be seen with the use
of new computational designs, such as the IBM Watson system, which can
review large numbers of journal articles, clinical trials, guidelines, and med-
ical records to apply the best evidence to a specific patient care situation.
Digital technologies also provide a paradigm for managing chronic
diseases. Remote monitoring, such as devices that monitor heart condi-
tions and blood sugar levels, can feed data in near real time to electronic
health record systems (Manyika et al., 2011). With these technologies, for
example, diabetics could monitor changes in their blood sugar after eating
different foods and after different levels of exercise, giving them greater
control over their condition. Additionally, at each consecutive appointment
their provider could see blood sugar data for every day since their previous
appointment, giving the provider greater ability to spot trends and precisely
fine-tune medications.
On another front, increases in computing power allow for the use of
advanced statistical analysis, simulation, and modeling. These new statisti-
cal techniques can help segment results for different populations, as well as
highlight the impact of different interventions on population health (Berry
et al., 2006). Advanced analysis, simulation, and modeling techniques may
also allow for more sophisticated population-level planning and policy de-
velopment. In addition, the growth in computational power makes possible
simulation models that can replicate physiological pathways and disease
states (Eddy and Schlessinger, 2003; Stern et al., 2008). These models can
then be used to simulate clinical trials and tailor clinical guidelines to a
patient’s particular situation and biology (Eddy et al., 2011). As computa-
tional power increases, the potential applications of these simulation and
modeling tools will continue to advance.
Conclusion 4-1: Advances in computing, information science,
and connectivity can improve patient-clinician communication,
point-of-care guidance, the capture of experience, population
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CAPTURING OPPPORTUNITIES 117
surveillance, planning and evaluation, and the generation of real-
time knowledge—features of a continuously learning health care
system.
Related findings:
• Computing capacity is improving rapidly, enabling large-scale data
analysis and improved care. Over the past three decades, computer
processing speed has grown by an average rate of 60 percent per
year, and the capacity to share information across telecommunica-
tions networks has grown by an average of 30 percent per year.
• The digital infrastructure for routine health care is developing rap-
idly. Projections are for 90 percent of physicians to have access to
fully operational electronic health records by 2019, up from 34-35
percent in 2011.
• Digital capacity to provide electronic decision support prompts
at the point of choice holds promise for transforming the safety
and effectiveness of care. One study found that implementation
of a computerized physician order entry (CPOE) system reduced
potential adverse drug events by 41 percent.
• Developing digital communication capacity opens up the possibil-
ity of rapidly and seamlessly connecting researchers, patients, and
providers. The number of Americans with access to the Internet
grew from 14 percent in 1995 to almost 80 percent in 2011, and
by 2020 there will be 10 billion mobile Internet-connected devices
in use.
• Web-based health information holds considerable promise for in-
forming patient decisions. Fully 80 percent of Internet users now
look for health information online, making this the third most
popular Internet activity.
LESSONS IN CONTINUOUS IMPROVEMENT
FROM OTHER INDUSTRIES
Over the past several decades, many industries have developed new
methods to improve safety, reliability, quality, and value. Several organi-
zations have learned how to manage and analyze large volumes of infor-
mation; how to coordinate their workers (numbering in the hundreds or
thousands) to create products or services with consistent quality; and how
to ensure reliable performance, even under conditions of high risk. Several
of these methods could be adapted to health care to improve the system’s
performance. In such adaptation, it is important to consider unique aspects
of health care, such as patient diversity and the technical complexity of
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modern medicine, that may limit the methods’ applicability, as well as the
many factors that could affect their implementation. A discussion of the
factors that influence the diffusion of innovation, including characteristics
of the discovery, characteristics of the potential adopter, and environmental
factors, can be found in Chapter 6.
Lessons for Enhancing Safety
The IOM publication To Err Is Human: Building a Safer Health System
highlights several practices from other industries that health care practitio-
ners could adopt to improve the safety of care (IOM, 1999). In particular,
the health care system has opportunities to leverage the knowledge gained
by industries that also confront high risk and complexity. Several of these
industries have developed methods for substantially reducing the number
of accidents and effectively mitigating human error.
One high-risk industry that has made substantial progress in safety is
aviation. Improving mechanical components and ensuring that redundan-
cies exist resulted in a sharp decline in aviation accidents. Even after these
improvements, however, a residual level of accidents remained. Further
improvement in the accident rate required addressing human factors. The
industry adopted advanced safety measures centered on the assumptions
that human error is inevitable and that systems must be designed to cor-
rect for individual mistakes (Nance, 2011; Wiegmann and Shappell, 2001).
As a result, the safety of commuter air travel has improved dramatically.
Domestic commercial commuter airlines reported 2.1 fatalities per 100,000
aircraft departures in 1980 and zero fatalities from 2007 to 2010 (Bureau
of Transportation Statistics, 2011).
Industries that manage complex risks, such as aviation and nuclear
power, operate on the assumption that accidents can be prevented through
good organizational design and management. These industries are charac-
terized by a commitment to safety, standard work processes, and a strong
organizational culture for continuous learning (IOM, 1999). For example,
the culture of these organizations encourages workers to search routinely
for environmental factors or processes that could cause failure. Uncovering
these safety concerns as a matter of common practice can allow the organi-
zation to address problems at a stage when they are easily fixed and before
they have led to an accident (Chassin and Loeb, 2011).
Efforts to introduce safety practices from other high-risk industries into
health care have yielded positive results for patient safety. One initiative, for
example, introduced several methods drawn from aviation, such as check-
lists and a focus on teamwork and communication, to address catheter-
related bloodstream infections. These methods eliminated such infections
in the intensive care units of most hospitals and resulted in an 80 percent
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CAPTURING OPPPORTUNITIES 119
decrease in infections per catheter-day (Pronovost et al., 2006, 2009). The
checklist concept has been diffused through the World Health Organiza-
tion’s Surgical Safety Checklist. Implementing this checklist has reduced
fatalities and surgical complications by approximately one-third globally
(Haynes et al., 2009). In another example, Great Ormond Street Hospital
for Children drew on the pit stop techniques of the Ferrari Formula One
race car team to redesign several aspects of its process for handoff from
cardiac surgery to intensive care unit, yielding a 50 percent reduction in
error rates (Catchpole et al., 2007). While not all industry safety methods
will be effective in a health care setting, these examples illustrate the po-
tential for practices pioneered in other industries to improve patient safety
when adapted to a health care environment (Lewis et al., 2011). Chapter
9 explores additional lessons for managing errors in terms of reporting,
organizational culture, and mitigation of impacts.
Lessons for Improving Quality and Value
Other potential lessons for health care come from commercial strategies
for managing and improving the quality and value of goods and services
(Hammer, 2004; Kenney, 2008). These strategies, including lean, Six Sigma,
and others, introduce methods for coordinating complex work across di-
verse organizations, identifying existing and potential problems, and ad-
dressing those problems systematically (Chassin and Loeb, 2011; Kaplan
et al., 2010). All of these strategies imply that the goal should not be to
make the system work perfectly immediately, but to establish a process of
gradual improvement (Young et al., 2004).
One notable strategy for improvement is the Toyota production sys-
tem (Bohmer, 2010; Kenney, 2011). Under this system and related strate-
gies, work is viewed as a series of ongoing experiments that immediately
reveal problems. First, each worker’s tasks are broken down into highly
regimented sequences of steps. These steps make clear when workers are
deviating from specifications and help both workers and their supervisors
monitor adherence to the work process. Second, connections and commu-
nications among workers and between workers and outside suppliers and
customers are standardized. Each communication unambiguously states
the expected result of the request, the person or people responsible, and
the time within which the request will be met. The third step of Toyota’s
production system is to create simple, defined workflows for the products,
services, and help requests that make up the company’s production lines.
These workflows deliberately and systematically link sets of tasks and com-
munications together, thereby reducing ambiguities. When ambiguities do
arise, the fourth and final step of Toyota’s production system is to teach
workers how to address them, requiring that changes to workflows be in
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accordance with the scientific method, guided by a teacher, and made at the
lowest possible level of the organization. To meet this requirement, Toyota
trains its workers to frame problems and to formulate and test solutions.
In this way, the organization fosters a learning environment in which work-
ers at all levels are invested in identifying the root cause of problems and
developing practical, implementable solutions (Spear and Bowen, 1999).
Additional methods that have shown success in improving quality come
from the fields of systems engineering, industrial engineering, and opera-
tions research. Major corporations, from Wal-Mart to Boeing, could not
operate their complex organizations without extensive use of engineering
tools for the design, analysis, and control of complex production and dis-
tribution systems. These tools help companies coordinate deliveries from
suppliers and manage complex production across multiple sites, and allow
production to improve continuously. Several of these tools, including statis-
tical process controls, supply chain management, modeling, and simulation,
could be applied to improve health care processes (Agwunobi and London,
2009; IOM, 2005; IOM and NAE, 2011).
Initial results from the application of these methods to health care set-
tings have been positive. For example, one hospital that applied the lessons
of queuing theory and variability methodology was able to smooth the flow
of patients, thereby increasing its surgical volume by 7 percent annually
for 2 years without increasing staff or adding beds, while simultaneously
improving the quality of care (Litvak and Bisognano, 2011). Similarly, a
pharmacy unit at a large hospital applied production system methods to
streamline its work. By undertaking systematic problem solving, the unit
not only reduced the time spent searching for medications by 60 percent
and the number of times medications were out of stock by 85 percent, but
also substantially decreased the amount of medication that was spoiled or
wasted (Spear, 2005).
Conclusion 4-2: Systematic, evidence-based process improvement
methods applied in various sectors to achieve often striking results
in safety, quality, reliability, and value can be similarly transforma-
tive for health care.
Related findings:
• Industries that regularly confront high risk and complexity have
successfully transformed performance. For example, domestic com-
mercial commuter airlines reported 2.1 fatalities per 100,000 air-
craft departures in 1980 and zero fatalities from 2007 to 2010.
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CAPTURING OPPPORTUNITIES 121
• The introduction of safety practices from high-risk industries into
health care has already improved patient safety. In one study,
the use of checklists inspired by the aviation industry eliminated
catheter-related bloodstream infections in the intensive care units of
most hospitals in the study and resulted in an 80 percent decrease
in infections per catheter-day.
• Commercial strategies for improving the reliability of the delivery
of goods and services have potential applicability to health care. A
pharmacy unit, for example, undertook systematic problem solving
and reduced the time spent searching for medications by 60 percent
and the frequency of out-of-stock medications by 85 percent.
OPPORTUNITIES FROM A CHANGING
HEALTH POLICY LANDSCAPE
Across the United States, there is growing momentum to implement
novel partnerships and collaborations that test delivery system innovations
aimed at high-value, high-quality health care. In many settings, federal,
state, and local governments; public and private insurers; health care deliv-
ery organizations; employers; patients and consumers; and others are work-
ing together to pursue shared interests of controlling health care costs and
improving health care quality. The convergence of these novel partnerships,
a changing health care landscape, and investments in needed knowledge
infrastructure establishes a potentially unique opportunity in the nation’s
history to achieve a learning health care system.
Many states have been at the forefront of initiatives to expand health
insurance coverage, improve care quality and value, and advance the overall
health of their residents. Massachusetts, the first state to enact a plan to
achieve universal health insurance coverage for its residents, achieved a 98
percent coverage rate for its population following the passage of its 2006
health care reform law (Raymond, 2011). To extend coverage to previously
uninsured state residents, the state established the Commonwealth Care
Health Insurance Program (CommCare), a publicly funded health insurance
program for low-income adults; Commonwealth Choice (CommChoice),
a program that assists those individuals who are ineligible for CommCare
but do not have access to employer-sponsored insurance; and the Connec-
tor, which provides an exchange that residents can use to purchase insur-
ance plans. The Quality and Cost Council, established as a provision of
the health care reform law, was charged with developing and coordinating
quality improvement goals, with the objectives of lowering costs and im-
proving care quality, and further legislative action on these goals is likely
(McDonough et al., 2008; Raymond, 2011; Song and Landon, 2012). At
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the same time, private initiatives are being established to focus on health
care payment and value.
Utah is another state that has established a health insurance exchange,
which was created by legislation in 2009. The exchange supplies a tech-
nological foundation for providing information on health insurance and
comparing different plans, as well as a standardized electronic application
and enrollment system for purchasing insurance. One question that states
consider when establishing exchanges is the extent to which they prefer to
engage actively in the market, such as by setting minimum quality standards
for plans, limiting variations in plan offerings, or including a bidding pro-
cess. Some states have taken a more active role, while others have preferred
to take a more market-oriented position (Corlette et al., 2011).
Vermont also has initiated a number of health care reforms, simultane-
ously establishing its own Vermont Health Benefit Exchange and beginning
the transition to a single-payer system (State of Vermont, 2011). These
reforms build on Vermont’s 2006 health care reform legislation, which
established the Catamount Health Plan to provide an insurance option for
uninsured individuals with incomes below 300 percent of the poverty level,
and developed initiatives to create a statewide, integrated electronic health
information infrastructure (Kaiser Family Foundation, 2007). In parallel
with coverage- and insurance-oriented reforms, Vermont passed legislation
to implement delivery system reforms, including patient-centered medi-
cal homes, community-based support teams, coordinated transitions with
medical and nonmedical services, multi-insurer payment reforms that align
incentives with health care goals, a statewide health information network,
and the data systems necessary to support knowledge generation and a
learning health care system (Bielaszka-DuVernay, 2011).
Potential opportunities also lie in leveraging changes in recent national
health care legislation. Recent legislation includes initiatives related to three
objectives of particular relevance for a learning health care system: expand-
ing clinical research knowledge, increasing digital capacity, and improving
the value achieved from health care. While this legislation provides one
potential path for advancing these three objectives, several other paths are
possible. Regardless of the path followed, however, each of these objectives
is critical for advancing a learning system.
Seeking to increase the level of clinical effectiveness research, the Pa-
tient Protection and Affordable Care Act (ACA) of 2010 established the
Patient-Centered Outcomes Research Institute (PCORI), an independent,
not-for-profit, private research organization. To accomplish its mission, the
organization will support patient-centered outcomes research that compares
the benefits and risks of different interventions, therapies, or delivery sys-
tem initiatives. In support of these priorities, funding of $210 million has
been provided for the first 3 years, rising to $500 million annually from
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2014 to 2019 (Washington and Lipstein, 2011). While it is premature to
judge PCORI’s work, increasing the level of knowledge about comparative
effectiveness is critical to building a learning system.
To promote the adoption of health information technologies, the Health
Information Technology for Economic and Clinical Health (HITECH) Act,
part of the American Recovery and Reinvestment Act, formalized the Of-
fice of the National Coordinator for Health Information Technology in
the Department of Health and Human Services and provided substantial
financial incentives for health care providers and hospitals to adopt and use
electronic health records. Resources devoted to those programs include $2
billion for programs by the National Coordinator, as well as almost $30
billion in Medicare and Medicaid incentive payments to physicians and hos-
pitals (Blumenthal, 2009; Buntin et al., 2010). Notably, the act encourages
not only the adoption but also the meaningful use of such record systems,
which is projected to yield savings of $93 billion between 2011 and 2019
(Congressional Budget Office, 2009).
A considerable portion of the ACA is focused on value initiatives. The
law established pilot programs to test bundled payments, created value-
based purchasing for several common conditions, and reduced Medicare
payments to hospitals with high rates of avoidable readmissions and health
care–acquired conditions (see Appendix C). One prominent program de-
signed to improve value is the development of accountable care organiza-
tions (ACOs). ACOs are voluntary groups of physicians, hospitals, and
other health care providers that assume responsibility for specified patient
populations. As noted in the final October 20, 2011, regulation for the
Medicare Shared Savings Plan, ACOs are responsible for delivering high-
quality care as defined by specified quality measures, and share with Medi-
care any savings that result from better care coordination (Berwick, 2011).
These programs are intended to spread the concept of coordinated care
beyond Medicare to all payer arrangements.
Another ACA provision focused on value is the creation of the Center
for Medicare & Medicaid Innovation. The Center is charged with testing
and evaluating innovative payment and delivery system models that could
improve care quality while slowing cost growth in Medicare, Medicaid, and
the Children’s Health Insurance Program (CHIP). While the ACA outlines
approximately 20 areas the Center could consider at the outset, it gives the
Center substantial flexibility to explore different models. Successful mod-
els may be extended to a larger patient population with approval by the
Secretary of Health and Human Services. The Center’s ultimate goal is to
promote the rapid development and diffusion of innovative payment and
delivery models that can improve quality and value (Guterman et al., 2010).
In its first year, the Center introduced 16 initiatives and stimulated numer-
ous other activities (Center for Medicare & Medicaid Innovation, 2012).
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Passage of legislation alone will not lead to fundamental change in the
health care enterprise. The legislation will have to be carefully implemented
to better orient health care toward science and value. These reforms are an
ongoing process and will evolve over time in response to changing national
conditions.
Federal and state government actions are complemented by multiple
initiatives on the part of employers, specialty societies, patient and con-
sumer groups, health care delivery organizations, health plans, and others
seeking to improve the health care system:
• In 2012, the American Board of Internal Medicine (ABIM), along
with nine other specialty societies, released its Choosing Wisely
campaign, focused on reducing overuse of specific medical tests or
procedures in different health care specialties (Cassel and Guest,
2012). The first stage of the campaign, piloted by the National
Physicians Alliance, developed a list for use by primary care prac-
titioners to promote the more effective use of health care resources
(Good Stewardship Working Group, 2011); current initiatives are
working to expand this list to additional medical specialties.
• Drawing on their experiences in improving outcomes and lowering
costs through initiatives in their own institutions, a group of health
care delivery leaders has developed “A CEO Checklist for High-
Value Health Care,” which describes system-change approaches
that can be adopted in most health care settings to improve out-
comes and reduce costs of care (Cosgrove et al., 2012) (Appendix
B).
• The Patient-Centered Primary Care Collaborative is an initiative
that seeks to spread patient-centered medical homes.
• Other innovative approaches are being explored by partnerships
among health systems, employers, payers, and other key stakehold-
ers. In 2004, for example, Virginia Mason negotiated an arrange-
ment with Aetna by which Virginia Mason production system’s
lean methods would be used to provide care more efficiently in
exchange for Aetna’s providing analyses of claims data to support
the endeavor. Four major employers in the Seattle market—Costco,
Starbucks, King Country, and Nordstrom—also participated, each
choosing a condition prevalent among their workforces on which
Virginia Mason should concentrate its efforts to deliver high-value
care (Ginsburg et al., 2007; Pham et al., 2007).
• In Wisconsin, two multistakeholder groups—the Wisconsin Col-
laborative for Healthcare Quality and the Wisconsin Health Infor-
mation Organization—work to collect, measure, and report health
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CAPTURING OPPPORTUNITIES 125
care quality and efficiency data with the aim of encouraging value-
based payment (Toussaint et al., 2011).
• All-payer databases are being established in various states around
the country.
• Community-based initiatives include the Aligning Forces for Qual-
ity program and the Chartered Value Exchange project.
As these examples illustrate, sustained transformation will require ini-
tiatives and partnerships that nurture continuous learning and promote
improvement and innovation.
Conclusion 4-3: Innovative public- and private-sector health system
improvement initiatives, if adopted broadly, could support many
elements of the transformation necessary to achieve a continuously
learning health care system.
Related findings:
• Many states have undertaken productive health system improve-
ment initiatives. States ranging from Massachusetts to Utah to
Vermont have introduced initiatives aimed at expanding health
insurance coverage, improving care quality and value, and advanc-
ing the overall health of their residents.
• Incentives for the adoption of health information technology may
promote learning and yield substantial savings. The Health Infor-
mation Technology for Economic and Clinical Health (HITECH)
Act provides $30 billion in Medicare and Medicaid incentive pay-
ments for the meaningful use of health information technology by
clinicians and hospitals, which has been estimated to yield savings
of $93 billion between 2011 and 2019.
• Efforts to encourage innovative payment and delivery models may
help steward the transition to a continuously learning system. The
Center for Medicare & Medicaid Innovation, created to promote the
rapid development and diffusion of innovation that could improve
the effectiveness and efficiency of care, has stimulated activities be-
yond the 16 initiatives introduced in its first year.
• Increased comparative effectiveness research may yield insights
that can help clinicians and patients make better-informed health
care decisions. The Patient-Centered Outcomes Research Institute
(PCORI), created to increase the quality and quantity of informa-
tion about what works best for whom, will receive annual funding
of $500 million from 2014 through 2019.
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126 BEST CARE AT LOWER COST
• Partnerships and collaborations are increasingly identifying and
testing opportunities for improving care delivery. Multiple ini-
tiatives by employers, specialty societies, patient and consumer
groups, health care delivery organizations, health plans, and others
are aimed at improving the health care system. These initiatives
include the American Board of Internal Medicine (ABIM) Choos-
ing Wisely campaign, the Good Stewardship project, the Patient-
Centered Primary Care Collaborative, and others.
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