Preamble

The United States appears to be on the verge of instituting significant reform of the financing and organization of personal health care services. President Clinton is committed to submitting a proposal for reform in the near future, and many alternative proposals have already been put forward. These proposals vary widely in philosophy and mechanics, even as they seek the common objectives of universal access to affordable care and better control of escalating costs.

Although many Institute members are—as individuals—closely associated with various of the current reform proposals, the Institute of Medicine (IOM) has not developed its own comprehensive plan for reform. The judgments needed to formulate such a comprehensive plan involve specific trade-offs among social and economic values that are more appropriately addressed by the political process. We believe, however, that the IOM can make a different kind of contribution to the debate by helping to establish a framework for assessing reform proposals and their implementation. This framework should clarify objectives, identify issues that proposals should address, distinguish between what should be expected and achieved in the short versus the long term, and direct attention to important but sometimes neglected questions about the organization and provision of health services.

To this end, the IOM appointed a subcommittee of its Board on Health Care Services to develop a brief report that would be useful to all who are developing or assessing options for reform and that would apply to most of the likely reform scenarios. In developing this report, the committee has drawn where possible on the prior work of the IOM,



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Assessing Health Care Reform Preamble The United States appears to be on the verge of instituting significant reform of the financing and organization of personal health care services. President Clinton is committed to submitting a proposal for reform in the near future, and many alternative proposals have already been put forward. These proposals vary widely in philosophy and mechanics, even as they seek the common objectives of universal access to affordable care and better control of escalating costs. Although many Institute members are—as individuals—closely associated with various of the current reform proposals, the Institute of Medicine (IOM) has not developed its own comprehensive plan for reform. The judgments needed to formulate such a comprehensive plan involve specific trade-offs among social and economic values that are more appropriately addressed by the political process. We believe, however, that the IOM can make a different kind of contribution to the debate by helping to establish a framework for assessing reform proposals and their implementation. This framework should clarify objectives, identify issues that proposals should address, distinguish between what should be expected and achieved in the short versus the long term, and direct attention to important but sometimes neglected questions about the organization and provision of health services. To this end, the IOM appointed a subcommittee of its Board on Health Care Services to develop a brief report that would be useful to all who are developing or assessing options for reform and that would apply to most of the likely reform scenarios. In developing this report, the committee has drawn where possible on the prior work of the IOM,

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Assessing Health Care Reform whose independent committees of experts have addressed many relevant topics in previous reports. Although these earlier studies do not provide a "grand plan" for reform, they do yield a body of considered analyses and recommendations that can help shape particular elements of such a plan. The committee has, in addition, gone beyond existing IOM reports to provide its own judgments and recommendations on some issues that it considers essential to achieving the goals outlined below. In very broad terms, the committee identified fundamental goals for health care reform as a starting point for its report. These goals are to: maintain and improve health and well-being; make basic health coverage universal; and encourage the efficient use of limited resources. Furthermore, reforms should honor, whenever possible, the American preference for diversity and personal choice in arrangements for health services. Reform proposals should also acknowledge and emphasize the responsibility and accountability of individuals, health professionals, and society as a whole for improving health and well-being. Health and well-being depend on many factors in addition to health care coverage and services. Because environmental, educational, and other activities also enable people to lead healthier lives, society increasingly has come to understand that reforms should seek to improve what the health care system achieves while minimizing the diversion of resources from these other beneficial activities. Although there will be pressure on policymakers to look for quick results, significant progress on the goals identified above will require patience and commitment over many years. It is critical that reforms be structured and implemented in ways that make possible systematic learning and program revisions based on experience. The arrangements for health care are so complex and the implications of major reform so profound that it is unrealistic to act as if we will know all of the answers when implementation of a plan is begun. Many aspects of reform will evolve over a period of years. This evolution will, in fact, place a premium, first, on having good information on which to base an evaluation of results and, second, on the flexibility to respond to the

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Assessing Health Care Reform evaluation and modify programs—thus our emphasis in this report on the importance of good data about health and health care. In addition to building on strong clinical and health systems information, successful reform will also require sensitivity to the individual and social values that underlie our approaches to health and health care. In developing a framework for assessing health care reform, the committee has focused on five topics: extending access to health care; containing costs and improving value; assuring the quality of care; financing reform; and improving the infrastructure for effective change. The first three topics relate closely to the fundamental goals for health care reform that the committee identified above. The last two topics address essential means for achieving those goals. The committee believes that any plan or proposal intended to bring about significant movement toward the goals should address each area, although the mix of responses and the trade-offs among objectives will vary according to the values of the decisionmakers. The infrastructure component of this framework is, in the committee's view, particularly important. Many key decisionmakers will not be health care experts and may not fully appreciate why reform proposals should recognize the crucial links between policies to expand access, control costs, and assure quality, and policies to improve system governance and administration, knowledge development and its application, human and physical capital, and community-focused public health programs. These infrastructure improvements are essential to reform over the long term and can proceed in parallel with other aspects of reform; the committee would not want infrastructure needs to be used as an excuse to delay health care reform. The committee has not addressed the complicated issues of long-term institutional or home care, not because these issues are unimportant but because they cannot be treated adequately in this short report. The financing and provision of long-term care deals, in particular, with assistance in the activities of daily living, and therefore requires attention

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Assessing Health Care Reform to related issues of housing, social services, and transportation, as well as income support policies, estate preservation, and encouragement of continued voluntary efforts by spouses, other relatives, and friends. The burgeoning costs of the Medicaid program are heavily affected by long-term care expenses. The committee hopes that policymakers will also be able to focus on these concerns while health care reform for acute care services is being debated and implemented. Finally, in this short document, the committee has focused on the kinds of issues that will particularly engage central policymakers in a direction-setting role. It has tried, nonetheless, to reflect the reality that health care is provided in thousands of local communities by tens of thousands of practitioners, administrators, and others working with real patients, families, and problems. The committee urges those developing reform proposals and making policy decisions to vigorously and continuously seek the experience and insights of those who work daily to maintain health, manage illness, and sustain dignity under circumstances that range from commonplace to desperate. PREAMBLE Key Statements The fundamental goals for health care reform are to: maintain and improve health and well-being; make basic health coverage universal; and encourage the efficient use of limited resources.