THE LEARNING HEALTH SYSTEM SERIES
THE HEALTHCARE IMPERATIVE
Lowering Costs and Improving Outcomes
Workshop Series Summary
Pierre L. Yong, Robert S. Saunders, and LeighAnne Olsen, Editors
INSTITUTE OF MEDICINE
OF THE NATIONAL ACADEMIES
THE NATIONAL ACADEMIES PRESS
THE NATIONAL ACADEMIES PRESS
500 Fifth Street, N.W.
Washington, DC 20001
NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.
This project was supported by the Peter G. Peterson Foundation. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the organizations or agencies that provided support for this project.
International Standard Book Number-13: 978-0-309-14433-9
International Standard Book Number-10: 0-309-14433-7
Additional copies of this report are available from the
National Academies Press,
500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu.
For more information about the Institute of Medicine, visit the IOM home page at: www.iom.edu.
Copyright 2010 by the National Academy of Sciences. All rights reserved.
Printed in the United States of America
The serpent has been a symbol of long life, healing, and knowledge among almost all cultures and religions since the beginning of recorded history. The serpent adopted as a logotype by the Institute of Medicine is a relief carving from ancient Greece, now held by the Staatliche Museen in Berlin.
Suggested citation: IOM (Institute of Medicine). 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press.
THE NATIONAL ACADEMIES
Advisers to the Nation on Science, Engineering, and Medicine
The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences.
The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering.
The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine.
The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council.
ROUNDTABLE ON VALUE & SCIENCE-DRIVEN HEALTH CARE1
Denis A. Cortese (Chair), Emeritus President and Chief Executive Officer,
Donald Berwick, Administrator,
Centers for Medicare & Medicaid Services (ex officio)
David Blumenthal, National Coordinator,
Office of the National Coordinator for Health IT (ex officio)
Bruce G. Bodaken, Chairman, President, and Chief Executive Officer,
Blue Shield of California
David R. Brennan, Chief Executive Officer,
Paul Chew, Chief Science Officer and CMO,
sanofi-aventis U.S., Inc.
Carolyn M. Clancy, Director,
Agency for Healthcare Research and Quality (ex officio)
Michael J. Critelli, Former Executive Chairman,
Pitney Bowes, Inc.
Helen Darling, President,
National Business Group on Health
Thomas R. Frieden, Director,
Centers for Disease Control and Prevention (designee: Chesley Richards) (ex officio)
Gary L. Gottlieb, President and CEO,
Partners HealthCare System
James A. Guest, President,
George C. Halvorson, Chairman and Chief Executive Officer,
Margaret A. Hamburg, Commissioner,
Food and Drug Administration (ex officio)
Carmen Hooker Odom, President,
Milbank Memorial Fund
Ardis Hoven, Professor of Medicine,
University of Kentucky; Chair-elect, American Medical Association
Brent James, Chief Quality Officer and Executive Director,
Institute for Health Care Delivery Research, Intermountain Healthcare
Michael M. E. Johns, Chancellor,
Craig Jones, Director,
Vermont Blueprint for Health
Cato T. Laurencin, Vice President for Health Affairs,
Dean of the School of Medicine, University of Connecticut
Stephen P. MacMillan, President and Chief Executive Officer,
Mark B. McClellan, Director,
Engelberg Center for Healthcare Reform, The Brookings Institution
Sheri S. McCoy, Worldwide Chairman,
Johnson & Johnson Pharmaceuticals Group
Elizabeth G. Nabel, President,
Brigham and Women’s Hospital
Mary D. Naylor, Professor and Director of Center for Transitions in Health,
University of Pennsylvania
Peter Neupert, Corporate Vice President,
Health Solutions Group, Microsoft Corporation
Nancy H. Nielsen, Past President,
American Medical Association
William D. Novelli, Former CEO,
Jonathan B. Perlin, Chief Medical Officer and President,
Clinical Services, HCA, Inc.
Robert A. Petzel, Under Secretary,
Veterans Health Administration (ex officio)
Richard Platt, Professor and Chair,
Harvard Medical School and Harvard Pilgrim Health Care
John C. Rother, Group Executive Officer,
John W. Rowe, Professor,
Mailman School of Public Health, Columbia University
Susan Shurin, Acting Director,
National Heart, Lung, and Blood Institute (ex officio)
Mark D. Smith, President and CEO,
California HealthCare Foundation
George P. Taylor, Assistant Secretary for Health Affairs (Acting),
Department of Defense (designee: Michael Dinneen) (ex officio)
Reed D. Tuckson, Executive VP and Chief of Medical Affairs,
Frances M. Visco, President,
National Breast Cancer Coalition
Workshop Planning Committee
Arnold Milstein (Chair),
Pacific Business Group on Health
Johnson & Johnson
Robert S. Galvin,
Global Healthcare/General Electric
Paul B. Ginsburg,
Center for Studying Health System Change
McKinsey Global Institute
Medicare Payment Advisory Commission
Nancy H. Nielsen,
American Medical Association
Steven D. Pearson,
Institute for Clinical and Economic Review
Reed V. Tuckson,
Christie Bell, Financial Associate
Patrick Burke, Financial Associate (through December 2009)
Jane Fredell, Program Assistant (through September 2009)
China Dickerson, Program Assistant (through November 2009)
Chanda Ijames, Program Assistant (through December 2009)
J. Michael McGinnis, Senior Scholar and Executive Director
Claudia Grossmann, Program Officer
LeighAnne Olsen, Program Officer (through June 2010)
Brian Powers, Program Assistant
Robert Saunders, Program Officer
Pierre L. Yong, Program Officer (through May 2010)
Kate Vasconi, Senior Program Assistant
Catherine Zweig, Senior Program Assistant (through June 2010)
This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the process. We wish to thank the following individuals for their review of this report:
Helen Darling, National Business Group on Health
Robert S. Mecklenberg, Virginia Mason Medical Center
Sheila Smith, Office of the Actuary
Sean Tunis, Center for Medical Technology Policy
Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the final draft of the report before its release. The review of this report was overseen by Floyd Bloom. Appointed by the National Research Council and the Institute of Medicine, he was responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the editors and the institution.
Institute of Medicine
Roundtable on Value & Science-Driven Health Care1
Charter and Vision Statement
The Institute of Medicine’s Roundtable on Value & Science-Driven Health Care has been convened to help transform the way evidence on clinical effectiveness is generated and used to improve health and health care. Participants have set a goal that, by the year 2020, 90 percent of clinical decisions will be supported by accurate, timely, and up-to-date clinical information, and will reflect the best available evidence. Roundtable members will work with their colleagues to identify the issues not being adequately addressed, the nature of the barriers and possible solutions, and the priorities for action, and will marshal the resources of the sectors represented on the Roundtable to work for sustained public-private cooperation for change.
The Institute of Medicine’s Roundtable on Value & Science-Driven Health Care has been convened to help transform the way evidence on clinical effectiveness is generated and used to improve health and health care. We seek the development of a learning health 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.
Vision: Our vision is for a healthcare system that draws on the best evidence to provide the care most appropriate to each patient, emphasizes prevention and health promotion, delivers the most value, adds to learning throughout the delivery of care, and leads to improvements in the nation’s health.
Goal: By the year 2020, 90 percent of clinical decisions will be supported by accurate, timely, and up-to-date clinical information, and will reflect the best available evidence. We feel that this presents a tangible focus for progress toward our vision, that Americans ought to expect at least this level of performance, that it should be feasible with existing resources and emerging tools, and that measures can be developed to track and stimulate progress.
Context: As unprecedented developments in the diagnosis, treatment, and long-term management of disease bring Americans closer than ever to the promise of personalized health care, we are faced with similarly unprecedented challenges to identify and deliver the care most appropriate for individual needs and conditions. Care that is important is often not delivered. Care that is delivered is often not important. In part, this is due to our failure to apply the evidence we have about the medical care that is most effective—a failure related to shortfalls in provider knowledge and accountability, inadequate care coordination and support, lack of insurance, poorly aligned payment incen
tives, and misplaced patient expectations. Increasingly, it is also a result of our limited capacity for timely generation of evidence on the relative effectiveness, efficiency, and safety of available and emerging interventions. Improving the value of the return on our healthcare investment is a vital imperative that will require much greater capacity to evaluate high priority clinical interventions, stronger links between clinical research and practice, and reorientation of the incentives to apply new insights. We must quicken our efforts to position evidence development and application as natural outgrowths of clinical care—to foster health care that learns.
Approach: The IOM Roundtable on Value & Science-Driven Health Care serves as a forum to facilitate the collaborative assessment and action around issues central to achieving the vision and goal stated. The challenges are myriad and include issues that must be addressed to improve evidence development, evidence application, and the capacity to advance progress on both dimensions. To address these challenges, as leaders in their fields, Roundtable members will work with their colleagues to identify the issues not being adequately addressed, the nature of the barriers and possible solutions, and the priorities for action, and will marshal the resources of the sectors represented on the Roundtable to work for sustained public-private cooperation for change.
Activities include collaborative exploration of new and expedited approaches to assessing the effectiveness of diagnostic and treatment interventions, better use of the patient care experience to generate evidence on effectiveness, identification of assessment priorities, and communication strategies to enhance provider and patient understanding and support for interventions proven to work best and deliver value in health care.
Core concepts and principles: For the purpose of the Roundtable activities, we define science-driven health care broadly to mean that, to the greatest extent possible, the decisions that shape the health and health care of Americans—by patients, providers, payers, and policymakers alike—will be grounded on a reliable evidence base, will account appropriately for individual variation in patient needs, and will support the generation of new insights on clinical effectiveness. Evidence is generally considered to be information from clinical experience that has met some established test of validity, and the appropriate standard is determined according to the requirements of the intervention and clinical circumstance. Processes that involve the development and use of evidence should be accessible and transparent to all stakeholders.
A common commitment to certain principles and priorities guides the activities of the Roundtable and its members, including the commitment to: the right health care for each person; putting the best evidence into practice; establishing the effectiveness, efficiency, and safety of medical care delivered; building constant measurement into our healthcare investments; the establishment of healthcare data as a public good; shared responsibility distributed equitably across stakeholders, both public and private; collaborative stakeholder involvement in priority setting; transparency in the execution of activities and reporting of results; and subjugation of individual political or stakeholder perspectives in favor of the common good.
Health reform is driven by the needs of the 47 million uninsured in this country and is also propelled by the central issue of cost. Escalating national healthcare expenditures engulf a rapidly enlarging fraction of the federal budget. Businesses pass part of the soaring costs on to their employees in the form of rising health insurance premiums. Families struggle to pay their healthcare bills, and many have delayed seeking necessary and important care.
Since 2006, the Institute of Medicine has assembled the diverse leadership across the health care system—including patient and consumer, provider, manufacturer, payer, research and policy representatives—under the auspices of our Roundtable on Value & Science-Driven Health Care (formerly the Roundtable on Evidence-Based Medicine) to engage the pressing issues confronting the U.S. healthcare delivery system today. Under the guidance of its membership, the Roundtable developed the vision of a learning health system, one in which evidence development is not merely an occasional byproduct of health care, but one in which evidence capture and analysis, as well as its application, is systematically structured as an integral and natural component of the care process. Building on its efforts to enhance the value obtained from health expenditures and with the generous support of the Peter G. Peterson Foundation, the Roundtable convened stakeholders from across the healthcare field in a series of four 2-day meetings, titled The Healthcare Imperative: Lowering Costs and Improving Outcomes. These sessions were devoted to understanding the sources of excess costs in health care, reviewing what is known about ways to reduce the excess, and identifying policy solutions.
This summary highlights the presentations and discussions from these workshops, delving into the major causes of excess spending, waste, and inefficiency in health care; considering the strategies that might reduce per capita health spending in the United States while improving health outcomes and preserving innovation; and exploring the policy options that would facilitate those strategies. The ideas and observations throughout this volume are offered in the belief that health reform, now and in the future, will benefit from identifying actionable options to lower healthcare costs in ways that maximize value.
I would like to extend my personal thanks especially to the Peter G. Peterson Foundation and its President, David Walker, to the Planning Committee assembled for the series, to the Roundtable membership for their continued leadership and commitment to advancing health care in this nation, and to the Roundtable staff for their contributions in coordinating and supporting the meeting series and ongoing Roundtable activities.
Harvey V. Fineberg, M.D., Ph.D.
President, Institute of Medicine
Stimulated by the challenges facing our nation as healthcare expenditures continue to soar and threaten our fiscal future, the four-part workshop series The Healthcare Imperative: Lowering Costs and Improving Outcomes, supported by the Peter G. Peterson Foundation, explored in detail the sources and implications of waste and excess cost in health care, as well as the strategies and policies necessary to address the issues. This volume summarizes the workshops, which were convened in May, July, September, and December of 2009 by the Institute of Medicine (IOM) Roundtable on Value & Science-Driven Health Care (formerly the Roundtable on Evidence-Based Medicine), as part of its Learning Health System workshop series. These meetings offered a forum for the broad spectrum of stakeholders in health to discuss the range of issues pertinent to reducing health spending without compromising health status, quality of care, or valued innovation. The discussion summary and its related presentations reflect the contributions of experts from multiple sectors involved in leadership, policy, practice, and innovation on behalf of better value in health care.
Guided by its membership, the vision of the IOM Roundtable on Value & Science-Driven Health Care is to catalyze the development of a learning health system—a system in which the processes and systems utilized by the healthcare system enable both the natural delivery of best care practices and the real-time generation and application of new evidence. With the support of senior leadership from the country’s key healthcare sectors, the Roundtable has furthered its vision through collaborative initiatives, including public workshops and published proceedings. This workshop series emerged from prior work of the Roundtable on value in health care,
as well as the ongoing dialogue on healthcare reform, and provided a forum for stakeholders to discuss their perspectives and to identify ideas and areas for further consideration.
The contributions of the workshop discussions to better understanding have been conceptual, quantitative, and qualitative. Conceptually, the approach fashioned by the Planning Committee grouped the sources of excess costs in health care into six domains: unnecessary services (volume), services delivered inefficiently, prices that are too high, excessive administrative costs, missed prevention opportunities, and fraud. Except for the last, the sessions organized by the Committee for the first workshop reviewed these domains in detail, and, while much work remains, the workshop presentations have offered a substantially enhanced understanding of the nature and size of the problems in each of those domains. Two things are clear: (1) each is an important contributor to excessive healthcare costs, and (2) the amount of excessive costs incurred from each is tremendous.
In discussions about potential cost control strategies and policy options, key levers for change were identified and considered in the second and third workshops, as vehicles for initiatives of particular policy relevance, including payment transformation, governance streamlining, transparency, knowledge development, care system redesign, and community health capacity. The nature, barriers, and potential impact of the various measures were extensively explored. At the request of the Planning Committee, a fourth workshop was scheduled to focus solely on the Series’ motivating proposition: reducing healthcare costs by 10 percent within 10 years, without compromising health outcomes or valued innovation.
Throughout the progression of the meetings, a number of opportunities and challenges were also identified around which the engagement of stakeholders such as those represented on the Roundtable, might be especially important and facilitative. These issues will be explored through future workshops, commissioned papers, collaborative activities, and public communication efforts.
We are especially indebted to the members of the Planning Committee, which crafted this unusually productive and path-breaking discussion series. The members of this stellar group were: Arnold Milstein (Pacific Business Group on Health, Committee Chair), Kathleen Buto (Johnson & Johnson), Robert S. Galvin (Global Healthcare/General Electric), Paul B. Ginsburg (Center for Studying Health System Change), Eric Jensen (McKinsey Global Institute), James Mathews (Medicare Payment Advisory Commission), Nancy H. Nielsen (American Medical Association), Steven D. Pearson (Institute for Clinical and Economic Review), Gail Shearer (Consumers Union), and Reed V. Tuckson (UnitedHealth Group).
Multiple other individuals and organizations donated their valuable time toward the development of this publication. We naturally also ac-
knowledge and offer strong appreciation for the contributors to this volume, for the care and thought that went into their analyses and presentations, for the ideas and observations they shared at the workshops, and for their contributions to this summary publication. In this respect, we should underscore that this volume contains a collection of individually authored papers and intends to convey only the views and beliefs of those participating in the workshops, not the express opinions of the Roundtable on Value & Science-Driven Health Care, its members, its sponsors, or the Institute of Medicine.
A number of Roundtable staff played instrumental roles in coordinating the workshops and translating the workshop proceedings into this summary, including Pierre L. Yong (the staff officer with primary responsibility), Catherine Zweig, LeighAnne Olsen, Kate Vasconi, Jane Fredell, China Dickerson, Chanda Ijames, Patrick Burke, Christie Bell, and Ruth Strommen. Franklin A. Cruz also contributed substantially to publication development. We would also like to thank Vilija Teel, Jordan Wyndelts, Michele de la Menardiere, and Jackie Turner for helping to coordinate the various aspects of review, production, and publication.
Clearly, successfully addressing the challenges of lowering healthcare expenditures while preserving outcomes and innovation will require significant effort and collaboration. We believe the dialogue emerging from The Healthcare Imperative begins to define the opportunities and options for successfully tackling this challenge, and look forward to continued learning from its insights.
Denis A. Cortese
Chair, Roundtable on Value & Science-Driven Health Care
J. Michael McGinnis
Executive Director, Roundtable on Value & Science-Driven Health Care
Planning Committee Chair
Why Americans Spend More for Health Care,
Saving Money (and Lives),
Regional Insights and U.S. Health Care Savings,
Costs from Inefficient Use of Caregivers,
Getting to High-Performance,
CBO Scoring: Methods and Implications,
Bundled Payments: A Private Payer Perspective,
Medicare and Bundled Payments,
Bundled Payment: Physician Engagement Issues,
Patient Perspective and Payment Reform,
Payment Policies and Medically Complex Patients,
Palliative Care, Access, Quality, and Costs,
Payment and Better Care of Complex Patients,
Care of Patients with Multiple Chronic Conditions,
Profile of System Fragmentation,
Payments to Promote Delivery System Integration,
Payment Reform to Promote Integration and Value,
Health Information Technology to Promote Integration,
Better Use of Healthcare Professionals,
Transparency and Informed Choice,
Administrative Simplification and Payer Harmonization,
Payer Harmonization on the Provider Perspective,
Policies Targeting Payer Harmonization,
Consumer Views of Higher-Value Care,
Insurers, Consumers, and Higher-Value Care,
Policies Shaping Consumer Preferences on Value,
A Look at the Numbers,
Appendixes A-D are not printed in this book. They are available online at http://www.nap.edu/catalog.php?record_id=12750.