Date: Nov. 19, 2002
Contacts: Christine Stencel, Media Relations Officer
Chris Dobbins, Media Relations Assistant
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Bold Initiatives Aim to Solve Key Health Care Problems;
Demonstration Projects Lay Foundation for Systemwide Reform

WASHINGTON -- Computerized health information and records, greater access to health coverage, and medical liability reform are among the areas that offer the greatest potential for improvement to policy-makers looking for ways to mend America's ailing health care system, says a new report from the Institute of Medicine of the National Academies. It outlines five strategic areas in which demonstration projects could test strategies to solve some of the most pressing health care concerns. The proposed projects were developed in response to a request from Tommy Thompson, the secretary of the U.S. Department of Health and Human Services, for ideas to address the mounting problems that threaten to overwhelm America's health care system.

"Given the enormity and complexity of the health system, we think it would be wise to pursue a building-block approach to change through a series of targeted demonstrations," said Gail Warden, president and chief executive officer of the Henry Ford Health System, Detroit, and chair of the committee that wrote the report. "If these projects are implemented as a set, we believe that within five years they could go a long way toward transforming health care in America."

The proposed demonstration areas are information technology development, expanded health insurance coverage, malpractice reform, chronic disease management, and primary care enhancement. Performance measures should be used to gauge success of the initiatives, with the goal of achieving initial improvements in each project area within two years of implementation and significant progress toward reform within five years, the report says. Many of the project ideas build on existing innovations, and all but one -- expansion of health insurance are not expected to require additional funding over the long term after upfront investments.

Information technology development. A critical element underlying all of the proposed demonstration projects, as well as the ability to meaningfully reform the overall health care system, is the need for state-of-the-art information technology in all care settings. The health care sector has languished behind almost all other industries in adopting information technology. Many caregivers still record patient data on paper documents that cannot be easily accessed by other providers in different settings -- or sometimes even the same setting -- which can result in errors and costly duplication of effort. To bridge this technology gap, the report calls for eight to 10 initial projects and 25 second-generation projects to develop computerized information systems, with the goal of virtually eliminating paper-based processes in the demonstrations sites within five years. The federal government must take the lead in setting the uniform data standards that are essential for all the parts of a national infrastructure to work together, the report says.

Computerizing health care will require sizable upfront capital investments. Private-sector health providers should supply resources to support the ongoing collection and exchange of electronic information, and should modify payment policies to cover e-mail consultations and other evolutions made possible by information technology. However, the federal government must provide the bulk of the initial support for these projects in the same way that it underwrote the development of the interstate highway system or the work that led to the creation of the Internet, the report says.

Expanded coverage. One of the most daunting health challenges is the growing number of uninsured Americans, which now exceeds 41 million people. The committee recommended that three to five states be selected to embark on model projects designed to extend health coverage to all residents. It suggested two possible approaches: provision of tax credits to offset the costs of eligible participants' insurance premiums, or the expansion of Medicaid and the State Children's Health Insurance Program to cover a broader range of participants. Among anticipated benefits are coverage of families under a single plan and access to a personal clinician, both of which increase the likelihood that patients will receive appropriate, timely care in the right setting. The projects should last 10 years to provide enough time to build an infrastructure for electronic enrollment and the public-private partnerships necessary for these initiatives to succeed.

Although cost savings can be anticipated from increased efficiency and improved health and productivity, both approaches inevitably will require significant infusions of resources. Given the severe constraints on many state budgets, the federal government likely will need to provide most or all of the necessary funds to conduct these projects, perhaps in the form of block grants tied to commitments to cover a specified number of individuals, or through existing channels for funding public insurance programs.

Malpractice reform. The cost and availability of malpractice insurance has resulted in limited access to care for patients in some communities, fear of liability has impeded efforts to identify sources of error so that they can be prevented. Moreover, the tort system frequently does not result in injured patients getting compensated, and those who do often experience long delays. Four or five states should create injury compensation systems outside of the courtroom that are patient-centered and focused on safety, the report says. These systems would set reasonable payments for avoidable injuries and provide fair, timely compensation and apologies to a greater number of patients, while stabilizing the malpractice insurance market by limiting health care providers' financial exposure. The projects provide incentives for care providers to develop processes for reporting and analyzing medical mistakes, and to involve patients in efforts to reduce errors, the report says.

Chronic disease management. Another area of concern is the quality and appropriateness of patient care, given the rising prevalence of chronic conditions, such as diabetes and heart disease. Roughly 120 million Americans have one or more chronic conditions, many of which could have been prevented or delayed through education or other interventions that promote healthy behaviors. Current health care practices generally are focused on acute, episodic problems and do not effectively provide the ongoing treatment and coordination among multiple care providers and settings needed by those with chronic ailments. Moreover, health care still focuses largely on treatment rather than prevention. For example, half of all diabetics do not receive foot examinations to check for nerve damage, and smokers fail to receive counseling about quitting during three-quarters of all physician visits.

The committee proposes that 10 to 12 projects be undertaken to develop care programs for chronic conditions and community-wide prevention and health promotion strategies. These programs would initially focus on Medicare beneficiaries, but successful strategies should be expanded to all patient populations, the report says.

Primary care enhancement. The majority of patients enter the health care system and receive most of their care in primary care facilities, making these settings critical to achieving goals in care of acute and chronic conditions, prevention, and health promotion. About 40 federally supported community health centers should undertake initiatives to reinvent and substantially enhance primary care through new models of care delivery, support for patient self-management, and other strategies. The centers should build on their existing innovations in electronic record-keeping and management of chronic diseases, and consider new incentives, such as enabling centers and their staffs to share in the rewards of the cost savings they generate by eliminating waste.

The report was sponsored by the Institute of Medicine, which is a private, nonprofit institution that provides health policy advice under a congressional charter granted to the National Academy of Sciences. A committee roster follows.

Read the full text of Fostering Rapid Advances in Health Care: Learning from System Demonstrations on the Web, as well as more than 2,500 other publications from the National Academies. Printed copies are available for purchase from the National Academies Press Web site or by calling (202) 334-3313 or 1-800-624-6242. Reporters may obtain a pre-publication copy from the Office of News and Public Information (contacts listed above).

[ This news release and report are available at ]

Board on Health Care Services

Committee on Rapid Advance Demonstration Projects: Health Care Finance and Delivery Systems

Gail L. Warden, M.H.A, F.A.C.H.E.* (chair)
President and Chief Executive Officer
Henry Ford Health System

Anne M. Barry, J.D.
Acting Commissioner
Minnesota Department of Finance
St. Paul

Robert A. Berenson, M.D., F.A.C.P.
Senior Adviser
Washington, D.C.

Donald M. Berwick, M.D.*
President and Chief Executive Officer
Institute for Healthcare Improvement

Bruce E. Bradley, M.B.A.
Health Plan Strategy and Public Policy
General Motors Corp.

Christine K. Cassel, M.D.*
School of Medicine, and
Vice President for Medical Affairs
Oregon Health and Science University

Karen Davis, Ph.D.*
The Commonwealth Fund
New York City

Don E. Detmer, M.D.*
Dennis Gillings Professor of Health Management
University of Cambridge
Cambridge, England, and
Professor Emeritus and Professor of Medical Education
University of Virginia

Arthur Garson Jr., M.D., M.P.H.
School of Medicine, and
Vice President
University of Virginia

Larry A. Green, M.D.*
Professor of Family Medicine
University of Colorado
Denver, and
The Robert Graham Center
American Academy of Family Physicians
Washington, D.C.

Joseph P. Newhouse, Ph.D.*
John D. MacArthur Professor of Health Policy Management
Harvard University
Cambridge, Mass.

William L. Roper, M.D., Ph.D.*
School of Public Health
University of North Carolina
Chapel Hill

William M. Sage, M.D., J.D.
Professor of Law
Columbia University School of Law
New York City

Marla E. Salmon, Sc.D., R.N.*
Dean and Professor
Nell Hodgson Woodruff School of Nursing
Emory University

William W. Stead, M.D.*
Associate Vice Chanellor for Health Affairs;
Director of the Informatics Center; and
Professor of Medicine and Biomedical Informatics
Vanderbilt University
Nashville, Tenn.

Edward H. Wagner, M.D., M.P.H.
W.A. McColl Institute for Healthcare Innovation
Center for Health Studies
Group Health Cooperative of Puget Sound


Janet M. Corrigan, Ph.D.
Study Director

* Member, Institute of Medicine