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News from the National Academies

Date:  Sept. 6, 2012

 

FOR IMMEDIATE RELEASE

 

Transformation of Health System Needed to Improve Care and Reduce Costs

                       

WASHINGTON — America's health care system has become too complex and costly to continue business as usual, says a new report from the Institute of Medicine.  Inefficiencies, an overwhelming amount of data, and other economic and quality barriers hinder progress in improving health and threaten the nation's economic stability and global competitiveness, the report says.  However, the knowledge and tools exist to put the health system on the right course to achieve continuous improvement and better quality care at lower cost, added the committee that wrote the report.

 

The costs of the system's current inefficiency underscore the urgent need for a systemwide transformation.  The committee calculated that about 30 percent of health spending in 2009 -- roughly $750 billion -- was wasted on unnecessary services, excessive administrative costs, fraud, and other problems.  Moreover, inefficiencies cause needless suffering.  By one estimate, roughly 75,000 deaths might have been averted in 2005 if every state had delivered care at the quality level of the best performing state.

 

Incremental upgrades and changes by individual hospitals or providers will not suffice, the committee said.  Achieving higher quality care at lower cost will require an across-the-board commitment to transform the U.S. health system into a "learning" system that continuously improves by systematically capturing and broadly disseminating lessons from every care experience and new research discovery.  It will necessitate embracing new technologies to collect and tap clinical data at the point of care, engaging patients and their families as partners, and establishing greater teamwork and transparency within health care organizations.  Also, incentives and payment systems should emphasize the value and outcomes of care.

 

"The threats to Americans' health and economic security are clear and compelling, and it's time to get all hands on deck," said committee chair Mark D. Smith, president and CEO, California HealthCare Foundation, Oakland.  "Our health care system lags in its ability to adapt, affordably meet patients' needs, and consistently achieve better outcomes.  But we have the know-how and technology to make substantial improvement on costs and quality.  Our report offers the vision and road map to create a learning health care system that will provide higher quality and greater value."

 

The ways that health care providers currently train, practice, and learn new information cannot keep pace with the flood of research discoveries and technological advances, the report says.  How health care organizations approach care delivery and how providers are paid for their services also often lead to inefficiencies and lower effectiveness and may hinder improvement.

 

Better use of data is a critical element of a continuously improving health system, the report says.  About 75 million Americans have more than one chronic condition, requiring coordination among multiple specialists and therapies, which can increase the potential for miscommunication, misdiagnosis, potentially conflicting interventions, and dangerous drug interactions.  Health professionals and patients frequently lack relevant and useful information at the point of care where decisions are made.  And it can take years for new breakthroughs to gain widespread adoption; for example, it took 13 years for the use of beta blockers to become standard practice after they were shown to improve survival rates for heart attack victims.  

 

Mobile technologies and electronic health records offer significant potential to capture and share health data better.  The National Coordinator for Health Information Technology, IT developers, and standard-setting organizations should ensure that these systems are robust and interoperable, the report says.  Clinicians and care organizations should fully adopt these technologies, and patients should be encouraged to use tools, such as personal health information portals, to actively engage in their care.

 

Health care costs have increased at a greater rate than the economy as a whole for 31 of the past 40 years.  Most payment systems emphasize volume over quality and value by reimbursing providers for individual procedures and tests rather than paying a flat rate or reimbursing based on patients' outcomes, the report notes.  It calls on health economists, researchers, professional societies, and insurance providers to work together on ways to measure quality performance and design new payment models and incentives that reward high-value care.

 

Although engaging patients and their families in care decisions and management of their conditions leads to better outcomes and can reduce costs, such participation remains limited, the committee found.  To facilitate these interactions, health care organizations should embrace new tools to gather and assess patients' perspectives and use the information to improve delivery of care.  Health care product developers should create tools that assist people in managing their health and communicating with their providers.

 

Increased transparency about the costs and outcomes of care also boosts opportunities to learn and improve and should be a hallmark of institutions' organizational cultures, the committee said.  Linking providers' performance to patient outcomes and measuring performance against internal and external benchmarks allows organizations to enhance their quality and become better stewards of limited resources, the report says.  In addition, managers should ensure that their institutions foster teamwork, staff empowerment, and open communication.

 

The report was sponsored by the Blue Shield of California Foundation, Charina Endowment Fund, and Robert Wood Johnson Foundation.  Established in 1970 under the charter of the National Academy of Sciences, the Institute of Medicine provides objective, evidence-based advice to policymakers, health professionals, the private sector, and the public.  The Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council together make up the independent, nonprofit National Academies.  For more information, visit http://national-academies.org or http://iom.edu.   A committee roster follows.

Additional Resources:

  • Report in Brief
  • Project Page

  •  

    Contacts: 

    Christine Stencel, Senior Media Relations Officer

    Luwam Yeibio, Media Relations Assistant

    Office of News and Public Information

    202-334-2138; e-mail news@nas.edu

    Pre-publication copies of Best Care at Lower Cost: The Path to Continuously Learning Health Care in America are available from the National Academies Press; tel. 202-334-3313 or 1-800-624-6242 or on the Internet at http://www.nap.edu.  Reporters may obtain a copy from the Office of News and Public Information (contacts listed above).

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    INSTITUTE OF MEDICINE

    Institute of Medicine Executive Office

     

    Committee on the Learning Healthcare System in America

     

    Mark D. Smith, M.D., M.B.A.1 (chair)

    President and CEO

    California HealthCare Foundation

    Oakland

     

    James P. Bagian, M.D.1, 2

    Director

    Center for Healthcare Engineering and Patient Safety, and

    Professor

    College of Engineering and Medical School

    University of Michigan

    Ann Arbor

     

    Anthony S. Bryk, Ed.D.

    President

    The Carnegie Foundation for the Advancement of Teaching

    Stanford, Calif.

     

    Gail H. Cassell, Ph.D.1

    Visiting Professor

    Department of Global Health and Social Medicine

    Harvard Medical School, and

    Vice President of Scientific Affairs and Distinguished Lilly Research Scholar for Infectious Diseases

    Eli Lilly and Co. (retired)

    Carmel, Ind.

     

    James B. Conway, M.S.

    Adjunct Lecturer

    Harvard School of Public Health, and 

    Senior Fellow

    Institute for Healthcare Improvement

    Woburn, Mass.

     

    Helen B. Darling, M.A.

    President

    National Business Group on Health

    Washington, D.C.

     

    T. Bruce Ferguson Jr., M.D.

    Professor and Inaugural Chairman

    Department of Cardiovascular Sciences

    East Carolina University

    Greenville, N.C.

     

    Ginger L. Graham, M.B.A.

    President and CEO

    Two Trees Consulting,

    President and CEO

    Amylin Pharmaceuticals, and

    Group Chairman

    Guidant Corp.

    Ventura, Calif.

     

    George Halvorson, M.B.A.

    Chairman and CEO

    Kaiser Permanente

    Oakland, Calif.

     

    Brent C. James, M.D.1

    Chief Quality Officer and Executive Director

    Institute for Health Care Delivery Research

    Intermountain Healthcare Inc.

    Salt Lake City

     

    Craig A. Jones, M.D.

    Director

    Vermont Blueprint for Health

    Burlington

     

    Gary Kaplan, M.D.

    Chairman and CEO

    Virginia Mason Health System

    Seattle

     

    Arthur A. Levin, M.P.H.

    Director

    Center for Medical Consumers

    New York City

     

    Eugene Litvak, Ph.D.

    President and CEO

    Institute for Healthcare Optimization

    Newton, Mass.

     

    David O. Meltzer, M.D., Ph.D.

    Chief

    Section of Hospital Medicine, and

    Director

    Center for Health and the Social Sciences

    University of Chicago

    Chicago

     

    Mary D. Naylor, Ph.D., M.S.N.1

    Marian S. Ware Professor in Gerontology, and

    Director

    NewCourtland Center for Transitions and Health

    School of Nursing

    University of Pennsylvania

    Philadelphia

     

    Rita Redberg, M.D.,M.Sc.

    Editor

    Archives of Internal Medicine, and

    Professor of Medicine

    School of Medicine

    University of California

    San Francisco

     

    Paul C. Tang, M.D., M.S.1

    Vice President and Chief Innovation and Technology Officer

    Palo Alto Medical Foundation

    Palo Alto, Calif.

     

    STAFF

     

    Robert Saunders, Ph.D.

    Study Director

    ____________________________________

    1 Member, Institute of Medicine

    2 Member, National Academy of Engineering