The Institute of Medicine Report “Best Care at Lower Cost”

As we listen to the political debates about health care, and the childish accusations of who is lying about what, it is nice to see adults really studying the problem and developing a thoughtful approach to the analysis and to possible solutions. The Institute of Medicine is famous for doing such careful studies and this one is no different.  I spent much of this weekend reading the report itself, as well as the news reports of the study, and came to two major conclusions of my own:

The press reports of the study suggest that most journalists have not actually read it, or if they have they have missed the major conclusion.

The challenges faced by the high costs in medical care require a rethinking of health care in our country and not just a debate over who is going to destroy or save Medicare. 

If you read the media reports about the study, one would think that the purpose was to determine the excess costs of health care in the United States.  That, of course, is at best incomplete, and at worst incorrect as suggested by the title.  The study is an attempt at analysis and solutions, not at just defining the size of the problem.  Thus the study starts with a quote. 

            “Knowing is not enough, we must apply.

            Willing is not enough, we must do.”

-          Goethe

This IOM study is about what we must do to optimize health care for all in this country and not just about the excess costs.  The number of more than $750 billion dollars of waste in the system is what caught the eye of the media however even more interesting is what the authors saw as the source of the excess costs.  That was reflected in this table.

TABLE S-1 Estimated Sources of Excess Costs in Health Care (2009)

Category	Sources	Estimate of Excess Costs
Unnecessary Services	· Overuse—beyond evidence-established levels · Discretionary use beyond benchmarks · Unnecessary choice of higher-cost services	$210 billion
Inefficiently Delivered Services	· Mistakes—errors, preventable complications · Care fragmentation · Unnecessary use of higher-cost providers · Operational inefficiencies at care delivery sites	$130 billion
Excess Administrative Costs	· Insurance paperwork costs beyond benchmarks · Insurers’ administrative inefficiencies · Inefficiencies due to care documentation requirements	$190 billion
Prices That Are Too High	· Service prices beyond competitive benchmarks · Product prices beyond competitive benchmarks	$105 billion
Missed Prevention Opportunities	· Primary prevention · Secondary prevention · Tertiary prevention	$55 billion
Fraud	· All sources—payers, clinicians, patients	$75 billion

                                                                                                Source: IOM 2010

So this is not a simple problem and it is also not a problem for payers that will be solved by a total focus on prevention or a total focus on excess administrative costs.  One must also address unnecessary and inefficient services in order to truly address the health care cost crisis in our country.  With this starting point, the study methodically makes the case for a “continuously learning health care system” with the following characteristics.

TABLE S-2 Characteristics of a Continuously Learning Health Care System

Science and Informatics

·         Real-time access to knowledge—A learning health care system continuously and reliably captures, curates, and delivers the best available evidence to guide, support, tailor, and improve clinical decision making and care safety and quality.

·         Digital capture of the care experience—A learning health care system captures the care experience on digital platforms for real-time generation and application of knowledge for care improvement.

Patient-Clinician Partnerships

·         Engaged, empowered patients—A learning health care system is anchored on patient needs and perspectives and promotes the inclusion of patients, families, and other caregivers as vital members of the continuously learning care team.

Incentives

·         Incentives aligned for value—In a learning health care system, incentives are actively aligned to encourage continuous improvement, identify and reduce waste, and reward high-value care.

·         Full transparency—A learning health care system systematically monitors the safety, quality, processes, prices, costs, and outcomes of care, and makes information available for care improvement and informed choices and decision making by clinicians, patients and their families.

Culture

·         Leadership-instilled culture of learning—A learning health care system is stewarded by leadership committed to a culture of teamwork, collaboration, and adaptability in support of continuous learning as a core aim.

·         Supportive system competencies—In a learning health care system, complex care operations and processes are constantly refined through ongoing team training and skill building, systems analysis and information development, and creation of the feedback loops for continuous learning and system improvement.

The report starts and does not end with this definition of the scope of the problem and this vision for a continuously learning health care system.  It then goes on to build recommendations and strategies for achieving these characteristics in order to reach that new health care system model.  The recommendations that they put forth fall into these categories as defined in the report.    

Categories of the Committee’s Recommendations

Foundational Elements

Recommendation 1: The digital infrastructure. Improve the capacity to capture clinical, care delivery process, and financial data for better care, system improvement, and the generation of new knowledge.

Recommendation 2: The data utility. Streamline and revise research regulations to improve care, promote the capture of clinical data, and generate knowledge.

Care Improvement Targets

Recommendation 3: Clinical decision support. Accelerate integration of the best clinical knowledge into care decisions.

Recommendation 4: Patient-centered care. Involve patients and families in decisions regarding health and health care, tailored to fit their preferences.

Recommendation 5: Community links. Promote community-clinical partnerships and services aimed at managing and improving health at the community level.

Recommendation 6: Care continuity. Improve coordination and communication within and across organizations.

Recommendation 7: Optimized operations. Continuously improve health care operations to reduce waste, streamline care delivery, and focus on activities that improve patient health.

Supportive Policy Environment

Recommendation 8: Financial incentives. Structure payment to reward continuous learning and improvement in the provision of best care at lower cost.

Recommendation 9: Performance transparency. Increase transparency on health care system performance.

Recommendation 10: Broad leadership. Expand commitment to the goals of a continuously learning

While I praise these elements, I also know that the strategies suggested in the report will by necessity be incomplete, as many minds in every field will develop new ways of looking at these problems and new solutions.  Often, many of the best tactics and strategies come from the private sector which includes for profit and not-for-profit organizations.  We, at Accolade have found our own solutions to some of these issues and have been able to prove their efficacy at meeting the challenge of “best care at lower cost” that the authors have defined. 

In our case we have focused on the care improvement targets and those foundational elements and policies which support those elements.  We also know that solutions tend to build upon a foundation of other solutions.   Thus, we are just at the beginning of finding new approaches and new technologies to solve our health care dilemmas.  We are only limited by our commitment and our creativity so I remain optimistic about our health care future.