initiatives, but public funding for some portion of up-front costs can be a valuable resource for an organization that is interested, willing, and ready to redesign the delivery of health care to improve quality. Thus, the Health Care Quality Innovation Fund represents a public-private approach to change, with the public sector providing seed money and the private sector using operating revenue to fund some of the up-front costs and any ongoing costs.

Third, rather than trying to identify large programs aimed at reforming the entire system, smaller applied projects of varying size and focus should be permitted to flourish. Public funding for a mix of projects would permit midcourse corrections to be made as greater understanding is gained on what types of projects work or fail. Use of public seed money can also require an objective evaluation of demonstration projects and public access to the tools and techniques used. Rather than remaining in the private domain, the information becomes a public good for use by all to learn how to improve health care quality.

Research and demonstrations for organizational redesign in health care occur today in both the private and public sectors, although the level of effort appears to be modest given the size of the task ahead. In the private sector, one of the main sources of funds for organizational design research is foundations. The Robert Wood Johnson Foundation has sponsored the Changes in Health Care Financing and Organization Program since 1988. It has provided over $50 million to stimulate research into new strategies in the financing and organization of health care and the impact of changes in the delivery system on quality, access, and costs. The program funds research, policy analysis, demonstrations, and evaluations to provide timely information to policy makers, purchasers, providers, and researchers.

Some health care organizations also devote a portion of their revenues to research and development projects. For example, Kaiser-Permanente has conducted work on risk adjustment methods for payment policy; Group Health Cooperative of Puget Sound has conducted extensive work on improving care for populations with chronic illness; and Intermountain Health Care in Salt Lake City has developed data systems for evaluating and improving process of care. Organizational design research is also being conducted at universities across the country.

On the public side, the primary source of funds for organizational design research is AHRQ. The Center for Organization and Delivery Studies was created in 1996 to provide leadership for research on health care markets, delivery systems and organizations (Agency for Healthcare Research and Quality, 2000a). The Integrated Delivery System Research Network is a new model of field-based research that partners health services researchers with large health care systems to develop and disseminate evidence on data and measurement systems and organizational best practices (Agency for Healthcare Research and Quality, 2000b). Approximately $4 million has been allocated over a 3-year period. Other AHRQ projects also contribute to innovation in health care delivery, such as work in

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