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I; ~ :< 1 The Time for Change Has Come In March 2001, the Institute of Medicine (IOM) released the report Crossing the Quality Chasm. A New Health System for the 2Ist Century, calling for fundamental-change in the health care system (institute of Medicine, 200Ib). Responding to widespread and persistent, systemic shortcomings in health care quality, that report challenges the nation to undertake a major redesign of both the health care delivery system and the policy environment that shapes it. The recommendations in the Quality Chasm report did not come altogether as a surprise. The safety and quality of health care in the United States had been brought to the forefront with a renewed sense of urgency starting in 1998 through the release of three major reports on the quality of care. The IOM's National Roundtable on Health Care Quality had concluded that "the burden of harm conveyed by the collective impact of all of our health care quality problems is staggering" (Chassin and Galvin, 1998, p. 1004~. The Advisory Commission on Consumer Protection and Quality in the Health Care Industry (1998, Chapter 1) called for a national commitment to improve quality after concluding that "today in America, there is no guarantee that any individual will receive high-quaTity care for any particular health problem." And the conclusions of both of these national panels had been supported by the results of an exten- sive literature review conducted by researchers at the RAND Corporation, which encompassed publi- cations in peer-reviewed journals between 1993 and mid-1997 and revealed evidence of systemic quality problems throughout the health care sector (Schuster et al., 1998~. Moreover, these findings had been corroborated by studies that looked in more detail at the treatment of specific diseases (e.g., cancer) or focused on particular types of quality problems (e.g., errors) (Institute of Medicine, 2000; Institute of Medicine and National Research Council, 1999; Leatherman and McCarthy, 2002~. In an effort to chart a direction for health system improvement, the Quality Chasm report identi- fied six national quality aims: health care should be safe, effective, patient-centered, timely, efficient, and equitable (see Box 1-~. These aims address not only the serious quality challenges noted above, but also the need to use resources more wisely.

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The Time for Change Has Come 1. BOX 1-1 Quality Aims for the 21st-Century Health Care System Sate avoiding injuries to patients from the care that is intended to help them. Effective providing services based on scientific knowledge to all who could benefit and refraining from providing services to those not likely to benefit (avoiding underuse and overuse). Patient-centeredproviding care that is respecffu! of and responsive to individual patient preferences, needs, and values and ensuring that patient values guide all clinical decisions. Timely reducing waits and sometimes harmful delays for both those who receive and those who give care. Efficient avoiding waste, in particular waste of equipment, supplies, ideas, and energy. Equitable providing care to all who could benefit that does not vary in quality because of personal characteristics such as gender, ethnicity, geographic location and socioeconomic status. SOURCE: Institute of Medicine (2001b, p. 39~0~. i, In the 2 years since the release of the Qual- ity Chasm report, the challenges confronting the health care system have probably worsened. Overall, national health spending has increased as a portion of gross domestic product and is expected to continue to do so for the remainder of the decade- from 13.2 percent in 2000 to approximately 17 percent in 201 ~ (He filer et al., 2002~. Employers are expected to see a 13 to 15 percent increase in their health care premiums in 2002, which will be the sixth straight year of rising premiums (Alliance for Health Care Reform, 2002; Center for Studying Health System Change, 20011. Medicaid is also experi- encing cost increases an average of 25 percent over the 2 years between 2000 and 2002 (Alliance for Health Care Reform, 2002~. These rising costs, in combination with the recent economic downturn, are expected to have a number of consequences. Increases in employ- ers' health care premiums are likely to result in employers narrowing benefits and/or shifting a larger portion of costs to workers in the form of premiums or copayments. More employees may choose not to participate in employer-sponsored ~3 plans, and more employers, especially small businesses, may choose not to offer health insurance altogether. Overall the number of uninsured people in the United States has been increasing for more than a decade about one in six Americans is without coverage today (Institute of Medicine, 2001a). The uninsured do not receive the heath services they need, and this gap has serious health, financial, and other consequences for both the uninsured individuals and their families (Institute of Medicine, 2002a, 2002b). More- over, the growing numbers of uninsured place increased demand on public hospitals, academic health centers, community health centers, and other safety net providers that offer a sizable proportion of services to those who lack health insurance and cannot afford to pay. There are also serious inequities in health care. A significant body of research reveals disturbing disparities in health care access and quality, especially for racial and ethnic minori- ties (Institute of Medicine, 2002c). Minorities receive a lower quality of health care than non-

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The Time for Change Has Come minorities, even after controling for such factors as insurance status and income. The Quality Chasm report calls for changes at four levels patient experiences, smaTi- practice settings or Microsystems that deliver care (e.g., provider groups, multidisciplinary teams), health care organizations that house the Microsystems (e.g., hospitals), and the health care environment (e.g., payment policies, legal liability, regulatory processes) (Berwick, 2002~. There is little doubt that change of this magni- tude will be difficult to accomplish, but it is imperative that the process begin. This report sets forth a strategy for health system reform in which states are used as laboratories for the design, implementation, and testing of alterna- tive redesign strategies. The set of demonstra- tions called for by this strategy addresses criti- cal leverage points at each of the above four levels. ORIGINS OF THIS REPORT ., The disturbing trends in health care summa- rized above have not gone unnoticed by health care leaders. In June 2002, the Secretary of Health and Human Services met with represen- tatives of The National Academies and expressed his concerns about the need to reverse these trends. It was agreed that workable solu- tions must be found quickly. Almost immedi- ately, the IOM initiated a fast-track study with the objective of identifying interventions and approaches that showed promise for solving key problems, and recommending a set of demon- stration projects to test these solutions. The Secretary expressed a strong interest in demon- stration projects that might be conducted in collaboration with states starting in 2003. To conduct this study, the {OM established the Committee on Rapid Advance Demonstra- tions in June 2002. The committee began by developing a set of criteria for use in selecting potential demonstration projects. Working groups for each of the five categories of demon- strations (enumerated below) were then convened to delineate the specifics of the poten- tial demonstration projects. The full committee then met to finalize the set of proposed demon- strations. CRITERIA FOR SELECTION OF DEMONSTRATIONS The committee went through a multi-step process to identify potential demonstration projects. Each committee member was asked to identify potential demonstration categories. These categories were then discussed with over- lapping or related areas being combined, result- ing in a list of seven categories. Small working groups were formed to develop detailed descrip- tions of these seven categories. The full committee then discussed the seven categories further and narrowed the list to five. Categories that were considered, but not selected, are dis- cussed later in this chapter. The committee concluded that the demon- stration projects as a set, and individually if possible, must be bold and transformational. Recognizing the gravity of the problems confronting the health care sector, as well as the need for a major redesign of health care proc- esses, the committee focused on projects that would address the fundamental building blocks of the health care system. To guide its work, the committee generated a list of criteria encompassing factors that would lead to a successful demonstration initia- tive (see Box 1-2~. These criteria fall into two categories: those related to the intended results of demonstrations and those related to the likeli- hood of successful implementation. The demonstration projects are intended to produce four results: . Improved health status for patients and populations The health care system of the 2ISt century should maximize the health and functioning of both individual patients and communities. To accomplish this goal, the system should balance and integrate needs for personal health care with broader community-wide initiatives that target the

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f The Time for Change Has Come Box 1~2 Criteria for Selecting Bold anc! Transformational Demonstrations Criteria relater! to intenciec! results of clemonstrations . /mprovec! health status of patients and popu/ations . System improvements . Reduced waste . Stimulus for continued innovation Criteria related to likelihood of successful implementation Resonates with public and policy makers Broad base of support Recognizes and addresses barri- ers Builds on existing compelencies . entire population (e.g., prevention initiatives to address obesity). The health care system must have well-defined processes for making the best use of limited resources. System improvements In the 20~ century, "bricks and mortar" constituted the basic infrastructure of the health care delivery system. To deliver care in the 2iSt century, the system must have a health information and communications technology (ICT) infrastructure that is accessible to all patients and providers. Over the past several decades, the health care needs of the popu- lation have been shifting from acute to chronic care (The Robert Wood Johnson Foundation, 1996~. Although infectious diseases and acute care are still important, the vast majority of health care resources are now devoted to the ongoing manage- ment of chronic conditions. The processes used by the health system must be redes- igned to emphasize the prevention and ongoing management of such conditions, and this redesign will require integration across sites of care and more sophisticated interfaces between the health care and social service sectors. Ready access to elec- tronic medical records will be essential as well. . . Reduced waste The 20-century health care system is extremely wasteful, charac- terized both by clinical waste (e.g., unneces- sary procedures, redundant laboratory tests) and administrative waste (e.g., compliance with the requirements of multiple insurance programs, which have not been standard- ized). Waste in the system must be reduced so resources can be rechanneled to meet the needs of patients and populations. Stimulus for continued" innovation- The 2ISt-century health care system must have the buiTt-in capacity to continuously change and accommodate innovations in knowi- edge and technology. The change process will not be easy, and the demonstrations must be able to withstand many challenges. In identifying promising demonstration projects, then, attention must be paid to implementation issues, including the need to: . . Resonate with the public and! policy makers The demonstration projects must be understandable to the lay public and pol- icy makers and must address their immedi- ate concerns. The demonstrations should be structured to produce some tangible results in the short run. Develop a broad base of support- While a start-up investment may be necessary to assist in initiating change, most demonstra- tions should be budget neutral to the federal government over the long term or at least budget conscious. Careful thought should be given to the benefits and costs of the demonstrations to each of the major stake- holders, including patients, payers, and

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The Time for Change Has Come providers. Financial and other incentives should be offered to key stakeholders, recognizing that major change is difficult to initiate and to sustain over long periods of time. Both the public sector (i.e., federal and state governments) and the private sec- tor (e.g., philanthropic foundations) should provide up-front support for the conduct of the demonstrations. Recognize and address barriers There will be many bamers to change political, cultural, organizational, regulatory, and oth- ers. To be successful, demonstrations must identify and eliminate (or at least mitigate) these barriers. Build on existing competenciesThere is no time to lose. The set of demonstration projects initiated in 2003 should produce the building blocks of a model 21 St-century community health care system by 2006. The DeparDnent of Health and Human Services should select demonstration sites that have a high likelihood of making rapid progress. The~committee identified five major catego- ries of demonstrationschronic care, primary care, ICT infrastructure, state health insurance, and liability. These demonstration categories are discussed in turn in Chapters 2 through 6. For each category, multiple demonstration projects or sites are proposed for two reasons. First, within any given category, there would likely be a good deal of variability in design characteris- tics, which in turn will influence the likelihood of success or failure. For example, an ICT demonstration project in a predominantly rural state would likely have different characteristics than one in a large metropolitan area. Much can be learned from assessing the variability in design characteristics across different types of demonstration sites, and the effects of different designs on impact. Second, a sizable number of sites will be needed for this strategy to begin to have a measurable impact on the health system overall. SUPPORTING AND EVALUATING THE DEMONSTRATIONS As the demonstrations are launched, there must be comprehensive parallel efforts to support exchange among organizations under- taking the projects within a given demonstra- tion, to evaluate the effectiveness of the approaches and interventions being practiced, and to broadly disseminate best practices thus identified. Such efforts are critical so that the demonstrations can achieve their full potential, and those that show the most promise can be rapidly replicated across the country. The committee believes that learning coliaboratives are the best mechanism for providing support for the demonstrations, and that such collaboratives should be formed for each of the five areas enumerated above. The learning collaboratives would be modeled after similar efforts at both the national and state levels, in which provider organizations have defined common goals and related performance measures and collaborated . successfully- excnang~ng ~ueas and information to improve clinical care for patients with diabetes, heart disease, and other conditions (Institute for Healthcare Improvement, 2002; Oswald, 2002~. In the process, these organizations have successfully reengineered delivery systems to meet their quality improvement targets. These demonstration-specific collaboratives which would exist virtually but would need some staff support would be created by various organiza- tions, depending upon interest and existing capacity. For example, the Health Resources and Services Administration might take respon- sibility for establishing the primary care collaborative, and the Centers for Medicare and Medicaid Services the chronic care collabora- tive. Of course, either or both agencies might choose to conduct the collaborative directly or to contract with a private-sector organization. In addition to the learning coilaboratives, the committee believes there needs to be a national evaluation and dissemination effort that would span all five demonstration categories and would include an advisory council with representatives from each of the areas. Given

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~ The Time for Change Has Come the previous, related work of the Agency for Healthcare Quality and Research (AHRQj, it would be logical for this agency to take the lead in creating and nurturing such an effort. There would need to be adequate support to carry out this critical activity. Planning for the evaluation should begin at the same time as planning for the demonstrations. The criteria, performance measures, and data to be used in assessing pro- gress must be defined in advance. Those involved in the effort would, over time, rigor- ously review quantitative and qualitative performance data from all of the demonstrations to assess effectiveness, and then extensively disseminate the best practices identified. They also would be able to discern how the five demonstration categoriespotential building blocks for a reformed health care system might fit together in the future. In addition, they would be well poised to identify the specific environmental obstacles that need to be addressed if demonstrations that prove success- fu! are to be replicated on a larger scale. Learning ColIaboratives As the demonstrations were being designed and initiated, the learning collaboratives would play an important supporting role in enabling the sharing of information about strategies, tools, and techniques (see Box 1-3~. Such ar- rangements allow implementing organizations to benefit from the creativity and experiences of others, help guard against reinventing the wheel, and foster continuous learning. Learning collaboratives rely on regular contact, mainly electronic, and regular reporting of agreed-upon performance measures and qualitative progress reports. The colIaboratives for these demonstra- tions would also provide informal and, to a lesser degree, formal technical assistance to the projects. Once performance could be assessed, the collaboratives would provide a venue for discussions about what does and does not work generating information necessary for midcourse corrections. This kind of transparency and accountability across the demonstration organi- zations could help foster a culture of change in a health care system that has firmly entrenched interests and has over the decades stubbornly resisted reform. Evaluation and Dissemination A cntical step, whether earned out by AH[RQ or another organization, is to identify up front what would constitute success in each of the five demonstration categories and to ~ans- Box 1-3 Components of a Learning Collaborative Multiple organizations that make a commitment, signed by the top leader, to achieve measurable improvements on a given set of metrics and to support staff in their efforts to do so Shared goals and related performance measures Education and training on how a collaborative functions A coordinated, supportive network through which demonstration project staff can actively learn from each other Informal coaching for project staff Reporting of performance measures back to the collaborative and to the larger evaluation effort SOURCE: Adapted from Oswald (20021. ~11 _

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The Time for Change Has Come late these ideas into quantifiable measures and associated data requirements. This effort is important because limited documentation exists on approaches that represent alternatives to the traditional ways in which care is delivered and financed. With such measures, a rigorous evaluation can be performed, including, where possible, a business case and economic analysis. This business case would help determine whether the demonstration benefitsas meas- ured by clinical quality indicators and other measuresoutweigh the costs, after accounting for up-front investment, particularly in the case of the ICT infrastructure demonstrations. It is essential to identify the interventions that are and are not successful and to understand what factors contributed to their success or failure. Such an evaluation can go a long way toward convincing powerful stakeholders about why and how they need to change. The evaluative measures should help provide a strategic focus for the participating organizations that emphasizes the objectives of enhancing quality of care and reducing waste. To the extent possible, these clinical measures should be aligned with the process and outcome measures included in the National Health Care Quality Report, which is to be published by AHRQ in September 2003. As a conceptual framework, the National Health Care Quality Report will use the six quality aims enumerated earlier (i.e., safety, . . .. .. effectiveness, patient- centereclness, timeliness, efficiency, and equity). Specific measures falling into one or more of these domains have been selected for exam- ple, the percentage of diabetics with hemogio- bin Ale under control and the percentage of heart failure patients prescribed an angiotensin- converting enzyme (ACE) inhibitor at discharge are measures of effectiveness (Agency for Healthcare Research and Quality, 2002~. AHRQ is also developing the National Disparities Report, and measures from this report might be highly useful in assessing efforts to address racial, ethnic, and geographic disparities. [f demonstration sites apply some or all of the same measures, it will be possible to gauge their progress in comparison with that of the nation as a whole. At the close of the demonstrations, when it is clear which approaches and interventions have yielded best practices and on what specific dimensions, it will be time to get the word out to the broader community. The information dis- seminated should include all the documentation and analysis generated over the course of a project, including costs incurred, gains realized (particularly in the clinical realm), and opera- tional issues confronted and overcome. This would also be an appropriate time to identify environmental obstacles that must be confronted for best practices to take hold, including those that cut across a number of different demonstrations and therefore necessi- tate priority action. It is clear that future wide- scale implementation of the best practices resulting from the demonstrations will require more than Medicaid waivers, Medicare demon- stration authority, or communities and states that are uniquely supportive of a given demon- stration. Those individuals involved in evaluating and disseminating demonstrated best practices will have an important vantage point. They will understand not only which of the demonstration building blocks are effective, but also how to combine them into a more comprehensive, synergistic redo model. They will understand where gaps exist and how to Fiji them. Finally, they will have detailed knowledge about envi- ronmental obstacles that need to be overcome and areas in which new ground rules need to be articulated for the seeds of the successful demonstrations to be sown and to take hold across the country, transforming the landscape of the health care system in the process. OTHER POSSIBLE DEMONSTRATION AREAS The committee believes that the five demonstration categories enumerated above rep- resent a reasonable starting point from which to stimulate fundamental change in the health system, but they are not the only promising areas. The following are summaries of the two other areas that were seriously considered but _

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The Time for Change Has Come not selected, which may also represent good candidates: Making America's hospitals safe and effec- tive and a clecent place to work- Many if not most of the country's hospitals were built decades ago. Since that time, a great deal has been learned about how best to design work environments to promote patient and worker safety and improve effi- ciency. There have been many advances in information technology and medical devices that have specific space and other physical requirements. There have also been innova- tions in architectural design that result in environments more conducive to the provi- sion of patient-centered care and workforce satisfaction. it should be noted that although the committee did not ultimately choose this category, some of the categories selected particularly TCT infrastructurecould well lead to improvements in hospital care and environments. Evidence-baseci, patient-centerecipharmacy management Medications, both prescrip- tion' and over-the-counter represent one of the fastest-growing components of heath care services. Safety is a serious concern, with many suffering preventable adverse drug events that could have been avoided through the use of computerized medication order entry systems (Bates et al., 1999~. Cost Is a mayor Issues given that Medicare and some other insurance plans provide little or no insurance coverage for prescrip- tion drugs. Numerous options exist for promoting evidence-based prescribing of medications and improving efficiency. Although pharmacy management was not selected as one of the five categories, the committee believes that projects in some of the selected categories including chronic care, primary care, and ICT infrastructure- will have a highly positive impact in this area. REFERENCES Advisory Commission on Consumer Protection and Quality in the Health Care Industry. 1998. "Quality First: Better Health Care for All Americans." Online. Available at http://www. hcqualitycommission.gov/final/ [accessed Aug. 28, 20023. Agency for Healthcare Research and Quality. 2002. National Healthcare Quality Report: Preliminary Measure Set. Alliance for Health Care Reform. 2002. "Health Care Costs and Health Coverage." Online. Available at http :llwww. allhealth. org/pub/pdf/Costs- Coverage_Aug2002.pdf [accessed Sept. 3, 20023. Bates,D.W.,J.M.Teich,J.Lee,D. Seger,G.J.Ku- perman, N. Ma'Luf, D. Boyle, and L. Leape. 1999. The Impact of Computerized Physician Order Entry on Medication Error Prevention. J Am Med Inform Assoc 6 (4~:313-21. Berwick, D. M. 2002. A User's Manual for the IOM's 'Quality Chasm' Report. Health Aff (Millwood) 21 (3~:80-90. Center for Studying Health System Change. 2001. "Tracking Health Care Costs: Hospital Care Key Cost Driver in 2000 (Data Bulletin Number 21, September 2001 - revised)." Online. Available at http ://www.hschange. org/CONTENT/380/ "accessed Sept. 3, 2002~. Chassin, M. R., and R. W. Galvin. 1998. The Urgent Need to Improve Health Care Quality. Institute of Medicine National Roundtable on Health Care Quality. JAMA 280 (11 ):1000-5. Heffler, S., S. Smith, G. Won, M. K. Clemens, S. Keehan, and M. Zezza. 2002. Health Spending Projections for 2001-2011: the Latest Outlook. Faster Health Spending Growth and a Slowing Economy Drive the Health Spending Projection for 2001 Up Sharply. Health Aff (MillwoodJ 21 (2~:207-18. Institute for Healthcare Improvement. 2002. "Institute for Healthcare Improvement Home- page." Online. Available at http://www.ihi.org/ [accessed Oct. 8, 20023. Institute of Medicine. 2000. To Err Is Human: Build- ing a Safer Health System. eds. L. T. Kohn, J. M. Corrigan, and M. S. Donaldson. Washington, D.C.: National Academy Press.

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The Time for Change Has Come . 2001a. Coverage Matters: Insurance and Health Care. Washington, D.C.: National Acad- emy Press. . 2001b. Crossing the Quality Chasm: A New Health System for the 21st Century. Washington DC: National Academy Press. . 2002a. Care Without Coverage: Too Little, Too Late. Washington, D.C.: National Academy Press. . 2002b. Health Insurance Is a Family Mat- ter. Washington, D.C.: National Academy Press. . 2002c. Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care. eds. B. D. Smedley, A. Y. Stith, and A. R. Nel- son. Washington, D.C.: National Academy Press. Institute of Medicine and National Research Council. 1999. Ensuring Quality Cancer Care. eds. M. Hewitt and J. V. Simone. Washington, D.C.: National Academy Press. Leatherman, S. and D. McCarthy. 2002. Quality of Health Care in the United States: A Chartbook. New York, NY: The Commonwealth Fund. Oswald, N. 2002. Structured Collaboratives: Accel- erating Quality Improvement in California. Oakland, CA: California Healthcare Foundation. Schuster, M. A., E. A. McGlynn, and R. H. Brook. 1998. How Good Is the Quality of Health Care in the United States? Milbank Q 76 (4~:517-63, 509. The Robert Wood Johnson Foundation. 1996. Chronic Care in America: A 215 Century Chal- lenge. Princeton, NJ: The Robert Wood Johnson Foundation. ~r~ _

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