improvement tools. The health care system does not even come close to a well organized, systematically designed system like a production or manufacturing system.

Our experience in Kaiser Permanente suggests that these numbers are not exaggerations. When we look for ways to improve the organization and delivery of care, we often find that substantial improvements can be made in the underlying cost performance of the organization. In fact, the premise on which we compete is that we can drive costs down by improving quality.

There are five major problems with the health care system. The first is that most of the scientific and technological breakthroughs that have occurred since World War II have not simplified the task of taking care of patients. In fact, they have made it more complex. Here are some examples:

  • As we entered the 1950s, there were about 10 to 12 categories of health care professionals in the United States. Today, there are more than 220 categories of health care professionals.

  • Right after World War II, there were about six to eight—depending on how you counted them—specialties in medicine. Today, there are more than a hundred.

  • In 1970, there were approximately 100 published randomized control trials (RCTs) in the American medical literature. In 1999 alone, almost 10,000 RCTs were published. Half of RCTs published in the United States have appeared in the last five years.

Science and technology have certainly contributed to growing complexity in medicine—increasing the number of people involved, increasing the number of categories of people involved, raising expectations about what can be done to treat people, and increasing the amount of science and technology that must be managed. Largely as a result of advances in science and technology, the medical care system is far more complex today in terms of the number of institutions and types of health care practitioners than it was in 1950.

Second, the health care system, or nonsystem, has grown enormously over the last 50 years but has failed to keep the patient and the patient’s family at the center of the enterprise. It is small wonder that people identify the system as a nightmare to navigate. It is not a patient-centered system.

How could the complexity of a system be significantly decreased? First, we could create a highly sophisticated production-design or manufacturing-design process to handle the complexity. Then an investment could be made in an information technology infrastructure. Next, we could create flow systems to manage the support activities required to carry out these processes, retain people, and set new standards of quality.

In medicine, we have done very little of this. Physicians are still trained on the principle of individual, professional autonomy, even though, in reality, they do not work in autonomous situations at all. Production design is a foreign word. In fact, it is considered almost sacrilegious to talk about production design in medicine. To many practitioners medicine is a religion, not a science. Therefore, the tools of production design have not been applied in the units where patients get care.

The third issue is that it is extraordinarily difficult to scale up medical care delivery. There are few examples of integrated care across ambulatory, inpatient, hospice, and home settings. Only a few systems enable us to capture capital and reinvest capital in the delivery system infrastructure. With 80 percent of physicians practicing in groups of fewer than 10, medicine remains largely a single interaction between a patient and a doctor. In reality, although the patient-doctor interaction remains absolutely essential, the enterprise itself now involves a much more complex set of interactions.

Except for the Veterans Health Administration, Kaiser Permanente, which has 10,000 physicians, is the largest health care delivery system. The next largest may be the Mayo Clinic. Most others are small, regional players on the delivery system side. Until there are more scaled-up enterprises, it will be difficult to collect and reinvest enough capital to build and support the production capability essential to the delivery of the science and technology that innovators are creating for us.

Fourth, our public policy environment is structured to inhibit the reshaping of the medical care delivery system. For example, in Wisconsin there are 27 licensed categories of health care professionals, each with its own board of practice. Medicine should be about removing boundaries so that people can flow seamlessly among a variety of practitioners, based on what the technology requires and what the patient needs. Yet regulatory and license-based silos create barriers between professionals. These barriers must be broken down to create teams and to deliver integrated care. This can be done, but only with great effort. The licensing system is designed to protect the interests of particular professional groups in medicine, not to further the delivery of integrated care.

On the reimbursement side, the fee-for-service system is designed to reward individual acts by individual clinicians. Our current reimbursement system does not support integrated delivery capabilities. Crossing the Quality Chasm called for experimenting with a variety of reimbursement approaches to determine which ones would stimulate the creation of integrated delivery capabilities—prepayment, perhaps, or capitation or other approaches. The fact remains that the classic fee-for-service system is a barrier to the development of collaborative medicine.

The final issue identified in Crossing the Quality Chasm is that information technology is not being used in the delivery system the way one would expect for such an information-rich industry. It is estimated that less than 2 percent of total revenues in health care is being invested in information technology infrastructure. Much more is being invested on the health insurance side, but investment on the delivery system



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