IOM: Physicians play key role in stopping health system waste

The institute, which concludes that 30 cents of every health care dollar is wasted, seeks payment incentives and health IT adoption to improve patient outcomes.

By Jennifer Lubell — Posted Sept. 24, 2012

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To cut down on what it says is a massive amount of waste and inefficiency in health care, an Institute of Medicine report is recommending that physicians and other health professionals become part of a “learning” system that uses new clinical support tools and payment models linking performance to patient outcomes, as well as a team approach to care management.

A panel convened by the institute to look at the challenges facing the U.S. health system found that unnecessary services, fraud and excessive administrative costs accounted for about 30%, or $750 billion, of total health spending in 2009. Wasted resources have human consequences, according to the report, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America.” According to one outside estimate, 75,000 deaths may have been prevented in 2005 if the quality of care in all of the states had risen to the level of care of the highest-performing state in the nation.

“Our health care system lags in its ability to adapt, affordably meet patients’ needs and consistently achieve better outcomes,” said Mark Smith, MD, chair of the IOM committee that wrote the report. Dr. Smith cited examples of these inefficiencies during a press event to discuss the report’s 10 main recommendations on transforming the health care system.

Cost and complexity of health care are the two issues at stake, Dr. Smith said. Physicians in private practices can interact with as many as 229 other physicians in 117 different practices for their Medicare patients alone. Some of this interaction relies solely on outdated technology from the last century, such as telephones and faxes. “Who uses faxes anymore?” he asked.

The cost problems are known as well, Dr. Smith continued. For 31 of the past 40 years, health care has been increasing at a greater rate than the economy as a whole and now comprises roughly 18% of the nation’s gross domestic product.

Getting rid of health care inefficiencies and waste requires a broad transformation to a system that adopts new clinical and information technology tools to manage patient care better. Unlike the situation in 1999, when the IOM’s landmark patient safety report “To Err Is Human: Building a Safer Health System” was released, the industry today has newfound access to computing and connectivity tools to make substantial gains on cost and quality, Dr. Smith said. “Our sense is the system must learn continuously, that patients, clinicians and the communities they reside in have to be part of constant circle of the generation of evidence and capturing of information from patient care that can then be returned to scientific knowledge.”

Pay-for-performance, technology promoted

Current payment methods also foster inefficient care, the report stated, advising that pay instead should be based on care outcomes and the principle of providing optimal care at lower cost, instead of on individual products and services. “Payers should adopt outcome- and value-oriented payment models, contracting policies, and benefit design to reward and support high-quality, team-based care” that focuses on patients’ needs, the IOM report stated.

Physicians, particularly older ones, have been resistant to such changes, said Paul Keckley, PhD, executive director of the Deloitte Center for Health Solutions in Washington. “They invest a lot of time to get prepared to practice, and then the rules change and they’re frustrated,” he said.

Investment costs are tied to information technology, to transferring from a physician-centric to a team-based delivery model, and to shifting incentives from volume to outcomes. “And it’s coming at a pretty difficult time, when the health system’s costs are a major issue.”

Keckley said the new generation of physicians in medical school has a clearer idea of what medicine will look like in the future and will be better equipped to deal with the changes the IOM report is recommending. “They know they’re going to be using iPads and mobile devices, they know they’re going to be dealing with educated consumers that have Bluetooth devices that are looking at treatment options and cost.”

Roy Schoenberg, MD, MPH, president and CEO of American Well Systems, a telehealth company based in Boston, said the IOM study’s focus on new technology is significant. “This report should fuel the momentum we see today within the physician community to embrace innovative technologies such as telehealth, which improves access to quality care while reducing costs.”

Telehealth in particular is advancing quickly and boosting efficiency, Dr. Schoenberg said. “What used to require very costly and sophisticated hardware and IT investments can now be done simply with a computer or a smartphone.”

Also critically important to this transformational process is the report’s emphasis on a team-based approach to improve wellness, said T. Bruce Ferguson Jr., MD. He’s a member of the IOM committee that wrote the report and a professor of cardiovascular sciences and inaugural chair at the Brody School of Medicine at East Carolina University in Greenville, N.C.

Physicians won’t be able to keep patients with multiple disease processes out of the hospital without the support of their families, the communities in which they live and community-based resources, Dr. Ferguson said. “It is an impossible task for a physician to accomplish by themselves. Part of that lack of ability is inherent in our lack of connectivity, our lack of using technologies to create those ways to follow our patients and provide them with the support they need.”

The IOM committee recommended that health care professionals employ various tools such as patient portals to share health decisions with patients and families.

The findings also emphasized the role of medical specialty societies in encouraging the adoption of its recommendations, Dr. Ferguson said. “I think there’s going to be a lot of interest among organizations as they digest this.”

Jeremy A. Lazarus, MD, president of the American Medical Association, praised the IOM’s work, stressing that new health care delivery models should be patient-centered and physician-led. “We look forward to the day when a more robust digital infrastructure exists to further these goals, and we remain committed to working closely with regulators and industry partners to meet these goals in a manner that best supports patients and physicians,” Dr. Lazarus said.

Keckley said the incentive models the report discussed still are works in progress. This area is one where physicians should be very proactive in determining what process measures and outcomes measures are valid, reliable and science-based. “And I think there’s a lot of appropriate debate and concern among clinicians around some of these measures. That part of the puzzle hasn’t been solved yet,” he said.

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10 IOM recommendations for a better health care system

To promote the transformation to a “learning” system that continuously improves care management and patient outcomes — and that aims to reduce the estimated 30% of health spending that is wasted — the Institute of Medicine made 10 major recommendations:

  • Improve capacity to capture clinical, care delivery process, and financial data for better care, system improvement and generation of new knowledge.
  • Streamline and revise research regulations to improve care, promote capture of clinical data and generate knowledge.
  • Accelerate integration of the best clinical knowledge into care decisions.
  • Involve patients and families in decisions regarding health and health care, tailored to their preferences.
  • Promote community-clinical partnerships and services aimed at managing and improving health at the community level.
  • Improve coordination and communication within and across organizations.
  • Continuously improve health care operations to reduce waste, streamline care delivery and focus on activities that improve patient health.
  • Structure payment to reward continuous learning and improvement in the provision of better care at lower cost.
  • Increase transparency on health care system performance.
  • Expand commitment to the goals of a continuously learning health care system.

Source: “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” Institute of Medicine, Sept. 6 (link)

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