Report to the President Better Health Care and Lower Costs: Accelerating Improvement through Systems Engineering

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In recent years there has been success in expanding access to the health-care system, with millions gaining coverage in the past year due to the Affordable Care Act. With greater access, emphasis now turns to guaranteeing that care is both affordable and high-quality. Rising health-care costs are an important determinant of the Nation's fiscal future, and they also affect the budgets for States, businesses, and families across the country. Health-care costs now approach a fifth of the economy, and careful reviews suggest that a significant portion of those costs does not lead to better health or better care.

Other industries have used a range of systems-engineering approaches to reduce waste and increase reliability, and health care could benefit from adopting some of these approaches. As in those other industries, systems engineering has often produced dramatically positive results in the small number of health-care organizations that have implemented such concepts. These efforts have transformed health care at a small scale, such as improving the efficiency of a hospital pharmacy, and at much larger scales, such as coordinating operations across an entire hospital system or across a community. Systems tools and methods, moreover, can be used to ensure that care is reliably safe, to eliminate inefficient processes that do not improve care quality or people's health, and to ensure that health care is centered on patients and their families. Notwithstanding the instances in which these methods and techniques have been applied successfully, they remain underutilized throughout the broader system.

The primary barrier to greater use of systems methods and tools is the predominant fee-for-service payment system, which is a major disincentive to more efficient care. That system rewards procedures, not personalized care. To support needed change, the Nation needs to move more quickly to payment models that pay for value rather than volume. These new payment models depend on metrics to identify high-value care, which means that strong quality measures are needed, especially about health outcomes. With payment incentives aligned and quality information available, health care can take advantage of an array of approaches using systems engineering to redesign processes of care around the patient and bring community resources, as well as medical resources, together in support of that goal.

Additional barriers limit the spread and dissemination of systems methods and tools, such as insufficient data infrastructure and limited technical capabilities. These barriers are especially acute for practices with only one or a few physicians (small practices) or for community-wide efforts. To address these barriers, PCAST proposes the following overarching approaches where the Administration could make a difference:
1. Accelerate alignment of payment systems with desired outcomes,
2. Increase access to relevant health data and analytics,
3. Provide technical assistance in systems-engineering approaches,
4. Involve communities in improving health-care delivery,
5. Share lessons learned from successful improvement efforts, and
6. Train health professionals in new skills and approaches.

Through implementation of these strategies, systems tools and methods can play a major role in improving the value of the health-care system and improving the health of all Americans.


Ken Musselman