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The Performance Improvement Imperative: Utilizing a Coordinated, Community-Based Approach to Enhance Care and Lower Costs for Chronically Ill Patients

As the second decade of the 21st century unfolds, the federal government finds itself with significantly expanded capacity to catalyze improvement in the delivery of health care services. At the same time, rising federal budget deficits, coupled with the need for coordinated action across public and private payers and governmental authorities, present significant logistical, fiscal, and political challenges. How can the nation seize this unique moment to improve health system performance in the face of such complexity and uncertainty?

The Commonwealth Fund Commission on a High Performance Health System believes the federal government needs a comprehensive, disciplined implementation plan that takes full advantage of the new opportunities provided by the Affordable Care Act, the American Recovery and Reinvestment Act, and the Health Information Technology for Economic and Clinical Health (HITECH) Act. We identify the following general principles to help guide this strategic plan:

  • Develop a strong vision for performance improvement that includes clear performance improvement goals.
  • Set priorities for implementation consistent with those goals through a collaborative process involving public and private sector stakeholders.
  • Simplify payment methods, delivery models, and performance improvement targets to reduce errors, minimize the burden on health care providers, and decrease systemwide costs, while also enabling and encouraging a wide variety of health system actors to participate.
  • Build into the implementation plan the capacity for rapid data-driven feedback, to capture early results and inform midcourse corrections.
  • Act fast, by creating new processes for policy development and regulatory review.

To begin, the nation must create a vision for improving the overall health of the population, enhancing patient experiences with care, and lowering the growth in health care costs. To that end, the federal government, in partnership with other public and private participants in the health care sector, should seek by 2016 to double the current annual rate of improvement in quality-of-care metrics tracked by the Agency for Healthcare Research and Quality, from 2.3 percent to 4.6 percent. The focus, at least at first, should be on areas where the potential is greatest to facilitate prevention, make health care safer for patients, and reduce preventable complications of care.

The nation should also aspire to reduce the growth in health care costs. By 2016, the annual increase in national health care expenditures per capita should be held to the annual growth in per capita gross domestic product plus 0.5 percentage points (4.4%, given current projections), a rate that should be maintained thereafter. Bringing the increase in health spending more in line with economic growth would reduce total national health expenditures by $893 billion over 10 years, compared with current trends.

One possible way to achieve these goals is to prioritize improvement in chronic disease care, in particular for patients with multiple, high-cost conditions. Under our proposal, local communities would seek to involve all chronically ill residents, regardless of health insurance status or source of coverage, in care improvement initiatives utilizing three evidence-based tools: payment reform, to encourage accountability; primary care, to improve care coordination; and health information technology, to promote information use and sharing. It is important to note that "communities" is defined broadly as any area where providers, payers, residents, and others work together to achieve common goals related to improving care and reducing costs for the high-cost chronically ill. Armed with these tools and with sufficient flexibility in approach, such community-based initiatives would achieve synergies to fuel rapid progress in care for a population that bears a high burden of illness and accounts for a disproportionate share of health system costs.

We propose that over the next 12 months, the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services use the extraordinary new resources made available by recent legislation to create 50 to 100 voluntary "Health Improvement Communities" that utilize these and other tools to mobilize public and private resources for the improvement of care provided to complex, high-cost patients. The selected communities should receive both seed funding and regulatory relief in support of program goals. This should include waivers enabling close coordination between Medicare and Medicaid, so as to optimize care for dually eligible patients, and encouraging the participation of private payers to help align incentives and support local action. Additional financial resources and technical support should be made available to communities that express an interest in participating but are not initially selected.

The potential savings from improving care for high-cost chronically ill patients are significant. Recent research undertaken by the Urban Institute for The Commonwealth Fund found that building on the reforms contained in the Affordable Care Act to improve care for the chronically ill has the potential to save $306 billion over the 10-year period from 2013 to 2022. If 50 to 100 Health Improvement Communities are established, it is possible to achieve $184 billion in national health expenditure savings from the recommended combination of new payment strategies to advance the patient-centered medical home model of primary care and to encourage providers to be more accountable for the cost and quality of the care they deliver. These savings would account for 21 percent of the $893 billion in reduced national health spending proposed above as a systemwide target.

Improving care for the chronically ill is just one of many steps required to lower national health spending and bring about the dramatic change needed in the way health care is organized and provided. Clearly there are additional compelling priorities for performance improvement—among them, care for vulnerable populations, pregnant women, and newborn children. But the nation cannot prioritize everything at once; it must choose a strategy that promises significant gains in quality and efficiency within a short period. We simply cannot afford to wait.

To foster "game-changing" innovation in the U.S. health care system, federal, state, and local leaders must partner with private sector stakeholders in using the new authorities available under the Affordable Care Act and other federal statutes. Doing so will not only realize much-needed savings in federal and state budgets, but it will also improve the health, well-being, and financial security of millions of patients and their families.

Publication Details



The Commonwealth Fund Commission on a High Performance Health System, The Performance Improvement Imperative: Utilizing a Coordinated, Community-Based Approach to Enhance Care and Lower Costs for Chronically Ill Patients, The Commonwealth Fund, April 2012.