A New U.S. Health Care System
Creating Substantial Reform by 2011

Denis Cortese, M.D., President and CEO of Mayo Clinic

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Robert Smoldt, Vice President and Chief Administrative Officer

Editor's Note: Denis Cortese, M.D., CEO of Mayo Clinic, and Robert Smoldt, CAO of Mayo Clinic, recently published an essay describing a visiong for health care delivery in the 21st century. Read the full article in Mayo Clinic Proceedings.

The Problem

The current health care system in the United States is broken. A confluence of issues point to the fact that significant reform must take place within the next few years:

Quality - Nearly half of physician care is not based upon best practices. Nearly 100,000 people die from a medical error each year.

The uninsured - The number of uninsured or underinsured in America is rising. In 2004, there were nearly 46 million uninsured people, according to the U.S. Census Bureau.

Public distrust - Among those who have health insurance, more than one-third report being very worried that their health plans are more concerned about money than about them.

Misaligned payment incentives - The current outpatient Medicare model rewards doing more even though studies have found no evidence that doing more improves outcomes or satisfaction of patients with chronic disease.

Rising costs - With the exception of the mid-1990s, health insurance premium increases have generally exceeded the rate of increase in the Consumer Price Index as well as worker earnings.

Aging baby boomers - In 2011, the first baby boomers will qualify for Medicare. This will put a huge strain on the program.

No real system of care - The health care industry doesn't function as a system ... rather like disparate parts with few connections.

Toward a Solution: Vision and Principles

It's simple to draw attention to what's wrong. But what can we do to make it right? How would a health system work in an ideal world? In the book, "Crossing the Quality Chasm: A New Health System for the 21st Century," the Institute of Medicine outlines the goals of an ideal health system: medical care that is safe, effective, efficient, timely, equitable and patient centered.

To accomplish these goals, Mayo Clinic envisions a new health care system that functions as a learning organization. Business guru Peter Senge describes learning organizations as places "where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together."

Elements of a learning organization include:

1. Shared vision - Our vision for health care is a system that is safe, effective, efficient, patient centered, timely and equitable.

2. Information technology - A vision for the role of information technology is to have all information about an individual's health care immediately available to both physician and patient — anywhere in the world — with the simple click of a computer key. For example:

• Over the last 10 years, Kaiser Permanente — which provides health care coverage and medical care to more than 8.3 million members throughout the country — has invested $3.2 billion into a comprehensive electronic health information system. The overriding goal is to improve the quality of care. Once fully implemented, patient medical information and clinical decision support will be available all the time, more than one clinician will be able to use a single patient's information simultaneously, and patients can more easily participate in their own care.
  
  Information technology is key to providing safe and effective ongoing care for patients and mandatory for generating knowledge. Unfortunately, only 15 percent of U.S. physicians' offices and 20 percent to 25 percent of hospitals are using electronic medical records.

3. Systems engineering - Physicians need to know how to improve the processes of care ... they need training in engineering principles and partnerships with engineers. Some examples include:

• Henry Plummer, M.D. - Dr. Plummer was an early partner in the Mayo Clinic practice. He was the first in the world to suggest a system of keeping clinic and hospital notes in a central repository, instead of in physicians' and surgeons' offices.
• Lean management at Virginia Mason (VM) - By working to eliminate waste, VM created more capacity in existing programs and practices so that planned expansions were scrapped, saving significant capital expenses: $1 million for an additional hyperbaric chamber that was no longer needed; $1 million to $3 million for endoscopy suites that were not needed. Despite a no-layoff policy, staffing trends at VM show a decrease in 2003 and 2004 after six years of annual increases. Using lean principles, staff, providers and patients have continuously improved or redesigned processes to eliminate waste, requiring fewer staff members and less rework and resulting in better quality.

4. Professionalism - Individuals in learning organizations move beyond mastering a basic body of knowledge, completing an apprenticeship and practicing. They should expand their knowledge through perpetual education, pass on knowledge through teaching or mentoring and add to the body of knowledge through basic, clinical or health sciences research. Examples include:

• Making New Cancer Therapies Available More Quickly - In their efforts to explore more effective and efficient ways to conduct clinical trials, Mayo Clinic cancer researchers presented new recommendations about how long studies should track results when evaluating new cancer therapies. The analysis showed that many study results garnered after three years are just as reliable as those produced after five years.
• SARS work - A Mayo Clinic researcher was the first to develop a series of three-dimensional (3-D) models of an enzyme responsible for the replication of the deadly Severe Acute Respiratory syndrome (SARS) virus. These instantaneous "structures-in-time" are central to designing an anti-SARS drug.

An Implementation Framework

To achieve this vision of a new health care system for America — one that functions as a vibrant, innovative learning organization — stakeholders should adopt the following roles and responsibilities:

• Providers must commit to achieving a collaborative learning organization for health care, competing only to provide the best care and to advance medical science.

• Patients are central in this model. They are partners with their care team, making healthy lifestyle choices and following through with their care plan. Patients also should have some element of financial responsibility — a financial stake — in their medical care. They must insure themselves and their families. If they can't afford health insurance, the government should help cover the costs.

• Insurers have an important role in this new system. It is to improve the health of their enrollees. A recent survey of insurance plans that measure and report performance data was performed by the National Committee for Quality Assurance, a privately funded nonprofit group, and "U.S. News & World Report." It found that many insurers have improved patient care. All private insurers need to operate in a way that is patient centered. Insurance companies must have a financial stake in supporting prevention and treatment of chronic diseases — and they should take care of their members throughout a lifetime, not simply until they turn 65.

• The government's role would change from insurance company to enabler of innovation and a financier/coordinator of private health insurance, based on need, perhaps by providing sliding scale financial assistance to purchase private insurance.

  Innovator
  The government has a central role in pulling together the disparate parts of our health care system, supporting the diffusion of knowledge and creating mechanisms to allow medicine to function as a learning organization.

  As an enabler of innovation, the government can convene private, standard-setting activities designed to foster competition based upon quality, service and cost. The government could also create a regulatory board that provides incentives for providers to quickly adopt safety and quality improvements.

  Financier/Coordinator
  Many aspects of this approach for health care reform are based on the Federal Employees Health Benefits Plan (FEHBP), which provides private health insurance to federal employees through a market-based system of choice and competition among insurance plans. FEHBP, as a model, is affordable, offers choice, covers drugs, has no state mandates and allows people the right to purchase more options. Employers would not be required to provide health insurance, but, in the interest of their business or employees, could choose to contribute to the cost. The federal government could coordinate these insurance offerings through an organization such as the Office of Personnel Management, which currently runs the FEHBP at a relatively low administrative cost.

  The federal government has a significant role to help finance insurance for those who are in need. The government would determine who is eligible for financial assistance to purchase health care. Assistance can be in the form of vouchers, tax credits or direct payment. Financial assistance could be based on income, age, disability or any other criteria the government chooses. Eventually, there would no longer be a need for a separate Medicare or Medicaid program, as this new model would ensure coverage for all. A transition period may be necessary to avoid disruption for current beneficiaries.

This model offers several benefits:

1. It allows the government to focus its limited financial resources on those who need help, an imperative as the baby boom generation reaches Medicare's current eligibility age.
2. It allows everyone to choose from among multiple insurance offerings, as long as they meet the minimum package requirements. Individuals could buy coverage that exceeds the minimum, if they wished.
3. It provides assurance that everyone will have access to a basic level of affordable, market-based universal health insurance.

Next Steps

These principles provide a strong foundation upon which to build a learning health system for all Americans. We also realize that others have creative ideas about how to transform health care in order to meet the needs of patients.

All stakeholders must come forward to share ideas and develop consensus on best approaches for solving the problems within our health care system. To help facilitate this discussion, Mayo is sponsoring health reform symposia and forming a health policy center, a nonpartisan collaboration of stakeholders who are committed to making meaningful health care reform a reality by 2011. We invite and welcome your participation.