The Bush administration will use a report published last week by the Institute of Medicine to develop new policies that could transform America's "ailing healthcare system," officials said after the IOM released its gloomy assessment of the industry. But critics contend the report may not easily catalyze the sweeping reform that the IOM suggests is necessary.
"There isn't a lot of loose change in most states' pockets to do major demonstration projects to expand insurance coverage," said Ed Howard, executive vice president of the Alliance for Health Reform in Washington, referring to the report's recommendations that states test new ways to broaden access to health insurance.
"Don't look for this to be an immediate transformation," Howard said of the policies that could stem from the IOM report.
At the outset of its report, the IOM acknowledges the scope of the problem.
"The American healthcare system is confronting a crisis," the report states. "The cost of private health insurance is now increasing at an annual rate in excess of 12%, while at the same time individuals are paying more out of pocket and receiving fewer benefits. One in seven Americans is uninsured, and the number of uninsured is on the rise. ... The healthcare delivery system is incapable of meeting the present, let alone the future needs of the American public."
The IOM is a division of the National Academy of Sciences, a private, not-for-profit organization that advises Congress on scientific issues.
Prepared at the request of HHS Secretary Tommy Thompson, the 93-page IOM report outlines five strategic areas in which state-level demonstration projects should test initiatives to expand access to and improve the quality of care. Demonstration projects are nothing new for HHS, but the agency hopes that more aggressively using states as laboratories will determine which approaches are ineffective, and which ones should be translated into federal policy.
The five areas the IOM recommended for demonstration projects are chronic-disease management, expanded insurance coverage, information technology development, malpractice reform and primary-care enhancement.
"If we want to continue to deliver high-quality healthcare we need to make some changes," an HHS spokesman said. The IOM report, he said, "is a beginning, not an end."
HHS has no immediate plans to begin the demonstration projects, but as of last week Thompson planned to meet Nov. 24 and 25 with about 30 industry luminaries-including some members of the IOM report committee-to sketch out next steps, according to the agency.
"Demonstration projects can be an important tool for encouraging innovation and paving the way toward progress," Sen. Bill Frist (R-Tenn.) said in a written statement last week. "I'm particularly encouraged by the report's focus on the importance of liability reform and information and communications technology."
In a section of the IOM report detailing a "patient-centered and safety-focused" approach to liability reform, the authors call for demonstration projects that would "create injury compensation systems outside of the courtroom ... while also addressing provider concerns about rapidly rising liability insurance premiums."
Gail Warden, president and chief executive officer of Henry Ford Health System in Detroit and chairman of the IOM committee, told Modern Healthcare that the recommendations represent "quite a departure from (current) tort liability."
In some respects, however, the committee's recommendations may not prompt such a change.
"The proposed demonstrations showcase good ideas that can make a difference," said Len Nichols, a vice president of the Center for Studying Health System Change in Washington.
Though in some cases, Nichols said, the recommendations "fall a bit short of bold and transformational. For example, the primary-care demonstration focuses on physicians in community health centers. I think you can make a strong case that at least some of the primary-care demonstrations should be in private physicians' practices, where most Americans get their care."
As previous IOM reports have done, the latest one stresses the importance of information systems that coordinate the exchange of data both inside the hospital and across the industry. Specifically, the report suggests demonstration projects focused on computerized patient records, decision support tools that physicians and others can use at the point of care, knowledge-management applications and Web-based communications.
Some of the recommendations made in the report would require legislative action, such as tax credits and Medicaid expansions to help low-income families buy insurance coverage, and most would require significant support from the Bush administration.
"Secretary Thompson is quite receptive to trying these ideas, or appears to be," Warden said.