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Health care industry

Redesigning American Health Care for the Better: Lessons from Successful Communities

Strategic Insights

— 2 min read

As the national health-reform debate heats up, Americans are faced with a daunting task: redesigning a healthcare system that is bankrupting the nation. The current system's exploding costs and inadequate coverage have led to calls for either raising taxes or rationing care. However, a more desirable alternative exists: changing how care is delivered to make it both less expensive and more effective. By studying communities across America, a group of researchers has identified 74 "positive outliers" – Hospital Referral Regions with low or declining per capita Medicare costs and above-average quality scores. These regions, including Asheville, N.C.; Cedar Rapids, Iowa; and Sacramento, have discovered ways to provide excellent care while spending significantly less than the national average. Through their innovative approaches, these communities have shown that better, safer, and lower-cost care is within reach.

Key Takeaways:

  • 74 Hospital Referral Regions in the US have been identified as "positive outliers" with low or declining per capita Medicare costs and above-average quality scores.
  • These regions include Asheville, N.C.; Cedar Rapids, Iowa; Everett, Wash.; La Crosse, Wis.; Portland, Me.; Richmond, Va.; Sacramento; Sayre, Pa.; Temple, Tex.; and Tallahassee, Fla.
  • The per capita Medicare costs in these regions are $1,500 (16%) lower than the national average, with a slower real annual growth rate (3% vs. 3.5% nationwide).
  • These regions have implemented various approaches to achieve better, safer, and lower-cost care, including:

+ Salaried doctors employed by a unified local system focused on quality of care (Temple and Sayre).

+ Electronic systems to improve communication among physicians and quality of care (Cedar Rapids).

+ Collaborations among doctors, state officials, insurers, and community leaders (Portland).

+ Hospital mergers and eliminations of unneeded beds (Asheville).

  • These successful communities demonstrate that better, safer, and lower-cost care is within reach, and that many high-cost regions are just a few hours' drive from a lower-cost, higher-quality region.
  • The various reform bills making their way through Congress have included provisions to protect successful medical communities by incorporating payment approaches that reward those that slow spending growth while improving patient outcomes.

Statistics:

  • 74 Hospital Referral Regions in the US have been identified as "positive outliers" with low or declining per capita Medicare costs and above-average quality scores.
  • These regions spend $1,500 (16%) less per Medicare patient than the national average, with a slower real annual growth rate (3% vs. 3.5% nationwide).
  • The number of CAT scans performed in the US is 62 million per year for 300 million people.
  • Cedar Rapids, Iowa, has a CAT scan rate of 52,000 per year for a community of 300,000 people, which is better than the national average.

Sources:

  • The Dartmouth Atlas of Health Care
  • The Mayo Clinic
  • The Cleveland Clinic
  • The Guthrie Clinic
  • The Scott and White clinic
  • The Joint Commission

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