Physician Viewpoint: 3 Levers to Improve Delivery System…Or Risk Failure

I co-authored a Health Affairs blog with Robert Pearl, CEO of The Permanente Medical Group and president/CEO of the Mid-Atlantic Permanente Group. He and I chair and vice chair, respectively, the Council of Accountable Physician Practices, representing the nation’s largest multi-specialty medical groups. Below is an abbreviated version of what we recommend policymakers consider to truly improve U.S. health care delivery.

The last few months have been an anxious time. Daily, elected officials face angry constituents fearful of losing their coverage. What is clear is that voters want affordable, convenient, technologically enabled, high-quality medical care.

Such care is possible, but only by leveraging the “doctor-patient” relationship and transforming how medical care is structured, measured and reimbursed. Policymakers who focus predominantly on health insurance coverage will fail unless they simultaneously focus on transforming and modifying the delivery system; otherwise, the cost of providing that care will erode any program they create.

There are different “levers” to pull for delivery system improvement. Three are fundamental:

Value-Based Payment: A fee-for-service system based on volume, even when outcomes are suboptimal, will not cure quality and cost problems. We need instead to pay providers for producing good health and achieving best outcomes quickly and safely.

The public and private sectors have made strides in shifting health care payments from volume- to value-based. Medicare Advantage and Medicaid managed care programs continue to grow. Payers are experimenting with accountable care organizations, capitated approaches and bundled payments for episodes of care. These efforts need to continue. Coupled with quality reporting, the shift to capitation and other forms of prepayment creates the right incentive for providers to deliver the highest quality care, every time.

We recognize that not all providers are ready to accept full capitation, and that bundled payments, if done well, are an important step in the right direction. However, to make significant cost reductions and improve people’s health:

  • Payers must broaden these programs’ scope to include common chronic conditions, such as coronary artery disease and diabetes.
  • They must reward disease prevention and improved patient safety.
  • We need scientifically sound research to ensure the scope of any given payment bundle is consistent with the natural history of the disease, and that it produces high-quality, long-term outcomes.

Widespread, Coordinated Use of Robust Health Initiative Technology (HIT): The federal government invested $30 billion in incentives for health care providers to purchase HIT, yet different vendors’ systems can’t “speak” to one another. The Office of the National Coordinator for Health Information Technology expressed concern that, for competitive reasons, some EHR vendors deliberately make the exchange of health information from one system to another difficult or impossible.

This type of fragmentation isn’t tolerated in any other industry, whether banking or travel. People want and deserve the secure, private and convenient access to services and information in health care.

  • HIT must allow patients and providers to connect in more efficient and convenient ways, such as secure email messaging and telephone and video visits. Current reimbursement policies, particularly in Medicare, disincentive the use of these methods, forcing patients to miss work and school for office visits or delay treatment.
  • Vendors should open their Application Program Interfaces (APIs) so third-party developers can connect disparate systems and achieve full HIT interoperability.
  • Payment policy should allow providers to use and be reimbursed for e-health interactions over the telephone, secure email or video when medically appropriate and preferred by the patient.

Improved, Harmonized Quality Measurement: We can’t pay for value if we don’t know it when we see it. If we want to improve health while lowering cost, it is essential to determine who benefits from care they receive and who does not. And if we want to empower consumers to make better choices in health care coverage, we need to provide quality information at the delivery system level.

The current “system” of quality measurement in this country is fragmented, redundant, burdensome to providers and confusing for patients.


  • We must identify the highest-value measures, quickly measuring outcomes of care rather than processes, when possible. This will require robust risk-adjustment mechanisms to account for clinical, demographic and socio-economic differences among patient populations.
  • Outcome measures must be organized around things patients care about, such as how quickly they can resume normal activities and return to work. We need to include all care settings, including hospitals, surgical centers and medical offices.
  • Private and public payers need to standardize quality measures and limit their total number to avoid overwhelming and unfairly burdening doctors and hospitals.

Looking ahead: The impending health care crisis will not be averted, regardless of what happens to the Affordable Care Act, unless we move from fragmentation to integration; from volume- to value-based payment; and from paper records and stand-alone computers to interoperable, comprehensive electronic systems. If these issues are ignored in the rancorous debate about health care coverage, then no matter the outcome, the system will fail.

We have a tremendous opportunity today to transform health care in this nation, and together we must embrace a new path forward.

Norman Chenven, MD, is the Founding Chief Operating Officer of Austin Regional Clinic.