IOM Report Highlights Health System Inefficiencies

America's health care system has become too complex and costly to continue business as usual, according to a new report from the Institute of Medicine (IOM) that calls for a systemwide transformation. IOM analyses indicate that about 30% of health spending in 2009—more than $750 billion—was wasted on unnecessary services, inefficient delivery of care, excess administrative costs, inflated prices, prevention failures, and fraud. Inefficiencies have other costs: as many as 75,000 deaths might have been averted in 2005, according to research cited in the report, if every state had delivered care at the quality level of the best-performing state.

The changes called for in the 360-page report, Best Care at Lower Cost: The Path to Continuously Learning Health Care in America, will transform the U.S. health system into a “learning” system that continuously improves by systematically capturing and broadly disseminating lessons from every care experience and new research discovery. The changes will necessitate embracing new technologies to collect and tap clinical data at the point of care, engaging patients and their families as partners, and establishing greater teamwork and transparency within health care organizations.

The report focuses particularly on improvements to the “digital infrastructure,” or “the capacity to capture clinical, care delivery process, and financial data for better care, system improvement, and generation of new knowledge.” Health care organizations and clinicians should adopt decision support tools and knowledge management systems that deliver up-to-date, reliable clinical knowledge at the point of care. Research and advocacy organizations, professional societies, and care delivery systems should facilitate the development and use of evidence-based and harmonized clinical practice guidelines.

Patient-centered care is also a primary focus of the report. Health care organizations can do much more to engage patients and families in care decisions and illness management, which can lead to better outcomes and lower costs. The report calls on health care organizations to embrace new tools to gather and assess patients' perspectives and use the information to improve delivery of care. Health care product developers should create tools that assist people in managing their health and communicating with their providers.

Chapter 9, “Creating a New Culture of Care,” and Appendix B, “A CEO Checklist for High-Value Health Care,” offer a blueprint for transforming health care organizations to learning systems. Appendix C, “ACA Provisions With Implications for a Learning Health Care System,” aligns the changes called for in the report with specific provisions of the Affordsable Care Act.

The report was sponsored by the Blue Shield of California Foundation, Charina Endowment Fund, and Robert Wood Johnson Foundation. It can be downloaded from the National Academies Press Web site at www.nap.edu/catalog.php?record_id=13444.