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Date Updated: November 9, 2011

Health System Reform Policies Appendix

Evidence of the Need For Reform of the Healthcare System

The facts about our healthcare system present self-evident reasons for the need for reform. Our healthcare system has excluded tens of millions of Americans who are unable to afford any health insurance and many millions more who are underinsured because they cannot afford sufficient insurance. We need insurance and payment mechanisms that assure quality care for and protect the health of all of the public.

The composition and distribution of the healthcare workforce are not in balance with the needs of the public. Of special concern are impending shortages, especially in primary care. There are significant imbalances in the distribution of healthcare professionals with respect to specialties and geography. These imbalances result in differential access and outcomes for patients. The healthcare system must assure that there are sufficient professionals to meet public needs for healthcare services across all areas of our nation. We need a compensation and incentive system that helps achieve this goal.

Our healthcare system is plagued by preventable medical errors and adverse events5, and in too many instances, unacceptable variations in quality within and across geographic regions. Some patients receive quality care; others do not. The system is fragmented, lacking patient-centered coordination and care. The fragmentation of care increases the likelihood of medical errors and quality deficits. We need to remove the system roadblocks to quality care and improve clinicians’ skills in avoiding errors and optimizing quality.

There is a mismatch between the health needs of the public and the payment systems for professionals. Some specialties are undercompensated while others are overcompensated. Compensation is based on the number of procedures, rather than on patient-centered care that furthers prevention and optimal allocation of resources. Utilization of the clinicians’ total body of medical and communication skills is undervalued. The result is a misdirected and inefficient use of resources and excessive expenditures. We need compensation structures based on the treatment needs of the patient, the body of skills of the clinicians, the outcomes of care, and the financial incentives for professionals to serve those needs in an efficient way.

5 The Institute of Medicine (IOM) has recognized the issue of quality of care as important to the landscape of current healthcare policy. Its two landmarks reports, To Err Is Human and Crossing the Quality Chasm clearly indicate the importance of quality in the current healthcare debate.


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