The Institute of Medicine ("IOM") issued a report yesterday entitled "Best Care at Lower Cost: The Path to Continuously Learning Health Care in America," which concludes that "pervasive inefficiencies, an inability to manage a rapidly deepening clinical knowledge base, and a reward system poorly focused on key patient needs, all hinder improvements in the safety and quality of care and threaten the nation's economic stability and global competitiveness."  According to the report, the United States healthcare system wastes approximately $750 billion annually through six main areas of waste, which include unnecessary services ($210 billion), inefficient delivery of care ($130 billion), excess administrative costs ($190 billion), inflated prices ($105 billion), prevention failures ($55 billion) and fraud ($75 billion).  The report provides several recommendations to improve the healthcare system including:

• Fully adopting electronic medical records
• Revising regulations to allow for better care coordination through clinical data
• Ensuring that clinicians and patients are informed by current best evidence
• Engaging patients and their families in care decisions
• Promoting community-clinical partnerships and services to improve the system at the community level
• Restructuring payment and contracting structures to reward effective communication and coordination among members of the patient's care team
• Continuing to improve health care operations to reduce waste, streamline delivery, and focus on activities that improve patient health
• Restructuring payment models to reward continuous learning and improvement in care
• Increasing transparency on health care system performance
• Expanding the commitment to the goals of continuous learning and improvement

The IOM noted that if the current system is left unchanged, "health care will continue to underperform; cause unnecessary harm; and strain national, state, and family budgets.  The actions required to reverse this trend will be notable, substantial, sometimes disruptive – and absolutely necessary."

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