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 Aiming High or t he U .S. Health System:  A Context or Health Reorm  Ka ren Davis, Cathy Schoen,  Katherine Shea, and Christine Haran O n the eve o the presidential inauguration, the U.S. health system aces rising costs o care, growing numbers o uninsured,  wide variations in quality o care, and mounting public dissatisaction. 1 Despite spending more on health care than any other country, a recent Com- monwealth Fund Commission on a High Per or- mance Health Care System National Scorecard reports that the United States is lagging ar behind other major industrialized countries — all o which provide universal health insurance — in ve key domains: healthy lives, access, quality, equity, and eciency. 2 U.S. national perormance is well  below benchmarks o top perormance set by other countries or high perorming states, hospitals, or health plans within the United States, 3  with broad disparities in experience depending on geographic location, income, race/ethnicity, and insurance coverage. National leadership is required to man- age the growing health care crisis in the United States and improve care or all Americans. This article presents an overview o how the United States ares in comparison to the rest o the industri- alized world in key domains. It draws on the 2008 Commonwealth Fund National Scorecard on Health System Perormance (hereater reerred to as the Scorecard), an update o the 2006 rst edition that presents a whole-system view, capturing changes in perormance across dimensions including qual- ity, access, eciency, equity, and health outcomes. 4 In 2008, the U.S. scored 65 out o 100 on indica- tors reecting these key dimensions o perormance,  where the 100 benchmark is based on the best per- ormance achieved internationally and in the U.S., and in relation to desired policy goals identied by the Commonwealth Fund Commission on a High Peror- Karen Davis, Ph.D., is the President o The Common- wealth Fund, a private oundation that aims to promote a high perorming health care system that achieves better ac- cess, improved quality, and greater eciency, particularly  or society’s most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults. She is a nationally recognized economist, with a distinguished career in public policy and research.  Cathy Schoen, M.S., is a Senior Vice President at The Com- monwealth Fund. She is a member o the Fund’s executive management team and the Research Director o the Fund’s Commission on a High Perormance Health System. Her work includes strategic oversight and management o sur- veys, research and policy initiatives to track health system  perormance. Katherine Shea is s research associate or the  president o The Commonwealth Fund. She is currently pur- suing an M.P.H. degree in Health Policy rom Columbia’s  Mailman School o Public Health. Christine Haran, M.A., is the Director o Online Inormation or The Commonwealth  Fund. health care • winter 2008 629

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 Aiming Highor the U.S.

Health System: A Context orHealth Reorm Karen Davis, Cathy Schoen,

 Katherine Shea, and 

Christine Haran

On the eve o the presidential inauguration,the U.S. health system aces rising costso care, growing numbers o uninsured,

 wide variations in quality o care, and mountingpublic dissatisaction.1 Despite spending more onhealth care than any other country, a recent Com-

monwealth Fund Commission on a High Peror-mance Health Care System National Scorecardreports that the United States is lagging ar behindother major industrialized countries — all o whichprovide universal health insurance — in ve key domains: healthy lives, access, quality, equity,and eciency.2 U.S. national perormance is well below benchmarks o top perormance set by othercountries or high perorming states, hospitals, orhealth plans within the United States,3  with broaddisparities in experience depending on geographiclocation, income, race/ethnicity, and insurance

coverage. National leadership is required to man-age the growing health care crisis in the UnitedStates and improve care or all Americans.

This article presents an overview o how the UnitedStates ares in comparison to the rest o the industri-alized world in key domains. It draws on the 2008Commonwealth Fund National Scorecard on HealthSystem Perormance (hereater reerred to as theScorecard), an update o the 2006 rst edition thatpresents a whole-system view, capturing changesin perormance across dimensions including qual-ity, access, eciency, equity, and health outcomes.4 

In 2008, the U.S. scored 65 out o 100 on indica-tors reecting these key dimensions o perormance, where the 100 benchmark is based on the best per-ormance achieved internationally and in the U.S.,and in relation to desired policy goals identied by theCommonwealth Fund Commission on a High Peror-

Karen Davis, Ph.D., is the President o The Common-wealth Fund, a private oundation that aims to promote ahigh perorming health care system that achieves better ac-cess, improved quality, and greater eciency, particularly  or society’s most vulnerable, including low-income people,the uninsured, minority Americans, young children, and elderly adults. She is a nationally recognized economist,

with a distinguished career in public policy and research. Cathy Schoen, M.S., is a Senior Vice President at The Com-monwealth Fund. She is a member o the Fund’s executivemanagement team and the Research Director o the Fund’sCommission on a High Perormance Health System. Her work includes strategic oversight and management o sur-veys, research and policy initiatives to track health system perormance. Katherine Shea is s research associate or the president o The Commonwealth Fund. She is currently pur-suing an M.P.H. degree in Health Policy rom Columbia’s Mailman School o Public Health. Christine Haran, M.A.,is the Director o Online Inormation or The Commonwealth Fund. 

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mance Health System.5 It also ofers reorm options

that have the potential to achieve universal coverage while lowering health spending relative to projectedtrends by improving inormation or health care deci-sion making, promoting health and enhancing diseaseprevention, aligning nancial incentives with quality and eciency, and correcting price signals in healthcare markets.

U.S. Falling BehindThe U.S. scores worse relative to other industrializednations on health outcomes, access, quality, eciency,and equity and also compares poorly overall relativeto benchmarks achieved within the United States.6 Further, between 2006 and 2008, U.S. health sys-tem perormance declined and variability increased. With health care costs rising aster than ination and

increasing numbers o Americans uninsured or under-

insured, the U.S. is clearly on the wrong track, makinghealth reorm an urgent priority or the nation. Theollowing highlights Scorecard ndings rom an inter-national perspective.

 Long, Healthy, and Productive LivesThe Scorecard ound that the U.S. is less likely thantop-perorming countries to promote long, healthy,and productive lives among its residents. On a criti-cal indicator within this dimension o care, “mortality amenable to health care” — a measure that includesdeaths beore age 75 or conditions that could be pre- ventable or modiable by efective health care — the

Figure 1

Mortality Amenable to Health Care

* Countries’ age-standardized death rates, ages 0–74; includes ischemic heart disease.

See Technical Appendix for list of conditions considered amenable to health care in the analysis.

Data: E. Nolte, London School of Hygiene and Tropical Medicine analysis of World Health Organization (WHO) mortality les.

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

 With health care costs rising aster than ination and increasingnumbers o Americans uninsured or underinsured, the U.S. is clearly on the

 wrong track, making health reorm an urgent priority or the nation.

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U.S. ell rom 15th to last place among the 19 industri-alized countries in the analysis. There were 110 suchdeaths per 100,000 people in the U.S., compared to 65

per 100,000 in France, the best-perorming country on this indicator (Figure 1). Although the U.S. rateimproved by our percent between the two study peri-ods or this indicator (1997-1998 and 2002-2003),mortality amenable rates improved by 16 percent, onaverage, in the other countries.

 AccessThe Scorecard ound that access is one o the dimen-sions in which the U.S. perorms most poorly. Poor

access to care is the rst barrier to achieving high-quality care. As the number o Americans withoutinsurance has steadily grown, so has the number o those considered “underinsured” — insured but stillexposed to catastrophic medical costs relative to theirincomes.7 In 2007, 25 million working-age adults (14percent) were underinsured, an increase o 56 percentor 9.6 million adults since 2003. Given erosion in cov-erage and rising costs o care, amilies are increasingly 

Figure 2

Access Problems Because of Costs, 2007

* Did not get medical care because of cost of doctor’s visit, skipped medical test, treatment, or follow-up because of cost, or did

not ll Rx or skipped doses because of cost.

AUS=Australia; CAN=Canada; GER=Germany; NET=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2004 and 2007 Commonwealth Fund International Health Policy Surveys.

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

Universal health insurance that simplies insurance enrollment,increases continuity o coverage, and institutes health system reorms that

encourage cost-efective care, early primary care, and movement away roma ee-or-service system o payment would save the U.S. billions o dollars in

national health expenditures.

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Figure 3

Medications Reviewed When Discharged from the Hospital, Among Sicker Adults, 2005

Note: Indicator was not updated due to lack of data. Baseline gures are presented.

AUS=Australia; CAN=Canada; GER=Germany; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2005 Commonwealth Fund International Health Policy Survey of Sicker Adults (Schoen et al. 2005)

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

Figure 4

Medical, Medication, and Lab Errors Among Sicker Adults, 2007

AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2005 and 2007 Commonwealth Fund International Health Policy Surveys

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

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likely to struggle with unpaid medical bills and accu-mulated debt. By 2007, two o our U.S. adults (41percent) reported a medical bill problem or outstand-ing medical debt, compared to 34 percent in 2005.

People who cannot aford to pay or care out o pocket — a group that includes the uninsured andthe underinsured — have been shown to skip neededcare and medications, practices that oten result in aneed or more expensive care at a later date.8 In 2004,40 percent o Americans did not get appropriate care because o costs. Yet in 2007, not much changed: 37percent o American adults reported that they didnot visit the doctor, skipped a medical test, treatment

or ollow-up, or did not ll a prescription or skippedmedication doses because o cost (Figure 2). By con-trast, in the Netherlands, which has an excellent sys-tem o primary care including an organized of-hourscare system, only ve percent o people reported thisproblem.

QualityThe U.S. health care delivery system is characterized by poor coordination — i.e., no coherent transitionsin care and a payment system that does not promote

integration. Thus, without adequate instructions,patients may unnecessarily end up back in the hospital with complications. One key to efective transitionalcare is that patients understand the medications they are to take — or not take — when they return home.The Scorecard ound that 67 percent o U.S. adults with health problems had their medications prior tohospitalization reviewed when they were dischargedrom the hospital with a new prescription, compared with 86 percent in Germany (Figures 3).

Sae care is a component o quality where all coun-tries have ample room or improvement. But the U.S.systematically scores worst among seven countries in

the survey, reecting both the greater number o med-ications used by adults in the U.S. and our ragmentedhealth care delivery system. Nearly one-third o U.S.adults with health problems reported in 2007 thatthey had experienced a medical mistake or medicationor lab error in the last two years (Figure 3). The rateor this key indicator o sae care was 40 percent lowerin Germany, the best perorming country.

Patient-centered care is health care that patientsneed and provided when they need it and in the man-ner they want. Timely access to care — such as same-

Figure 5

 Waiting Time to See Doctor When Sick or Need Medical Attention, Among Sicker Adults, 2007

AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2005 and 2007 Commonwealth Fund International Health Policy Surveys.

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

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Figure 6

Difculty Getting Care on Nights, Weekends, Holidays without Going to the ER, Among Sicker Adults,

2007

AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2005 and 2007 Commonwealth Fund International Health Policy Surveys.

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

Figure 7

Adults with Chronic Conditions: Receipt of Self-Management Plan, Among Sicker Adults, 2005

Note: Indicator was not updated due to lack of data. Baseline gures are presented.

* Adult reported at least one of six conditions: hypertension, heart disease, diabetes, arthritis, lung problems (asthma, emphysema,

etc.), or depression.

AUS=Australia; CAN=Canada; GER=Germany; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2005 Commonwealth Fund International Health Policy Survey of Sicker Adults (Schoen et al. 2005a)

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

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day appointments and of-hours care when people aresick — is a hallmark o patient-centered care.9 Timely care can improve the likelihood that conditions will be caught early, and avoid the use o costly emergency room or inpatient hospital care. But patient-centered,timely care is not yet common in U.S. primary carepractices.

 According to the Scorecard, U.S. adults were lesslikely than those in other countries to report they 

could get a doctor’s appointment on the same orthe next day when they were sick or needed medicalattention. Forty-six percent said they could obtain anappointment within this time period, compared to 74percent in New Zealand (Figure 5). Only Canadianadults ared worse, with 32 percent reporting access tosame-day or next-day appointments.

Patient-centered quality care also includes easy access to care outside o regular working hours.10  Access to care on nights, weekends, and holidays with-out going to the emergency room is dicult or sick

adults in all countries compared (Figure 6). However, American patients are the worst. The percentage o U.S. adults who had this problem rose by 12 percent-age points between 2005 and 2007, moving up rom61 percent to 73 percent. The lowest rates were seenin the Netherlands (48 percent) and New Zealand (49percent).

One bright spot within quality or the U.S. was sel-management o chronic disease. Fity-eight percent o 

U.S. adults with chronic conditions, such as heart dis-ease and/or diabetes, said that their doctor gave thema management plan that they could ollow at home(Figure 7). This relatively high percentage was secondonly to Canada, where 65 percent o adults receivedsuch a plan.

  Yet, on many dimensions, the care or those withchronic conditions is substandard. The United Stateshas a weak oundation o primary care with a muchlower percentage o physicians practicing primary care. The U.S. is the only industrialized nation with-

Figure 8

Ambulatory Care Sensitive (Potentially Preventable) Hospital Admissions, by Race/Ethnicity and

Patient Income Area, 2004

* Combines 4 diabetes admission measures: uncontrolled, short-term complications, long-term complications, and lower extremity

amputations.

Patient Income Area = median income of patient zip code. NA = data not available.

Data: Race/ethnicity estimates—Healthcare Cost and Utilization Project, State Inpatient Databases (disparities analysis les) and

National Hospital Discharge Survey (AHRQ 2007b); Income area estimates — HCUP, Nationwide Inpatient Sample (AHRQ

2007a).

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

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Figure 9

 Went to ER for Condition That Could Have Been Treated by Regular Doctor, Among Sicker Adults,

2007

AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2005 and 2007 Commonwealth Fund International Health Policy SurveysSource: Commonwealth Fund National Scorecard

on U.S. Health System Performance, 2008

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

Figure 10

Test Results or Medical Record Not Available at Time of Appointment, Among Sicker Adults, 2007

AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2005 and 2007 Commonwealth Fund International Health Policy Surveys.

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

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out universal and comprehensive insurance coverage,resulting in nancial barriers to needed medical care,

prescriptions, or ollow-up care. Inability to pay orprescriptions critical to controlling chronic conditionsis a major issue. As a result, admissions to hospitalsor potentially preventable complications o asthma,diabetes, heart ailure, or chronic lung conditionsare high or low-income and minority patients (Fig-ure 8). The combination o poor nancial access and

diculty getting an appointment or care ater-hoursundermines the quality o care or those with chronicconditions.

 EciencyThe U.S. spends more than double what other countriesspend or medical care — $6,102 per capita in 2004 —

compared with $2,083 in New Zealand and $2,546 inthe U.K.11 Yet, U.S. patients are more likely to report

going without care because o costs, and to say thatthe health care system needs to be rebuilt completely.12  Widespread ineciency in the U.S. health care systemis a result o the inaccessibility, poor care coordina-tion, and other problems documented by the Score-card. For example, poor access to care likely explains why 21 percent o sicker adults in the U.S. went to the

emergency room or a condition that could have beentreated by a regular doctor, compared to 6 percent inGermany (Figure 9).

Twenty-two percent o sicker adults in the U.S.reported that, within the last two years, test results were not available at the time o an appointment (Fig-ure 10). By comparison, 9 percent o sicker adults in

Figure 11

Duplicate Medical Tests, Among Sicker Adults, 2007

AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2005 and 2007 Commonwealth Fund International Health Policy Surveys

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

 Adopting an integrated set o ederal policies, based on lessons rom abroadas well as examples o excellence within the U.S., will require consensus on areorm strategy that addresses national health care costs so that greater value

is achieved and the health o the entire population is improved.

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Figure 12

Primary Care Physicians’ Use of Electronic Medical Records

AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.

Data: 2000 and 2006 Commonwealth Fund International Health Policy Surveys

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

Figure 13

Percentage of National Health Expenditures Spent on Insurance and Administration, 2003 and 2005

a 2004 b2001

* Includes claims administration, underwriting, marketing, prots, and other administrative costs; based on premiums minus claims

expenses for private insurance.

Data: OECD Health Data 2007, Version 10/2007.

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.

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the Netherlands reported visiting a doctor’s oce only to learn their test results were missing. This example o ragmented care may be one reason why 20 percent o sicker adults in the U.S. reported that they had dupli-cate medical tests within the last two years, compared with our percent in the Netherlands (Figure 11).

In addition to reducing access gaps, the use o elec-tronic medical records is one strategy or improvingcare coordination and reducing delayed or duplicative

care. However, primary care physicians in other indus-trialized countries are more likely to use electronicmedical records (EMR) than primary care doctors inthe U.S. While more than 90 percent o primary carephysicians in the Netherlands and New Zealand usedEMR in 2006, just 28 percent o U.S. primary carephysicians reported using them (Figure 12).

Our ragmented insurance system — with multiplereporting, paperwork, and payment systems, as well ascosts associated with churning in and out o coverage— drives up premium costs and also administrative

costs or physicians, hospitals, and other componentso the health care delivery system.13 High percentageso health care dollars spent on administration are aninecient use o resources. The U.S. currently spends7.5 percent o national health expenditures on healthinsurance and administration, compared with 3.3 per-cent in the single-payer United Kingdom system and5.6 percent in the mixed private-public health systemin Germany (Figure 13). Moreover, health insurance

administrative costs in the U.S. are increasing asterthan overall health care spending despite the act thatuninsured numbers are rising and the scope o cover-age is dwindling.14

Over each dimension o eciency, quality, access,equity, and the potential to lead healthy lives, theU.S. health system continues to under-perorm rela-tive to what has been achieved by other industrializednations and relative to the resources invested. Suc-cessul international models or improvement existand create a compelling case or improvement in the

Figure 14

Total National Health Expenditures, 2008 – 2017 Projected and Various Scenarios

*Savings options include: Health Information Technology, Center for Medical Effectiveness, Public Health, Episode-of-Care, Strength-

ening Primary Care, Benchmark Rates, and Prescription Drug Prices.

*Selected options include: Promoting Health Information Technology; Center for Medical Effectiveness and Health Care Decision-

Making; Public Health: Reducing Tobacco Use; Public Health: Reducing Obesity; Blended Episode-of-Care/Fee-for-Service Payment;

Strengthening Primary Care and Care Coordination; Competitive Bidding; and Negotiated Prescription Drug Prices.

Source: C. Schoen et al., Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending, Commonwealth

Fund, December 2008. 

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U.S. However, such improvement requires a whole-system approach to change, integrated across all vedimensions o health system perormance.

Options for Achieving Savings andImproving Value in U.S. Health SpendingInternational models o high perorming health sys-tems provide an important context or national healthreorm. The international experience demonstratesthat it is possible to have universal coverage whilespending a much lower percent o Gross DomesticProduct on health care. Such systems, in particular,tend to have the ollowing: (1) much lower spending

on administrative costs; (2) comprehensive benetsthat encourage early primary care; (3) a stronger roleor government in negotiating or establishing pro- vider payment rates or hospital budgets; (4) mecha-nisms or determining the cost-efectiveness o drugs,devices, and procedures; (5) more organized primary care systems that oten hold primary care practicesaccountable or patients’ primary care and reerral tospecialized care; and (6) a more limited supply o spe-cialists, who oten are employed by hospitals and com-pensated on a salaried basis. Building on innovations

abroad, ederal policy options or integrated, ecientU.S. health system reorm exist.Many o the policy options would not be politically 

acceptable in the U.S., but suggest that it is possibleto achieve savings. Universal health insurance thatsimplies insurance enrollment, increases continuity o coverage, and institutes health system reorms thatencourage cost-efective care, early primary care, andmovement away rom a ee-or-service system o pay-ment would save the U.S. billions o dollars in nationalhealth expenditures.

One proposal or a universal health insurance sys-tem, called Building Blocks, enhances the current U.S.

mixed private-public system o insurance by expandinggroup coverage through private markets and publicly sponsored insurance.15 This Building Blocks approachincludes a new national insurance “connector” thatofers small businesses and individuals a structuredchoice o a Medicare-like public option and privateplans. To help nance the plan, employers would berequired to ofer coverage or contribute 7 percent o earnings, up to $1.25 per hour. Those employers ofer-ing coverage to employees would be responsible or atleast 75 percent o the premium and plans would have

Figure 15

Savings Can Offset Federal Costs of Insurance for All: Federal Spending under Two Scenarios

* Selected options include improved information, payment reform, and public health.

Data: Lewin Group estimates of combination options compared with projected federal spending under current policy.

Source: C. Schoen et al., Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending , Commonwealth

Fund, December 2008.

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to meet general minimum standards. Other eaturesinclude required individual participation, Medicaid/SCHIP expansion, and tax credits to ensure aford-ability. The plan would insure 44 million o the esti-mated 48 million uninsured Americans in 2008, with-out disrupting coverage or those who already have

coverage. The authors estimate an increase in healthspending o less than 1 percent, or $15 billion dollarsin 2008, as expenses would be largely ofset by loweradministrative costs and a net reduction in providerreimbursements.

 A recent Commonwealth Fund report, Bending theCurve, also ound that it would be possible to reduce

national expenditures over the next decade whilesimultaneously improving access, quality, and popula-tion health through a Building Blocks insurance “con-

nector” design and other key ederal policy options.16 Combining selected options in the context o reormto ensure afordable private or public health insurancecoverage or all could yield $1.6 trillion in cumulativenational health expenditure savings by 2017, whileachieving universal coverage and improved qual-ity (Figure 14). Further, by the end o a decade, thenet ederal costs could be negligible i bundled withoptions that ocus on improving both the efectivenessand eciency o care (Figure 15).

 Bending the Curve ocuses on ve sets o ederalpolicy options to produce and use better inormation,

promote health and prevent disease, align incentives with quality and eciency, and correct price signalsin the health care market.17 One set o options breaksdown the inormation barriers that cause ineciency in our health system and damage care outcomes. Oneoption, or example, is the establishment o a Centeror Comparative Efectiveness and Health Care Deci-sion Making to integrate inormation about the rela-tive clinical and cost-efectiveness o alternative treat-ment options into health care purchasing and coveragedecisions. By generating the inormation and creating

incentives or providers, payers, and consumers to useit, this policy option could result in estimated healthsystem savings o $368 billion over 10 years, shared by all payers.18 Transparency o health costs and quality and the ability to use such inormation are critical pre-requisites or efective, sae, coordinated care and the

development o policies that encourage such care.The other sets o options take aim at the structure

o the health system. The health promotion optionsattempt to diminish the signicant costs o care andcomplications or patients with chronic diseases, suchas diabetes or heart disease. Public health initiativesand improved preventive care have the potential to

lower the incidence o disease. The payment reormpolicy options deal with the misalignment o incen-tives in our ee-or-service payment system and the

private insurance market. Rewarding hospitals pro- viding higher quality care is a spur to all hospitals toimprove perormance.19 Payment reorm also includesapproaches to strengthen primary care to provide bet-ter coordination and more accessible and patient-centered care through enhanced “medical home”approaches that help integrate care. Finally, the pric-ing options attempt to x the issue o pricing mecha-nisms that are currently  sending the wrong signals toparticipants in the market: mechanisms that promoteinecient care and inappropriate variation in costs,quality, and outcomes across geographic areas.

Moving Forward: Toward a High PerformingU.S. Health SystemCrating a high perormance health system or thenation will be complex and very dicult. However,placing the U.S. in the context o key benchmarks o access, quality, eciency, equity, and long, healthy lives that have been achieved by other industrializedcountries or states within the U.S. sheds a spotlight onour health system’s shortcomings and lie-threateningaws. Adopting an integrated set o ederal policies,

Policy changes that will improve quality and enhance valueobtained or health spending should be pursued simultaneously with

expanded insurance coverage — both to ensure afordability and sustainability o the system. Such ederal policies would include investing in improved

saety and inormation systems, and realigning nancial incentives to supporta patient-centered medical home and prevention, health promotion, and

management o chronic conditions.

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 based on lessons rom abroad as well as examples o excellence within the U.S., will require consensus ona reorm strategy that addresses national health carecosts so that greater value is achieved and the health o the entire population is improved.

 Key StrategiesUniversal health insurance should be a major prior-ity or a new administration. The most pragmaticapproach is building on a mixed public-private sys-tem o group health insurance.20 Insurance designcritically matters or the potential to reduce insuranceadministrative costs and complexity and to develop astronger oundation or quality and eciency, includ-ing more consistent policies.21 But coverage alone willnot be sucient to drive the U.S. to a high perormancehealth system. Policy changes that will improve qual-ity and enhance value obtained or health spending

should be pursued simultaneously with expandedinsurance coverage — both to ensure aordability and sustainability o the system. Such ederal poli-cies would include investing in improved saety andinormation systems, and realigning nancial incen-tives to support a patient-centered medical home andprevention, health promotion, and management o chronic conditions. Key to better perormance is theestablishment o national goals, setting priorities orimprovement, monitoring and tracking progress, andrecommending policies required to ollow a path tohigher perormance.

In short, ve strategies are key to a high peror-mance health system:22

Extending afordable health insurance to all;1. Aligning nancial incentives to enhance value and2.achieve savings;Organizing the health care system around the3.patient to ensure that care is accessible andcoordinated;Meeting and raising benchmarks or high-quality,4.ecient care; andEnsuring accountable national leadership and5.public/private collaboration on agreed-upon goals

and policies.   A new president and a new Congress should worktogether to implement these strategies: (1) universalhealth insurance coverage building on private groupinsurance and public insurance programs; (2) reormo provider payment moving away rom ee-or-serviceto more bundled orms o payment and rewards orquality and eciency; (3) reorm o the organizationo health care delivery with a patient-centered pri-mary care home or everyone supported by an orga-

nized delivery system that ensures care coordinationand continuous quality improvement; and (5) invest-ment in the inrastructure, such as health inormationtechnology, required or a high perormance healthsystem.

This requires making a high perormance health

system a top priority, embracing transparency andaccountability, committing the necessary budgetary resources, and collaborating so that all parties, publicand private, are working in concert to achieve agreedupon goals. It also requires national leadership. TheU.S. should aspire to have the best health system inthe world — not just assert it — and can do so by learning rom examples o excellence within the U.S.and abroad.

 AcknowledgementsThis work is original and draws on work sponsored by the Com-monwealth Commission on a High Perormance Health System.The discussion builds on the Commission’s National Scorecard and Bending the Curve report analysis o policy options to achieve sav-ings and improve value. We acknowledge Cathy Schoen, SabrinaHow, and Douglas McCarthy or the Scorecard and Cathy Schoen,Stuart Guterman, and Tony Shih or the options analyses. Itreects the views o the authors, not the directors, ocers, or staf o The Commonwealth Fund.

ReerencesCommission on a High Perormance Health System,1.  A High Perormance Health System or the United States: An Ambi-tious Agenda or the Next President , The CommonwealthFund, November 2007; Employee Benet Research Institute,“2006 Health Condence Survey: Dissatisaction with HealthCare System Doubles Since 1998,” November 2006, avail-

able at  <http://www.ebri.org/pd/notespd/EBRI_Notes_11-20061.pd> (last visited September 17, 2008).C. Schoen, D. McCarthy, and S. How, “U.S. Health System2.Perormance, 2008: Updating a National Scorecard,” underreview. See also C. Schoen, D. McCarthy, and S. How, Why Not the Best? Results rom the National Scorecard on U.S. Health System Perormance, 2008 , The Commonwealth Fund,July 2008.In the interest o length, we will ocus only on international3.comparisons. For more detailed inormation about stateinnovations, please see J. C. Cantor, C. Schoen, D. Bellof, S.K. H. How, and D. McCarthy,   Aiming Higher: Results roma State Scorecard on Health System Perormance , The Com-monwealth Fund Commission on a High Perormance HealthSystem, June 2007.C. Schoen, K. Davis, S. K. H. How, and S. C. Schoenbaum, “U.S.4.Health System Perormance: A National Scorecard,”  Health Afairs Web Exclusive (September 20, 2006): W457–w475.The Commonwealth Fund Commission on a High Peror-5.mance Health System,   Framework or a High Perormance  Health System or the United States, The CommonwealthFund, August 2006.See Cantor et al.,6. supra note 3.C. Schoen, S. R. Collins, J. L. Kriss, and M. M. Doty, “Insured7.

 but Not Protected: How Many Adults Were Underinsured in2007,” Health Afairs (in press).S. R. Collins, C. Schoen, K. Davis, A. K. Gauthier, and S. C.8.Schoenbaum,  A Roadmap to Health Insurance or All: Prin-ciples or Reorm, The Commonwealth Fund, October 2007.

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K. Davis, S. C. Schoenbaum, and A. J. Audet, “A 2020 Vision9.o Patient-Centered Primary Care,”  Journal o General Inter-nal Medicine 20, no. 10 (October 2005): 953-957. Id 10. .J. Cylus and G. F. Anderson,11.  Multinational Comparisons o  Health Systems Data, 2006 , The Commonwealth Fund, May 2007.C. Schoen, R. Osborn, M. M. Doty, M. Bishop, J. Peugh, and12.

N. Murukutla, “Toward Higher-Perormance Health Systems: Adults’ Health Care Experiences in Seven Countries, 2007,”  Health Afairs Web Exclusive 26, no. 6 (October 31, 2007): w717-w734.J. G. Kahn, R. Kronick, M. Kreger, and D. Gans, “The Cost o 13.Health Insurance Administration in Caliornia: Estimates orInsurers, Physicians, and Hospitals,” Health Afairs 24, no. 6(November/December 2005): 1629-1639.K. Davis, C. Schoen, S. Guterman, T. Shih, S. C. Schoenbaum,14.and I. Weinbaum,   Slowing the Growth o U.S. Health Care  Expenditures: What Are the Options? , The CommonwealthFund, January 2007.C. Schoen, K. Davis, and S. R. Collins, “Building Blocks or15.Reorm: Achieving Universal Coverage with Private and Pub-lic Group Health Insurance,”  Health Afairs 27, no. 3 (May/June 2008): 646-657.

C. Schoen, S. Guterman, A. Shih, J. Lau, S. Kasimow, A. Gau-16.thier, and K. Davis, Bending the Curve: Options or Achieving  Savings and Improving Value in U.S. Health Spending , TheCommonwealth Fund, December 2007. Id 17. . Id 18. .P. K. Lindenauer, D. Remus, and S. Roman et al., “Pub-“Pub-19.lic Reporting and Pay or Perormance in Hospital Quality 

Improvement,”  New England Journal o Medicine 356, no. 5(2007): 486-496.See Schoen et al.,20. supra note 15.S. R. Collins, C. Schoen, K. Davis, A. K. Gauthier, and S. C.21.Schoenbaum,  A Roadmap to Health Insurance or All: Prin-ciples or Reorm, The Commonwealth Fund, October 2007;see id. (Schoen et al.).See Commission on a High Perormance Health System,22.supra note 1.