Skip to content Skip to navigation

IOM report: Healthcare must behave more like a business, reward quality and learn from data

September 6, 2012
by pamela tabar
| Reprints

The U.S. healthcare system has a lot to learn from businesses in other industries, especially when it comes to process improvement, according to “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” a report released online this week by the Institute of Medicine (IOM).  The 381-page report examines why the U.S. healthcare system “continues to fall far short of its potential.”

Unlike nimble businesses in other industries, the healthcare system takes too long to learn from its own mistakes and is too slow to adopt processes and technologies that can improve healthcare delivery, the report notes.

The report pinpoints two main problems: soaring costs and the explosive amounts of healthcare information that have to be managed and retained in a usable way.

Cost is a crippling factor both in what the healthcare system wastes (unneccessary services top the list at $210 billion) and what it fails to capitalize on (missed prevention opportunities, operational inefficiencies and fraud), the report states. With so much waste inherent in the system, quality and care delivery are inconsistent and plagued by inequities.

The healthcare system also suffers from data overload. Technology advancements have provided newer and faster ways to collect data, but not enough attention has been paid to how the data is analyzed or how it can be applied to improve healthcare processes.

Healthcare should leverage its data the way other businesses do—constantly assessing information to discover ways to improve safety, streamline processes and provide better quality at a better price.

The goal, the report says, is to transform healthcare into a customer-centric business with a focus on quality, competitive cost and customer satisfaction.

Getting it done will mean rewarding care that is high in quality and high in value, while aligning the incentives across organizations to encourage partnerships and care continuity and removing obstacles such as inconsistent payment models and cost waste. It also includes embracing technology that can help healthcare manage its information better so all stakeholders can react to data—clinical and operational—in a more timely fashion.

Above all, healthcare must commit to a philosophy of constant learning, enabling the system to improve itself and to adapt as the healthcare environment changes. “A health care system that gains from continuous learning is a system that can provide Americans with superior care at lower cost,” writes Harvey Fineberg, MD, PhD, president of IOM, in the report’s foreward.

The report comes nearly 13 years after the release of “To Err is Human,” IOM’s hallmark report on medical errors and patient safety.

Topics