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Good News on Innovation and Health Care

Data that support medical decision-making and collaboration, dovetailing with new tools in the Affordable Care Act, are spurring the innovation necessary to deliver improved health care for more people at affordable prices.

Ed. note: This is cross-posted from the HealthCare blog at Read more about data-powered health care here.

A recent New York Times column, Obamacare’s Other Surprise, by Thomas L. Friedman echoes what we’ve been hearing from health care providers and innovators: Data that support medical decision-making and collaboration, dovetailing with new tools in the Affordable Care Act, are spurring the innovation necessary to deliver improved health care for more people at affordable prices.

Today, we are focused on driving a smarter health care system focused on the quality – not quantity – of care. The health care law includes many tools to increase transparency, avoid costly mistakes and hospital readmissions, keep patients healthy, and encourage new payment and care delivery models, like Accountable Care Organizations. Health information technology is a critical underpinning to this larger strategy.    

Policies like these are already driving improvements. Prior to the law, nearly one in five Medicare patients discharged from a hospital was readmitted within 30 days, at a cost of over $26 billion every year. After implementing policies to incentivize better care coordination after a hospital discharge, the 30-day, all-cause readmission rate is estimated to have dropped during 2012 to a low of 18 percent in October, after averaging 19 percent for the previous five years. This downward trend translates to about 70,000 fewer admissions in 2012.

Insurance companies are also now required to publicly justify their actions if they want to raise rates by 10% or more. Since the passage of the Affordable Care Act, the proportion of requests for double-digit rate increases fell from 75 percent in 2010 to 14 percent so far in 2013.

Reforms like these have helped slow Medicare and Medicaid spending per beneficiary to historically low rates of growth.

Mobilizing Use of Health Information Technology

Last week, we reached an important milestone in the adoption of health information technology. More than half of all doctors and other eligible providers and nearly 80 percent of hospitals are using electronic health records (EHRs) to improve care, an increase of at least 200 percent since 2008.

Friedman wrote of Dr. Jennifer Brull, a small-town Kansas family doctor, as an example of how health IT is making a difference in real patients. One of our “physician champions,” Dr. Brull installed alerts in her EHRs to improve the rate of colon cancer screenings for her patients. She found colon cancer early in three patients as a result – so early that they did not need chemotherapy or radiation.

Friedman also cited several companies, like Lumeris of St. Louis, that are using health IT and “mountains” of  HHS data now in electronic form to improve health outcomes. Mike Long, the CEO of Lumeris, says his company is analyzing hospital, insurance and HHS data and getting the information to physicians in real time. “ [W]e wind up delivering better care. …And it’s lower cost,” Long said.

Government Data as Fuel for Innovation

Since the early days of the Administration, we have provided the public with high quality health data. Making our data more accurate, available and secure brings transparency to a traditionally opaque health care market and allows innovators and entrepreneurs to use it for discovering innovative applications, products, and services to benefit the public.

Earlier this month, the Administration released unprecedented data about what hospitals across the country charge for the 100 most common Medicare inpatient stays, which can vary widely. For example, average inpatient charges for hospital services in connection with a joint replacement range from $5,300 at a hospital in Ada, Okla., to $223,000 at a hospital in Monterey Park, Calif.

In May, we announced a $1 billion challenge to help jump start innovative projects that test creative ways to deliver high quality medical care and lower costs to people enrolled in Medicare and Medicaid.

There is much work yet to be done to change the habits of the health care system. But by encouraging transparency and market-based innovation around health data, we are playing to America's greatest strength to solve our most pressing problems.

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