In addition to the many hotly contested insurance and access-related provisions in the America’s Healthy Future Act of 2009, the Chairman’s Mark from Senator Baucus on behalf of the Senate Committee on Finance, released Wednesday, there is in the bill a section that addresses in a substantive way reform of the health care delivery system with a focus on quality.  Much of the underlying thinking in Title III of the bill, entitled "Improving the Quality and Efficiency of Health Care," draws from the Institute of Medicine’s seminal publication in 2001 of Crossing the Quality Chasm.  Especially in Subtitle A, "Transforming the Health Care Delivery System" (pages 75 to 110), one can see the impact of the IOM’s definition of quality as six aims: care that is safe, effective, efficient, patient-centered, equitable and timely. As a current member of the IOM’s Board on Health Care Services, I am gratified to see these ideas captured in important proposed legislation.

In Title III, there are the following key provisions with important long-term implications for health care providers:

·         A hospital value-based purchasing program in Medicare that moves beyond pay-for-reporting on quality measures to paying for hospitals’ actual performance on those measures;

·         A charge to the Secretary of HHS to establish a national quality improvement strategy, which would, among other things, address improvements in patient safety, health outcomes, disparities, effectiveness, efficiency and patient-centeredness;

·         Recognition of Accountable Care Organizations, which, beginning in 2012, would be allowed to qualify for incentive bonus payments; among other requirements, an ACO would have to have a formal legal structure to allow it to receive bonuses and distribute them to participating providers;

·         Formation at CMS of an Innovation Center that would be required to test and evaluate patient-centered delivery and payment models;

·         The establishment of a bundled payment pilot program involving multiple providers to cover costs across the continuum of care and entire episodes of care; if the pilot is successful, it would be made a permanent part of the Medicare program;

·         Beginning in 2013, reductions in Medicare payments to hospitals with preventable readmissions above a threshold based on appropriate evidence-based measures.

There is much more content in Title III, but the above gives a flavor.  If passed, these sorts of provisions can help advance the quality of our delivery system enormously.  I think that they have bipartisan support.  And I think they have a chance of surviving any final bill that might get passed. If so, a period of expedited innovation, clinical integration and sharing of best practices in quality health care realistically could result. We may look back in several years at this Fall of 2009 as a moment of transformation in our delivery system.

Click here to see a copy of my article published in the BNA Health Law Reporter.