Creating new incentives for quality care and improving the management of diseases is a key policy goal towards reducing the growth of health care costs and making sure Americans get the right care at the right time.  

  • Managing Chronic Disease: Most states have some sort of Medicaid managed care program, either administered by a private firm or contracted directly with primary care physicians. Vermont's statewide chronic care management program, Blueprint for Health, is working to move the health care system to one that helps people stay healthy, rather than merely treating isolated medical events. A Pennsylvania commission has proposed a model focusing on engaging patients in making better health decisions, creating a quality-oriented provider culture, improving information systems, andestablishing payment incentives for providers.
  • Pay for Performance: Paying providers in a way that rewards quality carerewards quality care and care that keeps people healthy, instead of simply paying for each service rendered or office visit, can reduce costs and keep people healthier. More than half of US states have pay for performance systems in their Medicaid programs, and a Medicare pilot project is achieving cost reductions and quality improvements in participating hospitals. As Families USA and Community Catalyst point out, pay for performance is also a mechanism to eliminate health disparities and hospital errors.
  • Certificate of Need: Certificate of Need (CON) is a state regulatory process designed to contain health care costs by preventing spending on unnecessary health care infrastructure and services. Under CON, hospitals and other medical facilities are required to get state approval before building a new facility or offering a new medical service. Approval, in large part, hinges on a clear demonstration of need for the new facility or service. Maine's Dirigo Health Reform strengthened the state's Certificate of Need by expanding it to include hospitals and large outpatient doctor collaboratives. Additionally, the state established a budget, called the Capital Investment Fund (CIF), to limit the amount of expenditures approved by CON.
  • Ending Reimbursement for Avoidable Hospital Errors: The State of Massachusetts and Blue Cross and Blue Shield of MA will prohibit hospitals and other providers from billing for 28 preventable kinds of medical and surgical errors. Similarly, the Pennsylvania Medicaid program recently launched a program to identify and stop reimbursements for care related to avoidable hospital errors. These efforts are similar toa Medicarerule prohibiting payment for preventable conditions acquired at hospitals.
  • Reducing Hospital-Based Infections: Public reporting of medical errors can lead to laws targeting infections acquired at medicalfacilities. The Governor of Pennsylvania reports that in 2006 there were 19,154 infections, resulting in 2,500 deaths and more than $3.5 billion in hospital charges. In response, lawmakers enactedSB 968,which will require hospitals to test their highest-risk patients and patients admitted from nursing homes for infections that are resistant to antibiotics. The law will also increase reimbursements to hospitals that meet benchmarks in preventing infections and require reporting to the CDC.
  • Electronic Medical Records: A statewide electronic medical records system in Maine could save the state $50 million each year by eliminating duplicate and unnecessary tests, procedures, prescriptions, and hospital admissions. The program was created by private and public stakeholders and will start with a pilot project before expanding statewide. Similarly, Vermont's chronic care management program, Blueprint for Health, is creating a new web-based and free Chronic Care Information System. Delaware has already built a statewide system providing immediate access to patient records, and New York City has launched a system offeringtraining and maintenance assistance to doctors with a large number of Medicaid patients.
  • Promote Best Practices: The Maine Quality Forum, a strategic initiative of Maine's 2003 Dirigo Health Reform, provides consumers with information about where to obtain the best quality care as well as disseminating best practices and other clinical information to providers across the state.