PCAST: Fee-for-Service Healthcare Limiting Big Data Use

To achieve better quality at lower costs, the healthcare industry needs to adapt the big data-based "systems engineering" approach currently used in manufacturing, aviation and other industries. However, the current fee-for-service healthcare model is a significant disincentive for employing this approach, according to a report from the President's Council of Advisors on Science and Technology.

Systems engineering is an interdisciplinary field focusing on using available data to better design and manage large, complex projects to improve both the volume and quality of output. The report's authors note some healthcare organizations have started to embrace this method (and have seen positive results), but it has yet to become widespread throughout the industry.

The main barrier to the employment of systems engineering principles is healthcare's current fee-for-service payment structure, as it does not reward efficiency, according to the report. As long as reimbursements continue to reward providers for large numbers of tests and procedures over efficient care, providers have no impetus to employ systems engineering methods.

To reap the benefits of big data by using systems engineering, the reimbursement structure in healthcare needs to change. "First and prerequisite for other kinds of progress, the nation must accelerate the transition to payment models that pay for value rather than volume," according to a preface written by the report's authors.

With the move to value-based care, the industry also needs data-backed quality metrics to help determine the care paths that will best engineer the care system and how resources can best be marshaled around the goals of improving quality and efficiency. This will require the un-siloing of healthcare data, more health IT resources and cultural changes at provider organizations as well.    

The report ultimately makes the following recommendations:

  1. Accelerate the move to value-based care
  2. Accelerate the development of a national health data infrastructure
  3. Provide national leadership through supplying data needed to benchmark provider performance and evaluating regional or national trends in delivering high-value care
  4. Provide technical assistance to providers attempting systems engineering
  5. Support community engagement efforts
  6. Incentivize systems engineering in healthcare through contests, awards or prizes
  7. Build competencies and a workforce for redesigning healthcare

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Practice Fusion Launches Free, Real-Time Database

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