In its quest to find ways to reduce healthcare costs but boost healthcare quality, the U.S. Department of Health and Human Services (HHS) launched its first fellowship program in September. For the next year, I’ll be a technical advisor on the part of this program that focuses on quickly developing ways to measure clinical quality under the new healthcare act.

I’ll be working on a team with Mindy Hangsleben, an innovator in Lean technology at Intel in Portland, Oregon. We’ll be examining the challenge presented by the Affordable Care Act, which aims to move reimbursements from “fee for services” to” fees for performance.” Our questions are: “how do you measure performance? How do you pay for it?” Some aspects of health care delivery are easier to measure; e.g., what percentage of the relevant population gets a mammogram. But basing performance upon a more holistic measure of patient outcomes is tricky because all patients are not equal, and a comparison and ranking of outcomes is not easy. In addition, we’ll be looking at ways to determine the role played by various electronic health records (EHRs) in the capture of these performance parameters, as required under the new Health Information Technology for Economic and Clinical Health (HITECH) Act.

The other HHS Innovation Fellowship projects include:

  • Finding ways to quickly determine Medicaid or CHIP eligibility for people. This is going to be very important under the new healthcare law because a significant percentage of the 30 million new health-insurance eligible people will be covered under Medicaid.  It will take a sophisticated infrastructure to make sure people know about the coverage they are eligible for and are getting the care they need, at the right time. Could a combination of the fulfillment ability of Zappos with the innovation of Apple show the way to some solutions?
  • Optimizing services in the event of disaster. Preparing for disasters is problematic because disasters are rather rare—but as “Superstorm”/Hurricane Sandy showed, the need for care is acute when these types of natural disasters occur. This team is looking at ways to optimize devices and services for rare disasters and that may have collateral benefits for routine events. While only an advertising line, Motel 6’s “We’ll leave the light on for you” hints at ways to provide a constant state of comfort, if not readiness.
  • Developing electronic tracking and efficient transport for the nation’s organ transplant system. Could the logistics expertise of United Parcel Service (UPS) provide new avenues, for example?

The fellowship program was spawned when HHS met with other federal agencies to determine issues that might require some outside help (very much like the Defense Advanced Projects Research Agency). For the first round of the program, the teams assembled make for an extremely varied group, which should foster fresh ideas and perspectives, some of which are readily borrowed or repurposed from other industries.

What do you see as some of the biggest challenges facing healthcare with the ACA in place? Are the ones outlined above “it” or are there others that HHS might consider next? How would you develop a fee-for-performance system, perhaps borrowing ideas from other industry segments? Are there specific ideas you’d like to share with me as an advisor in this effort? Let me know your thoughts.