1. Efficiency Matters: Inducing Moore’s Law in American Care Delivery
Arnold Milstein, MD, MPH
IHA P4P Conference
February 29, 2008
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2. To Afford Expanded Coverage and a Continual Inflow of Medical Miracles, New Health Policy Must Accomplish Two Jobs (while improving health outcomes)
“Translational Efficiency” Lower total cost of care by ~ 35 percentage points from average levels to current benchmark levels
“Knowledge Turns” Lower total cost of care by >2.5 percentage points every year thereafter via discovery of leaner care methods
(Read Andy Grove ’06 JAMA article)

3. A Converging National Path to Moore’s Law in Health Care
A Converging National Path to Moore’s Law in Health Care? (Three Simple Rules)
Moore’s Law
High
Rule III Clinical Reengineering
Larger annual gains in quality and affordability by “learning organizations”
Rule II Performance Sensitivity
Faster uptake & discovery of “better, faster, leaner” care delivery innovations
Efficiency of Health Benefits Spending (Health Gain / $)
Rule I Performance Transparency
Performance-sensitive health plan design and/or provider payments
Universal hospital & MD transparency on effectiveness & efficiency
Low
2005
Evolutionary Path
20XX

4. 3 High-Friction Dilemmas
Unit of accountability?
Allocation of net savings?
Minimum validity threshold for consequential performance reporting?
(Customer decides)
(Every level of influence)
(Ask Solomon)
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5. Mission Summary
An increasing fraction of Americans and their purchasers cannot afford wasteful conventional care methods
Necessary acceleration of “translational efficiency” and “knowledge turns” will only occur if customers become much more performance-sensitive
Regional differences in physician public-mindedness will resolve 3 high-friction dilemmas differently
The price of tepid incrementalism is two deaths per hour in working class households