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Reimagining Health Care Delivery: Remarks to the Aspen Institute Care Innovation Summit

HHS Secretary Kathleen Sebelius

Washington, D.C.
February 27, 2014


Thank you.  I’m delighted to have the opportunity to join you here today.

A great American computer scientist by the name of Alan Kay wrote that “the best way to predict the future is to invent it.”

I want to thank Walter Isaacson, and his amazing team at the Aspen Institute for your commitment to these issues.  And I want to thank all of you for being a part of this discussion.  I am pleased to be in this forum to talk about a cutting-edge, reinvention that has been underway for the last five years under President Obama’s push for health innovation...  something that is too often overlooked.

You know, so often when we come together as a public health community to talk about innovation, the question invariably comes up: “How is the transformation of our health care system impacting innovation?”

Today, I want to talk about the inverse: “How can we harness the transformative power of innovation, to guide us through reforming our health care system?”

I believe the answer is two-fold:

First, we need to unlock and liberate the information that drives innovation.

Second, we need to align the way we pay for care, with the results we want for our families and for our nation’s finances.  We all know the expression “you get what you pay for.”  We want to pay for better outcomes rather than more operations.  Innovations rather than readmissions.

For five years, this has been our strategy for improving care and the way it’s delivered.

What we’ve been finding, is that when you remove the barriers to innovation, you can actually hold costs down, while lifting entrepreneurs up and getting better health results.

We’ve been finding that it’s possible to actually slow spending growth at the same time we speed economic growth.

And we’ve been finding that when you empower engineers, scientists, and coders, they respond by creating new tools to empower physicians, patients, and parents.

The Dichotomy of these Times

I think we’d all agree that we live in transformational times.  And to me, part of the magic of this era is that the very same innovations, discoveries, and technologies that are allowing us to live longer, healthier lives, are also creating a healthier economy.

But we have to face facts.  If you were to give our nation a report card, our grade on health innovation – at best – would be an “incomplete.”

Why do I say this?

I want to invite everyone to close your eyes for a moment.  Think about the first time your parents took you to see the doctor for a checkup.  In many ways, the overall experience of going to the doctor’s office hasn’t changed that much.

How patients track and manage their own health, how they choose a doctor, how doctors work together to develop a treatment plan – none of these processes have kept pace with innovation.

Think about what happens if a little girl is diagnosed with an ear infection.  Four decades ago, her mom or dad had no easy way to find a good specialist.  Maybe they’d have a friend who is a doctor or nurse.  When they finally scheduled an appointment for their daughter, they’d have to fill out all her health information from scratch, on a clipboard, hoping they didn’t miss any crucial details.

Eventually, her doctor would make a diagnosis, with little access to past test results or notes from other doctors involved in her care.  And then maybe she would be sent home with a treatment plan, but no easy way for her parents to check on her progress or ask questions until her next appointment.

Today, that exact scene plays out thousands of times every day.  The only difference is the dates on the magazines in the waiting rooms.

Still, when I think back to all that has been accomplished since my parents first took me to see our pediatrician, Dr. Cassady – the march of human progress is nothing short of incredible: new medicines and vaccines, new technologies like MRIs and CT scans, innovative procedures like heart transplants,… it’s not too long ago, when the possibility of any of these things would have been dismissed as science fiction.

And that’s the great dichotomy of these times: We’re living in a 21st century world with a 20th century delivery system.

We live in a world in which the National Cancer Institute is now texting teens to convince them to quit smoking...  But, ask any parent how easy it is to get their kid’s immunization report from the doctor’s office...

While closing our innovation gaps won’t solve all our problems, we have some very real opportunities to improve the quality of care that’s delivered to millions of Americans.

You may have read Tom Friedman’s piece this past May, which touched on several of the topics we’re here to discuss.  He focused on Health IT, Big Data, and innovations being spurred by the Affordable Care Act.  And he credited them with creating, what he describes as a “Health Care Silicon Valley – that has the potential to create better outcomes at lower costs by changing how health data are stored, shared and mined.”

I want to talk with you about how each of these three areas Tom Friedman identified can impact patients – particularly in the area of payment and delivery.

Electronic Health Records

Oftentimes, when folks hear terms like “HealthIT” or “Electronic Health Records,” their mind initially goes to big hospital systems.  And the adoption of electronic health records is making a tremendous difference in the lives and care of patients in these hospitals.

But the adoption of electronic health records can also save lives and improve care for patients who get their care from solo practitioners or smaller practices.

By applause, do we have any Kansans with us in the audience today?  How about folks who’ve visited Kansas?  One of the smallest of the 105 counties in Kansas, in the heart of the great plains, is a beautiful area called Rooks County.  And in Rooks County is Plainville, Kansas, a city of slightly less than 2,000 people.

Now Plainville is a big deal.  The high school boys track team are two-time defending Class 2a State Champions; the town is the home of a U.S. Senator, a late Hollywood actor, and a world-renowned furniture company named Dessin Fournir.  (If you saw the movie Saving Mr. Banks, you’ve seen Dessin Fournir’s work, because one of its designs was featured in the background.)

Plainville is also the home of a doctor named Jennifer Brull.  She has a small solo family medicine practice in a small community – but don’t let that fool you.  She’s at the leading edge of a new movement that’s reshaping how patients get their care – and for the better.

When it comes to Jennifer’s patients and their health records, clipboards are out.  Keyboards are in.

Jennifer told me that she was positive she had been getting colon cancer screenings for all her patients who were over 50 (and by the way, under the Affordable Care Act, her patients have a right to these screenings at no out-of-pocket expense).

You can imagine Jennifer’s shock, when she ran the numbers for the very first time and found that only about 43% were getting tested.  A clipboard or quill won’t tell you that.  A computer will.

Here’s what Jennifer did: She set up an electronic system to automatically notify her if a patient hasn’t had a test.  Armed with this information, she was able to get her screening rate up to 89% – and she’s working to get it to 100.

But here’s the more important part of this story: Dr. Brull was able to detect colon cancer in three of her patients early enough, that they were cured without needing radiation or chemotherapy.

Stories like this are not an anomaly.  The research tells us that patients with Electronic Health Records get better care.

A study of Cleveland adults with diabetes published in the New England Journal of Medicine, for example, found that patients with digital records were six times more likely to get high quality care.

Nationally, we’re making progress in this transition from quills and clipboards to computers and keyboards.

When President Obama took the Oath of Office in 2009, at the time, only about 1 in 8 hospitals was using a basic Electronic Health Record. By 2012, this number had more than tripled.

This is no coincidence.  There were incentives built into the Recovery Act to help them make this transition.  As of December 2013, nearly 9 in 10 hospitals and nearly two-thirds of providers had received these incentives to go digital.

So this is very good news for patients, but it’s also good news for our economy.  Remember that “Health Care Silicon Valley” that Tom Friedman wrote about?  Venture funding for digital health more than doubled between 2011 and 2013.

Big Data: From “Lazy” to “Active”

Speaking of Silicon Valley … Our host for today, Walter Isaacson, wrote the definitive biography of Steve Jobs.  I truly believe that the innovations and advances that are taking place in the health care space might very well lead the next Steve Jobs to create the Apple or Google or Facebook of health care, at the very same time, she – or he – is helping us reimagine the way we deliver care or defeat the next big epidemic.

One of the ways that we in government can help facilitate this sort of private sector innovation is by unlocking the flow of information.  This can also be incredibly beneficial to patients, their families, and to their doctors as well.

Take for example the “Hospital Compare” tool we’ve made available for all on  All you need to do is punch in your zip code and you get a list of hospitals in your area.  Click on up to three, and you can compare them by categories such as “surveys of patient’s experiences” and whether or not they have medical imaging capabilities.  With a few clicks you see things like the average time patients spent in the emergency department, before they were admitted to the hospital as an inpatient, or 30- day readmission rates.

There’s a digital revolution taking place both in and out of government in favor of open-sourced data, innovation, and collaboration.  And we’ve made this our mission at the Department of Health & Human Services, since Day 1 of this Administration.

Our Department collects an incredible amount of data, from public health data about the prevalence of disease, to Medicare data about health care spending and provider activity, to data about ongoing clinical trials and much, much more.

But until we started opening things up, we found that too much of this information was difficult or impossible to access.  It was scattered across hundreds of websites or publications.  It was published in formats that were hard to use.  Sometimes it was hidden behind pay walls.  In most cases, it was unknown to the public.

This is how things have tended to be done, not just at HHS, but really across governments, big non-profit organizations, and even in many private sector companies as well.

As the great inventor Charles Kettering said "If you have always done it that way, it is probably wrong."

We had a lot of “lazy data.”  That means information that could be valuable to patients and their doctors – and for that matter to scientists, researchers, programmers, engineers, entrepreneurs and policy makers – was information that never got to them.

So at HHS, we’re working to convert our “lazy data” into “active data” – to push it into the public domain for the common good.

We’re taking the vast stores of data our Department already had, stripping out all the personal information, and making it available to the public.

And I’m pleased to tell you that we recently announced that our 1,000th data set was released on

In the past, only scientists and others who were willing to pay a lot of money were able to get their hands on much of this data.  Today, we’re democratizing it.

What we’re finding is that when we make data open and accessible, the private and nonprofit sectors use it to start innovating.

After his family went through the process of having to make 17 calls, send five faxes, and spend three extra days in the hospital to find post-acute care for his uncle, an entrepreneur named Russ Graney founded a company named Aidin.  His app uses CMS data to help patients find the best follow-up care at facilities like nursing homes.

We’re seeing innovation in the academic and nonprofit sectors, as well.  A university of Pittsburgh initiative called Project Tycho, for example, unlocks CDC data on contagious diseases which goes back all the way to 1888.  Among other things, they've identified more than 100 million cases of contagious illness that were prevented by immunizations.

Many of the new apps that are being developed have benefited from collaborations at our annual Datapalooza conferences, which began in 2010. When we first brought stakeholders together in for one these summits, we started with 45 people in a room who came back to us with 20 new apps. At our last summit, we had an overflow crowd of more than 1,600 people who produced 120 applications.

Datapalooza 5 is going to be held in Washington on June 1-3, so mark your calendars!

One of our past Datapalooza participants is a former CDC Epidemic Intelligence Officer named David Van Sickle.  And David has a great story to tell.  You see, he figured out that if you put a GPS device on an Asthma inhaler, you empower patients to better track and manage their asthma.  So he founded Asthmapolis – which is now called Propeller Health.  It’s been described as “hacking the inhaler” to give patients and their doctors the information they need to control their asthma.

Now consider this: CDC’s research tells us that 26 million Americans have asthma.  It also tells us that medical expenses associated with asthma have increased to about $56 billion when you take into account things like emergency room visits, lost productivity, and hospitalizations.

So the more that we can do to encourage people like David to innovate, the better off we are both in terms of the nation’s health and the nation’s wallet.  And patients can finally get control over their own health.

The same logic applies to the way we pay our providers.  If we encourage them to be innovative and effective, it benefits the patients they serve and the people who pay the bills – which in the case of Medicare and Medicaid, is all of us.

Paying for Results

One of the lesser known innovations in the Affordable Care Act – except to those of us in the health care world – was the creation of the Center for Medicare and Medicaid Innovation: A first of its kind research and development center.

Since Medicare and Medicaid are the two biggest health insurance plans in the world – together they cover roughly 1 in 3 Americans – if we can make meaningful reforms to the way we deliver care to these Americans, it will eventually change the way we deliver care to all Americans... and for the better.

The Center is looking at ways we can reduce costs while at the same time improving care.  They are testing new models and advancing new strategies.

One of the most promising of these strategies is the advancement of Accountable Care Organizations – where groups of hospitals, doctors, and other health care providers receive a financial incentive for joining forces to better collaborate and coordinate their delivery of care.  So far, 5 million beneficiaries are receiving higher quality care as a result.  And taxpayers are already saving $270 million.

Another great example, is the Partnership for Patients.  More than 3,700 hospitals all across our country are looking at ways to make hospital care safer, more reliable and less costly.

For the first time, preventable readmissions have declined – 130, 000 fewer patients were back in the hospital in the first 18 months, leading to lower costs and better health results. And there are some very promising early results on hospital acquired conditions.

The Center is also doing some cutting edge research to test new ways to provide better care to dual-eligibles, those vulnerable Americans who are eligible for both Medicare and Medicaid.  This partnership is with the laboratories of innovation known as state governments, who often are out ahead of the federal government testing strategies that work.

Ultimately, our ability to reduce costs and improve quality depends on our ability to change our incentive structures.

“The more-you-do, the more-you-get paid” does not make logical sense.

There is the story of a patient who drew an “x” on her shoulder to make sure her surgeon knew to operate on the correct limb.  Of course, the crazy thing about the way our system has been set up for the past half century, is that had the procedure been conducted on the wrong arm, her doctor might have actually been able to bill Medicare and get paid for the wrong surgery. Those days are over.

Other sectors of our economy do not operate this way.

Let’s say you have a craving for a hamburger.  Or speaking as your Health Secretary, I should say a turkey burger.  So you go to a restaurant and order a turkey burger and the waiter comes back with a t-bone steak.  And you say, that steak looks delicious, but I’m on a diet.  So you send it back, and 15 minutes later out comes a veal chop.  And you send that back again, and finally you get your turkey burger.  So you finish your meal and then the bill comes.  And when you look at the check, you see that the waiter has charged you for three meals.

For 50 years, this was our health delivery system.

We were creating incentives to keep patients in the operating room rather than out of it. And if your idea for improving care worked, you were actually paid less money.  But now we are working hard to align payments to reward the right care to every patient, each and every time.

Bending The Cost Curve

As we’ve worked to implement these strategies, one of the things we’ve learned so far is that there has been an incredible shift in the cost curve when it comes to health care spending.

By 2010, in the United States, health care costs had grown so uncontrollably, that we were spending far more as an economy – in gross and in per capita terms – than all other developed countries across the globe.  Yet we had more uninsured people and our citizens were living sicker and dying younger than many of our global competitors.

And then President Obama signed the Affordable Care Act.  Fast forward to 2014: We have now held down spending growth in health care to the slowest rate in a half century.

Private health insurance premiums are growing at the slowest rate in a decade and a half.  And as costs go down, businesses have more resources to invest in new job creation, and new products and services.

And don’t let anyone tell you that this progress is only happening because of economic conditions.  Medicare coverage for a beneficiary is constant – it doesn’t change if he or she enters or leaves the workforce.  As a result Medicare spending is agnostic to the overall state of the economy.  In economic terms, you might say it’s a “control.”

Here’s what we’ve learned: between 2001 and 2009, average spending growth per beneficiary was 6%.  Between 2010 and 2012 it fell to 1.6%.  In 2012 alone it was 0.7%.

So from 6% on average before the Affordable Care Act was signed to 0.7% just two years later.  That’s a difference of 158%.


Remember the little girl with an ear infection I asked you to imagine at the beginning of my remarks?

As I close, I want to ask you one more time to close your eyes and picture her all grown up.  Let’s say she brings her young son to the doctor for the very first time.

What happens now, if he’s diagnosed with an ear infection of his own?  Will nothing have changed?

Or maybe, just maybe, his mom will be able go online to compare local specialists using an app that was developed with HHS data.  And maybe she’ll be able to use her smart phone to schedule an appointment.

And when they show up at the office – understandably a little nervous – they’re greeted by medical personnel who have already received her son’s health history – no clipboard needed!  And everyone breathes a sigh of relief because no one wants any important information to fall through the cracks.

Now imagine there is an open question about whether or not that boy will need to go to the hospital.  But since his doctors are coordinating better – and since nobody has an extra financial incentive to operate – they determine the best course of action is to send that boy home. Fortunately, his mom has tools for monitoring the boy’s progress and for getting answers in between appointments. And the doctor knows if the prescription, which has been sent electronically from the office, has ever been filled. And can e-mail the parents to get regular updates on progress, avoiding a trip to the emergency room.

The best way to predict whether or not we will have this future, is to invent it.

I’d like to propose that as a health reform community, we make an agreement amongst ourselves, that from now on we will look at innovation as something that’s happening “for” us, “with” us, and “by” us, rather than something that’s happening “to” us.

We have an opportunity to create a future where we are actually encouraging providers to keep people away from acute care, whenever possible;

A future where we are empowering more private entities to create tools for the common good;

A future where we are healthier as a people, and healthier as an economy.

A future that is better for physicians; better for patients; and better for parents.

I look forward to working with all of you to harness the innovation necessary to make this so.

Thank you.

Content created by Assist. Sec./Public Affairs - Speechwriting Division
Content last reviewed on June 13, 2014