Aiming Higher: Results from a State Scorecard on Health System Performance, 2009

The 2009 edition of The Commonwealth Fund's State Scorecard on Health System Performance finds deteriorating health insurance coverage for adults and rising health care costs, but also improved quality of care on dimensions of performance that have been the focus of public reporting and incentive programs. As reported in the inaugural State Scorecard in 2007, where you live within the United States makes a difference in your access to care, quality of care, and experiences with care providers. The findings of this report point to the urgency of comprehensive national health system reforms aimed at improving health system performance across the country, eliminating disparities, and enhancing and assisting states' efforts to address population health needs and ensure affordable access.

With a central focus on identifying opportunities to improve, the State Scorecard provides a framework for state and federal action to address common concerns as well as specific areas of need. It assesses states' performance relative to what is achievable, based on benchmarks for 38 indicators of access, quality, costs, and health outcomes. The findings highlight continued wide variability in performance across states. But they also show that all states face challenges posed by rising costs of care and poor care coordination. Although the scorecard does not yet reflect the impact of the economic downturn—given the two- to three-year time lag in data reporting—the deterioration seen in access to care across the country underscores the need for coherent reforms that would change the trajectory of costs, ensure access, and enhance value.

Overall, the 2009 State Scorecard paints a picture of health care systems under stress. Still, improvements made in certain indicators and in certain areas of the U.S. indicate that individual states have the capacity to do much better, especially when their efforts are supported by strong federal policy and national initiatives. In 2009, Vermont, Hawaii, Iowa, Minnesota, Maine, and New Hampshire lead the nation as the top-ranked states (Hawaii and Iowa tied for second place; Maine and New Hampshire tied for fifth). Their performance ranks in the top quartile of states on a majority of scorecard indicators. In particular, the reforms passed by Vermont in 2006 to cover focused on preventing and controlling chronic disease are providing a new model for other states.

Thirteen states—Vermont, Hawaii, Iowa, Minnesota, Maine, New Hampshire, Massachusetts, Connecticut, North Dakota, Wisconsin, Rhode Island, South Dakota, and Nebraska—again rise to the top quartile of the overall performance rankings, outperforming their peers on multiple indicators. Conversely, states in the lowest quartile often lag the leaders in multiple areas. The persistent wide geographic variation points to the need for national reforms to ensure high performance across the country.

Following are some of the cross-cutting state findings and key trends gleaned from analysis of the scorecard results:

Since the beginning of the decade, insurance coverage in most states has been eroding for adults while increasing or holding steady for children. This divergence reflects the impact of federal action to expand coverage for children through the Children's Health Insurance Program (CHIP); rates of uninsured children in 2008 were the lowest since 1987. Nevertheless, high and rising rates of uninsured adults in many states underscore the need for comprehensive national reform to expand coverage in all states, and to further the gains made in Massachusetts, Vermont, and other states that have taken a lead in enacting reforms.

• The quality of hospital care for heart attack, heart failure, pneumonia, and the prevention of surgical complications improved dramatically, as all states gained ground and the variation across states narrowed. This improvement reflects the impact
  of national efforts by Medicare to measure and benchmark performance.
• Key indicators of nursing home and home health care quality improved substantially in nearly all states, with declines in rates of pressure ulcers, physical restraints, and pain for nursing home residents and improved mobility for home care patients. Notably, these long-term care quality metrics have also been the focus of public reporting and collaborative improvement initiatives.   
• Ambulatory care quality indicators, including preventive care, changed little or declined in half the states, with wide gaps persisting across states.
• In a majority of states, symptoms of poor care coordination and continued inefficiency in the use of resources are evident in the increasing rates of hospital readmissions. And in most states, there have also been increases in hospital admissions and readmissions from nursing homes, as well as hospital admissions for home health care patients. These indicators point to a lack of incentives for effective transitional care and care management.
• States with the highest readmission rates also tended to have the highest costs of care overall—signaling a need for a systematic approach to addressing cost concerns.
• Rising costs are making care and coverage less affordable for a growing share of families. Across the country, insurance premiums are rising faster than middle-class family incomes.
• Differences in how well the health care system functions for people based on their income level, health insurance status, and race/ethnicity—what is referred to here as the "equity gap"—were more likely to widen than narrow. Distinct regional patterns and sharp differences in performance across states—with some persistent gaps even in the best-performing states—attest to the reality that our health care system fails to provide reliable access to the affordable, effective, patient-centered, coordinated care that everyone should expect, given the large and growing share of the nation's economic resources that are invested in the health care sector.

Distinct regional patterns and sharp differences in performance across states—with some persistent gaps even in the best-performing states—attest to the reality that our health care system fails to provide reliable access to the affordable, effective, patient-centered, coordinated care that everyone should expect, given the large and growing share of the nation’s economic resources that are invested in the health care sector.

Highlights and Cross-Cutting Themes

Leading states consistently outperform lagging states across indicators and dimensions; public policy and public–private collaboration can make a difference.

Maine, New Hampshire, Massachusetts, Connecticut, North Dakota, Wisconsin, Rhode Island, South Dakota, and Nebraska—again rise to the top quartile of the overall performance rankings. Though specific rankings shifted, these are the same
group of states identified as top performers in the first State Scorecard two years ago. Many have been leaders in reforming and improving their health systems—for example, by targeting efforts to reduce rates of uninsured adults and children.

Ten of the 13 states in the lowest quartile of performance—Tennessee, Alabama, Florida, Kentucky, Texas, Nevada, Arkansas, Louisiana, Oklahoma, and Mississippi—also ranked in the bottom quartile in the 2007 State Scorecard. Three others—North Carolina, Illinois, and New Mexico—dropped from the third quartile, while California, West Virginia, and Georgia moved up out of the last quartile. The 13 states in the lowest quartile lagged well behind their peers on indicators across dimensions of performance. Rates of uninsured adults and children are, on average, double those in the top quartile of states. Receipt of recommended preventive care is generally lower, and mortality from conditions amenable to health care is, on average, 50 percent higher in these states than in leading states.

Among the states that moved up the most in the overall performance rankings, Minnesota rose within the top quartile to become the fourth-ranked state, with significant improvement on multiple indicators. In three states—Arkansas, Delaware, and West Virginia—plus the District of Columbia, at least half of the performance indicators improved by 5 percent or more. Leading states set new benchmarks for 20 of the 35 indicators with trends.  These patterns indicate that public policies, plus state and local health care systems, can make a difference. Vermont, Maine, and Massachusetts, for example, have enacted comprehensive reforms to expand coverage and put in place initiatives to improve population health and benchmark providers on quality. Minnesota is a leader in bringing public and private-sector stakeholders together in collaborative initiatives to improve the overall value of health care—an approach that is gaining traction in other states. As New York and Utah have made concerted efforts to improve their performance in priority areas, these states' performance on key indicators has improved. Yet socioeconomic factors also play a role. Many of the states that ranked low on multiple performance indicators have high levels of poverty, making it difficult to provide affordable coverage without federal action.

Wide variations in access, quality, costs, and health outcomes persist across states.

Overall, the range of performance remains wide across states and across dimensions of performance, with a two-to-three-fold spread between top- and bottom-performing states on multiple indicators. On many indicators, the leading states have improved substantially since the 2007 State Scorecard—setting new benchmarks.

The divergence in performance is particularly wide when it comes to the following indicators: percentage of insured; diabetic patients receiving recommended care; mental health care for children; pressure ulcers in nursing homes; preventable hospital admissions; and mortality amenable to health care. To reach the level of top-performing states, bottom-performing states would need to improve by an average of 40 to 50 percent.

Improving the performance of all states to the levels achieved by the best states could save thousands of lives, improve access and quality of life for millions of people, and reduce costs. In turn, this would free up funds to pay for improved care and expanded insurance coverage—producing a net gain in value from a higher-performing health care system. If all states could match benchmarks set by the top-performing state, the cumulative effect would mean:

• Nearly 78,000 fewer adults and children would die prematurely (before age 75) each year from conditions amenable to health care.
• The number of people without health coverage would be more than halved, with 29 million more people insured.
• Nine million more adults (age 50 and older) would receive all recommended preventive care, and almost 800,000 more young children would receive key vaccinations on time.
• Four million more diabetic patients across the nation would receive basic services to help avoid complications such as blindness, kidney failure, or limb amputation.
• At least $5 billion would be saved from avoiding preventable hospitalizations and readmissions for chronically ill or frail elderly nursing home patients.
• Savings of $20 billion to $37 billion per year would be possible if annual per-person costs for Medicare in higher-cost states fell to the median state rate or to the average rate achieved in the top quartile of states.

Geographic variations remain striking, repeating the same general patterns seen in the first State Scorecard. States in the Upper Midwest and New England continue to lead, and states across the South, the Southwest, and the Lower Midwest continue to trail those in other regions on overall performance rankings. This pattern generally holds for the access, quality, and equity dimensions, though western states tend to perform better on avoidable hospital use and costs of care and on the "healthy lives" dimensions. Yet exceptions also exist, especially where states and care systems have made a concerted effort to improve.

Improvements in key areas of health care quality are promising.

The State Scorecard also documents widespread improvement across states on selected indicators, especially quality indicators for which there has been a national commitment to reporting performance data and collaborative efforts to improve. Notably, for some indicators of hospital clinical processes, the average performance of the bottom-ranked states now exceeds the median state rate of three years ago, with virtually all states improving.

These indicators include treatment for heart attack, heart failure and pneumonia, prevention of surgical complications, and provision of written discharge instructions for heart failure patients. 

Publicly reported quality measures related to the delivery of patient-centered care in nursing homes also improved substantially across states. The average state performance on reported pain and use of physical restraints on residents improved by at least 5 percent in all states, and in the majority of states average performance improved by the same amount for a measure of pressure ulcers; the range of performance between states narrowed as well. One key measure of home health care quality—improvement in patients' mobility—also showed a 5-percent-or-greater improvement in most states.

Currently, all hospitals are required to publicly report selected quality indicators in return for payment updates from Medicare. Several public and private initiatives have further tied payment incentives to hospitals' improvement on such metrics. The rapid improvement in a relatively short time illustrates the importance of data in guiding and driving change, as well as the necessity of having incentives in place to foster higher performance. In contrast, hospital readmission rates and several quality indicators that generally are not publicly available at the delivery-system level failed to improve or evidenced mixed performance across states. A general trend toward lower rates of mortality amenable to health care, cancer deaths, and smoking is also promising, although most states' death rates substantially exceed rates achieved by the benchmark states.

Unfortunately, these large gains were not matched in other areas. For example, there were only modest improvements seen in preventive care for adults—and in only half the states. The majority of states failed to improve on multiple indicators of ambulatory care quality and access over the two-to-four-year trends typically captured by the 2007 and 2009 scorecards. Many indicators of avoidable hospital use and costs of care failed to improve or grew worse, especially hospital admissions and readmissions from nursing homes—highlighting the need for better coordination of care across care settings. It should be noted that the data related to access to care reflect the period prior to the current economic recession, which has likely worsened access for adults. Similarly, the data predate the extension of CHIP, which may be helping to offset the recession’s impact on children.

On 20 of 35 indicators for which trend data are available, the median state rate (representing the middle of the range) failed to improve or declined by 5 percent or more. Only 15 indicators improved by 5 percent or more, mainly in the quality domain. Disturbingly, the range of performance across states widened on a third of indicators—often in tandem with a decline across states.

Making continual improvement the norm across all performance indicators and in all states will require national as well as state policies that ensure access to care, realign incentives, set targets, and make available the information needed to effect change. Robust measures of outcomes are needed as well to drive transformative system change; "process" indicators alone are not enough. It is also clear that improving care one disease or process at a time will not be an effective approach to achieving high performance across the board.

Symptoms of poor care coordination and inefficient or suboptimal use of resources point to opportunities to improve both quality and cost.

The State Scorecard points to evidence of gaps in care and fragmented care that reflects health system dysfunction: the failure to provide timely and effective preventive and chronic care; high and, in many states, increasing hospital readmission rates; and rising hospitalization rates for nursing home residents and home health care patients across most states. Despite improvement, rates of potentially preventable hospitalizations remain relatively high in many states. And the gaps in receipt of recommended preventive care such as cancer screenings and immunizations across states underscore the need for a stronger primary care infrastructure in the United States.

Annual costs of health care (average employer-group premiums for individuals and Medicare spending per beneficiary) vary widely across states, with no apparent systematic relationship to insurance coverage or ability to pay (as measured by median income). Moreover, across states there is no systematic relationship between scorecard indicators of the cost and quality of care across states. Some states in the Upper Midwest (e.g., Iowa, Minnesota, Nebraska, North Dakota, and South Dakota) achieve high quality at lower costs. Although these states are exceptions to the rule, they provide examples for other states to follow in pursuit of both goals.

States with higher medical costs tend to have higher rates of potentially preventable hospital use, including high rates of readmission within 30 days of discharge (Exhibit 4) and high rates of admission for complications of diabetes, asthma, and other chronic conditions. Reducing the use of expensive hospital care by preventing complications, controlling chronic conditions, and providing effective transitional care following discharge has the potential to improve outcomes and lower costs.

Affordability is a growing concern throughout the states.

In most states, health insurance premiums have been rising faster than household incomes. Using average employer-sponsored insurance premiums (including the employee share) for individual employees as a proxy for average insurance costs in each state, the State Scorecard finds that by 2008, average premiums amounted to 16 percent or more of median household income in 37 states, compared with 16 states five years earlier (Exhibit 5). In 18 states, premiums amounted to 18 percent or more of median income for the under-65 population. By 2008, only three states (Colorado, New Jersey, and Maryland) had premiums averaging under 14 percent of median income.

This upward pressure on the cost of health coverage has led to erosion in the generosity of insurance benefits, which in turn has increased the number of "underinsured" individuals and caused others to lose their coverage entirely. Reversing these trends will require a dual focus on "bending the cost curve" as well as action to secure affordable coverage for all.

There is room for improvement across all states.

All states have substantial room to improve. No state ranked in the top quartile across all performance indicators. On some indicators, even the top rates are well below what should be achievable. In each of the states with the highest overall rankings, several indicators declined by 5 percent or more; each also had some indicators in the bottom quartile or half of performance. At the same time, in each of the lowest-ranked states, there were certain areas of performance that improved—some quite significantly.

While leading states such as Massachusetts, Minnesota, and Vermont have enacted policy reforms that are extending coverage, promoting community health, and building value-based purchasing strategies through public–private collaboration, this
has not been the case in the vast majority of states. Encouraging the adoption of systemic improvements will likely require Medicare's participation in state payment initiatives and will require collaborative federal and state efforts to develop the information
and shared resources infrastructure necessary to achieve high performance.

 Key Findings and State Variations by Dimension of Performance

Access

• For the most part, performance on the State Scorecard's health care access indicators failed to improve from 2003 to 2008. Gaps in health insurance coverage between the top and bottom states remained wide, with uninsured rates for children ranging from 3 percent to 20 percent and rates for adults ranging from 7 percent to over 30 percent.
• Since the start of the decade—from 1999–2000 to 2007–08—the number of states with high uninsured rates (23% or higher) for nonelderly adults rose from two to nine, while the number with low rates (under 14%) dropped from 22 to 11. In contrast, the number of states with high children's uninsured rates (16% or more) declined from nine to three during this time, reflecting federal support of CHIP.
• From 2004–05 to 2007–08—the time span represented in the State Scorecard's coverage indicators—trends in coverage were negative in most states for adults and in two of five states for children. That this was true even before the severe recession underscores the challenge that states face in ensuring coverage for children and adults in the absence of federal action. 
• Massachusetts, which had only begun to implement its universal health insurance program during the period covered by the State Scorecard, had the greatest increase in coverage for adults and made gains in coverage for children between 2004–05 and 2007–08, becoming the top-ranked state for the coverage of both adults and children as well as the top-ranked state for access to care overall.
• Across states, the percentage of adults who reported going without health care because of the cost is  closely associated with insurance coverage and is up to three times greater in states with the highest uninsured adult rates than in states with the lowest uninsured adult rates (19% vs. 7%).

Prevention and Treatment

• Almost all states improved on process indicators of the quality of hospital treatment (48 states by 5% or better) and nursing home care (38 to 51 states by 5% or better across three indicators). On a set of hospital clinical quality measures, the rate in the five lowest-performing states in 2007 had risen to the level of the five highest-performing states three years earlier. On an expanded set of measures to prevent surgical complications in hospitals, the variation in performance among states narrowed by half.
• Despite a 30 percent narrowing in state variation on nursing home care, the range has remained wide, with a two-to-five-fold variation between the top-five and bottom-five states.
• States have failed to match these gains when it comes to the quality of ambulatory care; even in the best states, quality continues to be well below standards. The percentage of adults age 50 and older receiving all recommended cancer screenings and immunizations ranged from a high of just 53 percent in Delaware to a low of 35 percent in Oklahoma. Only about half the states improved by 5 percent or more. The proportion of diabetic patients receiving three basic services to prevent disease complications varied from two-thirds in Minnesota to one-third in Mississippi. The rate worsened or failed to improve significantly in 24 of 42 states for which data were available.
  
• More than one-quarter of young children in the bottom-five states did not receive timely preventive medical and dental visits and recommended vaccinations, and in the bottom five states more than half of children who needed mental health care did not receive it. Top states, in contrast, achieved vaccination rates of 90 percent and preventive visit and mental health care rates that were 20 and 30 percentage points higher, respectively. Only nine states improved substantially (by 5% or more) on vaccination rates, while 10 lost ground. And only 21 states improved substantially on child mental health care, while 12 declined substantially.
• In 48 states, there was no appreciable change in the percentage of adults who had a usual source of care—not surprising, given the lack of improvement in health insurance coverage. The proportion of children who received effective, patient-centered care coordination from a primary care medical home ranged from more than two-thirds (69%) in New Hampshire to less than half (45%) in Nevada.
• Across all states in 2007, there was a divergence in how Medicare patients rated their care, with provider interactions rated more highly and overall care experience rated more poorly than in 2003. (These trends should be interpreted with caution, however, because of changes in survey administration.) More data are needed to judge whether these shifts are an anomaly or represent an enduring change in patients' experiences.

 Potentially Avoidable Use of Hospitals and Costs of Care

• Hospital admissions among Medicare beneficiaries for ambulatory care sensitive conditions improved (i.e., declined) in a majority of states, although rates fluctuated from year to year—illustrating the importance of looking at long-term trends when assessing improvement. Declining hospital admissions may reflect patients’ improved access to medications for chronic conditions, or incentives provided to manage such conditions better. (The way hospital administrators code diseases for reimbursement purposes also has changed, potentially influencing trends for some conditions.)
• Hospitalization rates for pediatric asthma declined across most of the 32 states that reported data in both time periods. Yet despite some narrowing in state variation, rates were three times greater in the highest-rate states compared with the lowest-rate
  states, indicating that an opportunity exists for further reductions to benchmark levels. 
• Hospital admissions and 30-day readmissions among nursing home residents increased by 8 percent and 11 percent, on average, between 2000 and 2006, with negative trends seen in a significant majority of states. Rates went up by 5 percent or more in 29 to 37 out of 48 states for which trend data were available for these two indicators. Rates in the worst-performing states (i.e., those with the highest admission rates) were two to three times higher than in the best-performing states, and the ranges widened.
• The 30-day hospital readmission rate among all Medicare beneficiaries either failed to improve or increased across most states from 2003–04 to 2006–07, with continued sharp variation across states. Readmission rates in 2006–07 ranged from lows of 13 to 14 percent in the best-performing five states (Oregon, Utah, South Dakota, Nebraska, and Idaho) to highs of 21 to 23 percent in the worst-performing five states (Louisiana, Arkansas, West Virginia, Nevada, and the District of Columbia). Improvements in some states, as well as recent experience in some hospitals, suggest that all states could improve if incentives were better aligned to support care transitions and improve quality of care.
• Medicare fee-for-service spending per person grew by 6.5 percent per year from 2003 to 2006 for the median state—more than twice the rate of general inflation. The gap in per-beneficiary spending between the highest- and lowest-cost states widened. By 2006, average per-beneficiary spending in the five most costly states was 50 percent higher than average spending in the five least costly states ($9,439 vs. $6,027).
• Employer premiums (including the employee shares) for a single individual rose an average of 4.5 percent per year in the median state from 2004 to 2008; average annual increases ranged from 8.5 percent in Utah to less than 1 percent in neighboring Nevada. Premiums bought less coverage, as annual deductibles and cost-sharing went up during this time. By 2008, average premiums in the highest-cost states were 30 percent higher than in the lowest-cost states ($5,056 vs. $3,904).

Equity 

• In most states, there are wide "equity gaps" in performance on access and quality indicators based on income level, health insurance status, and race/ethnicity. Disturbingly, in the majority of states, these equity gaps widened over time. Equity gaps were most likely to worsen for access and coordination of care. (Equity gaps measure the difference between the experiences of vulnerable population groups in each state and the national average for a total of 24 equity comparisons, only 17 of which had data that could be compared over time.)
• Only eight states—Connecticut, Delaware, New York, Utah, Wisconsin, Oregon, Montana, and Michigan—saw the equity gap narrow, with the vulnerable group improving on more than half of equity indicators and improving relative to the national average. The greatest gains in equity across states were in mortality amenable to health care. Yet even on this indicator, in only half the states was the gap reduced for blacks relative to the national average; moreover, within all states, white–black differences remained large.
• In those states ranked at the top for equity overall, the gaps between vulnerable groups (low-income, uninsured, and minority) and national averages tended to be smallest. Six of the 13 top-ranked states—Maine, Vermont, Rhode Island, New Hampshire, Delaware, and Iowa—scored in the top quartile on this dimension for all three vulnerable groups. Conversely, five of the 13 states in the bottom quartile of the overall equity rankings score in the bottom quartile for all three groups.
• In some higher-performing states, traditionally disadvantaged groups reported quality of care that exceeded the national average. For example, the percentage of low-income diabetic patients receiving basic recommended services was higher in 11 states than the national average for all diabetics (44%). In a few instances, the care received by vulnerable groups was on par with that received by the typically advantaged group.
• The performance patterns for the equity dimension indicate that it is possible to close gaps—and raise the floor on performance—for vulnerable groups in comparison with national averages.

 Healthy Lives

• Rates of mortality for conditions amenable to health care improved in most states from 2001–02 to 2004–05, but wide regional variation persists. Average death rates were 68.2 per 100,000 persons in the lowest-rate states (Minnesota, Utah, Vermont, Colorado, and Nebraska) compared with 135.4 per 100,000 in states having the highest mortality rates (Mississippi, Louisiana, Arkansas, and Tennessee) and the District of Columbia.
• Looking just at white mortality rates for conditions amenable to health care, the spread across states is also wide, ranging from a low of 61 deaths per 100,000 in Minnesota to a high of 111 deaths per 100,000 in West Virginia.
• In all states, potentially preventable deaths among blacks are considerably higher than among whites. Even in the five states with the lowest rates for blacks on this indicator, there is still an average of 92.0 deaths per 100,000 blacks, which exceeds the national average for whites. Preventable deaths among whites have gone down in most states, yet some states have had increases in black mortality, resulting in widening disparities.
• State variations in breast and colorectal cancer narrowed between 2002 and 2005, as bottom-ranked states improved faster than states with the lowest cancer mortality rates. Notably, rates of colorectal cancer deaths in the bottom states are now at the median state rate observed in 2002.
• Few states experienced appreciable improvement in their infant mortality rates from 2002 to 2005. Signaling the need for urgent action, several states with already high rates experienced further increases, reaching an average of more than 11.0 deaths per 1,000 births—more than double the rates of states with the lowest infant mortality (4.5 to 5.1 deaths per 1,000 births). 
• Smoking rates among adults declined by 5 percent or more in the majority of states from 2003–04 to 2006–07. Yet more than one of four adults smoke in high-rate states, compared with just one of 10 in Utah, the lowest-rate state.
• Obesity is a growing concern across states. As of 2007, at least a quarter of children ages 10 to 17 are overweight or obese in all but three states (although these states are not far behind). And one of three children is overweight or obese in 17 states, with regional patterns closely tracking mortality amenable to health care.

Summary and Implications

In the midst of the current national debate on health system reform, the State Scorecard provides a framework for states to take stock of how they are currently performing and where they have opportunity to improve. The challenge for all states and for all private-sector health care delivery system leaders is this: to learn to use health care resources more effectively and efficiently, so that greater value and greater gains in outcomes can be realized. Achieving this goal will require incentives to improve and payment systems that support high-value care. There is also a need for greater integration of medical and public health interventions to help people adopt and maintain healthy lifestyles, as a means to counter the growing threat of obesity and prevent the development of chronic diseases—a major source of health care costs.

The erosion of insurance coverage (with the notable exception of a few states) and the high uninsured rates in many states underscore the need for national reform and federal action to extend affordable insurance and ensure access for everyone. Federal and national reforms also are needed to enable all-population data, spread the adoption and effective use of health information technology, and initiate payment reforms. The Medicare program, as the single-largest payer of hospitals and physicians, has the ability to serve as a national leader in the area of payment reform.

Wide geographic variations, as well as states' commonly shared concerns over care coordination and rising costs, further point to the need for national reforms that would stimulate and support state initiatives to improve performance. In the State Scorecard, those states that face the greatest health care challenges often have high poverty rates and more limited resources to invest in improvements. Moreover, the experience of the economic recession highlights the challenges of "going it alone"—even for states at the top of the scorecard rankings. State action is similarly critical. States play many roles in the health system: purchasers of coverage for vulnerable populations and for their employees; regulators of providers and insurers; advocates for public health; and, increasingly, conveners of and collaborators with other health system stakeholders.

State action is also key to improving primary care infrastructures and community-wide systems that facilitate access, improve coordination, and promote effective care. Hence, a cogent and congruent set of national and state policies is needed to move the country further on the path to higher performance. Disparities across states point to the importance of federal action that raises the floor on performance levels across all states and creates a supportive climate for state innovation and achievement. The Commonwealth Fund's Commission on a High Performance Health System has identified five essential strategies for comprehensive reform. States can play an important role in fulfilling these aspirations as part of a broader national effort.

1. Affordable coverage for all. In addition to working toward comprehensive insurance coverage reforms, states can improve affordable access and efficiency in the organization of insurance through effective oversight and reform of insurance markets and value-based purchasing of health plans for state employees. Expanding eligibility for Medicaid and CHIP and improving payment for health care providers would lead to greater participation in these programs and expand access to care for low-income families. Federal action is essential for setting a national floor of coverage across states that ensures access and financial protection and eliminates disparities.
2. Align incentives with value and effective cost control. The U.S. health system’s reliance on fee-for-service reimbursement creates incentives for providers to increase the volume of services they deliver—irrespective of the value of that care. Strategic payment reforms include reimbursing providers with more "bundled" payments for services with accountability to encourage efficiency, and providing financial support to develop and spread primary care medical homes. Several states are looking to multipayer initiatives to move in the same direction, with an emphasis on value and on bending the cost curve. Given the fragmentation of health insurance, it will be critical for public and private payers to work together to create consistent and coherent incentives.
3. Accountable, accessible, patient-centered, and coordinated care. States can design their Medicaid and CHIP programs in a way that links enrollees with a personal source of care that can serve as a medical home to facilitate appropriate care and manage chronic conditions. Several states are collaborating in multipayer, public–private demonstrations to develop and evaluate the effectiveness of primary care medical homes. The federal government recently announced a new demonstration that will allow Medicare to participate in such initiatives. States are also investing in key support systems for smaller physician practices—including more nurses and modern information systems—to facilitate delivery of effective, patient-centered care and to build community capacity.
4. Aim high to improve quality, health outcomes, and efficiency. Benchmarks set by leading states, as well as exemplary models of innovation found throughout the U.S., show that there are broad opportunities to improve and achieve better and more affordable health care for all. Information is critical to guide and drive change. The federal economic stimulus legislation provides the opportunity for states to play an important supporting role in the development of health information exchanges, which can help improve quality and efficiency by allowing providers to get timely information needed to treat patients effectively and prescribe drugs safely. States can also play a central role in building all-population, all-payer databases on costs, quality, and outcomes that can inform improvement and hold providers accountable for the care they deliver. Such systems also facilitate goal-setting and monitoring of the effect of policy and practice changes over time.
5. Accountable leadership and collaboration to set and achieve national goals. Top-performing states set benchmarks and provide examples of the leadership and collaboration necessary to improve. They and other states that have made gains have established quality improvement partnerships with other health system stakeholders to promote standard approaches to quality measurement, public reporting and transparency, consumer and provider engagement, and payment reform to encourage value-based purchasing. With the prospect of national reform, there may be new opportunities for Medicare to put in place the payment policies that are necessary to move forward.

The State Scorecard shows that all states can aim higher in their health system performance. But without federal reforms to help states stem rising costs and provide more affordable coverage, access will likely deteriorate. At the onset of the current recession, 1.5 million more adults were uninsured in 2008 than in 2007 because of a drop in employer-sponsored coverage, while the rate of uninsured children declined to its lowest level since 1987—an accomplishment made possible by coverage gains under government-provided health insurance such as Medicaid and CHIP. Estimates have the number of uninsured climbing to 61 million by 2020, with millions more expected to be underinsured.

Such erosion in access and the ability to pay for care would exacerbate financial stress for families, overwhelm safety-net providers, and undermine the financial foundation of community health systems—putting quality care at risk for everyone. With rising costs putting pressure on families and businesses alike, it is urgent that states and the federal government join together to take action to enhance value in the health care system and ensure that everyone has the opportunity to participate in it fully.