The US healthcare system is in deep trouble and requires fundamental reengineering rather than single incremental reforms. Reengineering involves rethinking the entire care delivery process from the perspective of health outcomes and patient value. It requires abandoning long-established clinical approaches and entrusting generalist clinicians to lead interdisciplinary teams providing standardized, evidence-based care coordinated around patient needs. While challenging, reengineering following principles demonstrated by IBM could transform the system to dramatically improve quality and control unsustainable costs.

1. VIEWPOINT
Reengineering US Health Care
Ari Hoffman, MD
Ezekiel J. Emanuel, MD, PhD
I
N AUGUST 1910, THE NEW YORK TIMES PUBLISHED AN AR-
ticle about Paul Ehrlich, the Nobel PrizeϪwinning German scientist, who had discovered a compound to treat
syphilis—the “magic bullet.”1 In August 2010, The New
York Times published an article about Americans avoiding basic and necessary health care because it is too expensive.2 One
hundred years after discovery of the first treatment for syphilis and nearly 3 years after passage of the Affordable Care Act,
the core health policy question remains the same: is there a
single solution to improve the quality of US health care while
simultaneously controlling costs?
In the treatment of many diseases, modern medicine has
found treatments similar to Ehrlich’s discovery. However,
for more complex chronic conditions, such as congestive
heart failure and diabetes, multimodality approaches that
integrate different medical therapies with lifestyle changes
and comprehensive outpatient care are required. Likewise,
health reform requires fixing a chronically dysfunctional system. While it is tempting to try to identify a single solution
to this complex problem, the cure will require a multimodality approach with a focus on reengineering the entire care
delivery process.
Searching for a Single Solution
Many experts have advocated myriad changes—health information technology (HIT), pay-for-performance, chronic
disease management, malpractice reform, comparative effectiveness research, payment reform—to solve the health
care cost and quality problems. Each of these changes is necessary, but none is sufficient. When implemented individually, these changes almost invariably fall short of expectations to improve quality and reduce costs.
Chronic disease management is a good example. According to a Congressional Budget Office (CBO) review, Medicare funded 34 demonstration programs aiming to maintain or improve quality of care while reducing costs primarily
by preventing hospitalizations. These programs sought to
achieve this goal through enhanced coordination of care for
beneficiaries with common chronic conditions. After colAuthor Audio Interview available at www.jama.com.
lecting 10 years of data, the results were disappointing. The
nonpartisan CBO reported no net effect on hospital admission rates or Medicare expenditures.3 Once the fees incurred by Medicare were accounted for, almost every program either cost more money or saved none. With regard
to quality, these programs had “little or no systematic effects on the process of care measures that were examined,”
which included routine preventive and screening services
based on guidelines. In other words, the programs failed to
show a net effect on both quality and costs.
Single, incremental changes, such as disease management systems and HIT, may have effects, but are not solutions. As another CBO report states, new electronic systems can “make it easier to reduce health spending if other
steps in the broader health care system are also taken to alter
incentives to promote savings. . . . [but] by itself, the adoption of more health IT is generally not sufficient to produce significant cost savings” [emphasis added].4 Presenting HIT, disease management programs, comparative
effectiveness, or payment reform as fundamental solutions
distracts from the more comprehensive reorganization necessary to accomplish the dual goals of quality improvement and cost control.
The Reengineering Imperative
Reform to improve quality and reduce costs requires a multimodality approach. Hammer and Champy have defined
reengineering as “the fundamental rethinking and radical
redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance.”5 Consider changes at IBM Credit, a subsidiary that
finances the products sold by IBM.
Initially, it took IBM Credit an average of 6 days to move
from credit request through issuance, with 6 distinct steps,
each performed by a different individual in a different department. The company attempted to improve its efficiency by streamlining each individual task, but failed to reduce turnaround time. Other fixes were tried. The company
installed a control desk that logged each step, allowing sales
representatives to track their deals. Ironically, this added
Author Affiliations: Department of Internal Medicine, University of California, San
Francisco (Dr Hoffman); Office of the Provost and Department of Medical Ethics
and Health Policy, Perelman School of Medicine and Wharton School, University
of Pennsylvania, Philadelphia (Dr Emanuel).
Corresponding Author: Ari Hoffman, MD, University of California, San Francisco, 505
Parnassus Ave, Room 987, San Francisco, CA 94143-0119 (ari.hoffman@ucsf.edu).
©2013 American Medical Association. All rights reserved.
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JAMA, February 20, 2013—Vol 309, No. 7 661

2. VIEWPOINT
to turnaround time and required more administrative personnel at higher costs, a similar effect that electronic medical records (EMRs) have in some settings.
Those early efforts were well-implemented incremental
reforms that honed each step to a matter of minutes, but
overall efficiency actually decreased. The processing system was broken.
A new management team reengineered IBM’s system, developing a generalist “deal structurer” position to manage
the entire process with the support of a new computer system and available specialists capable of handling the difficult cases. Surprisingly, the average total time plummeted
from 7 days to 4 hours and the number of deals increased a
hundred-fold.
The take-home lessons include fundamentally rethinking the overall process rather than focusing on individual
tasks; abandoning long-established procedures in favor of
an entirely new approach; and entrusting individuals with
standardized processes while providing them with the necessary tools and backup specialists for challenging cases.
Reengineering for Health Care
Three types of businesses undertake reengineering: (1) those
at the peak of their game with ambitious executives, (2) those
that reengineer to stay ahead, and (3) those in deep trouble.
The US health care system is in trouble, and rather than single
reforms, it needs reengineering. For many reasons, this will
not be easy: focusing on the entire process of care rather
than a single intervention is more difficult to understand
and rigorously evaluate; the pressure to prove effectiveness through evidence-based research methods leads to the
identification of individual variables rather than multimodality thinking; and systems-level changes require broad
buy-in and culture change.
Reengineering may be difficult, but seeking single solutions for the health care system is likely to fail, and failure
will continue to fuel opposition to health reform. Individually implemented changes are divisive rather than unifying
with respect to the stakeholders in health care, and they jeopardize the fundamental rethinking of health care delivery.
Reengineering is possible. As with the IBM example, the
principles of successful change can be applied to health care.
Successful reengineering proceeds in an orderly manner: rethink, redesign, and then apply necessary tools. Isolated solutions like disease management approach the problem backward, applying tools to a faulty delivery system. Fundamental
rethinking will require addressing broad questions of who
provides health services, how services are paid for, and how
much society should pay. Radical redesign will involve sys-
662
tems overhaul in the domains of education, research, infrastructure, and public health in addition to new systems for
health care delivery and payment. Application of necessary
tools like EMRs, decision support, malpractice reform, and
care coordination build on a solid foundation.
As the IBM example makes clear, reengineering of the
health system will require a focus on health outcomes rather
than serial treatments by clinicians, overall value of health
interventions, and changes to all domains affecting health.
This starts with the patient as the end-user of health care,
and it ends with a hundred-fold increase in productivity.
Like IBM, US health care can harness the power of a generalist heading an interdisciplinary team of clinicians. They
will need reliable and actionable EMRs and standardized,
evidence-based processes of care for common problems with
access to specialists for challenging cases.
In addition, clinicians need to abandon their longestablished approach of caring for patients in the hospital
or the office. They have to provide constant access to a clinician who knows the patient and encourage communication with whatever mode patients are comfortable with—
telephone, e-mail, or office visits. Patients spend most of their
time away from the health care system and the focus has to
be one of managing their health literally where they live with
much more wireless monitoring, electronic and phone visits, at-home care, and patient engagement.
No single change will solve the health care value problem. With a focus on reengineering, the nation may succeed not only in implementing systematic health care reform, but reform that actually improves the health of
Americans while simultaneously controlling unsustainable costs.
Conflict of Interest Disclosures: Both authors have completed and submitted the
ICMJE Form for Disclosure of Potential Conflicts of Interest. Dr Emanuel reported
receiving payment for speaking engagements unrelated to this work.
Online-Only Material: Author Audio Interview is available at http://www.jama
.com.
REFERENCES
1. Bachalar N. Paul Ehrlich, 1908. New York Times. February 1, 2010. http://www
.nytimes.com/2010/02/02/health/02first.html. Accessed January 7, 2013.
2. Pear R. Economy led to cuts in use of health care. New York Times. August 16,
2010. http://www.nytimes.com/2010/08/17/health/policy/17health.html. Accessed January 7, 2013.
3. Nelson L. Lessons From Medicare’s Demonstration Projects on Disease Management and Care Coordination. Congressional Budget Office Working Paper. January 2012.
4. Orszag P. Evidence on the Costs and Benefits of Health Information Technology.
Congressional Budget Office; May 2008. http://www.cbo.gov/sites/default/files
/cbofiles/ftpdocs/91xx/doc9168/05-20-healthit.pdf. Accessed January 7, 2013.
5. Hammer M, Champy J. Reengineering the Corporation: A Manifesto for Business Revolution. New York, NY: HarperCollins Publishers; 2003.
JAMA, February 20, 2013—Vol 309, No. 7
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