Fact sheet

Delivering Better Care at Lower Cost

Delivering Better Care at Lower Cost

Over the past five years, the Obama Administration has made significant progress towards improving access to quality, affordable care for all Americans. Purchasers of health care, both public and private, are increasingly pursuing innovative approaches to health care improvement, wellness and cost containment, and encouraging results over the past several years show that success is achievable, particularly where public and private actors are aligned:


  • Nationally, the lowest per capita cost growth in national health expenditures over the last four years in more than 50 years.
  • According to a major annual survey released last week, employer premiums for family coverage grew just 3.0 percent in 2014, tied with 2010 for the lowest on record back to 1999.
  • Health care price growth is historically slow, with prices rising at a 1.8 percent annual rate since passage of the Affordable Care Act, the slowest rate of increase over a period of that length in 50 years.
  • All in all, the slowdown in Medicare spending between 2009 and 2012 has resulted in spending that is $116 billion below what it would have been had 2000-2008 trends continued.
  • Looking forward, the Congressional Budget Office now estimates that Federal spending on Medicare and Medicaid in 2020 will be $188 billion below what it projected as recently as August 2010.

Patient Care, Experience, and Safety

  • Nearly 10% reduction in harm experienced by patients in hospitals nationally, such as decreased health-care-associated infections, and $4 billion in savings with the help of the Partnership for Patients program, the Quality Improvement Organization program, and other initiatives. Together, these efforts have prevented 15,500 deaths in hospitals and prevented over 500,000 patient harms in 2011 and 2012.
  • From 2012 to 2013, hospital readmissions in Medicare decreased by nearly 10%, with the help of Medicare’s Hospital Readmissions Reduction Program and additional initiative to improve care coordination, translating into 150,000 fewer hospital readmissions.
  • The number of Medicare beneficiaries served by highly rated 4 and 5 star Medicare Advantage plans has risen dramatically from 16% in 2009 to 55% in 2014.

Innovations To Provide Incentives For The Best Care Possible

  • Successful new demonstrations within the Center for Medicare and Medicaid Innovation, such as Accountable Care Organizations, are outperforming published benchmarks on quality and patient measures and generating hundreds of millions of dollars in savings.
  • 25 states are participating in the Center for Medicare and Medicaid Innovation’s State Innovation Models program to develop and test state-based, innovative multi-payer payment and health care delivery system reforms.
  • Thousands of hospitals and related health care organizations in Medicare have agreed to receive “bundled payments” for care associated with nearly 50 conditions and procedures, being rewarded for helping patients get well quickly and stay well rather than simply for the number of services hospitals provide.

Availability of Electronic Health Information

  • Over 75% of eligible professionals and over 90% of eligible hospitals have adopted electronic health records through the Center for Medicare and Medicaid’s electronic health record incentives programs.
  • 150,000 providers (nearly 50% of primary care physicians and over 80% of health centers and critical access hospitals) are receiving hands-on support through the Office of the National Coordinator’s Regional Extension Centers to adopt electronic medical record systems.
  • Cost and charge data for hundreds of services (inpatient, outpatient, and physician services) and quality scores for hundreds of thousands of hospitals, physicians, nursing homes, and other providers are now available on the Medicare website.

While we have made significant progress so far, several key challenges remain.

  • Consumers need better access to information to be active partners in medical decision-making.
  • Businesses and other purchasers need better information on provider and plan quality to make well-informed contracting decisions and to ensure a healthy workforce.
  • Clinicians and providers are engaged but need a roadmap of how incentives and payment models will change over time, the technical assistance to get there, and better access to electronic health information to reduce duplication and improve value- and evidence-based decision-making.
  • States need ongoing support to update their Medicaid and their health systems, including through technical assistance to develop the right incentives and information to drive improvements in patient care.

To address these challenges and deliver impact system-wide in providing better care at lower cost, continued action is needed across three key areas to drive progress:

  1. Incentives: We need to strengthen incentives for providers, payers, and consumers to encourage the best care possible.
  2. Tools: We need to empower providers, states, and other payers with the tools they need to transition to new models of care and improve the doctor-patient relationship.
  3. Information: We need to increase the availability and accessibility of information for effective, informed decision-making.

Significant work is already underway in each of these areas across the Department of Health and Human Services, but we have an opportunity to build upon innovations in the private sector and other areas of the health care system to accelerate this progress. By collaborating and building on best practices across sectors of the health care system and beyond, we can deliver the results of higher quality care and lower costs that consumers, providers, purchasers, and businesses deserve. We are interested in working with anyone with ideas for carrying out this important work together.