The Science of Reform

$9.96 million Laura and John Arnold Foundation grant helps launch new Health Care Markets and Regulation Lab

In the midst of a transformation of health care in the United States, the Department of Health Care Policy at Harvard Medical School has launched the Health Care Markets and Regulation Lab to provide policy makers and industry leaders with the scientific evidence and analytical tools necessary to create a fiscally sustainable, high-quality health care system.

The lab’s first major initiative, supported by a $9.96 million grant from the Laura and John Arnold Foundation, officially begins on Oct. 1.  Faculty in the lab will conduct seven research projects in the areas of health care payment reform, consumer engagement, delivery system reform, health care exchanges, quality measurement and risk adjustment. In addition, they will also directly engage both public sector and private industry leaders to help apply the best available science to reform efforts.

Michael Chernew. Image: Mark Finkenstaedt. “We hope to not only provide scientific evidence about the effectiveness of reform efforts that are underway but to speed the translation of that science into action, shaping the implementation of regulations and guiding future iterations of reforms,” said Michael Chernew, HMS Leonard D. Schaeffer Professor of Health Care Policy, who will serve as director of the lab.  “Ultimately, the goal is to create a higher quality, more efficient health care system.”

Barbara McNeil, Ridley Watts Professor of Health Care Policy and chair of the Department of Health Care Policy noted, “This funding puts us in the forefront of suggesting changes in the health care system by drawing together faculty from many parts of Harvard as well as individuals in the private and public sectors.”

The mission of the new lab is to provide the critical evidence and tools necessary to generate high-quality health care at a sustainable cost. To do this, faculty from the Department of Health Care Policy will join with experts from throughout the university, including a governance board that includes leaders in health care policy from the Harvard Business School, the Harvard School of Public Health, the Harvard Faculty of Arts and Sciences and the Harvard Kennedy School of Government.

The U.S. health care system is widely regarded as inefficient, with spending too high and quality too low. The leaders of the new lab note that this situation is due, in part, to the fee-for-service system of payment dominant in the U.S., which encourages providers to increase the volume of services rather than increasing the value of those services. In other words, rather than earning more by making patients healthier, providers earn more by doing more procedures.

At the same time, consumers—protected from the real costs of care by insurance that is subsidized by employers—have little incentive to shop for good deals in coverage or care.

Taken together, these inefficiencies have led to calls for reform of payment systems and development of better tools, such as insurance exchanges, to support markets and patient engagement, including those in the Affordable Care Act and various state and private reforms.

Supported by the Laura and John Arnold Foundation and other funders, members of the lab will lead studies in key reform areas and proactively engage policy makers and industry leaders to guide the implementation of reform.

“I don’t think any of us went into health care policy just to write papers,” Chernew said. “At core, we’re researchers, but in a world in the midst of great transformations, researchers must find new ways to make sure their work contributes to finding the best possible solutions. We want to be a part of transforming health care in a tangible way.”

“It's easy to complain about the failings of the health care system,” Chernew added. “Everybody knows there are problems. It’s much more important to figure out how to fix them.”