Designing More Affordable and Effective Health Care

by Lauren Hughes, Douglas McCarthy, Anne-Marie Audet, and Sarah Klein

This case study is part of ongoing research by The Commonwealth Fund to track how health systems are transforming care delivery, particularly to meet the needs of high-need, high-cost patients and other vulnerable populations. The first publication in the series profiled the Penn Medicine Center for Health Care Innovation.


Spiraling health care costs in the U.S. place untenable burdens on an increasing share of Americans and divert money from education, research, and economic development. In 2010, Stanford University launched its Clinical Excellence Research Center (CERC) to develop new ways of delivering health care that might slow this spending growth. “What we want is affordable clinical excellence, and that’s what is distinctive about what we’re doing,” says Arnold Milstein, M.D., M.P.H., CERC’s director, who was recruited to lead CERC in part because of his success redesigning ambulatory care for medically fragile patients. The center identifies diseases, conditions, and health care services for which spending could be lowered by 30 percent or more for certain populations while also improving patient health and care experiences.

The new care designs are developed by multidisciplinary teams of postdoctoral fellows, including physicians, systems engineers, and social scientists. Fellows spend one to three years at CERC and receive intensive training in its research and care redesign methods. The teams are assigned ambitious goals — for instance, cutting in half national spending on treatment for chronic musculoskeletal pain. Because real-world demonstrations are a key to spreading new care models, CERC partners with health systems and health plans across the United States to try out and test their approaches.

Structure and Approach

The Stanford University School of Medicine and its academic medical center cooperate with CERC in researching, designing, and refining new care approaches. The medical school provided half of the center’s start-up funding and continues to provide administrative support and an academic home for CERC faculty. The center’s annual operating budget of $3.5 million partially supports 21 full-time-equivalent staff members. Funding sources include private philanthropy, grants, and industry sponsors.

The center’s work consists of four synergistic work streams:

  • studying high-performing clinical teams to identify their replicable characteristics
  • identifying the greatest sources of discontent among patients, families, and clinical teams
  • collaborating with other Stanford researchers to identify new tools and knowledge from other disciplines that can be applied to health system redesign
  • designing, implementing, and evaluating new care models that, if broadly implemented, would slow growth in health care spending.

CERC’s initial areas of focus were selected by studying populationwide spending trends, reviewing the current literature, and consulting with clinical experts. This approach identified promising opportunities to reduce needlessly costly or unnecessary care.

Once targets are identified, the center looks for key points in the trajectory of a condition or disease where changes in provider and patient behavior could slow the progression or make possible the use of less expensive but equally effective treatment methods. CERC’s leaders refer to these windows of opportunity as “ambush points.” For example, if a patient with chronic kidney disease begins to experience severely reduced kidney function, she could transition to either center-based or home-based dialysis. According to CERC’s estimates, home-based dialysis, along with better management of early disease stages, could save the United States $63 billion per year while improving patients’ experiences.

To identify new tools and techniques, CERC has fostered relationships with 16 other Stanford departments, including those focused on health behavior, management science, economics, and technological innovation. A collaboration with researchers working on artificial intelligence, for example, led to the idea of using computer vision technology to lower the cost of continuous patient monitoring in intensive care units (ICUs) and senior housing. This technology could also be used to improve patient safety by detecting whether clinicians adhere to recommended infection prevention measures when entering the rooms of children with compromised immune systems, or by checking whether appropriate procedures are being followed in the ICU to prevent blood clots from forming in patients’ legs.

Developing partnerships with other health systems and payers is another key strategy. CERC recruits partners with a population health focus and a history of taking on financial risk and then works with them to refine value-based care models.

As of October 2015, these partners included six insurance companies or self-insured health care purchasers and 11 integrated health systems. Several of the health systems support the center’s fellowship program by helping fellows hone their new care models.

CERC’s Efforts to Improve Care for Kidney Disease, Cancer, and Stroke

Chronic Kidney Disease

Problem: Patients with chronic kidney disease often do not receive optimal primary care treatment in the early stages. Those with late-stage disease, meanwhile, often struggle to follow the recommendations of the wide array of specialists involved in their care, including endocrinologists, neurologists, cardiologists, nutritionists, physical therapists, and social workers.

Solution: CERC found opportunities to improve outcomes and lower health care spending at critical junctures in care — after diagnosis and when patients begin to experience severely reduced kidney function. First, the center uses software to scan electronic medical records or lab reports to identify patients with early-stage chronic kidney disease whose loss of kidney function can be slowed. In those cases, a nephrologist remotely advises the patient’s regular doctor on ways to alter therapy to meet key goals, like controlling blood pressure. Patients with late-stage disease are assigned a nurse care manager, who joins the patient in the nephrologist’s office for a videoconference with other specialists to create a coordinated care plan that reflects quality-of-life goals. This new care model, which also emphasizes shared decision-making to respect patients’ preferences, is being tested to determine whether it can slow disease progression, reduce emergency department visits, and make greater use of safer and less costly home-based end-stage treatment methods.

Who is currently testing this model? VA Palo Alto Health Care System; New York’s Mount Sinai Health System, in partnership with the Building Service 32BJ Health Fund.

CERC’s estimate of savings if implemented nationally: $63 billion annually.

Enhancing Quality of Care for Patients with Advanced Cancer

Problem: Cancer patients with poor prognoses experience fluctuating emotions, great uncertainty, and evolving symptoms at the end of life. Treatment decisions are complex and often result in high-cost care that can worsen quality of life. Poor management of pain and nausea also leads some patients to turn to costly emergency department care for relief.

Solution: CERC’s new care model for patients with advanced cancer relies on health coaches, who help talk to patients about their goals for their care and quality of life. Such conversations take place over time in patients’ homes, in language free of technical jargon. Coaches also engage with family members whose goals may differ from the patient’s — for example, grown children who aren’t prepared to give up on treatment. These are difficult conversations that can be hard for busy providers to manage. Under the care model, patients also have the option of receiving chemotherapy at home, and they have access to emergency medication packets for immediate treatment of their pain and nausea while at home. In addition, a 24/7 symptom control call center is staffed by experienced cancer care nurses.

Who is currently testing this model? CareMore and St. Jude’s Heritage Medical Group in Southern California; Unite Here Health in Chicago and Atlantic City; VA Palo Alto Health Care System.

CERC’s estimate of savings if implemented nationally: $37 billion annually.

Advancing Stroke Prevention and Care

Problem: When it comes to treating a stroke, the time it takes to begin treatment has a significant effect on outcomes, quality of life, and subsequent costs to the health care system. Victims who are unaware of the signs of stroke may delay treatment, missing an opportunity to receive the clot-dissolving medication tPA, which must be administered within three-and-a-half hours to restore blood flow to affected parts of the brain.

Solution: CERC’s approach to stroke care emphasizes patient behavior, using education and regular “stroke drills” to help at-risk patients and their families recognize symptoms and understand the importance of immediately calling an ambulance. On the way to the hospital, paramedics communicate with the neurologist about the patient’s clinical history. Once at the hospital, patients who are likely experiencing a stroke are delivered directly to the computed tomography scanner, which reveals whether a clot exists. If so, a nurse is ready to administer tPA.

CERC has also developed innovations in stroke prevention and post-stroke care. Through lay coaching, which is supervised by a nurse, at-risk patients are encouraged to make lifestyle changes. Meanwhile, specialized outpatient clinics evaluate patients with transient ischemic attacks (mini-strokes), which may be a warning sign of an impending major stroke.

Who is currently testing this model? Stanford Health Care; Geisinger Health System in Pennsylvania; Allina Health in Minnesota; Virginia Mason in Washington. CERC is also collaborating with California Stroke Registry/California Coverdell Program through the California Department of Public Health to extend its model to two California regions.

CERC’s estimate of savings if implemented nationally: $2.8 billion annually.

CERC has identified primary care sites, outside of well-studied large integrated health systems, that excel in delivering value. In assessing the factors that contribute to their higher performance, Melora Simon, M.P.H., and her colleagues looked at the total cost of care, as determined by market prices paid by private payers (rather than prices paid by Medicaid and Medicare) and quality measures like the Healthcare Effectiveness Data and Information Set (HEDIS). Their analysis, conducted with IMS Health, used claims data for some 40 million commercially insured Blue Cross Blue Shield patients, collectively seen by half of the physician practices in the United States.

Melora Simon, M.P.H., leader of America’s Most Valuable Care Project

The team identified primary care practices that had at least two physicians and scored among the top 25 percent on quality measures. These practices were then narrowed down to only those within the lowest 25 percent of total annual per patient spending (after adjusting for disease severity). Less than 5 percent of the approximately 15,000 sites CERC assessed met both of these criteria.

After visiting 20 of these high-performing sites — a diverse mix in terms of geography, practice size, labor costs, market share, and practice arrangements — the clinical experts and CERC faculty described and ranked their distinguishing features with regard to cost impact, quality, and transferability of features to other practices. The team is developing a toolkit that practices can use to achieve similar results.


How CERC Describes the Ten Characteristics of High-Performing Primary Care Practices

1. They are “always on” and regard patients as individuals. Patients have a sense that their care team is always available and that they can quickly reach someone who knows them, whether the practice is open or closed. Practices offer same-day appointments, accommodate walk-in visits, and have extended evening and weekend hours.

2. Physicians adhere to quality guidelines and choose tests and treatments wisely. The care team has systems to ensure patients receive evidence-based tests and treatments. At the same time, the team conserves resources by tailoring care to align with patients’ needs and values.

3. Patient complaints are treated like gold. Complaints from patients are considered as valuable as compliments, if not more so. High-value primary care providers take every opportunity to encourage feedback that can help to improve the patient experience.

4. They in-source, rather than outsource, needed tests and procedures. Primary care teams do as much as they can safely do themselves, within the scope of their expertise, rather than refer patients to external providers. This includes services that take more time than a visit usually allows: skin biopsies, insulin initiation and stabilization, joint injections, or suturing. If specialist supervision can be arranged, primary care teams will take on additional low-complexity services, like treadmill testing for cardiac patients.

5. They stay close to their patients after referring them to specialists. Physicians refer to carefully chosen specialists whom they trust to act in accordance with their patients’ preferences and needs, and they stay in close communication as care decisions are made. Although physicians cannot always select the hospitalist or emergency department physician who cares for their patients, they do stay connected to ensure treatment plans respect patients’ preferences and needs.

6. They close the loop for patients. The care team follows up to ensure that patients are seen rapidly after hospital discharge, are able to continue their prescribed medications, and can see specialists when needed.

7. They maximize the abilities of staff members. Physicians are supported by a team of nurse practitioners, physician assistants, nurses, and medical assistants — all of whom are working at the top of their licenses. This allows physicians to care for more patients and spend more time with each one.

8. They work in “hived workstations.” Care teams work together in an open, collaborative environment that facilitates continuous communication among clinical and nonclinical staff alike.

9. They balance compensation. Rather than relying solely on fee-for-service reimbursement, pay typically also reflects quality of care, patients’ experiences, use of resources, and contribution to practicewide improvement activities.

10. They invest in people, not space and equipment. Practices rent very modest offices and only invest in lab, imaging, and other equipment if doing so allows them to deliver care more cost-effectively in-house. Saving money this way eliminates the need to see more patients or order expensive tests to generate a competitive income.

Source: Stanford University Clinical Excellence Research Center


CERC is now performing a similar analysis to identify features of high-performing community hospitals and care practices in seven high-cost specialties: cardiology, endocrinology, nephrology, obstetrics, oncology, cardiothoracic surgery, and interventional cardiology.

CERC’s Fellowship Program

In CERC’s care innovation design fellowship program, participants develop new care models using multiple techniques: observing high-value clinical teams, studying emerging technology, such as automated clinical workflow support systems, and conducting interviews to identify patients’ and clinicians’ unmet needs.

The care models are refined through discussion with experts in industry and science, including leaders from health care systems and companies recognized for delivering high-value care. In their second year, fellows work with health systems to implement their new designs, assess their impact on cost and quality of care, and refine them.

Once they’ve developed a new approach, the teams practice explaining it to health system leaders, payers, and frontline clinicians — experiences that CERC hopes will prepare them to lead health system transformation elsewhere.

Jeffrey Jopling, M.D., M.S., a general surgery resident and CERC implementation fellow, explains the different approach required to redesign — rather than simply improve — health care systems.

Lessons and Insights

Collaborate with health systems and purchasers as partners in care model design and implementation. To increase the likelihood of success, partners need to take ownership of and adapt the care models to their respective settings without compromising the integrity of design. That’s why CERC develops innovations that can be tailored to each pilot site’s level of capability and motivation to manage change.

CERC has yet to determine how it will progress from testing with a limited number of partner sites to reaching a broad cross-section of adopters. The size of the potential market for the center’s innovations will depend on how quickly the country moves from volume-based, fee-for-service payment to value-based reimbursement, and on the willingness and readiness of clinicians to take on financial risk for lowering the total cost of care.

Develop policies that support rapid learning. When private payers and providers in a competitive market participate in collaborative research, there can be challenges related to ownership of data and intellectual property. To avoid these issues, CERC worked with partners to define an open, nonproprietary innovation model that supports shared learning. To ease agreement on data use, the center does not collect protected health information from its partners or data suppliers, although it does help them perform relevant analyses.

Seek peer-reviewed publication to strengthen scientific standing and spur adoption. CERC strives to develop methods and approaches that meet the standards of peer-reviewed journals publishing early-stage research. The goal is to validate the credibility of the center’s work with external audiences as well as the academic community. “In a university setting, published research is the ‘coin of the realm,’ and we have to find a way to make what we’re doing relevant to the research mission as well as the teaching mission of the university,” says Bob Rebitzer, M.B.A., CERC’s chief operating officer.

Draw on the expertise of the university. The center’s position within a leading research university allows it to tap scholarly resources and fund collaborative opportunities, like its work with the Stanford Artificial Intelligence Laboratory. This requires intellectual curiosity, disciplined inquiry, and the ability to identify partners willing to take calculated risks in testing new approaches.


What Lies Ahead

Stanford University’s Clinical Excellence Research Center focuses on care redesign aimed at improving the affordability of high-quality health care. It’s a mission that distinguishes CERC from innovation centers pursuing commercialization ventures to sustain their operations or generate revenue.

As health care spending continues to grow unsustainably, CERC may become a national source of frugal clinical innovations for health systems facing increasing pressure to embrace higher-value care. The spread of its new care models, however, will ultimately depend on how easily they can be adopted, and whether policymakers increase incentives for the health care industry to do more with less.

At the same time, CERC’s approach also can improve the care experience — and quality of life — for people with complex and costly medical conditions. Indeed, the patient is never far from CERC director Arnold Milstein’s mind. “If we don’t design methods of care delivery that address the most deeply felt unmet human needs of patients, family members, and clinicians, our new models aren’t going anywhere,” he says.