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Kathleen Sebelius Headshot

A Long Overdue Wave of Health Innovation -- and the Smart Policies Behind It

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Three years ago, our Department kicked off the Health Data Initiative with 45 people gathered in a conference room. Our theory was that if we unlocked the vast stores of public data our Department collects on everything from provider quality to clinical trials, entrepreneurs would use it to create new tools that would lead to better health for Americans and lower costs across the system.

This week marks the fourth annual edition of what has come to be known as 'Datapalooza,' and the results have exceeded our wildest expectations. What started as a small brainstorming session has grown into an event that brings together nearly 2,000 tech developers, health care professionals, researchers, policy makers, and business executives. Apps and software showcased at Datapalooza are now being used to do everything from creating customized hospital discharge plans that help reduce readmissions to helping consumers research surgical procedures.

These innovations promise to transform aspects of the health care experience where progress has stagnated for decades. Think about showing up at a doctor's office and filling out forms on a clipboard in a waiting room. Huge swaths of the American health care system have long felt frozen in time.

As the incredible new products on display this week at Datapalooza demonstrate, the problem wasn't a lack of new ideas. The problem instead was obstacles--for example, inaccessible data--that prevented those ideas from being put into action. But what Datapalooza is showing is that smart policy can be instrumental in removing these obstacles to innovation. And we're now seeing the same pattern play out across the health care system.

Take electronic health records. We've long known digital health records are a critical tool for improving patient health--but because they came with high upfront costs and compatibility challenges, they were being used by fewer than 10 percent of hospitals and fewer than 20 percent of doctors in 2008. By reducing the obstacles to adoption through incentives that help offset those startup expenses and through common standards for information sharing, our Department has been able to dramatically speed up the spread of this technology in just a few years. As of last month, over half of doctors and nearly 80 percent of hospitals have adopted electronic health records to improve patient care.

You can see similar progress in care delivery. For years, the best methods employed by our leading hospitals, like delivering care in teams to ensure better coordination, were confined to small pockets of our health care system. Part of the problem was payment policies that often rewarded providers for delivering unnecessary and duplicative care, while punishing those who kept patients healthy and out of the hospital.

Through the health care law, we're starting to change those incentives, and the results have been dramatic. In the last few years, more than 250 health organizations of all shapes and sizes have formed Accountable Care Organizations that agree to be paid partly on how successful they are at keeping patients healthy and costs low. And similar models are spreading rapidly in states and among private insurers.

While these changes are still in their early stages, Americans are already seeing benefits. For example, hospital readmission rates for Medicare beneficiaries that had held steady for years have now fallen to a record low. And national health care spending has grown at historically low rates for three straight years.

There's more work to be done to create the kind of 21st century health care system Americans deserve, but these early results--and the pioneering technologies, products, and apps on display at Datapalooza this week--clearly illustrate that big gains are possible when the right conditions for innovation are present.

Going forward, our Department will continue seeking out opportunities to help empower health care innovators. Last month, we released data for the first time on how much hospitals charge for different inpatient procedures. And today, we're releasing similar data for outpatient care. As one innovator recently told me, "data is oxygen for innovation--and there's a lot more oxygen in the environment now."

We don't know exactly how developers will use this raw material. What we do know is that the combination of smart government policies and the ingenuity of American entrepreneurs has proven to be a powerful formula for producing long overdue innovation in health care. And that's great news for the American people.

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