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Colorado, Minnesota, and Vermont are pioneering innovative health care pay­ment and delivery system reforms. While the states are pursuing different models, all three are working to align incentives between health care payers and providers to better coordi­nate care, enhance prevention and disease management, reduce avoidable utilization and total costs, and improve health outcomes. Colorado and Minnesota are implementing accountable care models for Medicaid beneficiaries, while Vermont is pursuing multipayer approaches and moving toward a unified health care budget. This synthesis describes the common drivers of reform across the states, lessons learned, and opportunities for federal administrators to help shape, support, and promote expansion of promising state initiatives. It also synthesizes strategies and lessons for other states considering payment and delivery reforms. The accompanying case studies describe the states' efforts in greater detail.

An examination of nine hospitals that recently implemented a comprehensive electronic health record (EHR) system finds that clinical and administrative leaders built EHR adoption into their strategic plans to integrate inpatient and outpatient care and provide a continuum of coordinated services. Successful implementation depended on: strong leadership, full involvement of clinical staff in design and implementation, mandatory staff training, and strict adherence to timeline and budget. The EHR systems facilitate patient safety and quality improvement through: use of checklists, alerts, and predictive tools; embedded clinical guidelines that promote standardized, evidence-based practices; electronic prescribing and test-ordering that reduces errors and redundancy; and discrete data fields that foster use of performance dashboards and compliance reports. Faster, more accurate communication and streamlined processes have led to improved patient flow, fewer duplicative tests, faster responses to patient inquiries, redeployment of transcription and claims staff, more complete capture of charges, and federal incentive payments.

New analysis of the 2003 Commonwealth Fund Biennial Health Insurance Survey reveals that an estimated 77 million Americans age 19 and older--nearly two of five (37%) adults--have difficulty paying medical bills, have accrued medical debt, or both. Working-age adults incur significantly higher rates of medical bill and debt problems than adults 65 and older, with rates highest among the uninsured. Even working-age adults who are continually insured have problems paying their medical bills and have medical debt. Unpaid medical bills and medical debt can limit access to health care: two-thirds of people with a medical bill or debt problem went without needed care because of cost--nearly three times the rate of those without these financial problems.

A 2003 Commonwealth Fund/Health Research and Educational Trust survey of 576 New York State firms found that, in order to manage rising health costs, employers are increasing the share of the insurance premium that employees pay, delaying the start of benefits, and increasing cost-sharing at the point of service. This has enabled employers to preserve health benefits, but has raised costs for workers and their families. On average, workers' contributions for family coverage rose 54 percent, from $1,392 per year in 2001 to $2,148 per year in 2003. During that time period, fewer workers selected family coverage. Employers are receptive to a wide range of approaches to make coverage more available and affordable for their employees, but they have limited familiarity with public programs that could cover their lower-wage workers, such as Healthy New York, Family Health Plus, or Child Health Plus.