Healthcare Innovation Zones (HIZs)

Update AAMC Briefs Capitol Hill on Healthcare Innovation Zones Academic medical center leaders held a Capitol Hill briefing for congressional staff on the transformative potential of HIZs as part of national health care reform. The event was hosted by the AAMC and CAMC. Related The Congressional Academic Medicine Caucus Rep. Allyson Schwartz (D-Pa.) and Rep. Patrick Tiberi (R-Ohio) will serve as co-chairs of the newly established CAMC, a bipartisan group of congressional members dedicated to maintaining and strengthening the nation's medical schools and teaching hospitals. The Economic Impact of AAMC-Member Schools and Teaching Hospitals 2008 (PDF) This new AAMC report reveals that its member medical schools and teaching hospitals had a combined economic impact of over $512 billion on their state economies and the nation overall in 2008. Washington Highlights Subscribe to Washington Highlights, a weekly electronic newsletter featuring brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

Our country continues to have difficulty bridging the gap between conceptualizing and creating a better-functioning healthcare delivery system. Improving quality and reducing costs nationally will require a fundamental redesign of both the systems of care delivery and payment for healthcare in the U.S. today.

The AAMC proposes the creation and testing of a concept called the "healthcare innovation zone" (HIZ). The HIZ is designed to demonstrate that coordination of care, coupled with a multiple payer reimbursement model, will support more effective planning and delivery of care, and enable resources to be allocated where they can add the greatest value. This demonstration will be large enough to demonstrate the efficacy of fundamental changes in the healthcare delivery and financing models that are needed to increase quality and reduce costs throughout the U.S.

The HIZ is a geographic region containing an Academic Medical Center (AMC) and other clinical and non-clinical entities that provide the full spectrum of healthcare services to a defined population.

For public and private insurers, the HIZ will provide care at an aggregate payment level less than the projected payment growth rates. With specific exemptions and waivers from certain laws, rules and regulations, savings will be achieved by creating more efficient methods of healthcare delivery and increasing provider collaboration and integration through the realignment of provider payment incentives.

Why Academic Medical Centers?

• Academic Medical Centers (AMCs) realize that the only way to solve our healthcare challenges is to harness the most thoughtful and innovative of our leadership to create, test, refine and implement new models of care delivery and payment
• Because of their locations (often urban) and diverse patient populations, AMCs can tailor HIZ initiatives to provide the best outcomes for their patients. AMCs currently provide services to 40 percent of the "at-risk population" in the U.S., are the sites for tertiary and quaternary care in their communities, train the medical workforce of the future, and create the medical innovations that advance care
• Many AMCs have organized physician group practices of the size and sophistication needed to provide the full continuum of healthcare to a defined population
• Many AMCs are already engaged in smaller-scale innovation initiatives, and have demonstrated an interest and a readiness in fundamentally changing care delivery as evidenced by participation and discussions at the recent AAMC HIZ Forum

HIZ Pilot Program

The Healthcare Innovation Zone (HIZ) pilot program is designed to increase integration and align healthcare provider incentives to reduce the rate of healthcare costs while improving quality of care for Medicare, Medicaid and privately insured patients. The HIZ is a geographic region that contains a teaching hospital, physicians, and other clinical entities that would provide a full spectrum of health care and could provide for the incorporation of new and innovative clinical initiatives for training the next generation of health care providers. New innovations in clinical care would be developed and implemented by physicians and other clinicians in an innovation zone that helps facilitate coordination of care, quality improvement, and cost reduction.

The program would consist of two phases. The first phase would distribute planning grants to entities, comprising a teaching hospital and others, that would develop and submit HIZ design plans tailored to their own geographic region, and address issues including, but not limited to, how providers would reduce the rate of increase in spending, how physicians, hospitals and other providers would collaborate and align to provide the full spectrum of care as well as collect, analyze and share data among the clinical partners. The proposals could include necessary exemptions from regulations and other barriers that impede integration and alignment. The second phase would be the implementation of a pilot program that would be based on the approved proposals but would also require that the participants provide care to at least 50 percent of the population within the HIZ and accept Medicare payments that are equal to a base level increased by a rate of growth that is 1.5 percentage points less than the projected rate of Medicare payment growth for the HIZ.

Learn More

Rep Schwartz's HIZ Dear Colleague Letter—October 2009

How Healthcare Innovation Zones (HIZs) Can Leverage the Best of American Medicine (PDF)

Rep. Schwartz Reintroduces Healthcare Innovation Zone Legislation
Rep. Allyson Schwartz (D-Pa.) Sept. 29 reintroduced the AAMC-supported "Healthcare Innovation Zone Program Act of 2009" as H.R. 3664 (PDF). The reintroduced legislation clarifies and expands several issues by modifying the definition of a healthcare innovation zone (HIZ), creating and defining a "HIZ Coordinating Entity" to receive and administer payments, and expanding a waiver provision to include Medicaid and antitrust barriers, among other changes.

HIZ Concept Paper (PDF)—October 2009

AAMC Support Letter on Healthcare Innovation Zones (HIZs) (PDF)—October 2009

More Than Just Insurance, Reform Forges Ahead—AAMC Reporter, September 2009
Various incarnations of health care reform legislation could markedly affect medical schools, teaching hospitals, and physicians, but are not on the national radar.