A big reason the healthcare debate in Washington has gone nowhere is that it’s all about who pays for healthcare, not how to create better outcomes at lower cost. For every winner, there’s a loser, and that’s a recipe for gridlock. Meanwhile, medical costs continue climbing. Ultimately, everyone loses.

The business of figuring out how to improve outcomes and reduce costs gets a tiny fraction of the media attention, but if there’s ever going to be a solution to the healthcare crisis, it will come from stretching healthcare dollars, not redistributing them. As it happens, Virginia is taking the lead in an initiative that may help “bend the cost curve.”

Five Virginia health plans are taking part in a pilot program funded by private foundations and led by the Catalyst for Payment Reform (CPR), a nonprofit group that seeks to measure “which strategies are having the desired impact in the market,” reports Virginia Business magazine. Virginia will be one of only three states selected to participate, says Beth Bortz, CEO of the Virginia Center for Health Innovation, which coaxed Virginia’s five insurance companies into sharing their data. (Two other insurers have yet to commit.)

Each of the participating companies — Aetna, Anthem, Optima, UnitedHealthcare and Virginia Premier — possesses vast quantities of data on healthcare expenditures and outcomes. But data residing in five silos isn’t as valuable for analytical purposes as a database encompassing all five. Reports Virginia Business:

The key goal is to identify health-care payments in commercial and Medicaid sectors that are “value oriented,” which CPR defines as effective treatments combined with a reduction in unnecessary spending. That means the project’s intent isn’t just to find effective treatment. “We’ve been about advancing value,” Bortz says. “It’s not quality at any cost.” …

Involvement with CPR will help a project VHCI has already begun. It is a data-based measurement of health care called the Virginia Health Value Dashboard. Its purpose “is to prompt action for improving the value of health-care services,” says VHCI.

Examples of “low-value” care that the dashboard project is targeting include: avoidable emergency-room visits, hospital readmissions and the use of high-cost service sites when less expensive options are available. The “high-value” care examples include: up-to-date vaccinations, smoking cessation programs, better screening for cancer and improved management of chronic conditions such as diabetes.

The goal is to have in place by January a dashboard tool for groups that provide, buy or fund health-care services to use in evaluating various costs. Being part of the CPR’s project is a big step toward that goal. “It costs money to get good data,” Bortz says.

Bacon’s bottom line:

 It would be great if Virginia could bend the cost curve. Households could find some relief from the relentless squeeze on their pocketbooks. More people could afford afford insurance coverage. And, to the extent that healthcare is a big chunk of employee compensation, Virginia businesses could gain a competitive advantage.

There is a gap, however, between knowing what the best practices are and actually putting them into place. The political economy of healthcare in Virginia is riddled with special interests that benefit from laws and regulations that stifle change. Many regulations — mandated benefits, medical licensure, the Certificate of Public Need process — create incentives for perverse behavior. The best data in the world won’t do much good if health care providers don’t do anything with it. So, while the CPR initiative is a positive development, Virginia has much work ahead to create the conditions where healthcare insights will be acted upon.