In this plan, we describe the problems with quality of care and high costs in the US healthcare system and the potential role for effective care transitions to achieve performance improvements at the state and national levels. We review why transitions fail, and what is known about effective transitions based on national models and randomized trials. We outline current projects in Massachusetts that form the infrastructure for future work and state health policy among providers, insurers, patients and policy makers. Finally, we present principles, recommendations, action steps and measures for consideration by the Health Care Quality and Cost Council, legislators and other state leaders. We believe that Massachusetts can lead the nation in improving care transitions and reducing avoidable hospitalizations.