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The future we need, want, and can have—if we act soon.

by Michael Rohwer

As this series concludes, Dr. Michael Rohwer explains the characteristics of a healthcare system grown using the model of a Complex Adaptive System.

This series has been about the underlying reasons why healthcare cost is out of control while quality underperforms expectation. As noted many times, our expensive system is the result of how we have viewed the problem. Moreover, when we come to believe things work in a particular way, it is very hard to see anything else.

In one of his routines, the late comedian George Carlin coined the phrase “vuja de.” It is the opposite of “deja vu” in that it involves seeing the same thing repeatedly and then suddenly experiencing a completely different understanding. In healthcare, we have been working from the same playbook for decades. We are uncomfortably comfortable with it and believe that, with all its flaws and failings, it is acceptable. Even though the financial bottom line gets worse every year, we find solace in its apparent logic and the myriad of activities that continue to show improving but unproductive Vanity Metrics related to internal processes. This was my model, too, until Bart McMullin connected what I already knew about Complex Adaptive Systems with the lack of progress in moving healthcare’s bottom line in a healthy direction. And I am not alone. All across this country, there is a growing awareness that the model of the Complex Adaptive System (CAS) is a better fit for healthcare.

I’d like to conclude this series by taking a look at what is possible using this better model and how such a system would work. Recent advances in information technology, new knowledge from complexity and system sciences, and the experience of other industries make this feasible for us now. Getting there is not accomplished in one fantastic leap, however, but by a long and sure journey of small steps. While no one can predict the exact structure of a CAS, we can implement certain characteristics necessary for success by using the tools discussed in Healthcare and Purpose Driven Management.

General structure of a new system

Every system we know or conceive exists within nature, not outside of it. Within nature there are recurring patterns and behaviors of natural events that are unpredictable but not random, and these events are the result of underlying mechanisms we are only beginning to understand. This is important because success will come by implementing systems that resonate with this underlying reality and are organized along the patterns of nature. And healthcare, as a human organization, is a system of nature.

The World Health Organization (WHO) healthcare system definition is this: “A health system consists of all organizations, people and actions whose primary intent is to promote, restore or maintain health.” The system is defined by its purpose. Some definitions add that it exists to serve a “target population,” which I believe is a mistake because this perspective leads to paternalism and exclusion of members from the solution—a position and a place from which we cannot achieve the IHI triple aim. All this leads to the first principle around which we will build the new system.

Members are part of the healthcare system. If members are a target and not participants, they cannot be part of the solution. Effective systems, however, create value by enabling cooperation and the ability of its parts to focus on what each does best. Complex Adaptive Systems are driven by information and feedback. Since health of the overall population depends on the health of all members, each member is an active component in the web of information flow and feedback loops necessary for success.

Healthcare management’s goal will be to maximize value to the member. For businesses operating in a competitive environment (and healthcare management is a business), this is a no brainer. Better products and services come from the active pursuit of more choice and better quality. While the science-and-technology side of healthcare is pushing back the boundaries of knowledge, the delivery system is intentionally constrained by an enormously complicated price control system that prevents competition around value.

The current price controls will be phased out. While these controls were well intentioned, it is hard to see anything positive to counterbalance the negatives. Our current system prevents productive competition, fails to measure the value delivered, generates inflationary pressure, and incentivizes unnecessary care that ultimately requires necessity management producing pockets of artificial scarcity. The latest bundled payment initiatives remain based in encounters and resource requirements, thereby compounding the problem by aggregating away the detail critical to improve the system. All of this is counter-productive to the purpose of the healthcare system, which is to “enhance and preserve human health.” Before we can create a better system, we must have clarity around what we are paying for.

Clinical performance is the benchmark of success. Success for any system is the achievement of its purpose, which requires a specific set of goals within a specific clinical context. While this is often difficult, it is the only true measure of what is accomplished.

Every member with significant problems will have multiple layers of context that apply and every provider will work in multiple areas. This is Brer Rabbit’s briar patch for physicians! Dealing with this detail is part of their nature and training. Practitioners of all stripes will deliver better care when allowed to operate within a professional context and be accountable for the core of what is important. Measures that are fair, accurate, and appropriate to the situation are key. This is accomplished with the community using a standardized value-based approach.

Community Value Systems will enable effective community innovation. Communities have the advantage of smaller size. They understand their own strengths and weaknesses because they live them daily. Behaviors that emerge from Complexity are fewer and identified sooner when the size is small. Replication of community-based programs provides for more sustainable scale as each community adapts the solution to its specific needs. This better fit creates both better performance and efficiency. The Community Value System (CVS) provides the tools to design new or extend existing standards. It is a stable platform on which the community can modify the standards or guidelines in ways that are more effective, based on community-level negotiation. It is a tool for measuring effectiveness. It provides a way to compare similar measures, guidelines, and resulting outcomes. The CVS provides the mechanisms to measure and pay for value and to propagate methods to other communities or national review organizations. By measuring the value delivered to the member, we make it possible to understand what is being purchased and to implement true value-driven competition.

The evolution of a value-driven network will bring new options and freedom. Many of the activities that practitioners and provider organizations must engage in is not what they what they intended when they chose the profession, nor what they are best suited for. Most of this myriad data entry can and should be delegated to lower-cost and more competent cloud-based providers as the new system develops.

Consider the following example. In the past, every tech company maintained its own data center. This gave them greater control over their product and a greater sense of security. But this is changing for two reasons. Modern data centers are increasingly complex and expensive, at the same time this capability is available from multiple high-quality vendors by subscription. This modularity of the product, with selective outsourcing of less expensive and more reliable components, is a business model that serve everyone well.

Healthcare will benefit from this same approach. Services and technologies will be adapted to the administrative problems of healthcare. Because they are standardized processes, they’re ideal for the cloud. Just like the data center, they will cost less and be superior to what even large institutions are capable of alone. Multiple competing vendors will allow providers the freedom to choose and change. This will give providers lower overhead and the flexibility to practice in a way that supports their most important relationships to their patients. This new dynamic, based on the information-age connectivity and cooperation, does not require the mountains of concrete and steel that holds the Integrated Delivery System together. This new paradigm will produce a cascade of important changes.

Transparency around price and value will enable true competition. This is what makes the general economy so productive. In healthcare, we will see new flexible benefit plans and more effective alternatives to limiting member choice and denial of care. Practitioners will find they actually enjoy their work for the first time in years. Members will have real choices, and by making them will drive costs down and quality up.

We need to get started!

This is not mythical or illusive healthcare reform. It is intelligent, informed, practical, and a doable remedy—but we need to get moving because time is running out. There are many who share this vision and a coalition that sees the need for change—guided by healthcare operational experience, expertise in technology, and knowledge of Complexity and System Science—is beginning to form. Healthcare management really, truly can be healthy, on target, and profitable. For more information about this coalition, please email me, michael.rohwer@phtech.com.