THE BLOG
10/01/2009 11:05 am ET Updated May 25, 2011

Beyond Politics: Making a Difference in Healthcare Now

"Markup" time is politics in action as Chairman Max Baucus' healthcare reform bill faces a barrage of amendments in the Senate Finance Committee. Politics in action equals deal making in action, and as I watch, it makes me nervous.

Here's politics in action:

Bloomberg News describes how Sen. Baucas has fought off many challenges from both parties. For example, an amendment by Sen. Nelson (FLA) would have required drugmakers to provide $106 billion in rebates over 10 years. With Democratic Senators Carper (DE) and Menendez (NJ) and all 10 of the committee's Republicans, Baucus defeated the proposal, which would have torpedoed an earlier deal he reached with the industry. When it comes to Congressional deal making, bipartisanship is alive and well.
• The New York Times noted that the defeat of the drugmaker rebate amendment was a "big victory" for President Obama, as it "upheld a deal reached in June by the White House and the drug industry."
• The Washington Post tells us how the "White House and the drug lobby make an unusual - and unusually powerful - team."

I am not a naysayer on healthcare reform. I champion the cause of major change in our healthcare system. And I know deal making is the name of the game in Congress. But, I am anxious about how healthcare reform based on deal making will work.

What is happening now is not having a calming effect on me, or any of us for that matter. Take Medicare reform. The latest New York Times/CBS News poll found that only 15 percent of Americans believe changes under consideration would make the Medicare program better, while 30 percent think they would make it worse.

Let's face the facts: we do need to change. The U.S. healthcare system is not just out-of-balance; it's perfectly designed to deliver increasingly less care for increasingly more cost.

For those who believe there's an easy answer elsewhere, this is not just an American problem. We see that the health and financial systems of many developed countries are severely damaged. For example, the single payer British National Health Service is considering layoffs of 1 in every 20 healthcare employees to control rising costs.

The answers are not in sight and I don't believe deal making is the solution. It's time to take a new approach to reform.

That's the subject of my new book Designed to Adapt: Leading Healthcare in Challenging Times, available October 15. It shows how our struggling healthcare system could benefit from combining the strategy of disruptive innovation with the leadership and management capabilities of adaptive, transformational companies.

The book is designed for these challenging times. The tattered fabric of business, insurance, finance, healthcare and government we inherited from the 20th Century is unraveling in the 21st. But, challenging times also present great opportunities. History is clear that in periods of rapid change, highly adaptive organizations have great competitive advantage.

So what to do? First, we must accept that great innovations and great reforms are not dependent on what we have done in the past or are doing now, but rather on how we adapt what we are doing to a constantly changing environment.

Secondly, the history of transformational, disruptive innovations shows that the structures and systems of current organizations, including government, and the mindsets of the people embedded within them will always slow, stall and commonly stop innovative, adaptive change.

Therefore, we must do more than hold our ground, implement best practices or just change things - like funding, planning, reimbursements, technology, facilities, people, processes or organizational charts. Instead, we must change minds and develop people to continually adapt to new opportunities.

The key to healthcare reform is to develop new adaptive capacity inside healthcare organizations. Although it seems impossible to consistently execute adaptive change in the face of organizational barriers and the inertia of people (e.g., staff, physicians, management, regulators, government, even patients) who don't want change, it can be done. There is a tested solution. I call it Adaptive Design.

My research and work, and the work of hundreds of people around the country, have shown that healthcare can be "designed to adapt." It has been proven that the adaptive capacity of companies like Toyota, Intel, and Southwest Airlines - companies that build new capability even in the worst of times - can be put to work in healthcare.

The secret to these companies' longevity is their unique knowledge management methods. Built into their organizational DNA is the capability to change minds and develop people to adapt and respond to complex, dynamic, unpredictable opportunities. We seek to capture that adaptive capacity for healthcare so that everyone is empowered and everyone is accountable for taking the lead in adapting his or her own corner of the organization to any and all new realities.

Designing healthcare to adapt requires a different approach than the top-down, "big-fix" practices driven by our current mindset. Leading in challenging times means revitalizing trust, optimism, high performance and innovation that makes a difference for patients. Those are the kind of results true governmental reform can help propagate.

Let's get the message straight. We need to get patients exactly what they need at continually lower cost. To do that we need to work adaptively and that's everyone's job. It's a tough uphill journey, but together we can do it. It's the way to fix health care.

Dr. John Kenagy is a physician, patient and former Visiting Scholar at Harvard Business School. His book, Designed to Adapt: Leading Healthcare in Challenging Times, will be available October 15. For more information, see his website at www.johnkenagy.com. Adaptive Design is a registered trademark of Dr. Kenagy.