THE BLOG
09/17/2009 05:12 am ET Updated May 25, 2011

Solving the Health Care Reform Puzzle

Health care reform in America is possible. In fact, four eminent physician leaders wrote an intriguing editorial in the New York Times on Aug. 12 offering the opinion that, in places, it has already been done.

Authors Atul Gawande, Donald Berwick, Elliot Fisher and Mark McClellan -- who represent a broad spectrum of physician leadership -- note how the health care reform debate has funneled into the discussion of only two options: raising taxes or rationing care. Neither fly very well in politics. They are almost always dead ducks.

But then the editorialists raise an option that really does fly and which readers of my Huffington Post columns know I've repeated over and over again: "Change the way care is delivered so that it is both less expensive and more effective."

To counter the widespread skepticism about whether this option is possible, the editorialists make an intriguing argument -- it's not only possible, it's already been done! As evidence they list the multitude of examples around America and the world in which more care is available at lower cost -- big name places like Mayo and the Cleveland Clinic, but more importantly, from many other "towns big and small, urban and rural, North and South, East and West."

Here's their list: Asheville, N.C.; Cedar Rapids, Iowa; Everett, Wash.; La Crosse, Wis.; Portland, Me.; Richmond, Va.; Sacramento, Cal.; Sayre, Pa.; Temple, Tex.; and Tallahassee, Fla. There's not a "magic kingdom" medical center anywhere on this list. That's just America!

Sure enough, the evidence is there. But the evidence only makes one piece of the health care reform puzzle.

This puzzle has three parts.

1. Everyone -- President Obama, both parties in Congress, health care managers, doctors and nurses, and, of course, patients -- wants more care at lower cost. Surprise! We have some unanimity in this fractious, bitter debate. We can agree on something!

2. And we can do it! The data shows that more care at lower cost is possible. The editorialists reference many places, right here in expensive, profligate, "greedy," multi-payer America, where more care at lower cost is not only available, it's the norm.

3. Everybody wants it and we can do it. But we can't get it done! Instead we face higher taxes and rationed care. That's the puzzle.

How is it possible that we all want more care at lower cost and data shows that it's available, but we can't achieve it? How is it possible that our health care reform options have been reduced to raising taxes and rationing care, which will achieve exactly the opposite -- less care for more cost? It's more than a puzzle; it's a trillion-dollar dilemma.

My research at Harvard Business School into the few companies that innovated strategically when others failed to adapt shows that the root cause of our dilemma is the way we are approaching the problem.

For my entire 40 year career as a physician, health care executive, scholar, adviser, and patient, we have been "fixing" health care. Methods yield outcomes. Therefore, all our past solutions have summed together to create our current condition, which we all agree is tragically flawed. The problem is that our approach is well intentioned, but antiquated and ill-suited to the unpredictable complexities of 21st Century health care.

Our current approach seeks to manage the problems of health care with methods that worked successfully for mid-20th Century factories. We identify the biggest problems, gather data about them, then bring experts together in meetings to decide upon and implement big solutions. It's data up/implement down, but in the fast-moving, complex world of 21st century health care, these methods can't keep up with the problems.

The faster the rate of change, the more flexible and responsive we must become. As I describe in my forthcoming book, Designed to Adapt: Leading Healthcare in Challenging Times (Second River Healthcare Press, September 2009), adaptive innovators like Intel, Southwest Airlines and Toyota, and a small but growing number of health care organizations, have begun to make a difference. Instead of just implementing a big top-down fix, they are identifying better ways to rapidly adapt by making small fixes exactly when and where they are needed.

All health care, like politics, is local. And not surprisingly, all the evidence of programs and policies that deliver more care at lower cost noted in the New York Times editorial are also local. What's the secret formula or silver bullet? In my experience, those great results were the product of the knowledge, creativity and problem solving of people who had the opportunity to adapt their work to getting patients what they needed.

Fortunately, we can harness that creativity and direct the powerful desire of almost everyone in health care to make it better for patients through a method called "adaptive design." Instead of moving data up to experts, management can develop new critical thinking skills and embed new coordinated decision-making capability where the information is, very close to the patient.

There clearly is a role for government to accelerate and generalize this success. The policy options I described in my previous column: "My Health Care Reform Fear: It's Not Who Pays, It's What We Get" can stimulate the growth and development of the thousands of small, local fixes that will truly reform our troubled system.

The physician leaders writing in the New York Times last week have established our objective -- more care at lower cost. The history of innovation shows that we will not get there through data up/implement down methods or big, expensive technology. We will achieve that objective by growing locally from thousands of places close to the point of care. How? -- By putting in place disciplined, structured ways to harness the knowledge and creativity of everyone in health care to focus on getting patients exactly what they need at continually lower cost. Government policy can help make that happen. That's the adaptive design approach. That's the way to fix health care.

Dr. John Kenagy is a former Visiting Scholar at Harvard Business School and the author of the forthcoming book Designed to Adapt: Leading Healthcare in Challenging Times (Second River Healthcare Press, September 2009)

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