Creating a market that values health

5 months ago

My last article described the difference between “Complicated Systems” and “Complex Adaptive Systems (CAS)”. It explained how wicked problems arise when there is a mismatch between a management system and the environment it’s trying to manage. Such is the case in healthcare. Healthcare’s complicated management is too slow and rigid to keep pace with the reality of the complex adaptive systems environment it is supposed to serve. We need a management system as agile and adaptive as the problem environment we face. 

To leverage the $2.7 trillion in capital spent on medical care in the US, there is clear opportunity to reduce this mismatch. Innovators at  SOCAP Health 2014 meeting convened for just this purpose. Their conclusion?  Create a market that values health.
 
A systems approach opens entrepreneurial opportunities and new investment frameworks that can drastically reduce healthcare costs and improve lives. New tools and technology give us the capability to create a market that meets the unique and specialized needs of healthcare. Examples from other industries show higher productivity and lower prices. And, systems science offers ways to manage the market so that it continually self-organizes to achieve its purpose.

A healthcare marketplace   

Healthcare’s value is its purpose – better outcomes. All markets deliver purpose and exchange it for money. We don’t buy a new car because we want a shiny lawn ornament. Likewise, for appendicitis, we don’t buy a surgery; we want to keep living. It is purpose that aligns the parts of a car and connected purpose that aligns all the parts necessary for a good outcome from surgery. The result is important and in most markets, we use a marketplace to keep prices down and quality up. That is not happening today in healthcare. 

Healthcare needs a marketplace with the capability to ensure that achieving its purpose remains the primary driver of its business success. Outcomes become monetizable if they are accountable and transparent. In other words, value in healthcare –can be realized with purpose based outcome based on measures that are visible to all. 

Every community and every person in that community, has unique issues and situations. Individual and community circumstance strongly affect even well-understood conditions. 
 
Outcomes are hard to define and achieve in the real world. Some outcomes look easy on paper. Most are difficult in practice. This is where shared technology and network infrastructure can deliver real value. A shared and open framework embedded in the marketplace will offer adaptive transparency that supports learning. Adaptive transparency opens the door to new real-time analytics support from existing vendors, outcome-based payment from existing payers, and the ability to move from a retrospective understanding of healthcare to the equivalent of in-flight instrumentation. This will enable control and distributed innovation in every community. This approach and toolset offer real improvement and recognition for real performance. 

The engine that makes this possible is the underlying power of every marketplace, self-organization. 

Guiding self-organization 


The engine that powers every marketplace – and occurs naturally in every complex adaptive system - is self-organization. Self-organization combined with transparency delivers better products at lower cost. A better healthcare marketplace with adaptive transparency will empower every Point of Care with more and better options, greater rewards for success, and the freedom to choose based on price and expected outcome. 

This is important because point of care is the only place in the system that is in direct contact with the patient and the problem. It is the only place in the system capable of keeping pace with its changes. Like any marketplace, this is an adaptive network that supports movement. Decisions made by each point of care continually guide self-organization to be increasingly patient centered. This is a learning system that works by empowering practitioners. 

Next steps 

We begin in each community around their unique areas of opportunities. It means working together using agile engineering where we take small steps, learn together, and share what we have learned. 
   
The best opportunity for creating real-good and achieving real-savings is the integration of social determinants of health (SDH) into medical care. We can create real-value at the same time we create a better future for practitioners and patients alike. 

We will look at integrating social determinants of health into medical care next.