Healthcare as an innovation problem
I’ve been loosely following the healthcare debate in the U.S. and there are some obvious points for innovation gone wrong. It’s not Obama’s fault, at least not yet, as the system he is working in is designed to make innovation quite difficult. Big change of any kind, for better or for worse, is extremely hard to do as power is divided across so many people, with so many entrenched and selfish interests.
Given what I know about innovation, if I were tasked with the challenging of reforming U.S. Healthcare, the last thing I’d do is try to overhaul the entire system all at once. It’s too big, too complex, and has too many built in defenders of the status quo to ever pull off. It would also be much too hard to get right in one shot.
Instead I’d do the following:
- Inform the populace of examples that already exist that we can emulate. Innovation is less scary if people can see and talk to others who are already doing something. Which U.S. states or countries are closest to what Obama wants to do? I have no idea, yet I’ve followed the high level debate points so far. Many of the criticisms hinge on the belief what Obama wants to do can’t be done, yet somehow most developed nations in the world do provide a form of universal health-care. We are ignorant of how else this can work and it’s a flaw in American culture that we’re ignorant of other successful ways governments can run. I want to see a chart comparing the U.S. to Sweden, Japan, Canada, Germany, etc. so we know how else this has been done, and can learn from them.
- Run a pilot program so the risks are smaller. Pilot programs are the only way to take risks in a safe way and avoid criticisms driven by fear (see idea killers). If you take a small group, and apply the changes there, and observe the results, you create a way to learn from mistakes in the small, prove the core principles and gain support from people who say it can’t be done. It’s much easier to get support for a pilot project than for the real thing. You often can do it in some form with a minimum of approvals. Do a small one, show it worked, then repeat on a bigger scale until you have enough evidence to make your case.
- Insure more people every year instead of all at once. Another way to minimize risk is to grow the system over time. This is a form of pilot program – piloted over time. Instead of radically overhauling the system, increase coverage to 5% of the uninsured in 2010, learn from how that worked, then expand to %15 etc. By making changes incrementally there is less to fear and less risk of abuse, bloat, and mismanagement. And it reduces the costs risks many complain about.
But the problem with my advice is the U.S. government is not designed to make this kind of thing easy. Budget cycles and Senate processes do not encourage experimentation, and the momentum required to get any legislation passed at all is so complex and momentum bound that once in motion there likely will not be a second chance – you get one bullet to spend during a term as president, if that at all.
Many corporations suffer similiar systematic problems – there is so much required to even get an idea on the table, that big ideas become brain dead easy to kill if that’s what you want to do, which most people who already have power and seniority tend to want to do.
As is often the case for me in American politics, I’m worried less about which side wins whatever battle, than I am about the low quality of discourse and discussion. It’s hard to sort our how much the headlines reflect what is actually going on, but stupidity and arrogance are harder problems to fix than innovation. Whether at work or a town hall meeting, when many arrive with decisions already made, or with the goal of silencing others, there’s not much room for progress to happen.
I love the pilot program idea. I always thought the auto industry is where they should’ve done this. Instead of giving the companies bailout money directly, take health care off their hands (don’t have numbers but I think I read it was well into the billions per year they were spending on it). The employees/retirees are saved that benefit if their company goes out of business; the companies get a huge relief; and the general public (a) doesn’t see their tax dollars given to a corporation and (b) gets to see progress towards something we should already have.
Excellent post, Scott.
In January of 2000 I took a university course called social workers and medicine, covering things such as working in hospitals. Our professor reported being at public meetings (plural) on medical insurance at U.S. universities where he would hear absolute lies about Canada. One of the liars was a (past or future) U.S. vice president. I knew then the U.S. system was unfixable.
On a more amusing note: for several days, as I dimly recall, one of our local newspapers had front page stories about the plight of a married couple who were stuck in the U.S. because (I think) the wife gave birth. Our universal coverage does not cover foreign countries. People here in Calgary were collecting money for them. The last story was when they got back. They reported that the hospital had proposed to do x-rays before they went back in anticipation of no x-rays being available back in Canada. “They’ve got socialized medicine there” said the educated doctors and nurses.
I’m no psychiatrist, but if the U.S. mental block is that big then change will take a long, long time.
I believe it was Lawrence Peter (of the Peter Principle) who taught me the need for, but political difficulty of, federal pilot projects.
I know it was Scott Berkun in his project book who opened my eyes to how some people arrive at a meeting “to discuss” (with presumably open minds) with their minds secretly made up in advance. “Thank you, Scott” (he said, sadder but wiser)
We already have a pilot program: Massachusetts! The reforms Mitt Romney signed into law there are very similar to what’s being proposed on a national scale. Here’s a good read about how well it’s worked: http://www.masstaxpayers.org/publications/health_care/20090501/massachusetts_health_reform_the_myth_uncontrollable_costs
Here are some interesting graphs comparing the US to other countries.
http://blogs.harvardbusiness.org/haque/2009/08/how_to_think_constructively_ab.html
Very interesting analysis; thanks, Scott. I agree that government is not set up for rapid innovation, and it’s not clear to me that it *should* be. On the other hand, I think private industry is, or can be, set up for innovation. So the best thing the government can do is: establish the conditions, the environment, where it’s *profitable* to provide healthcare to virtually everyone. In that environment, private experiments will find the best way to do that. John Mackey (CEO of Whole Foods) proposes some concrete steps in a WSJ opinion piece today: http://online.wsj.com/article/SB10001424052970204251404574342170072865070.html
I agree with some of the other commenters that we’ve already had pilot programs: Medicare/Medicaid, Massachusetts. We can consider other countries as pilot programs as well. But it’s not trivial to find good analyses of those programs, since you’ll find conflicting reports based on conflicting ideologies. E.g., contra an earlier comment, here’s an article on the Massachusetts program claiming it was a massive failure: http://www.theobjectivestandard.com/issues/2008-fall/mandatory-health-insurance.asp
Which leads to a deeper question: Is innovation the real problem? I think the deepest conflict here is not practical, but moral. There’s a fundamental contradiction between universal charity and government protection on the one hand, and individual rights and liberty on the other. People are going to decide where they stand based on that.
As you’ve pointed out, you have to get the basics right, or the details don’t matter.
I do agree with the concept of pilot programs and getting representative implementations of trials that can be referenced and held up as successes. I think that this goes against the “think big” mindset that likes to take Herculean tasks head on and vanquish them in one shot. Ultimately, an approach with pilot programs is bootstrap in nature with growth over time, but I can only see top level politicians taking credit for efforts made in this manner, not initiating such efforts themselves. There is little credit to be gained.