Making ‘Sense’ of Health Care Costs and Other Complex Challenges

This week’s New Yorker has another interesting column by James Surowiecki, entitled Local Knowledge, which laments the fact that there are huge anomalies in health care in the US from community to community, a result of a combination of local customs, patient demographics, and the varying supply and accessibility of practitioners and facilities. Great variations in treatment have been noted in many diseases and conditions, including serious and controversial ones like cesarean sections, spinal fusions, mastectomies, and coronary-bypass surgeries. Different treatments and variances in hospital stays mean great variations in medical cost, Surowiecki says, and this could be costing the US health care system billions it can’t afford. His prescription? Not a new government standards body, but increasing awareness of people about these differences, so that the ‘inefficiencies’ are driven out of the system by informed patients and caregivers.

What Surowiecki seems to be looking for is what in business is called ‘best practices’. What’s interesting to me is that business has recently become disenchanted with ‘best practices’: In a world where every job, every situation, every context is different, the applicability of some documented ‘best practice’ in any situation other than the one it was identified in is increasingly dubious. Dave Snowden articulates these three ‘heuristics’ about real-world knowledge:

So what we have here is a clash of two new and exciting philosophies: Surowiecki’s argument that tapping the Wisdom of Crowds can allow much better answers to emerge than relying on experts, versus Snowden’s argument that such ‘wisdom’ is possible and useful only in relatively simple situations where apples can clearly be compared to apples, and doesn’t work in the majority of more complex situations where every case is arguably significantly different.

An identified ‘problem’ in Surowiecki’s article is the large number of facilities and practitioners providing over-long stays to patients in Florida, compared to other states. They are drawn there, of course, because that’s where the customers are, and, as in all things, the work tends to expand to fill the available space, money and time. In public health services we seem to try to offset these ‘market’ tendencies by making sure both facilities and practitioners’ time are in constant short supply, in the presumption that this will yield less waste and force greater efficiency, rather than posing a serious threat to public health. And this is exactly the problem with applying mechanistic, industrial, simple-situation prescriptions to complex-situation challenges.

So what should we do when doctors in one community perform appendectomies and tonsillectomies four times as often as they do in the next community, of the same size, a stone’s throw away? Surowiecki thinks we need to figure out “how to pay doctors for the quality, rather than the quantity, of the care they provide” and hopes that “eventually people will start paying attention to the data and recognize how costly these variations can be”. But even he seems dubious of the possibility of either of these things happening. Of course patients need to be better informed about preventative health care, self-treatment and new knowledge about less invasive and unnecessary procedures. But health care isn’t like widgets, where differences in ‘unit’ product cost, quality and service are conspicuous. Every situation is truly different, and we’ll never come up with either a formula for determining the right health care answer, or an expert system that will tell us precisely where the ‘inefficiencies’ in health care are and how they can be eliminated.

Surowiecki suggests the problem is geography and parochialism. But geography is just one way of slicing community, and these days it’s not even the most important one. The issue isn’t isolation of community, it’s incomparability of situations with infinitely many different contexts. When the data is a million cases of one, the significance of patterns is likely to be illusory.

And health care isn’t the exception either — most of the products and services that are essential to human well-being, like education, nutrition, freedom, justice, security, transparency of government and a healthy environment are also enormously contextual, circumstantial and relative. Experts and advocates in these fields have torn out their hair trying to find benchmarks, standards, measures, scorecards and ‘best practices’ that will allow us to cajole improvements in performance from those we assess to be falling short. It can’t be done. Complicated solutions don’t solve complex problems.

The essence of Snowden’s new approach to sense-making and management ‘science’ is to first assess whether the situation lends itself to simple-to-complicated solutions and approaches (like root cause analysis, systems thinking and The Wisdom of Crowds), or if it requires more complex approaches (like cultural anthropology, pattern-seeking, Open Space and emergent understanding techniques like the AHA! Discovery Framework diagrammed above). It doesn’t take much thought to realize (a) that most of the challenges we face in business and society today are complex, and (b) attempts to force simple and complicated-situation solutions in complex situations, like the deliberate starving of the health and education systems (and like the ubiquitous imposition of lousy service in all areas of business today), in the ill-conceived belief these will somehow mechanically force efficiency and productivity improvements in them, are doomed to make the situations worse, not better.

It’s time we woke up to the realization that industrial-age solutions are increasingly inapplicable in the information age, and it’s time we got over our discomfort with the imprecision, uncertainty, lack of causality, and non-amenability to command-and-control hierarchy that complex approaches entail. Managers, grit your teeth and prepare for some revolutionary new, difficult and important learning.

So sorry, health care fans desperate for solutions to spiraling costs. No ‘best practices’ or ‘popular wisdom’ answers here. Move along, please.