Squeezing Harder Won’t Work
Here’s the thing about toothpaste tubes. You can squeeze all you want on one part of the tube and the toothpaste will only pop up in another part of the tube. Many of today’s important systems operate much the same way.
The big challenges we face today including health care and education are systems issues that require systems solutions. These systems have evolved over a long time and are well intentioned. Players in the system work hard year after year to deliver value, improve their position, and create sustained incremental improvements. It is not enough. We need new toothpaste tubes. We can’t fix these system issues by squeezing harder on different parts of the tube. We need to design and experiment with new system level solutions.
Everyone loves to point fingers at the other players in the system as the cause of the problem. Health care is a classic example. Observing our health care system today is like watching an intense rugby scrum that is moving in slow motion hoping the ball will pop out. Finger pointing and incessant public policy debates galore. We love to admire the problems: It is the cost of drugs that is killing us. It is the high cost hospitals that are the problem. It is the insurance companies that are in the way of change. Doctors are the ones who are resisting change. If only the government would get its act together. If only patients would take more responsibility for their care. It goes on and on.
In education, the same movie is playing with different actors. It’s the unions that are getting in the way. Teachers are resisting change in the classroom. Administrators don’t understand what is going on in the classroom. Parents are not engaged. Public policy makers can’t make up their minds. If only private sector companies were more engaged. Students are unruly, undisciplined, and disrespectful. Everyone is blamed and nothing changes.
I’m not a cynic. I’ve seen and participated in many innovative initiatives that are trying to create systems-level changes within healthcare and education. And some of them have indeed succeeded in creating incremental value. But where are the disrupters? Where are the systems-level game changers? The problem is that great ideas coming from one silo are tried but quickly bump into the other silos and constraints of the system. Promising new solutions squeeze on one part of the toothpaste tube only to learn that when you squeeze on one part of the tube it just pops up in another. We need safe environments to design and experiment with new toothpaste tubes or systems.
The student and the patient should be at the center of our redesign efforts in education and health care. We need to experiment at the systems level, trying new approaches to see what works. For instance, we’ve proven that innovation works at the school level with hundreds of successful charter schools across the country. Now we need to experiment at the district level to test new student centered system approaches that are not constrained by the way the current system operates. That is the only way we are going to learn what solutions can deliver value to the student at scale. The same thing is true in health care. We need to design and test patient centered system approaches that are more about well care than about sick care. We can’t get there by playing at the margins of today’s system. Squeezing today’s toothpaste tubes harder will not work.
Hey Saul,
Could you possibly comment further on the contrast between disruption-from-within versus disruption-from-the-outside ? (Are the two perhaps really the same thing packaged differently?)
To me it would seem easier to “usurp the throne” and get things done by building a parallel, and gradually equivalent system to make the existing one irrelevant. With governments this is really hard to do but with some industries this is easy or easiest as long as the existing system doesn’t completely prevent the evolution and arrival of a parallel one. I work in software and this is in fact standard operating procedure. The software systems world has naturally selected for this type of systems evolution by encouraging tying together two very simple ideas: 1) loose coupling, 2) strong contracts (of the mathematical kind). You ensure systems are replaceable, modular, and only connected at their most necessary minimal interaction points (and no more than that, hence loose coupling), while specifying those minimal interactions very carefully and precisely (strong contracts). An example of this in the real world is the formalization and wide agreement upon a data format such as HTML. HTML is specified strongly enough that most of the systems that interact with HTML display it the same way, and don’t care which tool created it, or which server is serving it, etc. At every level, those components are replaceable, and interchangeable, and this has created intense competition and progress. Standards go a long way towards encouraging parallel competing “experiments”. Meanwhile, look how much the office software world stagnated in the same time period as HTML’s rise, on account of a single vendor locking up the market space with a single document format. With open formats like HTML and the arrival of the web, we now have a not “completely”, but “mostly” equivalent parallel system for business communication.
In the meatspace world, we’re unfortunately stuck with our legacy systems like highways and health care systems. Alternative systems exist, I can avoid a highway by taking a train for example, but they’re not parallel in the strictest substitutable sense. And so sometimes I wonder if expecting strict substitution equivalence (i.e. “completely” vs. “mostly”) is what hampers our ability to construct or fund *viable* parallel systems. In my experience I’ve seen a lot of people who are willing to give up a car and walk/bike/bus “the last mile” in many cases (much like they were willing to give up setting fonts and colors in emails so that they could go wild on their Blackberries and gain mobility and speed), but something holds us back from rapid, transformative, disruptive change in these wider, bigger systems like transportation. Perhaps it’s just a matter of time.
I recall your example of the school from your presentation in Toronto; To change the way kids were educated, they built another school and did things differently there. It seems that the educational system at least has some level of loose coupling in place, with the strong contract maybe simply being a “well-rounded education”. This is a great example of new systems springing up and letting the old ones fade.
My concern is that this won’t work well for the biggest and influential systems around us, which often happen to be the most illiquid and complexly-defined in terms of their mathematical “contracts”, if you will.
Maciej Great comment. I love the notion of loose coupling. In the business model innovation world it applies to the connections between capabilities. We need to experiment by combining and recombining capabilities in new configurations aligned to deliver more value to the end customer. In the case of my examples,the patient and the student. The problem is that capabilities are tightly coupled to their current business model and systems. We need to create safe environments to experiment with new configurations.
While we need to experiment with new system approaches in parallel to the current system it will be important to create connections between them for two reasons. 1) Experimentation often doesn’t require the invention of any new capabilities, just the ability to recombine them in novel ways unconstrained by the current system. Rather than recreating them it is easier to borrow them or gain access to them which requires a connection to the existing system. For example an experiment with hydrogen fuel cell vehicles will most likely use the existing road system and refitted gas stations. 2) If promising new system approaches emerge through experimentation it is not clear whether those systems are more likely to scale by expansion reaching a tipping point, and usurp the throne as you suggest,(charter schools certainly haven’t caused a system change yet) or if leaders from the existing system will prove capable of transferring the learning from the experiments in order to create the necessary systems change from within (I can hear the skeptics laughing).
I tend to buy into Christensen’s disruption model and think that new systems will emerge around disruptions that meet the needs of those that are not being served well by today’s system. It is becoming clear that the number of under-served by our current education and health care systems is growing every day.
There’s one issue with the student-centered education system. Who can say what the student needs other than the students. Many people claim to be advocates for students. The problem is, they all have different ideas, many of which are at odds with the others. No one wants to listen to the students themselves because “what do students know, they’re just kids”. The education system, however, is not fixed by short-sighted legislation (NCLB, for instance). It’s not simply fixed by getting rid of the unions. The public education system needs to look towards the private schools to see how they work and why they work. While not all public schools are bad, in most major metropolitan areas, they are (at least those that aren’t special charter schools or requiring an entrance exam). Teachers, after many years, can get lazy. They need to keep their education current. Rules for tenure should require re-evaluation of the teachers’ own skill-set. It should require teachers continue to educate themselves through more than simply professional development. Student progress should not be evaluated by test scores alone. Teachers get lazy and only concentrate on getting those test scores up to show that they’re effective. Administrators push that on teachers to show that their schools are effective. The students are the ones losing out. I’m not known to be a big proponent of unions. They have their place. The school system is not one of them. It protects the long time teachers who may have gotten lazy in their ways and hurts the new teachers who have new ideas. Why is it that the vast majority of private schools have dedicated teachers who will bend over backwards for their students, staying after school much later than the required time to help out, while public school teachers all run out the door once their required time is up? I’m not saying that all public school teachers are poor teachers, but the union is protecting seniority. Education is the one industry where seniority should absolutely not rule. It may not be the only answer to the problem, but it would be a step in the right direction.
The patient oriented system needs to happen. Patients need to start standing up for their own rights. They need to treat health care as a commodity. They need to not let the doctors and hospitals walk all over them. They need to get the best deal they can. Sure, it’s health care. It’s a necessity, but it’s still a business. How many people would walk into a grocery store and blindly pay top dollar for food they can get for a lot less somewhere else (all else held equal)? People without insurance need to demand they get the same rates that the insurance companies get. There’s no reason they shouldn’t be. Unfortunately, though, health care reform is a major headache and has no one simple, easy solution. One quick easy fix would be to require doctors offices post all their rates for various procedures and office visits. This would include even the cheapest rates they charge (usually for Medicare/aid). People are generally intimidated by doctors, and generally, rightfully so. Most doctors offices have this air of secrecy with everything. Their costs are completely arbitrary. No one knows what they’re paying because their insurance companies pay most of it, while they pay a small co-pay. That system is broken. It’s broken when one guy, who is unhealthy, gets declined by major insurance companies when he tries to get it on his own. However, once his wife has a job and has insurance through her place of employment trough the same company, he’s not declined. The patients need to demand a better system.
The biggest problem, however, is that most people are resistant to change. This is the same across all industries. It’s easy to keep the status quo.
Wonder about the “safe” environments. If its too safe it doesn’t matter. It is easy to play and not have to make changes. Too easy to create “shelfware”. How often are amazing technologies developed by large organizations that are not launched because they would detract from existing markets? Or just don’t fit in their product mix? In general the existing big players will have trouble making things happen in safety or not. Even with the amazing folks working on health care the bigs are lumbering oxen that will have to be led by the nose just like the auto industry. They need to feel the pain and see the benefit too clearly before they will give up their cash cows and or stop pointing fingers. Fortunately start ups are showing the way that things can be done. Or providing the “new tubes”.
In the same way that http://www.betterplace.com and http://www.teslamotors.com are getting real traction and attention by outmaneuvering the existing giants in the auto industry. Health care groups such as http://www.hellohealth.com and http://www.curetogether.org are also making noises that can’t be ignored. These groups are showing how an individuals concept is radically scalable in a way that was unimaginable 10-15 years ago with a disproportionate level of impact. Improved information infrastructure, highly accessible technology, and an ever growing group of transformative thinkers will force health care giants hand. Those disrupters don’t do it from a place of safety though. They do it on the edge. Minute Clinic could be an example of innovation from relative safety. Disrupters also tend to be designer types that do it from enlightened self-interest rather than simply being profit monkeys. BIF seems to have been able to have advanced the right education disrupters and am excited to see what you choose for health care. Perhaps you can help force their hand.
Anyway, perhaps the bigs are smart to wait for the tide of change. To see which of the disrupters starts to win out and eclipse or buy them. Their massive entrenchment should enable them to roll out faster and more deeply than start ups. Of course their entrenchment is also often their barrier. Perhaps it will take a total disaster like the auto industry to move. You could argue we are there. Either way they certainly have to be smart about seeing far enough into the future to adopt or adapt to the right platforms and technologies so they are not lost. Maybe BIF can help them do that?
Does that leave us in need of a safe place? Or the willingness to take risks? Or in need of a stronger innovation network? Seems like a little from columns a, b, and c
Speaking of systems change here is Clayton Christensen’s 2 cents on systems level health care innovation:
http://hbswk.hbs.edu/item/6149.html
The inclination to compare the purchase of healthcare goods and services to other commodities, such as groceries, unfortunately short-cuts the complexities of the issue. A consumer typically has the capability to judge the value and quality of purchased groceries, and is willing to decide an acceptable trade-off between value and price. It’s more difficult for an average consumer to judge the quality of a specialist or medical facility in order to make an informed purchase decision.
If you have ever faced a decision as to the care you desire for yourself or a loved one when needing highly specialized care, such as between oncological treatments, neuro-surgeon, or medical center, you realize the emotional need for ‘the best care,’ the treatment most likely to succeed.
Pricing transparency will help to some degree–but only to the extent that the patient will pony up a portion of the bill. With the advent of higher-deductible health plans and associated Health Savings Accounts, this is occurring. But this answer is still a proposal within the constraints of the current healthcare delivery-and-funding triangulation, where patients drive demand, providers with specialized knowledge supply services, and employers, government, and insurers foot the bill. The classic analogy is that of a tenant controlling the heat in the apartment while the landlord is paying the fuel company. One seeks comfort, the other, frugality.
The brutal fact is that the provision of health care costs money, and in such extreme quantities that for the individuals who require intensive or extensive treatment for a critical or chronic condition the costs are prohibitive and financial protection is necessary to avoid financial ruin along with health deterioration.
The traditional answer has been an insurance vehicle, but insurers also cannot bankrupt themselves in serving their members, or the system will be prone to failure on a larger scale. The financial answer lies in pooling all the risk so that those requiring care are bouyed up by the large populace funding the pool. The insurers understand this. Within the past week, AHIP, the Association of Health Insurers has acknowledge that in a system of universal coverage, medical underwriting becomes unnecessary because all the risk is incuded in the pool.
When we suggest resolving health care via a patient-centric view, we will need to include both the health status and the financial status of the individual–and the population as a whole–to develop a full solution.
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-Bill-Bartmann