Decisions and Org Structure LO4854 - And health reforms

DHurst1046@aol.com
Sat, 13 Jan 1996 14:21:45 -0500

Replying to LO4774 --

Hi Gray Southon,

I am not sure that you can argue that decisions in the health system
should be made at the clinical interface when the costs are not borne at
that interface and the antecedent causes of the need for a decsion are
complex and systemic. IMHO this is precisely the mechanism that has got us
into trouble in our health systems.

Many of our health institutions are "unnatural systems", that is they have
developed without the checks and test imposed on natural systems
(ecosystems like forests, for example) by competition and scarcity of
resources. Characteristics of unnatural systems (hospitals, telcos before
deregulation, much of government) include:

1.Very large scale organizations which pay little attention to costs.
2. Generalists trying to perform a wide range of services.
3. Internal technical complexity with clear boundaries between specialties.
4. Technological criteria and technicians dominate decision-making.
5. Contempt for management as a valuable skill: "Anybody can do that." (Which
in the absence of competition and resource scarcity may actually be true!)

Coupled with a political process in which hospitals were seen as a "good
thing" for a community to have without experiencing the costs, this has
lead (at least in Canada) to considerable overbuilding. Many governments
are effectively bust and can't afford this anymore.

Reforms have to take the form of a reduction in the overall scale of the
system as well as individual institutions; greater specialization of the
institutions; cheaper community care and a much greater emphasis on
prevention rather than cure. We have to work with the total system, not
just clinical decisions -- by then it's too late.

The room for savings in total system costs is huge. Take a mundane op like
a hernia, for example. There is a specialist hernia hospital near Toronto
(Shouldice) which consumes 1/4 of the resources that a general hospital
does to repair a hernia. They have done this by changing the entire
process from diagnosis to recovery and return to regular activities. They
are also recognized as pioneers in the repair techniques and produce
better quality (recurrence and infection rates) than anyone else. They
have done over 250,000 operations in the last 50 years, so this is not
surprising. People come from all over the world to get their hernias fixed
-- they use their "alumni" for marketing. Incidentally there is a Harvard
Business School case (9 683 068) if you want to read about it.

--
Best wishes,
David Hurst
Speaker, Consultant and Writer on Management
dhurst1046@aol.com