Chapter One | A HEALTH DELIVERY SYSTEM

A HEALTH DELIVERY SYSTEM
A Design for a Complete New Health Delivery System

CHAPTER ONE: Orientation

My conception of ‘health services’ encompasses all services that contribute to superior health status including: physician services, self-care, behavioral medicine, hospital services, rehabilitation, mental health services, public health services, pharmacy services, and such. Note especially that I include the consumer as provider-for-self. (More about that in later chapters.)

The imperative underlying all health services is the desire of every consumer for good health. Does your present conception of health services differ?

Many large and familiar corporations have dropped out of competition since I was a young man. We have lost W.T. Grant, TWA, Studebaker, Woolworth 5 & 10… and so many others.

Gas lights, 78 rpm records, typewriters, and real silk stockings are no longer hot sellers.

The history of business tells us that there is an ongoing cycle of births and deaths of entities and markets which address our needs and wants.

Why? Usually, a mix of factors is at work: cultural change; creeping emergence of superior competitors; new technology; failure of management to adopt improved methods; adoption by competitors of more cost-effective production technology; failure to attend to ongoing changes in the business environment which alter the connection between producer and consumer.

Sometimes, a corporation at its peak of success is blind-sided when an emerging competitor adopts a new management structure, new methods of operation, and better understanding of the customer base. Perhaps the chain of TARGET stores is a current example of an ‘emerger’. But whatever the reasons, the probability is small that a successful business will remain at the top forever. As a confident successful leader tries to maintain dominance by patching methods and means, there comes a time when competitors with fundamentally more powerful methods and means emerge, take over, and eventually replace the overconfident leader of yesterday.

This change dynamic is healthy. It reflects the operation of a market economy. If as consumers and taxpayers we support a corporation (or other business form) that is past its useful life, we pay unnecessarily. We pay excessive prices and receive less-effective products and services.

Our so-called health care system is the case in point here. It hovers at the precipice. Our current system will fail soon unless we provide it with more props — and that will strain our economy while we continue to receive less-than-good health services at hugely inflated expense. Performance reports and projections substantiate this expectation.

The task before us now is to develop and fund a Health Delivery System design that will yield superior health for all with contained cost.

Replacement, not reform

This is not a proposal for reform of our present non-system. Our need today is for a complete new design for a Health Delivery System that can be held to account for delivery of health as the target outcome.

The so-called system we employ today is a result of adding patch-after-patch on the ways we have attempted to meet the needs of consumers for health. The consequence of our addiction to patchwork is a ‘system’ which has no documented design. That’s difficult to accept for a ‘system’ which consumes over 15% of our Gross Domestic Product. And, at the current rate of increase, this will one day soon be 20% of GDP.

In this book you will find a Health Delivery System design for a complete system. It is a design which enables us to move to a true cost-effective system without stress and confusion on the way.

The system I describe here is one organized at the state level. After some groundwork has been covered, I demonstrate in the text why that is so.

Health comes first

In a Health Delivery System (HDS), the principal focus must be on delivery of individual health. Need for funding is a consequence of efforts to deliver health.

In the design of the Health Delivery System which is the topic of this book, the importance of cost-containment is recognized. It is, however, the second target in design and operation of the whole system to achieve superior health for all individuals served by it. Arbitrary imposition of specific cost controls on the system today may lower expenditures this month, but usually with lessened delivery of health, and often with increased future cost.

A key to improvement in cost-effectiveness is continuing research and development which leads to opportunities to improve delivered health while containing present and future cost.

Cost-containment efforts today

The ‘system’ we have today has proved to be incapable of delivering superior health with best cost-containment. That weakness cannot be overcome by allowing funding agencies to exercise control over delivery processes. Improved cost-containment is obtained by improving delivery system design, not by imposing cost control from outside. Reform proposals today fail to recognize this verity. Proposals are typically based in whole, or in good part, on cost containment exercised by funding agencies which have no enforceable accountability for the best use of health delivery technology — agencies such as legislatures, insurance companies, government agencies, and employers.

A framework for a complete integrated system

The design offered here is a sturdy system framework. This design does not identify all of the ‘interior’ parts’ of the system down to the last level of detail; that would require a multi-volume set. Rather, it employs a logical system design process to structure a framework within which the relationships among major interior components are specified. The dynamics among these are identified in a manner which clearly justifies each as necessary for the cost-effective operation of the whole.

The ‘system’ we have today is a concoction of ‘parts’. Its design has never been documented — nor would it be possible to do so. With each new effort to improve it we have added new components, and new ‘rules’, creating in this process a composition which is undecipherable.

Failure to recognize this verity is one core weakness of reform proposals today.

The role of the legislature

Like all systems, a Health Delivery System runs on an ‘energy’ input; in this case that input is money. It follows that we need to provide for two connected components:

1. a part which is required to collect and deliver money to the system;

2. the operating system which is called upon to deliver health to each member of a defined population.

(Much more about this in following Chapters.)

For a state-level system it is the state legislature that must be accountable to taxpayers and to consumers for developing and monitoring a method of funds collection which taxpayers accept as equitable and well-reasoned. On the other hand, it is the operating system that must be accountable to citizens for delivery of superior individual health with cost-containment. System professionals must have the skills needed to deliver superior health; typically, health professionals do not have the skills or authority needed to develop funding for the system.

These two components, the system and the legislature, should be positioned to interface on two occasions: (Chapter 14)

• when the annual Plan & Budget for the health delivery component is presented to the legislature in the form of a well-documented funds request — for negotiation as necessary;

• when the legislature delivers agreed funding to the system.

In the design offered here, you will find that the operating Health Delivery System does not tell the legislature how to collect the funding. And, the legislature does not tell the system how to deliver superior health status for individual citizens. This division maintains clear enforceable accountability.

An action plan

It would be foolhardy to move forward today to wide adoption of the system design offered in this book without testing it. In the final Chapter, I describe an action plan for moving toward implementation of whatever system design emerges from design efforts. The action plan calls for small steps which test its application. Small steps provide opportunity for improvements before moving to application at the level of a state, and that only after evidence assures us that we are on a sound path. The lives and funds at risk are far too valuable to charge ahead with an untested design. (As we will discuss later, it is likely unwise to create a system at the national level.)

Just as we are now learning to construct improved complex hard-technology systems, in the future so will we learn to construct systems which serve individuals with better use of resources. The way we paste together public service systems today by political process will, over time, transition into a reasoned process responsive both to consumers and taxpayers. Here, I offer a step in the direction

of rational design. There is much further to go — others will contribute as we make our first steps away from patchwork and political games to a technology tailored for the design and development of systems which continuously seek to improve cost-effectiveness.

The primary target audience I have in mind for this book includes:

• legislators with serious interest in health services change;
• providers of health services;
• consumers willing to dedicate effort to influence change;
• advocates for consumers of health services;
• journalists;
• professionals engaged in health services system design;
• others who want to have a role in constructive change.