Simulating A Healthcare System That Works

by Joe Flower


A version of this article appeared in the Whole Earth Review #79, Fall 1993
International Copyright 1993, 1996 Joe Flower All Rights Reserved





There are other ways that we could do this.

Nobody in the world manages health care the way we do. Billions of people watch our movies, import our technology, and aspire to our democratic ideals. Nobody imitates our way of managing health care -- not one country.

If we look at other modern, high-tech developed countries with impressive medical panoplies, we can see that half of every dollar we spend on healthcare is unnecessary. We spend more for healthcare than anyone else: more dollars per person, more of the wealth of the nation, any way you want to measure it, more than any country in the world, more than any people in recorded history. We spend almost half again as much per person as Canada, the next most expensive country. How happy are we with the result? A recent worldwide poll of the top 40 developed nations included this question. We were number 40: Americans, who pay the most, were less satisfied with their health care system than anyone else in the developed world.

The statistics bear out our gut instinct. We are far from the longest-lived people in the world. Our infant mortality rates are shocking, and going up. Preventable and treatable infectious diseases such as tuberculosis, syphilis, and measles are increasing, not decreasing. Fully a third of our children arrive at kindergarten with health problems that limit their learning. Health and wellness vary with class: the better off you are, the better off you are. Our emergency rooms are swamped with sore-throat and fever cases that have nowhere else to turn, and with life-threatening disease cases that would have been routine if they had been caught earlier.

At the same time, increasing numbers of Americans have little or no health coverage. Millions of Americans live in fear that their coverage could be cut off by self-insured employers, that they could be effectively dumped by their insurer, or that their insurer may suddenly find them ineligible -- that they will become destitute because of their health. Some one in five Americans suffers "job lock" -- a kind of post-industrial serfdom in which workers cannot change jobs because they can't be sure they will get adequate health care benefits in another job, especially if they or someone in their family has America's most dread disease: the "pre-existing condition" that effectively bars them from ever again joining a new health insurance program at a rate that does not amount to extortion.

Yet the failed Clinton reforms, and all the alternatives that were proposed, had something fundamental in common: they were only about how to pay for the healthcare system, and how to give more people access to it. They were not about how to rebuild it so that it serves our needs better and costs less. They made no attempt to re-write the social contract about health, to use the power of individual responsibility for health, to tie health directly to the life of communities, or to re-define health beyond the mere absence of disease.

The fact is, we don't have a "health care system." We have a hodge-podge, patchwork "health care industry" (that's what the people who run it call it). This industry is:

All of these have institutional and systemic goals and incentives that conflict and combine and influence one another -- and few, if any, are truly focused on keeping everybody healthy.

We pay for most health care through employer insurance programs, and those programs are optional. This means that we ignore the homeless, the unemployed and the underemployed, as if these people don't have health problems, don't enter the system, and don't have to be paid for. But they do. They are called MIAs ("medically indigent adults"), and they clog the system, typically coming into Emergency Departments when their condition has reached a crisis and become as hopeless and as expensive to treat as possible.

We usually pay only for acute care -- people who are already sick -- despite the fact that half of all the acute care for which we pay deals with preventable diseases. "Oh, yeah," one prominent health futurist told me, "if you get somebody in Emergency in insulin shock, he's a great customer -- all kinds of work, as long as you can charge it to Medicaid or his insurer. Never mind that you could have prevented the whole thing with ten bucks of education. No one's paying you the ten bucks for preventive education."

Insanity has been defined as doing the same thing over and over, while expecting a different result. There must be a way that we could try doing this thing differently.

Can we talk?

Can we model something different? As an exercise to play with the possibilities, we can start with bare ground and build what we would like. That's what I've done. You can follow along, and ask yourself: what would you do, if you could build healthcare in America from the ground up?

I'll start with the foundations: why healthcare doesn't work now, what my assumptions are, and my criteria: how I would know if a system really worked.

Why healthcare doesn't work now

In simple terms: we aren't paying anyone to keep us healthy. We are paying people to do procedures on us. We don't reward them -- often we actually penalize them -- for doing things that would keep us well.

It's not the fault of new technology -- some systems here and around the world use the same technology at far lower cost. It's not the malpractice-happy lawyers' fault: malpractice actually adds only about one percent to healthcare costs, and the over-reaction to it only a bit more. It's not the greedy doctors' fault. It's not the insurance companies' fault. It's not anybody's fault. Every system does what its structure makes it do, and this one is no exception. This system is not structured to provide for the health of the American people. It is structured to make a lot of money for some people, and provide steady employment to a lot of people, by lavishing advanced, technology-intensive medical procedures on people who have the correct papers.



Everyone has their own list of what would mark a system that really works. I believe that a system that works will have:

Finally, a system that works will do all these things naturally and easily -- they will be driven by the natural constraints of the system. Water plunges over a waterfall because it's impossible for it to do anything else. You don't have to pump it. Cost caps and managed care are like pumps -- they move some of the water where you want it, but they take a lot of energy, they leak, and sometimes they break. Waterfalls don't break. In a well-designed system, things happen because they are easy, not because you make them happen.

How do we make it happen?

Okay, here, we go. Given those assumptions and criteria, here is what I came up with: a system that pays for healthcare with money collected through the federal tax system but administered by local boards. The deliverers of healthcare are not individual doctors and hospitals, but integrated health systems that include all manner of health services, from primary care physicians to surgery to optometrists. The principles are: cover everyone, give people control, and arrange the incentives for the highest level of health at the lowest price.


Why base it on geographical areas, rather than on employers? Because many of the factors of health are matters of environment and community. It doesn't make sense to tie the profit of large systems to the change in the health of thousands of people scattered across the map -- the systems would have no way of effecting the lives of only their own clients. This system galvanizes communities to work together on factors that effect health, and gives health systems huge incentives to help the communities in that work.

Is it neat? No, it is messy. Neat, simple systems rarely work. This system is based on an ongoing local discussion of how to stay healthy at the lowest price -- but the people doing the discussing have their hands on the tools to make it happen. Such processes tend to be messy, and noisy, and can be personal, but they work far better than decisions made by well-meaning experts who don't live there. On the other hand, our current system is not only far more messy, it is also cruel, autocratic, mystifying, and expensive beyond all our nightmares.

Is it weird? No. You want weird, look at the way we do it now.

Will it work instantly? No. Most good systemic solutions make the immediate symptoms of the problem worse at first. Under this system, health care costs will probably continue to rise at first, and so will confusion. Over the years, though, costs will fall and clarity will rise in a continuing, self-driven fashion.

What will happen to the doctors? Most would be forced, not by statute but by the market, to join large, multi-specialty practices, to work in teams, rather than alone. And they would no longer be the "customers" of healthcare -- the citizens would. However, both these shifts are true under almost every future scenario for health care -- and they are already happening.

Will the health insurance industry disappear? No, but it will scale back considerably. Its main business will be providing "supplementary" insurance for people who want a higher level of care and are willing to pay for it.

Will it cost people their jobs? Yes. Over time, hopefully a lot of them. That's what much of the $1 trillion per year we are now paying goes to -- armies of people doing unnecessary procedures, shuffling paper, arguing over who pays for what, processing the paperwork on unnecessary tests, evaluating claims, tracking expenses. If we want to save money, we need to shrink the industry, and put those people to work doing more productive things.

Is this the only system that will work? Not at all. There are a number of ways of connecting the loops, bringing home the feedback that will turn our healthcare industry into a healthcare system. Some have more promise than others, but any of them would work better than what we are doing now.


Why isn't anybody doing this in real life? They are. Outside the glare of the TV lights, some people -- academics, futurists, and health care executives -- have been looking for a new blueprint for healthcare in America. Most people have never heard of these alternatives. They have not yet entered into the public discussion. These include:

These visions are large-scale efforts to do something like what I have done here. In fact, in this scenario, I used a number of pieces from these different visions. They have a common flavor: they close the feedback loops in our current system. They get outside the walls of our assumptions and beliefs to try on truly different possibilities.

What makes them different this article is very important: each of these is developed by major groups of people who have some power to put what they envision into effect. Healthcare is undergoing vast changes, and somewhere in these new blueprints is an image of its future.




Visions for the future of healthcare that are at once large and knowledgeable are scarce. Given the complexity of healthcare in our country, that's not surprising. But at least three organizations are taking a serious swing at it:


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