Competition and costs of health care

Here is CNN special report by Professor Amitai Etzioni explaining why strategies to control rising healthcare spending are not likely to be constrained by plans based on competition.

http://www.cnn.com/2011/12/27/opinion/etzioni-health-care-competition/index.html?hpt=hp_c2

For all the reasons he cites, patients are not in a position to constrain healthcare spending. And even if they/we could, we would likely engage in cutting back on preventive care, driving up costs in the long term. It seems to me that every good policy initiative intended to save money has been turned in a way that contributes to continuing increases in costs. The reality is a very complex network of incentives. Whatever new policy is initiated, people are going to find ways to exploit the new system in unintended ways. Here in Albany, Georgia our largest hospital system has just acquired the other local hospital despite concerns by the Department of Justice and others that the acquisition will reduce competition and lead to higher costs. I suppose one approach to creating an Accountable Care Organization is to own all the necessary parts of one. I can imagine that the recent Patient Protection and Affirdable Care Act may encourage hospital system administrators to buy up their competitors to avoid the legal and other challenges of participating in the creation of an ACO.

From systems understanding to systems design

I have always been interested in analysis. As a child this was evident in multiple adventures in taking things apart in order to try to understand how they worked or why they were not working. As an adult my interest in analysis has been manifest in terms of studying object-oriented software, relational databases and service-oriented architectures. Understanding how hospitals function and why public policy often produces unintended results fits the pattern of my interests.

It is all about systems and about dynamic complexity. The basic challenge in hospitals is the existence of two competing basic needs -- the motive to serve and the motive to survive. These two needs play out in patterns of scenarios involving many stakeholders who themselves embody these two needs. The pattern is fractal. In public policy, the core problem is that stakeholders tend to feel threatened by new legislation and can usually find ways to modify their behaviors in ways not intended by those who created the legislation. Plus, our political system itself is in a dysfunctional state such that rational policy making is often not possible. Insight into why things are as they are is one thing. Learning to become a player in the existing system is another. Hoping to improve dysfunctional systems is quite another. As a child I was often frustrated by my having a greater ability to take things apart than to put them back together again. Now as an adult I hope to gain additional abilities not only to understand but to play and to possibly to help design complex systems. My hope is that the field of Public Administration becomes more of a design science, as I think Herbert Simon suggested.