We've been wandering around for 6 million years; 100,000 years ago we left Africa; 25,000 years ago we learned to speak; 10,000 years ago we learned to grow food; 100 years ago we invented the X-Ray Machine; 60 years ago we discovered penicillin; 30 years ago we came up with the MRI; 10 years ago we developed the Internet; When will all this progress stop?
The evolutionary stages of organizational development that created the current health care system are explained at the macro level by the classical life cycle model. That model seems to apply to man-made systems where disruptive technologies periodically manifest to propel an industry forward towards some new paradigm, above and beyond incrementalism.
The traditional life cycle model does little to instruct us, however, on how to become change agents and transform a system. It seems so outside our control when we have to wait until the next stage occurs organically, the usual cause being a pertubation introduced by disruptive technology. What if we want to accelerate the process for the benefit of the citizenry? It is really not all that much help to know we came from hunter-gathers, progressed through agriculture and industrialization, and that we are now in some form of post-industrial information global world. The $64 question is how do we "reform" or "transform" major institutional systems such as health care and education, particularly if counter-vailing forces are holding the system in an equilibrium?
The last time the body-politic took steps to transform was at the turn of the 19th century, when progressives like Theodore Roosevelt broke up trusts and monopolies and we unleashed the power of farmer cooperatives against the banks and railroads. Until thirty years ago, the health care economy had been too small to attract more than marginal incremental policy actions to change its thrust and momentum. Most policy changes were subsidies aimed at increasing infrastructure(Hill-Burton Act) or access for a particular population group (Medicare, Medicaid, ERISA). The current systemic problems are largely the result of the unintended consequences of sustained compounded inflation over a thirty year period arising from those policy initiatives.
If you have read my scenarios analysis, two things should be clear: First, we are on a trajectory of overshooting our domestic capacity for health care as overhead burden in the economy. Any incremental policy change at the margins will, at best, buy us a little time before we hit a wall of unfunded liabilities. Secondly, the magnitude of the change required to transform health care from a dysfunctional economic system into an export engine seems daunting at best. It has really never been done before; the deregulation of airlines, trucking, and the electrical and telephone utilities pale by comparison.
Most industrial systems, when they were deregulated became subject almost immediately to severe disciplining forces of the market and disruptive technologies. Often the old industry was already mature and it quickly died off and was replaced with a new order. Railroads, replaced by trucking and airlines, is a good example.
Is that what we do with 16%, soon to be 20%, of the GNP? Just let the old health care system atrophy away while a new system, hopefully, arises in its place as a result of disruptive technologies? That may be part of the answer, but if health care is to become our new economic export engine, then the current system at large will have to be transformed within this generation, not 50 years from now. In my mind, a Pareto Effect must be created, whereby the 20% of the system that is most strategically essential must be altered by 80%, and, within 10 years.
Product Life Cycle
Classic Model of Development of Economies
STAGES OF DEVELOPMENT
The traditional model for all systems, be they biologic, information, political, social or economic is that there is the emergence of a simple system that increases in complexity through three or four stages. The hunter-gatherer to agriculture to industrial to information-society model is the one most of us know. But, little is known about how to reach levels of development beyond the classic stages.
It is my belief that we hit a wall at the industrial stage, because the economies of scale of mass production and markets is, out of necessity, carried out by large-scale organizations and bureaucracies. Large scale organizations have been, by definition, hierarchal and their structure defies change(reform). The rise of health care, education, and government grew up in the shadows of the Industrial Age and they were also organized hierarchally. We knew of no other model in our time that would work with the communications and information technologies at our disposal.
It should be noted that "perpetually-disruptive technologies", crashing like waves on a beach, can make it appear that a life cycle is being extended. Kurzweil has articulated that the exponential nature of technological breakthroughs is driving us towards a future that he calls "singularity". The role and impact of disruptive technology, both informational and medical will be examined at greater length in the pages to follow.
Continuous disruptive technologies perpetuating development cycles.
Genesis begins with a drop; a bubble
And, soon there is a proliferation of ideas and technology
Eventually, organization and management must be introduced
DEVELOPMENT USING A SYSTEM'S VIEW
My only dissatisfaction with the staged theory of development is that it is a crude explanatory tool, weak in explaining development between stages and at any level beneath the macro level. As a consultant dealing with real world problems and the need to implement solutions, I used systems development techniques to outline that the requirements of system. Graphically, the initial genesis of a function, organization or a new product is like a bubble bursting forth. As more bubbles (people, ideas, organizations,etc) emerge these bubbles begin to cluster within the domain called "the system" or "the market". At first the entities that emerge are very informal groupings, but then a clan, tribe, village, or small scale organization begins to form, leading to specialization and division of labor. In a hunter-gatherer tribe, there are said to be no more than 12 distinct positions. This takes very little organization, communication, or co-ordination and control. In a modern society, there are over 1 million different job descriptions.
As we have progressed from the single person organization to the cluster organization, we have, traditionally, out of necessity instituted the hierarchy as the method of organizing ourselves on a large scale. This was first done with military organizations. Then, when the industrial age and large scale government bureaucracy came into being, the hierarchy was found to be the best way to get things done. One problem, is that once a hiearchy is put in place it is notoriously difficult to change it.
The advent of the post-industrial information society, with its Internet, micro-computer and wireless communications is increasingly characterized by disintermediation, networked communication (peer-to-peer) and flattened organizations. The hiearchal organization as a model has now reached the end of its life cycle and will soon be in decline.
HIERARCHY: OBSTACLE TO REFORM
Management and organizational consultants know that the most difficult thing to change is a large-scale, hierarchal organization or bureaucracy. The power relationships, lines of communications and vested interests are normally in an equilibrium that defies outside assault.
So, how do you introduce change on a mass scale in an industry populated with industrial-like hierarchal organizations who do not know any other way of organizing their affairs and are threatened by any intrusion into their otherwise meditative state of existence? Two ways, in my mind:
1) Externally through the actions of the Supply Side of the Market (Disciplining Forces) and 2) Internally, through disruptive information and production technologies.
The rapid evolution of disruptive technologies, including computers and medical diagnostic devices now threatens to disintermediate the hierarchal form of organization. Displacement of labor, point-to-point communications, and other factors no longer require such a hierarchy and, in fact, make it cumbersome. But, by its very nature, hierarchies are stable and resistant to outside threat and change. Little is known as to how to alter the structure and process of hiearchies and what alternative forms of organization might suffice.
Incremental Evolution of the Hierarchy
When large scale military or industrial hierarchies attempted to evolve they had only three pathes to take; 1)horizontal by forming pyramids; 2) vertical by forming more levels and bureaucracy; or 3) merger and acquisition. As the organization become more complex it spent an increasing amount of energy managing its internal affairs and eventually reaches a point equilibrium. It is at this point the hierarchal form of organization is vulnerable to outside pertubation and threat. It's why the railroads couldn't see themselves in the transportation business and embrace highways. They thought is was a quantum leap to go from steam to diesel locomotives, but they were a day late and dollar short.
Disruptive technologies implemented internally
External disciplining forces applied by public and corporate policies
Hierarchal system transformed by geo-integration
Forces & Technologies applied to hierarchal organization to induce transformation
TRANSFORMATION OF THE HIERARCHY Using POSITIVE DISINTEGRATION
One way to understand how hierarchal systems might be transformed it to consider the process of a caterpillar becoming a butterfly. While in the cocoon, the caterpillar undergoes a biological transformation at the deepest levels. Upon emerging as the butterfly, the abilities and traits of the organism are different. Instead of a caterpillar whose only purpose is to eat, the butterfly possesses mobility and flight. It takes on a new purpose in life.
The life purpose of the caterpillar is to consume and grow mass
The caterpillar undergoes a chrysallis in the cocoon in its transition to butterfly
The butterfly maintains a semblance of the caterpillar but has greater mobility and purpose in life
Hierarchy ==> Geo-Integrated System
The transformation of a hierarchy into a geo-integrated system is accomplished by the chrysallis of "positive-disintegration". The new system is reordered in terms of its geometry and its energy flows. Most significant is the uncoupling of the technology from the outer structure. The outer system, which is most visible to the user consists of inter-coupled tiles resembling a mosaic.
Evolution continues at the surface on the facets and, internally, with the supporting technology.
Process of "positive-disintegration"
How one small idea bubble evolves to become a big idea
Case study: A failed case of positive disintegration?
Sometimes evolution leads to devolution and further transformation is not possible
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