Monday, May 7, 2007

Limits of Technology - In Health Care Innovation, The Edge is the Center

“The World Health Organization rates the French health care system among the best in the world..,,Yes, life is expensive: a web of protectionist regulations has kept a lid on the ability to save money at discount stores and restaurant chains. But that has also kept neighborhood bistros and cheese shops and charcuteries in business far longer than in most developed countries, creating a rich fabric of daily live that a word everybody loves.”

Craig Smith, “Forget Who’ll Win in France. Change is the Loser,” New York Times, May 6, 2007

It’s Sunday, May 6. France elected a pro-American conservative today – a change unlikely to Americanize French politics or to keep the French from being French from being French or being eollectivist socialists at heart.

With the French election on my mind, this day I embarked on the usual Sunday routine – coffee with the boys, 10,000 daily steps, and a walk up and down Main Street - roughly a mile, or about 1800 steps in all. On my stroll, along the way I counted twenty shops or restaurants that had closed, opened, or were being renovated.

In capitalistic American, we call this open-and-close process “creative destruction. ” We endorse it as good – a hallmark of capitalistic efficiency. In socialist France, they would call this turnover “destruction” all right, but not creative, and not progressive either.

In any event, beside the article mentioned in the opening quote, the Sunday Times contained two other articles that caught my attention –“Winning Isn’t Everything. Check the Periphery,” about the importance of innovation at the edge, and “The Silver Lining to Impending Doom, “ about creative destruction as a good thing for American capitalism.

My Sunday Times reading routine prompted me to consider two aspects of health care innovation in America -- one, that most fundamental innovations occur at the “edges”
of care, and two, that “creative destruction” is at work in health care too.

My Mentors and Heroes, in Chronological Order

My intellectual mentors and heroes in monitoring and understanding these peripheral and destruction processes, are, in chronological order.

• Peter F. Drucker, who in 1986, wrote Innovation and Entrepreneurship: Principles and Practices. Drucker’s hero is Joseph A. Schumpeter, a Austrian economist. In 1942, in his classic text Capitalisn, Socialism and Democracy, Strumpter coined the term “creative destruction, “ which rivals Adam Smith’s “invisible hand,” as a catch phrase to define capitalism.Stumpeter said innovation, replacing of old ideas with new ones, is the driving engine of capitalism. Almost all businesses, including health care enterprises, fail because they stop innovating.

DVDs replace record albums, digital watches replace Swiss watches, jets replace propeller airliners, word processors replace manual typewriters, cars replace horse and buggies, and so on. On the health care side, nurse practitioners replace GPs, retail outlets replace primary care physician officees, websites replace textbooks, tutorial videos replace paper manuals, digital records replace paper records, and consumer partnerships replace physician paternalism , and so on down the line. These changes have a dark and nasty side, and be only partial. And all innovators are, to some extent destroyers, but the net result, capitalists assure us, is economic efficiency as opposed to economic stagnation.

• Brenda Zimmerman, Curt Lindberg, and Paul Plesek, who were, in turn, as associate professor at the Schulich School of Business in Toronto, an employee at the VHA, Inc, a performance improvement company, and an engineer and independent improvement consultant. In 1998, they wrote Edgeware: Insights from Complexity Science for Health Care Leaders.

They encapsulated their insights into nine interconnected and emerging principles, all of which involve what’s happening at the edge.

1. Complexity lens – View your system through lens of complexity, focusing on complex events taking place at the edge.
2. Good enough vision – Build a good enough vision with minimum specifications, rather than trying to work out or plan ever little human detail.
3. Clockware/swarmware- When life is far from certain, lead from the edge. Life in not like a clock, you have to swarm at it by balancing data with intuition ,planning with acting, safety with risk, giving honor to each.
4. Tune to the edge – with just the “right” degree of information flow, diversity and difference, connections inside and outside the organization.
5. Paradox – It’s always there at the edige. Accept it. It’s natural. Work with it.
6. Multiple actions – Go for multiple actions at the edge. That’s where the action and results are.
7. Shadow systems – Keep your ear on the ground at the edge. Listen to gossip, rumors, and hallway conversations. That’s where people’s minds and future acts are.
8. Chunking – Complex systems grow from chunking at the edge, Simple systems, not centralized planning, are the future.
9. Competition/cooperation – It’s not one or another. Mix them.

On the latter point, Red Burns, who has run an innovative hotbed . The Interactive Telecommunications Program at New York University, since 1983, observes,

“Competitive people have energy, they’re interesting and so forth. But they’re so focused on competition, they fail to see what they’re doing. They just want ‘better, bigger, stronger, longer.’ And they miss the periphery. And that is where you find things you don’t even know are there.”

Finding things you don’t even know are there is why, later this week, I’m interviewing Harry Lucas, chief information officer at Lehigh Valley Memorial Hospital System. At his institution, Lucas as assembled a rotating team of caregivers from the frontlines of his system to form a “wild “ team. The team meets to toss around innovative ideas. Rank is out the window. No ideas are considered too wild. The only rule in these unstructured, sometimes chaotic sessions, is “no snickering.”

• My last hero is John Naisbitt, who wrote Megatrends in 1982 but whose latest futurist contribution is Mind Set!, Naisbitt wrote it 2006 after living 6 years in Vienna, and closely observing the European styles of capitalism and socialism.

I won’t go too deeply into what he thinks of the future of Europe vs. the U.S. except to say he doesn’t think the European “Union,” as a whole or in its separate parts, can sustain rich social welfare programs and robust economies at the same time. As a Marie Antoinette might say, “People can’t have their cake and eat it too.

Instead I shall cite Naisbitt’s remarks on China. China? What has China got to do with the U.S. health system? Well, China and the U.S. cover about the same territory geographically. Both have roughly the same budget, $2 trillion, and both have similar problems, as I will show in my italicized responses to Naisitt’s prelude to his China chapter, titled prophetically, “The Periphery is the Center”

“Many people worry that China may break up (as they do about the U.S health system, with employers shedding health benefits, and uninsured numbers growing), Well, China is breaking up, walking down the twin paths of globalization (150,000 Americans went abroad last year for care, the first wave of the Medical Tourism tsunami) and decentralizing (on the ground and at the edges, American health care is centralizing into more efficient more specialized more efficient more regional and more local units, while talk at the top is about more centralization and consolidation) more than any other country in the world, a process essential to its sustainability (a word you’ll hear more and more often in the U.S. as the health economy grows), giving more efficiency and power tot is parts, cities, provinces, and regions ( in the U.S. these “parts” are individual States, with their universal programs, who understand their citizens better than policy pundits in Washington; specialists and hospitals, who hold the purse strings and who are vying for power; and consumers, who may yet assert themselves and become the dominant power brokers,) The periphery is the center.

In this long and edgy blog, I have sought to make these points and counterpoints. It is at the edge, not the center or the top, where the future lies. It’s centrifugal not centripetal forces that bear watching. If you’re going to hedge your bets on thefuture of health care, hedge them at the edge.

Finally, keep in mind that information technologies may be the innovation at the edge that makes changes easier , but the Internet and the computer doesn’t change human nature. Still, these technologies are the future. As I say in Innovation-Driven Health Care, “these technologies glue together health care innovations, reduce costs, ease use, and improve care and outcomes.” They make good care at the periphery possible.

Bon Jour and Bon Voyage. Or as Groucho would say, Hello! Goodbye! I’ve got to be going!


1. Craig Smith, “Forget Who’ll Win in France. Change is the Loser, New York Times, May 6, 2007.
2. Denise Caruso, “Winning Isn’t Everything. Check the Periphery,” New York Times, May 6, 2007.
3. H. Pascal Zachary, “The Silver Linings to Impending Doom, “ New York Times, May 6, 2007.
4. Peter F. Ducker, Innovation and Entrepreneurship: Practice and Principles, Harper Books, 1985.
5. Brenda Zimmersman, Curt Lindberg, and Paul Pisek, Edgeware: Insights into Complextity Xseince for Health Care Leaders, VHA, Inc, 1008
6. John Naisbitt, Mind Set!, Collins, HarperCollins Publishers, 2006
7. Richard Reece, Innovation-Driven Health Care: 34 Key Concepts for Transformation, Jones and Bartlett, 2007

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