Systems and the risk of failure

Dec 3, 2008, 1:59 AM, Posted by

As the ripples of the financial meltdown continue to spread, I’ve read a handful of articles that discuss the contribution that networks, interconnections and dependencies made to the problem. Essentially, they assert, if we hadn’t had this highly evolved, interconnected international financial system, the damage would have been much less, contained to one sector or one country.

It got me thinking about our health care delivery system and the long-standing observation that our system isn’t a system and that it needs to be more of a system to achieve better outcomes. And I wondered whether achieving more system-ness in health care delivery, that is, a more networked, interconnected and interdependent system, might produce greater possibility of significant breakdown and failure along with the efficiencies it also produces.

I e-mailed a couple folks—Ramanan Laxminarayan, PhD, a natural resources economist and senior fellow at Resources for the Future; and, Steven Weber, MD, PhD in political science at UC Berkeley. Ramanan has a grant from Pioneer to develop solutions to the problem of antibiotic resistance by treating antibiotics as a resource that need to be managed; Steve has been involved in some scenario planning the Pioneer Portfolio has done. Below are some excerpts.

Ramanan Laxminarayan:

“There is connectivity in the system – that’s the reason why we are able to forego paying for health insurance for the poor but rely on emergency rooms for primary care. This ability to pick up slack elsewhere is the main reason the system works (kind of). But it all depends on Medicare keeping things moving through carrot and stick. Once their reimbursement rates drop below a threshold beyond which its not worth being the health care business, that’s the beginning of a possible end…I suppose a collapse could happen in a number of ways leading to a rapid escalation in the price of health care and the inability of small and medium businesses to pay for employee health care (most are doing serious cost-sharing anyway). A collapse scenario could involve a wave of hospital and ER closures, exit from the system by medical professionals, escalating health care costs (which would happen because of fewer providers) etc.”

Steven Weber (who did some reading on this topic a couple years ago):

“There’s lots of work in different disciplines, most of which seem not to fully know that other disciplines are doing the same thing, on this simple but profound question: are highly interconnected systems more fragile (call it the contagion hypothesis) or more robust (call it the diversification/redundancy hypothesis)…[M]y conclusion after reading all this stuff is that we are probably asking the question the wrong way…[We should be] looking for parameters of systems that can be measured in advance, that tell us when interconnection yields fragility through contagion and when it yields robustness through diversification.  I suspect there are as yet untheorized characteristics of the connectivity itself that account for these effects, but that there will not be good generalizations that move across different kinds of systems (i.e. the explanation for the brain will be different from that of financial markets will be different from that of interconnected health systems).  

That said, here is one constructive takeaway that I do try to keep in mind:  whenever I see anyone argue that a system is more robust and redundant by virtue of its high connectivity, I ask myself, ‘What is the shock or where is the threshold that makes it the opposite -- i.e., that makes it come crashing down together,’ and I ask exactly the opposite when I hear the 'fragility' claim.”

These e-mails lead me to three questions:

  1. Would more system-ness leave the health sector more vulnerable to collapse?
  2. If we had the amount of system-ness in the health care system people think we need (use your own standard here), what shock would cause it to collapse?
  3. What would a collapse mean?

This commentary originally appeared on the RWJF Pioneering Ideas blog.