Thursday, December 19, 2013

Transparency of Price in Health Care

Does it exist?

Health care in the USA is under great pressure to change these days.  So regardless of which pole of the political sphere you personally are drawn toward, the landscape underneath your view point will be changing.  One could ask why.  It is an interesting line of inquiry.  Will the fact that health care is just too costly, increasing at exponential rates, and leaving an ever enlarging number of americans out of the "care" system suffice for the moment?

So this domain of the american system is being pushed off a proverbial cliff into a turbulent troubled sea of change.  I wonder - do we have any system models that would describe what might help in these situations?

Here's a case in point, a CEO announce a spur of the moment policy change, a move toward transparency.  Why?  Perhaps he was frustrated with the ill-rational behavior of "the system".  And decide that a move toward transparency was a rational behavior.

Florida Hospital Takes a Step Toward Price Transparency
Miami's Mount Sinai Medical Center has pledged to publicly disclose its price contracts with insurers
By Kate Pickert June 03, 2013 TIME.com

Speaking in May on a local public radio affiliate, WLRN, Steve Sonenreich, CEO of the Mount Sinai Medical Center in Miami Beach, FLA, said, “We’d be willing to put our prices to all the insurance companies out in public and we would welcome that kind of transparency of everyone in the marketplace.”

More articles on the money issue:  Follow the money with Time's Steven Brill.
Steven Brill - The Daily Show
Watching Jon Stewart's interview you may realize that the health care industry is not like any industry you are familiar with -- let's say one that you work in, where reasonable people do things with reasonable cause and effect correlation.  So how do we model this rather chaotic (Alice in Wonderland) world such that we can make reasonable decision about how to tame the beast?  If you are from another domain (say regular world) you may be tempted to apply regular world logic to a small subset of the problems and be surprised by the systems behavior.  A case in point, almost every other industry has some level of price transparency.  Customers have choices before they purchase a good or service and may choose to shop around based upon price.  So what happens when some nut job suggest that health care do the same?  Well you can bet the chaotic system does not react like your normal world system.

If only there was a general model of this meta system of systems - some which behave sanely, and some which are just too difficult to understand.  A model that could give us some guidance as to how to behave when we knew which land we happen to be in at any one moment.

Do you know of such a model?  Let me see, here's a few:

Reagan's Trickel-down economics (Supply-side)
Keynesian economics
Various economic models compared to scientific models
Wonderland model

I don't think these models will work for our problem.  Why?  Because they do not model insane systems very well.  They all seem to assume the rational mind exist within the system.  And I think we can agree -- there is no rational control within the health care system.

Perhaps if we go a bit more abstract... maybe a weather system model will work.  Those model really weird system that produce erratic behaviors like hurricanes and tornados and even sharknados.

Or maybe we are barking up the wrong tree... perhaps we should simplify our models...  try to make sense of the meta information, apply some common sense to the problems instead of getting inside the tornados of data and assuming that every thing moves in a counter-clockwise direction (talk about getting wrapped around the axel).

Try this simple model... based on the classic two dimensional four quadrant model... but with a dimensional twist out of the page... kinda like MC Escher would do...  So it is a bit like a model that fits wonderland.  Cynefin framework by David Snowden.




Back to the health care price transparency issue now.  Which Cynefin domain is health care pricing?  Hum... oh I fear answering because I could get it wrong...  well there's only 4 domain, I've got a 25% chance just by guessing.  WRONG!  There are 5 domains and the fact that I don't know which domain I'm in tells us the answer, we are in the disordered domain (the 5th one - the one we are most likely to be in most of the time).  Damn, I think Mr. Snowden may be on to something here.

So if health care pricing is in a discorded domain, what's the model tell us we should do?  I think (and I may be wrong - and wouldn't that be FUN) it doesn't matter - we act, then sense.  So was Steve Sonenreich, CEO of the Mount Sinai wrong to just act?  To suggest that price transparency may be a good thing for the system.  Then to sense what the system does with this new input.  Certainly the people in his organization had a bit of panic in their throats and had to change lots of things to make his decision a reality.  We might not see the cause and effect for some years to come.  So be very careful when we sense.  We might not sense the ripple effect.

How does Snowden suggest we sense?

I'll leave that you to you to answer.
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