Why In The World Is Healthcare Broken?

Why Doesn't Healthcare Work Better?


In December 2016 the World Economic Forum published Misaligned Stakeholders and Health System Underperformance.

In summary their findings are:

Misalignments (i.e. situations involving conflicting incentives, behaviour, structures, or policies) among key stakeholders are likely to lead to significant waste, whether measured in terms of health or money for health.

The paper identifies three kinds of misalignment.

Divergent Objectives

This category includes the divides between short and long term interests of stakeholders, or problems caused by short term targets or payment mechanisms.

One example cited is the case of telephone or electronic consultation. The payment systems don't reimburse these ways of transacting care, so providers don't use this mechanism, even though this might be highly efficient.

Another example is the excessive and inappropriate use of antibiotics, which is fueling drug resistance. The divergence here is between immediate comfort over long term consequences.


Power Asymmetries

This category covers imbalances in power whether economic, legal, informational or political that arise between stakeholders and create waste.

An example is the outsize power of the tobacco industry which inhibits some governments from controlling tobacco.

Another is the US regulations on drug negotiations for Medicare which cause higher drug prices for federal reimbursements.

Co-operation Failures

This category covers barriers such as cultural or operational and regulatory which keep stakeholders from collaborating in their mutual best interests. Features of these misalignments include, disconnected budgets, lack of leadership or barriers to data-sharing.

An example is the poor interoperatability of electronic medical records systems which leads to inefficient care and negative health outcomes.

The report examines how these misalignments impact on cancer, diabetes and mental healthy care before attempting to quantify the size of the problem.

The Size Of The Problem


The report considers the implications of the waste caused by these misalignments. It states:

  1. Global life expectancy could be increased by more than four years at current expenditure levels if each counrty matched matched the best outcomes in its spending class.
  2. Current global life expectancy could be sustained at one third of current health expenditure.

After examining how different countries are dealing with these misalignments the report has four Key Lessons.

Key Lesson 1

Alignment doesn't just happen. It requires determined leadership and a commitment to improving the quality, affordability and equity and efficiency of care. Most of the alignment examples rely on one stakeholder taking a strong system leadership role. 

The key is to create a case and space for system-thinking to flourish and to challenge institutional intransigence and short-term self-interest (or at least show how alignment would better meet that self-interest).

Key Lesson 2

Stakeholders should work together to highlight and overcome the misalignment. Stakeholders should:

  1. Quantify and highlight a particular area of inefficiency and the value to be unlocked from a different way of working together
  2. Agree on a vision for how healthcare could be improved
  3. Determine how the benefits of that improvement will be shared
  4. Create new – or alter existing – targets and incentives to promote that alignment;
  5. Introduce and standardize new care processes across the system.

Key Lesson 3

Misalignments are sometimes overcome by a more disruptive and unpredictable change. Often a new entrant or technology is introduced that, rather than solving the underlying misalignment, sidesteps it by creating a totally new business or care model.

Key Lesson 4

Particular alignment approaches tend to pair with different types of misalignment.

The report argues:

  1. That in addressing divergent objectives it is critical to identify the value being lost to the system – which creates the case for finding a new way.
  2. In correcting power asymmetries, it is generally not the less powerful stakeholder that drives the change. Something else has to happen, which might include the more powerful stakeholder realizing the value lost through disempowerment or by a third party intervening.
  3. In resolving cooperation failures a key step is to create a situation in which the benefits of alignment are shared across everyone who needs to act.

I think the WEF has summarised the dilemma that leaders in healthcare often face. Perhaps the paper will stimulate some further debate about to tackle these system level problems.

In addition, I think there are some plausible strategies that healthcare leaders can adopt to reduce the cost system misalignment. 

What would be your first step? 

Question: What misalignments do you observe in healthcare?

Misalignments in healthcare WEF