A New World of Health Care

Traditional health-care systems are struggling in the face of cost constraints and public demand for higher quality. The growing gap between the promise and the reality of health care has created room – in developed and developing countries alike – for new players who are concerned more with social behavior than with biology.

NEW YORK – Traditional health-care systems are in trouble. In the OECD, costly hospitals and clinics dominate health services, and account for 97% of the United States’ health-care spending. These systems are struggling in the face of cost constraints, public demand for higher quality, and exaggerated expectations.

But there is a different system, widely practiced in poorer countries that cannot afford Western-style hospitals, and centered on community-based healthcare. We need both approaches; and we need them to work together. Indeed, the growing gap between the promise and the reality of health care has created room – in developed and developing countries alike – for new players who are concerned more with social behavior than with biology.

In his seminal 1996 article in the Harvard Business Review, W. Brian Arthur identified the important distinctions between a health-care system defined by planning, hierarchy, and control and one characterized by observation, positioning, and flattened organizations. The first type of system, he argued, is concerned with materials, processing, and optimization. It is principally focused on access to medical care, and typically faces diminishing returns.

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