Imagine the American healthcare industry as the proverbial proud oak tree that refuses to bend during a windstorm. For decades the industry has been deft at fending off resolution of the Three Cs, cost, coverage and quality of care. Predictably, this political success has nurtured a lack of resilience, by which I mean the ability of an organization to absorb exogenous shocks or disturbances and return to its original state.
As with the financial sector and the automobile industry, healthcare will be humbled by the ongoing fiscal/economic crisis, which has hidden ecological roots and far-reaching social and political implications. My view is that in the context of this crisis the Three C’s will take on the aura of “toxic assets” and SUVs –once profitable now a millstone. This suggests three outcome scenarios: 1) a medical care system affordable only to the rich; 2) nationalized universal coverage in a system using less energy and other resources; 3) a collapse followed by reorganization at a lower level of complexity and resource consumption, probably accompanied by an integration with public health and alternative forms of medicine (Wikipedia[a] ND).
A warped recognition of the macro-economic predicament is betrayed in the industry’s recent proposal to “voluntarily” hold down cost escalation. Whatever motivation lies behind this offer is it not astounding that this is the response with unemployment spiraling upward; federal debt growing at an unprecedented pace, with a $2 trillion deficit in 2009 and one of every two dollars budgeted borrowed; world oil production at its peak, population growth, climate change, water scarcity and a host of environmental pressures; Social Security and Medicare in distress; income and sales tax revenues declining; most states and many cities this year dependent on bailouts from a debt-ridden federal government with California on the precipice of fiscal calamity; housing prices continuing to plummet; production capacity utilization at its lowest point in at least 42 years; double digit wealth destruction that is eviscerating retirement plans; commercial real estate set for major defaults; GDP shrinking at a rate of 6% a year; and on and on it goes.
The Resilience Alliance points out the role of information in ecological and social systems:
A resilient ecosystem can withstand shocks and rebuild itself when necessary. Resilience in social systems has the added capacity of humans to anticipate and plan for the future (Resilience Alliance 2009).
Converted to the language of strategic management, a critical function of the executive is to gather and synthesize information –do environmental scanning- to keep the organization aligned with a dynamic external environment. The poorer the understanding of the macro-context is, the bigger the mismatch between organizational strategy and environmental realities, and the greater the risk of decline or demise. It’s that simple.
Healthcare’s executive leadership – hospital administration, journal editors, medical school deans and executives, doctors and allied professionals associations, health insurance companies, the pharmaceutical industry, medical suppliers- is brimming with intelligence, savvy, and craftiness. Unfortunately, this bounty of brainpower and expertise is planning backwards, locked into an episteme (Foucault 1970) -similar to Kuhn’s (1964) paradigm- whose guiding metaphors are economic growth and technological progress. We focus on growth here since a message of the 2008-09 crisis is that growth, as we have known it, is ending.
The federal government’s allegorical attempts to save preferred financial houses reveals an inability to understand social and ecological sustainability, above all the role of oil as the source of 1) operating the economy -and healthcare (Bednarz 2007), 2) maintenance and repair of the levels of complexity and functioning in the economy, and 3) future expansion to pay off debt incurred today (Leclerc and Hall 2008). We find ourselves, therefore, in a “natural” economic contraction brought on by overconsumption, natural resource constraints (primarily crude oil), environmental degradations –which are hidden- and reckless fiscal policies –which are obvious. The good news is these are continuous not discreet problems; the grim news is that the longer this systemic relationship goes unrecognized the more healthcare’s options are narrowed –and the same applies throughout government and society.
It is tempting to conclude that healthcare is ignoring these external forces and events. The deeper truth, however, is that with rare exceptions its leadership has no inkling these are acute, interdependent and systemic problems. Operating from within the episteme of growth they believe the economy will be “fixed,” and, if one stimulus policy does not work, try another and another until business as usual resumes. There is no contingency thinking –let alone planning- on this matter.
The Long Emergency (2005) author Jim Kunstler lays out what I believe is the choice facing healthcare and our nation:
[D]o we put our dwindling resources and “hopes” into resuscitating … dying systems, or do we move forward to the next chapter of American life…? (Kunstler 2009).
In the nomenclature of strategy, how can healthcare realign itself with a radically changing external environment now characterized by ecological dilemmas and fiscal constraints? Answer: By envisioning a healthcare system whose central features are first, reductions in complexity and resource consumption (Pierce and Jameton 2004) -how much is ultimately determined by ecological limits- and, second, creating a model of managing without growth (Victor 2008).
Ironically, the logic of this question and its answer is incommensurate with the episteme of growth. For illustration, imagine that a contemporary doctor begins to argue that “miasma” –not microbes- is the theory with which to treat disease. This is thoroughly outside the bounds of rational 21st century medical discourse; it’s absurd. However, a century and a half ago the situation was reversed when a physician who attempted to introduce hand washing into medical practice paid dearly for challenging the status quo:
Semmelweiss’ hypothesis, … that all that mattered was cleanliness, was extreme at the time, and was largely ignored, rejected or ridiculed. He was dismissed from the hospital and harassed by the medical community in Vienna, which eventually forced him to move to Pest (Wikipedia, ND).
Recognition of the microbe led to medical progress that miasma theory could not deliver. Substituting “socio-ecological sustainability” for “microbe” and “episteme of growth” for “miasma” gives a rough indication of what is at stake today.
In addition, this is not solely about strategic fit and intellectual rigor. A socially dominant episteme supports vested interests and arrangements of wealth, status and power that can make leaders resistant to information. So some healthcare leaders cannot and others do not want to explore outside the dominant system of knowledge. Yet there are always a few who eventually do see and act, typically because they are well read risk takers who are able to capitalize on the insights and complaints of vocal followers and assorted change-agents and hell-raisers. Most important, however, is the requirement of a fertile organizational culture to produce visionary leadership; for example, some non-profit hospitals hold environmental sustainability and service to the community as integral to their mission.
The passing of the episteme of growth may turn out to be as profound as the Copernican Revolution (Kuhn 1957; 1964). Virtually every American grows up believing that growth is sacrosanct, serving as the wellspring of personal happiness and success, the elimination of poverty and other social problems, and an emblem and embodiment of our nation’s uniqueness and prowess. Counterintuitive as it may seem to many, growth is now harmful for two molar reasons. First, the American economy is suffering the comeuppance of what Kevin Phillips (2007) terms Bad Money: an out of control financial sector that has captured the regulatory function of the federal government and indulged in debt expansion masquerading as wealth creation. A corollary belief of financiers is that “money can give birth to money,” which is not possible since wealth ultimately traces back to energy or other valuable commodities. Hence we are having a massive “correction” – a painful destruction of life chances for many- as paper wealth is realigned –through destruction- with real wealth. Second, simultaneously we are entering The Bottleneck of ecological crises E. O. Wilson (2002) notes is humanity’s central challenge of the 21st century. Peak oil is the most salient natural resource limit at present; it serves as a governor on real wealth creation and economic expansion. And it appears to have played a role in exposing the Bad Money financial sector and crashing the economy (Cohen 2009; Hamilton 2009; Tverberg 2009; Mobus 2009; Rubin 2009).
Directly, you need energy to do work, and an ever-increasing amount of energy to create real wealth. We no longer have this increasing energy supply at our disposal; oil production has been on a bumpy plateau since May 2005, and all indications are that it will enter into decline within a few years. So as difficult as things have been in 2008 and 2009 this is the early stage of a great transformation.
Had oil production instead continued to increase each year since 2004, cheap energy still would be available. Therefore the financial sector might still be expanding the housing or some other bubble, and debt might still be serviceable, although there is no denying that the amount of debt outstanding probably is devastating in its own right (de Soto 2009). Further, it is not far-fetched to argue that we are at “Peak Everything” (Heinberg 2007), particularly fresh water and various minerals and other natural resources. This suggests that we have reached “Peak credit and debt” as an indirect consequence of peak oil disrupting the dynamic of the financial sector to keep borrowing and lending.
If a return to limitless economic growth is impossible, what, then, is the next chapter in American life? And what does this portend for medicine?
It is important to remember that debt is a social construct; the political leaders of the world could convene and decide upon a debt write down, forgiveness, jubilee, etc. –after all, they are now creating money by stroking computer keys. Or this debt could provoke a war. Given the enormity of debt, a write down would impose economic hardships–a lower standard of living in the USA is inevitable- from which American medicine would at best emerge deeply altered. Nonetheless, debt eradication can be accomplished through human volition. And it will occur one way or another despite the efforts of our federal government to prevent it.
Even if these Bad Money debts were unwound we still have The Bottleneck, a set of ecological realities immune to political blandishments, incentives and rhetoric. We may have a false dawn “recovery,” but unless new and plentiful sources of energy –especially liquid fuels- are found, any return to economic expansion will collide with energy constraints. Moreover, the discovery of a new cheap and plentiful energy source –now in the realm of a Hail Mary pass- to replace oil would still leave climate change, water scarcity, soil erosion, dying oceans, and other Bottleneck problems unresolved.
Bad Money and The Bottleneck are, I suggest, diagnostic metaphors –there are others such as “Overshoot” (Catton 1982), “The Spirit in the Gene” (Morrison 1999), and “Limits to Growth” (Meadows et al 1972)- for guiding integrative thinking about how sustainability can replace the pursuit of economic growth. These metaphors converge with my reading of ecological economics (Daly and Farley 2004; Boulding 1992; Georgescu-Roegen 1976)), or biophysical economics (Cleveland ND), a field premised on the idea that the human economy is proscribed by the earth’s ecosystems.
The episteme of growth reaches its zenith in classical economics, which posits that price measures all and that ecosystems and natural resources are pawns of human ingenuity. This makes human economic activity seem practically boundless –but only as long as we are on the upside of finite resource extraction. As Catton points out, this “Cornucopian” worldview is woven into our national identity. Europeans “discovered” what they conveniently considered a bountiful “New World” and proceeded to draw down natural capital as if it were infinite and an indication of their prowess and manifest destiny. But from a socio-ecological perspective, something quite different was occurring:
[W]hat has happened to the American dream … can be understood as ecological succession (and related processes). Members of the human species failed to heed clear omens of our own predicament because we did not know they were precedents. We had not yet learned what processes matter most. Some of them seemed trivial by conventional standards of thought. We disregarded innumerable instances in which populations of organisms so changed their own environments that they undermined their own lives. Most of us didn’t know that this was what these examples exemplified. And we never supposed the pattern could include us (Catton 1982: 95-96).
Those few laboring inside the healthcare system who share or are close to Catton’s perspective, doctors, nurses, allied professionals, and the rare “heroic” administrator (Campbell 1968), live a paradox of awareness: providing life-preserving care from within a moribund system. This is redolent of Semmelweiss’s dilemma a century and a half ago. Typically, when healthcare professionals raise concerns about peak oil, climate change, or the massive consumption of resources and pollution created by the healthcare industry they are chided not to lose focus on the primacy of the patient and the need to make profits. They are often told to stop introducing extraneous and “extreme” or “personal” concerns into the workplace. Occasionally they are directed to the office of sustainability, which, as one doctor puts it, “has no input to operations –it’s pretty much changing light bulbs, public relations, and grass on the roof.”
This is how the episteme of growth denatures sustainability, and one instance of why Michael Pollen writes the “whole concept is in danger of floating away on a sea of inoffensiveness.” (Pollen 2007).
An invigorated socio-ecological definition of sustainability goes like this:
[M]aintaining contexts that produce the goods, services, and amenities that people need or value, at an acceptable cost, for as long as they are needed or valued (Allen et al 2003: 26).
Healthcare leaders are now trying to squeeze out efficiencies, cutting staff levels, reclassifying jobs to downgrade salaries, competing vigorously for grants, and so on, to reduce mounting costs and threatened or actual revenue losses. This is treading water not swimming to shore; and federal stimulus money is yet another postponement. What’s needed in healthcare management is supply-side sustainability:
Knowledge is the basis of supply-side sustainability. By this we mean not the mechanical knowledge on which technological optimism relies but knowledge of how to use ecosystem processes so that they support us, rather than conversely. This approach is meant to minimize the costliness of problem solving…We use ecological processes wherever possible…The alternative is to continue traditional management, in which we manage for the outputs of productive systems, endlessly plugging leaks and trying to keep outputs at an even level and never understanding why the task grows more challenging (Allen et al 2003: 391).
This recognizes that the locus of socioeconomic control does not belong to humans. It invites humans to work with, not against the natural ecology. Its acceptance rests on supplanting the episteme of growth much as the microbe replaced miasma and the heliocentric model of astronomy replaced the Ptolemaic one. There are increasing signs of –as Foucault puts it- “resistance” to the dominant episteme. A financial analyst recently wrote, “The ability to sustain high rates of economic growth, decreed by governments and central bankers, is questionable” (Das 2009). Columnist Tom Friedman –implicitly renouncing much of his oeuvre- recently has wondered if we’ve reached the limits to growth. And the U.K. Sustainable Development Commission (2009) has released a report titled, “Prosperity without Growth? – The transition to a sustainable economy.”
In conclusion, brief comments on the future of healthcare are in order. The first scenario listed above, a system only the rich can afford, is the outcome to expect if America maintains a commitment to healthcare as a market commodity purchased through insurance. The second possibility, nationalized universal coverage is what many reformers have been seeking for decades; but it will not have the bells and whistles of the current system. It will be frugal, and this has great ethical implications. The third possibility, collapse, is not necessarily a sudden breakdown. It refers to a reduced inflow of energy and other resources, which leads over time to lower complexity –less care, less equipment and fewer specializations. A fiscal collapse, however, could make this occur abruptly, but decline could also develop in punctuated downward steps.
Clearly scenario two is in keeping with an egalitarian democratic ethos and human dignity. And we must remember that the rest of society will be reeling and also losing complexity as this unfolds, so there will be no bailout possible that returns healthcare to its present level of complexity.
Finally, the question of how human agency can influence the probabilities of these scenarios occurring is for another essay.
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