Unhealthy healthcare

A friend introduced me to an experienced and renowned medical doctor. Don’t worry, I am not sick and looking for a second opinion. I was looking for a second opinion on the dire diagnosis of Nya Karolinska, the most prestigious, and expensive, Swedish healthcare project. My interest was awoken by reading the brilliant book ‘Konsulterna‘, by Lisa Röstlund and Anna Gustafsson, which unfortunately is only available in Swedish.

The crown jewel

Sweden has a state financed health care system that is open to everyone. Swedish law states that those most in need of care should be prioritised. The Karolinska University hospital was the crown jewel in the Swedish health care system and the most prestigious workplace for nurses, doctors and researchers.

A university hospital has three main purposes: educating medical doctors, conducting medical research and providing medical care to the public. Training a medical doctor requires both theoretical and practical skills. Like most hospitals, Karolinska was structured around a set of clinics based on different specialisms. The clinics created natural silos and medical staff were considered inflexible and stubborn by the civil servants in charge of the public health care budget.

The sales pitch

It all started when Boston Consulting Group (BCG) began aggressively selling the concept of Value-Based Health Care (VBHC) in Sweden. The method, introduced by the Harvard Professor Michael Porter, would revolutionise health care by putting the patient at the centre, reducing overheads, increasing efficiency and lowering costs by monitoring efficiency across hospitals. This would reduce the waiting time between diagnosis and treatment, lower the cost and increase the public’s satisfaction with the health care system.

As part of their sales pitch, BCG produced a report “showing” that Stockholm was lagging behind. The negative trend could be reversed and Stockholm could become a “world class” hub in bio-tech. According to BCG, the key was to introduce VBHC at the Karolinska University hospital and to work closely with the pharmaceutical industry. This was sweet music to the politicians and civil servants in charge, since it would address many problems simultaneously.

A beautiful model

Almost every hospital in the world is structured across clinics. Patients are sent around to meet different experts, which, at times, can negatively impact the patient experience. The main idea in Value-Based Health Care, borrowed from the manufacturing industry, is to organise the medical expertise around a number of typical patient flows, which would be closely monitored and the data used to benchmark hospitals. This would help the regional government, paying for the health care, to evaluate different private and public care providers. The best performers would be awarded more funding, thereby squeezing out laggards over time – introducing a sort of market economy in the tax financed health care.

It was argued that the reorganisation of the hospital must be facilitated by a new, state of the art hospital building designed for the new patient flows. Building a new hospital is a big financial undertaking, so the Stockholm region entered into the largest Public Private Partnership in Sweden to build the “Nya Karolinska”.

The ugly reality

On paper it was an attractive plan, but in reality it ignored the complexity of running a university hospital. A radical reorganisation would replace the core organisational structure - the clinics - with a new organisational structure is a massive endeavour associated with high risks. Combining such reorganisation with a relocation to a new hospital building, in itself a high-risk project, was literally asking for problems.

The new hospital building turned out to be a functional and financial disaster. It was designed with single rooms, which required more staffing than the old hospital building, but without sufficient budget. The patient alarms were based on wireless technology but did not work  at the time of the relocation, jeopardising patient safety. In addition, the Public Private Partnership contract was written in such way that any structural changes, such as moving a door, was extremely expensive. The regional government was on the hook for another two decades for a hospital building that was not particularly functional. Nya Karolinska turned out to be one of the most expensive hospitals in the world and continues to drain the already stretched health care budget.

The new organisational structure did not deliver, since it created more silos than it replaced. The medical doctors no longer had an office where they could go and contemplate different treatments. The idea was that doctors should be available/visible, a sort of open landscape without desks. The oral handover between shifts was replaced by a written log, which improved the data collection but it was more time consuming and eliminated the previous two-way dialogue. The new organisation worked well if the patient had an illness that fitted with a designated patient flow, but in practice the most frequent patients were old and had multiple illnesses…

An unintended consequence of narrowly defined patient flows was that the medical doctors did not get enough variety of patients to maintain their general skills. This highly focused patient flows also impacted education, since newly examined doctors did not get broad experience when practicing at the university hospital. Another unintended consequence was that the financial compensation, based on the VBHC methodology, prioritises hospitals with few medical complications and fast procedures. This makes it unattractive to allow new examined doctors to practice since they are more likely to make a mistake and generally take more time than an experience doctor. In other words, the VBHC methodology discouraged investing in the next generation of doctors.

Don't let ideology trump reality

The real problem was not the consultants, but the inability of the regional politicians, and their civil servants, to acknowledge that they faced a highly complex system. The change was driven by good intentions, but in a decision process where ideological beliefs trumped factual knowledge, it was convenient to wilfully neglect the complexity of the real world. In that situation it was easy to end up being taken on a ride by well-spoken people, with nice power point slides, offering simple solutions to complex problems.

Some try to blame the debacle on the political eagerness to privatise, but the problem was the regional government’s inability to procure private services, as well as follow up and manage a project of this magnitude. As a result, the project ended up in the hands of the consultants, who apparently also lacked these particular skills. At the end of the day, the taxpayers of the Stockholm region had to foot the bill for years to come.

This sad story brings important lessons for many of us. When faced with change management in a complex situation, it is wise to begin making small changes and observe the unintended consequences. The general rule is that the more complex the problem is, the smaller the changes should be. Just be realistic and have a process for debiasing your own beliefs. If someone offers you a silver bullet that will solve all your problems at once, it is best to stay vigilant and apply a large dose of common sense.