This article explores the theme, A New Model of Change: Why Complex Global Problems Need Local Systems Solutions, as part of our learning project, MasterClass on TransformingSystems with Arun Maira. The project is based on Maira’s book ‘Transforming Systems: Why the World Needs a New Ethical Toolkit’. The other two themes are: Creating Ethical Leaders of Tomorrow, and Building Purpose-driven Networks.
A note on the theme by Arun Maira: The Sustainable Development Goals (SDGs) are inspiring many people around the world. They aim to solve global problems of poverty, environmental degradation, and social inequities. When problems are large and complex, a human instinct is to turn upwards for solutions—to God, to the United Nations, or to a powerful government. When confronted with large-scale problems, the default theory of effective management, of command-and-control, becomes very tempting to apply. Governments construct centralised, top-down programmes. International NGO programmes, and large scale philanthropy, are managed centrally to achieve scale and to improve efficiency by deploying best practices.
This approach does not work because problems such as persistent poverty and inequality, environmental degradation, etc., are systemic issues. They have multiple interacting causes. They cannot be solved by any one actor. Nor are they amenable to silver bullet solutions. Though the problems appear everywhere, they come together in different ways in each place. Another problem with this approach is that people who must be the ultimate beneficiaries of solutions, and who can contribute to their design and implementation, have inadequate voice.
Local solutions are required, but they must be systemic too. Systems thinking must be applied by local change agents to the challenges in local environments. For example, solutions to improve livelihoods must improve the condition of the natural environment too. Solutions to improve skills must go hand-in-hand with solutions to create more jobs. The need for empowering local governance is often touted. For example, it is enshrined in the Indian Constitution through specific amendments. Even business organisations want their frontlines to be empowered, innovative, and responsive.
So, the first question is, why does the established system not let go of control? An explanation, or excuse, often given is that the locals will make a mess of it. So, the second question is, how can the capacity of the locals be improved to manage systems problems?
There is perhaps no better example than healthcare where locally appropriate but systemically consistent solutions need to be found urgently. India’s performance on the Disability Adjusted Life Years Lost per 100,000 population (DALY Rate), a summary measure of population health and wellbeing, is very poor. At a 2016 DALY Rate of close to 35,000, India ranks 114th among 176 countries, just a tad ahead of Rwanda which spends only about half of what we spend, and over 60 levels behind our neighbour to the north, China.
One possible direction is to somehow persuade each state government to quadruple the amounts that they spend on health as a proportion of their domestic product, and then to pour that money into their monolithic, departmentally run health system, as it exists today. Of course, this remains only a theoretical possibility since in India, no state government, since 1947, has shown any inclination to increase its budgets on healthcare by anywhere close to what is needed. Besides, there are few, if any, local or global examples left of successful health systems which are run as ours are, with detailed line-item budgets clearly specifying every single item of expenditure, leaving little room for local autonomy and enterprise.
Thailand is a relevant case study here. Since the 1970s, they’ve pushed through massive increases in their health budgets, and have successfully operated what is essentially a government-owned and financed health system, particularly in their rural areas. They’ve achieved remarkable results by offering a great deal of trust and autonomy to their local and regional divisions. And to ensure a measure of systemic consistency, they’ve relied on tools like capitated payments, a model of reimbursement in which the providers receive a fixed amount of money per patient; on global budgets, which cap total annual health expenditures; and on detailed guidance on protocols and cost-effectiveness from HITAP (Health Intervention and Technology Assessment Program). There are important lessons for us here on how our state governments could get better value from the money that they currently spend, even if right now it is well short of what is needed.
Unlike in several poorer countries, in India our total spending on healthcare is substantial and more than adequate for our needs, even if most of it comes directly from our pockets, rather than via the taxes we pay to our governments. Take for instance, Uttar Pradesh (UP). Its government spends Rs 16,000 crore per year on healthcare and the people of UP spend an additional Rs 54,000 crore from their own pockets. But this massive annual expenditure of Rs 70,000 crore hasn’t quite delivered real outcomes for its 22 crore population, and UP’s health indicators continue to rank among the worst in the world (2016 DALY Rate about 40,000).
Enabling better outcomes in this vast country-sized state needs an approach where systems designers and policy makers fully embrace their current reality and stop looking for possible solutions only from their severely under-funded, tightly-controlled, government-owned-and-financed health providers. Instead, they need to allow local understanding and innovation to thrive, within a well-defined framework and struts that provide both structural stability and consistency to the entire health system.
An example of such a strut could be a state-wide technology backbone (like the “UP Health Stack”, a set of building blocks which are essential for building a modern health system). This, if built and offered freely and widely, would help thousands of systematically-empanelled primary care providers to carefully on-board their patients; offer them comprehensive evidence-based treatment for over 90% of their health conditions; and smoothly refer them to, or consult remotely with, registered secondary and tertiary care providers when necessary, without receiving any funds from the government.
Another strut could be built by the UP State Health Authority (UPSHA) allowing all its residents who are ineligible for their free scheme, to buy into it by paying the Rs 1,200 to Rs 1,500 insurance premium to UPSHA. Such an approach would allow providers and consumers to connect directly and at a local level under the overall oversight of UPSHA. Not only would it help them hold each other accountable, but it would also spur innovation and governance at the local level. This would help ensure that the current spends of Rs 70,000 crore deliver better value, and help get to the outcomes that the people so urgently need, without spending any more money.
Such approaches have, for example, been put into practice in tiny and far-flung communities in ice-bound Alaska. The community there came together and created non-profit organisations, which train and equip local residents to offer comprehensive primary care services. This is then combined with air-ambulance services, to be used in the rare instances when they are needed to help transfer patients to base hospitals. Several other countries have also dramatically expanded the impact of their ubiquitous pharmacies, so that patients can get access to consistent and continuous chronic care support for non-communicable diseases such as diabetes, dyslipidaemia, and hypertension right at their doorsteps.
As a general design principle, loosely coupled systems which offer a great deal more independence to each component are simultaneously stronger and more agile than those that are joined at the hip—as the Romans discovered over 2,000 years ago when they constructed their agile Legions which went on to annihilate the fearsome Greek Phalanxes; Railways discovered more recently when they built the couplings for their wagons allowing them to create very long trains; and PepsiCo discovered under Indra Nooyi when they spun off Pizza Hut, KFC, and Taco Bell restaurants but preserved the brands. Nowhere is this principle more applicable than in healthcare where each patient and community needs a level of attention, customisation, and innovation that rigid, centrally-controlled systems cannot even imagine, let alone provide.
By Swati Ramanathan | Challenges such as garbage collection are universal, yet deeply local to each city. And they are the result of many aspects of the city system being broken. A systems approach, adapted to the local context, can help find unique solutions
In the next few days, we will publish essays by thought leaders on the other two themes in this learning package: Creating Ethical Leaders of Tomorrow: Why Management Education Needs to Rethink Its Role, and Building Purpose-driven Networks: Why their time has come .
You can see all the articles in this package here.