Monday, February 7, 2011

Volatility, Uncertainty, Complexity and Ambiguity

In the era of healthcare reform when accountable care organizations, global payments, and partial capitation are the buzzwords filling Board rooms, healthcare executives are wondering what to do next.

The answer came from Dr. Gene Lindsey, President and CEO of Atrius Health during a recent retreat.

It's about accepting and managing VUCA.

V = Volatility. The nature and dynamics of change, and the nature and speed of change forces and change catalysts.
U = Uncertainty. The lack of predictability, the prospects for surprise, and the sense of awareness and understanding of issues and events.
C = Complexity. The multiplex of forces, the confounding of issues and the chaos and confusion that surround an organization.
A = Ambiguity. The haziness of reality, the potential for misreads, and the mixed meanings of conditions; cause-and-effect confusion.

The common usage of the term VUCA began in the military in the late 1990s, but it's been applied to corporate and non-profit leadership by several authors, especially Bob Johansen, former CEO of the Institute of the The Future.

I recommend two books by Johansen -  Get There Early  and Leaders Make the Future.

Johansen suggests that strong leaders turn volatility into vision, uncertainty into understanding, complexity into clarity, and ambiguity into agility.

He concludes that
1. VUCA will get worse in future.
2. VUCA creates both risk and opportunity.
3. Leaders must learn new skills in order to create the future.

Dr. Lindsey and I discussed these ideas and he added two of his own.

4.  Leaders need to turn ambiguity into action.  How many times have you heard "I do not have enough data to make a fully informed decision".   Not acting makes you a target in a VUCA world.

5.  Johansen notes that the most difficult VUCA competency for the future is "commons building".  Dr. Lindsey related this to Don Berwick's concept of the medical commons.  Berwick, when he was CEO of IHI, wrote about the need for a medical commons to accelerate the Triple Aim in healthcare.  He wrote, "Rational common interests and rational individual interests are in conflict. Our failure as a nation to pursue the Triple Aim meets the criteria for what Garrett Harden called a 'tragedy of the commons.' As in all tragedies of the commons, the great task in policy is not to claim that stake- holders are acting irrationally, but rather to change what is rational for them to do. The stakes are high. Indeed, the Holy Grail of universal coverage in the United States may remain out of reach unless, through rational collective action overriding some individual self-interest, we can reduce per capita costs."

Let's explore the issue of "commons building" with a healthcare IT example.  15% of the lab and radiology tests done in Eastern Massachusetts are redundant or unnecessary.  Ensuring all test results are available electronically among all providers (especially between competing organizations) will cost millions in EHR, HIE, and interface implementation. Thus, we'll have to spend money to reduce all our incomes.   It's the right thing to do, but the medical IT commons will be at odds with individual incentives in a fee for service world.   The right answer - change the incentives and pay individuals for care coordination, not ordering more tests.

I've thought about Dr. Lindsey's comments and realized that I've had my own VUCA challenges in the past as well many VUCA challenges in the present.

Let's turn back the clock to 2008.  The Obama campaign suggested that EHRs and HIEs were the right thing to do.   We had all the signs that ARRA and HITECH would be coming, but large scale EHR rollouts require significant lead time.  We had to act.   BIDMC decided that Software as a Service (Saas) EHRs were the right thing to do and created a Private Cloud.   The concept of the Private Cloud really did not existing in 2008 and we did not know enough to predict it.  We just did what we thought was right - keep all software and data on the server side rather than in the doctor's office.   Today, people look at our Community EHR SaaS model and congratulate us on our foresight to build a cloud.   I'll be honest - it was not planned or forecasted.   We just had intuition based on the market forces and technology trajectory we saw and we guessed.   I would really like to say we built a private cloud on purpose.   It was a serendipitous guess.   In the future, there may be cloud providers that offer business associate agreements for high reliability, cost effective, secure EHR hosting.   We should think about migrating our private cloud to such services in the future.

Also, 3 years ago, BIDMC decided to focus our Clinical Systems efforts on CPOE, Medication reconciliation, HIE, Quality measurement, and advanced Ambulatory function instead of inpatient clinical documentation or nursing workflow.   Meaningful Use Stage 1 was a perfect reflection of what we did.   I have no influence on the Policy Committee's focus nor did we have amazing insight.   It was a best guess.   Stage 2 is likely to include electronic medication administration records/bedside medication verification, enhanced vital signs capture, and more clinical documentation to provide data for quality measures.   We'll want to focus our future efforts there.

ICD-10 is required by 2013, new payment models based on quality and care coordination with incentives to share savings will begin in 2012, and pressure to reduce cost via guidelines/protocols/care plans will increase.    Our governance committees will have to make hard choices about what not to do in the VUCA world of the next 3 years.   Maybe the future is going to include more ambulatory and ICU care with ward care moved to home care.   We'll have to guess again where the puck is going to be.

As a leader, my time needs to divided among Federal, State, and Local initiatives so that my governance committees, my staff, and I can make the guesses for the future.   None of us know what healthcare reform will bring or what the reimbursement models will really be.   However, we need to act now to be ready for the next two years.   That's VUCA.

On occasion I tell my wife that someday the VUCA I face every day will get better.   She reminds me that it will only get worse.  If I'm doing my job properly, I will accept and manage the VUCA, so that my staff can focus on the work we need to do to stay on the cutting edge.


Tom Home said...

Fantastic post. As CIO of a private orthopedic practice, I deal with these issues frequently and am in a constant struggle between "getting frustrated and freezing up" and "accepting that things will happen and coping". This post and several of your others have helped me "cope" better; thank you for taking the time to share your experiences and knowledge with others. They are making our "tiny" corner of the world a better more-civil place.

Jeff Kerr, MD said...

So, John, what you are saying is that vucation is our... vocation?

John Feikema said...


I like the gist of your post.

I have a good friend and board member and who is a HBS graduate. He once told me that the best thing that he was told by a professor at HBS was that his objective was to enable his students to be able to make decisions in the absence of complete data. Sounds like VUCA.

Unknown said...

As a HIT thought leader, your VUCA is lower than you think ... a growing segment of the market is informed by your actions and writings.

Donald Green MD said...

I posted the comments below to enhance discussion on how we progress to improve our daily lives. I am resending it because I think it increases interchange from different viewpoints. Broadening exchanges may prevent unleashing the law of unintended consequences. All sides should be heard if we sit at ground level on any project. Once underway direction can be more focused. With only 20% of small practices adopting EMRs after years of selling the idea some pause as to why needs to be explored.

The world should not be becoming more complex since knowledge is suppose to clarify and simplify. Also before guessing on a particular road one must make sure any assumptions have some validity. It is not wise to fly by the seat of your pants, especially if what you are doing will affect many.

Sir Francis Bacon warned us of "idols of the market place." These are ideas we embrace because of their attractiveness but ultimately turn out to be wrong.

The jury is still out on EMRs making vast improvements to health care. In fact no solid evidence exists to date to show that. It is an important tool to get one's work done and to do it efficiently. However it might be that doctor's work flows and data gathering skills are more germane to good care than how neatly it is documented.

Cloud computing has its place but so do in house servers have theirs. The literature on this rages on.

Instead of more acronyms I feel we need to develop some strong basic tested framework. Health care should not be a cash cow but should pay its providers decently or well. Corporate entities should not be making decisions on how we receive our health care.

It should also be recognized that personal health care is a universal need for all to survive properly. It can not be treated like a commodity in the same manner as other services or products we use. It is unpredictable in terms of its users and needs collective financing to sustain itself.

Solutions to dealing with health care reform has been quite spotty so far since there is not enough wide spread agreement on what the proper role of health services plays in our lives. Let's come to agreement on that first instead of creating Rube Goldberg answers to our problems.

Ravi Kumar said...

This is brilliant blog post, John. very timely and apt. Uncertainty is certainly the name of the HIT world we live in! Thanks for sharing.

Bill Crounse, MD said...

Ditto to comments already made. We need more industry visionaries. It is reassuring that there is still a place for "common sense" in healthcare and health IT. John makes a strong case for the power of common sense when everything around us is in chaos.

Medical Quack said...

A very good post as always and you were a bit more eloquent than my own description, which I call the "new left curve" technology throws us every day:) The predictions are not much longer lasting than the day they are made to a point, agree!

Interpretation is also another big area of concern too with medical studies that have been found to be inaccurate or in a couple of cases just plain fake, and that rolls back over into Health IT too. You can crank out numbers but how they get interpreted means a lot and I like this book, Proofiness, the dark side of mathematical deception as it makes some good points with awareness and looking for the rationale in what you are looking at with studies, formulas, etc. and making sure you are making the best informed evaluations, if that is possible sometimes:)