Making strategic decisions in the face of deep uncertainty about the future is one of the most difficult responsibilities of executive leadership. Perhaps nowhere is this truer than in health care. In this new blog series on strategic planning in health care we draw on recent FSG client experience to make the case for an alternative futures approach to managing the complex uncertainties in the health care domain.
No single issue in the US has a more pervasive societal impact than health care. From individual patients to the institutions of medicine, from private to public interests, the delivery of care is complicated, expensive and seems to change all the time
And that’s on a good day.
Why strategic planning in health care is difficult
Over the last dozen years the Futures Strategy Group has developed a reputation for its innovative application of scenario planning to the problems of multiple players in the American health-care industry. All that experience has not turned us into a health-care think tank. But it has taught us a couple of things.
First: Emotionally-charged arguments about good guys and bad guys in health care get us nowhere. Good and bad are not the subjects of strategic planning. Drivers of change and their meaning for key actors and institutions are.
Second: Scenario planning as we practice it has proven its value in helping health-care clients step back from their present quandaries to chart a strategic path with fresh eyes and a new perspective on future forces driving and shaping change.
The collision of social forces and interested players
A common discovery among FSG’s clients is the way in which external forces that planners may spend little time thinking about can abruptly rewrite what was considered a settled environment. Health care is no exception.
Health care delivery is dynamically uncertain. How can anyone think strategically under such a condition? How can anyone plan?
Start by imagining health care as an equation of great computational complexity. On one side are large social forces—demographics, income distribution, climate change, geography, technology, political partisanship, international tensions to name only a few. These forces may have no obvious connection to medicine and still influence every aspect of care delivery.
On the other side of the equation are a variety of actors contributing in some way to delivering care to sick people. These include care givers of different kinds, hospital administrators, insurance companies, pharmaceutical firms, the institutions of medicine and medical education, investors, regulators, and, most important, patients and the families. They may act independently of each other, often with conflicting incentives having nothing to do with medical science. But they all have one thing in common – they are reacting to the forces for change emanating from the other side of the equation.
A good example are state legislators, who need to fill gaps in their physician populations while contending with a federal government that controls who can come into this country and practice medicine. In this tug of war hospital systems can feel like bystanders. All are coping with both care delivery and the societal forces coming at them.
Multiple plausible futures
Against what can seem like an incoherent operational dynamic the practical usefulness of FSG’s approach to scenario planning is made vivid.
Our approach places clients in multiple, thoroughly described futures. It requires that clients build a business model for success in each future. Taken together these yield a clear view of where a client’s interests lie across multiple plausible futures.
A good example of the practical usefulness of this approach is in the implications of artificial intelligence technologies, a subject we have explored with medical educators, certifying boards and hospital systems.
In the AI conversation all kinds of issues arise that clients are sometimes surprised to find are part of strategy development. The geographic maldistribution of specialties, for instance. And the pressure on hospital systems to do things more cheaply and still provide great care. And variability in population health. And pushback from physicians who do not fully trust the technology and, indeed, view it as a threat to professional standards.
Emotion is an obstacle to strategic planning. Living for a while in alternative-future scenarios lets clients step away from emotion. The scenarios rigorously describe the various societal forces and the incentives of the same actors, with the dynamic collisions among these forces and actors differing in essential but always plausible ways.
By inhabiting these “worlds” scenario planners can think across multiple dimensions and multiple actors. They become clear-eyed about the consequences of choices that will have long tails into the future.
This approach enables the management of unstable conditions to a degree conventional extrapolative planning never can. Conventional tools are too easy to manipulate for the answers we expect, in large part because the inputs are rooted firmly in the present, in the things we think we know.
The future of health care may seem in disarray. The elements of the care equation are complex and uncertain. But they do not have to be impenetrable.
What’s really powerful about the scenario approach in the health care context is that it absolutely neutralizes the too-often influence of “experts” who have supposedly seen it all. Well, I doubt they’ve seen what’s coming, because it’s bound to be unprecedented and uniquely challenging to all the players involved. Great essay, guys.
I never disparage expert opinion. I truly don’t.
I would only suggest that, with respect to the perpetual uncertainty of the health-care future, expertise can too often be rooted in past experience and present perspective. The value of scenario planning, as we practice it anyway, is that it can shake imaginations loose from present mindedness. suggesting new applications of expert knowledge.
I agree with you completely, Kevin, however Peter does offer up a caution that we have all seen. Scenario planning works quite well when true experts bring that valuable knowledge and experience into the scenarios and give their imaginations and insights free rein to apply what they know to new and challenging settings. However, we have all also experienced the ego-driven expert who can conceive of no challenge to what they know to be true. The good news is that an ego-driven attitude, while briefly disruptive, fails the test of seeking new helpful insights in a scenario process. Whereas it can dominate discussions in extrapolative strategy discussions.
Great representation of the various dynamics pulling at the current and future state of health care, and presented as an equation which makes my engineer heart sing! FSG’s scenario approach does more than help build a future-proof strategy, it helps us recognize how these seemingly disconnected forces actually interact. That’s sometimes difficult to recognize in current state because they are so fundamental to our day-to-day lives and experience they become transparent. Placing ourselves in a foreign future scenario removes that familiar experience and allows us to observe those interactions. Which is useful, since scenario planning is as much or more about planning for today as it is for tomorrow.
Your last point, Joe, is an excellent one.
Scenario planning is not day dreaming. It is a strategy-development tool for right now. It explicitly asks the question, “In the choices we make today what are we aiming at? Why have we chosen the targets we have?”
This reminds me of the apocryphal Einstein quote, “We cannot solve these problems using the same mindset which created the problems in the first place.” Only by removing ourselves from the boiling controversies of the present and imagining a variety of distant future equilibria, systematically spread out across the limit of the plausible, can we imagine the kinds of changes that we may see in the near future, and what to do about them. Health care leaders of today cannot create survivable futures for their enterprises purely by using the mental frameworks they employ to survive and prosper in the present. Short-term thinking almost always ends in a strategic cul-de-sac.
Pat, I was taken by your reminder of how important mental frameworks can be. Peter Senge’s work on Mental Models always had a nice overlap with scenario planning philosophy. It is a reminder that mental models not only frame how you see the present, but how you conceive the future. In the case of health care that becomes overly complex. Health care executives see the present and future in economic and business terms – their mental model. While physicians see the exact same conditions, but from the perspective of clinical experience, science, and patient care. They literally do not speak the same language. Yet, we have seen both sets of leaders, faced with an entirely new and challenging future scenario seek out combined solutions.
Good points, Tom. And to make it even more complicated there are different and sometimes fractious mental models at work among physician groups – e.g., general practitioners, complexivists, surgeons, other specialists, etc. The observed shift to specialization and super-specialization will only accentuate the potential divergence of mental models in clinical care.
What gives Einstein’s (supposed) remark its punch is that we all recognize the temptation to stick with what we have always known without even realizing that that is what we are doing.
The power of the scenario-planning experience is that it detaches us from our familiar ways of thinking, and gives us fresh eyes.