ABSTRACT
Healthcare is a troubled sector everywhere. Nowhere does it work to the satisfaction of all constituencies, payers, patients, providers, and politicians. The predicament appears as cost inflation, a lost connection between spending increases and improvement in public health. Health service production is geared to emergencies and heroic medicine, and it finds it difficult to deal with long-term, low-intensity, and multicausal ailments. Many interventions are high risk, but failure-safe systems are inappropriate. A symptom of system-level problems is the simultaneity of overcare and undercare.
From an operations management perspective, the predicament of healthcare is the contradiction between craft and mass production. At the core is the healing relationship and the necessity of individual diagnosis and a care plan. To meet increasing demand, the supply side has to employ principles of mass production, from which follows fragmentation and loss of individuality.
Spending freezes are not politically viable. Efficiency can be improved, but the financial arrangements based on third-party finance do not offer proper incentives. Market-based solutions contradict public health objectives.
A cognitive impediment to healthcare reform is the assumption that health service production is one industry. There is a need for a way to segment healthcare into managerially homogeneous parts.
