Cybernetics and Systems SYSTEMS THEORY

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Cybernetics and Systems

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SYSTEMS THEORY APPROACH TO THE HEALTH CARE ORGANIZATION ON NATIONAL LEVEL

Andrzej Bieleckia; Ryszard Stockib a Institute of Computer Science, Jagiellonian University, Kraków, Poland b Wyźsza Szkola Biznesu—National-Louis University, Nowy Sącz, Poland Online publication date: 29 September 2010

To cite this Article Bielecki, Andrzej and Stocki, Ryszard(2010) 'SYSTEMS THEORY APPROACH TO THE HEALTH

CARE ORGANIZATION ON NATIONAL LEVEL', Cybernetics and Systems, 41: 7, 489 — 507 To link to this Article: DOI: 10.1080/01969722.2010.511533 URL: http://dx.doi.org/10.1080/01969722.2010.511533

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Cybernetics and Systems: An International Journal, 41:489–507 Copyright # 2010 Taylor & Francis Group, LLC ISSN: 0196-9722 print=1087-6553 online DOI: 10.1080/01969722.2010.511533

Systems Theory Approach to the Health Care Organization on National Level ANDRZEJ BIELECKI1 and RYSZARD STOCKI2 1

Institute of Computer Science, Jagiellonian University, Krako´w, Poland Wyzsza Szkola Biznesu—National-Louis University, Nowy Sa˛cz, Poland

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National health care systems have been found ineffective in most countries. The subsystems of the health care systems are not autonomous and as such cannot be competitive in the market. A participative health care system with empowered patients as customers and hospitals as providers is proposed. The consequences for both further modeling and implementation of such systems are discussed. KEYWORDS autonomous systems, health care, hospital’s empowerment, systems theory

INTRODUCTION There are few features of our civilization that would be more universally criticized than health care systems. Health care systems have not met the goals defined in Millenium Development Goals (MDG) related to health: child mortality, improving maternal health, combating HIV=AIDS, malaria, and other diseases (Travis et al. 2004), especially in countries in the global South. Their health systems lack capabilities in key areas such as health workforce, drug supply, health financing, and information systems to be able to utilize the offered assistance (Travis et al. 2004). Rich countries experience similar problems. Charlton and Andras (2005) described the difficulties in implementing health care system change in the UK. Even Denmark, famous for its gradual democratic ‘‘drip-drip’’ reforms, waits for comprehensive changes that will lead to more radical changes (Vrangbaek and Christiansen 2005).

Address correspondence to Andrzej Bielecki, Institute of Computer Science, Jagiellonian University, Łojasiewicza 6, 30-348 Krako´w, Poland. E-mail: [email protected] 489

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The greatest curiosity is the U.S. health care system. Its pathologies include increases in medical errors and lower quality care as a return on expenses in spite of an abundance of means (Bar-Yam 2006). In spite of many ideas on how to change the system, the Farrell et al. (2008) shows that Americans pay $650 billion more on health than might be expected. The money leaks from the system due to some medical practices (visits to physicians, same-day hospital treatment, and emergency room care), purchase of pharmaceuticals, and cost of administration and insurance (Farrel et al. 2008). No wonder then that public health system is becoming a new research domain (Lenaway et al. 2006). The problem is how to organize the research in this field (Lenaway et al. 2006). One of the generally accepted solutions is the systemic approach to health care systems (Mlakar and Mulej 2007).

SYSTEMIC APPROACH Just a few years ago, Travis et al. (2004) complained about disinterest in the systemic approach to health care. At that time, constraints in health services were addressed in parallel. For instance, pharmaceuticals would be delivered regardless of what was happening in other areas (Travis et al. 2004). The authors enumerated a number of inefficiencies that are caused by using nonintegrated parallel systems and reasons why health policy and system research were neglected. We should remember that an applied systems approach was first associated with centrally controlled systems (Travis et al. 2004). Further works in this domain proved the usefulness of systems theory approach. Fahey et al. (2004) demonstrated the value of adopting a systems framework to understand the complexities of the health care system. Homer and Hirsch (2006) proposed the use of systems modeling to population’s health. Trochim et al. (2006) proposed concept mapping to identify key challenges to implementation of systems thinking and modeling in public health. Bar-Yam (2006), by means of systemic analysis, studied the flows of information, care, and information and finance in the national health care system and the loss of each, which is the cause of all evil in the structure of these flows. However, the more that systemic approaches are used, the more questions arise. In the following three sections we shall discuss how three such important issues were dealt with in the literature so far: the level of analysis, the main stakeholders, and the readiness of the systems for such a radical change. We agree with Churchman’s (1970, after Midgley 2006) statement that system boundaries and values are intimately linked and that, as a result, values determine the drawing of system boundaries. Because sets of values are not universal for all stakeholders, we should expect that alternative methodologies and approaches exist at the

National Health Care Systems Organization

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same time. Midgley (2006) advocated the coexistence and pluralism in methodologies and approaches.


THE LEVEL OF ANALYSIS Due to financial flow, the most elementary unit for systems analysis is the specific service or disease. It is present in international health initiatives (Travis et al. 2004). The same is true for other analyses (Porter and Teisberg 2004; Bar-Yam 2006). This assumption about the elementary unit influences further divisions and the conclusions drawn. For instance, Bar-Yam (2006) differentiates between large-scale tasks, with multiple individuals working as a coordinated unit or multiple individuals performing the same task (e.g., immunizations), and fine-scale tasks, which involve the attention of a number of individuals each performing a unique task (a doctor diagnosing and treating an individual patient). His conclusion was that prevention and health care are radically different tasks and that merging them into one system leads to ineffectiveness. This conclusion results from the first assumption about what is the elementary unit. Similarly, Porter and Teisberg (2004) claimed that the competition should take place not on the level of health plans, networks, and hospital groups but on the level of prevention, diagnosis, and treatment of individual health conditions or concurring conditions. Again, their cure for the health system is indebted in this first assumption about the elementary unit. Against common knowledge, but along with their assumptions, Teisberg et al. (1994) considered all payers, physicians, and patients as customers because each of the parties makes health care choices and influences cost and quality. The ‘‘individual health condition’’ is a subsystem, but it is not an autonomous subsystem and as such cannot be the basis for analysis. We shall write more about this in the next chapter. We should agree with Travis at al. (2004) that in this approach the locus of control of changes is placed outside the real decision maker. This theoretical conclusion is supported by Thomas E. Spicer, a physician from Rock Springs, Wyoming (1994), who in his argument with Teisberg and Porter (1994) said that what the health care system needs is individual decisions about value, not more competition. As was said before, a disease-practicerelated approach is evidently linked with the flow of finance, because it is usually the elementary unit for financing. If this assumption is taken for granted, the first real decision maker is placed on a high level—it is the public or private insurance organization. Insurers and government decide on the flow of finance (Bar-Yam 2006). The insurer is the provider and the employers, physicians, patients, nurses are all customers. It sounds strange, but this is true. This is the core reason why all health systems built on this finance flow architecture are ineffective.

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The alternative approach is to first lower the level and then view only autonomous systems. The lowest level with an autonomous system, the most frequently mentioned candidate is the patient (Spicer 1994; Travis et al. 2004). Spicer is explicit about this: ‘‘It may be a hard pill to swallow, but if we want a dynamic and responsive health care system in the United States, we must shift the responsibility for monitoring value back to customer’’ (p. 185). This conclusion is supported by Andersen’s (2005) analysis, which reveals that the best political strategy may be to leave control to the steered systems themselves. With this approach, besides the patient the other autonomous subsystems include the government, the insurers, the hospitals, the physicians, and the pharmaceutical companies; however, who is provider and who is the customer is a matter of further complexity and is explained in the next section.

THE MAIN PLAYERS—DEFINING CUSTOMERS AND PROVIDERS It is interesting how the two different assumptions discussed above influence the selection of subsystems to analyze. Fahey et al. (2004) considered health professionals the main focus of interest for the modeling effort. Bar-Yam (2006) enumerated such stakeholders as employers, insurers, doctors, and patients. We should emphasize the lack of hospitals as stakeholders because they have a rather passive role in the financial flow. The disease-practice perspective causes passing costs from one player to another (Porter and Teisberg 2004). It is an interesting omission if we remember that 10% of all American physicians are employed in hospitals; what is more, the tendency is to increase the number of physicians employed in community hospitals due to development of new (expensive) technologies of diagnosis and treatment and complexity of the insurance systems. Although Porter and Teisberg (2004) criticized the system-to-system competition in which physicians are forced to commit to one closed network or another, the association of physicians with an employer is already a fact. They are right that this limits competition at the level of diseases and treatments but it shifts the competition to the level of the patient, who is the decision maker, which paradoxically increases competition. Although it is not stressed in systems analysis, the patient as an autonomous system is not only a decision maker but is also a natural system, where health and all diseases are internally systematically intertwined. With the alienated courses of treatment of particular diseases, a patient suffering from psychosomatic problems calling on doctors of various specialties would never be cured, unless she started with a psychiatrist. From the patient’s point of view, the health is the main value, not a good treatment of a disease. Good treatment is the second best value when the first has not been achieved. The two values are organically linked within the same



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person. This is why Bar-Yam’s (2006) idea of separating the prevention from the disease treatment may be valid only if we reject the natural integrity of the human being; in other words, if we assume the financial and not medical perspective. I dare say that the medical perspective, which is consonant with the patient’s perspective, is a better perspective for the main relationships analysis in health care systems. Another argument of Bar-Yam (2006), to separate disease and prevention in separate institutions, concluded that it is not a good idea to use across-the-board (large-scale) rules to try to control a highly complex system that is making careful (highly complex) decisions. He also argued that curing processes differ and that different types of industries should be organized in different ways, but this does not mean that different industries cannot be organized under one responsibility structure. According to Obło´j et al. (2004), hospitals are corporations performing a portfolio of services in different processes. If they systematically processed patient information, they could easily prevent information outflow. It should be noted that all these tasks are related and as such cannot be treated separately. It is a different thing to produce motorcycles in a different system than to design fashion, but it is unmet to have separateness where design and production are related, so cars are designed within the same system where they are produced. The same is true about fashion. Though practically performed by specialized agents in their separate industries, radical competitiveness may be achieved in merging the two functions in one participative systems as it is done in Zara, a company that successfully competes with cheap Eastern clothes producers by shortening the information flow and design to shop time. Why should prevention and cure not be similar? To sum up, the structural equivalence of the complexity of the human being should be met with the comprehensive system of a provider of services, and it is not a single specialist but a hospital with a portfolio of health services including prevention. Insurers are simply a competitive force for hospitals. The money they earn will never reach the hospitals and generally they and not hospitals earn on health. For instance, less than 30% of the insurance paid by hospitals and doctors for malpractice goes to injured patients or their families (Porter and Teisberg 2004); the rest stays with other institutions. Insurance also increases costs of some services. The threat of malpractice suits creates opposing incentives for physicians to overtest, overtreat, and overrefer their patients (Porter and Teisberg 2004). In many cases, insurers are systemrelated competitors difficult to argue with, especially where they are state agencies. Our proposal, which will be explained in detail later, might be strategically called backward vertical integration, which occurs when a company takes over the activity of its supplier. According to Porter and Teisberg (2004, p. 75) ‘‘employers should lead the way’’ to the health service reform. But we should note that they are even

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further in the supply chain than insurers and their role has emerged as a consequence of insurance. The real payers in the health system are patients, not the companies they work for, because they earn the money that the company can later pay to the insurance company. If we agree with the systems equivalence assumption, the most important relationship in health service is the hospital–patient relationship. It should be the hospitals that lead the way in cooperation with physicians (employed and self-employed). Hospitals are not prepared for this role yet.


EMPOWERMENT OF HOSPITALS REQUIRES PATIENTS TO BECOME CONSUMERS The economic (financial), not medical, view of health service has its historical consequences. According to Herzlinger (2002), the health care industry has been shielded from consumer pressure by employers, insurers, and the government, which resulted in the explosion of costs even as choices have narrowed. Doctors are not prepared or educated for the business judgments they are expected to make (Bar-Yam 2006). Also, patients today have little choice about providers and treatments and are in no position to make informed decisions given the limited information available to them (Porter and Teisberg 2004). We could conclude that there is no market with hospitals as providers of health care and patients as customers. We might agree with Spicer (1994) that patients could make the best decisions if they were accurately informed about their choices and risks, yet available information about medical experiences and outcomes is largely word-of-mouth, even among physicians, and may be unsupported by evidence (Porter and Teisberg 2004). This is why information campaigns and education of patients, including, for example, medical literacy training, should be an important element of the system. Patients have to gain the identity of consumers. This may happen only if patients–consumers are given back the responsibility to make decisions about their care and a significant portion of costs associated with those decisions (Spicer 1994). In the next part of the article we are going to make a short introduction to Mazur’s (1966) autonomous systems theory. We should show the main characteristics of such systems. Equipped with this conceptual framework, we are going to make a review of national health care systems. We shall show what systemic role is played by the institutions described above. Finally, we shall propose a model of participative health care system and accordingly we shall show its systemic characteristics. In summary, we shall discuss some consequences of the presented overview and draw conclusions about what should be done from a systems theory point of view to make the changes in health care possible at all.


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AUTONOMOUS SYSTEMS THEORY To be able to comprehend the essence of the weaknesses of existing health care systems, we shall present an outline of the autonomous system theory of Mazur (1966). Let us introduce a few definitions.


A receptor is an organ that receives signals (stimuli) from the environment. An alimentator is an organ that receives energy from the environment. An effector is an organ that generates reactions of the system. An accumulator is an organ that stores and sometimes processes energy. A correlator is an organ that processes information. A homeostat is an organ that secures functional balance of the system. The simplest system, a so-called organized system, is equipped with receptors, alimentators, and effectors. Both stimuli and energy are supplied to the system by an outer organizer, which receives stimuli and energy from the environment and processes them. Alimentators and effectors constitute an energetic line, whereas receptors and effectors constitute an information line. The structure of an organized system is presented in Figure 1. The controllable system is a somewhat more complex system, which is supplied with an accumulator. The accumulator increases autonomy of the system as it liberates the system from necessity to supply energy on time. According to laws of physics, some energy has to be dispersed back to the environment. The rest of the energy, so-called dispositional energy, is used to evoke reactions in the effectors. The presence of an accumulator implies that the controllable system received energy not only from the organizer but also directly from the environment. The scheme of the system is shown in Figure 2.

FIGURE 1 Cybernetic scheme of an organized system.


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FIGURE 2 Cybernetic scheme of a controllable system.

A controllable system equipped with a correlator is a self-controllable system. In the self-controllable system, due to the existence of a correlator, the information received from the environment is processed and stored in order to be utilized later on. The presence of a correlator implies that the system receives stimuli not only through the organizer but also directly from the environment. In a self-controllable system, the organizer’s role is to keep the system in functional balance and to set the goals. The organizer also controls the system by means of the correlator; for instance, by introducing an algorithm to the correlator. The structure of the system is presented in Figure 3.

FIGURE 3 Cybernetic scheme of a self-controllable system.



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FIGURE 4 Cybernetic scheme of an autonomous system.

An autonomous system is a self-controllable system equipped with a homeostat. An autonomous system is an organizer for itself. It is both a controlling and controlled system. Its structure changes during acting. However, disorganization of the structure would prevent control. So the autonomous system cannot allow disorganization of its structure. The structure of the system is presented in Figure 4. The self-controlling ability is called functional balance. The tendency of the system to keep a functional balance is called homeostasis (Cannon 1932). Self-control of an autonomous system consists in keeping the state of the system in a state close to functional balance. There is a set of feedback loops aimed at keeping the functional balance in an autonomous system. As a result, an autonomous system counteracts factors that may lead to its disorganization or distraction. There are two ways to counteract the destructive factors. The first is prophylactics, consisting of preventing changes in the environment, which may cause disturbance of the functional balance of the system. The second is therapy, consisting in removing disturbances in case of their appearance. A homeostat is the organ responsible for keeping the functional balance of the system (Ashby 1956). A homeostat appears in two fundamental feedback loops in an autonomous system: in the feedback loop with the accumulator, which allows controlling the energetic line, and in the feedback loop with the correlator, which allows controlling the information line.

PARAMETERS OF HEALTH CARE SYSTEM EFFECTIVENESS So far the efficiency of health care systems is based on such parameters as the number of delivered services, the number of patient days in a hospital, etc.

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Paradoxically, the more patients in the society, the more effective the services in hospitals can show. It should be stressed that in order to measure efficiently the real goodness of the system new evaluating parameters should be introduced. They may be divided into the following groups: 1. Control parameters. This group of parameters is related to information processing and decision making. According to subsidiarity principle defined in Article 5 of the Treaty establishing the European Community, it is intended to ensure that decisions are taken as closely as possible to the citizen and that constant checks are made as to whether action at the community level is justified in light of the possibilities available at the national, regional, or local level. This principle requires that control of information flow is exactly measured. Otherwise, the principle has no practical consequences. We propose the following measures in this respect: managerial and financial competence of all employees of the hospital, simplicity of the health care processes, transparency of all information=availability of all information associated with the function of the system to all stakeholders (including patients, doctors, administration, and the general public), and participatory practices (Wojtyla 1979; Stocki et al. 2008). 2. Financial parameters. The financial parameters should be constructed in such a way that they reflect not only the costs in absolute numbers but their structure; in particular, the parameters should easily grasp any waste of resources. This may be achieved if a dynamic system of parameters is used depending on the external situation (Stack 1992, 2003; Stocki et al. 2008).The second feature of the parameters is related to their time perspective and scope. For instance, resources allocated for prophylactics or professional education should not be treated as a cost but as an investment. An example of this kind of approach is calculating the so-called Tobin’sQ, which shows the value of an asset on the basis of its replacement cost (Stewart 1997). This kind of treatment of financial effectiveness requires abandoning traditional accounting habits (Stewart 1997). 3. Patient empowerment parameters. In the traditional system the physician is paid for knowing the patient’s illness, whereas if we apply the subsidiary principle to the doctor–patient relationship, it is the patient who is the best expert on his illness. The doctor’s role is not to know but to be ignorant and ask questions to understand the illness and propose treatment based on this understanding. The understanding requires a holistic approach to the patient and his or her environment. The centralized financing deprives the patient of the responsibility for his or her treatment. It is the doctor or hospital who is responsible. The patient is a passive receiver of the service. If the patient is to choose the hospital to go to, he or she has to know more about the treatment and has to make


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the first step in reconstructing responsibility for the diagnosis and treatment. A patient’s understanding of his illness and conformity of the doctor’s and patient’s goals are examples of parameters that can easily be measured by appropriate questionnaires. 4. Medical care effectiveness parameters. This group of parameters is key because it shows the efficiency of health care in the long run. They should be measured not on the national level but on the population of patients of a given hospital. Only then can we show how the hospital shapes the patient’s health in the long run. The parameters should be benchmarked to other similar institutions and communities. The parameters may include (1) society’s general health parameters, (2) health services waiting time, (3) prophylactics, (4) real patients’ medical treatment costs, and (5) free market control mechanisms.

TAXONOMY OF NATIONAL HEALTH CARE SYSTEMS WITH THEIR SYSTEMIC CHARACTERISTICS Below we shall present primary systemic models of health care. It should be stressed that, in practice, each system is a mixture of the primary systems each with different significance and different proportion of total flow of patients and money.

Health Care Costs Fully Covered by Patients In this organizational health care system the patient pays directly for every medical service and receives it immediately. Figure 5 presents a scheme of

FIGURE 5 Scheme of privately financed health care.


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such a system. Medical care is treated as an ordinary good, which may be purchased or not depending on the needs and financial means at the patient’s disposal. This kind of system covered most of the national health care in most European countries in the 19th century. In this system the health care is limited to individuals who can afford the services, which is a crucial drawback of the system. For most citizens only the most elementary services are available. Possibilities to treat serious and=or chronic diseases are limited, more so because in such cases the patients have limited opportunities to earn money. From a systemic point of view, possibilities of curing patients are limited by the resources they managed to accumulate; that is, the content of their accumulators. In practice this means that most autonomic systems that lost the functioning ability (sick person) are sentenced to functional disability (permanent illness) or eliminated from society (death). As mentioned above, medical care covers only a small percentage of the society, and the health service is far from exhausting its potential—more patients could be cured in a more efficient way, but those who need treatment usually cannot afford it. From the point of view of Mazur’s (1966) theory, the autonomous system with an impaired energetic subsystem requires an extra portion of energy to return to the system homeostasis. In this model there is no possibility of inflow of additional energy to the system if we abstract from the assistance of the closest family. In this solution there are no mechanisms to implement systemic prevention policy. This causes the health condition of the whole society to be rather poor. This system has some advantages. First, there is no dissipation of financial resources. The patient pays directly to the physician without intermediaries. Second, the services are delivered immediately after payment. Third, market mechanisms of control are present: the patient selects the best doctor he can afford, and the doctor tries to be the best expert, because it attracts patients and increases progress of his practice. The fourth advantage of the system is its maximal flexibility. On the one hand, the patient may choose any doctor or may go to different doctors at the same time—the choice depends entirely on him; on the other hand, both physicians and hospitals functioning in a market environment try to cover the needs with their services. Furthermore, the effectiveness of the system is high because there exist only two types of participants and their goals are convergent: the patient pays for the treatment and the physician treats him for the payment. In case of veterinary services, advantages of the system outweigh its disadvantages. In the case of people, such a solution is unacceptable for ethical reasons. Human health must not be treated solely as a purchasable good. To sum up, the subjects of the health care systems are autonomous systems according to Mazur’s (1966) classification, which enables freedom and efficiency of functioning. Yet, from the patient’s point of view, the goals of the system are not optimal: the subsystems of the health care system are not interested in the patient’s health but in his being treated.


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Health Service Costs Covered by Insurance Companies In this system patients buy packets of health care services from insurance companies, which cover the treatment costs within the services covered by the insurance policy. The company may refund the treatment costs in two ways. Either it pays the hospital for the delivered service or pays the patient’s costs for treatment. So the money either goes to the patient (Figure 6, patient 2) or to the hospital (Figure 6, patients 1, 3, 4). This system is characteristic of the third sort of participant in the economic game—the insurance companies. Divergence of the goals of the insurance firms and the remaining two participants is the first and most important disadvantage of the system. The interest of the company is to get the highest price for their insurance and spend as little as possible on covering the treatment costs; the interest of the hospital and physicians is to secure the possibly high inflow of financial means to provide the health services. This weakness manifests, among other things, in many litigations that end up in court. The insurance companies are called to court for finding any pretext to refuse to cover the costs of treatment. On the other hand, it happens that hospitals get money out of the insurance companies for fictitious services. Oftentimes the conditions of insurance are formulated in an unclear way on purpose to make their interpretation difficult. Another drawback of the system is the delay in payments in the system. The division of the health care risk, as a feature of any insurance system, is the greatest advantage of the system. This is why a patient who otherwise could not afford treatment may be cured in this system. From the point of view of Mazur’s (1966) autonomous systems theory, there are three kinds

FIGURE 6 Scheme of an American model with insurance companies.


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of autonomous systems in health care: health care institutions, whose goal is to get money from insurance institutions; insurance institutions, whose goal is to get money and keep as much as possible for themselves; and patients, who want to be cured and to spend as little as possible on it. Insurance institutions are autonomous systems on the one hand; on the other hand, they play the role of additional accumulators of the whole complex system. This is the advantage of this system over the first model. The health services may be offered to a greater group of people than in Model 1. This is due to insurance mechanisms: the risk of serious disease is relatively low, as one suffers from it the treatment costs are high and they are divided into many members of the health insurance system. Apart from this, all three groups of the health care system: health care institutions, patients, and insurance institutions, are autonomous systems so they have full control. The additional dispersed external accumulators network in the system are filled with a minimal percentage of energy from each participant of the insurance system. In case of illness, the patient, who is an autonomous system, draws from common financial resources accumulated by the insurance company. The effectiveness of the system is based on the fact that frequency of serious and chronic diseases is relatively low, and the costs of treatment of common diseases are relatively low.

Health Funds (Krankenkassen)—The German Model Health funds are national institutions that play a role similar to insurance companies described above. On the one hand, health funds, as national institutions, have much greater financial resources for their disposal than private insurance companies, which, theoretically, enables financing health care on a much broader scope. On the other hand, however, as state institutions they are burdened with a huge and costly bureaucratic apparatus and are often entangled in political games. As a practical monopolist in financing health care services, health funds in cooperation with the government arbitrarily set refunding policy including the prices of their services. And as a national institutions they enjoy immunity and justify their ineffectiveness by the lack of funds from the government. Any pathologies are justified by political and economic situations. They also often create strong lobbying groups, which, under cover of public interest and patient well-being, realize their own interests. These drawbacks are not sufficiently weakened by limited possibility to choose the health fund by the patient. From the point of view of Mazur’s (1966) theory, the system comprises an external accumulators network, in which a single accumulator is much larger than in the American model, but with much higher energy dissipation, caused by high bureaucratic burden. Self-control of the subsystems in this model is limited. Neither health care institutions nor health funds are autonomous systems.


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National Health Care System (Polish Model) This is the least efficient of all the models because the nature of the system causes information loss and is difficult to localize and estimate waste of energy. The system is centrally planned and controlled. As a result, the expenses planned for particular services are distant from reality. They are highly underestimated, which forces hospitals to deny execution of services in the last quarter of the year, aware that the national fund will not cover the costs. As a result, hospitals do not utilize their potential, and patients wait for diagnosis and treatment and costly medical equipment is not used. The regulations of refunding the costs of medicine are set arbitrarily, which naturally causes pharmaceutical companies to lobby for their products. Low salaries of physicians and nurses and high salaries of the system officers are the next feature of the system. In Poland this causes mass outflow of medical professionals abroad. To sum up, the citizens are forced to pay taxes (so-called national health insurance) for national health care, which does not provide sufficient medical care and, in many cases, in particular those requiring specialist interventions, patients have to cover some of the costs from their private pocket as in the first model. According to Mazur’s (1966) classification, the subjects of the health care system create an organized system with the state as the organizer. The state delivers energy in the form of money, takes care of the functionality of the system through development and modernizing the health care, and processes information; for example, by predicting the demand for health services and by organizing medical education.

Participative Health Care System (Proposal) In this part of the article we introduce the model of the health care system in which information processing is robust and energy dissipation minimal. The main feature of this system is the internal accumulation of information and energy and such an organization of health care, including information processing, which enables operation of market mechanism in the health care functioning. The subjects of health care are autonomous systems. In the proposed model the hospital is the primary functional unit of the health care system. This means that any community health center is a part of a concrete hospital. Each hospital has a bank account for collecting the insured citizens’ money: its accumulator. Financial resources transferred so far from the citizen to the state budget would be transferred directly to the hospital selected by the patient; see Figure 7. Each hospital announces services offered from the minimal insurance amount and services offered for extra insurance or pay. The hospital would also be responsible for refunding medicines and defining its policy in this respect. If a patient needed a service unavailable in a hospital, the hospital would buy the service from another

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FIGURE 7 Scheme of a participative model without insurance companies.

(i.e., specialized) hospital. The patient has full freedom in choosing the hospital and makes the decision on the basis of the hospital announcements. A dissatisfied patient has the right to change the hospital and transfer the money to a different hospital. Each hospital would have the freedom to start subsidiaries such as other hospitals or community health centers any place in the country. The hospitals are independent and any subsidy by the government should be forbidden. An inefficient hospital goes bankrupt and its property is bought by other hospitals. Hospitals have full freedom of management and employment strategies. The hospital has no means to impose pressure on the patient. It cannot keep the patient if he wants to be under the care of another hospital. It cannot refuse insuring a patient if he has chosen a given hospital. The money transfer requires two additional changes in the function of the existing institutions: internal revenue and banks. Internal revenue would control whether a citizen paid the insurance in the amount required in the given country, and the banks would have to provide a service in which the amount paid to the hospital account by a citizen would be confidential and only the fact of payment would be visible. We do not want to indulge in the question of what the tax (insurance) system should be like. This is a separate question. We assume that the total sum of money in the system is the same as now and only want to show how this sum can be utilized. Confidentiality is necessary to make sure that all citizens are treated equally. The payment would be realized after calculating the monthly income. In the declaration, everyone would declare the name of the hospital and would transfer the money to a special bank account of the hospital, described above. The hospital knows the total amount of money at its disposal. This model has the following characteristics. The resources are not wasted by intermediaries; the only intermediary is the bank where the hospital has the special confidential bank account. The hospitals would have the right to select a bank. Any solutions leading to creation of one central bank to provide services to hospitals would be a mistake, because they would lead to monopoly of one bank and increase of its services. It would also be easy to politicize such an institution and influence hospitals through



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it. The market mechanisms are in operation. Good hospitals have more patients, so they start new subsidiaries and community health centers, and inefficient hospitals are eliminated. The system works in such a way that bankruptcy of one hospital does not harm its patients, because they are free to choose another hospital that cannot refuse any patients. The hospital’s benefit is the same as the patient’s: the less they are ill, the better. It is in the interest of the hospital to have clients who pay and are healthy. In this way, to simplify it, the hospital has resources and not much work. This is why the hospital will be interested in investing in much cheaper prevention. The hospital will be interested in raising the doctors’ qualifications because numerous good doctors will be a competitive advantage in the quest for patients. Such a decentralized health service makes government an outside stakeholder. It may only react with some regulations to pathologies that may appear in the system. The system also awakens the innovativeness of all stakeholders because their interests are easily visible. The hospital may choose standards, procedures, innovations, and equipment. Hospitals will be encouraged to innovate to attract more patients. The proposed solution involves a mechanism of sharing risk similar to insurance systems. A hospital is proposed as a primary unit; a small health center would be too weak to collect sufficient funds. If hospitals were too small, they would naturally cluster into larger entities to reach the optimal size. Self-regulation processes would be very strong and have a positive impact on such a system. The main problem would be associated with the implementation of such a system. First of all, all stakeholders have to see and understand their future interest in the new system. Individual responsibility will certainly increase the efficiency of the system. The system should be tested on a small scale in one region and introduced on a larger scale only after correcting all weaknesses.

SUMMARY As was shown in the Introduction, the challenges of health care functioning require a systems approach. Yet systems modeling is neither equivocal nor simple and certainly is not a cure in and of itself. Many systems have functionalized their pathologies so they are very difficult to recognize and even more difficult to cure. Out review of writings about health care systems shows that this may be the case in health care systems when the elementary unit is a disease and not a healthy person. This pathological approach has entered the world of health care systems through the economics of health care. In this case economics has played the role of postulating the nature of processes, which turned out false. To be able to overcome those difficulties, on the one hand we should select the most appropriate systems theory for modeling; on the other hand, we must be aware of the assumptions

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we make about the nature of the systems we try to model. For the present analysis we have chosen Mazur’s (1966) autonomous systems theory as the best model to make competitiveness in health care modeling possible. We have shown that only autonomous systems are capable of competing in the market because the very essence of free market competition is free choice. Only autonomous systems are free to choose. This choice of modeling system agrees with the anthropology of the person. It should rather be the acting person (Wojtyła, 1979) than Homo oeconomicus. Those two choices and viewing the health care systems from their point of view lead us to the participative health care system with the patient as the core customer and the hospital as the core provider of services, with the passive bank playing the role of the insurance company.

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