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.

John Halamka, MD, blogs regularly at Life as a Healthcare CIO.