“Managing the Commons” versus “Tragedy of the Commons”
M A N A G E R E S O U R C E S
INTRODUCTION
“We cannot solve problems
by using the same kind of thinking we used
when we created them.”
Albert Einstein (1879 – 1955) *
“Do not go where the path may lead,
go instead where there is no path and leave a trail.”
Ralph Waldo Emerson (1803 – 1882)
No doubt, these are two remarkable statements, one by a Nobel Prize winner in Physics and the other by a romantic poet. They represent two alternate but complementary solutions to paradigm paralysis. Without a change in our thinking very soon, many citizens with Complex Healthcare Needs will encounter worsening inequities affecting the availability of health care for their Basic Healthcare Needs. This will arise from a doubling of the population over the age of 64 between 2000 and 2030. This group already accounts for more than 30% of health spending by our nation. A new “kind of thinking” on a new “trail” will be necessary for healthcare reform. The views of Albert Einstein and Ralph Waldo Emerson should be a strong reminder that tinkering and dithering with the details of a largely paralyzed paradigm are not likely to promote a significant improvement in its performance. Given this view, a national catastrophe is looming ahead from the dominating level of our nation’s Federal deficit aggravated especially by the level of health spending for our nation’s healthcare.
As the Medicare-eligible population dramatically increases, there is likely to be a substantial increase in the financial demands encountered by hospitals. These financial demands may force a small but significant number of large hospital systems to eventually encounter unmanageable operating challenges. It would be unfortunate if the federal government reacted by offering emergency financing to several large metropolitan hospitals because they could no longer borrow money for their cash flow needs. The subsequent events could be devastating. We need a solution to this “huge social dilemma” before the next recession.
Ultimately, the NATIONAL HEALTH Initiative could be most successful to the extent that it fosters a comprehensive paradigm shift within our healthcare industry. The Knowledge already exists that is required to efficiently offer high-quality health care for both the Basic as well as the Complex Healthcare Needs of each citizen. A well-defined and precisely implemented paradigm revision would realign the health spending portion of our national economy to a level that preserves our nation’s autonomy within the worldwide community. The Design Principles for managing a common-pool resource already exist.
“MANAGING THE COMMONS”
Another Nobel Prize winner, Professor Elinor Ostrom, devoted her entire academic career to the study of institutions that have successfully managed a finite resource to remain accessible by a group of persons who function with norms of trust, cooperation and reciprocity to prevent depletion of the resource, as in the portion of our nation’s economy that is devoted to annual health spending. Our nation’s healthcare industry has encountered a “Tragedy of the Commons” (30) since its cost is no longer sustainable by our nation’s economy. I have slowly begun to appreciate the concepts formulated by Professor Ostrom as my understanding of her research has grown. To begin, the emphasis on decentralized governance and on monitoring have become two central themes. As the details for the proposed tasks of NATIONAL HEALTH achieve greater precision, their formulation should reflect the precepts related to the research of Professor Ostrom and her many colleagues. Our nation’s future autonomy within the worldwide marketplace arenas for its Resources as well as for its Knowledge and Human Dignity will depend on it.
CONGRESSIONAL CHARTER PROVISIONS FOR THIS GLOBAL TASK
I. SEMI-AUTONOMOUS INSTITUTION
A. The Federal treasury shall annually pay NATIONAL HEALTH in October for its operational status during the ensuing fiscal year with an amount determined by a Base Rate multiplied by the current National population. The Base Rate shall be annually adjusted for inflation and periodically be adjusted by Congress to reflect:
1. any responsibilities transferred to or away from NATIONAL HEALTH by Congression and an annual adjustment of the Base Rate according to the annual cost-of-living change as determined in the previous calendar year by the Treasury Department;
[ COMMENT: The Base Rate was initially identified on this Blog in 2013 with an annually-compounded, inflation-adjusted rate of $1.00 per citizen. With a 2.5% annually compounded adjustment, the Base Rate would be $1.28 in 2023. ]
2. the annual National Population shall be determined by the Census Bureau;
3. the Federal payment along with any privately arranged donations for a specific supplemental study project shall pay for the affairs of the Board of Trustees, the Regional Councils and the District Coalitions; and
[ COMMENT: The fiscal year for NATIONAL HEALTH would follow the Federal Government, unless otherwise defined by Congress. It may be appropriate to define an operating unit within the Executive Branch that is managed at the prospective Home Office of NATIONAL HEALTH in Saint Louis, Mo. for 6 months prior to the initial MEETING of the Board of Trustees. This would prepare NATIONAL HEALTH to start with a “head-wind” in place. ]
4. the Community HEALTH Forums shall be locally supported and only receive technical support and training from their respective District Council.
[ COMMENT: A Sub-Page of the GOALS Page defines a proposal for an initial Strategic Projects Plan for NATIONAL HEALTH. It also describes a preliminary budgetary allocation. ]
B. Accrual accounting standards with Fund Accounting supplementary reports shall be the basis for all financial accountabilities required by the Congressional Charter.
1. Supplemental fund accounting may occur in the event that a funding source grants financial support for a time-defined purpose to enhance the Congressional Charter of NATIONAL HEALTH.
2. The use of any financial resources under the control of NATIONAL HEALTH for the financial support of any health care offered to a person is strictly prohibited. Any financial agreement that arranges for an employment benefit of health insurance for an Associate of NATIONAL HEALTH shall not be considered as a payment for health care under this provision. AND
3. The Board of Trustees shall establish and periodically review an OPERATIONAL STATEMENT for the choice of an independent accountant for the annual audit of its financial affairs in addition to any Federal oversight.
C. The Board of Trustees shall establish a “rainy-day fund.” This fund shall be limited to an amount equal to no more than 4 months of total standard operating expenses. This fund would be used for any termination ordered by Congress or other unforeseen circumstances as determined by the Board of Trustees. To further protect this fund, the Board of Trustees shall maintain and annually review an OPERATIONAL STATEMENT for a Comprehensive Risk Management Plan by NATIONAL HEALTH.
D. The Board of Trustees shall commission every 5 years an independent evaluation of the most recent annual report of the National Health Expenditure Accounts Team, Office of the Actuary, Centers for Medicare and Medicaid Services located in Baltimore, Maryland.
E. The Board of Directors shall consider from time to time establishing a continuing retainer, consulting connection with a law firm for use primarily under certain limited circumstances for the sudden importance of a preliminary advisory legal opinion.
[ COMMENT: The availability of a consultation from a firm with knowledge of NATIONAL HEALTH’s obligations and responsibilities may be an important resource under certain unexpected circumstances. The traditions of a Federally Chartered, semi-autonomous institution may be associated with certain legal traditions that would supervene this TASK. ]
II. DECENTRALIZED GOVERNANCE
A. The Board of Trustees shall retain the core responsibilities of NATIONAL HEALTH at its Home Office. The remainder of the responsibilities for the affairs of NATIONAL HEALTH shall be allocated to the Home Offices of the nine Regional Councils. These responsibilities shall be distributed based on staffing skills and the availability of local expertise. The Board of Trustees shall define and periodically consider a redistribution of these responsibilities based on an OPERATIONAL STATEMENT that both the Board of Trustees and the Regional Councils review and revise at least every three years.
[ COMMENT: A preliminary Task list of the corporate level, institutional responsibilities may be found on the initial GOVERNANCE Sub-Page of the OVERVIEW Page. The list is reported below:
1. Home office: Operational Statements, Governmental Liaison, Unified HEALTH Glossary, Annual report
2. Regional Council TBA: Finance, Information System, External Audits
3. Regional Council TBA: Human Resources, Internal Training, Crisis Intervention Team
4. Regional Council TBA: HEALTH SECURITY Certification development
5. Regional Council TBA: PRIMARY HEALTHCARE BENEFITS PLAN development
6. Regional Council TBA: PRIMARY PHYSICIAN EDUCATION PLAN advisory process
7. Regional Council TBA: Security, Risk Management, Internal Audits
8. Regional Council TBA: Planning, Grants management, Internal Research
9. Regional Council TBA: Public Relations, Complaint Triage, Non-covered Benefits Definitions
10. Regional Council TBA: “Community HEALTH Forum” development
The list is not intended to be implemented in this array of functions over any specified period of time. There are certain governance components that are probably improved by their mutual proximity. The unique availability of certain functions at a certain location may drive this process. ]
B. The Board of Trustees will maintain and periodically review an OPERATIONAL STATEMENT for the quarterly reporting of a Balance Sheet, Income Statement, and Cash Flow Statement for Board of Directors and the Income Statements for the separate Regional Councils and their District Coalitions.
[ COMMENT: The Community Health Forums are economically supported by their own community. Along with technical and consulting support, it is possible that supplementary funding from NATIONAL HEALTH would be appropriate temporarily under certain circumstances. ]
( * ) WIKIPEDIA labels the opening quotation from Albert Einstein as weakly attributable. On 1-12-17, I visited WIKIPEDIA at Albert Einstein Quotes. A similar and verified quotation from Tony Robbins applies, less the Nobel Prize connection: “If you do what you’ve always done, you’ll get what you’ve always gotten.”