As the COVID-19 outbreak widens, hospitals across the country are being stretched to their limits. They scramble to increase capacity to handle the surge of infections, while hunting for protective gear and medical equipment.

The novel coronavirus has laid bare some of the shortcomings of the U.S. health care system. “The system is overtaxed now,” says Darden Professor Dennie Kim, “but even before the pandemic, patients weren’t getting the best care. We have pockets with world-class hospitals, but at the same time the system as a whole fails to meet the needs of many patients.”

During the height of the crisis, physicians, nurses and other health care workers are limited as to what they can do, despite their best efforts, argues Kim. “That’s because they are working within the confines of a fragmented system that is not designed to deliver the collective response that a pandemic requires.”

Kim, whose research explores the design and performance of organizational networks, with particular focus on the U.S. health care delivery and reform, shares his insights on the failings of the U.S. health care system and explains why a multidisciplinary approach is needed to improve it.

High Costs and Poor Outcomes

The United States spends more on health care than any other country — close to 17 percent of GDP.1 Despite that, health care quality and outcomes are nothing but disappointing. According to the Organization for Economic Cooperation and Development (OECD), the U.S. has the lowest life expectancy and highest suicide rates among wealthy nations. It also has the highest chronic disease burden and an obesity rate that is twice as high as the OECD average.2

“To put it differently,” says Kim, “our health care system fails to translate rising costs into better health outcomes for patients. In most industries, this would be a perfect scenario for competition and innovation, but in the health care industry that has just not been the case.”

“Our health care delivery is fragmented. We have various autonomous health care systems and organizations that think of themselves as silos.” Professor Dennie Kim

Efforts to make health care more efficient and cost-effective are decades’ long. However, it’s not easy to improve an extremely complex system that wasn’t well-designed in the first place, according to Kim. “Our health care delivery is fragmented, “says Kim. “We have various autonomous health care systems and organizations that think of themselves as silos. And there’s no organizational or systems-level infrastructure in place in which there is a more fluid transfer of knowledge, patients and crucial supplies between hospitals.”

That fragmentation is what, among other things, exacerbates the current crisis. Take, for example, Kim’s close friend, a physician working in California who volunteered at a hospital in New York City, where infections were peaking. “From a systems perspective,” says Kim, “my friend’s brave act is a logical response — shift capacity to where it is most needed. Unfortunately, in a fragmented system, such an act requires private citizens and organizations to voluntarily bear the associated costs and risks. This is not a sustainable model.”

A Multidisciplinary Approach to a Complex Problem

Solving a complex problem of a fragmented system calls for a multidisciplinary approach at the intersection of medicine and management, argues Kim. Joining forces with Professors Russell Funk and Aks Zaheer, at the University of Minnesota’s Carlson School of Management, and John Hollingsworth, at the University of Michigan Medical School, Kim is interested in applying networks perspective to this challenge. “My research explores how independent organizations collaborate to achieve collective goals,” he says. “I use big data that captures millions of interactions among U.S. health care providers, and I apply network analysis to examine efforts to reduce health care costs while improving patient outcomes.”

Recently, Kim has been studying efforts by Medicare, the government health plan for the elderly and disabled, to increase integration and coordination among health care providers through the creation of Accountable Care Organizations (ACOs). Medicare ACOs, which were launched in 2012, are formal associations of autonomous health care providers such as hospitals, physician groups, clinics and private practices, that establish a contract with the government to improve the value of health care for a specific population of patients.

“In a sense,” says Kim, “ACOs are a type of network intervention through which different incentive structures, such as payment mechanisms and performance metrics, are used to promote better collaboration across organizational boundaries.”

One of Kim’s research findings is that policy-driven interventions, such as ACOs, are not enough to address the underlying issue of fragmentation. To improve the health care system, he says, “Work must be done at a local level. Health care organizations should work together within their communities to put patients’ long-term outcomes ahead of the success of any individual hospital and clinic.” 

Lessons From the Pandemic

Once the worst of the outbreak is behind us, will there be any changes in the U.S. health care system? Kim entertains one possibility.

During the current national health crisis, many front-line health care workers — like Kim’s friend from California — may be crossing organizational boundaries in unprecedented ways, helping where they are most needed in their communities. “This is one of those shocks to the system,” says Kim, “that offers people and organizations opportunities to build stronger relationships with one another, in which case, after the crisis subsides, we may have something to build upon.”   

The more likely scenario, however, is that the fragmentation and disparities that exist in the U.S. health care system will persist. “It could be,” says Kim, “that some of those random connections that are being made won’t be enough to ameliorate the existing structural problems within our communities, where organizations within a given health care system operate as silos.”

Kim hopes that multidisciplinary research that focuses on ACOs will help change that. “By trying to understand various mechanisms through which we can improve the performance of networks,” says Kim, “we can learn how to reconfigure collaboration across organizational boundaries and design better networks so that we can maximize the potential of our excellent clinicians, hospitals and medical infrastructure in serving their communities.”

This article was developed with the support of Darden’s Batten Institute for Entrepreneurship and Innovation, at which Gosia Glinska is associate director of research impact.

 

  • 1. OECD (2019), Health at a Glance 2019: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/4dd50c09-en. (Accessed 16 April, 2020).
  • 2. Ibid.
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About the Expert

Dennie Kim

Assistant Professor of Business Administration

Dennie Kim is an Assistant Professor of Business Administration in the Strategy, Ethics, and Entrepreneurship area at Darden. His research examines the design and performance of whole organizational networks, with particular interest in U.S. health care delivery and reform. Current work examines the networks of Medicare Accountable Care Organizations and surgical procedures, as well as the emergence of retail health clinics in the U.S.

He earned his Ph.D. in business administration from the University of Minnesota and A.B. in biology from Harvard University. Prior to joining academia, he worked for several years as a strategy consultant in the biopharmaceutical industry and project manager in hospital administration.

B.A., Harvard University; Ph.D., University of Minnesota Carlson School of Management

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