An Economics Lesson: Local Solutions

Because I now have less time to read things that don't look like textbooks and lecture notes, I've become a frequent podcast listener. Some of my favorite podcasts are This American Life, NPR's Fresh Air, IHI's podcast, and The 10th Wonder. I have about an eight minute walk to class, so a week of walking takes me through about two hour long podcasts!

After listening to two phenomenal This American Life podcasts coproduced by NPR's Planet Money team about the rising cost of health care, I've started listening to NPR's Planet Money podcast. One of the most recent NPR Planet Money podcasts is a short interview with Elinor Ostrom, the first woman to win the Nobel Prize for economics. The podcast describes her Nobel Prize winning work: qualifying the concept of The Tragedy of the Commons.

The Tragedy of the Commons is a famous economics dilemma about shared or common resources published in Science in 1968 by Garrett Hardin. The dilemma looks like this: a large group of people, hypothetically farmers, share a common resource, a pasture. No one owns the resource and each individual farmer, acting on self-interest, will use as much of the shared resource as possible. This leads to overuse and the ultimate destruction of the limited pasture. The tragedy of the situation is that everyone loses and everyone is stuck in this unfortunate situation. Any solutions to the problem must come from an outside source: government intervention or transforming the resource from a shared one to divided private ownership. Health care can also be seen as a Tragedy of the Commons situation.

Elinor Ostrom's work qualifies Hardin's original theory. In studying farmers in the Swiss Alps, she has found communities that have been able to maintain common properties for centuries by choice. Ostrom identified groups that used these shared resources as a community. In this example, the farmers share a common meadows pasture. The environmental driver for this shared resources model is that the meadows are "patchy." Unpredictably, some parts of the meadows would be lush and perfect for grazing, and at other times, those same parts would be covered with snow. Thus, it is in everyone's best interest to share the pasture. Over time, the community of farmers organized rules and regulations on their own...a local solution to a local problem, to regulate overgrazing and maintenance of the commons. These "rules" then became part of the local culture.

Here's where the "IHI bells" began to ring in my head! Reforming or transforming health care probably operates on the same principle. At the How Do They Do That? Low Cost, High Quality Health Care in America meeting in July of this past year, one of the big take home messages that I learned was that the solutions for low cost and high quality care were local, home-grown solutions. What worked in Temple, TX was the opposite of what worked in Sacramento. And Cedar Rapids was a bit of a hybrid of Temple and Sacramento. Operating under the guidelines of critical self-evaluation of their cost and health care outcomes, each hospital referral region (HRR), developed their own solutions. And over time, these practices became part of the local culture-- "that's just how they do things."

Ostrom believes that humans are complex: we do operate on principles of self-interest, but we are also able to act for the good of the group. The solutions to our common problems don't need to be imposed upon by an outside third party, they need to come from the community experiencing the collective problem. Perhaps the role of the third party would be to facilitate community problem solving by sharing success stories and making it easier for us to learn from each other.

As I work on the Check a Box. Save a Life. initiative, I see the need to emphasize that every group of health professions students hoping to promote, implement, and analyze safe surgical practices will be faced with their own unique set of challenges. How each group of students will get involved will be a local solution. But, I do hope everyone will share their experiences. We'll take a note from Ostrom's Nobel Prize winning economics work by following the examples of positive deviants and making local adaptations to our common problem.