Managing the Health Commons – Nobel Prize Winner Studies Health
The greatest challenge facing healthcare in America is how we use our limited resources to achieve better health and better care at a lower cost. Elinor Ostrom won the 2009 Nobel Prize in Economics for a theory that could help us reach this goal. That’s why the Fannie E. Rippel Foundation has initiated a new 18-month action-research project with the Nobel Laureate and her Workshop in Political Theory and Policy Analysis at Indiana University. They will focus on economic governance, especially the “commons.” The project will be led by Professor Ostrom, PhD, Research Advisor, and Michael McGinnis, PhD, Principal Investigator.
Professor Ostrom was awarded the Nobel Prize in Economics for her research on “economic governance, especially the commons.” Established economic theory predicts that users of common resources are doomed to suffer a “tragedy of the commons” – the total collapse of a sustainable system due to overuse. Yet by looking at examples of common pool resources such as forests, fisheries, oil fields, grazing lands, and irrigation systems around the world, Professor Ostrom concludes that conditions found in many real-world communities make it possible for them to work together and avoid a tragic fate. Specifically, users of a common pool resource can manage that resource in a sustainable manner when that group both builds trust and is allowed sufficient autonomy to devise and enforce its own rules. Professor Ostrom’s work offers an alternative to the often-accepted options that point to either government or the market as the only means of controlling resource utilization.
The Rippel Foundation-funded study will apply methods of institutional analysis, as developed by Vincent and Elinor Ostrom and their many colleagues and collaborators, to the common resource pools most critically involved in the health system. The hope is that this analysis can help Americans become healthier while paying lower, and more sustainable, costs for high-quality healthcare.
The project will include in-depth studies of four diverse regions, notably Cedar Rapids, Iowa, Grand Junction, Colorado and Bloomington and Bedford, Indiana. Each of these communities has differing experiences with collaborative models of governance, many of which have been focused on health. In cases where sustained collaborative management practices have been in place, the result seems to be higher-than-average quality healthcare at substantially lower-than-average costs. Among the project’s outcomes will be insights into new economic models, as well as surveys, assessments, and other measurement instruments that can be used in regions across the country.
In Governing the Commons (1990) and many other publications, Professor Ostrom demonstrates how local communities develop and sustain habits of collaboration that enable them to effectively manage resources critical to their own survival. She identifies eight principles of design that are common to examples of long-lasting, sustainable resource management.
The project team has tentatively identified three resource pools (or stocks of capital) as being especially critical in the study of health policy: human capital of physicians and other healthcare professionals; physical capital of healthcare facilities, and economic capital available for the diverse activities included in healthcare delivery.
Each of these resource pools exhibits a unique combination of (1) resource units that are extracted and used for various purposes, (2) groups of appropriators who are engaged in processes of extraction and utilization, (3) processes of replenishment and maintenance of relevant infrastructures, (4) managers who determine rules regarding access and distribution of rights, and (5) those who monitor the behavior of all relevant actors and determine whether sanctions should be applied to rule violators. The health commons connects these three resource pools in complex ways.
For each of these resource pools in the four test communities, the project team will identify key stakeholders and determine what types of behavior are related to each of the design principles described above. They will then locate patterns of commons management within the broader governance of this industry as well as critical linkages between public, private, and nonprofit organizations engaged in the production, distribution, and financing of the key public and private goods associated with healthcare. In short, they will be mapping the networks of polycentric governance in those communities.
Preliminary work on the project has already begun. The research will be collaborative, with direct participation by several healthcare professionals in each of the study communities, as well as the involvement of a cross-sector advisory board of national leaders in business, health, research, medicine, insurance, medical academia, leadership development and systems design. Among the products anticipated from this research:
- Practical tools for self-evaluation that healthcare leaders can administer in their own communities to identify both the status of and areas of potential improvement in cross-sector coordination.
- A paper that summarizes the lessons learned from this research project and suggested ways to foster collaboration and monitor changes over time to ensure that they continue to have the desired impact on healthcare outcomes.
- Long-lasting partnerships between Workshop researchers and health professionals to encourage the effective and sustainable redesign of health promotion and healthcare activities.
Source: Fannie E. Rippel Foundation
Read Professor Ostrom’s Nobel Prize lecture here:
Beyond Markets and States: Polycentric Governance of Complex Economic Systems
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