A Circular Healthcare Economy

The first time I heard the phrase “circular economy” was on a Freakonomics episode about the very topic. Maybe you’ve picked up on this new, multi-layered economic approach circulating in the news lately. Put simply, a circular economy is a systemic economic development designed to benefit businesses, societies, our health, and the environment. As the Ellen Macarthur foundation elegantly asserts, “an economy that is restorative and regenerative by design.” It’s no secret that our current trajectory of materials production and waste management is depleting nourishment from the ground we stand on.

But, isn't that what recycling is for? Well, recycling is arguably considered an outdated solution and there’s evidence that recycling behavior is often inappropriately executed, adding to the “not great for the environment” narrative. John Oliver spent an entire episode on his show opining on how plastics recycling is a broken system.

A huge step in decoupling growth from the linear consumption model was taken in March 2020 when the European Commission adopted the “circular economy action plan” as one of the key pillars of Europe’s ambitious goal towards climate neutrality by 2050 (also referred to as the European Green Deal). 

So, what does a circular economy have to do with healthcare?

Besides the obvious corporate social responsibility (CSR) discourse, the age of digital transformation has spawned an interconnected web of data analytics and robust HIT infrastructures promoting a population health ecosystem. This transformation has major implications for consumer engagement, accountability for outcomes, clinical insights, organizational culture, health policy, health equity, and payment reform – a crockpot of the modern healthcare economy.

Personally, over the last 3 years, I have invested a good chunk of my energy in exploring the vital role of leadership in sponsoring a workforce development strategy that aligns with and supports population health competency. And, I still scratch my head pondering how is it that nearly a decade after the passage of the ACA we are still debating reducing costs while bolstering quality healthcare. What are the key drivers of this diagram?

Naturally, the national landscape has shifted to focus on preventing people from ending up in the emergency department and incentivizing practitioners for value rather than volume of services. According to the Robert Wood Johnson Foundation, access to healthcare services and the quality of that care account for 20% of the health of a population. The remaining 80% is explained by social factors, including socioeconomic (safety, housing, and transportation insecurity), and behavioral factors (diet, exercise, smoking, and drug or alcohol use).

There are lots of arguments out there that current investments are too heavily allocated to technology and healthcare services and not enough resources address the social, economic, and environmental conditions that determine health and wellbeing.

Apropos this rebalance, we must begin with the identification of roles that are critical to achieving outcomes defined by the population health strategy. Enter circular economy.

Figure 3. Circular Healthcare Economy Design. Author: Calvin Parshad.

The two most common words I’ve heard to describe healthcare are ‘fragmented’ and ‘siloed’, just like the plastics industry. However, with the advent of technology, our interconnectedness is even more apparent. Technology and healthcare organizations need to work together rather than "disrupt" from a short-sided market perspective. Identifying digital transformation leaders and SMEs that can be liaisons and the bridge to change between clinical, community, and technology networks will place quality at the center of the entire paradigm shift. Here is how that shift can play out:

1. Digital transformation as a foundational infrastructure to identify and risk stratify populations, integrate clinical decision support, offer evidence-based advisories, shore up gaps in care, and intervene sooner with prevention strategies. 

2. Integrate the whole person into the equation of value. Understand the genealogy, culture, and dynamics of the family; advise and inform community resources to be a part of the individual’s treatment plan. Be culturally competent.

3. Execute front door solutions to offer better, more convenient access to care; triage and assess within a frame that secures physical AND psychological safety.

4. Leverage the continuum of health data to paint an accurate picture of the individual.

5. AGGREGATE, LEARN, AND REFINE best practices; invest in broad awareness, accessibility, and training of your staff.

6. Repeat.

Our healthcare economy is shared and we are all accountable for the bundle of complex challenges our patients and providers face. If we desire to be truly transformative we have to go BIG.