Panarchy, the collapse of the Canadian health care system, and physician leadership

Johny Van Aerde, MD, PhD



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The structured part of the Canadian health care system — hospital and medical services — has probably reached maturity and is on a cycle toward collapse. However, the “creative destruction” that is part of the panarchy model may lead to transformation of the system, with survival of some components and the disappearance of others. Are we, as physicians and leaders, prepared to take on the challenges that will accompany the collapse of the system as we know it?


“Panarchy is the structure in which systems, including those of nature (e.g., forests) and of humans (e.g., capitalism), as well as combined human-natural systems... [e.g., the health care system], are interlinked in continual adaptive cycles of growth, accumulation, restructuring, and renewal.”1


If Canada’s health care system is indeed complex and adaptive,2 it will evolve according to the panarchy renewal cycle, first described for natural ecosystems.3 The evolution and sustainability of complex adaptive systems include the natural and necessary processes of destruction and renewal. The panarchy model helps leaders think about what they need to stop doing as part of the destruction phase to facilitate renewal of their work in health care. The evolutionary renewal cycle of the health care system and what we, as physician leaders, can learn from understanding this ecocycle are the focus of this paper. Top


System boundaries


A system is complex when there are a large number of relations and connections between the interdependent agents that make up the system.2 It is adaptive when, in response to internal pressures and external events, it has the capacity to change, the ability to learn from the experience, and to self-organize.2 Top


To define these adaptive elements and processes, and to determine whether influences are internal or external, we need to define the boundaries of the system of interest. However, in health care, those boundaries may be ill-defined and changing.4 Easiest to identify are those of the acute health care system, structurally defined by the Medical Health Act in 1967 and redefined in the Canada Health Act in 1984.5,6 The two components of the structured health care system are the health care services provided in hospitals and the medical services provided by physicians in hospitals and private offices (Figure 1, circle 1), and they consume the bulk of the Canadian health care budget.


The boundaries of the co-evolving larger system of less-structured elements of health care (circle 2) and the very large system of all elements that affect health in general (circle 3) are more difficult to define. A recent study from Saskatchewan8 indicates that the structured health care system ranks only tenth among factors affecting health, and is preceded by nine other key health determinants, all included in circles 2 and 3 of Figure 1. Clearly, these multilayered systems influence each other and experience different stressors, continuous changes, and multiple equilibria. Top


The renewal cycle


Depending on the boundaries, change can then be viewed in two ways: the internal dynamics and stresses of the evolving system and the external influences and events pressing on the system. When a complex, adaptive system adjusts to internal and external dynamics, it follows a renewal cycle within the three dimensional space of the panarchy model: capital, connectedness, and resilience (Figure 2). Capital is the amount of material accumulated, such as biomass, physical structure, and nutrients in a forest, or accumulated physical, human, and technological resources in human-made systems. Connectedness means the number of links and separation distance between agents. Resilience, the opposite of vulnerability, indicates the capacity of a system to adapt to change and withstand shock without catastrophic failure.3,9,10 Top


Within that three-dimensional frame, the renewal cycle of the panarchy model contains a slow front portion (green part of the cycle in Figure 2) representing the dominant paradigm, i.e., the way we see and have seen health care in Canada for the last 50 years, and a fast back portion (red part of the cycle) involving creative change. Together, these contain four stages: exploitation (birth) and conservation (maturity) in the slow portion, and release or collapse (creative destruction) and reorganization (renewal) in the fast part of the cycle.3,11 There is no beginning or end to this infinite cycle, and the destruction of what was the previous cycle forms the beginning of a new one, but at a different, transformed level. Top


Panarchy and the Canadian health care system


After the turmoil that accompanied the Medical Care Act in 1967,5,6 the Canadian health care system entered the front part of the renewal cycle and grew. It was designed and structured to deliver acute care to a young population, for whom the almost exclusive emphasis on hospitals and physician care was sufficient at that time.


The era that followed was also one of great medical advances and boundless promises, when adding more and more, but similar types of resources, more technology, and more hospital care meant better care. However, there was no real innovation during this growth phase. As a result, despite the increase in resources and funding, wait times to see a general practitioner or specialist, to access operating rooms, and to be treated in emergency departments did not improve proportionally, nor have other benchmarks.12,13,14 Top


Moving up the front portion of the cycle, the system grows toward a climax state, developing more and more connections between an increasing number of agents, leading to less and less resilience. Increased vulnerability resulting from this over-connectedness leads to system collapse, as experienced in several economic systems over the last decade.15 Cumulative growth continued after the Canada Health Act in 1984, moving the health care system into the mature conservation phase of increasing specialization and resource accumulation.9 Top


Accumulating more and more similar rather than innovative material during the slow phase of the cycle leads to an increase in capital and more and more rigidity in a complex system, in general, as it did for the Canadian health care system. Some have argued that the Canada Health Act itself contributed to the rigidity of the structured component of the Canadian health care system16 (Table 1). Public fear of changing what is considered the only way to deliver health care adds to the rigidity.17 Vested interests of professional organizations and politicians, who act as mechanistic experts to give some satisfaction to the public during very short election and budget cycles, have all added to the loss of resilience in the Canadian health care system.18 With an increase in specialization and technology, the need to restructure and integrate the acute care system also increased, which added layers of bureaucracy and amplified the level of government involvement,19 thereby increasing the degree of connectedness and rigidity. Top


Although changes in capital, connectedness, and resilience have increased the internal stresses in the structured acute care system, external pressures are building too. The system fulfills fewer and fewer of the needs of the changing population, in which aging baby boomers are increasing utilization because they suffer from multiple chronic diseases and demand health services with a consumerism mentality. Unfortunately, there is a conflict between a universal, publicly funded health care system and the expectation that all care must be provided to every Canadian free of charge at all times.5 Top


Because the same, large segment of the population has started to retire, the tax base to support the health care system is also shrinking.17 Today 30% of Canadians pay less in taxes than the cost of the health care services they consume in a lifetime (more than $220 000), and that percentage continues to increase.5


Other factors also add to the external pressure on the structured health care system: the increasing cost of human resources, the increasing cost of medications, partly because of unethical practices in certain segments of the pharmaceutical industry, unfounded diagnostic and therapeutic practices, increasingly complex and expensive technology and procedures, biased and sensational news reporting by social and other media, and the increasing prevalence of chronic diseases, such as obesity and diabetes, resulting from the increasing power of an unhealthy food industry. Additional external pressures include reduced government revenues because of low natural resource prices and recession in the global economy. Finally, the ultimate external crisis can be triggered at any time by an economic collapse or a global pandemic disease. Top


Eventually, any adaptive complex system breaks down under high internal stresses combined with external pressure and/or some trigger event, similar to a forest fire after an ongoing drought. Whereas the growth part of the cycle progresses slowly, breakdown happens quickly, resulting in decoupling of the system and a loss of connectivity, allowing for reorganization of the system’s remaining components.10,11 Breakdown or creative destruction is a vital part of adaptation and innovation.3,10,11 However, although the renewal cycle is normal in eco-systems, it is rarely acceptable in our human-made economic or political systems, which is why people try to extend the growth portion indefinitely and avoid the inevitable breakdown. Such practices simply increase the probability of an even more serious crisis and breakdown in the future.10  Top


The 2004 Canada Health Accord has prolonged the growth portion of the structured Canadian health care system, as it has not led to the innovative changes that were expected.13,16,20,21 As we continue to tinker with the system rather than innovate, we are prolonging the front portion of the cycle and have probably become locked in a “rigidity trap” where we see things only one way.3 Characteristics of systems stuck in a rigidity trap include being heavily rule-bound, unresponsive, resistant to change, and having too many resources tied up in non-productive components.3,22 Some of these are recognizable in the Canadian health care system. Will this rigidity trap and the perpetuation of the front portion of the cycle ultimately lead to a more serious crisis, and will that crisis occur in the structured health care system only (circle 1 in Figure 1) or at the level of all systems affecting health (circles 1, 2, and 3)?


To get out of the rigidity trap means stopping doing what we have done for years and decades and abandoning an approach or a system that has served us well. Unless we release the resources of time, energy, money, and skills that are locked up in our routines and institutions, we will have difficulty creating new things or looking at things from a different perspective. Without new perspectives, novelty, and innovation, our organizations and systems lose resilience and become more rigid.22 For example, despite resource accumulation of all kinds, wait times from referral by a primary care physician to treatment have doubled in the last 20 years: from a mean of 9.3 weeks in 1993 to 18.3 weeks in 2015.23 What do we have to stop doing to allow for innovative and transformational change? Top


Stresses in the front portion of the cycle also accumulate when a system (e.g., circle 1) learns to displace much of its problems into the external environment, beyond its own boundaries into the hierarchically adjacent systems that have less clear boundaries (circles 2 and 3).10 The system might become increasingly competent at managing everything within its boundaries by pushing away components that it cannot manage well.10 For example, the structured acute care system is taking up larger and larger fractions of available resources, leaving fewer resources for creativity and innovation in the less-structured health care system, as well as other aspects of social service: primary care, home care, long-term care, prevention, and health promotion. The structured acute care system even takes resources away from the outermost circle, including funding for education and other determinants of health.10 Top


When the tipping point is reached, the rapid-release phase of creative destruction leads to real transformational change of the system. Creative destruction is one of the necessary elements of complex adaptive systems. The word “transformation” has been frequently linked with reform of the Canadian health care system,24 but, according to the panarchy model, transformation does not occur without some kind of system collapse, away from its present state. The ensuing transformational organization involves the appearance or expansion of opportunities through innovation and restructuring. During the reorganization phase, depleted resources then become available and certain agents of the system are selected for their ability to survive and innovate.   Top


Creative destruction


In human-made systems, the creative destruction phase may require dismantling systems and structures that have become too rigid, have too little variety, and are no longer responsive to the current needs of the community. The eco-cycle model uses the concept of creative destruction and crisis to explain the necessary periodic destruction of forms and structures to maintain the long-term viability of the overall system. In it, crises are opportunities to remove unnecessary forms and structures, and to enable the substance to be renewed and continue to evolve.11 Top


What does this mean for organizations or human systems, such as health care? Forms and structures that no longer support the work or mission of a system need to be destroyed in a manner that does not destroy the substance of the system. Forms and structures are necessary to enable the work to be accomplished, but they are not the essence of the work. In health care, this has become a major issue. The substance of health care is not the structures of hospitals and clinics or even the professions of physicians and nurses. Rather these are forms that have enabled health care work. As enablers, they are crucial, but they are not the substance of the work; forms and structures are ephemeral, as they support the work but are not the work itself.11 Top


Personal mental models and cultural beliefs make people cling to the old forms because they were the keys to success as they moved up toward the system’s maturity.11 As a result, creative destruction is threatening to the clinical professions, the institutions, politicians, and the public. Health care leaders, particularly physicians, need to learn this concept to ensure that the substance of health care is not lost but renewed. As in a forest fire, creative destruction is designed to release nutrients so that new life can indeed emerge. Therefore, creative destruction is positive and not synonymous with devastation where not only the forms and structures but also the substance is destroyed. In the case of Canada, this could mean the destruction of our values supporting the essence of disease prevention, health care, and health. Top


Questions around the sustainability of the Canadian health care system


Because agents of the system will be selected for their ability to survive and innovate, leaders need creativity during the release phase of the renewal cycle. Difficult decisions have to be made, because doing more of the same is untenable and we have to shake off old entrenched wisdom and culturally engrained models that lead to maintaining the status quo, fear, and conservatism. Some “wicked questions”25 that must be asked include, “What is the purpose of our health care system? What does sustainability mean? What do we want to sustain, and how do we make it sustainable? How do we influence the structured health care system (circle 1) by improving the less-structured health care system (circle 2) and global health determinants (circle 3)? Top


One big challenge as a society is to decide what we will say no to and to provide transparency and evidence for our decision. What must we stop doing, and how are we perpetuating what we must stop doing?11 We will also have to find ways to say yes to the right, evidence-based services that provide good outcomes and then amplify that return on investment5 — some of those yes items will likely be outside the boundaries of circle 1. Whatever the transformed system will look like, the Canadian values of fairness, equity, and compassion must be sustained at all cost.


Capabilities of physician leaders within the panarchy renewal cycle


Practising distributed and collaborative leadership,26 physician leaders can prepare themselves and support each other during the creative destruction phase, while reaching out to every group and sector in our Canadian society. The four capabilities in the “Systems transformation” domain of the LEADS framework27 provide some of the tools leaders need, no matter what phase of the renewal cycle we are in, and they prepare us somewhat better for the transformational changes that occur during creative destruction. Top


1. Demonstrate systems thinking

One of the challenges for leaders during dramatic change is to maintain a balance between a mechanistic approach to a technical or simple problem and an organic adaptive approach to a complex situation.28 That balance may be a function of our need for control. In a complex situation with innumerable variables, control is virtually impossible.27 Adaptive leaders who practise distributive leadership attempt to achieve a balance between giving people some freedom to create the future and total lack of coordination resulting in confusion and chaos.28


Another challenge for adaptive leaders is the fact that big change may not be incremental, but rather sudden and dramatic. If we as leaders are blind to the forces driving change, we won’t be prepared when they reach the tipping point and rapid transformation occurs. Because of the interdependency and non-linearity of a complex system, we need to be aware that we don’t control change, we simply have some influence over it.27 Top


2. Encourage and support innovation

Innovation cannot take place without unleashing potential and creativity. Letting go and stopping some existing tasks opens up possibilities for starting new initiatives or amplifying what is working well, while measuring outcomes. For example, in the 2014 Physician Master Agreement, Doctors of BC let go of the traditional fee negotiations and, instead, signed a facility-based physician initiative to improve the quality of service to patients and the work environment for physicians, in collaboration with their health authorities.29 Giving up the 50-year-old tradition of negotiating an increase in physician fees in favour of an agreement on facility engagement has led to many new physician-led initiatives throughout the province.


Many professional sub-cultures are often stronger than the prevailing system-wide culture. Physicians are accustomed to their autonomy and to putting allegiance to professional values ahead of the needs of the system as a whole. Because physicians play a unique role in the health care system, they must be involved in changes and innovation. To engage physicians in the change process, leaders need special strategies and tactics. Top


3. Orient strategically toward the future

Leaders often have to act before they have all of the information: they cannot rely on certainty, nor can they eliminate risk. Being able to live with uncertainty is one thing that separates those who are leaders from others. Enhancing our environmental awareness, using tools and techniques to scan the environment, developing information and communication systems, and deliberately contemplating the future in the context of the complex, adaptive health care system all help leaders orient toward the future and be adaptive to the shock that large system changes can trigger.27


4. Champion and orchestrate change

Physician leadership shows up in how actively we work to support and implement system change. To champion something is to advocate, support, and fight for it. To orchestrate change is to shape and combine agents in the hope of achieving a desired effect or learning from failure. Both verbs emphasize inclusiveness and connectedness, re-emphasizing the principles of distributive problem-solving and collaborative leadership.27 Top




Health care systems are complex and adaptive. The structured component of the Canadian system, i.e., in-hospital and medical care, has probably reached the top of its maturity phase or is stuck in a rigidity trap in the renewal cycle. The resulting loss of resilience has led to high internal pressure and a high risk of collapse or creative destruction. External pressures from the less-structured health care system and the global determinants of health also heavily influence the resilience of our structured health care system, as it was defined in legislation. Creative destruction will lead to transformation of the system, leading to the survival of some sustainable system agents and the disappearance of others. Are we, as physicians and leaders, prepared to take on the coming challenges that will accompany the collapse of the system as we have known it? Top



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Johny Van Aerde, MD, MA, PhD, FRCPC, is editor-in-chief of the CJPL and past-president of the Canadian Society of Physician Leaders. He is clinical professor of pediatrics at the University of British Columbia and the University of Alberta and an associate faculty member at the School for Leadership Studies at Royal Roads University in Victoria. He is also on the faculty of the Physician Leadership Institute.


Correspondence to:


This article has been reviewed by a panel of physician leaders.



System boundaries

Within that three-dimensional frame, the renewal cycle of the panarchy model contains a slow front portion (green part of the cycle in Figure 2) representing the dominant paradigm, i.e., the way we see and have seen health care in Canada for the last 50 years, and a fast back portion (red part of the cycle) involving creative change. Together, these contain four stages: exploitation (birth) and conservation (maturity) in the slow portion, and release or collapse (creative destruction) and reorganization (renewal) in the fast part of the cycle.3,11 There is no beginning or end to this infinite cycle, and the destruction of what was the previous cycle forms the beginning of a new one, but at a different, transformed level. Top

Questions around the sustainability of the Canadian health care system