About the Author

Geoffrey Moore

Managing Director, TCG Advisors Venture Partner, Mohr Davidow Ventures

Geoffrey Moore is a best-selling author, a Managing Director at TCG Advisors and a venture partner at MDV.  More...

November 2008

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Education and Health Care: Complex Systems Dreams, Volume Operations Budgets

While different in many ways, education and health care share a common predicament.  The receivers of these services—parents and students on the one hand, patients and advocates on the other—are cultured to expect superior, personalized attention, the sort of thing that a complex systems business model excels at.  The immediate providers of these services, teachers and doctors, share these same aspirations as well. 

Unfortunately, the complex systems model is not scalable to the needs of a large society.  The only model that scales is the volume operations model.  (For a discussion of the contrasts between these two models, see Harvard Business Review, December, 2005, “Strategy and the Stronger Hand”).  It does so by transforming unique relationships into standardized transactions.  It is not driven to achieve excellence but rather to meet minimum quality standards as economically as possible.  This is the model that legislatures and health plans fund, that administrators seek to administer, leaving teachers, aides, doctors, and nurses with the task of mediating between complex systems expectations and volume operations budgets. 

It does not take a great deal of reflection to realize that the volume operations path is the only feasible one to take from a social safety net point of view.  More affluent citizens may avail themselves of the complex systems model, but only at a considerable price.  The key point is that such service is not, and should not be represented as, a social entitlement. 

And this is where things get hairy, specifically in a society dedicated to egalitarian principles.  The economics of education and health care do not support entitlements beyond a basic safety net.  Yet the public dialog implies those entitlements exist, or would exist if only the economically privileged would be more generous.  At this juncture in the dialog a liberal/conservative split ensues, something which has played out over my entire adult lifetime, with no end in sight, and no insight in sight either.

I think the constructive path forward begins with abandoning any expectation of providing broader access to the complex systems model and instead focusing our creative energies on raising the standards of the volume operations capability as much as possible.  This means focusing public investment on the mean, not the extremes, of the health care continuum, investing in more efficient, effective, and pervasive basic health services.  Private funding can pursue the esoteric edges—that’s its privilege—but public funds should not.  We need to focus those dollars more on process, on access, on communication, on methodology, and on resetting societal expectations about the nature and value of primary care. 


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Carlos Leyva


Yes precisely, in both health care and education is it not the mean that is in the worst need of "fixin"? Small incremental changes to the entire delivery system (both health care and education) is likely to produce significant results (i.e. the greatest good for the greatest number). Either we do not have the political will to do it, or we do not have the know how. I suspect it is the former. It is an investment in the nation's social infrastructure that is required in the worst way but we can't even have a meaningful dialog because of the ideological split. The nation's infrastructure (e.g. levees in New Orleans and elsewhere) does not appear to be at the top of the list of priorities, but if not health care and education then what? I feel your fustration.

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