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In developing countries, public health care delivery has experienced chronic performance problems in access, availability, and quality. Amit Dutta, information systems and operations management professor, and LeRoy Eakin endowed chair at the School of Business, together with international colleagues Biju Paul Abraham, Rahul Roy, and Priya Seetharaman from the Indian Institute of Management in Calcutta, India, conducted research that identified structural mechanisms underlying these performance problems and suggested constructive managerial interventions to alleviate them.

“Despite sustained government investment, the public health care organization in the state of West Bengal, India, suffers from chronic problems including uneven utilization of capacity across different tiers of care and increased out of pocket expenses for the needy who most depend on it,” says Dutta. “We wanted to find out why these problems persisted despite additional resources being allocated year after year.”

“By modeling the public health care organization as a system of interconnected parts, we were able to use systems theory to show that the myopic solution of referrals to private hospitals is actually counter-productive in achieving the long run objectives of ensuring affordable, accessible and good quality public health care services. Referrals to private providers increases patient out-of-pocket expenses and makes care less accessible since most private providers aren’t located in areas where they cannot be profitable, such as the rural hinterland.”

Dutta says their research underscores the need for leaders to think systemically when making decisions, particularly strategic decisions. “Humans are very good at reasoning locally in space and time but are downright awful at deducing long term and organizationally distributed consequences of a network of interactions,” says Dutta. “Our research shows how they can use simple concepts like feedback loops and system archetypes to exercise some discipline and rigor to reason through the consequences of intended actions, in order to improve decision making and business performance.”