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    James D. Hamilton
    James D. Hamilton, MBA, FACMPE

    Research shows that systems thinking, a process applied to healthcare systems that employs a collaborative approach to solve complex problems and make overall improvements, can improve quality and safety initiatives for patients and all healthcare systems at large.1 Those in leadership positions should work to remove siloes in their healthcare systems to better facilitate a holistic approach to solving their most demanding challenges.

    Clinical systems thinking

    During the 20th century, the concept of systems thinking emerged as a field of study and application that draws on diverse disciplines such as biology, anthropology, physics, psychology, mathematics, management, and computer science.2 It emphasizes the interactive dynamics of individuals, processes, and technology.3 Systems thinking in healthcare was birthed from the clinical delivery of medicine. Physicians have always processed information and data in the context of the entirety of the human body. Each system of the body is integrally tied together, so treating human disease has ripple effects into other systems and subsystems of the body. Like the human body, our healthcare organizations are segmented into individual systems such as circulatory (cardiology), digestive (gastrointestinal) or musculoskeletal (orthopedic) systems. Each of these systems reveals the intricacies of the subsystems that comprise the greater clinical system. Therefore, siloed system thinking ultimately sacrifices holistic clinical relationships.

    Administrative systems thinking

    The administrative or business side of medicine has tended to mirror the clinical design and delivery of medicine. In some organizations administrative systems thinking has been formulated around a service line concept — a set of services that work together to enable a patient to complete an end-to-end journey. Unless well managed, service line designs can have potential business fault lines due to their unilateral nature. These fault lines can create seismic conditions due to financial, human, and technological resource allocations or through leadership bias. Regarding financial considerations for example, administrators may have a bias toward orthopedic services because the economic gain is much greater than psychiatry or pediatrics. This is true for physician practices and hospitals alike. There is a significant push-and-pull dynamic between primary and specialty care for those who have worked in multispecialty practices. For best practice operations, physician and administrative leaders must see the value each bring to the business of medicine. For example, specialists thrive on referrals from primary care, so these are not mutually exclusive. This multispecialty focus is at the heart of systems thinking in successful group practices.

    Leadership roles and responsibilities

    So, what does this mean to you as a healthcare leader? Perspectives among different levels of leadership vary. If you want to advance through the ranks of leadership, it’s crucial to think about systems issues holistically, as so many elements of clinic operations are integrally tied. Physician practices are a system of interlocked subsystems that need to function well, and this involves a great deal of critical thinking regarding the complexity of the system.

    Complexity in healthcare does not have to devolve into chaos. For many healthcare organizations, complex systems can run smoothly. One way to achieve this is by eliminating the structural barriers that exist between healthcare professionals, harmonizing their objectives, facilitating experimentation and setting up uncomplicated regulations to control expenses.4 If human, financial or technological resources are not adequately balanced, constraints can develop in complex systems, becoming bottlenecks impacting the smooth flow of operations.

    Systems thinking application

    It is common to find entry and midlevel managers unable to see past their own operational needs, potentially sacrificing other system resources that can be strategic and vital to an organization’s future. For example, it can be short-sighted to complain about leadership pouring financial resources into a new facility while there are no pay raises for employees without understanding the ins and outs of how capital projects are financed. At the same time, oftentimes these issues are not well-communicated within the leadership team, leading to dissonance and confusion.

    Some frontline managers obstinately reject incorporating the needs of other systems into their planning. This can be a dual edge sword. On the one hand, these managers’ employees will feel satisfied because they see this as their manager defending their needs. On the other hand, senior leadership may view this manager/leader as narrow-minded and contradictory to systems support. This same type of bias can also occur within senior leadership and can be very destructive to the organization — if a senior leader’s strategy only considers their own team’s needs, other senior management might model their thinking in a similar way.

    Chaos in systems thinking

    The previous example of narrow systems thinking can lead to chaos in an organization, and this can come in different grades of organizational/systems deterioration. If left unchecked, this chaos can spread rapidly across the organization; therefore, it’s incumbent on leadership to immediately address it. An overall organizational failure is generally an indication that unchecked chaos at many points within the organization’s systems has been allowed to fester for some time. This can occur in both clinical and administrative settings.

    An example of clinical and administrative failure is ineffective physician recruitment. Leadership should be concerned about the aging population of medical staff. Physician resources for community-based medicine and hospital/system support needs continual examination to address the essential services lost through physician retirement or physicians exiting the community.

    From a business perspective, the development of market competitive service lines will attract physician candidates and create an environment for successful recruitment. If such recruitment planning does not occur and if left unattended, physician recruitment will fail, negatively impacting the organization and community. This is particularly true for small and rural hospitals. Examples of dual clinical and administrative service line planning for success in physician recruitment is represented in Table 1.

    It is clinical and administrative leadership’s responsibility to create a work environment and culture that is free of short- and long-term chaos in complex systems.

    Leveraging points of change in a complex system

    Leadership must leverage points of change when addressing these complex systems that are pock-marked with chaos. Some will argue that small changes can create large-scale differences. Others suggest that when systems are in failure or are chaotic, solutions must include more than one point of change. For example, when hospitals employ physicians, they may find that the employed physician network is experiencing financial stress. Creating effective leverage points in this situation might include a total overhaul of the organization’s revenue cycle management, starting with improvements to physician productivity, a thorough examination of the fees and managed care contracting, appropriate coding for legal yet maximum financial return and a top-to-bottom review of the insurance and self-pay collection processes.

    Critical thinking in systems management

    One of the last components of systems thinking is the need for critical thinking skills. Critical thinking often comes from experience — asking the right questions and making the correct assumptions about problems that arise. Performing root cause analysis becomes crucial so leaders are preventing fires rather than constantly allocating resources for putting them out.

    An example of employing critical thinking in complex systems would be disaster management planning. Types of disasters (e.g., earthquakes, tornadoes, hurricanes) vary in the location and geography of our medical communities, but the potential for immediate chaos across the board is real. Terrorism, mass shootings and transportation failures/accidents can also create immediate chaos. Even losing access to community delivery of potable water and coordinating water alternatives to healthcare facilities requires considerable skills in critical thinking and resource management.

    One of our greatest challenges is anticipating all possible disaster scenarios that could devastate medical delivery systems; therefore, being able to think through the coordination of community resources so that everyone’s role is organized is essential.

    Mass disasters usually offer new learning opportunities. Being able to document these experiences and prepare response plans for local medical systems takes creativity and strong critical thinking skills, particularly when cutting across many organizations, people and local resources.


    Systems thinking in healthcare means understanding not only the overall systems and how they work together, but also the subsystems that support the organization as a whole. Additionally, healthcare leaders must be able to assess when complex systems are not functioning at optimal levels and have the critical thinking skills necessary to prevent chaos before it happens. Lastly, the overarching goal of all systems thinking should be tied to achieving the mission, vision and cultural values of the organization.


    1. Stalter AM, Phillips JM, Ruggiero JS, et al. (2016) “A Concept Analysis of Systems Thinking.” Nursing Forum, 52(4), 323-330. doi:10.1111/nuf.12196.
    2. Peters DH. “The application of systems thinking in health: why use systems thinking?” (2014). Health Res Policy Sys, 12(51), doi:10.1186/1478-4505-12-51.
    3. Trbovich P. (2014). “Five Ways to Incorporate Systems Thinking into Healthcare Organizations.” Biomedical Instrumentation & Technology, 48(s2), 31-36. doi:10.2345/0899-8205-48.s2.31.
    4. Lipsitz LA. “Understanding health care as a complex system: the foundation for unintended consequences.” JAMA. (2012). 308(3), 243-244. doi:10.1001/jama.2012.7551.
    James D. Hamilton

    Written By

    James D. Hamilton, MBA, FACMPE

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