Why Healthcare Reform Should Be Designed from the “To Be” State Rather than the “As Is” State

Introduction

Healthcare reform is not merely an exercise in repairing defects in an inherited administrative order. It is, more fundamentally, an exercise in institutional design: deciding what kind of health system a society wants, what outcomes it values, and how governance, financing, service delivery, workforce policy, and information systems should be aligned to achieve those outcomes. Contemporary reform agendas across advanced health systems increasingly converge around stronger primary care, better care integration, digital transformation, affordability, and more people-centred care. That convergence already suggests that reform is guided by a desired future state, not by passive extrapolation from legacy arrangements.

For that reason, healthcare reform should begin conceptually from the “to be” state. A target-state approach clarifies the normative goals of reform and helps orient institutions toward outcomes that matter: better patient experience, better population health, financial protection, affordability, and high value. A purely “as is”-driven approach risks optimizing inherited structures instead of public goals. As Berwick, Nolan, and Whittington argued in the Triple Aim literature, health systems perform best when they organize around explicit goals rather than around disconnected sectoral interests; similarly, people-centred care literature treats care design as something that should be organized around people’s comprehensive needs rather than around diseases, organizations, or payment silos.

That said, a rigorous answer requires one qualification. Reform should start from the “to be” state strategically, but it must still use the “as is” state diagnostically. Current-system analysis is indispensable for understanding performance gaps, political constraints, sequencing, and implementation capacity. The mistake is not to study the present; the mistake is to let the present define the horizon of possibility. The World Health Organization’s (WHO) performance-assessment and political-economy work both support this distinction: a sound understanding of current system performance is necessary, but reform succeeds when clear objectives, sequencing, and stakeholder strategy are anchored to a defined destination.

Note: Political-economy analysis (PEA) is a structured way of asking not just whether a reform is technically sound, but whether it is politically and institutionally feasible. In health reform, WHO defines it as analyzing the relevant stakeholders, their interests, positions, and relative power, together with the institutional and contextual factors that shape bargaining around reform. The point is to anticipate resistance, identify allies, and design strategies that improve the chances that a reform will actually be adopted and implemented. Political-economy analysis is the systematic study of how power, interests, institutions, incentives, and context shape the adoption, design, implementation, and outcomes of public (healthcare) policy reform.

Note: Healthcare payment silos are fragmented financial, administrative, and clinical systems that operate in isolation, preventing the seamless exchange of patient and billing data between providers and insurers. These silos cause administrative inefficiency, higher costs, and poor patient experience by separating clinical process data from payment information

Why the “To Be” State Must Come First

The first reason is path dependence. Health systems are deeply shaped by historical financing choices, professional settlements, legal categories, payment mechanisms, and administrative bargains (Quid pro quo). Once these are institutionalized, they structure what policymakers perceive as feasible and legitimate. The classic literature on England’s NHS explicitly shows how inherited arrangements can lock systems into suboptimal patterns of cost control, service distribution, and efficiency. Similar political-economy work on Thailand’s universal health coverage reform shows that path dependency can both enable and constrain change: historical legacies provided building blocks for expansion, but they also reproduced fragmentation that reformers then had to overcome. Starting with the “as is” therefore tends to reproduce the gravitational pull of the past.

The second reason is that the target state disciplines reform around ends rather than means. If reform begins with inherited statutes, provider boundaries, and legacy reimbursement rules, policy quickly becomes an exercise in legal editing and institutional bargaining. By contrast, if reform begins with a clearly articulated future model - for example, a people-centred, integrated, digitally enabled, equity-oriented system with strong primary care - then present institutions are evaluated instrumentally: they are retained, adapted, or removed according to whether they advance the chosen end-state. WHO’s integrated care framework is explicit that siloed, hospital-centred, disease-specific models undermine universal, equitable, high-quality, and financially sustainable care, and that reform should reorient services around individuals, families, carers, and communities.

Third, starting from the target state reduces the risk of incremental failure masquerading as prudence ("muddling through"). Incrementalism is sometimes necessary, but it becomes dangerous when it is directionless. The literature on health system governance warns that governance shapes not only what decisions are made but how they are implemented, and that some policy designs simply exceed the governance capacity of the systems expected to carry them out. A target-state approach helps distinguish between principled sequencing and mere accretion: reform can be phased around deliverables and milestones without losing its logic. In WHO’s political-economy guidance, technical readiness, strategic sequencing, and compromise matter, but compromises should not undermine core objectives.

In short, the “to be” state should come first because healthcare reform is a question of institutional purpose, not only institutional repair. The present system matters, but mainly as evidence about barriers, transition costs, and implementation tactics. The reform blueprint itself should be drawn from the desired architecture of value, equity, responsiveness, and sustainability.

Note: Incrementalism ("muddling through") is a decision-making and policy-making method characterized by implementing small, gradual changes over time rather than massive, sweeping reforms. Popularized by Charles Lindblom (1959), it suggests that decision-makers in government and business prefer manageable small adjustments to manage complexity, uncertainty, and limited resources.

Note: In public-policy literature, “fail forward” usually means a process in which policymakers respond to a crisis with a partial, lowest-common-denominator reform that moves policy forward somewhat, but does not solve the underlying problem. Because the reform is incomplete, the system remains fragile, new problems emerge, and policymakers later face pressure for another round of reform. “Fail forward” refers to a pattern in which policymakers adopt incomplete reforms that temporarily address crisis or pressure while leaving underlying structural problems unresolved, thereby creating the conditions for future policy failure and further rounds of reform. 

The Most Important Risks and Pitfalls in Healthcare Reform

A first major risk is path dependence and legal-institutional intertextuality: old laws, outdated payment rules, entrenched provider privileges, and administrative routines get written into the new reform. This creates “reform by amendment” rather than reform by redesign. The consequence is usually hybrid arrangements that preserve fragmentation and misaligned incentives.

A second risk is political capture and stakeholder veto power. Health reform redistributes money, authority, and professional autonomy. For that reason it is never merely technical. WHO’s work on health financing reform stresses that stakeholder positions, relative power, and the surrounding political context shape what becomes adoptable and what remains rhetorical. Reformers who ignore political economy often produce technically elegant but politically unsustainable proposals.

Note: You deal with vested interests first by recognizing that they are not just “bad actors” but organized stakeholders whose incentives are tied to the status quo. In health reform, WHO’s political-economy approach treats providers, unions, industry groups, insurers, employers, and consumer groups as actors that typically try to minimize losses and maximize gains from reform; OECD warns that the problem becomes especially serious when their influence turns into policy capture, meaning undue influence over public decision-making. The practical implication is that reformers should not assume that better evidence alone will prevail. They need to identify who stands to lose, how much power those actors hold, where the veto points are, and which parts of the reform are most vulnerable to being diluted or blocked.

A third pitfall is fragmentation. Reform often proceeds through disconnected initiatives - primary care here, hospital payment there, digital platforms somewhere else - without altering the system logic that links them. Yet current reform trends in Europe point toward the opposite lesson: durable improvement depends on integrated, community-based, multidisciplinary primary care, better continuity, and coordination across levels of care. WHO similarly argues that siloed, self-contained curative models weaken continuity and system performance.

A fourth risk is digital solutionism. Digitalization is an important trend, but the implementation literature is clear that many health technologies fail not because the technology is intrinsically weak, but because the surrounding value proposition, adopter system, organization, regulatory context, and wider system are too complex. T. Greenhalgh and colleagues’ Non-adoption, Abandonment, Scale-up, Spread, and Sustainability (NASSS) framework shows that technologies characterized by complexity across multiple domains rarely become mainstreamed. Reformers who treat digital tools as plug-ins rather than socio-technical changes often generate nonadoption, abandonment, or failed scale-up.

Note: The Non-adoption, Abandonment, Scale-up, Spread, and Sustainability (NASSS) framework is a theory-informed tool used to predict and evaluate the success of technology-supported health and care programs. Developed by T. Greenhalgh et al. in 2017, the framework identifies seven domains - including technology, adopter system, and context - to analyze why innovations fail or struggle to become mainstreamed in complex, non-linear environments

A fifth pitfall is weak governance, opacity, and corruption. The European Observatory’s governance framework identifies transparency, accountability, participation, organizational integrity, and policy capacity as core conditions of effective reform. WHO’s technical brief on corruption adds that corruption undermines financial risk protection, access to quality care, equity, supply chains, trust, and even antimicrobial stewardship. Reform that changes entitlements or financing without changing oversight can leak resources and legitimacy at the same time.

A sixth risk is excluding communities and frontline staff from reform design. Community participation is repeatedly described as a major principle of people-centred systems, but the empirical literature shows that participation is highly variable and often shallow; communities are commonly involved in implementation, but much less in defining problems or evaluating solutions. At the same time, workforce neglect can sabotage reform. The Quadruple Aim literature argues that patient experience, population health, and cost goals are imperiled when the work life of clinicians and nurses deteriorates. Reform that is nominally patient-centred but operationally hostile to (bed side) staff is self-defeating.

A seventh pitfall is weak evidence use and weak learning capacity. Evidence-based reform is not achieved by invoking evidence in advance; it requires (reliable)  measurement, feedback, and revision after implementation. The OECD’s recent work on Health System Performance Assessment (HSPA) notes that many systems are rich in data but weak in translating those data into policy learning. A systematic review of delivery-system reforms likewise concluded that reforms may improve value, but the evidence base is uneven and often lacks robust documentation of quality gains. Without a competent learning architecture, reform becomes assertion rather than governance.

What Should Be Done About These Risks?

The first requirement is to define the target state with unusual precision. Reform should specify the future system’s goals, institutions, and accountability mechanisms: what level of financial protection is intended, what role primary care will play, how continuity and coordination will be organized, what outcomes matter, how equity will be monitored, and how provider incentives will be aligned. A strong formulation is to combine the Triple Aim with the Quadruple Aim: patient experience, population health, per-capita cost, and workforce well-being. This keeps reform from collapsing into narrow cost containment or symbolic modernization.

The second requirement is to reposition “as is” analysis as an implementation tool. WHO’s performance-assessment framework is useful here: it links health system functions - (competent) governance, financing, resource generation, and service delivery - to intermediate (coherent, consistent) milestones and final goals, allowing policymakers to identify where poor outcomes originate. Combined with political-economy analysis, this makes it possible to ask not merely what is wrong, but which constraints are structural, which are political, which are administrative, and which can be sequenced. In other words, diagnosis should serve destination-led reform.

Third, reform should be sequenced, not diluted. WHO’s political-economy guidance is explicit that resistance can be reduced through strategic sequencing, and that compromise is often necessary, but not at the price of losing the reform’s core logic. In practice, this means identifying non-negotiable design features, transitional bargains, and areas for staged rollout. Thailand’s experience is instructive here: inherited fragmentation was not ignored, but neither was it accepted as the permanent template. 

Fourth, reform should embed robust and competent governance from the start. The relevant governance principles are not abstract: transparency in decisions and resource flows; accountability through independent oversight and performance review; participation of patients, communities, and frontline workers; integrity safeguards against conflicts of interest (COI) and procurement abuse; and sufficient policy capacity to implement what is promised. The governance literature warns that some reforms exceed system capacity; therefore reform design must match institutional ambition to administrative reality, or explicitly invest in that capacity before scaling.

Fifth, digital reform should be treated as organizational change, not procurement. The Non-adoption, Abandonment, Scale-up, Spread, and Sustainability (NASSS) literature implies that successful digitalization requires co-design, workflow fit, interoperability, credible business models, regulatory clarity, and long-term adaptation. Systems should therefore resist announcing digital transformation as an end in itself; they should instead define which problems digital tools are meant to solve and under what organizational conditions they can be sustained.

Sixth, reform must institutionalize participation rather than merely consult stakeholders episodically. The community-participation literature shows that communities are too often confined to implementation rather than agenda-setting, resource management, and evaluation. Likewise, stakeholder-engagement research indicates that engagement improves relevance, transparency, and the chances that evidence will actually be used. Participation should therefore be designed into governance structures, not appended as a communications exercise.

Finally, every major reform should be built as a learning system with milestones and targets. OECD work on HSPA emphasizes that performance assessment supports accountability and decision-making when linked to broader policy priorities, stakeholder engagement, and (quality) data infrastructure. This means pre-specifying indicators, evaluating reforms in stages, publishing results, revising policy instruments, and stopping interventions that do not work. Evidence-based reform is therefore not a one-time literature review; it is an iterative discipline of design, implementation, measurement, and correction.

Conclusion

Healthcare reform should start from the “to be” state because reform is ultimately about constructing a better system, not merely (patching) editing a defective inheritance. Starting from the current system alone invites path dependence, incrementalism, legal carry-over, and capture by entrenched interests. A destination-led approach, by contrast, places public goals - equity, integration, value, affordability, and patient- and workforce-centredness - at the centre of reform design. The “as is” state still matters profoundly, but as a source of diagnosis, sequencing, and risk management, not as the blueprint. The most serious dangers in reform are path dependence, political capture, fragmentation, digital overreach, governance failure, exclusion of communities and staff, and weak learning. The best defense against those dangers is a reform method that is (to be) target-led, politically literate, governance-conscious, participatory, and continuously evaluative.

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