Hidden conflicts in healthcare | Common Sense Systems

The Challenge

As a healthcare systems architect, I make a bold claim: give me any healthcare policy document, and I’ll show you several serious embedded conflicts—places where the policy puts people between a rock and a hard place, creating impossible situations for staff and patients alike.

This isn’t about being clever or embarrassing anyone. Healthcare policies are written by smart, well-intentioned people trying to balance genuine competing needs. But without a systematic way to identify and resolve conflicts, we inadvertently build contradictions into our processes. These hidden dilemmas create friction throughout the organization, impede patient care, and contribute directly to provider burnout.

Recently, I had the opportunity to demonstrate this using a real hospital’s Financial Assistance Policy. What we found illustrates both the power of systematic conflict analysis and the path toward resolution.

The Method: Theory of Constraints Thinking

Theory of Constraints (TOC), developed by Eli Goldratt, provides powerful tools for identifying and resolving conflicts. The core tool is the Evaporating Cloud—a diagram that maps out dilemmas by showing:

(A) A common objective both parties share
(B) and (C) Two legitimate needs required to achieve that objective
(D) and (D’) Two wants that attempt to fulfill those needs but directly conflict with each other

The magic happens when we examine the assumptions connecting these elements. Usually, the conflict exists because we’re holding unexamined assumptions that appear obvious but are actually challengeable. When we expose and test these assumptions, paths to resolution emerge.

The Document: A Hospital Financial Assistance Policy

The document I analyzed was a community hospital’s Financial Assistance Policy—a typical example of policies found in hospitals nationwide. It’s an 8-page document detailing how the hospital provides charity care to patients unable to pay for medically necessary services.

On the surface, it seems straightforward. The hospital commits to providing care “regardless of ability to pay.” It establishes income thresholds (100%-300% of federal poverty level) for different discount levels. It describes application procedures and documentation requirements.

But when we apply TOC analysis, we find the document riddled with conflicts that create impossible situations for both patients and staff.

Three Critical Conflicts

Let me walk you through three of the most significant conflicts we identified, showing how TOC analysis reveals both the dilemma and the path to resolution.

Conflict 1: The Documentation Dilemma

(A) Common Objective: Provide medically necessary care to all persons in need while maintaining hospital financial integrity

(B) Need: Protect the hospital’s financial resources from fraud and misuse

(C) Need: Ensure vulnerable populations can access financial assistance without bureaucratic barriers

(D) Want: Require comprehensive income verification (W-2s, pay stubs, tax returns, employer statements)

(D’) Want: Accept patient self-attestation or minimal documentation

D and D’ are in DIRECT CONFLICT.

Hidden Assumptions:

Without extensive documentation, significant numbers of ineligible patients will fraudulently obtain financial assistance.
Comprehensive documentation is necessary to accurately assess financial need.
Patients who truly need assistance can obtain and provide standard documentation.

Path to Resolution: Implement a tiered documentation system: (1) Presumptive eligibility for obviously qualifying cases—no documentation required; (2) Simplified documentation—patient choice of one verification method; (3) Standard documentation for complex situations; (4) Random audits to maintain integrity. This removes barriers for 70-90% of applicants while maintaining protection against fraud.

The Real-World Impact

This conflict manifests daily. A homeless patient arrives at the ED needing care. She has no W-2 forms, no pay stubs, no tax returns. She works occasionally for cash, stays in shelters, and has no permanent address. The policy says she qualifies for 100% charity care if her income is below 200% of poverty level—which it clearly is. But she cannot provide the required documentation to prove it.

The registration clerk faces an impossible choice: strictly follow the documentation requirements (and deny assistance to someone who obviously qualifies), or bend the rules (and risk audit findings).

Conflict 2: The Independent Provider Exclusion

(A) Common Objective: Fulfill commitment to provide medically necessary care regardless of ability to pay

(B) Need: Limit hospital financial liability to only those services under direct hospital control

(C) Need: Protect patients from surprise medical bills for services they reasonably believed were part of their hospital care

(D) Want: Exclude independent provider services (pathology, radiology interpretations, cardiology consultations) from financial assistance coverage

(D’) Want: Coordinate with independent providers to ensure zero patient financial liability for all medically necessary services

D and D’ are in DIRECT CONFLICT.

The Real-World Impact

This conflict creates perhaps the most damaging patient experience. A patient qualifies for charity care. The hospital tells her she’s approved. She receives treatment, relieved that she won’t face financial devastation. Then, weeks later, bills arrive from pathology labs, radiology groups, and cardiology associates—services she never separately requested, from providers she never separately saw, for tests ordered by hospital physicians as part of her hospital care.

From her perspective: “The hospital lied to me. They said I was covered, but I’m still getting bills I can’t pay.”

Conflict 3: The Presumptive Eligibility Void

(A) Common Objective: Provide timely medical care to those in need while making sound financial assistance decisions

(B) Need: Make accurate eligibility determinations based on verified information

(C) Need: Prevent medical debt accumulation and collection actions against patients who obviously qualify

(D) Want: Require completed applications with full documentation before granting any financial assistance

(D’) Want: Grant presumptive eligibility for clearly qualifying populations before full documentation

D and D’ are in DIRECT CONFLICT.

The Real-World Impact

This conflict operates at a meta-level, creating a structural gap in the policy. The hospital requires completed applications before granting assistance, but many obviously eligible patients never complete applications due to homelessness, mental illness, cognitive impairment, or crisis situations. These patients end up in collections despite clear eligibility. Staff spend time pursuing debt that should never have been created.

The Pattern: How Conflicts Embed in Policies

These three conflicts illustrate a common pattern. Well-intentioned policies attempt to balance competing needs by creating rules that seem reasonable in the abstract but create impossible situations in practice.

The conflicts persist because the underlying assumptions remain unexamined. We assume comprehensive verification is necessary without calculating its actual cost versus benefit. We assume patients understand complex billing structures that we ourselves find confusing. We assume patients in crisis can navigate bureaucratic processes that challenge even resourced, educated individuals.

These assumptions feel obvious—until we examine them systematically.

The Impact: Beyond This One Policy

These aren’t merely theoretical problems. They have real consequences:

For Patients

Eligible people denied assistance they qualify for
Medical debt accumulation despite programs designed to prevent it
Erosion of trust in healthcare institutions
Reduced likelihood of seeking needed care

For Staff

Impossible choices between following rules and serving patients
Moral injury from denying obviously eligible people
Time wasted on bureaucratic processes
Contributing factor to burnout

For the Hospital

Mission failure (not actually providing care “regardless of ability to pay”)
Reputational damage in the community
Increased bad debt from pursuing uncollectible debt
Higher collection costs

The Broader Application

This analysis focused on one hospital’s financial assistance policy, but the method applies universally. Every healthcare policy contains embedded conflicts:

Scheduling policies that attempt to balance access and efficiency but create impossible situations for schedulers
Quality metrics that attempt to measure performance but incentivize behaviors that don’t serve patients
Staffing models that attempt to balance safety and cost but put nurses in no-win situations
Documentation requirements that attempt to ensure quality but consume time needed for patient care

The Theory of Constraints approach provides a systematic way to find and resolve these conflicts. By mapping the competing needs, exposing the underlying assumptions, and challenging those assumptions, we can design better policies that serve both the organization’s needs and its mission.

The Process Going Forward

If you’re a healthcare leader interested in finding and resolving conflicts in your policies, here’s the process:

1. Select a policy

Choose one that seems to create friction or that staff complain about

2. Map the conflicts

Use the Evaporating Cloud structure

3. Identify the assumptions

Find what’s connecting needs to wants

4. Challenge each assumption

Test with evidence and alternative perspectives

5. Design solutions

Create approaches that satisfy both needs without the conflict

6. Test and iterate

Start small-scale before rolling out broadly

The goal isn’t perfection. It’s continuous improvement through systematic identification and resolution of conflicts that impede flow, quality, and staff wellbeing.

Conclusion

Healthcare is complex, and policies must balance genuine competing needs. But we can do better than embedding impossible dilemmas into our processes and forcing staff and patients to navigate them.

Theory of Constraints thinking provides tools to find these hidden conflicts and resolve them. Not through compromise—where both sides lose something—but through breakthrough solutions that satisfy both needs more fully than the original conflicting approaches.

The financial assistance policy analysis demonstrates both the prevalence of these conflicts and the possibility of resolution. Similar conflicts exist throughout healthcare operations. Finding and resolving them is fundamental to improving patient care, reducing provider burnout, and fulfilling our healthcare mission.

Give me any healthcare policy document, and I’ll show you the conflicts. More importantly, I’ll show you the path to resolution.

John Sambrook is the founder of Common Sense Systems, a healthcare systems architecture consulting firm that helps hospital leadership identify and resolve hidden conflicts perpetuating systemic problems. With 30+ years of experience and personal mentorship from Eli Goldratt, he applies Theory of Constraints methodology to healthcare operational challenges.