Where Has Our Health Leadership Gone?
Where Has Our Health Leadership Gone?
Address to the Hospital and Community Dentistry Conference in Christchurch by Ian Powell, Executive Director, ASMS
Thank you for the opportunity to address you again. As always, my comments are personal observations, although in broad terms at least I believe they are consistent with the Association’s view on the matters discussed. In this address, I would like to focus on the theme of what has happened to the standard of health leadership in the health sector and do we have a Minister of Health or a Minister of Airbrushing and Soundbytes. To avoid any ambiguity this latter point is a rhetorical question.
By leadership I include the Minister of Health, Ministry of Health, Treasury and the DHBs at the level of Chairs and Chief Executives. This dynamic should be seen in the context of the abandonment of clinical leadership as a priority for Government health policy by the Minister of Health through the repeated symbolic omission of it from his annual letter of expectations to DHBs. The Ministry, in turn, has dropped clinical leadership for a more generalised and less focussed form of leadership linked in to its mantra of ‘disruptive innovation’.
Further down, DHBs at the higher level have overall (there are exceptions) weakened their commitment to clinical leadership suggesting that previously their adherence was more to do with political expectations than genuine belief.
In summary, the dominant traits of our leadership culture are short-sightedness and neglect.
I’m usually interacting with members in at least one DHB once a week. Overwhelmingly I pick up increasing concern (sometimes despair) over the difficulties in providing safe and accessible quality care in such a retrenched environment. I also see increasing pressure on operational management to cope and increasing signs of managerial dysfunction. I have a sense of pending implosion if things continue as they are.
If a survey revealed that half of the most specialised workforce in public hospitals was burnt out, then one would have expected a responsible health leadership to be seriously concerned especially if they already were aware of a high level of presenteeism (working while ill) among the same workforce. One would have expected that health leaders would have put their minds to engage with this workforce to remedy a situation that should be considered without question to be unacceptable.
This is not a hypothetical musing. A survey of burnout among DHB-employed ASMS members conducted by us last year and subsequently published in the BMJ Open revealed an alarming burnout rate of 50%. The results were severe everywhere (including gender, age and size of DHB).
So, how did our health leadership respond. Both the Minister of Health and his Ministry reverted to silent mode and similarly not a squeak from the Government’s advisory body, Health Workforce New Zealand. DHB chief executive responses have been below the radar, somewhat empathetic but overall underwhelming although in Waitemata on the initiative of the Chief Executive a joint project with ASMS on specialist well-being is underway. It is hard to beat this overall indifferent response to specialist burnout as an example of a leadership dereliction of duties.
Turning a blind eye to entrenched specialist shortages
For some time now ASMS has been messaging that entrenched specialist shortages in DHBs have become the norm. In response, the leadership in health has turned a blind eye to what is in front of their noses.
Our research, based on surveys of clinical leaders at several DHBs, confirms that ocial DHB data on specialist vacancies is misleading and signicantly understates the size of the problem. Ocial vacancies are only those positions DHBs elect to advertise. We know that the advertised roles are far fewer than that what is needed to sustain safe accessible services delivered through patient centred care. The high rates of presenteeism and burnout further illuminate the pressures that the specialist workforce is under to maintain service provision.
It appears that if official vacancies were to be at a level consistent with actual shortages then they should be increased by somewhere between a factor of three or four.
Compounding this situation is the far too common approach within DHBs of obstruction when we endeavour to address this state of affairs. In our national collective agreement, we have an agreed process called job sizing. This requires an objective assessment of the average hours necessary to complete all duties and responsibilities (including after-hours and time for non-clinical duties) which lead to an assessment of the necessary specialist staffing levels for a specific service and can flow on to remuneration.
While our industrial officers have through job sizing achieved significant gains for members through this process, too often this involves battling through managerial obstruction indifferent in the exercise of duty of care to their staff.
Specialist workforce intentions in DHBs
Recently published ASMS research into specialist workforce intentions reveals that around a quarter of respondents to another ASMS survey are either likely or extremely likely to leave the DHB workforce over the next ve years. This conclusion is consistent with the Ministry of Health’s own internal modelling.
Much of this is attributable to the fact that like the rest of society the specialist workforce is aging and many simply wish to retire. They have concluded that they are at an age where this is the right decision and DHBs can do little about this, if anything. But they do need to plan for this.
But, of great concern but at the same time presenting an opportunity to turn this around, job dissatisfaction also looms as a significant factor behind this pending retention crisis. Excessive workloads and the lack of a sufficient engagement culture in DHBs are significant contributors. The main specific factors across DHBs are failure to recognise good work, hours of work, and remuneration.
It is unacceptable that this extent of dissatisfaction exists among such a highly trained and committed vocational workforce that makes such a difference in people’s lives, provides a highly appreciated public good, and is so professionally rewarding. It is an indictment of DHB leadership that this has occurred. It is both avoidable and fixable. A more responsible leadership culture could significantly mitigate against this pending retention crisis.
Leadership by distraction: Health Workforce New Zealand
In late 2014 the Government’ key health workforce advisory agency, Health Workforce New Zealand, identified specialist shortages in DHBs as a key priority for it to address. One would have thought that because of this unambiguous statement that over the past 30 months or so there might have been some evidence of work to help turn this parlous around. Unfortunately, there isn’t.
Instead, Health Workforce New Zealand appears intent, without an adequate problem definition, on radically deconstructing our funding model for vocational training by seeking to replace our current underfunded but professionally and exigency based system with a still underfunded but highly bureaucratic, excessively transaction cost and expensive business-like edifice. The model would be based on a phased contestability process.
Contrary to the principles of clinical engagement, a cabal of HWNZ and Ministry officials are attempting to push this proposal through. Chief medical officers who should be at the centre of this piece of action are side-lined. The professions themselves are marginalised in this process to the status of a frustrated bystander (as are DHBs from what they tell us privately). It is all about bureaucratic capture and empire building. This has all the hallmarks of a messy fiasco with significant unintended consequences.
Common sense may prevail but at the very least this has been an avoidable disruption from addressing more serious issues.
‘Disruptive innovation’: Trothplight by another name
Instead of addressing the vulnerability of its most highly trained and specialised workforce, the Ministry of Health has migrated to a different planet with its focus on disruptive innovation.
Trothplight is an example of a word that makes no sense. It is an old English term from the 1600s that as a noun meant engagement to be married or betrothal and to betroth as a verb. The only thing I can link to is that those that make decisions that have ‘troth’ in them then find themselves in a ‘plight’. If so, it is hardly an incentivising term for marriage. But, as a word that makes no sense, it is an apt term to describe the Ministry of Health’s obsession with ‘disruptive innovation’.
At a theoretical level, disruptive innovation attempts to understand and analyse why some commercial businesses have failed while others have thrived. The emphasis is on the disruptive power of unanticipated technological developments (eg, digital photography versus Kodak, Uber versus traditional taxi companies) that have transformed the way in which a business or service has been delivered.
At the heart of disruptive innovation theoretically is a fundamental belief in market forces. When applied to the ‘business of healthcare’, the view is that the health care industry simply need open its doors to these ‘high-tech’ market forces to raise the quality of health care for everyone. Existing powers need to ‘get out of the way’ to let market forces ‘play’. Once this ‘natural process’ of disruption can proceed, it will be possible to build a new health system.
But disruptive innovation is not a new law of nature, health care is generally assumed to be beyond for profit and not an economic ‘growth factory’. Further, given that people are not disk drives, it should be questioned whether this theoretical premise is appropriate as a discourse to frame a new direction for the New Zealand health system.
Part of the underpinning of disruptive innovation is the misleading assumption that technology is a driver of innovation. Technology did not drive day surgery. It enabled it but what drove it was clinical leadership and the development of new models of care.
Sometimes technology, because of the exciting things it can do, is seen as a cross between a magic bullet and a fundamentalist religious discovery. Being seen as a driver rather than enabler of change is a logical next step. A lesson from education is apt. Recently I read an interesting article in the New York Review of Books that observed:
The ‘ed-tech’ market swells constantly, as more school systems hand out iPads or virtual-reality goggles.…the One Laptop Per Child global initiative…. demonstrated no gain in academic achievement.
Furthermore, the same article noted that an OECD study in 2016 concluded that “students who use computers very frequently at school do a lot worse in most learning outcomes.”
Government message to DHB heads: ‘Keep quiet or else’
Treasury’s release of papers about Canterbury District Health Board’s financial performance last week appears to have been deliberately designed to intimidate and silence senior DHB officials who have dared to question the adequacy of government funding.
The papers contained repeated criticisms of the performance of the acting chair, the chief executive and appointed members of the board, and some border on threats to the positions of these individuals (including the Chief Executive). But the papers lack factual evidence to substantiate the criticisms.
Treasury itself acknowledged there is no ‘fact-based rebuttal of their arguments’. The criticisms are based on only ‘high level’ data which takes little or no account of the ongoing impact of the 2011 earthquake and subsequent earthquakes. There is no acknowledgement that while the formula for funding DHBs (Population Based Funding) is very comprehensive in what it provides for, it is not designed to cope with the aftermath effects of natural disasters.
As the Canterbury DHB and senior medical staff have emphatically pointed out, the DHB has been performing well, relative to other DHBs, in many service performance measures, despite the difficult conditions. That is down to the hard work and skills of DHB management and clinical staff, who have pulled together to keep services running extraordinarily well in the circumstances.
For Treasury officials to publicly vilify the DHB’s leadership for having the temerity to suggest the DHB is being unfairly funded is shameful, especially when they lack evidence to the contrary.
It is also disturbing. Too often information is released under the Official Information Act (OIA) with many sections blacked out to hide sensitive or embarrassing information, officially on the grounds of protecting the flow of ‘free and frank’ opinion. These papers are no exception, with numerous redactions – except where the ‘free and frank opinion’ relates to criticisms of the DHB’s senior officials. OIA releases of this nature will have been discussed with the Health Minister’s office.
The message from Government to all DHB senior officials is that if you dare to question the adequacy of funding, regardless of the validity of your arguments, your heads could be on the block. At a time when organisations are trying to address workplace bullying, we are witnessing one of the two most powerful Government agencies (Treasury) trying to bully and intimidate a DHB for demonstrating its commitment to responsibility for the staff it employs and the population it serves.
The scam that is ‘capital recycling’
Partly through ideology and partly through the short-sighted incentive of short term gain, the Government is pressuring DHBs that require major capital works development to adopt a funding arrangement like Private Public Partnerships in England that will worsen DHBs finances.
The first example is the small new $12 million ‘integrated family health centre’ in Westport. The Government, through its misnamed partnership group, is pressuring West Coast DHB to adopt a method of funding branded as ‘capital recycling’ that is a PPP by another name. A third party will purchase the crown land, build the facility and then lease it back to the DHB
The practical effect is that the DHB is likely to pay between $750,000 to $1,000,000 annually for about the next 34 years more than would it would have to under the normal way (Government loans repaid at a lower interest rate). To rub it in this lease amount would be Consumer Price Adjusted each year. In a word, it is a scam.
To make the Government’s books look good, the DHB’s financial position must worsen, thereby increasing the likelihood of deficits. Imagine if this new system of funding continues with the next and much bigger new outpatient facility as part of the post-earthquake Christchurch Hospital rebuild. This new facility could end up costing somewhere in the vicinity of $100 million which would then involve Canterbury DHB incurring extra annual costs of up to say $10 million.
In fact, one does not have to imagine anything. It has already been acknowledged that ‘capital recycling’ is on the cards and it was inappropriate involvement in it by the former Canterbury Board Chair that led to his resignation (much to the embarrassment of Government).
It is not good for one’s health to contemplate the financial implications for the struggling Southern DHB, with the extensive rebuild of the rundown through neglect of Dunedin Hospital now reported to cost over one billion dollars.
As an aside, there is a $10,000 threshold for major capital works where Government approval is required through its National Capital Committee. This has been unchanged for several years. In a hospital the size of North Shore, for example, the rebuilding or redesign of a ward can exceed this threshold. Given that the financial and compliance requirements that flow as a result are disproportionate to the amount of money involved, this is excessive national micromanagement. There is a compelling case to significant raise this threshold. But we appear not to have the level of insight at a national leadership to go down this path.
Partnership that you have when you are not having partnerships
Incidentally, while on the theme of funding major capital works in DHBs, the Government has developed the misnomer of ‘partnership groups’. These are Government appointed bodies supposedly involving partnership with the relevant DHB that make determinative decisions (subject to Government approval).
The experience of the new Westport facility is instructive. These are Government controlled bodies where the DHB input is heavily marginalised. The West Coast Board had a gun to its head when it was forced to accept the more costly ‘capital recycling’ approach – either accept it or no new facility. The Board has put some caveats on its approval of what was forced upon it which appears to have caused some irritation higher up but the point remains that this is partnership in name only and an abuse of the plain meaning of words.
My understanding is that the ‘partnership group’ is functioning in a similar way in Canterbury including an anticipation of being pushed down the road of ‘capital recycling’ for the new outpatient building.
Attitudes towards deficits are a huge driver of behaviours by DHB leaders, at times appearing to assume greater importance than standards of patient care even though this is never acknowledged and always denied. The Treasury ‘Pearl Harbour’ attack on Canterbury DHB illustrates this.
Health Minister Jonathan Coleman requires the Ministry of Health to closely monitor DHB financial performance and plays hardball over whether a deficit can be approved or not. If the deficit is too much, the DHB can be placed under ‘intensive monitoring’ and a crown agent added to the board. High transaction cost compliance requirements bog DHBs down. Chief executives, chief finance officers and other senior managers can understandably sweat and lose sleep when under this pressure.
The most recent financial data available shows DHBs recording combined deficits of $50.6 million for the 10 months to April 2017, $38.3 million worse than their plans. But as concerning as this might be to Government, it is not something that should dominate the focus of the leadership of the health sector.
Funding and its relationship with increasing costs is critical to the understanding of deficits. Analyses of annual Vote Health budgets by the Council of Trade Unions and the ASMS have found successive funding shortfalls since 2009/10 which have accumulated to more than $1.4 billion, most of which is carried by DHBs. The BERL economic forecasting agency has a higher estimate. Is it any surprise that we have deficits? It is more surprising that DHBs, given this extent of underfunding, don’t have far greater deficits.
But other Government actions also contribute to deficits. Pressuring DHBs undertaking major capital works to do this through ‘capital recycling’ would add significantly to ongoing DHB annual costs as discussed earlier.
The DHB with the greatest deficit is Canterbury, which is unsurprising given the ongoing impact of the earthquake devastation discussed earlier. The Population Based Funding formula is not designed to deal with unanticipated natural disasters that cause devastation which, among other things, significantly disrupt the reliability of population data and leads to unplanned large scale capital works requirements.
This has served to blow out Canterbury’s deficit. But, as with other rebuilds, the Government is requiring that it repay it with the standard capital charge. As it happens the capital charge for the earthquake rebuild to date roughly equates to Canterbury’s deficit.
There is a compelling argument that, given the exceptional nature of Canterbury’s circumstances, the Government should waive the capital charge, thereby removing the deficit and the consequential additional pressures on this victim of a natural disaster.
The Government also has investment options. It had the option of investing in the specialist workforce capacity in DHBs. In 2009, ASMS and the DHBs jointly developed a document known as the ‘Business Case’ which concluded that by improving the specialist workforce capacity (ie, employ more numbers through more competitive terms and conditions of employment) to free up more time for specialists to spend time on clinical systems improvements. This would include, for example, reducing clinical variation and adverse events. Through this approach, considerable financial savings could be made while improving quality.
Unfortunately, through a negative attitude from then Health Minister Tony Ryall and lack of backbone from chief executives, the DHBs reneged on the agreement. Thus, the opportunity was lost; had the DHBs not lost their nerve, then arguably today’s deficits would have been avoided.
Government has lost another opportunity to reduce costs by its failure to learn from the experience in Canterbury DHB of the clinician-led and developed health pathways between community and hospital, known as the ‘Canterbury Initiative’ which has both improved the effectiveness of patient care, constrained acute demand growth and saved considerable health dollars.
So, while chief executives and their immediate circle may sweat over deficits, why should specialists and other health professionals be subjected to this? Deficits are a consequence of government decisions in areas where they have options.
Further, the pressures on specialists at the clinical and diagnostic front line, trying to provide quality patient care in a financially retrenched health system, far exceeds the pressures that chief executives come under. Unlike clinical workforce pressures, operational expenditure deficits do not carry over to the next financial year.
Chief executives pay for these politically induced deficits with their sweaty brows. Specialists fund for it with their health including burnout.
In broad terms, there are two ways in which DHBs can function. One is relational as evidenced by Canterbury and also the South Island DHBs in the Health Benefits Ltd era. The other is contractual. The most immediate example of the latter is the leadership of the three Auckland DHBs who find themselves under their joint Chair Lester Levy in a virtual state of war with primary care due to the high transaction cost and contractual nature of their relationship and the leadership culture that shapes it.
If we had effective leadership from Government in the health sector, this could have required these DHBs to look at Canterbury’s much more effective relational approach to the community-hospital relationship and adapt this to their own populations. Given Lester Levy’s close political ties to Government this is unlikely; he is not nicknamed the Minister of Health for Auckland for nothing.
Sitting behind this relational versus contractual approach is what is known as the funder-provider split. This was the mechanism used to try to create a competitive market in our public health system in the 1990s. The ‘funder’ would make allocative funding decisions to competing ‘providers’. The system failed because it was highly transactional, those in the ‘funder’ who made allocative decisions had less expertise and were distant from practical reality than those in the ‘providers’, often poor allocative decisions were made, it undermined necessary collaboration between ‘providers’, and it was very disruptive. Apart from that it worked well.
The structures that provided this split disappeared with our new non-competitive legislation passed in 2000. But in many DHBs it continued internally with what were unhelpfully called ‘funder’ and ‘provider arms’. This did not lend itself to sensible integrated decision-making and over time in many DHBs the practical functions of funding were merged into the rest of the DHB rather than as a virtual separate entity within it.
Lester Levy was appointed Chair of Waitemata DHB in early 2009. As it happened that DHB was one of those still rooted in the old ‘funder arm’ system that many DHBs including Auckland and Counties Manukau had shifted away from. When he became Chair of Auckland DHB its funding roles were merged with Waitemata’s and ran along the same line as Waitemata’s. Now Counties Manukau is also tucked under his armpit, all the indications are that this third DHB will be forced back into the outmoded funder-provider split under a new ‘virtual structure’. The obvious risks of this is the likelihood of poorer allocative decisions and higher transaction costs.
It is interesting that in 2012 the ‘funder-provider’ split was enshrined in legislation for England through the mechanism of ‘clinical commissioning groups’. In the short space of time since then it is generally recognised that this has failed. Instead NHS England is endeavouring to get around it through new non-statutory formations such as ‘Sustainable Transformation Plans’ and ‘Accountable Care Services’. In that most unusual election in which the Conservative Party both won and lost concurrently, the governing party indicated it was moving away from this split.
DHB performance in MECA negotiations
Currently we have a ballot under way over whether to accept a recommended settlement of our multi-employer collective agreement with the 20 DHBs. I don’t want to comment of the specifics of the proposed settlement here but there are some brief observations worthy of noting given that the determining body of the DHBs’ approach in these negotiations was chief executives.
There were attempts to:
• Remove the current rights to agreed hours of work and job sizing.
• Loss of a week’s annual leave.
• Loss or abatement of clinical leadership allowances as a trade-off for an additional step on the salary scale.
But if this was not enough then at the 11th hour they attempted to reduce consultation rights and then were perplexed why we were angry and reported it back to members.
Both this behaviour and failing to comprehend why it would cause upset and anger is of itself a powerful indictment of the calibre of collective chief executive leadership at a national level at least.
What should the next Health Minister do?
I am not confident at all to predict the outcome of the election in September but I am confident that regardless of who wins there will be a new health minister. So, what should a new minister do to address this leadership malaise? In my view, this should include:
1. Full commitment to distributive clinical leadership in DHBs.
2. Require DHBs to take immediate steps to address specialist shortages and consequential burnout by requiring them to correct capacity and hours of work in according with the collective agreement obligations (job sizing).
3. Require DHBs to address unacceptable levels of specialist job dissatisfaction in order to mitigate the effects of the pending retention loss.
4. Require Health Workforce New Zealand to get its act together by addressing specialist workforce vulnerability, significantly improving its engagement with health unions and professional bodies, and (if it has not already done so) dropping its contentious funding proposal for vocational training.
5. Require the Ministry of Health to bin ‘disruptive innovation’.
6. Require Treasury not to engage in intimidation or bullying of DHBs.
7. Require DHBs to develop relational rather than contractual approaches including in respect of community and hospital services.
8. Reverse moves to reinstate or strengthen the funder-provider split within DHBs.
9. Objectively review the funding needs of Canterbury DHB in the context of the impact and aftermath of natural disasters.
10. End ‘capital recycling’.
11. Either make ‘partnership groups’ for major capital works genuine partnerships with DHBs or abandon them leave DHBs to have the lead role of recommending to Government.
12. Require a more nuanced and sensitive approach to deficits.
13. Invest in the specialist workforce consistent with the principles of the joint ASMS-DHBs ‘Business Case’ (2009) in order to improve the quality of care and improve financial performance.
14. Review DHBs approach to collective agreement negotiations to make it a more constructive process that is understanding of and respectful towards affected workforces.