Leak reveals public sector reform is failing

The UK press reports a leaked cabinet document showing productivity has worsened in the public sector despite the enormous amounts of money invested. Worst of all, health and education are 20% less productive. The statistics contradict Tony Blair’s claims to be ‘delivering’ so the leaked document reveals he is seeking to alter the way official figures are calculated to show his government in a better light. The memo also described the need to develop ‘credible stories’ to combat criticisms; the need to lodge ‘key delivery facts’ in the public’s mind; and the importance of setting up a ‘system of rebuttal’.

I have many ‘credible stories’ of how government specifications have made public services worse. I have key non-delivery facts and thus I expect to meet their system of rebuttal. I can’t wait.

What does the Prime Minister deliver?

For some time members of Tony Blair’s ‘Delivery’ Unit have been putting it about that the Prime Minster’s key targets are being achieved. One ‘key delivery fact’ they show in their presentations is a marked reduction in asylum seekers and they put this achievement down to ministerial action. If you have read the recent UK press you will know ministers acted to distort the system, whistleblowers have claimed people have been let in to the UK in huge numbers to avoid them seeking asylum. The whistleblowers have got it in the neck.

The people from the Prime Minister’s ‘Delivery’ Unit claim the Prime Minister is not responsible for the huge volume of targets as Tony only focuses on the key few. Oh really. They also say anyone who argues that targets are wrong is taking the debate to a moronic level. This is reminiscent of the Mandelson school of spin, if you can’t win the argument, take out the man.

Tony is the archetypal command and control manager. The ‘key delivery facts’ he wants to publicise are numbers reported to him which, I have no doubt, he believes. But he cannot see that these numbers have either distorted and/or have no relevance to performance. The ‘Delivery’ Unit ought to be called the Public Sector Destruction Unit.

The US is doing it too

A US correspondent writes:

“I suppose you think that you in the UK have a monopoly on madness in government. Well, here is an example that may raise a question or two about that.

The US congress has two important health care programs: Medicare, which is administered by the Federal Government and Medicaid, intended for low income people, administered by the 50 states. In Mississippi, where my daughter lives, the state has contracted with a private company, which calls itself Health Systems of Mississippi which proclaims that its mission is: ‘Promoting Quality and Value in Health Care for the Citizens of Mississippi’. Actually, this outfit has been hired by the state to examine and review health care services to see if they are necessary. They are paid a fee for health services denied.

When asked for the basis for a denial, HSM refers to the use of computer programs and criteria furnished by another private organization, Interqual. If you go to the Interqual site and try to find the criteria used in denying health service, you will find it is not there.

I called Interqual at the number on the site and told the lady who answered the phone that I was searching for the criteria used to deny medical assistance. She told me that this information was ‘proprietary’ and that I was not licensed to see it.

Now Mississippi is one of the poorest of the 50 states, with educational achievements (however measured) lowest of all. Get the picture? The program has been set up to keep the neediest folks in ignorance so that two private companies, acting on behalf of the state, can be paid for keeping Medicaid costs low.

So, don’t be so smug about your monopoly.”

I won’t be.

The burden of measurement

The Audit Commission reports that fewer hospitals are cheating with their measures, but does this simply mean fewer get caught? Most tellingly they write at the end of a recent report:

‘The information collected is too often seen as irrelevant [by the people who do the work] to patient care and focused on the needs of the ‘centre’ rather than frontline service delivery. In particular, more effort is needed to involve clinical staff in validating and using information produced.’

They just don’t get it do they?

The real causes of waste

A fellow systems thinker writes:

“During Jan, Feb and March I have been running a project involving two NHS Primary Care Trusts and an Acute Trust (trusts are hospitals). The Department of Health has got ‘targets’ as an art form. The NHS execs and managers are like rabbits caught in the headlights, micro managing everything to avoid losing a ‘star’ by missing a target or ‘cheating’ to achieve a target. It has been a thoroughly depressing insight into how 5,000 good people work under duress in highly dysfunctional processes with hardly any grasp of the system. Also, by setting PCTs in adversarial relationships with hospitals, and with GPs on the path of avarice it is quite difficult for anyone to stand above it all so they can work on the system and do the right thing for patients (which also achieves lower cost). Inside hospitals Clinician Consultants hold management to ransom and are a particularly large cause of rework and waste through their denial that their behaviours cause problems for everyone else.

Patient Choice, Payment-by-Results, Agenda for Change and so forth are all scams on good people and attempts to get command and control through devious routes. It’s so much enormous unnecessary cost.”

And these interventions have had disastrous unintended consequences. The spirit of the ‘accountability’ regime, we should hold Tony et al accountable.

Institutionalised call centre waste

Hospitals now have cancellation call centres. If they cancel an operation more than 48 hours before it was due, it does not appear on the statistics. A typical call centre employs 20 people and represents an investment in technology and facilities. It does no value work. Well done that minister.

And lawyers cause waste too

A reader in the ambulance service writes:

“We in the ambulance service have never benefited from reliable and consistent feedback about our patients’ diagnosis, treatment and outcome in hospital because their staff have been too busy and/or their computer systems not up to it. Finally, about a year ago, our local Accident and Emergency department advised us that they were providing this information to all local GPs, and would be prepared to provide the same info to us with the usual stipulation about having a secure terminal and named personnel to deal with the data (to ensure patient confidentiality). However, our management factory insists that a contract be drawn up. Although I am not sure, I doubt if any contract was considered necessary for the GPs.

A year down the line, and I am told that our legal department are involved in 2 or 3 ‘very important projects’ and don’t have time for this. I am also advised that drawing up this type of contract is a ‘very complicated process’. So, one of the most important breakthrough developments available to us gets stuck in the mire, and the lawyers, no doubt, make a fortune out of creating barriers to improvement!”


Another example of designing waste in

The government plans to introduce a national tariff for operations and procedures carried out on patients in the NHS, it means hospitals will be paid the same amount for each type of procedure. It is a classic example of how to drive up costs while the intent is to manage (and reduce) costs.

Any intervention that inhibits a system’s ability to absorb variety drives up costs. For a proof of this read my latest book. (Finally a plug for the book!).

Feedback on Six Sigma

In the last newsletter I exposed the weaknesses of Six Sigma. I got a lot of correspondence from people who have first-hand experience of the problems, here are two examples:

“I have a sister who was Six Sigma’d and tells me her whole team were left totally demoralised and extremely annoyed by the sheer arrogance and aloof nature of the approach. I have been training martial arts since Oct 1991. Some of the Black belts I know are self centred tossers who think they know it all. Their application understanding is poor and they rush through their gradings to get a black belt. They cannot equate martial arts to real world application. In the real world they would be beaten up by a streetwise kid.

And the second:

“Look at Invensys, it used to be boring old BTR (British Tyre and Rubber) with 700 largely autonomous business units, with managers rewards based on the extent to which return on capital exceeded a threshold – simplistic, but for two decades until the early 90’s it delivered the best shareholder returns of any FTSE100, so arguably effective. (Managers were left free to orient their business to customer needs, so long as they made financial returns)

In come new management, mergers and takeovers, and the introduction of ‘global matrix management’ and, you’ve guessed it, Six Sigma.

By 2001, the company was on the threshold of insolvency. £ billions of shareholder value destroyed, fire-sale of assets, and the rump of the business is stumbling along.”

Six Sigma = TQM on steroids, the plausible sold to the gullible. It will go down in history as one of the more lucrative fads (for its promoters). For the full critique please read the April 2004 newsletter.