Tag Archives: Bureaucracy

Identity Crisis (DC Comics)

Rescue is on the way; thank goodness for the superhero to save us. (DC Comics) (Photo credit: Wikipedia)

Right now, there is the proposed NHS Reinstatement Bill, a lobby document which lays out a way to reverse many NHS reforms.

This lobby document, which is what is it, is familiar reading, and brings back various structures that in the past have failed. You can find information on it at this link.

What is interesting about this approach is the aura of respectability that it wraps itself in, by proposing the changes as a legislative draft, almost as though it were ready to go to committee.  This is, obviously, an influencing tactic designed to force debate onto the topics covered in the proposed bill, and disarm critics who don’t agree that the points in the lobby document are the right starting points. In that respect, the lobby document polarises positions, particularly against current policy direction.

The whole lobby document’s comments and notes identifies proposed changes to a variety of existing legilsation. What we don’t find, though is any evidence that the authors were in any way persuasive  or influential during public consultations at the time. We call that ‘sour grapes’.

Approaches such as this suffer from the following:

  1.  a belief that the fundamental values underpinning the health service can only be protected in a particular way and these are the ways things used to be.
  2. a belief that the changes that have been made have violated these values; moreover, that the solutions have made things ‘worse’ as they see it.
  3. selective use of academic research to support the positions that one wishes to avoid changing.

New PublicManagement as reform of government itself must sit uncomfortably with this regressive thinking.

For the authors, they would no doubt point to market failure logic to prove that the NHS should not be ‘marketised’ as they put it, forgetting that a greater fear is ‘government failure’, for which there is ample evidence, not just with the NHS but a whole host of other public initiatives and legislation that has wasted public money.

Healthcare systems are complex and by trying to overlay what they see as simple solutions to the problems they claim arise from the reform agenda of past years, they misrepresent what the actual problems are. As messy, or complex/wicked, challenges, the authors believe that by taking away that messiness, they’ll also take away the problems. But they know just as well as anyone, that their solutions will only create, perhaps even recreate, the very problems that led to reform in the first place, except now they will be today’s problems, not yesterday’s.

One might argue that the authors are committing a type 3 error, of unintentionally solving the wrong problem well, but that would assume that they have are not clear in their minds what they are proposing. Therefore, it appears they are do know better and are committing a type 4 error, of intentially solving the wrong problem well because that fits with their policy preferences, or prejudices.

That’s why this is a lobby document, designed to intensionally convince, (is mislead too strong?) others of their definition of what the NHS problem is.

Regardless, the lobby document and the authors are caught by a fundament policy trap: of solving the wrong problem.

Want to know more?

Government failure in the UK is examined in Anthony King and Ivor Crewe, The Blunders of Our Governments, 2013 (@Amazon) and in Richard Bacon and Christopher Hope, Conundrum: Why every government gets things wrong and what we can do about it, 2013. (@Amazon)

New Public Management was originally conceptualised by Christopher Hood, in 1991, A Public Management for All Seasons. Public Administration, 69 (Spring), 3-19. Some (Dunlevey et al) argue that New Public Management is dead and that governance in the digital era requires greater, not less, government. That may be the case for some, but if you actually look at the tools that are available to government in a digital world, you’d find that there is little reason for government to own or run very much. See Christopher Hood and Helen Margetts, The Tools of Government in the Digital Age, 2007. (@Amazon)

I have found Leslie David Simon’s book, (Woodrow Willson Centre, 2000) an early, and compelling way of laying out the digital agenda in a policy context really well. (@Amazon)

I would also recommend Vito Tanzi, Government versus Markets: the changing economic role of the state, 2011. (@Amazon)


A recently released report from the European Observatory on Health Systems and Policies has produced a retrospective on what over 40 European countries did in


Financial policy trumps health policy (Photo credit: Tax Credits)

response to the financial crisis, triggered in 2007. The report “Health policy responses to the financial crisis in Europe” (by Mladovsky, Srivastava, Cylus, Karanikolos, Evetovits, Thomson, McKee) is here.

The report finds that a range of policy responses characterised what European countries did, ranging from doing nothing, spending more to spending less, from increasing benefits to cutting them, from cutting salaries, increasing co-payments, and curtailing capital spending. In many cases, plans to expand were put on hold, while in others, plans in place to drive efficiencies were accelerated. The price of medicines went up, down, reimbursements dropped, co-payments went up, retail prices were capped, prices to the pharmaceutical industry went down, or were modified. The response to crisis in some countries was hampered by powerful stakeholder groups (mainly clinical vested interest groups, e.g. pharmacists, doctors) resisting changes and governments backing down.

The authors note that, in the end, “…little has been done to enhance value through policies to improve public health…” We agree that this was a missed opportunity, though the continuing financial difficulties suggest the crisis is hardly over. My guess is that this will be a generational crisis, as the policy responses still need to feed through the system and lead to either increased ill-health, postponed treatment, or in some cases, simply delaying the inevitable future financial crunch.

Unfortunately, the report is a descriptive study; their assessment of the different policy choices made is based on research conclusions in the literature. What that means is that we don’t know whether the choices made were effective, appropriate, or mere compromise. The appendices provide useful summaries of individual country policy actions. I just wish the authors had assessed these actions.

I would also have liked to have known how individual governments made the policy responses they did; clearly some were unpopular, but that does not preclude making evidence-informed choices and sticking to them. What is evident is that political will in many cases is lacking, and the ability to leverage various policy instruments is seriously hampered by powerful vested interests. Clearly, the financial crisis and the need for austerity in indebted sovereign states, has not hampered the effectiveness of lobbying, only demonstrated that these groups are sufficiently powerful to resist reform even when it is most needed — what hope is there when change is optional?

On pages 28 and 29 the authors useful summarise policy tools that either promote or undermine health system goals, assuming of course that countries have in place strategies for their health systems that correlate with these instruments — it is not unusual for a country to require complex strategies simply to deal with the mis-behaviour of existing instruments — an example is where a country permits balance or extra billing, then needs public funds to cover the costs of underinsured individuals, then needs to have resource shifting policies simply because the co-payment/reimbursement system incentivises inappropriate prescribing or treatment, leading to serious regional variations in outcomes. Situations like this  (there are a number of countries in Europe with this specific problem) illustrate the failure to take a whole system approach to the use of health policy instrument selection. This report does not help either by failing to put the individual country policy responses into the context of the country’s system objectives. That might have produced a more useful report for policy-makers.

In the end, we are left undernourished and want to know whether any of these are likely to have perverse consequences (unintended consequences, perverse incentives, including increase in medical fraud and pharmaceutical crime).



Image via Wikipedia

Does the proposed amending directive on providing medicines information to the general public (sometimes thought of as advertising) actually enhance patients’ rights? Will it lead to good regulation? The document in question can be found here.

I’ll grant that a lot of people have been involved in this, so there must be some consensus, but is the proposed directive strictly in the patient’s best interests and how are we to truly cost the benefits?

The document itself is cumbersome as if trying very hard to close off any possible loop-hole in case advertising disguised as information might slip into the hands of an unsuspecting patient. To do this, a variety of tests are proposed, a net through which information must pass, presumably though, not advertising, that might meet these tests:

  • objective
  • unbiased
  • evidence based
  • up to date
  • reliable
  • factually correct
  • not misleading
  • understandable
  • meet patients’ needs and expectations

These tests are all good things, and I have no issue with them as such; certainly one would not wish to be in favour of subjectivity, bias, opinions full of errors and likely misleading, despite being incomprehensible — I suppose much like an insurance contract.

If I prioritise the last though, meeting patients’ needs and expectations, information would need to pass these tests for a reason other than internal scientific tests, namely, that it be useful. My fear is this process will produce information that may struggle meeting the test of being understandable. The reason for giving the information itself is to help the patient after all, so starting with their needs seems to me to the test against which I would assess everything else. Of course, little in this world passes these tests anyway, or if it does only for a very short space of time, and even then, facts can be in dispute and there are differences of opinion over how to interpret them. What we are left with in this proposal is a technocratic solution for what in the end is a human need for information.

What are policy makers afraid of in drafting this directive? What do they fear should patients have more information? And have they fully costed this approach?

It all seems to very old-fashioned and dated. Like trying to put the genie back in the bottle, I think this in time will prove to be the actions which caused more harm than good. Indeed, it may be that the benefits are less than the total system wide costs.

The question, then, to ponder further, is what decisions by patients are enabled through this directive, how does it specifically enhance the rights and needs of patients (keep in mind that most health systems neither respect nor completely understand what these mean). Certainly, taking a decision-based approach, perhaps a ‘decision architecture’ which determines what information in what form is needed to help patients make what sorts of choices, then we might know better what degree of ‘coercion’ is needed, if any — but can you give me an example where it is even ethical to withhold information from a patient?

Of course, such an approach would would be in conflict with this directive which builds on the view that only health professionals know best. Hardly a firm foundation for legislative reform of this magnitude. But we need to think of whole-system regulation and the distribution of costs and benefits on that basis, and not just the information issue itself.

I am not surprised that it has come to this, as there is a sort of ‘consensus’ amongst professional vested interests that an information and advertising free for all would lead to chaos, loss of control of drug budgets, and a flood of advertising on our televisions and newspapers about drugs influencing hapless patients and consumers (as though advertising to doctors didn’t achieve similar effects). But compared to the monastic model we have now, where patients know less about the drugs they take than the amount of fat in a kilo of ground meat, it would serve to open up to greater scrutiny industry claims and counterclaims. This lack of knowledge itself has a cost and serious consequences for the costs of healthcare systems.

Recently, the Economist has noted in an article on red tape in Washington how the various costs of regulation are identified, and how wider public benefits are calculated or missed. The US Congressional Budget Office has speculated that a moratorium on DTC would likely have perverse consequences and be unlikely to lower drug prices, and only shift advertising toward physicians. This of course challenges the narrower focus (not meant pejoratively) of the Directive which clearly fails to take account of wider regulatory costs, which are ignored as they fall outside EU competency. These regulatory costs include but are not limited to:

  • the potential beneficial impact on treatment costs and compliance with medicines regimes arising from wider engagement of patients in their care
  • the potential corresponding (and likely beneficial) challenges to the authority of health professionals (but ignoring that many countries are seeking to encourage patient selfcare which is designed to achieve just this result), who are influenced in other ways in their choice of medicines, with considerable evidence of irrational and inappropriate prescribing, despite efforts to counter this
  • greater awareness by the public of national medicines policies which may actually encourage greater cost efficiencies, such as trade-offs between medicines and inpatient care, as well as greater public scrutiny of how new drugs gain market access (a process which the public has little knowledge of and which has perverse consequences in many cases for patient access to new medicines — something an informed patient may wish to have a view on)
  • greater public awareness of the decisions of health technology assessment agencies, which may raise serious social and ethical issues
  • the possibility that the costs of regulation and claimed benefits to the health system may lead to the loss of research productivity and innovation from a more open environment; indeed the losses here may swamp the regulatory benefits.

I think keeping patients in the dark, as some have written, leads to greater system costs, and perverse consequences and incentives, than full and open disclosure to the public of medicines information, and indeed, even advertising. In an open environment, claims are tested in the real world and can be taken into account in whole-system benefits realisation, not exactly something that is designed to create an additional layer of regulation. In the end, the patient is excluded from playing an informed role in their own healthcare.

Want to know more?

Keeping Patients in the Dark, by Cardy, Edwards and Gay, Civitas, 2000. (Amazon sells it)

Benefits and harms of direct to consumer advertising: a systematic review, Gilbody, Wilson, Watt, Qual Saf Health Care, 2005 Aug;14(4):246-50.

Direct to Consumer Advertising is legal in the US. This is some material from the FDA: Information for Consumers…

US Congressional Budget Office, Potential Effects of a Ban on Direct-to-Consumer Advertising of New Prescrption Drugs, May 2011, Economic and Budget Issue Brief.

Dead End - mid

Is this the way to the future? (Photo credit: bennylin0724)

The World Economic Forum meeting in Vienna this week will be grappling with the challenging problem of European innovation. The evidence is suggesting that rather than leading the world, Europe is worryingly backsliding. Worse, of course, is the public rhetoric is not backed up by actual real-world action by governments, who persist in the old ways. This has produced the current complex mix of disincentives for risk-takers with governments fearful of the disruptive impact of innovation on European preferences (ranging from employment to lifestyle), coupled with frequently ineffective and unreformed public sector organisations. This has been admirably addressed, too, in the WEF report on the future of government.

Rather than FAST government (flatter, agile, streamlined, tech-enabled) as the WEF calls for, we find hierarchical and bureaucratic, slow and sluggish, complex and unreformed, tech-naive government — these are hardly attributes needed if the public sector is to play a role in public/private partnerships to drive forward innovation. Our innovation culture instead gets:

  • social costs that burden small and medium businesses with a disproportionate share of social costs, which kill off risk takers because they can’t even afford the first day of business; this includes unreasonable start-up capital requirements (1€ should be enough), pointless company start up procedures, wrong-head bankruptcy laws, and inflexible employment laws;
  • unreformed central governments, which absorb productive capacity , require very high levels of tax funding to support, and which generate administrative and regulatory red-tape to little end other than to control;
  • public ownership of intellectual property as the default position for publicly funded research, coupled with the poor commercialisation record of state-owned research infrastructure, leading to hoarding of innovations within bureaucracies, and not accessible to risk-takers;
  • weak academic performance amongst the universities, with little competitive forces within academe to encourage researchers to move outside the university to become entrepreneurs, or to work with investors to generate new ventures, as it frequently jeopardises public sector employment contracts as in many countries academics are civil servants (that is itself is undesirable) — there are very few world-class European universities, based on recent global rankings.

I have some experience here, and while governments value stability in their civil services, what they often get instead is classic ‘rent-seeking’ behaviour, whereby civil servants seek to monopolise whole areas of the economy, ranging from failing to control regulatory creep, to governments having all sorts of pre-emptions rights over private arrangements. This latter point is particularly concerning when it comes to pre-emption rights over intellectual property created with public funds — as the Commission has noted, Europe badly needs its equivalent of the US’s Bayh-Dole Act.

I put my money in a few areas, not just because I know a little about them, but because they have the benefit of driving wider benefits — they act like breeders for other innovations, as well as magnets for innovations developed in other areas:

  • health technologies, including life sciences, devices, new materials, nano-tech, imaging, remote monitoring;
  • information technologies, including the internet (many governments are fearful of the disruptive influence of the internet);
  • new media as the convergence of technological delivery systems (potentially disruptive and problematic when the state is an owner of media).

There are no thousand kilo gorillas in Europe because Europe’s governments have become authoritarians that fear disruptive innovation that may challenge deeply held beliefs and challenge the European model. This is the type of pride that goes before a fall.  So, action is needed in at least four areas:

  • liberating the investment climate to encourage a higher tolerance of risk and acceptance that higher risks should lead to higher rewards, which has implications for taxation, capital gains/losses and bankruptcy;
  • liberating labour markets, to incentivise business to create experimental forms of employment, whereby firms in acknowledged startup situations can have greater flexibility retaining and rewarding staff without being confronted with first euro social costs and minimum wage regimes;
  • understanding the tremendously heavy burden unreformed government and excessively zealous taxation has on entrepreneurs and the need to liberate the entrepreneurial system from official structures as much as possible; this also means that government needs to understand what it can and should do (and of course what it shouldn’t do);
  • placing publicly funded intellectual property on the open market — I would suggest even creating an auction market for publicly funded IP.

The European Innovation Road is not a paved autobahn; it is full of holes, and in some places just goes over a cliff, but it has the potential to be a superhighway if we get the fundamentals right.

Uncertainty can never be removed from the innovation process. We shouldn’t act as though it can.

Want to know more?

Just searching on the internet will produce an avalanche of information. Regretfully, much academic research is still published in journals that are not open access which means accessing them requires either a subscription or the payment of a fee, despite the vast majority of this work having been publicly funded. These articles are not listed. However, authors of papers who would like to have their papers listed here, and provide a pdf for download are encouraged to provide a paper for listing here.

Also consider:

Martin Fransman, The New ICT Ecosystem: implications for Europe (Kokoro, 2007) presents a thoughful policy framework.

Anything by Annalee Saxenian, but her The New Argonauts: regional advantage in a global economy (Harvard 2006) is worth reading in the context of European regional development.

Josh Lerner, Boulevard of Broken Dreams: why public efforts to boost entrepreneurialism have venture capital have failed, and what to do about it (Princeton, 2009) offers a research-based critique of the role of government and why for every dollar/euro/pound government puts into commercialisation of research, the private sector takes one out.

The new report from NESTA, Atlantic Drift [here] is worth reading for its US/UK investment comparisons with important insights for other countries.  It is authored by Josh Lerner, Yannis Pierrakis, Liam Collins and Albert Bravo Biosca.

Lawton Burns, The Business of Healthcare Innovation (Cambridge, 2005), explains important innovation drivers in healthcare, which offers some thoughts on how Europe can succeed here, despite widespread government control of healthcare systems. It is worth noting that virtually all EU countries and their regions have prioritised biotechnology/healthcare/life sciences in at least their top 5 areas.

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Bureaucracy - Magritte

Bureaucracy by Magritte

The well-known organisational practice of delaying has emerged as one way to achieve public sector austerity. This is to be aplauded, not regretted as it is applied to the English NHS. In fact, those looking to the total costs of running health systems should be taking serious note of what this is all about.

Public sector work has tended to favour layers of bureaucracy, to respond to the tendency of civil servants to do what is called rent-seeking, which in the end means building empires, or expand a sphere of influence. In the regulatory context, it is called regulatory creep, as mandates are progressively, but subtly expanded by rent-seeking regulators.

The end result is large spans of control for civil servants, but little actual progress in achieving public sector objectives and goals. This stifles creativity and further rigidifies individual behaviour into highly structured ways of working — further compounding the potential waste of public money.

In addition, the tendency of bureaucracies to create bureaucracies means that individual jobs are often highly compartmentalised from other jobs, as individuals carry specific dossiers or briefs. The compartmentalisation of government into ministerial portfolios adds additional barriers to sharing work, ideas, or insights across government, further compounding the opportunities to deliver better value for money.

The White Paper on the NHS plus the overall behaviour of the UK’s coalition government reflect a consistent and simple message about the way the public sector should be organised to undertake its tasks. De-layering means removing non-value-adding levels of organisational bureaucracy, layers with the sole purpose of either move information up (or down), or checking or verifying the work of others.

The NHS itself has been too long likened to a supertanker, but a school of fish is what we want — nimble organisations that can respond quickly to change. Instead, some commentators have questioned the proposed reforms, asking what will happen when you need to pull some strings centrally to get things done? What these commentators don’t realise is that healthcare is a complex adaptive system, which means that there aren’t really strings to pull.  Decades of belief in this assumption has produced ill-thought out control mechanisms, and inappropriate and pointless layers of supervisory control (such as Strategic Health Authorities), which really can be only weakly effective at best and destructive of initiative at worst. It is not unusual for SHA staff insert themselves into processes to assert  a measure of control reflecting their priorities, ignoring the real needs of people dealing with a front-line challenge.  Indeed, the rent-seeking behaviour of these quasi-civil servants challenges the validity, the very authority, of those who own the front-line problems in healthcare to actually solve these problems. Before all this, we had the failed Modernisation Agency, the failed NHS Training this, or NHS University that.

The insights in the White Paper have put paid to the assumption that overarching control mechanisms can work, putting the onsus on problem owners to solve these problems. There are proposals in the While Paper which accept the need for flexible and dynamic responsiveness to the local and real-world interface between the patient and their care provider. Many in the NHS will fail to understand this, and as in any organisational change process  there are some people who ‘don’t get it’.  By and large, failure to alter personal behaviours is a recognised barrier to implementing reforms, and many such people will need to be shown the door and encouraged to pursue other careers. The NHS often forgets to bury its dead and it frequently eats its young, meaning that failed bureaucrats get recycled and good ideas destroyed by a controlling culture.

I have immense confidence in the ability of the right people to solve the problems, (indeed of the ability of GPs to ‘get it’). There are also real challenges for the chief executives of the foundation trusts and other NHS providers to demonstrate the necessary leadership and management skills to drive out the costs and inefficiencies that are shot through the system; CEOs will be particularly challenged as they must now actually manage, and not simply administer a publicly funded entity and avoid rocking the boat.

There are too many quangos and other organisations around staffed with individuals from failed agencies so one must be vigilant to ensure that the delayering process does not just turn into a recycling exercise.

Want to know  more?

Charles Perrow’s important work, Complex Organisations, highlighted the hierarchical structure of professional organisations and asks important questions about how and why we construct overly complex organisations, and why they can become dysfunctional.