What’s the cure for an ailing health service?
Some economists like to talk about the ‘dead hand of bureaucracy’. This is shorthand for large self-sustaining bureaucracies whose core objective is no longer the delivery of their core services, but rather the maintenance of the status quo. In these systems, the staff have a vested interest in protecting their position and privileges, and so the system’s objectives move further and further from the needs of their clients, or in the public sector, the taxpayer.
The Irish health service is a case in point. It has between 100,000 and 140,000 staff (the PPARS debacle showed they couldn’t be precisely sure just how many were on the books); it consumes a quarter of every tax euro; it has received a huge increase in funds in the last decade; and yet it has completely failed to make the kind of significant service improvements that one would expect on such a huge budget. The root of this failure to deliver improvement is entirely down to the dead-handed approach that successive governments have taken to the challenge of health service reform.
Consider the HSE. It was meant to be the silver bullet that would stream-line the management of healthcare provision across the country. The old, clientelist system of local health boards dominated by county councillors was to be replaced with a lean centralised authority capable of delivering a health service equal to our position as a wealthy industrialised nation. Instead it merely added a final suffocating layer of bureaucracy to an already over-managed, under-productive system. In short it was a bureaucratic solution to a bureaucratic problem, and that was never going to work.
So far the HSE’s biggest achievement has been to turn a clientelist system into one with no political oversight or accountability. Ministers can now avoid nasty doses of responsibility by passing the buck over to Professor Drumm and Co. The HSE then refuse to respond on the basis that questions from our politicians are not for their ears, and should be referred back to the Department of Health. The net result is a merry-go-round with no answers. This means a lack of accountability from the single biggest spending area of the state, which has an annual budget of over €11 billion.
So if a bureaucratic solution isn’t going to work, and that is now plainly obvious, what other options are available. Well the reverse of a statist solution is typically privatisation. However, privatised healthcare can often reduce treatment to a means based rather than a needs based system – one need only look to the US for proof of that. While private healthcare can have a contribution in a wider system, doctors and nurses should for the most part remain in the public space, treating all before them without fear or favour. However, the problem with the Irish health service does not lie with the primary care givers and front-line staff. The problem at the root of the system lies with the administration.
In recent years, much of the increased investment in the health service has gone on funding new administrators. The HSE includes some of the least productive employees in the country. Consider the staff whose positions were to be moved to the newly centralised HSE. Many had cast-iron guarantees in their contracts regarding fixity of location and terms, the net result was that in many cases job functions were moved, but the incumbents didn’t follow. This meant that additional staff had to be hired to do the work that had been relocated, while the existing staff were kept on with little or nothing to do. Add to this the fact that many HSE staff consider that their annual holiday entitlement includes uncertified sick leave, and you begin to see that the real challenge lies in reforming the way the system is run.
This is not a challenge unique to Ireland. Britain’s National Health Service is Europe’s biggest employer with 1.5 million staff. BBC reports from June this year show that NHS staff take up to twice as many sick days as the average private sector worker. It is a huge drain on the exchequer and in much need of reform. However, over the past 20 years successive British governments from Margaret Thatcher onwards, have at least attempted to reform the health service by introducing a measure of competition.
The intellectual driving force behind this was Nobel-prize winning economist James Buchanan. Buchanan’s life’s work has been devoted to public choice theory. In terms of the NHS, his theories manifested themselves in what became known as the internal market.
Essentially internal markets introduce competition into previously monolithic bureaucracies by moving their systems of control away from rigid hierarchies and direct management to governance by goals and targets. In such systems, goals are incentivised so that the level of reward is measurably linked to achievement. In Buchanan’s world, the bureaucrat is free to achieve their potential, and so their selfish interest and the needs of their clients can be synchronised by appropriately defining the system of goals and rewards.
However, the initial attempts at this in the NHS produced unexpected results. For example, one of the primary goals was to reduce waiting lists. This should sound familiar to an Irish reader. One hospital did this by contacting patients awaiting procedures to find out when they would be on holidays. They then scheduled their procedures to coincide with their trips. The result was that patients cancelled their procedures rather than miss their holidays, allowing the hospital to remove them from the waiting list and give their appointments to others. The net result was a reduced waiting list, but not in a way that really benefited the patients.
The moral of the story is therefore that internal markets need to be designed in a way that ensures that the ambitions of the staff can be manipulated to maximise the patient benefit. This is not an impossible task but it would require some careful planning.
So how does this relate back to the Irish system? Well if we are to keep the actual provision of healthcare as an intrinsic public good, one that does not discriminate on means, then the challenge becomes one of ensuring that the support structures operate in a cost effective way that allows budgets to be deployed to the frontline with a minimum of overhead.
The internal market has a lot to offer in terms of reforming the administrative side in a way that incentivises increased levels of productivity on the staff side while simultaneously improving services. There are two broad models for the delivery of services under an internal market here in Ireland. Both essentially depend on establishing franchises, with bidders competing to secure franchises, with an opportunity to expand into others based on their performance. These franchisees could be created by breaking up existing HSE structures, or by encouraging the participation of private operators.
The first approach involves a return to a geographical system similar to the old health boards. Under this model, the country would be divided into areas of equal population with similar levels of base funding and bonuses for performance. Each franchise would be on a medium term basis in excess of five years, but not indefinite. The franchise periods would be staggered, and franchisees with demonstrable success could bid for additional franchises when they became available. Franchisees who fail to deliver would not be renewed.
The second option is to establish functional franchises arranged around significant service areas such as cancer screening, pathology, orthopedics, step-down care, etc. Again franchisees who perform well can expand their portfolio.
Ireland might seem a small market for such franchises to be workable, however, we must remember that the public cost of healthcare alone constitutes €11 billion p.a. and that is sure to rise. This is complimented by the private health market which is also growing apace. The key challenge is therefore constructing an appropriate set of rules to govern the market, while ensuring that doctors, nurses and assets remain in the public space.
One could argue that this happening in the current system under the Treatment Purchase Scheme, especially if the state uses it to pay for procedures in private hospitals like the Beacon. However, this does nothing to improve the underlying issues in the HSE and can at best represent a costly stop-gap.
Now as the boom years here are coming to an end, the era of throwing billions at problems without any improvement is over. It’s time to try a new treatment for our ailing health service.
8 comments September 19, 2007
Interesting times ahead?
Today may well prove to be a very important day in the history of Fine Gael. Enda Kenny’s initiative to create policy groups of members of the parliamentary party, the front-bench and experts from the wider party to look at four key areas is a very brave and interesting step
As Enda Kenny rightly highlighted in his speech, the politics of Ireland will remain centrist. The challenge we face in FG is to provide clearly Fine Gael solutions within that context to the problems facing the country, and this is centrally a useful way to come up with radical proposals in that regard. As Enda further pointed out in his speech “we came close to Government. It would be easy for us to think that a little bit more of the same will get us over the line the next time. It won’t.” We need to remember that over the coming months, and vigorously embrace initiatives such as this.
Such an approach requires an honest engagement from the upper echelons of the party to the outside ideas and influences, and in particular to the many people within the party who are have first hand expertise in the areas under scrutiny. And in return, the membership should actively engage in the debate. If not directly involved, party members should look to foster their own debate on the issues, and promote their own thinking. This blog will look to help in that regard by inviting people to contribute their views on the 4 areas over the coming weeks.
This is an opportunity for a fresh approach to be taken to many of the issues which despite our recent prosperity have not been tackled. It is an opportunity which the party should vigorously engage with after this week, and it is an opportunity to which all party members and supporters should take.
The four areas highlighted by Enda Kenny for discussion:
1. A Competitive and Green Economy – Achieving Strong and Sustainable Growth in Employment and Living Standards Across the Country
2. Public Services – Delivering Quality Public Services like Education and Health
3. Trust in Politics – Empowering Citizens and Restoring Political Accountability
4. Families and Communities – Balancing the Needs of Family, Community and the Economy and tackling long term issues like poverty and deprived communities .
4 comments September 11, 2007
Beal na Bláth
This Sunday will see David Puttnam give the oration at the annual Beal na Bláth commeration in west Cork. For those who have forgotten their history, it was at Beal Bláth that Michael Collins was ambushed and killed on the 22nd of August 1922, and in memory of his massive contribution to Irish history, an annual commeration and oration takes places there every year.
Michael Collins
In recent years, those who have made the oration have included Dr. Pat Wallace, Enda Kenny and Michael Noonan, with the Collins 22 Society maintaining transcripts of their orations which make for interesting reading. According to a 2006 Independent article, he lives primarily in Cork, but to be honest, I wouldn’t particularly know much about the man. However, some scouting about the net suggests he should be good.
He is currently Labour Lord in the House of Lords, and has a history in advertising before moving onto the film industry where he was involved as a Director-Producer in a number of quite successful productions such as Chariots of Fire and The Killing Fields and of course the The War of the Buttons. He is currently a Deputy Director of Channel 4, and was one of the main figures involved in drafting UK legislation on broadcasting, particularly as it related to public service broadcasting. At the end of last year, he gave a speech on this area to a BCI conference, which seems to have provoked an interesting debate.
Possibly more interesting however is his current role in the UK with regard to climate change, where he is chairman of a joint committee on Climate Change. Indeed, that committee under Puttnam came out strongly in the past week criticised a government proposed Climate Change bill as not going far enough. In addition, he also addressed the issue of the digital divide, and the resulting implications for equal opportunity for all in society.
There are a large number of issues which he may well address, and it looks like it should be a very interesting event. Unfortunately I won’t be able to make it along myself, but if anyone out there can make it down for the 3pm oration and would be willing to write up a report on it, and take a few photos to let us know what went on, please drop us a line.
6 comments August 13, 2007
Aer Lingus, Shannon and the Heathrow Slots
As has been fairly well shown in the Shannon-Heathrow debacle, the 25% stake the government continues to hold in Aer Lingus is valueless to the population at large. The government either cannot, or doesn’t wish to use it to influence their strategic policy – so, bar comforting the Aer Lingus unions there, why should we keep it?
Rather, what has been shown is that the real issue is not the airline, but rather the slots. While I appreciate there are difficulties with the ownership of slots, and potential changes in Heathrow, what I would propose is that the Irish government seeks to sell its 25% stake in the company back to Aer Lingus – in return for some form of deal which would include ownership of a number of their strategic slots i.e. those at Heathrow. These slots could be continued to be used by Aer Lingus for routes from Ireland, but if they closed down a route those slots could then be rented to other airlines for services from Ireland.
What puts this issue into further light was that on the radio the other Jeffrey Donaldson suggested that the competitor with Belfast for the Aer Lingus hub was Birmingham. Whatever about giving business north, moving it truly abroad is a different matter. Certainly, something worth considering, and possible a damn sight more useful than having a minority share in the company.
Further research obviously would be needed, particularly with regard to issues relating to the true ownership of the Heathrow slots and also Brussels competition law, but it is definitely something worth looking at.
Edit: One of our own, Dan O’Sullivan proposed something similar a year ago. Pity event proven him right. Indeed, Olivia Mitchell was raising concerns about the Heathrow slots and possibly retaining them going back to 2005.
10 comments August 10, 2007
Cleaning up politics
As the Mahon Tribunal continues, the Taoiseach’s explanations of his unusual financial dealings in the early 1990s become less credible by the day. During the general election campaign the Fianna Fail mantra was that the Taoiseach was fully co-operating with the Tribunal and that his personal finances were matters solely for the Tribunal. Since then there has been a sustained effort to undermine the Tribunal both by the Taoiseach’s counsel in its hearings and by his supporters outside. The two parties that were most vocally sceptical of Bertie Ahern’s finances during the election campaign sit with him on the government benches and have been silent on the matter since.
Past opinion polls suggest that when the media or the opposition has probed the Taoiseach on cash provided to him, Fianna Fail support has held steady, or even increased. Though it is quite likely that revelations on the Taoiseach’s finances played some part in the poor showing by the Progressive Democrats in the election, history suggests that further revelations are unlikely to turn off Fianna Fail voters. Regardless of the short term impact of these matters on party political support, it is inevitable that they undermine public confidence in politicians generally. Proactive steps need to be taken to demonstrate to the public that Irish political parties can meet the best international standards for probity.
With the Green Party and the Progressive Democrats now tied to Fianna Fail for perhaps the next five years, Fine Gael is positioned to lead the debate on this issue. The most immediate areas for reform seem to be public appointments by ministers, campaign spending and fund raising. Hundreds of state positions are filled in the lifetime of every government by ministerial appointment. While criteria are set for the various state boards and offices to be filled, a significant numbers of them are filled with supporters of government parties with little oversight.
Such cronyism means that it is unlikely that the most suitable person for the role is appointed. As a result, not only are salaries, expenses and perks given to the wrong person, but key decisions concerning matters of state are taken by under qualified individuals. Fine Gael could begin the public discussion on how to reform these public appointments. The party could explore how to establish transparent, fair and effective procedures for the majority of appointments. Prospective appointees for the most significant positions could be vetted by the relevant Oireachtas committees.
The same committees or the Public Accounts Committee could be given the power to investigate more minor appointments where they believe established procedure may not have been followed. The legislation that limits electoral spending has been shown to be flawed as parties and candidates spend significant amounts of money campaigning throughout the electoral cycle, not just after an election is called.
Minister John Gormley has suggested that he will be reviewing this legislation. The raising of political funds should also be discussed, considering the levels of money that should come from the exchequer and the levels to be raised privately. In leading these discussions Fine Gael should remember the lessons from its earlier unilateral ban on corporate donations. Proposed changes should be discussed at the parliamentary level first.
The party should aim for cross-party support for any steps to be taken. And the party should seek to reform political standards without attempting to take the moral high crowd. Any posturing on these matters for electoral gain is likely to be transparent to the electorate. Reform should be sought for the benefits that it will bring to Irish politics as a whole rather than merely for interests of anyone political party.
Add comment August 8, 2007
Fine Gael Presidential Dinner
A date for people’s diaries – October Saturday 13th will see the annual Fine Gael presidential dinner take place in the Burlington.
1 comment August 5, 2007
They’ve accepted their own hypocrisy, so why not accept them?
Given the value that the Greens attach to principle, it was no surprise to hear Trevor Sargent a few weeks ago stating in the Dáil that Fine Gael should have done a deal with Sinn Féin in order to get into government. To have gone down that course would have represented a complete insult to the electorate, as throughout the election and for the course of his leadership Enda Kenny had quite clearly and categorically stated his opposition to such a course of action.
Are Sinn Féin still to be frozen in the Coyctus?
But as one government has been formed, we should look forward to the next – and in that context, Fine Gael should be prepared to look at coalition with Sinn Féin if the numbers stake up. Such a course of action is something which cannot be undertaken lightly and there would need to be an open and vigorous debate on this within the part, but the events leading up to this election and subsequent too it suggest that we should no longer consider Sinn Féin as utterly beyond the Pale.
While the events in the North had over the past decade seen a softening of attitudes towards Sinn Féin, a number of factors militated against their participation in the Republic’s government. They still appeared to refuse to accept the common political narrative of this state, their position within that and all that implies; their political strength had the appearance of ever increasing momentum; and all the while the continued to adopt economic policies which were far beyond which could be incorporated in a workable government.
Most publicly through their acceptance of the PSNI, and previously through acts such as the PIRA’s decommissioning, the so-called ‘Republican Movement’ were increasingly adopting the accepted political narrative of this state – that whereas armed rebellion was acceptable in times past, it cannot be repeated again. The continued rhetoric from all levels of Sinn Féin in condemning militant activities and encouraging co-operation with authorities on both sides of the borders confirms this complete about their on their previous past. Indeed, in tandem with the above, their attempts to recast the narrative of the PIRA’s terror campaign as a human rights issue, rather than a war of attempted national re-unification is similarly encouraging.
They have now accepted that what was acceptable to them in the recent past, in circumstances not today dissimilar is no longer acceptable today. They have, liked most of the other political players did seventy/eighty years ago accepted their own hypocrisy, and lacerate those who did what they once did. Their armed revolutionary output is now purely of an historical variety, with no real implications for the future.
While the above has only really settled down in the past year, the potential rapid advance of Sinn Féin electorally in the absence of such settling was worrisome. Now, it is fairly clear that their electoral advance has been stymied, with the threat that they could possess to the general political order clearly limited. While the prospect of having Sinn Féin in a government when they were ever increasing in size and gaining further momentum wouldn’t be stomachable for many, most particularly those in the Labour party – after the most recent election, Sinn Féin as very much a junior partner are a different and more bearable proposition.
Finally, the almost complete abandonment by Sinn Féin of any form of strongly left-wing economic policies – most exemplified by their complete u-turn on corporation tax – show that on the economic front, they offer little that wouldn’t be compatible with a FG/Labour government. Indeed, on the policy front more generally their main issues would be covered by such a government in the main, beyond possibly on a number of issues relating to promoting a United Ireland.
These would appear to be namely a Green Paper on National Unity; speaking rights for Northern Ireland MPs in the Oireachtas and allowing voters in the North to vote for the President. While allowing Northern Irish MPs speaking in the Oireachtas may yet be a step too far – after all, if they aren’t going to be affected by the parliaments decisions, why should they be allowed speak there – the other two areas should present little enough difficulty. A Green Paper on National Unity is something which, as a United Ireland party, we should not be afraid to promote ourselves – indeed, it is something which if promoted by ourselves could be quite a useful mechanism for engaging the Unionist community. Expanding the vote for the President to all citizens would allow Northern nationalists vote, and is something which is largely important only in a symbolic way.
Therefore, as we look forward, Fine Gael should be willing to contemplate co-operation with Sinn Féin in a future government. Labour’s deal with Sinn Féin in the Seanad has set the tone, and we should not be unwilling to co-operate increasingly in the Dáil, with a willingness to one-day potentially work in government with them. Such a course of action will provoke a strong debate in the party, and there will be an inevitable backlash from some members and supporters – this was clear from the last meeting of this forum, when this subject attracted strong opinions from all sides.
And in addition to the above, they present little electoral threat to Fine Gael, but have the potential to be represent to Fianna Fáil what the PDs have represented to us. As they settle further in main-stream centre-left constitutional politics, there should be little obstacles to do a deal with this party in three, four, five years time.
Add comment August 5, 2007
