Adults in the Room: My Battle with Europe’s Deep Establishment

 

Yanis Varoufakis, The Bodley Head, 2017

Written by the ‘rock star’ Economist, Yanis Varoufakis, ‘Adults in the Room’, tells of his time as Finance Minister for Greece at the height of the Grexit débacle.  It makes fascinating and sobering reading.  It is especially apposite for the UK as it negotiates its own ‘rupture’ from the EU – Brexit.

Perhaps more shocking than the Machiavellian machinations of Eurocrats in Brussels and within his own government in Athens, are the appalling revelations of negotiations held in bad faith by the really powerful in Europe.  Negotiations that purport to strive for a ‘win-win’, but in reality are designed to crush the weaker side, ‘…pour l’encouragement des autres’ 1

The paraphrased strategy below, as described by Jeff Sachs, goes as follows:

‘The stronger demands x from the weaker as a starting point, promising talks about y and z later.  But they lie!  Once you give them x they will deny they ever promised you anything.  Don’t fall for it! 2

We can see this playing out again with Brexit. The EU demands that there be no negotiation of trade deals until the ‘divorce settlement’ is concluded: no phase 2 until phase 1 is complete.  This ‘ratchet effect’ is a well-known tactic designed to prevent compromise under the guise of a cautious, careful step-by-step approach.  Of course, phase 2 never comes!  

There are other striking similarities, too.  For example, the media war that the Eurogroup waged against Varoufakis and the way Brexit is being reported.  Varoufakis was portrayed as a bumbling, Left-wing incompetent, ego-driven, childish and not living in the real world. Whereas Wolfgang Schäuble, the German Finance Minister, was the exasperated father-figure, long-suffering and reasonable.  In the same way, the Brits are being described as clueless dogmatists leading their hapless citizens over a self-defeating precipice.  Unlike the benign German pragmatists, who simply want the best for ‘alle’.  

The reality is the opposite.  Varoufakis was trying to put forward moderate, sensible policies that would benefit both Greece and the EU.  He had support from neoliberal economists (not his natural bedfellows, such as Norman Lamont), and arch-pragmatists, like Christine Lagarde (whose comment gave the title of this book).  However, the supremacy of Germany had to prevail at all costs.  

Once again, with Brexit, for purely dogmatic reasons, we see that Germany must punish the UK to preserve the so-called, ‘four freedoms’, and maintain the integrity of the EU by making a terrifying example of Britain.  Further hypocrisy was added for Greece in that rules were readily broken to favour the strong, but insisted upon to chastise the weak.  Capital controls (supposedly forbidden under ‘free movement of capital’) were considered essential in Greece, and are still largely in place since 2015.  But, the UK is told that ‘freedom of movement of people’ is non-negotiable!

‘Adults in the Room’ gives an outsider’s view from the inside.  It shows how easily democracy can be subverted by unelected, career bureaucrats.  How even the loudest protesting voices can be intimidated and/or have their mouths ‘stuffed with gold’. 3  It is ‘Yes, Minister’ without the humour. 4

Yanis Varoufakis makes it clear that economic common-sense was never really important in Grexit; it was all politics.

 

Notes:

  1. https://en.wikipedia.org/wiki/Candide
  2. Varoufakis, Y. (2017) Adults in the Room: My Battle with Europe’s Deep Establishment.  The Bodley Head, London. p.425
  3. https://en.wikipedia.org/wiki/Aneurin_Bevan
  4. https://en.wikipedia.org/wiki/Yes_Minister

 

 

 

 

 

 

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Strength through flexibility

One of the oft-used, reactionary mantras heard in the NHS is, ‘we don’t want a two-tiered healthcare system; one for the rich and one for the poor’. It’s employed by the unthinking to close down any argument, however modest, which attempts to describe the potential benefits of private investment in the NHS.

In Schein’s model of culture, it’s a level 3, ‘basic and underlying assumption’, that brooks no discussion because it’s so ‘obviously true’. It is straight out of the Socialist, totalitarian playbook, which demands implicit (sometimes even explicit) and immediate obedience. But, it beggars the NHS by denying it the additional funding that could come from allowing those who want to, to pay for ‘extras’.

Is there a better way?  We’re all familiar with airlines offering passengers wildly different prices for different experiences; from Economy through to First.  All the passengers get on the same aircraft and reach the same destination, but those who value the extras on offer, can choose to upgrade for a price.

Ironically, when I worked in France, (generally considered a much more Socialist country than the UK), I discovered that about one third of the total GDP spend on healthcare was private, compared to a mere 10% in the, ‘capitalist’, UK.  This higher, private spend largely accounts for the higher total GDP spend on healthcare in France versus the UK; a fact often conveniently overlooked by those who benchmark GDP spending on healthcare.  One could say that the French permit an à la carte menu, whilst in the UK, it is strictly, prix fixe!

The French healthcare system, by permitting greater flexibility, is stronger, on almost every outcome measure, vis-à-vis the NHS.

So, rather than advocating for a ‘two-tier’ healthcare system, (which induces an allergic reaction in many so-called defenders of the NHS), the answer is to pursue, more formally than now, an NHS that is far more flexible.  This means embracing a ‘multi-layered’ system, with different patient experiences, such as rooms, food and extras paid for either out-of-pocket or via insurance.  This type of up-selling and cross-selling could revolutionise the patient experience and at the same time generate much needed additional revenue streams for hard-pressed Trusts.  It would introduce genuine and benign competition into the system and make it much more patient-focused.  It would be like a proverbial financial tide, lifting all the boats, great and small, rich and poor, alike.

For the NHS to survive another 70 years, the key will be flexibility.  If it can’t embrace differentiation, it faces disintegration instead.

 

 

 

 

 

Why can’t the UK National Health Service change?

underlying-reasons-for-resistance-to-change-300x300Many within the NHS feel it is in a state of constant change, but this is an illusion.  It’s based on changing superficial things; the classic, ‘rearranging the deckchairs on the ship’.  There is an appearance of change, and when it’s your job to move the chairs, it feels like a big change-around, but the reality is that the ship ploughs on. The fundamental forces that power the ship’s direction, (the engine, propellers and rudder) remain determinedly fixed.

It’s easy to prove that this is true.  Just consider the general process of healthcare:

  • The patient thinks something is wrong
  • S/he goes to see a General Practitioner (GP)
  • The GP performs an face-to-face interview
  • The GP may or may not refer to a specialist
  • The specialist is visited by the patient and definitive treatment is eventually planned

The whole thing takes weeks.  If you went back in time a hundred years in the UK, you would see basically the same process happening.  Similarly, take a UK citizen from 1950 and show them the current UK health system, and they would understand immediately what was going on.  No real change.

As a nationalised monopoly, the NHS has no ability to change itself.  The ‘rules’, which are de facto, laws, won’t allow it.  For example,

  • No money can change hands (services are ‘free’)
  • Patients can’t access specialists without permission from a GP
  • Diagnostic services are inaccessible directly (you can’t find out what’s wrong with you on your own volition)

The insurance industry was a bit like this 30-40 years ago.  A man with a briefcase would come to your house, fill out forms, and return weeks later with an insurance policy.  Nowadays, insurance is purchased online in a matter of minutes, because the rules were changed.  The ‘man from the Pru’ has disappeared.

In order for change to occur, the ‘rules of the game’ must change.  Powerful vested interests resist this as much as possible: the medical profession, especially GPs, could easily disappear, so resist fiercely all reform.  The politicians, who are in charge, fret about re-election.  The patients, who are vulnerable, don’t know any better.

The solution of the NHS’s problems are the same as those that have worked in other service industries, namely, change the rules.  This is known as ‘deregulation’; it’s not rocket-science.

Team of Teams

General Stanley McChrystal, Portfolio Penguin, 2015

This book attempts to show how learning from failure in a military context can be applied to other contexts, e.g. business or medicine.  McChrystal found that simply doing more of a failing strategy produced more failure, and that radical change in structures was needed to effect success.  He moved his huge organisation from a highly-structured and efficient hierarchy to a less efficient but more flexible, highly-networked structure that could adapt quickly to changing circumstances.

He noticed that small teams were successful because of the cross-linkages between members, but didn’t easily ‘scale’ due to organisational design and culture.  So, he created multiple linkages between teams by empowering individuals to work outside their teams. He calls this ‘empowered execution’, and this led to the ‘team of teams’ concept.

Think about your own situation.  How often do you communicate with people outside your immediate team?  So, try it now!  If it makes you nervous, try the question, ‘what would you do if you weren’t afraid?’.  Pick up the phone, or send an email if too timid, and link to someone you think might be useful to talk to.  Don’t worry about ‘rank’ or ‘organisational chart’.

Keep in mind the higher purpose of why you work in the organisation you do.  Check its mission or vision statement if unsure!  If anyone asks why you’re contacting them, remind them of the purpose of the organisation.

Productivity in the NHS

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Some doctors seem to be confused by productivity. It is the ratio of outputs to inputs. Output per hour is, more properly, a partial productivity measure. When I was a registrar in anaesthesia, I did more than 1000 anaesthetic procedures a year; nowadays a registrar is lucky to do 400. This means less output per doctor, but the cause is working fewer hours, so output per hour is similar. Twenty five years ago, my department did 21 000 anaesthetic procedures a year with six consultants, four registrars, and four senior house officers. Now, we do 25 000 with more than 30 consultants, eight registrars, and eight senior house officers; do the maths.

John Appleby, Chief Economist at the Kings Fund, rightly emphasises the productivity problem in the NHS—it is the crucial “missing piece” that few will talk about.1 Most self interest groups, such as political parties and trade unions (including the BMA and royal colleges), prefer to stress inputs, rather than outputs.

This navel gazing stops us learning from other systems, such as many European health systems (none of the top 10 European systems are tax-funded). When I worked in France, it was normal to work on Saturdays, cases at the end of lists were never cancelled through “running out of time,” and orthopaedic surgeons performed 500 primary joint replacements a year, compared with about 250 in the NHS.

The solution to the productivity problem includes the following: adoption of new technology, deregulation of restrictive practices, and changes to the way clinicians work. All these are frequently and effectively blocked by complacent and self- serving special interest groups.

1  Appleby J. UK NHS: Less money (but more bangs per buck)? BMJ2015;350:h1037. (10 March.)

Commissioning Support Units in the NHS: don’t use the ‘O’ word

supportFrom 1st April this year, NHS England contains 211 Clinical Commissioning Groups (CCGs), supported, to a lesser or greater extent, by 19 Commissioning Support Units (CSUs).  It is these CSUs that could be the focus of IT suppliers’ attention since by 2016 they will all be ‘externalised’, i.e. become independent organisations.   IT suppliers could outsource most or all of the functions of CSUs.  But, beware, the ‘outsource’ word is taboo in the new NHS, hence ‘externalisation’ is preferred.  To be fair, externalisation implies a more diverse model than traditional outsourcing.  For example, a ‘social enterprise’ could provide CSU functions, rather than a mainstream outsourcing company.   There will probably also be opportunities for strategic partnerships and joint ventures.

For a list of the current 19 CSUs, with managing directors email addresses, follow this link.

How Big?

CCG’s will have huge budgets: £65 billion ($100 billion) of the total NHS spend of £95 billion ($146 billion)!  That’s £1,226 per man, woman and child in England.  Of that, just £25 per capita will be spent on ‘management’, and it is anticipated that an average of £9 per capita will be spent commissioning services from CSU’s.  Thus, an average total CSU spend of £477 million ($734 million) per annum.  The range is £5-15 per capita.  Therefore, the maximum opportunity if all CSU functions were outsourced across the whole of the NHS in England would be £795 million ($1.223 billion) per annum.  Contracts will last 18-60 months.  Phew!

What do CSUs do?

CSUs will provide a range of services from business intelligence, procurement support and back-office functions.  Design of health services will also be driven by CSU’s.  Some CCGs will rely heavily on CSUs, others less so.  The full extent of ‘externalised’ services is not yet known and will probably be determined by success and political considerations.

Next steps?

It looks like CSU externalisation is a fantastic opportunity for IT suppliers.  I believe there is the required expertise within the industry to provide an excellent CSU service to NHS England.  It plays to their established strengths and the strategic industry themes of big data and analytics, cyber-security and cloud computing.  So, what needs to be done to press this opportunity?

NHS England

NHS englandNHS England is basically the new name for the ‘NHS’, but recognises that the NHS in Scotland, Northern Ireland and Wales are separate entities and may do things differently.

It’s worth spending a moment just taking in its size.  With 1.7 million employees it ranks 5th in the world’s largest organisations (you can guess the first four!).  Its budget is £95 billion ($146 billion).  There are 8,000 GPs (family doctors) grouped into 211 Clinical Commissioning Groups (CCGs) that purchase services for citizens. GPs are technically not employees of the NHS, but rather independent, contracted practitioners.  The 211 CCGs are supported by 19 Commissioning Support Groups, whose functions include IT services.  The budget for CCGs is £65 billion per annum.

NHS England commissions some services directly, such as specialised services (£11.8 billion), primary care, prison healthcare, and Armed Forces healthcare.

So, in the ‘new’ NHS, pride of place goes to clinical leaders, principally, doctors.  The idea being that they are best placed to know and understand their patients and hence to purchase services on their behalf;  a bit like an insurance broker.

NHS England is governed by various documents that set out what it must do.  These are the ‘laws’ that the executives within the NHS must obey.  The three most relevant ones to IT suppliers are:

Choice and Competition.  Any qualified provider can supply services to the NHS.  Of course, this has always been the case to some extent (think of GPs above!), but the general expectation is that more and more independent organisations will enter the market

Health and Social Care Information Strategy.  “Only with world class information systems will the NHS deliver world class care.” (Jeremy Hunt, Secretary for Health)

Patient Safety.  Electronic systems can improve patient safety by having the right information at the right time at the fingertips of the clinician and patient.

Everything the IT industry does in healthcare, must be framed by the desire to improve patient care.  We all are, or will be, patients at some point in our lives.  We all have first hand experience of illness, or caring for loved ones who are ill.  In short, we have ‘skin in the game’.