Do Professional Societies care about the Public or only their Members?

Yesterday I was horrified when I made a phone call to CPA Australia asking if a) someone had been a member and b) if they'd ever been the subject to Disciplinary action or complaint, especially around 2004.

The answer given I found shocking:

That information is Private, it's part of the "Member Record". You have to get their permission to release that information. [In response to question on 'serial offenders' and 'irregularities' in Association accounts well over $1M.] This is our Policy. If you want to pursue this, you can write to our Legal Department who probably won't respond to you.

Compare that to Aviation, not just Pilots...

Not only do they have the best Quality and Safety systems of any Industry and Profession, they take it as a given that Open and Transparent Governance, including professional discipline matters, is fully public.

Sunshine is the best antiseptic for corruption, negligence and incompetence.

Today I wrote to a TV current-affairs program with:

If you thought Dr Death of Bundaberg and the Butcher of Bega weren't bad enough, what do other Professional Societies do that's different?
Nothing...
Members First, stuff the public!
Unlike Aviation, they are there to keep the Sins of their Members secret.
2 stories: IT Recruiters and Accountants (CPA)

Links

IT Recruiting (ITCRA).
If you complain about a recruiter, whatever they decide about the compliant is a secret. Probably the same with general recruiting [the GM of ITCRA used to work for that Association. Commented they got many, many more complaints.]

My Story:
http://stevej-on-it.blogspot.com/2012/12/recruiting-fail-non-response-of-itcra.html
http://stevej-on-it.blogspot.com/2012/09/recruiting-fail-part-3-itcra-complaint.html
http://stevej-on-it.blogspot.com/2012/09/recruiting-fail-how-to-foul-up-employee.html

CPA Australia:
What happens when you ask if a CPA has ever been disciplined?
 ITS A SECRET...
Even if you think they're part of a 20yr conspiracy, potentially a swindle, worth $1-2MM...

The Association Investigation: NSW Assoc Y0133609.

NOTE: the Association is NOT the subject of this commentary on Professional bad behaviour and are known for being litigious. I will not name them and ask others to maintain this confidentiality although the registered name appears on the official documents and their Journal referenced. [I do have the technology to black-out the information in PDF's.]

RL was the Public Officer Y0133609 from  21 July 1997 to 10 December 2009 according to the official Association Extract.  He was also Treasurer, though the period is uncertain as the historical Committee Register of Y0133609 is not available on-line.

These Association returns, fully public, were procured from the NSW Associations Register and contain the name and address of the Public Officer, RL, at Heysen Close, Pymble:

Y0133609 1996 Return.pdf

Y0133609 1999 Return.pdf

What's NOT in the forms that four years returns (1996-1999) were submitted on the one day, triggering at least two penalty clauses of the 1984 Act:

• s54(1)(f) - Forced winding up on failure to lodge returns for 3 financial years
• s27 - Lodge statements within 1 month of AGM.

The accounts, in my opinion, violate s26(6) in that they don't give a "True and Fair view" of the financial affairs of Y0133609. If I'd been at the AGM those accounts were presented, I and everybody I've known in a Professional Association, would've rejected those accounts.

RL gave a Business Hours number on the Public 1996-1999 returns, identifying his then employer:  "CCS Partners" in the City. CCS used to be Calligeros, Cassim & Simos.
http://www.ccspartners.com.au/Home

CCS confirmed RL once worked there but would provide no other details, not even if he'd been a member of CPA Australia or the Institute of Charted Accountants.

There is a current White Pages listing for RL at 3 Ellendale Rd, Kenthurst NSW 2156.

The gross irregularities in Y0133609 accounts that I wanted to follow-up with CPA Australia is $1.25MM missing from the 1996-1999 Accounts attested to as correct by this upstanding, presumably registered, Accountant.

A large bequest was left to Y0133609 by Stanley Whaley of Queensland, except that it never appears in the Association accounts. The money was transferred to a Trust which under s26(6)(d) they were obliged to report as well, but never did.

Images of relevant Journal pages publicly declaring the Bequest and its movement to a Trust:

Y0133609 Journal 1995 #2 pg3
Y0133609 Journal 1995 #2 pp 5 & 6
Y0133609 Journal 1996 #4 pp 63-64

Full-text PDF on-line:

Y0133609 Journal 1995 #2

Y0133609 Journal 1996 #4

But the matter doesn't end there...

The Public Officer is seen under the Act as having special responsibilities, they are the official representative and where notices for the Association will be served by the Registrar. Under s23 of the Act the Committee has just 14 days to advise of a change of Public Officer and the new address to serve notices. It appears RL left Y0133609 5 or 6 years before the Registrar was notified.


RL is in the Journal of Y0133609 at the end of 2003, but never heard from again after that. He is still listed as being on the committee at the end of 2004 and there's no mention of him in mid-2005. After being a major "mover and shaker" within the Association, he's suddenly gone without trace.
Y0133609 Committee Nov 2004
Y0133609 Committee, Jun 2005
Y0133609 Journal 2003 #4

Yet he was still listed as Public Officer until 2009 when the Registrar took the highly unusual step of involuntarily cancelling the registration of Y0133609 for failing to lodge mandatory annual returns for 10 years.

After that little lapse of not filing returns for 4 years in 1996-1999, RL had never filed another one!
The official Association Extract shows Y0133609 didn't file a return in 2000-2003 nor any official documents until 07-May-2010.
After a period of almost a year, when accounts and returns for 2003-2009 were filed together, very strangely the Registrar, under s54A(2), reinstated Y0133609's registration as if nothing had ever happened. No penalties were levied, at least not according to the list of official documents available. Y0133609 were allowed to continue trading while formally deregistered, which makes me wonder "Why bother with the Act and registration at all?". I find this strange...

But this is about RL and his behaviour as a Professional Accountant.

Why were no accounts or returns filed by Y0133609 for the 4 years, 2000-2003?

The reason isn't on public record, but can't be related to a "7 year statute of limitations", nor to 5 years.

What we do know is that RL stopped writing in Y0133609's Journal in 2004.

What we see with the non-lodgement of the accounts is consistent with RL doing a massive Dummy Spit in early 2004 and withdrawing completely from Y0133609 and, we can guess, in a fit of temper deleting all records and files relating to them from his personal and work computers. If he'd felt this way, he also would not have felt a responsibility to inform the Registry of the Public Officer vacancy either. [Under the new Act of 2009, this is now an offence, with a penalty, for the Public Officer, but not then.]

As an Accountant acting as their Treasurer and responsible for filing BAS statements [noted in the Journal], he would've been handling the bookkeeping on a computer. Recreating that work from paper records would've been deemed too hard by both the incoming Treasurer and later by the Registrar.

I've been involved with a number of small Professional Associations and sometimes, in spite of the requirements under the Act, volunteers move on and records, especially 'the books' are lost forever.

It gets better yet, still.

In late 1999, the past-president of the "Victorian Branch", after years of confronting the Committee of Y0133609 and RL (still Treasurer), wrote about the events and misbehaviour in detail.

RL's actions were deliberate and intentional hiding this large bequest entirely from the Regulators and the Committee either went along with it or were involved.

The Victorian tried to publish his detailed account of the goings on at Y0133609 in the Journal of another well known and respected Society, but that editor withdrew the piece after threats of a defamation action.

Y0133609 was known for being litigious and for using Mr Whalley's money to back court cases. In its 1996 Report on Activities (the only one produced publicly), ~$180,000 was given to an individual for a failed lawsuit they'd followed closely, even reporting daily on. (The case was rumoured to have cost north of $500,000). This case, heard and appealed in the Federal Court, produced some much cited Case Law for the Trade Practices Act. The academic who took the action, a Professor, sold up and moved to Adelaide to pay his legal debts.

So, when there is strong Public Interest involved, why don't "Professional" Bodies automatically provide full public disclosure of complaints and disciplinary action?

Why are major and "serial offenders" in Law, Medicine and Accounting not publicly named and shamed to protect hapless victims that these people are known to prey upon but whom the Profession is sworn to serve?? How can these "Professional" Bodies, through deliberate action of suppressing information, not be held accountable for subsequent civil or criminal offences? How can they not have Public Interest as their first Duty of Care?

"Full Disclosure" is proven to work in all aspects of Aviation, so why do these other "professions" insist on still putting the interests of themselves and members ahead of the Public whom they supposedly serve?

My only conclusion, a personal opinion based on the evidence I can find, is:

That like RL, they are rorting the public and they know it...

Professions/Professionals: Conflicts of Interest

Consistent Altruism is a rare human commodity, probably impossible over a life-time, yet that's the standard implied by: Learned Professions owe a Fiduciary Trust to their clients.
That's All Clients, All the time.

It's simply stated and tested: Are Client Interests always placed before the Practitioner and Organisations? Yet its impossible without sustained, conscious, deliberate and co-ordinated effort by the whole Profession.

As a client or user of Professions, that's a reasonable standard for them to be held to.
As a Practitioner, Professional Organisation or Profession, it's a profound and never-ending challenge.

The overwhelming human behaviour is self-interest: often expressing as greed or avarice, but also in other "temptations", including sex, power and influence.
People may start with good intents, even living up to their ideals for a long time, but as Hollywood amply demonstrates, the road to hell is paved with good intentions.

Most people exhibit Altruism some of the time and often only towards related groups. How can that be leveraged to impeccable Professional Standards? It's not just a hard problem, but a diabolical one.

It's impossible for ordinary people to keep others interests before your own for an entire career, in the face of all direct temptations and, more importantly, preventing gradual, imperceptible declines especially in the face of "but everyone is doing it".

This is exactly what got the USA from a well regulated banking system in 1999 following the repeal of the 1933 Glass–Steagall Act, to a record financial collapse in well under 10 years.

All Professions have to address this central issue: How to monitor and deal with Conflicts of Interests.

The Iron-Cald Law of Quality applies: You cannot check your own work.

Which means ever Profession that needs to meet a Fiduciary Duty has to design, implement, staff and fund third party checking, investigation and monitoring systems (i.e. Governance and Audit), create Licensing, Compliance and Regulatory Bodies with real teeth and constantly train and check its Practitioners and Professional Organisations against those standards of Knowledge, Performance and Practice.

I'd argue that this Governance and Compliance function is more important for "Fiduciary Duty" Professions than Competency Testing and Licensing:

Without an absolute trust of Clients for the Profession's Services, it is fatally compromised and incapable of delivering good, let alone Adequate or Best Practice Services. If the Public won't come to you and don't trust you, it undermines your Mission/Purpose, devalues the Profession and pushes the Public to find substitutes.

In "mid standard" Professions two factors operate that limit the excesses increasingly found in Professions such as Banking, Finance, Financial Advice and Financial Audit which led to the record collapses of 2007/2008 requiring Public Bailouts:

• By definition, only "high standard" Professions owe a Fiduciary Duty to their clients, the rest only owe "normal commercial and contractual responsibilities.
• Consumer Protection bodies and legislation (ACCC and TPA/ACC in Australia) offer common law remedies (protections) to consumers against unscrupulous practitioners and organisations.
• The Consumer Protection bodies actively monitor the business world (practitioners and organisations) for illegal or 'sharp' behaviour.
• Cartels and price-fixing is illegal and is aggressively pursued by the ACCC.

• There is seldom, in "mid standard" Professions, a Natural Monopoly of Practitioners, Professional Organisations or Professional groupings/Associations.
• There are commonly large numbers of "best quality" practitioners and organisations for consumers to choose between:
• The operation of a large Free Market prevents prices ratcheting up faster than inflation.
• Market forces (Supply and Demand) act to regulate the number of Practitioners and Organisations offering the Service, including per location.
• Sometimes there can be a "race to the bottom" caused by new entrants (e.g. Chinese Dental Laboratories) that undermine demand even for high-quality local practitioners.
• Consumers often can find adequate Service Substitutes, either direct or within the Profession.
• When the Service is only offered by a sole supplier, often the Public Service or a single Government Licensee, a Natural Monopoly and market competition cannot keep Service, Quality, Safety and Price in check.
• Often in these situations, Audit and Governance ("Industry Watchdogs") organisations are formed in an attempt to restrain outrageous excesses.

So what's needed of Practitioners, Professional Organisations and Profession Groupings/Associations in "high standard" Professions?

The New Oxford Dictionary defines "Fiduciary" as:

involving trust, esp. with regard to the relationship between a trustee.

I use a more colloquial formulation:

Put the clients interests ahead of your own, every time, and in every way.

In Law, Business and Accounting, this problem is known as Agency Theory: How do you get an 'Agent', such as an employee, trustee or representative, to always put your Best Interests first, even to the detriment of theirs, either directly or through "Opportunity Loss" a.k.a. Insider Trading?

"High standard" Professions suffer multiple problems:

• They are Natural Monopolies without good substitutes (think Law, Medicine and Public Service).
• Where can the Public go if they don't like the Professions' Services? Nowhere...
• The rich always have more options like privileged access to other countries and systems, which creates its own special Conflicts of Interest in both countries.

• If they don't internally regulate, who can or will regulate them?
• Nobody else can properly assess their performance, errors, omissions and over-servicing.

• Because they are Natural Monopolies:
• The Monopoly is usually explicitly granted by the State.
• meaning there are Registration Boards and Licensing Examinations.
• They are highly desirable as a choice of Work: well paid, "protected" jobs for life,
• Numbers are tightly controlled,
• There is intense competition for admission, often on criteria irrelevant to good Professional Practice, such as Academic prowess.
• There is usually little effort in identifying desirable High Performer Professional characteristics and less effort or attention in selecting or evaluating against those criteria.
• All emphasis is placed on The Barrier to Entry, gaining a License, close to none is spent on ensuring All Licences are of Equal Value (a 1910 notion of Flexner's), which implies frequent full competency checking, against all current Knowledge and Best Practices, to retain a license.

• The traditional Learned Professions are backed by an extensive heritage of Common Law and Statues that create especial problems:
• They usually embody, explicitly or tacitly, a No Harm or No Fault clause:
• Medical Doctors, even unqualified frauds, are generally regarded as not ever having criminal intent to harm patients.
• This unfolded in Australia with the "Dr Death" of Bundaberg case. Whilst strict Academic-quality Evidence indicted him with causing many deaths and huge numbers of injuries, the legal system requires direct causal Evidence, reducing the criminal charges to "harming" a very few patients and a 5- or 7-year sentence. For any "mid standard" professional acting this way, they would've been found guilty of multiple counts of murder and received a probable life sentence.
• The 2011 sentencing of the "Butcher of Bega" underlines the on-going nature of this problem and jurisdictional inconsistencies.

• If the Profession in a country systemically fails to regulate itself against Conflicts of Interest, particularly Financial, then you end up with the US Healthcare system:
• 18% of GDP is spent on US Healthcare, versus 9% of GDP in Australia.
• In 1960, the US spent 5% of ts GDP on Healthcare, almost a quarter current levels.
• But Australians have universal Medical care access, out-live and have better health outcomes that US citizens, except for "Rescue Care", where the USA beats everyone.
• Arnold Relman and Marcia Angell, editors from 1977-2000 of the New England Journal of Medicine, have run a very long campaign against Medical Profession "Conflicts of Interest", starting in 1980 with Relman's, "The New Medical Industrial Complex".
• Despite unequivocal data and many high-powered, highly influential internal voices/activists, the US steadily increases the proportion of its whole economy spent on Healthcare and the proportion of uninsured people who are uninsured continues to climb.
• Perhaps in-line with the increasing disparity between the Rich (top 1%) and the bottom 30-50%.

My observations on "high standard" Professions achieving near a uniform, on-going delivery of Fiduciary Duty to Clients are:

• It's a war without end, every new generation has to discover their own solutions to the constantly evolving challenges. The Internet Changes Everything, including how Professions now experience Conflicts of Interest and the methods to address them.

• Perfection in managing Conflicts of Interest, like Quality, Security and Safety, is a journey, not a destination.
• If a Profession's Monitoring and Reporting systems are detecting nothing, they have failed.
• Human Nature hasn't changed in the 400 years since Shakespeare, it's not changing soon.
• The US "Medical Industrial Complex" that Relman and Angell have spoken against for 30 years versus the inexorable rise in Healthcare costs is definitive proof that without strong external intervention (from Politicians, pushed by the general public) a whole Profession can be wilfully blind to serious Conflicts of Interest.
• Without specific Agencies with real teeth, nothing changes.
• Simple, unequivocal definitions and tests are needed for the Qualitative Tests.
• Absolute and rarely changed quantitative measures are needed to convert Qualitative goals to measurable, reliable data.

• The NTSB/FAA example of separate, well-funded Investigation and Compliance, Licensing and Testing organisation staffed by selected dual-experts: they have to be both amongst the most Competent and Knowledgeable Practitioners and expert in Governance, Quality and Safety.
• These organisations and their staff also take care to constantly monitor, test and train themselves, with periodic "refreshes", or systemic re-examination and redesign.

• Initial Practitioner Selection and Testing and then through on-going Training, Testing and ReCertification regimes are necessary to even start to achieve high, uniform standards of "Fiduciary Duty" amongst Practitioners and Professional Organisations, along with Competency, Knowledge and Practices.
• Initial Practitioner Selecting and Training needs to be targeted at selecting for High Performance Practitioner Traits and Characteristics.
• Which implies they must be first researched, documented then kept current.
• And explicitly not to default to mere Academic Prowess as the sole entrance test.

• Fully public, Open and Transparent reporting of all Professional issues, Conflict of Interest and Practice of Individuals and Organisations is a minimum requirement.
• Without full data, the Profession internally cannot know "how it is travelling" and be able to take corrective actions as necessary.
• Without full public access, nepotism, cronyism and lax standards are inevitable and unavoidable. "We discipline our own, in private" is the hallmark of a Failed Profession.
• It also invariably leads to a pernicious and pervasive Inversion of Loyalty and Duty: Professionals swap their perceived Duty to Clients to a Duty to Protect the Profession at the expense of the Public they serve.
• This attitude of "We look after our own" is an absolute corruption of a Profession.  
• Professions with strong Duty and Safety Cultures and full disclosure don't need expensive and embarrassing Royal Commissions or Courts of Inquiry: they are doing the job of ensuring Good, Competent Practice and reinforcing the Culture each and every day.

• Structural elements have to be in place to prevent putting people in the way of temptation or compromise:
• Laws and Regulations allocating Blame and Liability to individual Practitioners for Ordinary Accidents and Failures must be replaced with Indemnifying Individuals within Organisations, provided they have acted properly and followed all relevant processes and procedures.
• Practitioners who exhibit unprofessional behaviours, should be stripped of all Professional protections and indemnities and be subject to stiffer Criminal charges and Penalties than the general public.
• Failing in your Professional and Fiduciary Duty is not an extenuating circumstance, it calls for harsher treatment. Those taking more Responsibility must be held to higher standards.
• Any Practitioner who self-reports Errors early on should be indemnified from censure for that event, though not for unprofessional action, such as repeating Known Errors, Faults and Failures.
• Any Practitioner who fails to self-report or report anothers' Error should be metered out harsh penalties. The Professional Mandate requires everyone involved to "own up" to their mistakes - and to make sure everyone else does as well. "No Error goes unreported, ever."
• Professional Organisations, and their managers, must be Criminally and Civilly liable for malpractice and failures in their Fiduciary Duties.
• In order to Indemnify individuals within Organisations who act properly and professionally, legal liability and Onus of Responsibility have to transfer somewhere.
• There also have to be powerful incentives for non-Practitioner Managers and Administrators to uphold the Professions' Fiduciary Duties, Competence, Knowledge and Practice standards and adherence to Quality and Performance Improvement.

An answer: Why not an NTSB for Healthcare? II

[Post moved to other blog.]

Continuing this topic: In the seminal Institute of Medicine (IOM) report, "An NTSB for Healthcare", a central question is posed:

Not Why an NTSB for Healthcare ... Why Not?

Medical Healthcare is often compared to Aviation on Quality of Care and Patient Safety, but the comparison is wrong and ineffectual: the story is poor and we're not yet ready to hear the message.

We, as travellers, wouldn't step onto any airplane if Safety and Quality were as variable and haphazard as Medical Healthcare in Hospitals, Primary Care Physicians, Specialists and other facilities.

So why, as individuals and a society, do we accept, seemingly without comment, 1000-fold worse Safety from Medical Healthcare than Aviation?

Medical Error, or "preventable harm", is the leading single cause of death in US Hospitals and seems to be heading in the wrong direction. Which, because Medical Healthcare is a universal, not optional, service, should be causing concern and outrage, instead it goes unremarked and unnoticed in the Media and hence with the General Public.

The more subtle cause is: Preventable Deaths and Serious Injury from Medical Error as not centrally collated and reported.
Even the more complex story, the decline in Medical Quality of Care and Patient Safety, cannot be told because there are no data.

Should then Media report the statistics?
No, as even Stalin knew: A Single Death is a Tragedy; a Million Deaths is a Statistic.

We are our own worst enemies as a society, when we need to address endemic problems:

• Without "something out of the ordinary", stories have no "news value".
• We suffer boredom and "compassion fatigue" from long running stories, no matter how terrible.
• Statistics are not personal, there is no emotional connection, hence little "news value".
• Nobody is forcing Medical Healthcare to report and categorise 100% of Medical Errors. This removes the possibility of even a larger, investigative story.

What the estimable brothers Heath, authors of "Made to Stick", don't make much of is a zeroth requirement:

There is nothing more powerful than an idea whose time has come, and
there is nothing less interesting than idea before its time.

The efforts being made to report and address the epidemic of Medical Healthcare Error are earnest, "real", well-crafted and creative. In another time they'd succeed, wildly.

The Public, and hence Politicians and legislators/regulators, are not yet ready to hear this message.
Perhaps we'll hit a tipping point when Healthcare either becomes generally unaffordable or 30% of people are directly affected by serious Medical Harm.

Until then, I hope those fighting this Good Fight can keep their spirits up and continue in the face of disinterest.

An answer: Why not an NTSB for Healthcare?

[Post moved to other blog.]

In the seminal  Institute of Medicine (IOM) report, "An NTSB for Healthcare", a central question is posed:

Not Why an NTSB for Healthcare ... Why Not?

We believe that the question regarding an NTSB for healthcare is not why...but why not!

The Safety Leaders site has more great material than you can believe - its carefully selected, well structured and crafted; and finely targeted to various interest groups. It doesn't rely on assertion and dogma, but forceful and compelling hard-evidence from Healthcare and other high risk fields.

In response to "Why not an NTSB for Healthcare", answers come from Change Management with insight form Human Behaviour and Organisational Dynamics.

The primary answer is:

• What's in it for me?
• What's the upside of doing this, of changing how I work?

and the concomitant:

• Are there consequences for not doing this?
• What's the downside of ignoring or not doing this, or continuing "Business as Usual"?

Without changing the rewards and penalty structure, there not only won't will be, there can not be any systemic change.
"There is no reason we can't do that in Healthcare"

The first answer to the most of the "Why not" questions, the practitioner, manager and Board answer is simple:

• Why not? Because we don't have to.

A more insidious, subtle and ultimately deciding, not even pivotal, factor to consider is:

What are the blocks, active and passive, to change?

Reframing this question:

• Who has the most to win or lose from maintaining the current Status Quo?
• Who are the gatekeepers, individual, organisational and political, that can either enforce the current Status Quo, or prevent/limit change?

To stop rewarding behaviours and practices that are dysfunctional or not supportive of Societal goals and to start rewarding those things that fix the system, that address known problems. The O'bama administration has attempted to change the Healthcare system, but with extreme opposition from 'conservative' interests. It is unclear that anything will be accomplished from this initiative.

To underline this point, consider the insights in, and impact of, the seminal article by IHI CEO, Don Berwick, over 15 years ago:

Berwick D. A primer on leading the improvement of systems. BMJ 1996;

Good systems are designed deliberately to produce high quality work.
By eliminating waste, delay and the need to redo substandard work, they achieve long-term cost effectiveness." 

The Central Law of Improvement: every system is perfectly designed to achieve the results it achieves

What has changed since 1996? Was there a revolution?

Quality Improvement is still an outlier activity. Medical Healthcare continues to kill and maim more people each year without seemingly garnering attention or comment. The "Doctor as God" Medical Culture continues unabated and new entrants are sill inculcated into it.

But the worst thing of all, the cost of Medical Healthcare, in absolute and relative terms, continues to rise unchecked.

The AMA is the primary gatekeeper to Medical Healthcare in the USA: it has the resources and ability to block any and all changes. At some point, there will be a showdown: the current Status Quo versus Change and Improvement.

There is another important difference between Aviation and Healthcare than must be addressed before there can be any systemic changes in the US Medical Healthcare system:

There are very few personal consequences of "poor performance" or "failures" for Doctors.

As a community, there has to be consensus support and a willingness to hold all Medical Professionals to the basic Professional standard:

• There is never an reason for a Professional to repeat, or allow, Known Errors, Faults and Failures.

Until the community embraces this as a minimum standard, nothing can change.

While this happens, all the incumbents that profit from maintaing the Status Quo will remain as active, vocal and trenchant Roadblocks to Change.

The path to "an NTSB for Healthcare" lies through Politics and a broad social demand for change, not empty promises and window dressing.

The unnoticed Crisis in Healthcare

[Post moved to other blog.]

This paper on solving the Quality of Care crisis in Healthcare, "An NTSB for Healthcare", made me wonder why nobody was talking about another long-running, endemic Crisis in Healthcare:

In trying to spend less, it costs more to provide less of a worse service.The more we try to cut costs, the more it will cost and there is no simple way out: the system is locked into this craziness.
Doing "more of the same" not only cannot break us out of the rut, it pushes us deeper into it

W. Edwards Deming, the person responsible for the Quality Improvement movement in Japan that also forced a revolution in manufacturing the United States in the 1980's, was very clear on this:

• When people and organizations focus primarily on quality, defined by the ratio (Results of Work Effort / Total Effort), quality tends to increase and costs fall over time.
• However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time.

Turning around any system spiralling out of control cannot be done by "more of the same", but needs careful attention to causes and the underlying systems. As Quality Improvement has repeatedly shown, focussing on "Doing Things Right First Time, Every Time", is a remarkably effective means of effecting even very large turn-arounds.

The definitive theoretical works on how this counter-intuitive effect presents in Computing, Virtual Memory "Thrashing", started in 1968 with the first paper on "Working Set" theory. It's not overstating the fact that without this work (theory + proof-in-practice) computers as we know them could not exist.

This is the counter-intuitive world that in Computing we call "Thrashing", in Catastrophe Theory a "tipping point" and in everyday parlance "past the point of no return" or "starting down a slippery slope". Even sometimes, "in a flat spin", meaning "with no way out".

These all occur when a system or thing is irreversibly pushed past a critical point or limit and then the rules of the game change. Much like stretching out the small spring from a retractable ballpoint pen renders it useless. It cannot be properly remade because the steel has been stretched permanently past its elastic limit. There's a different effect in "Memory Metals" which return to their original shape when heated, but you can't make springs out of them, only automobile body panels.

There are some other dynamic systems that most drivers are very aware of:

• Overbraking leads to the tyres skidding as the friction melts the rubber and you're suddenly sliding on a thin film of liquid rubber. For drivers encountering this for the first time, the though of releasing the brakes, not pushing harder, is usually terrifying. "ABS" braking solves this by automatically releasing the brakes and re-applying them.
• The opposite effect is high-powered cars spinning their wheels when accelerating. The wheels continue to slide until power is reduced enough to regain traction.
• Cornering or swerving too fast, usually in slippery conditions like ice, mud or rain, results in some or all the wheels losing traction. There are no good recovery techniques for an all-wheel slide. When only the back wheels have lost traction, the classic "steer into the slide" technique works - which for those new to it, is usually counter-intuitive.

In all these situations, once "traction is lost", control is lost unless specific recovery measures are taken.

Once a rubber tyre starts to slide, it will continue to slide at that and previously tractable speeds.

Recovery isn't just a matter of reverting just a little, but often quite a lot until the rubber stops melting or sliding. Once traction is restored, it will again stay adhering until the critical limit is reached again. "Good car control" is often staying just below the critical limit and maintaining maximum friction without slipping.

The necessary ingredient to create a system which can sink into "Reversal of Command" type dysfunction is two opposing system response curves:

• The "normal" response curve where increasing staff numbers (i.e.higher staff costs, more time per patient and more individual "slack" time) results in more throughput, but at the cost of lower "cost effectiveness" per patient, and
• The "stressed" response curve, where low staff numbers creates higher absentee and sickness rates, increases Medical Errors and Adverse Events, increases staff-overtime for those able to work, increased time-pressure creates more stressed staff, reduces their job satisfaction and radically increases turn-over. Because the total demand for care has not reduced, extra staff have to be found: either through overtime, substitution of under-qualified staff or hiring expensive Agency staff. Overly tired staff not only work slower, but miscommunicate more, are worse at detecting errors and omissions  and make inordinately more clerical errors, requiring extra time to correct.

There is an Optimum Staff Cost point: the most cases are treated for the lowest staff costs.

Attempting to reduce staff costs below this point is counter-productive. The "stressed" response curve takes over and increases staff costs whilst the overworked staff produce significantly worse outcomes.

The problem with large Healthcare and Hospital systems, is that nobody is tracking the dysfunction curve, only the headline "staff costs".

Because these events go unnoticed and unreported, total System Costs are much higher than they need be.

But without measuring them, who's going to believe it?

And if you don't believe it, why would you measure?

Teams and Departments can suffer similar system breakdowns in their culture, as described in this: the "Blame Spiral".

The crucial point is that the "Do it Right, First Time" Quality Improvement methodology, because it is based in real measurement and relevant reporting, catches these issues early and prevents minor culture issues from descending into massive dysfunction.

The Budget, The Promise, The Dividend

Australia is about to pass a pivotal milestone:
 the last Federal ALP budget to run full-term for perhaps a decade.

It is already notorious because of the commitment Kevin Rudd made in 2008 that this budget would be in Surplus and the Coalition's constant carping and criticism about the ALP's "incompetence" in every area, including financial management. The clamour from economics commentators that it is not just unnecessary, but unwise, is just part of the lead-up to this event.

So, my comments on why we are getting, The Surplus We Had to Have.


The Budget

With the Australian Federal Budget under a week away, the ALP is attempting to bring down a Surplus, seemingly only for Political reasons.

We'll only know the result in 18 months, at which point, believing current trends, the Coalition will be in power and will pick a figure that:
a) makes their case that the ALP were "incompetent at everything" and
b) uses the usual rhetoric of "the situation was much worse than we were led to believe, we have to make much deeper cuts and reduce or defer some or all of our promises".

I can't add to the debate over the economic pros and cons of "The Surplus we had to have", but can point to a deeper set of concerns.


The Promise

The Rudd/Gillard governments backed themselves into a corner a number of times by making unwarranted unequivocal statements (e.g. "there will be no tax on carbon" and "we will have a surplus in 2012/13").

But leaders before have done exactly this, or made outrageous gaffs, and not felt the same need to Keep The Promise. The current ALP leaders are holding themselves to their statements and in this, having the Opposition pursue them on their promises.

• Hawke: "No child (need/will) live in poverty by 1990".
• Keating: "The recession we had to have" and "Banana Republic".
• Howard: "That wasn't a 'core' promise".

This could be the result of a generational change. All Prime Ministers up to and including Howard (e.g. Whitlam, Fraser, Hawke, Keating) literally had to have "town hall meetings" and learn to deal with hecklers without the assistance of microphones, effectively what every stand-up comedian has to learn.

Younger ALP leaders, Latham, Rudd and Gillard, differ in two important ways:

• they've had limited experience dealing with hecklers and antagonistic crowds (think of the difference between TV-only comedians and stand-ups), and
• they joined the Party Machine (or the Union movement) almost straight from school. Unlike Ben Chifley, who had a career as an engine driver before moving into paid politics.

There are other effects, such as the logical/absurdist extension of Sampling Theory and Statistical analysis of surveys invented by Gallup and used in 1936 to predict FDR's upset election.

This 'surplus', head-line or underlying, real or faked, is entirely for Political reasons, and as such is an "own goal" for the ALP. At the very least, they've shown they are inflexibly wed to any and all their policy statements and can't see a way around themselves to "adapt, improvise, overcome" in response to changing circumstances and needs.

But the real concern for every elector/taxpayer is the overwhelming message from both major parties:

Politics trumps Public Good. They don't care what harm they cause in the pursuit of a short-term political advantage or goal.

This is our future, our jobs, our money they're playing with so cavalierly. There is no "Government Money" to spend, only taxpayers wages.


The (Efficiency) Dividend

[My previous piece on the "Triple Whammy" effects of waste in I.T. is useful background for this.]

Keating introduced the Efficiency Dividend, or really Automatic Budget Reduction, to Federal Government in 1986. Notionally, it was a systematic attempt for Departments and Agencies to be forced to realise, and hand back, the productivity gains due to Technology, I.T./I.C.T. particularly.

Which is fine sounding until you pick apart the assumptions and implementation.

I was caught up in the first I.T. Recession in Australia, at the end of 1990. Westpac laid off 500 contractors (for the abandoned project CS90) at Christmas. It was 1994 before Computing and I.T. graduates were back to 100% employment. For a while, a Chemistry or Geology graduate had a better chance of finding work in their field - very different to the industry cries beforehand of "we have a staff shortage crisis" and "I.T. it's a job for life".

That first I.T. Recession was because all the low-hanging fruit was picked: all Australian businesses and Government Agencies had hired more I.T. staff to automate their back-office functions and replace (low-level) clerical staff.

In 1990/1, I.T. staff were cut, just like all other staff.

Why is this problematic? Consider these three related points:

• If this was 1965 and government Agencies had to supply all now current services, would we ever have an unemployment problem? [How many people would it take for Centrelink, ATO, Medicare, etc to do their work and handle 800,000 unemployed?]
• I.T., like Marketing, is an intangible and an indirect cost. We do them both for a Business Benefit. But we don't measure, report or analyse I.T. benefits.
• I.T. is a Cognitive Amplifier. We use it to automate business processes and increase staff productivity. Rough estimates suggest a 10-100 times 'amplification'.

The Keating Efficiency Dividend is recognising all three points:  from all the money invested in Federal Government I.T. Systems, rather large savings should have been realised.

The workload, and notionally the workforce, of many or most Federal Government Agencies should scale with population size - growing at a long-term average of 1.5%. [18M in 1996, five times the 1901 size]

But after 30+ years of I.T. Automation, for the Public Service to have only achieved a 1% total savings either suggests:

• gross incompetence in either failed or unproductive/irrelevant projects,
• management fakery in reallocating savings to increasing empires, or
• an increased level of service, either numbers served or complexity and number of services provided.

But we don't know what's happened: what staff productivity or organisational efficiencies have been realised?

This is a massive management and reporting failure on behalf of the permanent Public Service, but an even greater failure of governance and insight on behalf of the Parliament they report to.

This leads to another set of points:

• Not all Government Agencies can achieve the same efficiencies as their workload and workforce are dependant on different factors,
• Different areas within Agencies cannot be expected to yield the same "efficiency gains" for the same reasons, their inherent workload scales from different factors, and
• "Percent maximum potential efficiency" is not calculated nor taken into account. The past improvement by individual Agencies, and the future savings possible, are seen as irrelevant.

The Productivity Commission [2004] reported that ICT was still the single largest factor driving (staff) productivity growth, yet there appears no intensive study of the APS (Australian Public Service) to which it has special access and interest, nor does there seem to be a recognition or refutation of this is Agency management practice.

If investing in I.T./I.C.T. is still the most cost-effective way of improving productivity, and hence of meeting the Efficiency Dividend, why are any Government Agencies apply the full 4% 'dividend' across all their organisational units?

If I.T./I.C.T investment is judged as not improving productivity, where is the evidence?
Pointing to a glaring omission of all Government Agency Annual Reports. Although they all have detailed reporting against "Key Outcome Areas", there are no output metrics.

Productivity is a measure of Output per unit of Input. Within the APS reporting schemes and managerial system/requirements, only Inputs (staff numbers and on-costs) are measured. Failing to even notice this gap, let alone address it, seems to me to be another monumental failure of the APS's management and culture.

Politicians, as managers of the APS, make decisions/directions are unpredictable, capricious and irrational. This is simply the nature of the beast. Politics is the Art of the Possible.

Which means senior managers in the APS have to deal with this insane world.

Down the organisation structures, staff never learn to relate their time input into economic value output. The simple cost/benefit equation at the heart of every business transaction that any 16-yo at MacDonald's learns is missing: wages have to be paid for.

This has led to an incredible blind-spot within the Public Service, resulting in systemic management and reporting failures such as not defining and collecting/reporting staff output data so year-on-year Productivity can be tracked.

What we can absolutely say about the 4% (1.5%+2.5%) Swan/Gillard Efficiency Dividend:

• it should not be evenly applied across all Agencies, but has to be because the necessary management data is missing.
• it should not be evenly applied within Agencies because the necessary data is missing.
• without evidence, APS managers are blindly acting. Should they be investing in more I.T./I.C.T. or reducing I.T. staff/budgets more than 4%?
• There will be uneven and disproportionate effects on the delivery of Government services.

Just because Politicians live in an extreme world is no excuse that they don't properly fulfil their Fiduciary Duty towards their constituents - the people who've entrusted to them their future livelihoods and living standard.

We, as taxpayers and electors, need to be demanding a much higher standard of management and governance from the Politicians representing us.

Is there any reason that the Public Service is not the best organised, best managed and provably most productive and efficient/effective organisation in the country? Why should the Public Service be less than the definitive model of good management and good governance? The standard that every organisation is judged by.

The only reason is that we haven't held our Politicians accountable for their performance.

We have let them get away with putting their interests ahead of what they are elected and paid to do:  husband the public purse, the taxpayer dollar, for the best possible outcomes and sustained benefits to the citizenry.

The Real Deal on Not-for-Profit enterprises

Philip Greenspun in a piece on Early Retirement neatly summarises my experience with a multitude of Not-for-Profits...

Non-profit organizations exist to provide their staff with great jobs and the fun of making decisions and spending money.

The folks who work at a non-profit organization are very interested in drawing a salary higher than their skills and working hours would command at a for-profit enterprise subject to competition.

They are not especially interested in efficiency or accomplishment.

If you've come from the commercial world, in which McDonald's must be ruthlessly efficient for fear of being destroyed by Burger King, working with or in the typical non-profit organization will likely drive you to insanity.

Funnily enough, this aspect, nor the consequential intense internal politiking, doesn't appear in the definitive book on the subject, The The Complete Guide to Nonprofit Management by Smith, Bucklin & Associates.

The Complete Nuts-and-Bolts Guide to Managing Today's Bottom-Line Oriented Nonprofit Organizations

This significantly revised and expanded Second Edition of the highly popular how-to book identifies and addresses the unique concerns of nonprofit organizations. Cutting through the morass of mere theory, the experts at Smith, Bucklin & Associates, Inc., a leading nonprofit management firm, get right to actual practice with dozens of real-world examples and case studies, and up-to-date, vital, "combat-tested" strategies and techniques for dealing with virtually every nonprofit business management issue, including:
* The daily role of boards of directors
* Fund development and marketing
* Public and government relations
* Educational programs and certification
* Information services
* Human resources management
* Using the Internet