Systemic Failure

Listener 23 December, 1995.

Keywords: Governance;

“Standing back and viewing the evidence objectively, that I am left with the overwhelming impression that the many people affected were all let down by faults in the process of government departmental reforms. Society always likes to feel it is progressing, but there are lessons for society in all of this. No government organisation can do its job without adequate resourcing. In my opinion, it is up to governments to ensure that departments charged with carrying out statutory functions for the benefit of the community are provided with sufficient resources to enable them to do so.” Judge George Noble, Committee of Inquiry into the Cave Creek Tragedy.

The reforms aimed to breakup the culture of the old public sector. They could not do this selectively. Everything had to be destroyed. Thus the practices of the Forest Service in the construction of platforms were not fully transferred to the Department of Conservation. This failure to transfer practical aspects of the past culture was not unique. It was pervasive, and exists to this day, occasionally coming to public prominence.

Take for instance “cost shifting”, the phenomenon of a business shifting costs from itself to the customer. The health reforms were deliberately set up to encourage cost shifting, not only with the introduction of user pays. The operating culture of the hospitals was changed, so that instead of being focussed on the patient they have to act in a business like manner.

Following this column raising the matter, the government promised there would be no cost shifting – another example of the fatuous promises which the reformers insist on making. Consider the easiest form of cost shifting open to a hospital – early discharge, where the patient leaves the hospital before they are ready. Does it happen? How would we know? You have an operation, you get let out early, you and the family suffer, but it is not recorded. The trick is the cost is shifted to the individual and their close friends and family so the community does not notice. The same thing happens for geriatric care. Early discharge, perhaps without any community support. Only the patient and those close notice.

There are exceptions. Mental patients cannot cope, and often they have no one close to assist them. So they end up on the streets, discharged when they should not have been. Because these people are seen as a menace to the community, we have a public outcry. But it is the tip of an iceberg of the much wider phenomenon.

I was at a meeting recently in which a senior administrator in the health sector described the skills needed for the job. References to knowledge about the health system were notably absent. When I questioned the omission he said that sort of knowledge was unnecessary. One of the audience said “it helps to know what you are talking about”, to which was replied “I dispute that”. No wonder the health sector, its staff, and patients are under such stress.
For a totally different example recall that not a single paper submitted to the government on abandoning capital controls on foreign exchange mentioned the tax implications. When the restrictions were terminated the financial sector shot off overseas to any going tax haven. That is the underlying story of the Winebox inquiry. Half baked policy led to the loss of millions of tax dollars – mainly legally.

Recall the reply of Wyatt Creech, the Minister of Revenue, to Ruth Richardson’s claim that he blocked her tax reforms. “The devil”, he said, “is in the detail”. True for tax law, true for a box of nails, true for the discharge decision, true in education, true everywhere. The grand reformers with their megalomaniac theories ignored the detail.

The story of poorly thought through reforms go on. The Core Health Services Committee has recently proposed that there should be “independent assessors” to decide waiting list priorities. The assessors will be accountable to the government, no doubt. As it happens authoritarian governments reward their supporters and penalize dissenters by manipulating waiting lists. An earlier column pointed out that the reforms set up the universities so they can be easily taken over by a fascist government. The Core Health Committee wants to do the same for health. Now I am not accusing those of proposing these authoritarian structures as being crypto-fascists. They just dont know what they are talking about.

The traditional culture of the public service has been gutted, to be replaced by something which is much more inefficient, failing to provide the service and security that was promised. Nor, and this is what concerns me most, are we doing anything about it. We are offered soothing words, and promises to spend a little bit more where the problem is obvious, or the tragedy has already happened. We ignore the underlying issue that the reforms themselves were misconceived. As the Nobel report says the failure was “systemic”, that is riddled throughout the system: not just that of platform construction, not just in one department, but through the whole damned state sector.