Pulling teeth

Many thanks to those readers of this blog who have written to me commiserating with the dental problems I talked about in my last post. Treatment is still ongoing.

But it seems that I am lucky in having a dentist who offered me the choice of root canal treatment rather than an extraction. Because it is reported today that many dentists now extract teeth unnecessarily as they receive the same amount from the NHS as for more lengthy and expensive treatments such as root canal surgery. NHS dentists are paid per ‘unit of dental activity’ and both extraction and root canal surgery constitute three units of dental activity. But since an extraction takes on average half the time of root canal surgery, there is an incentive to extract.

Here we have a very precise illustration of the perverse effects of targets, discussed on p.33-34 of the book, and the nature of bureaucratic dysfunctionalism. Like so much else that I write about in the book, the issue is not just one of the technicalities of organizational systems. Rather, dentistry in the UK has fallen apart for ideological reasons. Unlike other NHS services, it is no longer free at the point of use and quite hefty charges have to be paid. Indeed in many parts of the UK it is impossible to get access to an NHS dentist at all.

The roots (hah!) of this go back to the 2006 dental contract, the high watermark of New Labour infatuation with quasi-market and managerial solutions to the provision of public goods. In the intervening period there have been numerous complaints and reports, but nothing much has changed so that in March 2016 the British Dental Association (BDA) said:

​“The 2006 dental contract is not fit for purpose. It rewards dentists for hitting government targets for treatment and repair, not for improving their patients’ oral health. It was meant to improve access to NHS dentistry and put prevention at the heart of the service, but it has failed on its own terms. It has deskilled and demoralized the profession, and received criticism from patient groups, government, the Health Select Committee and the Chief Dental Officers for England and Wales.”

It’s important to understand that behind the bloodless formulation of being ‘not fit for purpose’ lie real people and real suffering. The consequence is self-dentistry, meaning, to be blunt, people extracting their own teeth with pliers. This in one of the richest countries in the world.

Fat cats?

The British government have today announced plans to further restrict redundancy pay-offs made to public sector employees. Proposing an £80,000 cap, this will only affect senior staff, and it is in part a response to a populist media campaign, enraged about public sector ‘fat cats’ not just because of redundancy pay-offs but, more generally, high salaries and ‘gold-plated’ pensions.

Fair enough, perhaps – although where is the comparable outrage about private sector rewards? – but it is worth considering how it has come about that public sector managers enjoy the high rewards that they do. For it was not always so. Traditionally, senior managers (then more often called administrators or officials) had substantially lower salaries than in the private sector, and were expected to be motivated primarily by their commitment to public service.

That all changed from the 1980s, when under the general ideology of the market and the particular influence of the ‘New Public Management’ that derived from it, it was argued that the public sector was inefficient because it did not have the dynamic management of the private sector and that, therefore, it had to offer rewards commensurate with those in the private sector so as to attract that talent. This new breed of managers could hardly be expected to work for so fluffy an ideal as public service – no, in line with the motivational theories of what was then called the New Right, they had to be paid top dollar. And they were – bringing with them many of the reforms that have laid waste to the public sector. But that is another story, about which I have written elsewhere in the blog.

One way of understanding this story is to see it as one of a huge number of examples where the consequences of decisions by now long-retired or dead politicians who were in power in the 1980s neo-liberal heyday have now come to fruition. Examples range from the decision to relax planning regulations on flood plain building because the market should decide where to build, leading to the floods of recent years, through to the deregulation that led to the global financial crisis.

It’s the same with the 1980s approach to those parts of the public sector that were not privatised (those that were, by the way, have mostly now died). Wind forward 30 years and we see that the very same ideologues who blasted the public sector for not paying the going rate for top managers now blast the public sector for … paying the going rate for top managers. It is a hypocrisy unleavened by any acknowledgement that the going rate for top managers is ludicrously high. Because of course their quarrel is not with top management pay rates at all, but with the very existence of the public sector.

Indeed, the attack on public sector fatcat pay is really only a way of finding a soft point to attack public sector pay in general. It is part and parcel of two claims. One is that public sector workers are paid more than private sector workers. The other is that public sector workers get 'gold-plated pensions’. Often, the two claims are linked together.

The problem with the first claim is that – again because of the impact of market ideology and neo-liberal reforms – the lowest skilled (and therefore lowest paid) jobs in the public sector have been outsourced to private sector contractors. Thus, of course, average public sector pay is higher. As regards pensions, in 2012 (the latest year for which I have been able to find comparative figures) the median-average public sector pension was £5,600 pa (mean-average £7,800 pa) and the median-average private sector pension was £5,860 pa (mean-average £7,467). It’s true that most final salary pension schemes in the private sector have closed; it’s also true that those in the public sector are closing (one reason being the pressure put on them by high paid managers).

So let’s by all means challenge the high pay and pensions of senior managers in the public sector. But doing so only makes sense if we do so across the board, perhaps by considering a maximum wage. In 1998 FTSE-100 CEOs were paid a huge 47 times the pay of their average employee. Shocked? Well, by 2014 they were paid 130 times as much as their average employee. We might think about Fred Goodwin, who brought down Royal Bank of Scotland and cost the taxpayer billions of pounds, scraping by on a reported pension of £342,500 pa, poor fellow. We might think about Paul Dacre, Editor-in-Chief of the Daily Mail which has so vociferously campaigned against public sector largesse. In 2014 his pay and bonus package was £2.4M. The average UK pay in 2014 was £26,500 or 1.1% of what anti-elitist Dacre earned that year. The highest paid public official, and this by a long chalk, in 2015 was the Attorney-General at £205,000 or 8.5% of what public sector scourge Dacre earned the previous year. We might think about Jonathan Isaby, the Chief Executive of the Taxpayers’ Alliance that campaigns against public sector pay in the interests of transparency – but, alas, so profound is his commitment to transparency that his pay isn’t on the public record, nor are the identities of the donors that fund the Taxpayers’ Alliance. Strange, perhaps, to learn that the Taxpayers’ Alliance are enthusiastic advocates of freedom of information, but we surely can’t doubt that everyone associated with them is an assiduous taxpayer, can we?

So let’s think about all that, let’s understand the hypocrisy of those who decry the consequences of what they advocate, and the underlying agenda they champion, and the kind of world they really want to see.

Right diagnosis, wrong prescription

A long-delayed report into the organization of the British National Health Service (NHS) has belatedly been published this week, with remarkably little media coverage. It was prepared by Stuart Rose, the former boss of retailer Marks & Spencer, and we might wonder to what extent his expertise is relevant to the NHS. Nevertheless, he makes a good fist of explaining how constant and contradictory changes have led to ‘change fatigue’; how targets have had a dysfunctional effect; and that the recent marketization of the NHS in particular has led to a virtually unmanageable situation.

So far, so good, and very much in line with what I have written recently on this blog about unhealthy management and healthy bureaucracy in the NHS. Unfortunately, Rose goes on to wheel out the tired and predictable nostrum that the solution is better leadership and leadership training. We’ve been round this loop endlessly in, especially, the public sector: first it’s better management that’s needed, then better structures, then culture change, then better leadership. Leadership, especially, currently takes on an almost magical character as the universal panacea for what ails organizations. There's an extraordinary impoverishment in the managerial imagination that keeps its proponents going round a hermetically sealed loop of systems (management, organizational structures) and values (leadership, organizational culture).

I don’t actually disagree that leadership (and management, and structure, and culture) matter both in organizations in general and in the NHS. But it is woefully inadequate to think that these things can make very much difference in the face of overwhelming resource deficiencies. As I’ve pointed out before on this blog, health costs are spiralling because of ageing populations, scientific advances and healthcare cost inflation that exceeds general price inflation. UK health expenditure per head is US$3405 or 15 in the world (OECD, 2011 figures), and this does not include the allied issue of care spending for, in particular the elderly.

Now, for sure, expenditure isn’t the whole story because the UK system of socialized health is more efficient than any other. Moreover, I’m very well aware that the situation in the UK is enormously privileged compared with most of the rest of the world. Still, there is a basic arithmetic here. How much difference can leadership make when compared with resources? Suppose, modestly, that it was equivalent to a 1% increase of per head expenditure. Then, the UK would remain at 15 in the league table. Suppose, more extravagantly, it was the equivalent of 10% of per head expenditure. Then the UK would rise to 14 in the list. Suppose, ludicrously surely, it was equivalent to a 20% increase in per head expenditure. Then, by a whisker, it would be 11 in the list. In fact, even if leadership had the capacity to be equivalent to a 100% increase, a doubling, in per head expenditure then the UK would still only be second in the global list. But consider this: no study has definitively shown that leadership makes any difference to organizational performance at all.