Private Hospitals Association of IrelandAnnual Conference

Dublin, June 20, 2017

Prof. Arne Björnberg, PhD

info@healthpowerhouse.com

MDD(Management Deficiency Disorder);

an Endemic Condition AffectingEuropean Public Healthcare

mailto:arne.bjornberg@healthpowerhouse.com

The Original Literature Referenceon Organisational Theory

Exodus 18:13-27Jethro, priest of Midian and father-in-law of Moses,

~1513 B.C.

i.e. ”management” is not a modern Americanism, and this presentation is notabout New Public Management!

The Endemic Condition affectingEuropean public healthcare

“MDD”;Management Deficiency Disorder

If Ingvar Kamprad of IKEA, or Mick O’Leary of Ryanair, were to learn in detail how a typicalEuropean hospital is being run, they would have to be admitted acutely!

MDD (4): Different DRG pricing

Financing institutions with long experience from micro-managing on costs try to stay serene and calm by making performance-based financing function just like block grants

Different DRG-prices to hospitals based on their cost levels (example from Slovenia, €/DRG point):

Regular secondary hospital: € 1142.-

University hospital Maribor: € 1400.-

University hospital Ljubljana: € 1613.-

Production ceilings in contracts

End result: An illusion of total cost control, and very weak efficiencyincentives!

Performance-based financing deformed back to block grant functionality!

A mindbogglingly stupid example (now rectified, thank God!):

MDD (27): Norwegian Counties

Norwegian healthcare used to be run by local county politicians, with no “money of their own”

Healthcare budgets were requested from Big Daddy the State

One result: the latest 500-bed new hospital built in Sweden cost MEUR 250 – a similar Norwegian hospital planned at the same time cost MEUR 700!

Reformed in 2002 – 2007!

but Norway still has severe waiting timeproblems

MDD (16): Anonymous CEE Country (Yes, A.D. 2017!)

No line of commandManagers of primary and secondary care institutions appointed by

local politicians, who have no budgetary responsibilities!

Riddle: Whichbody in thisstructure is

actuallyperceived to be

”managing” healthcare

institutions?

MDD (15): Austria

Austrian hospitals do have General Managers (”Geschäftsführer”)

But; the real acid test on who is the boss is ”Who hires and fires?”

Austrian Heads of Clinic are appointed by Committees of Doctors, i.e. not by the Hospital Manager – ”You scratch my back, and I’ll scratch yours”

MDD (67): Pharmacy margins

Believe it or not: still, AD 2017, there are countries wherepharmacies have a percentage margin on subsidisedprescription drugs, i.e.:

pharmacies make more money if they dispense an expensive drug thana cheaper drug

You do want 1000’s of pharmacies to co-operate on keepingdown the public drug bill!

Replace the pharmacy margin with a fixed fee for the service of filling a prescription!

Give pharmacies the obligation to do generic switching

Public subsidy should only cover the cheapest generic – if patients insiston branded drugs, they pay the difference out-of-pocket!

Not rocket science!

MDD (36): MRI capacity

What is a reasonable expectation on the number of examinations per year in one MRI machine?

2 000?

10 000?

These and many other numbers appear In Real Life today!

MDD (19): IT enablement

The most information-intensive industry on Earth is less IT-enabled than the average travel agency

A nurse handles 100 times more information in a work shift than a nightwatchman does

So why have nightwatchmen had handheld computers for 30 years, and nurses still have not?

Hypothesis: Public healthcare typically does not calculate Return-On-Investment (ROI) on investment

Investment budgets made on the principle ”All the children must get equally nice Christmas presents”?

MDD (19b): IT deficiency rectified!

Macedonia: You are looking at an actual 70 %(!) productivity gain in three years after IT-enabling referral system!

Brown line:

Waiting times, and yes, the scale is 1 – 2 days!

This is a solution giving Real Time overview of where clinical resources are available– not just moving referralsfrom pigeon holes to cyberspace!

Other countries, particularly Germany and Sweden, have caught up with the NL!

MDD (22): ”Structural Antiquity Index”or why the Dutch healthcare system is expensive

Accessibility in EHCI

MDD (13):

Europe is divided into”waiting list territory” (Red) and ”non-waitinglist territory” (Green).

This is independent of GDP/capita.

MDD (13b): Money does not buy betteraccess to healthcare!

CHBE

CZMK

SEIEUKPL

MDD (8): Accessibility not really related to number of doctors!

MDD (17): An example of a LAP Indicator; ”Level of Attention to the Problem”.Wealthy countries can afford admitting patients on weaker indications,

but there are deviations!

Greek hospitals have press gangsroaming city streets?

MDD (31): Sometimes money buys worse healthcare

Clinic dialysis is over-remunerated?

MDD (41): Greeks can somehow carry on spending on drugs and hospital admissions

There is no evidence which supports that public healthbenefits from dispensing drugs to deceased patients

Statin deployment Clopidogrel deployment

MDD (47): Deployment rates of vital and cheap generic medicationgoverned by local idiosynchrasies rather than by guidelines!

MDD (23):Less wealthy countries have higher Caesarean rates!

Women should have the right to abortion,but abortion as a contraceptive is not a good idea!

MDD (51): Abortion used as

contraception(CEE abortion rates on

their way down).

MDD (38):”Bismarck Beats Beveridge”

Bismarck systems less sensitive to MDD

Beveridge systems offer conflicts between loyalty to citizens and loyalty to healthcare system/organisation (“politician home town job preservation”)

lack of business acumen in Beveridge systems; efficiency gains and cutbacks frequently not differentiated!

Bismarck systems have essentially always paid for performance!

100’s of thousands of professionals take better decisions and drive development better than central bodies

The essential characteristic of Bismarck systems is the separation of financingdecisions and operative decisions – ”finansors should not micro-managehospitals”

MDD, and financial sustainabilityof European Healthcare

If MDD were cured to the level of a moderately well-run private corporation –what could be the productivity gain?

+30 – 50% or more!

Should provide sustainability enough for the next 40 years!

2060!

What can/should Ruritania*) do?

Not centralize financing/budgeting1. Introduce budgeting and management based on performance (DRG's etc), not on costs.

2. Separate decision-making on financing, from decision-making on the operation of Healthcare institutions – the latter is unlikely to be done optimally by anybody who ever worked for the Health Insurance Fund for any length of time.

3. Introduce a clear “line of command” in the healthcare provision system – institutions must be protected against micro-management from financing bodies. This is the most important property of Bismarck systems.

4. ELIMINATE WAITING LISTS: Acquire and implement the FYROM e-Referral and e-Prescription solution »Pinga«.

5. Open benchmarking: Commission the right institution to produce an easily Internet-accessible Slovenian version of NHS Choices, www.sundhedskvalitet.dk or Slovakian Hospital Web, showing Outcomes data for individual Slovenian clinics.

Ruritania*): typical Beveridge country

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