Address To The Hospital And Community Dentistry Conference

Nelson, 28 July 2007

Ian Powell

Executive Director

Association Of Salaried Medical Specialists

Once again thank you for the opportunity to address your Conference, something which I have always enjoyed. The views expressed below are my own although I do not believe they constitute a substantive departure from or contradict Association policy.

The reference to the Matthew effect in the heading of this address, the disciple recruited from tax collecting, is an attempt to link this effect to the difficulties of achieving health professional empowerment in district health boards. The Matthew effect, buried somewhere deep in the New Testament, is:

For to everyone who has will more be given, and he will have abundance but from him who has not even what he has will be taken away.

The reference to the ‘he’ that has ‘abundance’ is, in the context of this address with some literary license, Board chairs, chief executives and senior managers wrapped up in a cloak of mangerialism culture. It is relevant in terms of the frustrations encountered by the ASMS in trying to promote health professional leadership in our health system as the best means of achieving access, quality and cost effectiveness. It is also relevant to the disastrous industrial climate in DHBs that started off as an absurd strategy to ‘do over Deborah’ and survive strikes. Although this strategy backfired nevertheless it somehow was adapted for other negotiations.

The DHBs had thought that by putting a person with a military background in as their advocate they thought they would march to victory. However, this strategy failed to consider three important things—(1) you are not allowed to use guns in industrial negotiations, not yet at least; (2) collective bargaining under our current industrial law is more of a level playing field, and (3) experience in negotiations counts for a lot. This limited strategy did not include how to settle difficult and challenging negotiations. It sadly highlights the moribund leadership of DHBs at a national level despite there being many able and impressive board chairs, chief executives and other senior managers in their own patches.

Perhaps there is a role for coups?

I was struck earlier this year by a book review in the New York Review of Books on the Crow nation in the western United States who was pressured to give up their hunting way of life and shift to a reservation in the late 19th century (Jonathan Lear, Radical Hope). The leader at that time, and known as the last great chief of the Crow nation, went by the wonderful name of Plenty Coups, chosen almost a century before the CIA was created and even longer before coups were a gleam in the eyes of the Fijian military. He was a warrior up there with Sitting Bull. His name was derived from the tradition of Crow coups involving bravery on the battlefield against other tribes. The warrior, in the face of the enemy, would put a special stake in the ground, known as the ‘coup stick’. This was a sign to the enemy that they dare not pass. Over a long career Plenty Coups planted many ‘coup sticks’ in the ground.

But, in quite different times, in the late 1920s near the end of his life, Plenty Coups soberly reflected that:

When the buffalo went away the hearts of my people fell to the ground, and they could not lift them up again. After this nothing else happened. (emphasis added)

In other words, the Crow nation had lost its functioning modus operandi which was based on sufficient territory for hunting, sufficient buffalo to hunt, and crucial activities centred around honour and bravery.

The ASMS’s Health Professional-Led Approach

Since October 2005, soon after the last general election and with the constructive support of the Council of Trade Unions, the ASMS has been proposing a new strategic direction, which is health professional-led, in order to better achieve (a) cost effectiveness and fiscal sustainability and (b) quality (safety and effectiveness). This proposal had its seeds in our earlier advocacy of the clinical networks approach based on proactive clinical leadership and extensive engagement with health professionals in New South Wales.

Our proposed strategic direction is based on the premise that a health system which makes key decisions without engaging its considerable intellectual human capital (as well as its wealth of practical experience) is destined to make decisions that fall well short of standards of quality and cost effectiveness.

Positive Turn-around?

When we first forwarded our proposal to him around 22 months ago our Health Minister welcomed it describing it as an as yet unwrapped ‘gift’. However, to us he appeared to nod off (no doubt he has a different view) only to be woken, as one is, when the Prime Minister convened a meeting including the ASMS, CTU, Director-General of Health and key officials in March. She has always had a strong interest in this issue drawing on her own experiences as a former health minister. Arising out of this constructive meeting it appeared that our initiative might get real legs, particularly as it seemed to also dovetail nicely in with the new promising strategic direction emerging in the Ministry of Health under the new Director-General.

The outcome was that we would prepare a paper outlining an approach to health professional leadership underpinned by a stem document promoting the benefits of collaborative relationships with CTU affiliated health sector unions by the end of April that would then be considered by cabinet the following month. The cabinet approved outcome, in May, would then lead to an agreement signed off by the Government and CTU which would then become applicable to DHBs through the government’s various policy instruments such as annual Ministerial letters of expectation, funding agreements and the Health Ministry’s operating policy framework.

The proposed agreement comprised in the first instance a stem document on relationships in the sector particularly with the workforce through their unions. This is fine as far as it goes but without further substance they are more in the realm of nice words on paper. The main substance is in an attached appendix on health professional leadership in the engine room of decision-making.

The culture of managerialism is pervasive in DHBs despite some positive patches to the contrary. Health professional leadership as advocated by us is more than involvement. It seeks to proactively place health professionals in the engine room of decision-making and shift the role of senior management to facilitate and support rather than control and direct. It is the direct opposite of managerialism and managerial prerogative.

Health professional leadership is critical if effective regional and national clinical networks are to be developed. Without health professional empowerment, regional collaboration risks becoming a camouflage for pillaging smaller DHBs of their critical mass to maintain necessary services in their areas. A network is a network, not a crude means of transferring resources out of vulnerable DHBs. A culture of managerialism risks the crudity of the latter while health professional leadership means ensuring within a regional approach what are the critical masses and resources necessary to sustain an effective service in all of the whole combined region.

Also linked to health professional leadership is the importance of public provision. Secondary and tertiary care is highly integrated. No one branch of medicine or dentistry can operate in splendid isolation. Each branch functions best in an integrated manner. Private management, control or ownership of core secondary or tertiary services cuts across this and introduces a new fiscal pressure that both unduly complicates and risks working in the opposite direction; the need to maintain and enhance profit margins.

Is the Empire striking back?

However, things did not pan out in a way suggested by the optimism of the meeting convened by the Prime Minister. While the paper was prepared by late April the Minister referred it to DHBs who were raising serious concerns over the industrial climate. These quite different perspectives then got tangled up. It appeared to us that the DHBs were seeking to delay and buy time in order to enhance their relative influence in meetings with the government and CTU affiliated health unions (including us).

For a time it appeared that our initiative was as dead as Monty Python’s Norwegian Blue parrot. Had I been giving this speech a week ago I may well have used descriptions such as ‘Empire strikes back’! But meetings including with DHB national representatives earlier this week highlight the risks of what can happen if parties talk past each other, often due to the pace of activity. I have, at least for the moment, revised my assessment. Confusion had occurred because of the coming together of the two not directly related dynamics in such a way as they became entangled. Disentanglement and better communication suggests that we may not be as far apart as thought although time will tell. The critical issue for us will be whether DHBs are able to develop a consistent positive position, and that it involves at a national level the whole being bigger than the sum of the parts, and whether the Health Minister provides the necessary political leadership. Without strong political sponsorship it simply will not happen.

The jury is still out. But if this happens then perhaps Waiting for Godot will revert to being simply a great play rather than the modus operandi of the health sector.

Comparing Government and Opposition

It has to be said that at this point in time the National opposition has moved ahead of the Government on health professional leadership with National now assertively advocating the clinical networks approach in New South Wales. The ASMS has discussed this with National and we can only welcome this new direction. However, there are three important qualifiers:

1. Clinical networks will only succeed, or best achieve their potential, if they are underpinned by an active culture of health professional leadership and empowerment. This is not coming through strongly enough in National’s public statements although it is well ahead of the government which is still circling the issue and lacks certainty of direction.
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3. Given the integrated nature of secondary and tertiary services stable public provision is important. However, National is indicating a preference for returning, to one extent or another, to the contestable funding regime of the 1990s and to contracting out. This has the effect of fragmenting, de-stabilising and introducing the complications of other vested business interests that will undermine the potential effectiveness of the high level of integration necessary for clinical networks. National can’t have it both ways. Neither can the government. It is unfortunate that the Government’s willingness to privatise hospital laboratories has undermined the capacity for effective regional and national collaboration between public hospitals. The government ought to be ahead of National on this issue but its contradictory behaviour and lack of leadership suggests there is little to differentiate.
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5. National collective agreements as the main basis of employment of health professionals better enhance the capacity to utilise clinical networks. It is a more simplified and flexible form of employment conducive to clinical collaboration between DHBs. Unfortunately the National Party hankers back to the days of the anti-union Employment Contracts Act of the 1990s and seems to have an unjustified antipathy to collective agreements including national ones. On this issue the government is well ahead of their main opposition party.
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National DHB collective agreement (MECA) negotiations

As you will be aware the ASMS is now in the middle of 26 stopwork meetings in the 21 DHBs of which I am the main beneficiary through airpoints. The fact that this unprecedented event coincides with the commencement of the final series of the cult television programme (and my favourite), the Sopranos, one hopes is coincidental. I also want to make it clear that the fact two months ago I was travelling by train through New Jersey was coincidental. I was not seeking additional advocacy support. Rather I was simply investigating the American waste management industry.

Stopwork stocktake

After 12 out of the 26 stopwork meetings it is clear that a Rubicon has been crossed by the ASMS. The following observations can be made:

• Attendances have been beyond our expectations with the very large majority of those able to attend actually attending, in some cases 100% or very close to it.
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• Similarly the unity and strength of feeling has been beyond our expectations.
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• To date, despite us circulating their proposal only three members have voted to accept it.
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• The resolution to authorise a national ballot on industrial action should the impasse continue has been adopted overwhelmingly with very few dissents at most, in at least five meetings unanimous, and in some others just the odd abstention.
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• Several resolutions have been adopted unanimously or overwhelmingly sharply critical of the failure of DHBs and government to recognise what is described as a workforce crisis. More recently the criticisms of government have also become more discernible and pointed.
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Where the negotiations are at

Our national (multi-employer) collective agreement (MECA) negotiations with the DHBs commenced in late May 2006. To date we have had 24 days of negotiation including 10 with a mediator this year. Despite having an experienced and proactive mediator, no real progress has been made. The mediator has made two considered ‘without prejudice’ proposals based on shorter and longer terms. But while we have expressed on both occasions a preparedness to recommend acceptance to members the DHBs negotiating team has rejected outright the fiscal elements of both. Our negotiations, and several others, have also revealed serious weaknesses in the DHBs’ industrial relations capacity which, to give the DHBs their due, they are now recognising needs to be addressed.

Last year after much difficulty we succeeded in extracting their position from them: for a three year term from 1 July 2006, a 4.06% salary increase (1.3% per annum); increasing the T1.5 for average hours worked on after-hours call rosters to T1.75; increasing reimbursement of CME expenses by $2,000, all over a three year term. This remained their position for several months. In May they modified their position based on an in effect 46 month term created by delaying the commencement of the new agreement by 10 months and taking advantage of the maximum term available under the Employment Relations Act (three years).

If annualised over the 46 month period and if all the monies went into the base salary increase, then the increase would average 3.8% per annum plus a one-off pro rata $5,000 lump sum payment. Arguably this lump sum payment is an attempted bribe. The ASMS has no ethical position; we are ‘situationally’ ethical. It depends what the bribe is and this isn’t it.

Recruitment and retention threat

Unfortunately the DHBs have adopted a short-sighted industrial relations strategy that is contrary to and undermining the actual health professional workforce development needs in New Zealand. To simplify the challenge a first year specialist in New South Wales currently earns as a minimum over $29,000(A) more than in New Zealand. After seven years this bare minimum gap increases to $50,000(A). This is without taking into account the considerable financial advantage provided by Australia’s unique salary sacrifice system. In reality, however, the kind of packages being offered and promoted to our members and to doctors from the international market both countries seek to recruit from are invariably around double our packages.

By offering significantly superior terms and conditions of employment, Australia is well placed to attract specialists in New Zealand to migrate westwards across the Tasman. What began as a trickle is now becoming a flood with over 80 migrating during 2006-07, an average of one a week and a number roughly the size of DHBs such as Northland, Bay of Plenty, Hawkes Bay, MidCentral and Nelson Marlborough. Further, it is snatching our senior registrars who have completed, or are close to completing, their training with all the signs suggesting they are unlikely to return.

It is also very well placed to attract overseas trained specialists (New Zealand is already highly dependent on international recruitment with around 41% of our doctors overseas trained, the highest proportion in OECD countries; should the DHBs industrial relations strategy continue this dependence on overseas trained specialists can only be expected to increase). New Zealand has a wonderful lifestyle to help keep a number of specialists in New Zealand but, for those coming from overseas, it is a no brainer. Australia is not without lifestyle particularly if you disregard the fact that Australians live there.

The Prime Minister has always impressed me with her powerful command of detail in a wide range of areas. Consequently it was disappointing to learn how out-of-touch she is on medical/dental workforce realities in a recent radio interview. Essentially she referred to back to when she was Health Minister and believed it was about the same. But that was around 17 years ago! Successive reports in recent years commissioned by the government, the latest in May this year, have highlighted the seriousness of the situation as has the government’s own statutory body, the Medical Council. The Prime Minister can do better than this and should not be taken in by the spin of some DHB national leaders.

How the DHBs spin and say thank you

The response of the DHBs has been the foolish, short-sighted and rigid adaptation of the government’s ‘future funding track’, including trying to use our bargaining process agreement (a legal requirement under the Employment Relations Act) in an unsuccessful endeavour to muzzle the ASMS from commenting publicly about our negotiations and trying to fudge the size of their fiscal offer by including the already existing operational cost of salary step advancement. It also includes exaggerating senior doctor average income by including into the mix extraneous and misleading factors such as internal locum cover (compensation for specialists covering for absences of other staff and shortages) and loaded towards those working longer hours including on after-hours call duties.

Then they got really clever. As an expression of their appreciation for hospital senior medical and dental staff holding the system together during the week long RMO strike last year, they proposed counter-claims (claw-backs) which, when taken together, represent attempts to de-professionalise and disempower them along with cutting and fettering existing entitlements. These included:

• Restricting eligibility for sabbatical and cutting remuneration while on sabbatical.
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• Strangling the application of time for non-clinical duties including by deleting reference to the recognised professional standard.
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• Marginalising the role of the ASMS-DHB joint consultation committees in each of the 21 DHBs.
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• Minimising consultation rights and correspondingly enhancing managerial prerogative.
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• Making specialists in leadership roles accountable for actions that they have limited influence over and without the full authority that goes with this level of accountability.
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• Requiring specialists to ‘execute their responsibilities in accordance with their DHBs values’.
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Under their current position only one of these claw-backs still remains—watering down the consultation clause—which they naively believe can be used as a lever to force us to accept their position.

Current ASMS position

The ASMS has on more than one occasion also modified and reduced our claim. The main fiscal elements now include, for a two year term from 1 July 2006, a 10% salary increase (averaging 5% per annum but more of it in the first year); increasing the T1.5 to T2 for average hours worked on rostered after-hours call duties and extending it to after-hours shifts (taking effect towards the end of the term); and staging, through two phased $4,000 increments an $8,000 increase in the ceiling for the reimbursement of actual and reasonable CME expenses (even then well short of the $20,000(A) to nearly $28,000(A) in Australia). The remuneration benefit at the end of the two-year period is around 13% but is less than 10% during it due to our proposed phased impact approach.

More spin from DHBs

Instead of negotiating genuinely with us the DHBs response is to engage in spin deceitfully alleging that our claim is around 20%. But how do they get to this figure. It is quite simple really. The following embellishments and distortions explain it:

• Includes annual salary step progression which is an ongoing operational cost and not a cost of the negotiations. Further, it does not apply to the around 700 people already on the top of the scale.
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• Includes reimbursement of actual and reasonable CME expenses simply because, for planning and operational parties both parties find it useful to have a cap, unlike other work-related reimbursements. It is not remuneration.
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• It overstates the cost of additional salary steps by a bizarre method of calculating it over 16 years.
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• It includes the around 8% of the workforce not represented by the ASMS and not covered by the MECA.
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The DHBs have failed to learn that the use of spin and embellishments is guaranteed to make a settlement more difficult rather than easier to achieve.

DHBs’ fiscal irresponsibility

The absurdity of the DHBs position is that there is no way the DHBs can avoid increasing the cost of employing senior doctors and dentists. The DHBs as creatures of statute have no choice but to employ enough of them. They can’t simply withdraw without some form of satisfactory alternative arrangement put in place.

The way sought by the ASMS is to enhance for all the terms and conditions of the national collective agreement. Increasing them through the MECA is the fairest, most equitable and most fiscally responsible way of addressing this. But if the MECA terms and conditions are not competitive either to retain those we presently employ in New Zealand (particularly in response to aggressive very attractive recruiting from Australia) or to recruit those we seek from overseas largely from the northern hemisphere in competition for the much better placed Australia then DHB costs will blow-out for two reasons.

First, DHBs will be compelled to offer special deals well above the MECA to retain existing senior doctors and dentists. Second, DHBs will have to employ the much more expensive option of locums (extra costs of around 3 to 1 is a reasonable ballpark).

In both cases this is already happening and will only increase. It is a disgrace that the cost of employing locums (junior and senior) has doubled over the past six years and is now over $100m per annum and rising. The irony therefore is that the more that DHBs attempt to restrict the collective costs of employing senior doctors and dentists; the more the costs of employing them will blow-out and the lesser workload return and productivity. The DHBs position is fiscal irresponsibility gone mad!

Arbitration call

Immediately after the extensive media coverage of the first stopwork meeting at North Shore Hospital, the DHBs publicly called for arbitration. If the DHBs had been genuine about arbitration then they would have raised it with us four days earlier (13 July) when we were in mediation. It is clear that this was a public relations ploy to try to derail the rest of the stopworks, undermine the credibility of the ASMS’s negotiating team, and divide our members.

The call is made in the context of a provision in the MECA which provides for adjudication providing that both parties agree. Until now DHBs have been philosophically opposed to arbitration.

In summary, the following can be said about this arbitration call and our response to it:

• It was a panic response to the success of the first stopwork at North Shore.
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• If the DHBs were genuine they are saying that they would accept the ASMS position if an arbitrator ruled that way. Consequently, if they are genuine, they recognise that they can afford our claim. Therefore they should simply sit down with us and negotiate it. This is a point that has been evidently accepted by Medical Council Chair Professor John Campbell who, when interviewed by Radio New Zealand on Checkpoint, on 19 July, poured cold water on the DHBs’ ploy. He instead urged the parties to quickly resolve the issues. We agree.
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• On 17 July the DHBs said that mediation is over because it is exhausted. But four days earlier they agreed with us on new dates for mediation. All that happened in the meantime were large newspaper advertisements and extensive media coverage of the first stopwork meeting at North Shore.
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• The system of arbitration they have proposed (‘final offer’) is arguably the most conservative available. It is selected because it would favour the conservative position of the DHBs. It is based on an inflexible ‘winner takes all’ approach guaranteed to leave an aggrieved party. The arbitrator(s) have no discretion to adopt any position other than ours or theirs. It is not designed to address major problems such as recruitment and retention difficulties.
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• If the DHBs want to discuss arbitration we will do it in mediation next scheduled for 16 August presuming that they turn up. If there is to be arbitration then it will not be on the basis of a process and criteria set up to favour the DHBs position. If they are still interested in discussing it then we will engage and make our own proposal over the form of arbitration. However, we will not allow ourselves to be unnecessarily side-tracked by this matter.
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Bones of a settlement?

Despite everything if an experienced eye is cast over the circumstances, one can see the bones of a settlement. In fact, it is signalled by a flashing red light so bright that only the colour blind can’t see it. The gap would be considerably narrower and perhaps completely bridged if the DHBs were to:

• Stop counting annual salary step progression and CME expenses as costs of the settlement.
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• Take into account the reduced impact of phased increases of key remuneration elements.
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• Convert the lump sum payment into permanent funding.
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• Accept a significantly reduced term from nearly four years.
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• Withdraw their claim on watering down consultation rights.
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The track record of the DHBs industrial relations strategy over the past 15 months has been abysmal. There have only been two national settlements although two others are subject to ratification. The first was with resident medical doctors and followed a lengthy and bitter dispute, including a five day national strike. The DHBs’ objective was to do what was sometimes popularised at the peak of the dispute as ‘reclaiming the rosters; to reduce the influence of resident doctors through their union (Resident Doctors’ Association) on rosters and hours of work’. The ‘successful’ outcome was that this influence remained as fully intact after the settlement as it was before; in fact most likely the influence of resident doctors and the RDA increased.

The second ‘success’ was to contribute towards increased resident doctor shortages at a national level. One indication of this is the increasing dependence on specialists to cover for RMO absences.

Learning from Plenty Coups: After this something can happen

The story described briefly at the commencement of this address was not as depressing as suggested. In fact, in contrast with where his sober reflection left off, Plenty Coups eventually found way of making something else happening. He drew on the established Crow practice of going into the wilderness to seek a revelation through a dream.

This, in turn, led to a shift from hunting to farming as the Crow under his leadership settled down to farming lifestyles. In contrast with Sitting Bull it involved compromises with the American government but he espoused the shift in such a way as to be a new project rather than surrender. And it was based on practicality rather than wishful optimism. It included even, unusual in many respects for that time in Native American history, encouraging tribal members to attend university.

Perhaps the moral of this story for us, while accepting the vastly different circumstances of the Crow nation in the late 19th century and health professionals in our health system, is that we should never let ourselves be in the position of having no alternative unlike the DHBs industrial relations strategy. One would have thought that George Bush’s performance in Iraq has already demonstrated the need to have in advance an exit strategy and that no further lessons were necessary. We also need a ‘radical hope’ directed towards a future public goodness that transcends the current ability to understand what it is. Avoidance of despair is the indispensable condition. Like the rest of humanity, health professionals can find the resources to come back to what at times feels like a virtual dead end in today’s health system and to invent new ways of creative leadership and collaboration that will move our health system positively forward rather than in the current negative stalemate.

By doing this perhaps we can reverse or at least significantly alter the Matthew effect so that those who have more power will lose a solid chunk of it and those that have less will have more in order to shift our health system forward in the interests of access, quality and cost effectiveness. We need the leadership of Plenty Coups, something we have been lacking but which we must have the radical hope to continue to advocate for. Plenty of coups is the way to go!

ends

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