So what? Public service fat cats all received generous pay rises. That's the source of the health boss's "acceptable" range of 7-to-24% rise. What's wrong with the health boss being confirmed as the best paid public servant in Australia?
What is he hired to do?
| Thinking Lateral |
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| Need new thinking for your own problems? email nick leth at gmail dot com |
The health minister -- Jim McGinty -- justifies the pay rise. The public health service is in competition -- for employees -- with private health services. To attract a good health manager we must pay good money. Sounds fair enough. So what are the management skills required?
A private health service manager is required to provide health care and to make a profit. As long as patients are willing to pay, a private health service manager will provide more health services. It's a clear relationship: more patients paying more money for more services. The private health service manager has a clear task: make as much profit as the "customers" are willing to support.
In the public health system there is no profit motive. In fact -- there are no customers... There are sick people who require treatment and there are tax-payers who pay for that treatment. Tax-payers may also be sick people, possibly even at the same time. But there is no clear relationship between the people who are being treated and the people who are paying the bills.
In a private hospital the patient can get as much treatment as they can afford. Because a private hospital is set up to make a profit, the cost to the patient will include a profit margin. The patient understands and accepts the profit margin.
In a public hospital the patient can get as much treatment as they "deserve". Every patient -- naturally enough -- believes that they deserve the best possible treatment. They may even wish to get more and better treatment than their illness requires. After all, why not? The public hospital treatment is paid for by "the government".
The government, on the other hand, wants to restrict the money spent. With advances in medical technology, medical treatment, treatment possibilities -- there is no real limit to the amount of money that could be spent on a public hospital system. Imagine yourself to be a fantastically wealthy billionaire. How much could you spend on treatment to extend your life by yet another year? Now multiply that amount by the number of people in the state... and that is a starting point for the amount that could be spent on health in Western Australia.
So the government restricts its health spending to an amount that will satisfy most of the sick people -- without being so much that healthy people stop voting for the government. Too bad if some patients would like more or better treatment, the government's money must be spread across a range of personal projects and public vote-buying investments.
The main problem is -- the public health patients are not the people paying for the public health system.
It is not quite a charity but it is a public service. This leaves no room to make a profit. So there is not allowed to improve services in order to improve the profits.
Which leaves the public health system manager in a difficult situation... Limited funds, unlimited demands for services, growing "customer" base but funds that are not tied to patient numbers. What sort of manager does this require?
For a start, the public health system does not require a profit-motivated manager. What sort of manager is required in the private health system? Why, a manager who can provide both health services and an increasing profit! Are these the same managers? No way!
A private health system aims to make increasing profits by attracting more patients and by offering more health-related services. A public health system aims to control costs, within a restricted budget, by limiting treatment and -- if possible -- by reducing patient numbers.
So McGinty has paid a heap of money to buy Fong from the private system. Why? Fong's private health system experience -- the very basic aim of his past management experience -- is wrong. Private health: profitable service. Public health: restricted-cost service. The two are totally different. They need different managers.
The key issue is not the amount of money paid to Fong. The issue is, why was Fong -- a private health boss -- hired in the first place? What qualifications, what experience, does a private health boss have to effectively run a public health system?
Message to McGinty: Hire the right person for the job. Then the money -- however much it is -- may just be worth it.
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| Independent analysis of your problems by Agamedes Consulting. Support for your thought: email nick leth at gmail dot com |
