Friday, February 17, 2012

Finding a path to sustainability

Cutting public sector jobs may decrease overall expenditures, but it doesn't amount to the fundamental change we've been talking about, nor does it put us on a path to sustainability. At least that is what the recently released Drummond Report argues:
If civil servants and public sector workers want pay raises, they should find the money through cheaper ways to do their own jobs.
That’s what Don Drummond recommends in his new report, which takes a wide-ranging look at streamlining a vast bureaucracy that eats half the money Ontario’s cash-strapped government spends on programs.
“This government should provide a zero budget increase for wage costs,” the report said.
“Ministries and agencies will then have to drive out inefficiencies to absorb any wage increase.” Drummond rejected wage freezes — as proposed by Progressive Conservative Leader Tim Hudak and as mandated by the Liberal government for its non-union workers — arguing they only result in “catch-up” costs later. 
And he saw no point in setting limits on the number of civil servants, instead pushing for a hard look at programs the government offers — and eliminating unnecessary and ineffective ones — as the best way to shrink the public payroll. 
“There should be . . . only a consideration of practical logic — what produces the best result for the people of Ontario at an affordable cost?” - Rob Ferguson, Drummond Report: Ministries, agencies urged to ‘drive out inefficiencies’, the Toronto Star.

Looking beyond job cuts

Looking beyond the next round of cuts can obviously be difficult, and while those decisions are obviously made well beyond my pay grade, I can't help but try to offer some advice to those who have the responsibility to do so.

Consider the whole value chain

Often we frame things in a single lens. Cutting costs almost always means losing jobs, but as Drummond points out, it doesn't have to. It can also mean (pardon the jargon) finding efficiencies. For the uninitiated, "finding efficiencies" is govspeak for either improving the outcome of a particular policy, program or service at current costs; or reducing the costs thereof without harming current outcomes.

Herein lies the core challenge for public servants: In order to find efficiencies, organizations need to be better at systems thinking. They need to step back and see all the moving parts, evaluate them, posit improvements, test them, and implement them where appropriate. This is an incredibly complex task and many public servants are simply not in a position to undertake it. This is not due to some sort of lack of intelligence on the part of public servants but rather the lack of information. This is the natural consequence of a long history of large organizations, hierarchical systems and information silos. Simply put, no one can put the puzzle together if no one has access to all the pieces.

An lesson from the private sector 

By now we are all familiar with the historic decline of the record industry; an industry that had suffered from such myopia that it maintained its preoccupation with physical record sales even as traditional revenue streams dried up and new (long tail) markets emerged. What many in the industry failed to do was look at how the entire value chain was changing:
[E]very "free" video by an amateur requires that amateur to buy a camera, a video-capable laptop, editing software, and a broadband connection through which to upload the completed piece onto a conglomerate-owned video server, along with most its rights. Value is still being extracted from the work - it's just being taken from a different place in the production cycle, and not passed down to the creators themselves. - Douglas Rushkoff, Program or Be Programmed, p.121
Entrepreneurs like Derek Sivers, founder of CD Baby, were successful because he looked at the entire system, recognized the shift towards greater and greater self-production, saw the gap left by the major players, and stepped in to fill it (creating a tremendous amount of wealth in the process). Had the big record labels paid closer attention to the ground shifting beneath their feet they could have easily stood up a service like CD Baby themselves. But hindsight, as they say, is 20/20.

An example from the public sector
"Health care is at once the biggest item in the Ontario government’s budget, the issue of most concern to Ontarians, the source of the most intense and emotional public policy debate, and the centre of the most complex delivery system of any set of programs financed by the provincial government." - p.143 Public Services for Ontarians: A Path to Sustainability and Excellence (aka the Drummond Report)
While the quotation above outlines the Ontario experience, some of the most basic challenges of the health care system apply across the country. That is why I am really excited about the recent launch of the BC Health Service Locator App. The app, for reasons I will outline below, is exactly a step in the Drummondian direction.

Why is it a move in the right direction? 

First, it was cheap. It was developed entirely in-house and on volunteered time. A couple of public servants saw an opportunity, learned how to code, did a proof of concept, and the rest is available for download on iTunes. Moreover, the additional work required to bring this application to market is reusable. The process included bringing the data into line with the DataBC standard, meaning that it is now also available for use via BC's open data catalogue. Also, all of the legal costs associated with evaluating the terms of use with companies like Google or Apple can be re-used for future application development across the BC government.

Second, it took a bunch of data and made it relevant for citizens. Creating a dynamic list of health care options that literally builds itself around the geographic location of the citizen means more informed decision-making; and while I cannot say for certain that this will lead to hard cost-savings, it is my experience that more informed decisions are usually less costly ones.

Let's push it further

This app is just the beginning of what the future of mobile health services could look like.

What if the BC app took it a step further and combined location-based health services with real time emergency room wait times? Imagine you need to head to the emergency room, you pull up the app to find its location and right next to it is the estimated wait time. What if the app can automatically calculate the fact that you would most likely be admitted to an emergency room a little further away because it has a lower wait time? The app could simply use your GPS, Google maps, and the hospital wait time to calculate your most expedient option.

How about if you could complete the initial triage paperwork while en route to the emergency room via your smart phone? By the time you arrive the hospital already has your info ready to go, but it doesn't physically check you into the queue until you present yourself at the desk (or are automatically confirmed to be at the hospital via your phone's GPS).

Would you travel a little further or provide preliminary details via your mobile if it meant shaving two hours off your wait time?

Would lower wait times have spillover effects into issues like overtime pay, stress leave and quality of care?


A final thought

If you haven't seen Bill Ford's TED Talk on "A future beyond traffic gridlock" you should watch it, because what I am hinting at is essentially the exact same thing: smarter data driven health care services that circumvent the coming gridlock, the exact same kind of services that I think Drummond is arguing for when he says:
This context lifts the task ahead well beyond that of merely cutting or restraining costs. We must be students of history and history shows that simple cost-cutting by governments too often generates fiscal improvements that peter out after a few years as pressures build. In the end, spending surges again and the result is more of the same, but at a higher cost.
The only way to get out of deficits and stay out, in a period of limited economic growth, is to reform government programs and the manner in which they are delivered.
This should be viewed as an opportunity, not a problem. Ontario can and should have the best public services in the world; this is an opportunity to reach for that goal. To get there, we should study promising practices around the world by others who have faced similar issues.

Note: the TED Talk starts out a little like a Ford commercial, but if you can tolerate it, there is a lot of really cool ideas in it.

Originally published by Nick Charney at
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