Publications
Reports
Health Dialogues
SHAPING THE HEALTH WORKFORCE
ISSUE 1 MARCH 1999
Preface
The Health Dialogue is a discussion paper published by the Association of Salaried Medical Specialists to promote policy on related issues. The Health Dialogue will be published as necessary. The National President of the Association approves the Health Dialogue prior to publication. To this extent the Health Dialogue is representative of the Association.
This issue of the Health Dialogue is a response to the controversial occasional paper published by the Ministry of Health entitled Shaping the Health Workforce: Why employers need to lead the thinking and decisions in the health labour market. Jean-Pierre de Raad, who is a senior policy analyst within the Ministry, wrote the paper in order to stimulate discussion on workforce planning in the health sector. Although not official Ministry policy the Association of Salaried Medical Specialists has serious concerns about the direction and arguments of this Ministry of Health paper.
Introduction
The Ministry of Health’s(1) main argument is that central health workforce planning is bad and that employer-led planning is good. In developing their proposition that the process should be employer led they do not give serious thought to the real identity of the employer. In reality the government as the dominant funder determines the level and range of services provided and is the true employer. The employer that the Ministry of Health(1) refers to is actually only a manager within the provider process. Because the level and range of health services are determined centrally by the government, managers are forced into reactive behaviours and a short-term focus on the bottom line. They are not in a good position to lead strategic workforce planning. To maintain clarity in the debate, this paper refers to the Ministry of Health’s(1) ‘employer-led’ process as the management process it really is.
The Ministry of Health(1) asserts that there is a market solution to the problems of workforce planning. They maintain that compared to the abilities of a central agency, health managers are in the best position to understand "complex and dynamic" labour market signals because they are the end-users of labour. They propose that central agencies merely provide information and monitor the health workforce. Consequently they claim that central planning and occupational regulation interfere with the efficient operation of the health labour market.
This paper suggests a more collaborative view of workforce planning. It submits that employer-led workforce planning has a detrimental effect on the New Zealand health workforce. The reliance on the market to solve workforce planning issues in the Ministry of Health’s(1) argument is simplistic and ignores the important role that the health profession including frontline staff, professional medical colleges and associations can and must play in the planning the health workforce.
Problems with Manager Led Workforce Planning
The Ministry of Health(1) does not give enough consideration to the structure and composition of the health labour market in their arguments for a management led planning process. Evidence of this is the lack of consideration they give to primary care, the largest proportion of the health workforce, which is made up mostly of self-employed small businesses. It is difficult to accept that these small businesses can achieve sufficient co-ordination to determine general practitioner (GP) workforce planning requirements. A national agency with mandated GP involvement would be in the best position to undertake this planning process.
A national agency with GP involvement has the added advantage of being able to provide effective incentives to reduce current GP distribution crises. These represent symptoms of market failure, as comprehensive GP cover does not exist despite an oversupply of GPs in some areas. A previous example of a centralised attempt to resolve GP distribution was the service bond offered by the Department of Health. Currently the Health Funding Authority through the Section 51 notice and other centralised initiatives are seeking to resolve this concern. A national agency with representative GP involvement that combines both roles will be more effective and reduce fragmentation among government agencies.
The Ministry of Health(1) maintains that health managers have better incentives to use market signals to manage workforce planning. This reliance on market signals ignores the situation that the economic attributes of health care make it a commodity that is unsuited to market distribution and lacks due ethical consideration(2). Market signals are not enough to predict deficiencies in workforce planning because they are usually short term, subject to external events and unpredictable (3). This contradicts the long-term nature of health workforce training programmes. They can take from three to thirteen years, and sometimes even longer to complete. Long term co-ordinated research and national planning is required to identify future workforce requirements.
In addition to the short-term nature of market signals, management also has a short term focus because of centrally imposed short-term incentives such as a yearly contracting process and a very tight fiscal environment(1). The poor economic conditions combined with the need for constant cost cutting causes many firms to concentrate solely on short-term survival(4). Health managers are not in the best position to lead the long-term workforce planning environment because of the reactive nature of New Zealand healthcare delivery. This does not provide strong incentives for health managers to engage in effective long-term strategic workforce planning and implementation.
The lack of institutional memory due to high management turnover is concerning. Six years after the formation of crown health enterprises (now HHSs) in 1993 only two of twenty-three HHSs retain their original Chief Executive. By 1999 a number of HHSs have had three Chief Executives. Of greater significance is the high turnover of second and third tier managers. Effective health management cannot be achieved without either the history possessed by most health professionals or working in health for a long period of time. Newly appointed managers often require time to understand the complex issues and slowly evolving systems of the health service. Because of the operational problems they immediately confront they seldom have time to gain this insight. Management transaction costs will remain high, as health managers do not have the same understanding and control over the ‘production process’.
In contrast, until quite recently senior medical officers (SMOs) and other frontline health professionals did not usually leave the health sector, as this was their profession and the logical end point of their lengthy vocational training. This allows them to have high potential mobility despite a very low overall turnover in the health sector. SMOs possess specialised and institutional knowledge as well as a greater understanding of the health environment. Because of this they advocate for consultative national workforce planning as well as improved medical practices, increased efficiencies and innovative work practices. It is SMOs and other frontline health professionals who keep the system working in spite of management system failures.
The New Zealand Environment
Critical to the Ministry of Health’s(1) theory is the premise that health organisations have an interest in educating and training their workforce and that they will view this traditional ‘cost’ as an investment. Outside New Zealand and the health environment, only a few "cutting edge" firms have understood that investing in people is essential to their success(2). If this is the situation elsewhere the Ministry of Health’s(1) argument that New Zealand health managers will view workforce planning as an investment lack conviction.
Employers already determine short-term workforce planning decisions such as the best staffing configuration to meet funding levels and acute health need. This often occurs as a managerial right in the form of staffing reviews. Despite health professionals' repeated warnings even these short-term staffing considerations can have dangerous results. A prime example of this was experienced at Christchurch Hospital (5). A management led framework will only lead to increased fragmentation, confusion and haphazard workforce planning.
The Ministry of Health’s(1) arguments downplay the sometimes potentially mobile and generic nature of the health workforce. While the health workforce is often quite specialised in their professional skills, these skills are not specific to the organisation they work for. Health organisations in New Zealand are unlikely to view the cost of training as an investment when workers may take their skills to other health providers after their training. The Ministry of Health(1) cites evidence(6) that generic training provides individual organisations with benefits and as such should be viewed as an investment. However the Ministry of Health’s source for this evidence(4) only emphasised this because of continual under investment by employers in generic training. This suggests that employers in most countries struggle to view generic education and training as an investment.
Government Accountability
It has been acknowledged that the present New Zealand education and training system is not meeting current or future health needs.(7) National efforts to plan and develop the workforce stopped in 1991 because it was seen as being "an aspect of provider capture and an unnecessary interference by the state in the marketplace.(8) To their credit the colleges have maintained some semblance of workforce planning. Elsewhere, there has been a distinct lack of agreement as to who has responsibility for workforce planning. The absence of agreement has resulted in limited analysis and lack of direction(9) .
A shift towards management led workforce planning makes it difficult to ascertain who will be accountable for workforce planning. The Ministry of Health(1) stated that market signals would identify those employers who did not solve their workforce planning issues. However, geographic isolation in New Zealand means that an alternative provider might not be available to provide health care to an area that is under serviced by an inefficient provider. Market signals will not provide healthcare for those in need in isolated or unpopular locations.
Instead the market signal theory proposed by the Ministry of Health(1) appears to cost shift onto New Zealanders who will have to travel further and/or be denied care because of inefficiencies. To date the government has not sought to transfer responsibility for the health system from the public to the private sector. Clearly the government as the predominant funder of the public health system will be required to meet the costs of future mistakes made by market failure and health managers with an enforced short term focus. If the government is responsible, then surely the government should retain control of workforce planning.
Financial Pressures on Future Health Professionals
The Ministry of Health (1998) did not examine the potential effect of the student loan scheme on workforce planning. Increasing numbers of health professionals will enter the post-graduate workforce with high debts. Because of high debt future health professionals will want to be paid more. If their remuneration does not increase there will be increased pressure from doctors to decrease the time spent training in order to attain their financial goals.
There is also financial pressure on health managers for their "investment" in workforce planning to cost as little as possible, with as much benefit as possible. The combined pressure from trainees and managers to make training cheaper and shorter could result in reduced training quality and ultimately reduced quality of care.
Maintaining the professional medical colleges role of accreditation and occupational regulation will ensure that these pressures can be moderated so that patient safety will not be compromised. The professional medical colleges have a positive role in workforce planning and any threats to this professional regulatory role could create a serious risk to patient safety.
Occupational Regulation
Occupational regulation exists in legislation to ensure standards of care and the protection and safety of patients. The regulatory bodies arising out of this legislation demand a strong, legally enforceable ethical obligation from doctors to provide advocacy for patients. These roles essentially conflict with the role of the manager, who seeks to control health professionals in order to maintain economic control of the process.
This fundamental tension does not have to be viewed as a barrier to efficient performance but rather as a catalyst for improvement and evolution within the health sector. Any workforce planning issue requires a balanced approach between the employer, the patient and the profession.
Accountability to Employers
The Ministry of Health(1) argues that employers have had a limited role in workforce planning. They use Harrison and Pollitt’s(10) statement that employers do not have enough influence and control over health professionals as a reason for their limited role.
However, increasing managerial control over the health profession does not improve health care. Harrison and Pollitt(8) who advocate for increased managerial control demonstrate a fundamental lack of health care understanding. They suggest that employers should use new managerial practices such as algorithms and best practice methods to increase control in order to make the profession’s varying treatment decisions more accountable. However, accounting for individual variation is part and parcel of clinical practice and because of a core ethical dimension the physician must decide on the best course of treatment along with the patient (11).
Employers who seek greater control over the clinical treatment decisions, should, but are not, held accountable where treatment is denied or altered in spite of health professionals’ recommendations. Managing such a conflict of interest requires the lines of accountability to change with the changing roles of employers and the profession, an argument that is currently the topic of legislative debate in Britain and the United States.
Task Substitution and Consumerism
The Ministry of Health(1) argues that occupational regulation prevents health employers from using task substitution. Their argument centres on comments made by Richardson and Maynard(12) that new forms of labour have emerged, such as nurse practitioners. However, the Ministry of Health(1) failed to mention that these same authors found that task substitution might not be cost effective for two main reasons. First, the volume of activity could be different in that doctors might complete more tasks in less time than other substituted health professionals might and hence the cost per task may be similar. Second, the differing salary compensation methods should be taken into account, for instance salary versus overtime payments.
Schneider and Foley(13) determined that substitution was cost-effective as long as the salaries of the substitute providers remained considerably below (less than half) the salary of the physician. But this is unlikely to occur as changes in the work practices of other health professionals is likely to increase professionalism, make the work more pressured and lead to increased responsibility. This will lead to increases in the relative pay of the substituting health professionals because their market value has increased.
One New Zealand experience of task substitution has been the recent change to maternity services. The emphasis on midwives through the lead maternity caregiver initiative has been controversial and it has resulted in a review of maternity services. Despite a lack of empirical evidence there has been a fear that the costs for maternity care has increased. Despite the lack of pre and post measures, a review of these figures is urgently required.
Richardson and Maynard(10) could not find any studies that had examined the effect of task substitution on the level of patient health and well being. However, Carr-Hill et al(14) commented "that the higher the grades (and skills) of the nurses who provide care, the higher the quality of care" (pg.16).
National Workforce Planning
This paper does not advocate a rigid central planning system rigorously controlled by the medical profession, if such a situation has ever existed in New Zealand. Rather it proposes New Zealand should have a flexible national planning approach where employers, the profession and other interested bodies may meet on equal terms to develop a strategic workforce plan that will be successful for everyone involved. This should be organised and given strategic vision and direction by a neutral government agency. While this may require a new agency to be formed, it may make more sense in terms of infrastructure, costs and organisational experience to use an existing body. A unit contained within the Ministry of Health may be more suitable to reduce the fragmentation caused by the disparate government organisations.
Government agencies also advocate for a new government agency to be established. CAPE(15) argues that the current fragmentation of government roles has a detrimental effect on workforce planning. They suggest that there should be a separate crown entity established to decrease fragmentation and to promote co-operation and collaboration.
The Ministry of Health(1) suggest that because central agencies are too removed from the labour market they do not fully understand it. However, central agencies have the best information and know the most about the health workforce. For instance the government agency, the Crown Company Monitoring and Advisory Unit (CCMAU), collects information on the cost of employment and has other comparative financial information.
Government sets the policy direction through the Ministry of Health. The Medical Council of New Zealand regulates the quality of the workforce. Yet another government agency, the Health Funding Authority determines the price of services through their contracting round with health providers, which includes how much they will pay for labour and what services and technology they will provide. Employers tend to have a more reactive and short-term role of managing the end result of decisions made by all of the fragmented government agencies.
The Ministry of Health(1) argues that central workforce planning methodology does not predict shortages and surpluses, is outdated and does not account for new managerial techniques. This paper would agree that the previous methodology used by central planning agencies has been ineffective. However, this does not mean that central planning is ineffective.
As Scott(16) determined, two of the references the Ministry of Health(1) cites as deploring central planning actually called for greater government involvement and direction in central planning(10) (17), . Maynard and Walker(10) argue that a major problem with the current central health workforce planning agency in the United Kingdom is their planning methodology. They did not advocate for a market-based employer led planning approach. Likewise Paterson(14) argues for a more active central planning approach that used market based evidence methods rather than historic and outdated population ratios. More sophisticated information gathering that is timely, dynamic, flexible and inclusive [own emphasis] was also identified by Salmond(6) to be a prerequisite for successful workforce planning in New Zealand.
The Ministry of Health(1) points out health managers have not voluntarily taken advantage of the reduced central control in the current system. Currently, the Clinical Training Agency (CTA), a division of the Health Funding Authority purchases post-entry training contracts. There are more training positions available than the CTA pays for. In contrast to what the Ministry of Health(1) state, some health managers have already developed a short-term response to a perceived shortage of doctors at certain levels of training. However, not all of these are training positions and the colleges do not accredit all of these extra positions. The lack of co-ordination and strategic direction in workforce planning is forcing some doctors to accept positions that will not allow them to progress further. This may create staffing inadequacies at higher levels in the future.
The CTA(18) maintains that increasing demarcation will force limited funding from medical training to non-medical training (nurses and other health professionals). In an environment where funding is fixed and limited, the CTA called for an acknowledgement of the need to prioritise education and training. A shared strategic vision was one of the CTA’s recommendations(17).
Conclusion
Due to a lack of cohesive government policy and an inability to implement beneficial ideas there has largely been a lack of effective workforce planning leadership in New Zealand. The colleges have attempted to fill the gap in what has been a huge void. However, filling this void with management led workforce planning is an extreme that will cause new issues to develop.
A more balanced and flexible national workforce planning option will prevent further inadequacies from developing. A new government agency or a new Ministry of Health unit that is well integrated with the health sector would avoid the current fragmentation.
This paper recommends a collaborative process must be implemented. How that should happen requires further debate involving all interested parties within the health sector.
Bibliography
CAPE (1997). Education and Development of the Health and Disability Workforce: Recommendations from CAPE’s consultation with health, disability and education sectors. CAPE: Wellington.
CTA (1996). Strategic Issues in Post Entry Clinical Training in New Zealand: A way forward. Background Paper prepared for CAPE Workshop 24-26 July 1996. CAPE: Wellington.
Evans, D & Price, N, (1999). The Ethical Dimension of the National Waiting Time Project: A report prepared for the Health Funding Authority. Bioethics Centre, Dunedin School of Medicine, University of Otago: Dunedin.
De Raad, J., (1998). Shaping the Health Workforce: Why employers need to lead the thinking and decision in the health labour market. Occasional Paper, September 1998 (1). Ministry of Health: Wellington.
Eisenberg, J.M., (1994). If trickle down physician workforce policy failed, is the choice now between the market and government regulation? Inquiry, 28, 241-249.
Feek, C., & Grew, G., (1996). Future Directions in the Health Services: Implications for Education - from demarcation to flexibility.Background Paper prepared for CAPE Workshop 24-26 July 1996. CAPE: Wellington.
Harrison, S., & Pollitt, C., (1994). Controlling Health Professionals: The future of work and organization in the National Health Service.Open University Press: Buckingham.
Health and Disability Commissioner (1998). Canterbury Health Ltd: A report by the Health and Disability Commissioner, April 1998. Health and Disability Commissioner: Auckland.
Ministry of Health and Ministry of Education (1996). Educating the Workforce - Current environment for the education and training of the New Zealand health and disability workforce. Background Paper prepared for CAPE Workshop 24-26 July 1996. CAPE: Wellington.
Mirvis, P.H., (1993). Building the Competitive Workforce: Investing in human capital for corporate success. John Wiley & Sons: New York.
Nahkies, G., (1996). Long Term National Policy Directions for the Education of Health Professionals in New Zealand – Issues, priorities and work programme. Background Paper prepared for CAPE Workshop 24-26 July 1996. CAPE: Wellington
OECD (1998). Human Capital Investment: An international comparison. OECD: Paris.
Paterson, J., (1994). A new look at national medical workforce strategy. Australian Health Review 17(1), 5-41.
Richardson, G., & Maynard, A., (1995). Fewer Doctors? More Nurses? A review of the knowledge base of doctor-nurse substitution. Centre for Health Economics, York Health Economics Consortium, NHS Centre for Reveiws and Dissemination, University of York: York.
Rosenbaum, S., Frankford, D.M., Moore, B., & Borzi, P., (1999). Who should determine when health care is medically necessary? The New England Journal of Medicine, 340(3), 229-232.
Salmond, G., (1996). Health Workforce Developments: Past, Present and Future - An analysis using mental health services as an illustration. Background Paper prepared for CAPE Workshop 24-26 July 1996. CAPE: Wellington.
Scott, A., (1999). Future health service jeopardised by lack of workforce planning. Media Statement, 28 January 1999. New Zealand Coalition for Public Health: Wellington.
Scott, A., (4 November 1998). Workforce planning: should there be a plan? New Zealand GP, p.12.
Sparer, M.S., (1997). Laboratories and the health care marketplace: the limits of state workforce policy. Journal of Health Politics, Policy and Law, 22(3), 789-814.
Footnotes
1. Ministry of Health (1998).
2. Evans and Price (1999), p3.
3. Banks, (1996, cited in Evans & Price, 1999).
4. Mirvis, P.H., (1993).
5. Health and Disability Commissioner (1998).
6. OECD (1998).
7. Nahkies, G., (1996).
8. Salmond, G., (1996).
9. Ministry of Health and Ministry of Education (1996).
10. Harrison, S., & Pollitt, C., (1994).
11. Rosenbaum, S., Frankford, D.M., Moore, B., & Borzi, P., (1999).
12. Richardson, G., & Maynard, A., (1995).
13. cited in Richardson and Maynard, 1995
14. (1995). Cited in Richardson & Maynard, 1995
15. CAPE (1997)
16. Scott, A., (4 November 1998).
17. Paterson, J., (1994).
18. CTA (1996).
