Ian Powell: How ‘High Performance High Engagement’ became a costly house of cards in health sector

Ian Powell: How ‘High Performance High Engagement’ became a costly house of cards in health sector

The experience of trying to implement ‘high performance high engagement’ (branded as HPHE) in the 20 district health boards is an unfortunate example of zealotry flavoured with a dose of duplicity leading to poor policy-making at the taxpayers’ expense.  But for the intervention of pragmatism it could have been worse.  It is a case study on the capacity to waste an enormous amount of time and resources which should have been easily avoidable.

Incoming Prime Minister Jacinda Ardern briefly commended the implementation of HPHE in Air New Zealand in her address to a Council of Trade Unions (CTU) conference in October 2017. Although her focus was on HPHE as an example of good workforce engagement leading to improved performance, she did not go as far as to promote the particular form of HPHE to other sectors.  Nevertheless, HPHE zealots latched on to her comment as if she had.

The following April, Workplace Relations Minister Iain Lees-Galloway poured praise on HPHE arguing that it was a way of avoiding ”industrial warfare in collective bargaining between employers and unions” (Newsroom, 10 April 2018).  He referred to positive reports on HPHE experiences in Air New Zealand and Kiwi Rail and the establishment of a national HPHE framework for the Ministry of Health, DHBs and the CTU with three of its affiliated health unions.

In April 2019, along with Business NZ and the CTU, the Government held a tripartite forum on the future of work whose agenda included a draft work programme.  The work programme included a section on HPHE describing it as a particular approach to resolving workplace issues based on recognition that employers and employees are best placed to find solutions to work-related challenges by working together in decision-making.  It noted that the Government was considering how best to support employers and unions implement HPHE systems in their workplaces.

At the level of high principle this has an appealing tone to it.  Afterall those who do the job generally know how best to improve it, so it makes sense to have a good practical workplace culture.  But HPHE is not just high principle.  It comes with its own business consultants and formal processes as if one size fits all.  The company is HP2 (High Performance Partners Ltd) led by two articulate American principals Michael Belmont and Scott Camlin.  In a PowerPoint presentation to the April 2019 tripartite forum CTU President and HPHE devotee Richard Wagstaff stated that HP2 were “here in NZ to teach us how to do” HPHE.  He appeared oblivious to the poor record of external business consultants in our public health system.

The birth of HPHE was the large Californian based health business Kaiser Permantee with its Californian base.  This was the international showcase for HPHE and where the HP2 consultants learnt their ‘trade’.  But if avoiding industrial warfare is an indicator of HPHE success, then the facts tell a different story.  For many years Kaiser and the Californian Nurses Association have been embroiled in industrial conflict including a major bargaining dispute in early 2018 which included the union’s attempts to achieve safer staffing and unsuccessful attempted clawbacks sought by Kaiser.  Air New Zealand itself subsequently became embroiled in ‘industrial warfare’ including strikes in late 2018-early 2019.

DHBs, as the country’s largest employers, offer a salutary lesson when attempts to empower the workforce are narrowed down to a commercial brand such as HPHE especially when undertaken in a top-down bureaucratic manner.  Had this succeeded then it would have encouraged the rest of the state sector and perhaps also private sector employers to follow.

In November 2017 the CTU (through its affiliated health unions), DHBs and Ministry of Health reached agreement on a national framework for the implementation of HPHE.  This was established under the tripartite Health Sector Relationship Agreement (HSRA) involving the Ministry on behalf of Government, the 20 DHBs, and four health unions affiliated to the CTU – NZ Nurses Organisation (NZNO), Association of Salaried Medical Specialists (ASMS), Public Service Association (PSA) and E tu.  The HSRA steering group became responsible for monitoring implementation.

This was the message given to Government and to the tripartite forum on the future of work.  Message recipients had no reason to doubt it.  Minister Iain Lees-Galloway was certainly impressed.

The Ministry provided significant financial support through the employment of a temporary staff member and the engagement of HP2 consultants.  The temporary appointment was a former Ministry senior employee whose position had recently disappeared through restructuring.  She was initially employed as a fixed term employee and then contractor for 20 months between January 2017 and September 2018.  A conservative estimate of the total remuneration would be between $100,000 to $150,000.  A further $5,864 was spent on her airfares and accommodation to promote HPHE to DHBs.  She and others regularly provided overcooked progress reports to the HSRA steering group and were defensive them when accuracy was challenged.

Taxpayer dollars were also paid to HP2.  These consultants received $151,845 in fees and disbursements from February 2017 until June 2018.  They also received a further $17,385 for airfares, accommodation and other costs of HPHE promotional activities.

In total the costs of promoting and attempting to implement HPHE in the 20 DHBs were in the vicinity of $250,000-300,000.  On top of this was the additional cost of resources including time and the cost of DHBs flying staff into Wellington for national forums and meetings.

What was the result of this considerable investment of time and funding?  Only one small DHB (South Canterbury) out of 20.  It attempted four pilot HPHE projects that quickly petered out.  The Health Ministry facing up to this reality by not renewing the contract with HP2 at its expiry on 30 June 2018.  Privately HP2 acknowledged the failure.

There was a backdoor attempt to slip HPHE into the mental health and addiction service at Capital & Coast DHB through ACC funding by its then acting chief executive and Richard Wagstaff in mid-2019.  But it appears that once exposed this act of desperation went no further.

Why such a colossal failure?  First, HPHE requires a very formal process which is highly transactional cost and dependent on a specific consultancy company to implement.  In some sectors this might work. Both Air New Zealand and Kiwi Rail, along with involved unions, believe it has although it is significant that Air NZ abandoned it in responding to the Covid-19 crisis.

But in DHB provided health services sustainable change is largely around clinical and diagnostic services and is driven by a combination of exigency (non-stop 24/7 demand) and professionalism (the motivation of the values of health professionals providing a public good).  This change is most successful when clinically led and is invariably bottom up driven continuous quality improvement.  This occurs in even those DHBs with poor engagement leadership cultures.  Imposing HPHE would be overly bureaucratic and clunky with the inevitable outcome of obstructing the development of sustainable change.

Second, there are very few clinical and diagnostic services that hospital specialists are not central to and whose engagement is required for achieving sustainable change.  But equally so the application of the dogmatic HPHE structure would have obstructive to this engagement.  Many in DHBs understood this.  ASMS certainly did and said so.

Third, this was a top-down driven process from a minority of HPHE enthusiasts within the then Health Ministry and CTU leadership.  Instead of discussing how best to improve performance through better engagement in DHBs, they drove the process towards the consultancy based bureaucratic HPHE structure.

DHBs were in an awkward position.  On the one hand, they realised that HPHE was square peg in round hole territory.  They were also acutely aware that without hospital specialist participation HPHE would not fly.  On the other hand, they had to be mindful of their political masters and their perceived relationship with Richard Wagstaff.  However, Health Minister David Clark was not seduced by rhetoric and didn’t attempt to impose the HPHE on them.

On the union side support was mixed.    By agreement the position of all four unions was that HPHE had no greater recognition than other forms of engagement. CTU President (and former PSA National Secretary) Richard Wagstaff was zealous to the extent of promoting HPHE way above other less transactional forms of engagement. The PSA was strongly supportive of HPHE as was its right.  At the other end of the spectrum ASMS declined to be involved because of concerns how HPHE would be likely to undermine existing forms of engagement.

Both the two other health unions signed up to the national HPHE framework but with qualifications.  E tu representing staff in support service roles such as cleaners and orderlies was only interested in being involved in projects that involved bringing contracted out services back in-house.  NZNO’s support followed internal argument and with qualifications.  NZNO was also left with some residual resentment over what was considered to be undue interference by Richard Wagstaff in their internal decision-making.

The most recent official statement on HPHE was in the ‘Future of Work Tripartite Forum Strategic Assessment’ of last November which downplayed the significance of HPHE in the state sector to the State Services Commission and three government agencies working with the PSA on HPHE pilot schemes.  Not a murmur on the health sector.  Pragmatism prevailed in the end but only after wasting well north of a quarter of a million dollars and an enormous amount of people’s time.

Ian Powell was formerly the Executive Director of the Association of Salaried Medical Specialists for over 30 years until December last year.  In this role he was on the HRSA Steering Group, He is now a health commentator based in Otaihanga on the Kapiti Coast.