“The Scourge of Managerialism” – Generic Management, the Manager’s Coup D’Etat, Mission-Hostile Management Rolled Up, as Described by Some Men from Down Under

Lambert here: As we dig deeper into the health care system, concepts like those expressed in this article will become increasingly useful. The patterns identified by Poses here remind me of the university, which is also being eaten alive by a bloated and parasitical administrative layer.

By Roy Poses, MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Cross posted from the Health Care Renewal website

I just found an important article that in the June, 2015 issue of the Medical Journal of Australia(1) that sums up many of ways the leadership of medical (and most other organizations) have gone wrong. It provides a clear, organized summary of “managerialism” in health care, which roughly rolls up what we have called generic management, the manager’s coup d’etat, and aspects of mission-hostile management into a very troubling but coherent package. I will summarize the main points, giving relevant quotes.

Recent Developments in Business Management Dogma Have Gravely Affected Health Care

Many health practitioners will consider the theory of business management to be of obscure relevance to clinical practice. They might therefore be surprised to learn that the changes that have occurred in this discipline over recent years have driven a fundamental revolution that has already transformed their daily lives, arguably in perverse and harmful ways.

These Changes Have Been Largely Anechoic

these changes have by and large been introduced insidiously, with little public debate, under the guise of unquestioned ‘best practice’.

See our previous discussions of the anechoic effect, how discussion of facts and ideas that threaten what we can now call the managerialist power structure of health care are not considered appropriate for polite conversation, or public discussion.

Businesses are Now Run by Professional Managers, Not Owners

The traditional control by business owners in Europe and North America gave way during the 19th century to corporate control of companies. This led to the emergence of a new group of professionals whose job it was to perform the administrative tasks of production. Consequently, management became identified as both a skill and a profession in its own right, requiring specific training and based on numerous emergent theories of practice.

These Changes Were Enabled by Neoliberalism (or Market Fundamentalism, or Economism)

Among these many vicissitudes, a decisive new departure occurred with the advent of what became known as neoliberalism in the 1980s (sometimes called Thatcherism because of its enthusiastic adoption by the Conservative government of Margaret Thatcher in the United Kingdom). A reaction against Keynesian economic policy and the welfare state, this harshly reinstated the regulatory role of the market in all aspects of economic activity and led directly to the generalisation of the standards and practices of management from the private to the public sectors. The radical cost cutting and privatisation of social services that followed the adoption of neoliberal principles became a public policy strategy rigorously embraced by governments around the world, including successive Liberal and Labor governments in Australia.

Note that this is a global problem, at least of English speaking developed countries. The article focuses on Australia, but we have certainly seen parallels in the US and the UK. Further, note that we have discussed this concept, also termed market fundamentalism or economism.

Managerialism Provides a One-Size Fits All Approach to the Management of All Organizations, in Which Money Becomes the Central Consideration

The particular system of beliefs and practices defining the roles and powers of managers in our present context is what is referred to as managerialism. This is defined by two basic tenets: (i) that all social organisations must conform to a single structure; and (ii) that the sole regulatory principle is the market. Both ideas have far-reaching implications. The claim that every organisation — whether it is a mining company, a hospital, a school, a professional association or a charity — must be structured according to a single model, conforming to a single set of legislative requirements, not so long ago would have seemed bizarre, but is now largely taken for granted. The principle of the market has become the solitary, or dominant, criterion for decision making, and other criteria, such as loyalty, trust, care and a commitment to critical reflection, have become displaced and devalued. Indeed, the latter are viewed as quaint anachronisms with less importance and meaning than formal procedures or standards that can be readily linked to key performance indicators, budget end points, efficiency markers and externally imposed targets.

Originally conceived as a strategy to manage large and increasingly complex organisations, in the contemporary world, no aspect of social life is now considered to be exempt from managerialist principles and practices. Policies and practices have become highly standardised, emphasising market-style incentives, devolved budgets and outsourcing, replacement of centralised budgeting with departmentalised user-pays systems, casualisation of labour, and an increasingly hierarchical approach to every aspect of institutional and social organisation.

We have frequently discussed how professional generic managers have taken over health care (sometimes referred to as the manager’s coup d’etat.) We have noted that generic managers often seem ill-informed about if not overtly hostile to the values of health care professionals and the missions of health care organizations.

Very Adverse Effects Result in Health Care and Academics

In the workplace, the authority of management is intensified, and behaviour that previously might have been regarded as bullying becomes accepted good practice. The autonomous discretion of the professional is undermined, and cuts in staff and increases in caseload occur without democratic consultation of staff. Loyal long-term staff are dismissed and often humiliated, and rigorous monitoring of the performance of the remaining employees focuses on narrowly defined criteria relating to attainment of financial targets, efficiency and effectiveness.

The principles of managerialist theory have been applied equally to the public and the private sectors. In the health sector, it has precipitated a shift in power from clinicians to managers and a change in emphasis from a commitment to patient care to a primary concern with budgetary efficiency. Increasingly, public hospital funding is tied to reductions in bed stays and other formal criteria, and all decision making is subject to review relating to time and money. Older and chronically ill people become seen not as subjects of compassion, care and respect but as potential financial burdens. This does not mean that the system is not still staffed by skilled clinicians committed to caring for the sick and needy; it is rather that it has become increasingly harder for these professionals to do their jobs as they would like.

In the university sector, the story is much the same; all activities are assessed in relation to the prosperity of the institution as a business enterprise rather than as a social one. Education is seen as a commodity like any other, with priority given to vocational skills rather than intellectual values. Teaching and research become subordinated to administration, top-down management and obsessively applied management procedures. Researchers are required to generate external funding to support their salaries, to focus on short-term problems, with the principal purpose being to enhance the university’s research ranking. The focus shifts from knowledge to grant income, from ideas to publications, from speculation to conformity, from collegiality to property, and from academic freedom to control. Rigid hierarchies are created from heads of school to deans of faculties and so on. Academic staff — once encouraged to engage in public life — are forbidden to speak publicly without permission from their managers.

Again, we have discussed these changes largely in the US context. We have noted how modern health care leadership has threatened primary care. We have noted how vulnerable patients become moreso in the current system, e.g., see our discussions of for-profit hospices. We have discussed attacks on academic freedom and free speech, the plight of whistle-blowers, education that really is deceptive marketing, academic institutions mired in individual and institutional conflicts of interest, and the suppression and manipulation of clinical research. We have noted how health care leaders have become increasingly richly rewarded, apparently despite, or perhaps because of the degradation of the health care mission over which they have presided.

The Case Study

The article provided a case study of the apparent demise of the Royal Australasian College of Physicians as a physician led organization, leading to alleged emphasis on “extreme secrecy and ‘commercial in confidence,” growth of conflicts of interest, risk aversion on controversial issues. When members of the organization called for a vote to increase transparency and accountability, the hired management apparently sued their own members.

Authors’ Summary

Whether the damage done to the larger institutions — the public hospitals and the universities — can be reversed, or even stemmed, is a bigger question still. The most that can be said is that even if the present, damaging phase of managerial theory and practice eventually passes, its destructive effects will linger on for many years to come.

My Summary

I now believe that the most important cause of US health care dysfunction, and likely of global health care dysfunction, are the problems in leadership and governance we have often summarized (leadership that is ill-informed, ignorant or hostile to the health care mission and professional values, incompetent, self-interested, conflicted or outright criminal or corrupt, and governance that lacks accountability, transparency, honesty, and ethics.) In turn, it appears that these problems have been generated by the twin plagues of managerialism (generic management, the manager’s coup d’etat) and neoliberalism (market fundamentalism, economism) as applied to health care. It may be the many of the larger problems in US and global society also can be traced back to these sources.

We now see our problems in health care as part of a much larger whole, which partly explains why efforts to address specific health care problems country by country have been near futile. We are up against something much larger than what we thought when we started Health Care Renewal in 2005. But at least we should now be able join our efforts to those in other countries and in other sectors.

Reference

1. Komesaroff PA, Kerridge IH, Isaacs D, Brooks PM. The scourge of managerialism and the Royal Australasian College of Physicians. Med J Aust 2015; 202: 519- 521. Link here.

Musical Diversion

We have to leaven this dismal post with the 1980 live version of “Down Under” by Men at Work

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

28 comments

  1. JLCG

    The managerial class is the universal class Hegel wrote about. It is the enemy of the productive classes, the agricultural and the industrial.
    Perhaps managers are like the eunuchs in former empires, grabbing power without production, always zealous that no idea will threaten their standing.

    1. Eleanor

      It is unfair to eunuchs to compare them to managers. The man who led the great Ming dynasty naval journeys to SE Asia and Africa was a eunuch. The man credited with the invention of paper was a eunuch attached to the Han Dynasty court. Narses, one of the emperor Justinian’s great generals, was a eunuch. He began his military career at the age of sixty and continued until he was murdered by the then-emperor at the age of ninety-five. (This post is the result of very quick checking and memories of Robert Graves’ wonderful book Count Belisarius. But I am mostly right.)

      1. Ed

        This comment completely misses the point of JLGC’s excellent comment, and I refer you to the opening chapters of the Romance of the Three Kingdoms for remedial reading. Its become striking, at least to me, how much the developed western world is imitating the declines of the Chinese dynasties.

        1. jgordon

          Pick any empire on the verge of collapse in history and you’ll find terrifying parallels to America today. I think all failing empires/societies must follow roughly similar trajectories on their way to oblivion.

          1. Lexington

            One of those parallels is surely that authentic historical memory has been lost and replaced by the authority of works of fiction…

  2. S M Tenneshaw

    Back in 1975 at my local technical college, I was fortunate enough to snag a part-time COBOL programming job at the school. My colleagues and I noticed that several managers above the department level had little to do but sit around in their offices. Periodically they would emerge to engage some unlucky soul in dumb conversation. One of my co-workers summed it up admirably: “The more they make, the less they do.”

    A couple years later while reading the Sunday paper job ads, I ran across this job title: Manager of Management Development. A sign of very bad things to come.

  3. dk

    I have to wonder if it’s a coincidence that both healthcare and education are given as especially notable victims of inappropriate/ineffective management…

    Because both healthcare and education are things that can best and primarily be done by and for oneself. And there is overlap here: organic chemistry is a special case of molecular physics. Regardless of how well instructors present it, there is a wealth of well understood information on molecular physics (with a lot of special examination of organic chemistry), and so far the bulk of that information remains easily available (although it’s starting to disappear at an increasing and alarming rate). I know that many will say, “there’s a lot more to it than that!”, but this only indicates that they themselves have made no sustained effort to understand these matters. It’s not rocket science (which is, indeed, quite demanding).

    I think the authors may somewhat overlook collateral (and undoubtedly mutually synergistic with managerial phenomena) issues in the quality of teachers and doctors, which has also degraded in a similar way, possibly for similar reasons. Rote learning increasingly replaces comprehension in both fields. Inundated with unproven, and often unsound, commercial and theoretical dogma, rudimentary performance is still possible, but results are mediocre. Excellence in these fields requires patience, precision and and familiarity with underlying principles; “caring”, bonhomie and rote knowledge are admirable, but not viable substitutes.

    Does it even make sense to pay to undertake courses in order to get a certificate of achievement? From a commercial career perspective, certainly. But such a certificate is no sure guarantee of skill. “Qualified” personnel are not necessarily capable. In a time of ever increasingly complex systems and disciplines, capability is more needed than ever. The management sector is not the only area where performance, and fulfillment of actual (in contrast to nominal) responsibility, degrades.

    For that matter, does it even make sense to have somebody undertake to diagnose your own health, without detailed information about your diet, your regular environment, your physical history, and any exceptions to these; information for which you yourself should be the best source? The consulting physician enters at an immediate disadvantage, facing a significant information deficit; it behooves individuals to become more proactive, especially when rudimentary diagnostic equipment (sphygmomanometers, simple blood test kits, etc) and reference information (anatomical references, drug chemistries and interactions, etc) are readily available. True, there are some thing’s you can’t do yourself, surgery is surely a valuable skill and worthy of respect, but it has significant limits as well (replacing a bad heart in an unhealthy body won’t cure the body, etc).

    Managerialism is a scourge, a calamity, a great threat; no argument from me. But it’s not the only problem we face, as a culture, and as an economy, of human beings, in these fields and others. And the authors acknowledge this tangentially, but perhaps somewhat over-emphasize the impact if managerialism on the ongoing degradation of these and other fields, at least by omission of other evident and significant factors.

    1. norm de plume

      ‘Does it even make sense to pay to undertake courses in order to get a certificate of achievement? From a commercial career perspective, certainly. But such a certificate is no sure guarantee of skill. “Qualified” personnel are not necessarily capable’

      I think in time there will be a move away from official credentialing toward companies and organisations testing candidates – ‘qualified’ or not – themselves, with a professional or a dept (depending on the size of the concern) whose job it is to sort the wheat from the chaff. They would be in constant liaison with the various sections (and not just the heads) to keep abreast of what skills and knowledge are required in appointees, and test candidates accordingly. The net enables enterprising people too poor to afford expensive laurels to become as skilled and knowledgeable and probably more flexible than those born with ‘advantages’. The twin drivers of this change will be, for the employers, the degradation of quality in ‘qualified’ applicants that you refer to, and, for the employees, the debt peonage involved in becoming ‘qualified’

      ‘For that matter, does it even make sense to have somebody undertake to diagnose your own health, without detailed information about your diet, your regular environment, your physical history, and any exceptions to these; information for which you yourself should be the best source?’

      Not to mention your genetic heritage… yes, human variation is the big blind spot not just in medicine but health generally. Almost nothing can be generalised, yet whole industries in health and wellbeing rely on generalisation.

  4. norm de plume

    This

    ‘The claim that every organisation — whether it is a mining company, a hospital, a school, a professional association or a charity — must be structured according to a single model, conforming to a single set of legislative requirements, not so long ago would have seemed bizarre, but is now largely taken for granted. The principle of the market has become the solitary, or dominant, criterion for decision making, and other criteria, such as loyalty, trust, care and a commitment to critical reflection, have become displaced and devalued’

    Put me in mind of this:

    ‘And, so, finally the floodgates were open. Nowadays, every expected income stream is a fair candidate for capitalization. And since income streams are generated by social entities, processes, organizations and institutions, we end up with the ‘capitalization of every thing’. Capitalists routinely discount human life, including its genetic code and social habits; they discount organized institutions from education and entertainment to religion and the law; they discount voluntary social networks; they discount urban violence, civil war and international conflict; they even discount the environmental future of humanity. Nothing seems to escape the piercing eye of capitalization: if it generates earning expectations it must have a price, and the algorithm that gives future earnings a price is capitalization’

  5. Ed Walker

    The number of healthcare administrators has soared. Here’s a nice chart. The huge increase occurred in the early 90s.
    http://www.google.fr/imgres?imgurl=http%3A%2F%2Fimage.slidesharecdn.com%2Fpnhplongsetweisbartversion-121221105916-phpapp01%2F95%2Fpnhp-long-setweisbartversion-52-638.jpg%253Fcb%253D1356087906&imgrefurl=http%3A%2F%2Fwww.slideshare.net%2FPNHP%2Fpnhp-long-setweisbartversion&h=479&w=638&tbnid=jrT8UrwLVoOZbM%3A&docid=udNUOrYIofj7GM&ei=NfAxVpKnNYLjUc_foeAP&tbm=isch&iact=rc&uact=3&dur=1757&page=1&start=0&ndsp=15&ved=0CCoQrQMwBGoVChMI0pXI_LfnyAIVgnEUCh3Pbwj8

    1. guest

      Does anybody have an idea of what changed in 1990 to lead to such a sudden jump in the management overhead of health organizations? It must have been something crucial in the legal or economic environment of the sector.

  6. abynormal

    Sadistic Managerial ‘teams’ have existed too long in too many areas. my mother recently received a notice on the door of her apartment, she’s occupied for 5yrs. this letter was short and to the point…’if you do not pay .23 (cents) before the end of the business day, you will vacate your apartment’. mom, 81yro, called me in hysterics. i got to her apt. and immediately had to attend to her…racing heart and hyperventilating. i read the letter slowly and see where mom missed the “you will voluntarily vacate your apartment”.
    after a few deep breaths, i hiked down to the den of smiling sadist offering coffee and cake. they introduced themselves as the ‘new management’, when i asked how many of the group of 5 it took to pull the 3yro .23 Cent delinquency i was assured by the head honcho, she was involved with the entire process. i explained my CPA sister and myself, Corporate Analyst (stretch), were off a few zero’s and hadn’t even bothered to account for the home office reconciliations.

    back to ‘healthcare/hospitals’: “-owned hospitals. How many are there? Two hundred and thirty-eight of them in the whole country (out of more than five thousand)–somewhere between four and five percent of the total in the U.S. (numbers courtesy TA Henry from this excellent piece).

    What are the issues?

    Obamacare effectively bans doctors from owning hospitals in the U.S.
    Those already in existence are grandfathered in under the law.
    We know that doctor-owned hospitals have higher average costs–hence the rationale for banning them under a law with the intent of “bending the cost curve.”

    In the most recent Medicare data (December 2012 report on “value-based purchasing“), doctor-owned hospitals did well in terms of achieving quality milestones.

    How well?

    Really well. Physician-owned hospitals took nine out of the top ten spots in the country. And in spite of their low relative number, forty-eight out of the top one hundred.

    What’s the secret sauce? Here’s a little tidbit on the #1 ranked hospital from another excellent piece on this issue:

    The top one is Treasure Valley Hospital in Boise, Idaho, a 10-bed hospital that boasts a low patient-to-nurse ratio and extra attention, right down to thank-you notes sent to each discharged patient.

    A 10-bed hospital? Thank you notes for each discharged patient? Sign me up to go there next time I need hospital services.

    Who cares? Well, we all should. Why?

    It boils down to incentives.

    When doctors own the hospitals, they stand to directly share in profits. If you’re a doctor-owner, and the hospital you both run and own is functioning at a high level, you think, “This is what America is all about. Free enterprise. Why shouldn’t I make more money if my hospital runs well?”

    As a taxpayer, do I want government incentives going to hospitals that are privately owned and known for cherry-picking insured patients?

    Moreover, what does it say about public hospitals, or academic centers, that often see the sickest, poorest, most vulnerable patients? Yes, their quality is measurably lower, according to this data. But now, in spite of staying true to their core missions (serving the public) they’re being further penalized.

    Is this just another case of the rich simply getting richer?

    Maybe Obamacare’s got it wrong. Maybe we should build upon the model of doctor-ownership and turn over public hospitals to their workers. All of them. Let the nurses buy in. And the food handlers. And the “environmental services” folks (i.e. custodial crews). Let’s really let the workers own the means of production. Then we can see where incentives get us.” http://www.kevinmd.com/blog/2013/05/doctor-owned-hospitals-rich-richer.html

    Sister Act: Gov. Perry’s Little-Known Sister is a Lobbyist for Lucrative Doctor-Owned Hospitals; Milla Perry Jones is vice president of government relations at United Surgical Partners International, an Addison, Texas company that runs hospitals and surgery centers co-owned by doctors. Sister Jones works with trade groups to rebut claims that doctor-owned medical facilities inflate American medical bills. Both Governor Perry and his sister have championed doctor-owned facilities in Texas and Washington.
    2006 federal report found that Medicare costs are 20 percent higher at doctor-owned orthopedic surgical hospitals than at competing community hospitals. These studies typically do not determine if the extra procedures are beneficial. The doctor-owned industry says it delivers superior care and points to contradictory research that does not associate doctor ownership with higher costs.
    doctor-owned facilities are money machines. A 2009 study found that Texas’ doctor-owned hospitals pumped $2.3 billion into the economy each year. The industry has had to use some of this money to fend off political meddling. Heavily favoring Republicans, Perry Jones’ United Surgical PAC spent almost $250,000 on federal politicians from 2005 to 2010, according to the Center for Responsive Politics. The New York Times reported that Doctors Hospital at Renaissance donors gave congressional Democrats $1.3 million in that period, with then-House Speaker Nancy Pelosi visiting that hospital in 2007. Surpassing the powerful Texas Medical Association, the Doctors Hospital’s Border Health PAC spent close to $4 million on Texas state elections from 2005 through 2010, becoming Texas’ 13th largest PAC. Houston’s doctor-owned North Cypress Medical Center pumped another $500,000 into Texas state races, ranking as Governor Perry’s No. 5 donor in 2010.

    In one of his last presidential ads, Rick Perry skewered Washington as a twisted place where, “You can’t say that Congressmen becoming lobbyists is a form of political corruption.” United Surgical, North Cypress and Doctors Hospital at Renaissance have paid federal lobbyists—including ex-Congressman Tom Loeffler—almost $3 million since 2005. Joined by two Perry Jones-affiliated trade groups, these same doctor-owned interests paid 24 Texas lobbyists—including U.S. Senator John Cornyn’s daughter—up to $3.4 million in that period. These lobbyists do not include Milla Perry Jones, whose advocacy activities may not trigger Texas’ registration requirements. (A Texas lobbyist generally must register if she receives more than $1,000 a quarter for direct communications with public officials). http://www.texasobserver.org/obamacare-jags-rick-perrys-lobbyist-sister/

    …can you imagine the independent sadist managing these hospitals?

  7. Wade Riddick

    It’s about confiscating public budgets – and, as such, it fits into the broader pattern of privatized jail and war. When you have for-profit war, you never get any peace; there’s no money in it. For profit medicine is about sickcare and not healthcare. There’s no profit in cure or prevention, only treatment.

    Sickness creates natural captive markets for rent-seeking monopolies and cartels to exploit. Once you’ve got a disease there are only so many chemical options to treat it. Corporate America is often actively blocking cheap treatments to steer patients toward patented medicine. See my earlier comment about Pharmacy Benefit Managers. The recent epidemics of drug shortages aren’t a coincidence; they are engineered. It’s only happening with cheap, effective, often public domain chemicals (e.g., methotrexate, 2ml vials of MgSO4). This is by design. Rent-seekers confiscate public goods like public domain chemicals and provide inferior, expensive, patented substitutes.

    Some of these are baffling if you don’t understand the recent breakthroughs in biochemistry. When you take gel helminths (worms like whipworms) out of the body you get autoimmune diseases like m.s. and crohn’s. This has been clear for about ten years but have you heard about that research from drug company-funded “patient” groups? When you feed people antibiotics that kill their gut flora and sell people food stripped of necessary fiber to nourish said bacteria, you get inflammation and insulin resistance – contributing to, sometimes outright causing, Alzheimer’s, diabetes, autism, atherosclerosis, cancer and polycystic ovaries, among many diseases. What news company wants to tell the public the food companies in creating an addictive sugar-laden product by removing fiber is also creating disease? Big Tobacco wasn’t an anomaly. It’s a pattern of regular conduct across industries.

    Patients are being tortured to death in this system.

  8. washunate

    Love the read. The quaint notion that the top employees in healthcare aren’t in it for the money still lingers in some corners of our society.

    One quibble with using this quote

    A reaction against Keynesian economic policy and the welfare state, this harshly reinstated the regulatory role of the market in all aspects of economic activity and led directly to the generalisation of the standards and practices of management from the private to the public sectors.

    It does not apply very well to the American context. Healthcare in the US context is all about the welfare state. US taxpayers give more money to both medical and non-medical managers/administrators/specialists/etc. than any other taxpayers in any other country on the planet. Markets play no role in the monstrosities that have become our hospital franchises, drug dealers, and equipment peddlers. These corporations (many of them ‘nonprofit’) are the anti-thesis of price takers in a competitive marketplace.

  9. tyaz

    Health care in the US is a mess in more than one dimension. Many aspects of managerialism are certainly a major problem contributing to increased costs and reduced quality. But there is an aspect of “overconsumption” of health services as well. I put it in quotes because the framing of “overconsumption” puts the blame on patients (as if they are “consumers”), rather than where I think the blame truly belongs — health care providers and management.

    The existing system is largely setup to pay by the number of procedures (easy to measure with electronic health records) rather than the actual quality of care (not as easy to measure). Specialized doctors and managers have an incentive to push for unnecessary procedures and clinical visits, because it means they get paid more.

    Perhaps the strongest evidence for doctors responding to these perverse incentives is the specializations that doctors choose. Primary care specializations like family medicine, general practice, and pediatrics are being decimated because these specializations are largely focused with preventative or long-term care. As a result, the pay is substantially lower than other specializations that perform many procedures. The evidence is that there is a critical shortage of doctors in these primary care fields, especially in rural areas of the country. Doctors flock to specializations that offer many procedures and consequently higher pay.

    1. JTMcPhee

      Smaal example of “wallet biopsy” structuring of “health care:” You have a lab test or MRI or tissue biopsy done, under the “provider’s” order. To be “given the results,” even if normal or benign, you have to ” be seen in clinic.” A nurse or paraprofessional may actually “give you your results,” but that will be billed as an office visit with the doctor. Don’t want to pay f9r the wallet biopsy? Fine, the doc doesn’t “give you yor results.” And if you find a more compassionate, maybe even more skilled, provider? If there’s a balance due on your account with the first, S/he effectively has a “chart lien,” like a lawyer’s “file lien,” on your very own personal medical records.

      And maybe that’s “against the law,” some places, but as always, where there’s ño effective remedy (sue the doctor or the corporation? No effective remedy), there’s no right…

      My wife went through this with a “Chr8stoan” DO primary-care dude who discovered Mammon was a more compelling god than YHWH, corporations and privatized his practice and got into peddling “procedures” like in-office ablation of throat tissue to “cure apnea and snoring,” and Trusting Patient enrollment in drug trials for Bad Meds…

      Anyone who thinks clinicianscare all Albert Schweitzers needs to read “The House if God,” learn the real rules of practice, understand what a “GOMER” is, and hope you won’t get the “buff and turf” treatment. It’s a hilarious book, but a check on the irrational exuberance that endows practitioners of the calling art business of medicine with universal expectations of virtue… https://en.m.wikipedia.org/wiki/The_House_of_God

      And Lambert, don’t credit me with invention of that “wallet biopßy” phrase– it’s a commonplace in the business of medicine.

    2. JTMcPhee

      “Wallet biopsy:”. http://csn.cancer.org/node/253191
      Another less cynical take: http://www.urbandictionary.com/define.php?term=wallet%20biopsy
      And closer to the real meaning: http://insureblog.blogspot.com/2009/01/wallet-biopsy.html?m=1
      And more: http://www.healingwell.com/community/default.aspx?f=35&m=3346181

      Why the vast majority of us humans will” never have nice things,” like comity and empathy and simple decency, ‘cuz more than enough of us are “all too human.”

  10. TedWa

    Good read. Self-sustainability in all aspects of our lives is being usurped by un-free markets created by rent seekers or their lackeys. There is no longer a desire for America to be the best nation in the world because that would mean it’s self-sustaining. And I’m not talking budgets. I’m talking people running things instead of corporations. No longer does Buy American mean anything – actually, it’s been outlawed by our trade agreements. There is no drive among our leaders anymore for America to be self-sustaining, which includes taking care of the least of us because we’re all in this together. Capitalism as practiced by corporations is dead, it just refuses to be buried. Supported by the Fed handouts it’s busy handing out crutches for the entities it’s crippled – which it then intends to kick the crutches out from under. Hilarious ehh? Universities, hospitals, pharma, the post office you name it used to all be self-sustaining entities that people could afford or that provided needed services at low prices and actually cared about people. Self-sustaining to me means America having the best food, the best health care, the best education, the happiest people and on and on – the shining city on the hill so to speak. Instead we get crapification of everything we need and it’s all for sale to the highest bidder who then crapifies everything even more. It’s a race to the bottom and the ultimate goal is a floor full of crutches and no one left standing.

    1. TedWa

      I meant : “It’s a race to the bottom and the ultimate goal is a floor full of broken crutches and no one left standing.”

    2. Masonboro

      + 10

      The medical association I use actually has a C-level job called “Chief Efficiency Officer”. Her latest was raising the bar for hospital referrals thus reducing insurance company costs and increasing consumer (I have stopped saying patient) risk. The incentive is the insurance companies are kicking back part of the extra profit. Another case of privatize profit – socialize cost since the added cost to consumers is impossible to measure. If I can find the letter from the association announcing (and attempting to rationalize) the change, I will email a copy to Lambert.

      Jim

  11. Adam Eran

    Worth a look: Matthew Stewart’s The Management Myth. It discloses that the very foundations of “scientific management” originating with Frederick Winslow Taylor were flawed. Taylor cooked the results of his “scientific” experiments in getting more productivity from the workforce to fit his theories. The first MBA — Penn’s Wharton School — was founded on this con. Similar cons were at the inception of the Harvard MBA.

    The “MBA Mentality” — embodied by W, among others — says everything can be measured, and measurement is what makes it real. Hence…testing our students until their eyeballs bleed is now an endorsed strategy to improve educational outcomes. No actual science supports this conclusion, but that hasn’t stopped the people who want to leave No Child Behind(tm).

    Turns out, management is a liberal art! Who knew?!

  12. Mickey Marzick

    “The particular system of beliefs and practices defining the roles and powers of managers in our present context is what is referred to as managerialism. This is defined by two basic tenets: (i) that all social organisations must conform to a single structure; and (ii) that the sole regulatory principle is the market. Both ideas have far-reaching implications. The claim that every organisation — whether it is a mining company, a hospital, a school, a professional association or a charity — must be structured according to a single model, conforming to a single set of legislative requirements,…Originally conceived as a strategy to manage large and increasingly complex organisations, in the contemporary world, no aspect of social life is now considered to be exempt from managerialist principles and practices.”

    This is an apt description of MARKET TOTALITARIANISM.

    MBAs and project managers armed with their metric-driven spreadsheets in pursuit of “best practice” – market lebensraum – speak the same language and spearhead this offensive against the welfare state. A managerial elite devoted to the belief that the the market will set you free functions much like the Waffen SS did in another regime with explicit totalitarian aspirations. The need for concentration camps is not needed in this version of totalitarianism because “no aspect of social life is … exempt from managerialist principles and practices.” The institutions of civil society have been captured by this “weltanshuung/zeitgeist” and dissent is lost in the “nacht und nebel” of the eternal present.

    Herbert Marcuse [One Dimensional Man], Eric Fromm, [Escape From Freedom] and the Frankfurt School broached the idea of what has evolved into “market totalitarianism” shortly after the Second World War. Dismissed largely as a Marxist rant it did not garner much traction inside or outside of academia, especially in this country. I suspect many of you are too young to be familiar with this body of work – no fault of yours. Nevertheless, LIBERALISM 2.0 [aka neoliberalism] did not capture the hearts and minds of the political classes until the 1970s signified by Ronald Reagan’s election in 1980. From then on it gathered steam and by the 1990s it was apparent that “market totalitarianism” was on the rise, if not yet ascendant.

    Orwellian concepts like “doublethink/doublespeak” resonated as the language employed in political discourse became little more than smoke and mirrors. “Reform” signified a revamping of welfare and criminal justice. It also has come to mean little more than slash-and-burn CUTS to programs associated with the welfare state or their outright privatization under the rubric of “choice” . Natural gas and electric rate “choice” programs exemplify this approach. Indeed, the two biggest prizes – Social Security and Medicare – are subject to calls for “entitlement reform” by Republicans and Democrats alike. That both programs have been internalized in the minds of many as “entitlements” destined for “reform” testifies to this. The federal deficit matters now and the hysteria surrounding it will likely be a primary talking point in the 2016 elections. The question of how will we pay for the expansion of any program barring tax increases will become the retort by those opposed to both, MMT notwithstanding.

    The Great Recession has been portrayed as an anomaly or as a normal part of the business cycle and precipitated some rethinking. But make no mistake about it, the market totalitarian impetus in this country continues unabated. If anything, the monotheism of the market has accelerated in some respects as “businesspersons” – Donald Trump and Carly Fiorina – from the private sector now vie for the presidential nomination of the Republican Party. The very idea that business acumen/experience is now of paramount importance in running this country – as a business – testifies to the pervasiveness of market totalitarianism. It is now deep rooted in civil society.

    Even here in Akron, there are plans to rename the University of Akron: the Ohio Polytechnic University! Fans of Firesign Theater back in the day will recall the rivalry between “more science high” and “commie-martyrs’ high school! It would be funny in most circumstances. but who’s laughing now? Many a former rubber rat plan to vote for Trump!

    I have come to the conclusion that “market totalitarianism” now has to run its course in this country. The Achilles’ heel of market totalitarianism may be how and where it stifles/smothers innovation, subjugating research and development to market criteria in which the short term trumps the long term. To the extent that dissent/conflict is fundamental to innovation and cannot be confined to the laboratory, then resistance is NOT futile. It remains to be seen whether that dissent can be co-opted or reappropriated indefinitely by market totalitarianism in this country or not, yet alone outside of its borders.

  13. Jesper

    Ban collective bargaining and the collective will suffer. If a government was allowed to negotiate for the collective against the suppliers then maybe the outcome would be different. But as we all know, letting the government co-ordinate and negotiate for the collective will make it worse for some individuals so…..
    The needs of the many do not(?) outweigh the needs of the few. Be it for healthcare, education or?

  14. Jim

    “The Scourge of Managerialism” raised some profoundly important issues.

    But its fundamental assumption “…the traditional control by business owners in Europe and North American gave way during the 19th century to corporate control of companies. This lead to the emergence of a new group of professional whose job it was to perform the administrative tasks of production”–is only half correct.

    The creation of “professional managers” was not simply shaped by market fundamentalism but also by the progressive movement itself. Robert H. Wiebe’s book “The Search for Order: 1877-1920, does a remarkable job of detailing this process.

    The trajectory runs from local autonomy once being the heart of American democracy, to the incremental erosion of the autonomy of community, to the supposedly necessary regulatory, managerial needs of urban-industrial life. and finally to the creation of flexible administrative devices that tended to encourage the creation of professional managers(in both the public and private sectors) and the increasing centralization of authority.

    Can any renewal of democracy begin without a dismantling of professional managerial authority in both the market and the state?

    Is a breakdown of centralized bureaucratic power (both public and private) a precondition for democratic renewal?

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