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This page created October 2000 by Michael Wynne
This page explores some of the reasons why oversight and
regulation are so ineffective in health care.
When confronted by information about US corporate misconduct Australian authorities have responded claiming that our regulations would prevent this. Graeme Samuel see regulation and oversight using contracts as essential for his marketplace model.
Experience as I have indicated earlier shows that regulation oversight and contracts simply do not work in a health care marketplace. They have failed over and over again. The only people who have taken action and who have been truly effective have been ordinary citizens. When, in the role of patients, community members or employees they discovered what was happening they acted.
In a competitive marketplace the pressures generated by competition almost invariably result in problems which should be detected by regulators. Corporations go as close to the bone as they can get. It is in the interests of shareholders that regulators not become aware of these problems and that when they do detect them they do not act.
Controlling structures: - Market listed corporations are "formal structures" which more than any other have barricaded themselves against the "informal structures" in the community. They have escaped social control and the nuances of understanding which it brings. They are controlled primarily by the crude formal regulatory structures (the law) which set the limits of tolerable conduct. They have a fiduciary duty to operate at the limits of tolerable conduct if this advantages their shareholders. It is not illegal to do so. They are adept at stretching the limits of legality and groups like Columbia/HCA employed teams of lawyers to do so.
Corporations protest angrily that they have done nothing illegal. They have not however behaved as "fit and proper people" what most of us would call decently - a prerequisite in health care. This has nothing to do with the law and everything to do with society's values and the informal structures which support them.
Team players: - Corporate empires encourage a team spirit and team players are highly regarded. It soon becomes a game of outwitting the regulators and team players become part of this. Having friends "inside" to warn of inspections, bringing in extra staff when needed, not reporting problems, and having control of medical records gives corporate homes a big advantage in outwitting regulators. A culture develops which sees this as legitimate and the regulators actions are seen as too strict or too unreasonable. These practices are extensively described in aged care in the 1990's and also in psychiatric care in the 1980's.
Power: - Corporate facilities hold all the cards, prior knowledge, control over staff, control over the data (ie notes), as well as the money and legal expertise to contest every complaint. They influence and control the politicians who appoint the regulators. These politicians lend a sympathetic ear to suggestions that the regulators are unreasonable. Company directors and politicians both play golf. Regulators do not have large financial resources and must constantly watch their backs. Politicians appoint and fire them.
Equilibrium: - It is not surprising that an equilibrium is reached where the companies do pretty well what they like and regulators accommodate to this going though the motions of regulation and penalty. They develop processes and frames of understanding to permit this. It is an ideological illusion to believe that a system where all of the pressures are away from providing care can be made to function by government regulation.
CLICK HERE -- for more about regulatory failure in the USA
CLICK HERE -- for more about the failure of regulation and oversight
CLICK HERE -- to examine the failure of regulations in Australia.