November 30, 2007

Sicko & Deming

Watched the documentary Sicko directed by Michael Moore lately. When I finished the film, there is a name that is echoing in my head, W. Edwards Deming.

When I read his books, I always thought that he had some sort of agenda, context or audience. I think perhaps that context is the management adopted by American industries, government and education in particular.

Some interesting scenes in the film:

I think this happened when Bush promoting partially privatised social security system in Omaha, Nebraska. (the clip shown in Sicko is shorter than the excerpt below)

THE PRESIDENT: Good. Okay, Mary, tell us about yourself.
MS. MORNIN: Okay, I'm a divorced, single mother with three grown, adult children. I have one child, Robbie, who is mentally challenged, and I have two daughters.
THE PRESIDENT: You and I are baby boomers.
MS. MORNIN: Yes, and I am concerned about -- that the system stays the same for me.
MS. MORNIN: But I do want to see change and reform for my children because I realize that we will be in trouble down the road.
THE PRESIDENT: Yes, but nevertheless, there's a certain comfort to know that the promises made will be kept by the government.
THE PRESIDENT: And so thank you for asking that. You don't have to worry.
MS. MORNIN: That's good, because I work three jobs and I feel like I contribute.
THE PRESIDENT: You work three jobs?
MS. MORNIN: Three jobs, yes.
THE PRESIDENT: Uniquely American, isn't it? I mean, that is fantastic that you're doing that. (Applause.) Get any sleep? (Laughter.)
MS. MORNIN: Not much. Not much.

When Bush remarked "Uniquely American", it reminded me what Deming said in Principles for Transformation, Out of the Crisis, "They (people in management) shrug off problems of people with crab walk...".  Ms. Mornin is still taking the pride of her workmanship despite by being a single mother and working three jobs, however that she is very concerned that other than her workmanship will be robbed by the end of her work.


There is also a short interview with Tony Benn, the former MP, Secretary of State for Technology, Industry, and Energy, a prominent figure on the left for the labour party.

MR. BENN: Keeping people hopeless and pessimistic - see I think there are two ways in which people are controlled - first of all frighten people and secondly demoralise them.
MR. BENN: An educated, healthy and confident nation is harder to govern.

I always wondered why "Some managers say that a certain amount of fear is necessary to get the work done" as stated by Deming. The logic is perhaps the following, by fearing people, so they can be controlled, capable of controlling means getting work done to many managers. However, I guess when you look back in history, and you can only draw one conclusion, "their accomplishment is negative." (the list would be endless)


Another interview with Dr. Linda Penno, who was a medical reviewer of Humana, a Fortune 500 company, one of the largest Health Maintenance Organisations in the States. 

DR. PEENO: I was told when I started that I had to keep a 10% denial. Then they were giving us reports weekly that would have all the cases we reviewed, the percent approved and the percent denied. And our actual percentage denial rate. Then there would be another report that compared me to all the other reviewers. The doctor with the highest percent of denials was gonna get a bonus.
DR. PEENO: That was how they set it up. Any payment for a claim is referred to as a medical loss. That's the terminology the industry uses. I mean, when you don't spend money on somebody, you deny their care, or you make a decision that brings money in and you don't have to spend it, it's a savings to the company.

That must be an typical example of what Deming called "Management by Numbers" . He also remarked "Internal goals set in the management of a company, without a method, are a burlesque. an attempt to manage without knowledge of what to do..." Isn't that just what happened there?

I also wonder how did Humana made its way to Fortune's Top 5 Most Admired Healthcare Companies in the United States 2007. I could only presume it is the bonus that they handed over to their medical reviewer for the savings they made for the company that eventually elevated their ratings.

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