Thursday, February 6, 2014

NHS & McKinsey: A Doctor in a Trojan Horse!

As I sort through thousands of photos of my recent stay in Finland: I marvelled at how a country recovered so quickly from Russia & Nazi & provided its citizens with good free health care & child care. The State is still responsible for alcohol sale apart from beer. so the government kept the tax and profits. Not Supermarkets nor Wine Merchants. 

© 2012 Am Ang Zhang

It would seem to me that it was some genius or else some very smart plotters that worked out the scheme (or was it scam) to destroy our NHS of old. The NHS was not without its faults but just recently some Qatari took his private plane to check into a Private Hospital in London. But very quickly he was transferred to an NHS Hospital! No, not a Circle run one. People still have faith in our NHS Hospitals despite Mid Staffordshire or Baby P.

No!No!No! When you are really ill, you want real hospitals. Because by then you do not care about decor, cappuccino or Michelin Star meals. They know that the fabric might be old, but the medicine served is good.

So how can these Management Consultants succeed in the sell off of something as lovely as the Finnish Scenery. 

Simple: History! History! History!

Trojan Horse.

When Iceland banks failed, it was with the collusion of its regulators.

In the film, the Inside Job:

Not too long ago in Iceland, those working for the banking regulator may find themselves employed by the bank that they were “regulating” during one of their visits. We all know what happened to Iceland.

Some very smart people there indeed. Governments never seem to learn as our banks failed too, so did those in the US & Ireland and other countries.

There is much talk of the role of the regulator Monitor in safeguarding our health care. It was the genius thinking this is a way to fool us into thinking : ALL IS WELL.

Perhaps we should look at our most famous regulator: FSA. (Financial Services Authority).

The FSA was dragged into the news recently as its first head Sir Howard Davies, resigned as director of London School of Economics for eight years over "a mistake". The "mistake" was to advise the LSE's council to accept £1.5m research funding from a foundation controlled by Colonel Muammar Gaddafi's son, Saif.                                 More>>>>>>>>>

So, were there any other "mistakes" when he was head of FSA?


17 July 2008
The Financial Services Authority will be dealt yet another hefty blow to its credibility today, as the Parliamentary Ombudsman, Ann Abraham, reverses her decision of five years ago and accuses it of maladministration for its role in the collapse of Equitable Life eight years ago.

"The case of Equitable Life, which echoes earlier cases such as Vehicle & General in the 1970s and shares some similarities with the current example of Northern Rock, illustrates the need for absolute clarity as to what can and cannot be expected from financial regulation and the development of shared understandings as to the limits to the protection that such regulation offers to investors both before and after problems arise, as they inevitably will," said Ms Abraham.

"Key, however, is that those responsible for undertaking financial regulation should act in a way that is compatible with the duties and powers which Parliament has conferred on them. Those responsible for the prudential regulation of Equitable Life failed to do so throughout the period covered in my report."
Sir Howard Davies was previously employed by McKinsey and Company and was Special Advisor to the Chancellor of the Exchequer.

I was reading a book by Philip Delves Broughton on Harvard Business School (HBS): Ahead of the Curve.

He may not be the first to observe that HBS loves Marines, Mormons and McKinseyKim Clark  must indeed be the most famous sons of The Church of Latter Day Saints and PDB’s article in The Sunday Times: “Harvard’s masters of the apocalypse” may indeed be aptly titled.

He opened with:

If his fellow Harvard MBAs are all so clever, how come so many are now in disgrace?

From Royal Bank of Scotland to Merrill Lynch, from HBOS to Lehman Brothers, the Masters of Disaster have their fingerprints on every recent financial fiasco.

We MBAs are haunted by the thought that the tag really stands for:
Mediocre But Arrogant, Mighty Big Attitude, Me Before Anyone and Management By Accident.

For today’s purposes, perhaps it should be Masters of the Business Apocalypse.
On RBS (Royal Bank of Scotland)
When I was a student at Harvard Business School, between 2004 and 2006, I recall a distinguished professor of organisational behaviour, Joel Podolny, telling us proudly of his work with Fred Goodwin at RBS. At the time, RBS looked like a corporate supermodel and Podolny was keen to trumpet his role in its transformation. A Harvard Business School case study of the firm entitled The Royal Bank of Scotland: Masters of Integration, written in 2003, began with a quote from the man we now know as Fred the Shred or the World’s Worst Banker: “Hard work, focus, discipline and concentrating on what our customers need. It’s quite a simple formula really, but we’ve just been very, very consistent with it.”
Harvard Business School alumni include Stan O’Neal and John Thain, the last two heads of Merrill Lynch, plus Andy Hornby, former chief executive of HBOS, who graduated top of his class. And then of course, there’s George W Bush, Hank Paulson, the former US Treasury secretary, and Christopher Cox, the former chairman of the Securities and Exchange Commission (SEC), a remarkable trinity who more than fulfilled the mission of their alma mater: “To educate leaders who make a difference in the world.”

Trojan Horse: The Guardian

A global consultancy firm seeking to profit out of the fallout from the shake-up to the NHS is being paid £250,000 a year by the government for advice on the transition towards health secretary Andrew Lansley's vision of the service.

The American firm, McKinsey Inc, with estimated revenues of £4.1bn a year, has been advising the Department of Health on how best to manage the radical changes since March. McKinsey is also one of a group of private consultants that have united to provide paid-for advice to GPs as they prepare for life after the reforms.
Family doctors need help from private companies because of the government's decision to abolish primary care trusts as part of their controversial changes to the health service, a move criticised as a step towards privatisation.

The head of Monitor (a sort of health FSA!) is Dr Bennett. 

Monitor: Recent exchanges in Parliament

Q 195 Jeremy Lefroy (Stafford) (Con):  I have a couple of questions about the role of Monitor. The first is about the Mid Staffordshire trust into which the Francis inquiry is looking at the moment. It seems to me as the local Member of Parliament that Monitor approved the foundation trust status without going into sufficient detail as to the status of that trust, particularly the quality of care at the time. What assurances can you give us that Monitor’s approval of foundation trusts will be more rigorous in the future than it was in the case of Mid Staffordshire? 

David Bennett: Yes. I was not around at the time, but looking at the evidence, the trust was approved at a time when it was not delivering appropriate care to its patients, and that was wrong. Monitor has done three core things in the light of that, all based on an external review of what happened and why, and therefore what lessons can be learned. First, it has set a clear quality bar. That did not exist before—there was no clear definition of what was an adequate level of safe care for any trust to be providing to be authorised. In conjunction with the CQC and the Department of Health, there is now a clear definition of what the quality bar should be. 
Q 196 Jeremy Lefroy:  Sorry, are we saying that there was not a clear quality bar for approval of foundation trusts up till now? 
David Bennett: There has been for a while, but not at the time of Mid Staffordshire. 

Dr Bennett was a Director at McKinsey & Co. In his 18 years with McKinsey he served a wide range of companies in most industry sectors, but with a particular focus on regulated, technology-intensive industries.
Average citizen might think, he is a doctor regulating Health Care, it must be OK then. Well, he is not a Medical Doctor. Do you think the genius would put a doctor in the Trojan horse? 
There were more:

© 2012 Am Ang Zhang


Q 203 Mr Barron:  I was on the Health Committee during the previous Parliament, when it looked into the independent sector treatment centre programme. I had conversations with more than one company running the programme that said they felt threatened by the pensions implications, with the work force working in the independent sector while keeping the NHS rewards such as pensions. I call them distortions, but most of us have one. By implication, what does that mean? 
David Bennett: I think again of Sonia’s point. There are lots of considerations. Yes, pensions are an issue, but as someone said there is an issue around the complexity of the cases that we have dealt with. 
Q 204 Mr Barron:  I accept that. ISTCs were contracted for cases that were not likely to go wrong in surgery, because there was no back-up in the hospitals or institutions if someone needed to go into ITU, and so on. I understand that exactly. 

Sue Slipman: The only thing I would add is that it is clearly the public sector that is carrying the responsibility for the education and training of people across the system as a whole. There are balances here in those imbalances, and we would certainly be pressurising Monitor very hard to take them into account. 
The Chair:  I think that they accept that. 

Emily Thornberry:  I am tempted to press you further, David, given the profound implications of what you said in relation to work force pensions. We are about to pass this legislation and you are saying, “Take it on trust, as it will all be sorted out.” But we are talking about millions of people’s pensions here, and it is difficult not to push you at this stage. 

Worse than that, you said in an incomplete answer earlier that there were other obvious distortions and advantages that the NHS had over the private sector. I wonder whether you could list anything else, on top of pensions, that you might think might of? 
David Bennett: I said that obvious distortions are creating advantage within the NHS. I was also saying that there are other distortions in the market, and Sue has just pointed out two of them. At the moment, it is the public sector that has to pay for R and D, and it is the public sector that pays for training. That places the public sector at a disadvantage. That needs to be taken into account. 
Q 208 Emily Thornberry:  Do you have any others? 
David Bennett: I do not have a comprehensive list.        More>>>>>>>>>>


“You can’t get fired for hiring McKinsey & Company.”

It often goes unmentioned, but McKinsey has indeed offered some of the worst advice in the annals of business. Enron? Check. Time Warner’s merger with AOL? Check. General Motors’s poor strategy against the Japanese automakers? Check. It told AT&T in 1980 that it expected the market for cellphones in the United States in 2000 would amount to only 900,000 subscribers. It turned out to be 109 million. The list goes on.

A thought-provoking new book called “The Firm: The Story of McKinsey and Its Secret Influence on American Business,” which comes out next Tuesday, offers a fascinating look behind the company’s success.

The book, by Duff McDonald, chronicles McKinsey’s rise but also raises an important question about it that is applicable to the entire netherworld of consultants, advisers and other corporate hangers-on: “Are they worth it or not?”

The answer amounts to hundreds of billions of dollars annually. Indeed, the army of advisers whispering into the ear of Verizon and Vodafone (its C.E.O. is a former McKinsey partner) over the weekend for their work on the $130 billion deal stand to make over $200 million alone. And, perhaps most important, they don’t have to give the money back if the deal turns sour.

Mr. McDonald’s book explores the remarkable and intriguing disconnect between the advice McKinsey offers and the ultimate results.


NHS & Market Forces: Uncomfortable Readings!!!

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