moneyFYI
Financial Freedom Is Merely Organized Common Sense
When Design Matters
People who design something for their own use do a better job than when they design for unseen and ununderstood people. Complexity rises, and solutions weaken as you get further from the prime directive.
Identify the prime purpose.
What do drag race cars, and Lear Jets, have in common?
If you ask drag racers what the most important thing is, they will say, “Go fast in a straight line.” Subject to the sport’s regulations, every other vehicle construction and operation choice becomes inferior. Comfort is not even considered.
Before developing the Lear Jet in the ’60s, William Lear observed something interesting. After two hours in the air, passengers most valued “getting there.” So, he built a hotrod executive jet. It was not luxurious because luxury was merely a convenience. He focused only on the customers’ principal value – getting there sooner. His jet was the fastest, and it was the cheapest both to buy and to operate.
When you have a clear central factor, the decisions you use to execute the build are both easier and more effective,
Government-run healthcare has a design flaw.
Value decisions get weird when the user of the service (patient) and the people who pay the bill (governments) are disconnected from the ones who deliver it. Hospitals have that unaddressed problem. The system’s fundamental purpose and limits are not clear.
Users of the service, who know the price, are the only ones who can objectively judge value. Everyone else uses a proxy for value.
Who values what?
With no bill, patients employ an unpredictable proxy. They will establish “Good value” to be present if they return to health, the staff is friendly and instantly available, the many expensive tests are done quickly and effortlessly, there is a comfortable bed in a cheery, quiet room, the food is acceptable, and visitors are welcomed. Probably some combination of these with unknown, or worse, ever-changing parts.
Administrators use other proxies for value.
- Acceptable level of complaints from the patients,
- Achieve budgets, and
- Hit target wait times.
The doctors, nurses, and other support staff fit in the middle of administrative values, patient values, and government budget decisions. Absent a clear purpose, they cannot make strategic decisions. They end up frustrated, overworked, and undervalued.
Can we fix the problem?
No one is doing wrong. On an ongoing basis, each uses different ways to decide how they are doing. Patients expect the world, and administrators act to satisfy the bill payer with adequate attention to patient needs. Nurses, doctors and other staff try to satisfy patients and their direct supervisors. That is a perpetually failing proposition because you cannot satisfy people with objectives and measurements not within your control.
All act in good faith and do as well as possible within the parameters of their jobs. They just do not see the same purpose.
Creating a shared vision and assignment of duties is paramount.
Establishing a fundamental prime objective.
When we see people using inconsistent values, we know the strategic vision is incomplete or wrong. We need a common focal point. It must be honest, not just a talking point.
As with hotrods and Lear Jets, the system needs to answer, “What do we value most?” Patients in a hospital will likely respond, “Nothing is better than getting better.” The government, the administration, and the staff would agree but are subject to external limits. Primarily financial, drug availability, and deliverable technique.
Hospital administrators would do well to focus on the crucial thing and address less attention to resource-consuming conveniences that minimize complaints. What about budget favouring ideas that are invisible to patients? Is it acceptable to permit an increase in the number of c-difficile cases resulting from a budget-balancing maintenance reduction?
Patients should be informed of the costs incurred for their care. How much does it cost to deliver a child? What would be reasonable? Are they the same? If not, why not?
In the end, complex systems cannot get along effectively without a prime directive. Focusing on the critical value allows for mutual decision-making.
The bits to take away
The more complex the system, the more critical a clear guiding principle becomes.
Only users can understand the value. Be sure they have the information they need.
Be sure there is a way for objections to be heard.
Be sure the operators know the cost of their tools and can make cheaper trade-offs with no loss of serviceability.
I build strategic, fact-based estate and income plans. The plans identify alternate ways to achieve spending and estate distribution goals. In the past, I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning. I have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Business Development Bank.
Be in touch at 705-927-4770 or by email at don.shaughnessy@gmail.com.
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