Consultancy firms rob healthcare of decision-makers

4 minute read

The Health Services Union believes the use of consultants has brought universal healthcare ‘to the precipice’.

The infiltration of consultancy firms into the control and governance of local health districts has robbed the workforce of experienced decision-makers and perpetuated the companies’ profit-making model, says the Health Services Union.

Gerard Hayes, the union’s NSW, Queensland and ACT secretary, told the NSW Upper House inquiry into the state government’s use and management of consulting services that he was concerned that we are “at the precipice of losing universal healthcare”.

“There is no doubt in my mind of that,” he said.

“Some years ago, the Ministry of Health had power over the 17 local health districts. They all run their own races now. They’ve all got their own boards now. The problem now is you have 17 identical individual bodies doing the same thing, over and over again.

“That decentralised structure … was designed with the consultants on board,” he said. “The power and the influence of the Ministry of Health has decreased dramatically.

“We have learned through this inquiry that PwC and KPMG were involved in advising the Liberal government back in 2011 to have this local health district structure that we now have.

“There are a lot of questions about that.

“In the same way that McKinsey advised on the NHS system in the UK, and then ended up profiting hence handsomely from local trust boards in the UK [through] getting consulting work, we’ve got the same thing in in New South Wales now, where we’re seeing these consultants really profiting.”

Lauren Hutchins, assistant secretary of the HSU, described a case in point.

“We have a local health district that three years ago undertook a restructure where a number of middle managers – between 80 and 100 – were made redundant through voluntary redundancy,” she said.

“Three years on, the consultancy firm that was brought in to assist with change management still is now occupying pretty senior roles within that local health district.

“There is an incentive for this [consulting] organisation to maintain chaos among that workforce, because they are continued to be paid to oversee a change that should have finished some time ago.”

The human cost of that arrangement, said Ms Hutchins, was that the LHD are now unable to attract middle managers into roles “where the workload is unmanageable”.

“And the consultancy firm continues to hold those roles,” she said.

Under questioning from the committee, Ms Hutchins named Elevate as the consultancy firm in question.

“One would say that actually managing your staff is pretty core business,” said Ms Hutchins. “It shouldn’t go to consultancy firms; it shouldn’t be outsourced at all. And what we see here is that, years later, the same firms that were brought in to manage change are actually profiting from the ongoing chaos.”

Both union officials pointed out that it is now not uncommon for consultants to be embedded in the boards of local health districts.

At Western Sydney LHD, for example, the current chair of the Board Loretto Di Mento is “formerly an audit partner with Ernst and Young”. Board member Stewart Thompson is a partner in audit and assurance with Hall Chadwick.

HSD wishes to make it clear that it is in no way accusing Ms Di Mento, Mr Thompson, Ernst and Young or Hall Chadwick of any wrongdoing.

“We can’t keep supporting the Big Four [consultancy firms] and their respective shareholders at the expense of people in New South Wales, particularly when it’s their money [being spent],” said Mr Hayes.

“[In the health system, we have] people who have got a great skillset. They should be utilised for the abilities that they have. The failure to utilise them by continuing to outsource [means] those abilities will start to disappear; those people will start to disappear.

“At the end of the day, they want to be engaged, they want to be part of the solution, not just to be passing the ball to somebody else to tell them how to do it.

“This is an opportunity to look at frontline services, and also look at the back-of-house that will support those frontline services.”

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