Month: December 2009

The Professional Mess

There is a very interesting interview with Dr. Thomas Dorman on the Lew Rockwell podcast entitled ‘The Medical Mess’.

Dr. Dorman talks about how placing an intermediary between a professional (the doctor in this case) and their customer (patient in this case) destroys the relationship between the doctor and the patient.

I think anybody, not just Doctors, who considers themselves a professional will recognise the sentiments Dr. Dorman highlights as common to the experience of being over-managed and under-lead in many a large organisation.

In summary:

  • The intermediary breaks the clear ‘point of transaction’ at which point the consumer owns the service provided – creating arguments and errors which then require regulations
  • Regulations require the professional to ‘code’ medical conditions and categorise medical conditions based on the codes specified by the intermediary
  • Because payments are made based on these ‘codes’ it forces the professional to spend considerable intellectual effort on the management of codes – at the expense of spending intellectual effort on the service
  • Also, ‘if there isn’t a code for something there isn’t a service’. So ‘codes’ must be manipulated to order to produce ‘a fair outcome’. This creates mistrust amongst all parties.
  • Professionals then spend time ‘documenting things to the satisfaction of the inspectors’ rather than working on services. This amounts to ‘costs escalating exponentially’
  • This intermediation process is ‘known not to work’ in that it doesn’t create a more effective services. So ‘there must be an agenda’
  • This agenda is ‘control, rather than providing quality services’

Sadly, Dr. Dorman passed away earlier this year before I even listened to this podcast.  The ideas, as always, live on.

Confessions of an aeroholic

“Airlines are notoriously cyclical because revenue is very sensitive to changes in demand. Profits are greatest when strong demand results in full planes (‘‘load’’) and high prices (‘‘yield’’), but they can disappear quickly when demand falls because costs are relatively fixed and flights can’t easily be cancelled.”

via Confessions of an aeroholic.

I’m currently working on the very edges of the airline industry (via IT outsourcing).  I can relate to the ‘aeroholic’ tag.  It’s a very compelling industry and while I don’t invest money in it I certainly invest time in it.

So, somebody important let me under his umbrella this morning.  I spoke briefly to him and it got me thinking about Boston Consulting Group (from where he had worked as an adviser to Qantas for 10 years).

I think the airline industry’s highs and lows have been managed through sophisticated financial devices (fuel hedging, for example, or deferred losses).  This is by necessity, but I think this process might have had it’s own unintended consequences.

I’m currently focusing on what those unintended consequences might have been… because that is where I will be able to have the greatest impact.  There are some non-optimal behaviors and outcomes I have noticed.  I think if I understand them in terms of the necessities above things will make sense …

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