In November 2002, Roy Romanow (reference 5) presented his long-awaited proposal to enhance and improve the Medicare program in Canada.  His most notable recommendation was the injection of $15 billion of capital into the system, not unlike the Senate of Canada’s proposal earlier in the same month of injecting $5 billion.  This is an unmitigated disaster.  Now is an appropriate time to examine the issue from the point of view of sound management principles for human endeavors such as those espoused by this author’s 12-volume series (reference 7).

 1.  Assessing an Experience

 On December 2, 2002 in the Ottawa Citizen (reference 1), Dr. Lars Thompson, a urologist, outlined his experience of simultaneously working under the Canadian and American medical systems.  He continually hit on, what I believe are, germane points, tempered by realism and a conscientious approach to medicine.  He discussed his frustration within both systems: yet the benefits in the U.S. system and his philosophical attachment to the Canadian all-inclusive system.  His article provides background for some commentary which is detailed in Volume 12, paper C3, of the Caswell series (reference 6).

 2.  The Fundamental Flaw

 As most readers are aware, the 12 volumes referred to earlier (reference 7), guide enterprises to become more effective by honestly assessing and accepting human weaknesses and working with them – not against them.  The aim of the books is to get firms to quit dreaming of, or striving for a utopia of everyone behaving ‘properly’.  A multi-step program is initiated – a very difficult but rewarding process, that gets team-members aligned, and that takes two or more years to implement.  Although it is a long and arduous process, benefits begin to show almost immediately.  While many guidelines evolve from instituting change this way, one of these guidelines, “feedback”, defines the main reason, I see, for the failure of Medicare in Canada.

 3.  Systems Work with Feedback

The only way to get something to work is to get a response back of its effectiveness and tie a corrective process into that response.  We all have positive experiences of being affected in such feedback loops.

Savings Account

 The simplest example might be our savings account.  The feedback is the monthly bank statement that tells us if we are on target.  If we are behind, we know that to get back on schedule, we have to add more money to the account.  The monthly statement is a response to the effectiveness of our savings program and our putting in more money is our corrective process.  It could even be automated if our current account (assuming it was solvent) were tied to the feedback loop of our savings account and would automatically inject any shortfall.

Market Economy

 A complex example is our market economy.  The more people like a certain product, the more they buy and the resulting feedback of dollars allows the provider to make improvements with a newer version, a variant or a supporting product.  In any event, the positive feedback (of sales) sends a signal of the direction the consumers want.  Poor sales of a product will indicate its non-acceptance and will usually lead to its demise.  Whether one agrees with or disagrees with the philosophy of the market economy, there is no doubt of the product-success factor and societal-success factors of market economies vs. non-market economies.

Steering a Car

 When we drive a car, our steering wheel combined with body reflexes provides feedback for correction.  If we veer towards the edge of the road (assuming we are not tired or not inebriated) our eyes (body reflex) tell us that our direction is no longer that which we want, giving feedback that we translate into a slight corrective motion onto the steering wheel and hence, the vehicle.  Even if we are tired or inebriated, we will hit a noise strip at the edge of modern roads that gives us feedback that we are going off.  This feedback jolts us awake to allow us to take corrective measures.


 In the animal world feedback allows corrections and evolution – the adapting to change.  For example, a ram with small horns will lose the battle to a larger horned ram and access to the sheep maidens.  The feedback of strength (or evolution) allows the stronger ram to sew his seeds among the ewes, but excludes the weaker one from propagating his own weaknesses. A self-corrective process for strengthening the species continues.


Communism, as it has been practiced in most countries, was devoid of feedback – not listening to the common human reactions to change.  The result was a continuation down an unacceptable path until the humans were fed up enough to assume the huge risk to revolt.  In fact, all revolutions are a result of a system in place without adequate feedback response mechanisms.


 If there is no feedback, how are we to know what correction should take place?  We will keep going down the same path.  It may be the wrong avenue; it usually is the wrong path because there will always be change (another fundamental guideline) that we must respond to.  Nothing stays the same forever.

It is very simple. Corrective feedback allows corrections to a system, any system.  And correction is needed because there is always change.  Change is not unique to our society and our times.  Just ask the buggy-whip makers, the locomotive engine coal stokers or ask the dinosaurs.

4.  Feedback Principles Explained

The feedback principle begins with a definition of a need and then moves to task description, corresponding authority, measurement of performance and an appropriate response to acceptable or unacceptable outcomes. Please see Appendix A of reference 6 for a fuller description.  It is based upon an accountability model.

When individuals are willing to accept the feedback system that measures their performance and are willing to live by its reward and punishment, we say that such persons are accountable.  (The most effective rewards are positive reinforcements of self-esteem for a job well done – or not so well done.)

If, on failing a task, individuals react with excuses or attempts to shift the blame to others, they are not being accountable: they do not accept the reinforcement system.  Individuals need to accept a plus or minus accounting ledger entry for their own performances in order to be considered accountable.

Accountability Defined

Accountability occurs when a person accepts the measure of their performance against a mutually agreed upon feedback (rewards and punishment) system.  Note that accountability entails ‘mutually’ acceptable measurements.  Measures cannot be established unilaterally or imposed by a superior to the lower ranking person.  Otherwise it is not accountability and the process will fail.

 Thus, the feedback system works when the hospital says it will accept the measure and the rewards that go with the measure.  For example, let us say that the norm is that the hospital will receive 50% ‘acceptable’ rating from its patrons.  The reward might be that for each 10% above the norm, the hospital will receive a 1% addition to its capital budget that year.  Better still, the reward of improved processes and happier patients on the self-satisfaction of the hospital workers themselves with drive far more success than any monetary reward. (It has a multiplier effect: a good hospital will ensure that its patients fill out the forms, therefore getting more feedback which increases the accuracy of the information which leads to appropriate improvements, which leads to better services, which leads to more positive feedback, which leads to….)

5.  Other Principles (and Flaws)

Other management-flawed approaches that seem enmeshed within the current Medicare system violate sound management principles.  Seven of these principles and the accompanying Medicare symptoms, i.e., difficulties, are illustrated below.

5a.  Needs are Infinite, Resources are Finite

In most projects that most of us have participated, the needs (dreams) far exceeded the budget, resources or humans available.  That is, needs are infinite, resources are finite.  There is no limit on dreams, but there is a limit on money and people.  Feedback tells us when we are running out of resources.  This is fundamental with all human endeavors.

In a universal healthcare system, the consumer does not pay, and so a simple feedback mechanism is lost.  Therefore, it has to be replaced.  It leaves only one choice:  the government must provide the feedback reward; the province might make some payment against a mutually acceptable measure of success.

Further, it must review that measure annually and increase the measure (or introduce new measures) as, with experience, the performance increases.  As has been pointed out above, that measure has to be arrived at jointly by the person giving the reward and the person receiving the reward.  Increasing the measure is the way we move forward.  When we pass grade 6, we must move onto grade 7.  Or when the high jumper succeeds at scaling 2.0 meters, the bar is raised to 2.01 meters – hopefully, with the high jumper’s enthusiastic consent.

The same behavioral problem is responsible for today’s out-of-control internet spam problem – the spammers don’t have to pay to send out their messages.  Two proposed solutions that balance infinite needs with finite resources of the spam situation are (i) to make all message senders pay 1 cent per message (so you might have to pay $1 per day, but for the spammer it could be $ millions per day) and (ii) a time penalty by injecting a puzzle to be solved for each receiving computer – again, not penalizing the typical user but severely restraining the billion-a-day message sender. (See reference 3).

5b.  Stop Worshipping the God of Efficiency

Our society has a focus on efficiency.  Immediately upon detecting a problem, most groups tend to address it by trying to improve efficiency such as by cost cutting, layoffs, studies by inappropriate parties* – the works.  While this is not the place to clarify the role of efficiency, suffice it to say, that first one must be effective (serve someone else’s needs) before one can decide to become efficient (minimize wastage).  Trying to be efficient without first being effective is like pushing a block with a string.  A simple example is that a newly invented device has to work (be effective) properly before one starts improving its manufacturing costs (efficient).  If it doesn’t work, no amount of efficiency will bring it to life.  Please note the referenced paper Efficiency is Bad!  (See reference#2.)

Hospitals are not universally endorsed as effective (they do not serve patients well as noted in the last paragraph of Section 6 of this paper), so a focus on efficiency is inappropriate until what’s broken has been fixed.  Yet efficiency studies, cutbacks, etc. are currently a common approach to resolving the hospital dilemma.  When you try to become efficient without being effective, you become desperate.  Result: you end up cutting muscle instead of fat; that is, serving short-term needs at the expense of long-term efficacies – manifested currently by a shortage of doctors, nurses, lay-workers and support staff.

* If the problem is effectiveness, not efficiency, then a study by an efficiency expert will lead down an inappropriate path.  If the problem is bureaucracy, then a study by an ex-bureaucrat will wend its way to more of the same.

5c.  Lack of Accountability Leads to Bottlenecks

 The mixture of responsibility, delegation, authority and accountability, when properly defined, leads to work passing onto many hands simultaneously and successfully.  The absence of any one of these accountability elements will lead to bottlenecks.  For example you may intend to delegate a task to someone else, but then hover in the background to oversee its implementation and, before the results are there, quickly move in to ‘do it right’.  As you assume tasks that someone else should do, you assume more and more until you become the bottleneck.

The Emergency room could have many of its functions allocated to clinics, doctors’ offices, etc. – a sharing of the load.  No load sharing means the responsibility falls on one set of shoulders.  Too heavy a load will weigh any person or any system down, leading to a bottleneck.

Michael Rachlis says (reference 4) that almost all of the ills of the Medicare system can be addressed by getting care out of the hospital wherever possible and into the public domain.  He goes on to suggest many practical ways of doing that.

5d.  Delegate down to the Lowest Level

 Delegation is a trust issue.  In order to have all hands gainfully active, we must trust that others will learn the skills to do what we can do so easily and so well ourselves.  Delegating it to others is our investment in the future, because many sets of capable hands are superior to one set of hands.  You have to invest the time and the agony of overseeing another person’s learning – and people only learn by mistakes.  Failure to delegate will lead to a failure to handle growth effectively, for it is the delegated staff that would take on the added assignments that accompany growth.

However, for many hospital workers “It’s out of my control” is the common refrain. That’s not acceptable; department heads need to delegate down to doctors, down to nurses, down to nurses’ aids.  Supervisors have to stand back and trust the lower ranks to do the job.  The federal government has to delegate down to the provincial governments, the politicians need to delegate down to trustees, etc.  In each case, responsibility must be MATCHED to authority; otherwise it is not delegation.  Lack of delegation is endemic in Canada’s healthcare system, and in Canadian society as a whole.

5e.  Short Term has to be balanced with Long Term

In any successful enterprise the short term must be balanced with the long term.  Either one at the price of the other will lead to failure.

Many think the mix of business and government is doomed to be an oil and water mix.  The two can work very successfully together if each understands its role.  Simply put, the government should represent the long-term view, whereas the practitioners represent the short term.  We hire the private sector to do the job and we use the government to lay down the rules for doing the job, for monitoring that the rules are being followed (via feedback), and for changing the rules if we learn that they don’t work well enough.

 Making a political football of medical costs is short-term short sightedness by any government.

5f.  Innovation is the Key to Survival

 The common parameter of all failing enterprises is that the innovation component is neglected.  Innovation is not the domain of a few people.  It must be institutionalized throughout the enterprise.

Frustration results from the inability of the average medical professional to innovate and to create solutions.  Staff must be listened to as they suggest new ideas, because they are on the front lines and see what is required.  Doctors, nurses, administrators must have the freedom to innovate on the spot.  But innovation is not to be applied with reckless abandon.  By institutionalizing innovation, the enterprise opens the doors to new ideas (responding to changes in the world), yet maintains control – again, a balance of two apparently conflictive forces.

5g.  People’s Needs must be balanced with Getting Results

 A focus on getting results is important in any enterprise, yet all too often we see people being stepped on in the quest for direct solutions.  However, all enterprises are people driven or are for people.  Those who choose to ignore people will suffer at their own peril – if not now, certainly down the road.  The salesman who sells you a useless product will not get a repeat sale from you and every leading salesman knows that continuing success is based on repeat business.

All too often the needy appear neglected when it comes to public healthcare.  Or the rich may get undue preference over others.  As an occasional patient myself, I sense neglect – I feel I am on an assembly line – on the rare occasions that I have gone to a hospital.  What an outcome for all the dedicated workers there!  Obviously results are needed, but not at the cost of humiliating, alienating or neglecting patients.  It starts with some declaration of the sovereignty of the individual – all individuals – as a fundamental tenet, promulgation of that tenet, followed by continuous practice of that core value.

6.  Feedback and Medicare

What form would feedback take in the Medicare system?  Well it depends on the level we are considering.  For example, feedback for doctors, nurses, support staff and other individuals is one level.  On the macro level, feedback should be directed at medical facilities such as hospitals or clinics.

From where should feedback come?  On one hand, it should come from the user, Mr. and Ms. Canada.  However, there are a myriad of ‘clients’; they all should provide feedback, one way or another.  There are a multitude of areas, domains, departments that should be receiving feedback.

If there is no feedback, the system will not be self-corrective.  The result will be runaway excesses.  And the only solution will seem to be to throw money at them. One has to tread carefully on the Medicare sacred ground, to suggest any other solution.  The approach that uses ‘more money’, (a lot more money) as a first level solution is the trigger to shout “Disaster” in the opening of this paper.  Now let’s examine some of these excesses:

Please note that this paper was not written to suggest actual solutions, but to suggest an approach to solutions.  Although solution examples are used here, they are really only meant to illustrate a point.  Solutions cannot come from the outside; they can only come from people within the system, starting with inputs at the lowest level and working up.

6a.  $15 Billion Dollars is Needed

 Romanow says $15 billion, Kirby says $5 billion (reference 5).  Money as the first answer ignores the reality of the situation in two ways.  The first is that you can disguise all sorts of ills if you use money as a solution.  You no longer are forced to get at the root of the problem.  If you do not get at the root, it will simply return to haunt you later.

The second is that money, believe it or not, is limited.  At some point, if governments do not balk at the expense, the public will balk at the expense, especially when it is not accompanied by substantive improvements to the system.  Balking may not be through a political revolt, but it will certainly result in a wholesale use of alternatives, such as the purchase of U.S. insurance for U.S. medical care.  ($15 billion is about $1,300 per family.)

The feedback that exists at the macro level is that there is not enough money to do what Medicare was set up to do.  While it is logical to respond to the money signal, looking a little deeper tells us that the real feedback (macro) is that the system is not working very well and solutions to be effective need to be found.

6b.  Line-ups at Emergency Rooms

 If you are sick or your loved one is sick, you go to the Emergency Room of your nearby hospital.  This may not be the best thing to do for a minor cold, but who knows?  And after all, professional help is available, so why not use it?  There are two pieces of feedback to tell you that the Emergency Room is overused: the crowd that is already there and the length of the wait to get attention.

  1. There is no feedback to tell you that you may be misusing the service at a cost to someone who is seriously ill.

If you were charged a $100 fee the moment you entered Emergency, you might choose not to go to Emergency this time and prefer to wait the cold out.  In this fantasy example we could suppose that the Medicare system will pay you back the $100 within the month so that there is no real out-of-pocket expense.  Assuming you can afford the $100 cash, the responsibility of $100 will have you make a choice where none existed previously.  (This is not a proposed solution; it merely is trying to illustrate a point.  Obviously, people who could not afford the $100, even in the best of circumstances, would have no such choice.)  I hope you agree that if the $100 fee were applied to all individuals for each use of Emergency Room, the use would decline somewhat from that for zero-charge situation.  If it were a $500 charge, use would decline even more.  The value of the Emergency Room usage would quickly be established because there is feedback – a relationship between cash layout and usage of the Emergency Room.  One could keep adjusting the fee upwards until the lineups no longer existed.  Of course, this is not a socially acceptable solution, but it does show that feedback is self-correcting.

2. There is no feedback to the hospital that tells how much you are satisfied or dissatisfied with the medical attention you receive. In a feedback environment you might reward people for the service if happy (tips, for example at restaurants, smiles of satisfaction at hospitals), or give no reward if unhappy culminating in the most negative reward of all – you stop using that facility.  With the absence of feedback, every medical-care provider gets rewarded the same for good or bad service.  And one facility is just as out of control as the other.

6c.  Cost Overruns at Hospitals

 Hospitals are continually facing cost overruns.  When it is the rule, rather than the exception, something is wrong.  Can all hospital administrators be incompetent?  Not likely.  The cost-overrun situation results in finger-pointing which never resolves anything, as finger-pointing allows us to escape our own blame or culpability for the situation and discourages us from looking for solutions within the area that we ourselves, control.

 If hospital budgets were developed by the hospitals themselves with a realistic forecast of community usage of the hospital and feedback allowed effective monitoring of that process, corrective actions could occur.  However, when budgets are developed from management above, based on allotments by well-meaning people, the absence of feedback and a reasonable reward and punishment system assures continued frustration by all parties involved, because failure is inevitable.

6d.  Underpaid (or Overpaid Doctors)

 How much should a doctor earn?  How blue is the sky?  There is no finite answer and never can be.  Doctors’ earnings should be tied to doctors’ effectiveness.  (I believe you will find that the total of all doctors’ earnings as a percentage of Medicare’s total budget is not the critical factor.)  What is a doctor’s effectiveness?  It is not just the number of patients processed.  It encompasses quality of service, contribution to the profession and to the medical well-being of the community among other things.

In any event, feedback to the doctors is one of the easiest feedback components to control.  Subjective feedback from patients is such a simple means to measure and, taken collectively by doctors themselves, will tell a true story.  If 2 patients do not like the doctor’s performance, but 98 do, we can be pretty sure that doctor is doing a satisfactory job.  The method of measurement and the degrees of success have to be jointly arrived at between the doctor and the doctor’s supervisor – jointly accepted and then rigorously implemented.  (As an aside, the public should not confuse a doctor’s practice business income with the doctor’s personal income.  Running a business with an office and 2 or 3 staff on $500,000 a year is a starvation business.  I doubt if such a doctor would be able to see a $100,000 a year salary out of it – a typical manager’s salary today.)

6e.  Lack of Modern Equipment

 Capital purchases (major equipment) are a necessity for any enterprise.  If you own a piece of real estate, you will find you continually need to upgrade it – replace the roof or the walkway.  It is true of all operating enterprises.  A doctor’s office or a hospital is no different.  The questions are:  Do I need it? (always a ‘yes’ answer)  Can I afford it?  Can I justify it financially?

Feedback from patients tells us that we may need the equipment in terms of medical importance.  Feedback from our business may tell us if we can afford it.  Feedback from its use will tell us of the wisdom of our decision.  Feedback from its application in terms of ‘payment’ for use will help the doctor decide if a new piece of equipment can be afforded.

6f.  Line-ups for Surgery

 Book your surgery now and we’ll see you in 12 months.  Sounds just like the court systems or the refugee status hearings (also suffering the same malaise – control from the top rather than from the bottom).  The absence of feedback assures continuation of this disgusting situation. What is even more disgraceful is that we accept these lamentable delays in surgery as normal.

 Feedback such as unhappy patients seeking help outside of Canada should tell us something.  A testament to the ineffectiveness of our Medicare system is that people, at great expense and great inconvenience to themselves, choose to use another, and not-for-free, system.  Can there be any doubt about lack of effectiveness?

  1. Assessing Dr. Lars Thompson’s Observations

In a separate paper (reference 6) each of 16 observations of Dr. Lars Thompson, the physician whose comments opened this paper, are addressed applying the principles above.  That paper is available on request from the author. 

  1. Wrap-Up Comment

All problems of the common healthcare systems (Medicare in Canada) are resolvable, but they will not be resolvable if they remain out of each group’s control or if they fly in the face of rules of human behavior, most of which are just common sense.