The Flying Island of Organizational Consultants
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Institutional Dissociation

EHealth Disaster in Ontario

While I tend to avoid topical subjects, there was a news story that unfolded in the otherwise sleepy world of Ontario politics that caught my eye. Not that the specific details of this story merit much in the way of attention, but it did provide a convenient opportunity to explore a deeper problem. The story in question here provided by a government agency that found itself in hot water over contractual cronyism - the distribution of sole-source contracts to professional acquaintances as part of its strategy for restarting a disastrous venture into modernizing healthcare technology. The agency in this case is called "eHealth Ontario" and its mandate was to bring health records online by 2015. The disastrous venture, that had been forced into a reboot cycle, was known as "Smart Systems for Health" which had by that point burned through over $600 Million - without achieving any discernible progress, and before being curtailed or at least having its name changed.

Ignoring the predictable posturing of politicians, we do find interesting lessons being illustrated in this case. For one, we see in eHealth Ontario a perfect example of organizational barnaclization. For more background on barnaclization see my previous post on The Barnaclization of Systems.

The process of barnaclization at this agency commenced with its inception. Established as a separate agency (the netherworld of government operations where oversight and responsibility can be carefully muddled), eHealth Ontario was charged with bringing technological change to an environment (healthcare) where technological advancement in the provision of actual services has historically been glacially slow. The agency was then put upon to bulk up its credibility by staffing a plethora of management positions with people drawn from that very community of healthcare technology managers who had overseen this aggressive non-adoption of technology. Still feeling a need to appear innovative, these managers then felt pressure to import expertise, from anywhere and at any price. This led to the procurement scandals that are making headlines, at least in the forgettable world of provincial politics.

What was intriguing, to me at least, was that the experts being engaged through these questionable procurement practices did not in fact appear to be experts either in the technologies that will be needed to make eHealth a reality or in the management of technological innovation. They were in fact experts in helping healthcare agencies appear innovative to their various stakeholders and constituents. These experts were consultants drawn from the standard sources of high-priced consulting support that large organizations always rely upon and who do not, in any tangible sense, have any interest, or experience, in bringing real change to fruition. So what we see is one layer of barnaclized management calling upon another - creating two layers. The interactions between these layers become self-sustaining and are guaranteed to achieve nothing except to consume resources. With this being the healthcare sector, the analogy to self-medication is irresistible.

Self Medication

It gets even better, as the government minister supposedly responsible for the operation of this agency then called in independent auditors to review the procurement practices of the agency. This was more than a little funny because these auditors are generally comprised of individuals drawn from only two possible sources: the government itself (bringing an accounting perspective to the mechanics of procurement probity) and professional accounting agencies (bringing an accounting perspective to the accounting perspective). The likelihood that the application of this independent audit function would shed any light upon what has really been going wrong was effectively nil. It's a bit like a brain surgeon operating on himself (or herself).

I have been heard to say that "organization happens!" and that no one usually designs institutions - they just emerge and take the form that seems to suit their environment. In some cases, this pattern of growth spirals out of control and we see layers of barnaclization accumulate so that the resulting institutions must be classified as dissociated, or more tersely, insane. Performance becomes irrelevant as all eyes turn to having a staff position to fill every imaginable function, a group working on every conceivable issue, and a statement prepared for every possible criticism. eHealth Ontario, and its defunct predecessor, had slipped into this state and a review of the gross over-compensation provided to a long list of functionary positions makes this graphically, even comically, clear.

The predictable declarations from the political level, spurred by public outrage, that more strict procedures mandating "open competitions" for all positions will be put into place is a further sign that those in charge fundamentally do not get it. Another bureaucratic layer, this time a painfully laborious competitive procurement process that would strangle all efforts, good or bad, will not really help. On the contrary...


Given the necessity of making some kind of progress on the front of eHealth, the government of Ontario made some predictable moves. The organization seems to have been left more or less intact, and new management has been imported with pedigrees that are intended to instill confidence. Although it should have raised lots of eyebrows, it was felt that what was needed was to import executives from the financial sector where we naturally look for sound management judgment and high ethical standards. I have no doubt that, in some circles, associations with McKinsey & Co and the Harvard School of Business are taken as very good things. For others, echoes of Enron (or the most recent financial meltdown) don't seem entirely avoidable - so any sense of confidence that eHealth will soon be making any genuine progress in Ontario will be somewhat diluted. We can still hold out hope but the fact of the matter is that the ingrained patterns of faith in stock management strategies, that largely created the first series of debacles, have not themselves been changed.

For the distant observer, it's time to get another bag of popcorn because the future of eHealth in Ontario promises to provide a steady stream of spectacles...


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