A balancing act
New ACC head Jan White has a reputation for balancing
the books and keeping stakeholders happy. Her big thrust at ACC
is on boosting communication.
Sunday, June 25 2006 || BY Bert Aldridge
Dr Jan White had only been in the country once before when she arrived in New Zealand from Australia to take up a new job as chief executive of Health Waikato (her previous visit was for the job interview). It was a baptism by fire.
After being picked up at Auckland Airport, she was travelling to Hamilton with one of Health Waikato’s senior managers when she was told they had to pull over and find a quiet spot. When White asked why, she was told she had ten minutes before, as the new CEO, she had to do a radio interview about a nurses’ strike.
“When you’re in that position all you can do is to honestly say what your view is, honestly express your opinion,” White says.
Her response during that radio interview clearly indicates her approach to fiscal management in the public health sector — one she’s carried through to her new role as head of the Accident Compensation Corporation. At the time she stated the health authority’s offer to the nurses was “reasonable and within the constraints of what the business can offer”.
White took over the reins at ACC last October after serving six years with the Waikato District Health Board. Her public health pedigree is impressive: she has a background in medicine and a Master’s degree in health planning, was involved in health strategy and policy development for state governments in Western Australia and Victoria, and held senior executive roles in several leading health organisations in those states. She says she moved from her health practice to management because she realised she could do the most good for the most people as a manager.
She moved to New Zealand in 1999 to take up the role of chief executive of health for Health Waikato and towards the end of 2000 helped establish the Waikato DHB, of which Health Waikato became the provider arm. She was made chief executive of the new organisation in February 2001 and gets ringing endorsements from her former employer, who describes her work as “exceptional”.
“Dr White is an extraordinarily effective CEO who leads by example, works extremely hard and recognises and rewards the hard work of others,” says Michael Ludbrook, chairman of the Waikato DHB, which is one of the largest of the country’s 21 district health boards with an annual $650 million budget and some 5,000 staff.
ACC’s budget is considerably larger, currently $2.7 billion per year (approximately 80% of that is from levies), and there are 2,300 staff, many regionally located working with claimants and various injury-prevention and education programmes. Replacing long-time CEO Garry Wilson on his retirement last October gave White a role at national level — a good career move despite the fact the Crown entity has been something of a political football in recent years.
Its monopoly on workplace insurance was abolished with the privati-sation of the employers’ account by the National Government in 1998, followed by the swift reinstatement of the full ACC scheme when Labour won the treasury benches. ACC continues to attract a steady stream of criticism from a wide-ranging group including claimants, service providers and industry groups. In its briefing paper for the incoming minister last October, ACC acknowledged its poor showing in the BRC Public Sector Trust and Confidence Poll conducted in May last year: “the survey also shows that relatively few people report to have full trust and confidence in the organisation,” it read. The briefing also points out the obvious: “an increased level of trust and confidence will result in better working relationships with claimants, levy payers and treatment and rehabilitation providers.”
Speaking with White, you get the impression that her personal measure of success will be changing ACC’s reputation. But it’s clear that this is not about ego gratification; more that she sees herself as a cog, albeit an important cog, in a larger machine. She describes herself as a “participative manager who favours delegation”.
She prides herself on an ability to communicate effectively but likes to keep her private life private. White is personable and engaging in conversation, which is a relief as without these traits, her calm manner and meticulous grasp of detail might seem canned. One ACC staffer says she’s not motivated by being admired or acquiring power; it’s all about making things work better.
White is another of the new breed of CEO in the public sector. Rather than the cliched ‘Yes minister’ mandarin of old, she combines private-sector efficiency with an acute awareness of how to operate in the public sector with its additional constraints and accountabilities.
“Early in my career I was guided by chief executives of big hospitals and of government departments that I looked up to tremendously. They had good leadership skills. They had mana, respect and intellectual capa-city but the big thing for me was they always had a human side and were able to connect with people generally and care about individuals as well as run a big organisation.”
Has White been able to mirror the performance of those she looked up to in Australia during her time so far in New Zealand? “Honest” and “pragmatic” are the first words Ludbrook uses to describe White. The ultimate mandate for any DHB is working with its community, and community consultation is something White treats really seriously, Ludbrook says. “It wasn’t just lip service for Jan.” She made the DHB one of the most innovative in the country, he says.
She was instrumental in creating Intersect, a coagulation of government agencies in the Waikato region formed to address community problems. “No problem belongs to one department. We decided to get all the government people at a CEO level to work out what can we do together to get a better outcome rather than duplicating things,” she says.
One achievement was a police-led school breakfast programme for kids from lower socioeconomic groups who were playing truant from school. “The breakfasts achieved for education by helping the kids attend school. Healthy, nutritious food improved the health of these kids and from the police point of view, they weren’t out on the streets making trouble.
“It’s my belief — out there in the towns is where the rubber really hits the road because it’s where you can actually do things and see what you’re achieving,” White says.
Working with the community is one thing; balancing the books is another. One of the reasons White was so well favoured by the DHB board and no doubt part of the reason she was selected for the ACC role, is her commitment to “fiscal responsibility”.
Ludbrook says White successfully balanced the demands of more health services against the constraints of capped public funds — no mean feat when you consider the daily struggle other district health boards have and fail to deal with on the exact same issue. Waikato has been one of a handful of DHBs consistently in the black since 2001.
“‘We will break even, live within our means.’ The executive saw that as a baseline for operation,” Ludbrook says. “Jan had the discipline to see this through, and that can be difficult with pressure within the DHB, especially when you see other DHBs running deficits, knowing that they’re likely to be bailed out.”
White reckons, in her reasoned way, that any health management organisation in the world has to measure medical priorities against budget. Based on that philosophy, it doesn’t matter how big or how small the budget is — you simply have to live within your means despite the fact there are always more things you could do and would like to do if you had more money.
The DHB’s latest annual report confirms its good financial performance under White’s steady hand. It had a net surplus of $206,000 on annual expenditure to June 2005. That strong financial position has allowed the DHB to access capital for a major $215 million redevelopment of both the Thames and Waikato hospitals.
Talking more
At ACC, White faces an even more complex task. ACC management has five key drivers: injury prevention, rehabilitation, stakeholder satisfaction, staff satisfaction and fair and equitable levies. White’s team has to deliver to its government masters and liaise with government agencies, industry bodies, levy payers, claimants and the community at large. It’s a big ask. And nearly all Kiwis are impacted by ACC in some way.
ACC has in the last few years had an “internal focus”, White says, while it worked to improve systems and processes. Now most of that work is completed, the emphasis will be on communicating and engaging more with the organisation’s stakeholders.
“We need to communicate more. It’s across the board, an equal -balance between claimants and stakeholders. We need to be out there so levy payers understand more about us, and so that New Zealanders understand the scope of their entitlements.”
Her vision is to forge a “more people-focused” organisation that has improved relationships with industry groups and business through devices such as the Workplace Safety Management Practices programme, which rewards employers (those who pay over $10,000 in levies per year) with good health and safety systems through a discount on their levies.
What do business stakeholders have to say about ACC now?
One of the more outspoken critics is Business New Zealand, which has long advocated change in the accident insurance and compensation arena. CEO Phil O’Reilly made a formal submission earlier this year to ACC on levy rates for the next financial year, saying individual businesses should be rated and levied on their own risk profiles rather than that of the industry sector they belong to. Individualising claim profiles would mean offending companies would get penalised directly for poor safety practices.
“For companies, workplace safety is about running a successful -business. Rewarding companies by reducing levies creates a virtuous cycle; if the benefits of acting are greater than the benefits of not acting, companies will act,” O’Reilly says.
Though ACC does reward organisations with good accident planning, there is no mechanism that takes into account the specific good (or bad) accident history of a business. O’Reilly is advocating for something like this, the business accident insurance equivalent of a ‘no-claims bonus’ on your car. The ACC, O’Reilly says, is not acting the way a private-sector insurance company would.
White responds to Business New Zealand’s criticism by pointing out the underlying philosophical difference between a social insurance model and a business one.
“In a social insurance system, that concentrates on equitable access to entitlements and the rehabilitation of all people in New Zealand, everyone plays a role in providing entitlements to everyone else. In the more, pure business model system, the amount you pay is limited to your risk individually — you’re not paying to cover someone else driving a car, for instance.
“In the business insurance model an individual can say ‘this is my risk, so this is what I should pay’, versus the social insurance model approach that all of us should pay for everybody.”
Obviously, White is toeing the party line of her government masters in her response, but it also seems to be a personal conviction. She says she makes career decisions because she wants to “work in a position that I feel is achieving something for society”.
Despite their philosophical differences over ACC levies, O’Reilly is full of praise for White professionally. “Jan is more engaged in a range of areas, she has a positive openness and we’ve had good dialogue,” he says.
That’s a pretty good start. One of her other big challenges — this time on the fiscal front — is to fully fund residual ACC claims by 2014. In the ACC’s financial statement document (June 2005), Treasury reports an “outstanding claims liability associated with past claims of around $11.4 billion”. That’s why employers pay a residual levy on top of the annual levy.
While the ACC is building up its asset base to help manage the payment of these claims in future, White is also committed to making ACC “as efficient as it can be”. It is already doing pretty well in that respect.
While it is difficult to compare ACC with workers’ compensation schemes in Australia, last year’s briefing to the incoming minister states that, after analysis by independent actuaries, overall ACC’s performance compares favourably. New Zealand levies (currently 88 cents in every $100 of payroll for the employers’ annual levy) are on average 63% less than those in Australia, it claims.
Former ACC boss Garry Wilson signed off his last annual report in 2005 by saying ‘Kiwis helping Kiwis’ is at the core of everything ACC does. “We can expect Jan White to amplify this message during her tenure at the helm of ACC as she redoubles efforts to communicate ACC’s key proposition to all its stakeholders, as well as maintaining a steady hand on the organisation’s fiscal obligations.”
It’s that balancing act that White appears so adept at — keeping spending within budget while keeping stakeholders happy. No mean feat that.
White is contracted to ACC until 2009, which dovetails neatly with her own view that a chief executive needs between three to five years to achieve change and bring new ideas to an organisation. You can bet she’s already working on that.