New Public Management
(October 27– November 03, 2006)
by Manuel P. Mejorada
 |
| Manuel
P. Mejorada |
The principles behind the New Public Management (NPM) are not entirely
new to me. A few years ago, while enrolled in a graduate program
for public administration, I picked up a volume on the subject from
the library and read the book for about two weeks. It provided me
a first taste that served to whet my appetite to learn more about
this approach to public administration. I have always been fascinated
about the concept of a lean bureaucracy for more effective government.
But I never got an opportunity to see the principles put into practice
until I was accepted into the Friedrich Naumann Foundation (FNF)
seminar on NPM in Gummersbach, Germany.
Like most other executives in the government bureaucracy, the
organization that I joined was already stretching at the seams
with excess “fat.” The Iloilo provincial government
is primarily a political organization, and a large portion of
its budget is spent on the salaries of employees who don’t
have enough to do, but are kept on the payroll because they happened
to be children or protégées of political bosses
who helped the governor win the elections. The size of the organization
keeps growing and growing, even though the work could be more
effectively handled by a workforce half its size.
The concepts of management as practiced in the private sector
were alien to most of the people working in the local government.
Operational budgets were not based on well-studied needs assessments,
but rather off-target estimates that were made out of laziness
and incompetence. There was no serious effort to cut costs and
maximize our revenues. For example, the procurement process for
drugs and medicines were so cumbersome, and the costs of the items
were often twice the original.
The lessons that I learned from the one week seminar in Gummersbach,
as well as those I culled from the online discussions, enabled
me to implement measures to start carving out the excess fat,
minimize expenses and increase revenue. The impact of this program
was particularly felt by our district hospitals, which previously
depended almost a 100 percent on subsidies from the provincial
government for income. In this new program, we set standard rates
for the services we rendered, and required patients to enroll
in a health insurance system.
At first, there was resistance from both staff and patients.
For a long time, patients had gotten used to having their bills
charged to “charity.” This happened because of the
absence of control mechanisms. Under the new program, we scrutinized
each bill and only allowed those who could not afford to avail
of “charity” benefits. We required patients to pay
their bills if they could afford it. We helped patients fill up
registration forms for hospital insurance so that their bills
could be picked up by the government agency for hospital insurance.
Less than three months after this system was put in place, our
hospitals started to show dramatic improvements in their income.
On our part, we introduced improvements to our facilities and
conducted more training programs for doctors and staff. This led
to an over-all public image overhaul of our district hospitals.
We became known as well-equipped hospitals with trained doctors
and nurses. This helped attract paying patients who found our
facilities on competitive footing with private hospitals.
We found out that confidence is a key factor that would influence
a patient’s decision in choosing a hospital. We made cleanliness
and sanitation top priority in our hospital operations. We built
new operating rooms and delivery rooms, wards and private rooms.
A fresh coat of paint was applied to our walls. The smell of antiseptic
made everybody feel secure about the cleanliness of our facilities.
We invested in new equipment. Not too long after we started this
program, we no longer received complaints about the bills. Patients
were willing to pay their bills in full because they were satisfied
with the service.
This outlook is now being introduced in other areas of our operations.
We are still far away from having a lean staff to perform multiple
functions that would cater to the needs of our constituency. But
we are starting to appreciate NPM, which is always discussed in
our weekly conferences. We are starting to dangle the possibility
that our savings in employee salaries can be given as incentives
for good performance. This is creating an atmosphere of excitement
in our organization.
These dramatic improvements in our operations happened just because
I had the opportunity to attend the one week seminar in Gummersbach,
Germany and exchanged ideas with newly-found friends from different
parts of the world. As we continue to share experiences, I am
sure that we will develop innovative approaches to the services
that we deliver to the public, and we will introduce better ways
to do it. For this I am most grateful to the Friedrich Naumann
Foundation for the free passage to the world of NPM.
