8 May 2019

Pros and cons of MSIA CEO wearing two hats


The recent appointment of Emma Hossack, CEO of the Medical Software Industry Association (MSIA), to the board of the Australian Digital Health Agency (ADHA) caused some digital health stakeholders to immediately cry ‘conflict of interest’. Stakeholders seemed to divide into those who felt the MSIA and ADHA were formalising some form of pre existing and co-operative relationship (conspiracy theorists), and those who were arguing that Hossack couldn’t possibly marry her objectives as the Association head with those of the ADHA in a manner that would ultimately benefit MSIA members.

Here’s one comment that appeared on a popular health tech blog post in response to the ADHA press release on the new board members that was fairly typical of the naysayer crowd.

“Well done Tim, nicely manoeuvred, not only did you kill off those who would dispose of you for your charade but you have also managed to make MSIA and wing of the Government just like to CHF” – Anon, Australian Health Information Technology Blog, April 3.

A quick round of calls to a few MSIA members suggests some discomfort among members, but in each of these discussions the discomfort emanated more from a distrust of the ADHA and what they might do to potentially hobble Hossack from an MSIA perspective, than anything else.

From a strict governance viewpoint nothing seems to be wrong:

• any direct conflict that might arise between Hossack and the Board (and you’d have to imagine there would be some) is entirely manageable via normal board protocols
• there doesn’t appear to be anything in the constitution of either organisation or board protocols that prevents such an appointment , in fact, quite the opposite (see below)
• ADHA rules say they can’t appoint someone who would be in serious conflict and the Minster appoints board members so its unlikely someone has stuffed that procedure up

There is plenty of precedence for a CEO of member association being appointed as part of a government board or even regulatory body where their knowledge would be at once useful and their presence potentially, at times, conflicted. A good example, and one potentially much more incendiary if things went awry, would be the appointment of the CEO of Medicines Australia, the group which represents the interests of Australian Pharmaceutical Industry, to roles with the Pharmaceutical Benefits Advisory Committee (PBAC), the government body which oversees the approval of drugs which will be subsidised on the Pharmaceutical Benefits Scheme (PBS). The presence of the Medicines Australia CEO, given the nature of this industry would be very informative for such a board. Some would say not having MA representation would render PBAC dysfunctional. Drug companies are at once an absolute key stakeholder in the process of PBAC approval and collective of powerful and smart companies that PBAC needs to be very careful of.

The same dynamic is surely in play with Hossack’s membership of the ADHA board.

There are clear advantages for digital health of someone like Hossack taking a role on the ADHA board. Hossack has material and systemic knowledge about the digital health sector which should be very helpful in the ADHA board making ‘better’ (read more informed) decisions. Whether the board takes that information and uses it wisely or not, is on the board, not so much Hossack.

Boards, properly constituted and well run, are the most vital governance and strategy element of the running of a successful company or institution. A lot of boards are dysfunctional, either through poor governance or sometimes intentionally.

If you are serious about having a board that runs governance, oversees strategy setting and monitoring, and the appointment of key executives (general the three key roles of a board), then ‘diversity’ of members from key stakeholder groups in that institution’s sector, is first base.

This latest round of changes to the ADHA board are likely to make it a lot more functional than dysfunctional. In fact, if you read the governance statement which establishes the ADHA in the Health Act, what you see is an admission from the government that NEHTA and the PCEHR failed in significant part because their governance was wrong.

Even more telling, Public Governance, Performance and Accountability (Establishing the Australian Digital Health Agency) Rule 2016 (read it all here if you like https://www.legislation.gov.au/Details/F2016L00070/Explanatory%20Statement/Text)) specifically states that NEHTA failed its governance obligations by not having industry represented well enough in its workings. An introductory memo to the above document states:

”…governance processes around the PCEHR system did not adequately represent the industry, were overly bureaucratic in nature and did not effectively balance the needs of government and private sector organisations”

That reads just a little like NEHTA forgot to include industry stakeholders in any meaningful way, and their masters came to the conclusion that this may have been a big reason for it going off the rails, and needing a revamp in the form of the ADHA.

If you look at the makeup of the ADHA board prior to this latest shuffle,  it would be easy to argue that until it appointed someone like Hossack, it was still in bad territory with regards to this requirement. You might even go as far to say that the board still does not have enough stakeholder diversity on it. After all, most members are from either state or federal government health agencies and all these members are paid for ultimately by the Federal Government. If you really wanted to get into a serious discussion about board diversity and conflict, this might be a better place to concentrate your effort. But let’s just stick the MSIA appointment for now.

If we accept the mechanisms are actually there to materially manage conflict the fundamental question becomes, can Hossack progress the agenda of the MSIA better from inside or outside the tent? That is a relevant worry for MSIA members.

There are a range of issues that will likely determine this including:

• Just how many the fundamentals Hossack might be able to clear up for the board without any controversy. You suspect a few at least given past performance on certain issues to do with the software sector and industry in general. Secure messaging comes to mind. At the very least having someone with technical know-how a little closer a little earlier could have sped this process along more you suspect.
• Is the board balanced in a manner that Hossack and her charm and intellect doesn’t actually overbalance the board in favour of the MSIA too much. Ie, is there anyone on the board able to call Hossack out on sophisticated technical and commercial arguments that she might make that favour the MSIA, which aren’t necessarily in the interests of the greater digital healthcare good? Again, not really Hossack’s problem. It’s why you have good chair persons to run boards and good diversity. It’s normal board stuff. This is a  board of very capable people (not saying that it’s necessarily an effective board in saying this by the way).
• How well the board is actually run? This is probably the biggest potential issue. Most boards are more dysfunctional than functional ( I was never a chairman so don’t look at me). Board management is a complex milieu of power, intellect and politics almost always and how that falls depends on lots of variables around the institution. Good boards have very smart and often charismatic people on them. You don’t get to be on a board unless you’re successful and good on your feet. Managing these people to all pull in one direction, after of course robust discussion, is a fine and rare art form.

The issues identified already in the past by the government itself are likely to be the same ones that could limit the effectiveness of the ADHA board. It’s all down to politics in the end.

Usually you need an independent and strong chairman to run boards like these. Someone from outside the normal payroll but with requisite sector knowledge and board management experience and skill. From afar, that is not actually the profile of the current chair, Dr Elizabeth Deveny. Not that she won’t be smart and skilled at the role. But she is ultimately paid by government, and as the CEO of a Primary Health Network would struggle possibly more than Hossack to be ‘independent’. This is still is not to say the Deveny can’t do a good job. You can manage conflict.

Generally speaking, if your organisation has a meaningful board, and you aren’t on it, you aren’t even in the game. It can’t have been a hard decision for Hossack to give this chance a  go.

There will be trade offs.

Unquestionably some MSIA strategic options to lobby the government will be curtailed by some of the restrictions around her board membership. If she is a good board member she has to choose very carefully when to keep to herself on stuff she normally might be quite distressed about as the MSIA CEO.
When I asked her to comment on whether she might be in conflict she told me she could but she’d have to get permission from the board based on the rules she’d agreed to follow. I then asked her to comment in her capacity as the CEO of the MSIA not in her capacity as an ADHA board member. You can see the problem.

On balance however, you’d have to think that her chances of getting government, both state and federal, to understand the issues of the medical software industry better, and affect some changes for the better overall, are greater on the board than off it. Her access to high level stakeholders – such as the Health Minister or the secretary of the Department of Health – will be greatly enhanced as well. That can only be good for the MSIA, which, though an outfit that often punches above its weight, is still a minnow when you put it against some of the other organisations competing for the attention of the health minister. Eg, Medicines Australia.

Hossack is a very well qualified board candidate, for any technology focussed board. For a digital health board she’s almost certainly an asset, managed correctly.

She isn’t likely to mess her side of things up.

Time will tell if the ADHA board proves a too dense or political vehicle for her to have any positive effect for either the MSIA members or digital health as a whole.

The first person to know if the appointment is wasting everyone’s time will be Hossack. And you suspect she’ll be the out of there quick smart if she is.

That possibility in itself raises some very interesting power dynamics questions. If she left the board because she felt it was not working, that would be a terrible look for the ADHA and the government. Her very appointment gives her leverage.

Surely, her appointment is on balance, a good thing.

Emma Hossack will be on two panels answering moderator and audience questions at the upcoming Wild Health Summit at the Nano Hub Theatre Sydney University on June 25. Early Bird tickets closing soon, but you can still get them HERE if you act quickly. Full program HERE.