International controlling - Austria

10 years ago the first international Controllers' Health Care Congress was held as a cooperation of the working groups "Health care" Swiss and Germany. One year later the working group "Health care" Austria joined the congress as the organizers realized that the basic structures were very similar in all countries. Read all about how the heads of the working groups "Health care" Swiss, Rainer Stelzer, and Austria, Martin Reich, describe their collaboration today:

If you have a look at the health care systems in your homelands - where are analogies - and where are the main differences?
Stelzer: Nowadays in all three countries there are no longer sufficient public financial means to satisfy the expectations of the citizens due to age structure (longer lifespan), development of the medical sector (higher producibility), higher expectations of the population toward the principle of solidarity and lower means of the public authorities. In addition there are - depending on the health care system in the respective country - seriously wrong incentive-systems, implemented by political authorities.

How close do the working groups work together? How does this collaboration show up?
Stelzer: Our collaboration is an exchange of experiences - we became aware of the fact, that we are all busy solving similar tasks and that we all have similar tools to solve them; even though the packaging and the name of our systems are different, the content is almost identical. So we realized that we are all in the same boat concerning the challenges we have to deal with. The demands on controlling and the methods of accounting are the same in our sector of health care.

What criteria do you have when choosing the venue and the lecturers for the Health Care Congress?
Stelzer: The organisation is made within one country, considering the accessibility for all potential attendants from Austria, Germany and Switzerland. It's the same with choosing the lecturers. We try to guarantee a high attraction for the visitors of every named country by inviting lecturers from their homelands. The top subject-matter should relate to subjects that are currently being discussed, particularly in the country where the event takes place, but preferably in all of the three countries, for example Balanced Scorecard, DRG [Diagnosis related groups] lump-sum system, qualitative aspects and cost efficiency.
Reich: In Austria we have a special situation cooperating with the market leader ÖCI (Austrian Controller Institute). That is why we organized a common event, the Forum Health Care Austria, hosted by the ICV working group "Health Care" Austria.

How long does it take to prepare the Congress and how many people are involved?
Stelzer: You start to prepare the next Congress right after the end of the previous one, as you need one year in advance to get all done properly. Apart from the time the leaders of the working groups have to invest, there are 1 to 2 months of additional local support needed and 1 to 2 weeks of additional work in the ICV office. There is no accurate accounting as the main part of the work is done voluntarily and at no charge.

Seen over the years: is it getting easier or harder to organize the annual Congress?
Stelzer: It is for sure not getting easier as the offer of assimilable events in the sector of health care is increasing - while the means of the potential attendants are decreasing. At least the interest stays on the same level.
Reich: With the ICV Forum Health Care Austria we created routines, scheduling and predictability - experiences which the International Controllers' Health Care Congress benefits from. But indeed it is getting more and more difficult to obtain the financial means, volunteers or to motivate the helpers to go on helping, especially as it is absolutely necessary to avoid conflicts of interest with the main job.

How big is the interest of the attendants to play a part in the event for example during a discussion?
Stelzer: Usually it is very low. The aim of the main part of the attendants is to consume or to criticize, not to contribute. But this trend is not restricted to the Sector of Health Care! Meanwhile we have regulars, a group of participants who are getting involved in the event and the discussions and thus benefit very much from this fact. But mostly the initiative to bring the discussions forward remains at the respective heads of the working groups. At least there are more and more offers to lecture at an event.

How is the situation regarding "new blood" and the will of the newcomers to take over responsibilities in your organizations?
Stelzer: It is comparable to the will to take part in discussions during an event - namely almost not existing.
Reich: This is the central point of our concern, as it is not enough to just consume.

How would you describe the interaction of the generations within your working groups? What can young people learn from the older ones and vice versa, especially regarding controlling in the sector of health care?
Stelzer: To learn from the older ones is pretty hard due to a change in generations including the introduction of computing and controlling in this sector. 15 years ago this was not yet practiced in public non profit-institutions.

Reich: Controlling is a unique example for an area where differences between generations are supposed to be overcome as controlling means collaboration, especially between controllers and management (quod vide the definition of ICV). Only if both parts are partners - sometimes also sparring-partners - in taking over tasks and only when the common dialogue to reach the enterprise's goals is cultivated, it can work properly. Differences between the generations can be overcome within this process, as first of all it is about reliability and the determination that planning substitutes the trial by error.

What was the highlight of the Congress 2009?
Reich: We were glad to be able to present the directors' report of UNIQUA concerning operative health care management with the focus on reporting; a further highlight was the presentation of the reference book "Controlling, a management instrument to control health care enterprises" - a book like that did not yet exist in Austria.

Why is it worth taking part in your meetings or the Congress?
Stelzer: Only if we exchange our thoughts and experiences we can overcome prejudice and paradigms to simplify the challenge of controlling in the sector of health care for all those involved.
Reich: I agree with that. If the key persons do not talk about their challenges and problems, the health systems cannot be improved. Apart from that, there are other good reasons for visiting our Congress. How about networking, reports from the practice - and of course visiting Vienna!

What could be, what should be improved in the context of your events?
Stelzer: Everything - we're always in search of excellence.
Reich: We keep improving. At our events we hand out questionnaires. The results leave their marks on the next event.

What is the most important insight from the latest Congress?
Reich: Continuity pays off!

Proposal for a new role model for CEE headquarters as business partners in the course of specific market stages

In recent years many companies have expanded within new promising markets of Central and Eastern Europe (CEE). In spite of the fact that supervised markets are totally different, the responsibility for the entire region is in the hands of a board of directors or one managing director. It may not surprise that many CEE headquarters are not able to meet the requirements of local subsidiaries. As a consequence the added value of these regional headquarters is under discussion. Sometimes even after having successfully completed the introduction of the CEE headquarters in these countries, their existence might still be an issue. Solving the problem does not mean closing down the CEE headquarters: in case the activities are based on a market development plan, they might be able to support the subsidiaries as well as the global headquarters in a very efficient way.

A typical scene: the executive manager in Belarus is searching for an opportunity how to obtain a license from the local administration for installing one of his manufacturing machines. At the same time he is receiving an e-mail from his CEE headquarter asking him as representative of his country to publish the target figures for the following year containing all product ranges subdivided into cost centres and cost types. In situations like this the CEE headquarters appears to be an additional burden and not a support.

The crux of the matter is the wide range of requirements the teams are exposed to within the CEE headquarters. CEE country does not automatically mean CEE country: individual regions and countries might experience totally diverse stages of growth offering, however, various opportunities as well as bearing several risks. Everything applying to different regions is certainly applying to different countries. In the Czech Republic and Slovenia, where markets have almost reached Western standards, growth rates and margins have been declining slightly in many fields. Romania and Bulgaria, however, are still experiencing an enormous growth rate, although risks have risen in the course of the international financial crisis. Finally in the Ukraine and Belarus, the cooperation with the local administration continues to be difficult.

In this case a market development model may assist in coping successfully with different dynamics. Developments in the CEE markets are being divided into three different stages: market entry; growth stage; maturity stage. In each of these stages specific requirements have to be met referring to strategy, organization and processes as well as management control.

To quote processes and organization as example: in the entry stage only general minimum standards in organization are requested regulating the most important responsibilities clearly - high degrees of freedom which mean leaving a long leash is asked for. With regard to restructuring measures it is important to clearly demonstrate who is responsible for what and will be assigned which position in the future. In the growth stage, however, structures are to be installed in a fast and flexible manner. The target is to adjust processes and organizational structures to growth in the corresponding velocity. The multiplication of know-how in particular often bears a great challenge for smaller companies. In the maturity stage the organization is expected to be mainly harmonized in order to coordinate services and ratio analyses between diverse countries as well as to create synergy effects among them. This realization of synergies exceeding country boundaries is important for the success in the long term in particular due to the smallness of the CEE countries. Decisive differences also exist with management control: when entering the market only a small amount of target ratios is sufficient as well as the mainly personal contact to the dispatched managers. The return of these aspects of confidence creates demand in the growth stage for continuing and professional management control systems focusing extensively on growth ratios and external analyses. In the maturity stage at the latest this management control system is to focus more intensively on internal cost structures and must prove itself to be as effective as to offer companies the opportunity to be able to react quickly and targeted to the tougher competition and cost situation. Read more or download the article.

Dr. Stefan Bergsmann,
Horváth & Partners, Vienna