The New Social Insurance Agency - Right direction but a long way to go (2009:19)

For this final report, the assignment of the Swedish Agency for Public Management was to carry out a comprehensive assessment of how far the Social Insurance Agency’s reforms have improved the workings of the administration of social insurance. Over the past few years, the Agency for Public Management has issued four interim reports on the Social Insurance Agency’s reforms. In the latest interim report, the Agency for Public Management stated that the reforms had been pursued vigorously by the management but, at the same time, had entailed major strains both on the staff and on the clients who were in need of the Social Insurance Agency’s services.

The Social Insurance Agency’s reform programme was concluded in autumn 2008. The summer and autumn of 2008 had been characterised by long handling times and long telephone waits for the clients, and also heavy work pressure and extensive overtime for the staff. The reforms carried out in 2007 and 2008 were also characterised by major problems in the governance of IT development and a management culture that caused large risks to be taken in the course of the reforms. This, in turn, meant that by year-end 2008 the Social Insurance Agency found itself in a situation of having incurred a deficit of SEK 950 million for covering the costs of its activities in the forthcoming budget year. The Agency for Public Management found it unlikely that the Social Insurance Agency would be able to implement savings on the scale required to balance its finances without this having repercussions on the quality of decisions in its casework. Since then, the Social Insurance Agency has twice benefited from decisions to provide further grants corresponding to this deficit. The Agency has thus obtained the financial capacity it had requested to conduct its activities and complete the reforms during 2009.

Improvements in some areas

The approach in this assignment is mainly problem-oriented and focuses on various areas in need of development. Within the scope of its work on this report, the Agency for Public Management has found that improvements have taken place in several different areas. Below, we report on examples of areas that have developed favourably in the course of the reform programme.

The Agency for Public Management has found that clear improvements have taken place in the area of internal governance and control. Work on payment verification and risk analysis has improved since the Agency’s last interim report. In the present report, as in the previous interim report, the Agency has concentrated its follow-up on the portion of activities relating to the checking in, and of, case management that takes place.

Investigations of suspected offences have, to a greater extent than previously, addressed large-scale and complicated types of case. The Agency for Public Management finds that the Social Insurance Agency is developing methods to improve investigations of suspected offences in categories of cases that are difficult to investigate. The Social Insurance Agency is also developing methods of estimating the extent of offences against the social-insurance system. The Agency takes a favourable view of the way in which this work is developing.

Monitoring of case management has also been improved and made more stringent. The Social Insurance Agency has better control of the handling of cases than before, and there is also a higher degree of structure and professionalism in this work. Besides the monitoring of case management that is carried out by the head office, handling of cases is also inspected locally by specialists, special investigators and controllers.

The concentration of case management that has taken place in most types of case affords improved scope for governance and control, and thereby — at least in the long term — higher quality in the handling of cases and better prospects of greater uniformity. There is flexibility in the organisation, in the sense that, at times of peak workloads, the local offices can assist one another in their case management.

The Agency for Public Management also considers that greater availability of specialists in the client reception organisation is resulting in higher administrative quality. These specialists serve as a link between head office and line activities. Networks for specialists and unit managers have formed in the various case categories. The Agency is of the view that this will have a positive impact on quality and the uniformity of assessments.

New organisation a sound basis for more efficient activities

The assessment in its latest interim report from the Agency for Public Management was that there was a potential for the Social Insurance Agency, in the long term, to attain greater cost-effectiveness. The assessment of the Agency for Public Management is unchanged on this point.

All in all, the Agency for Public Management deems that, in the new organisation and with the new way of working, there is a good foundation for enhancing efficiency in, and the quality of, case management. However, the Agency is of the opinion that a great deal of work remains to be done before the Social Insurance Agency will be able to reap the benefits of the new organisation in full.

From rapid change with high risks to slower change with low risks

During the spring of 2009, the Social Insurance Agency entered into a more tranquil period in terms of the pace of change. The management is seeking greater stability in the Agency’s activities and an improved dialogue with the line organisation. This dialogue has, to date, attracted the attention of the line managers, in particular. Among the administrators at the Social Insurance Agency, there is a much more ‘wait-and-see’ attitude.

During 2008, the Agency’s reform efforts were characterised by a rapid pace of change and extremely high risk-taking. In 2009, the main impression of the Agency for Public Management is that the new management has, instead, opted to shift to a slower pace of change and avoid risk-taking. This change is manifested in the fact that certain IT development projects that are essential to activities have been temporarily shelved in 2009. It may be justified, on the one hand, to give the organisation a breathing-space during a transition period, after the strains entailed by the restructuring. Regarding these IT projects, one reason was that the costs of IT development had risen to a worrying extent, and an overview of how to proceed, and how fast, was called for. On the other hand, a brake was put on the essential development work that was intended to make use of new opportunities in the organisation and the new way of working. The Agency for Public Management sees a major risk in the fact that governance in the Social Insurance Agency is oriented excessively towards administration and not enough towards development that is necessary for the Agency’s work. This means that the gains from the new organisation and the new way of working have not been made, or have at least not been made at the rate that was planned.

Objectives for reform not yet fully realised

Simplifying somewhat, the overall objectives against which the Agency for Public Management measures the Social Insurance Agency’s reforms are that its activities should be conducted efficiently at minimal cost and while maintaining high quality; that application of the law should be uniform; and that the Agency should have a good staff policy. Ahead of the 2008 report, an additional objective was adopted: that no incorrect payments and offences against social insurance should occur. The Social Insurance Agency’s keywords are simple, fast and correct. Below, the Agency for Public Management describes the extent to which these keywords may be said to characterise current activities.

The objectives of the reform programme have not yet been fully realised. The Social Insurance Agency has partially remedied the problems that were extensive and acute during 2008. For example, telephone waiting times have decreased. Handling times are, however, still too long for some categories of cases and a great deal of overtime is still being worked, especially in certain parts of the organisation. Where handling times are concerned, a positive trend was observable during summer 2009, but in the view of the Agency for Public Management it is too early to draw any conclusions from this. A comparison with handling times for 2005 shows that these times have undoubtedly improved considerably for some benefits, the main ones being sickness compensation and activity compensation. Nevertheless, it is not yet possible, in the estimation of the Agency for Public Management, to see any clear improvements in efficiency overall with reference to the efficiency measures that are available.

The Agency for Public Management finds that the scope for achieving uniform application of the law in the Social Insurance Agency has improved with the advent of a new, coherent organisation. Nevertheless, there is no monitoring or evaluation in the Social Insurance Agency that shows how far this is the case. It is essential for such monitoring or evaluation to be carried out.

The Social Insurance Agency’s overall aim for staff policy is for the Agency to be one of Sweden’s workplaces that develop staff skills most, with employees who are proud to work there. Regarding this staff policy, the Agency for Public Management finds that several of the development needs found in previous interim reports still persist. For example, the workload remains heavy in parts of the organisation, and this has an impact on the scope for skills development. The objective of ensuring that no incorrect payments and no offences against social insurance should take place is more in the nature of a vision than of a practical aim. The Agency for Public Management finds that in this area, too, there is clear scope for improvements in the Social Insurance Agency.

The Social Insurance Agency from a citizens’ perspective

The long handling times are a cause for concern not only in terms of efficiency, but also from a service or citizens’ point of view. In January 2009, the Swedish Parliamentary Ombudsman (JO) directed severe criticism against the Social Insurance Agency for having disregarded the requirements of administrative law in connection with its reorganisation. JO’s criticism concerned both the Agency’s long handling times and the clients’ difficulties in getting in touch with the administrators. Since then, complaints to JO about the Social Insurance Agency have continued to increase. The seriousness of the criticisms made in these complaints has not yet been established, but many reports still appear to be about long handling times.

Individuals still sometimes find it difficult to obtain information about their own cases. There are indications that relatively severe problems occur in the services provided to clients, although the situation appears to be better than during 2008 on the whole. The opinion of the Agency for Public Management, in the light to these and other considerations, is that the Social Insurance Agency should analyse in greater depth the extent to which the new organisation corresponds to service needs among the clients. One circumstance that should be noted in the context is the great pressure of visits to local service offices in metropolitan regions. At these service offices, clients can meet Social Insurance Agency employees as an alternative to self-service or telephone service. There is a risk that the previous analysis of the Social Insurance Agency has underestimated the need for a personal meeting. In this context, the Agency should learn from experience at local level to develop the focus and scope of the services and support provided to clients at the local offices.

One purpose of the new organisation was to make large parts of the Social Insurance Agency’s case management more efficient, thereby releasing resources for the clients whose needs were judged to be complex. As yet, however, no follow-up or evaluation has taken place in the Social Insurance Agency showing how far it has been possible to implement these priorities. It is essential for this kind of follow-up or evaluation to be implemented and for people with such needs to obtain the assistance that the new organisation was intended to provide.

Need for greater cooperation among the various parts of the organisation

In the view of the Agency for Public Management, certain problems in the organisation have begun to emerge more clearly in the past year. Since 1 January 2005, the Social Insurance Agency has been a unified ‘mono-agency’. There is thus ample formal scope for uniformity, efficiency and quality. In its review, however, the Agency for Public Management has come across problems that counteract uniformity, efficiency and quality. One such problem is the lack of communication among the various parts of the organisation, which is problematical at several different levels. First, the communication gaps directly jeopardise efficiency, productivity and administrative quality alike. Second, they entail other risks at a more profound level since the various parts of the organisation are screened off from one another and tend, to some extent, to function in isolation with little understanding of the work situation of, and problems encountered by, other parts of the organisation. The Agency for Public Management considers that these tendencies should be heeded by the management and dealt with in a suitable manner. One way of dealing with them could be to make it possible for the various sections of the Social Insurance Agency to cooperate on a larger scale. Inducing the various parts of the Social Insurance Agency to see the whole picture and work in the same direction is, to a high degree, a management issue.

Some essential IT-based systems still missing

Another problem is that the fundamental preconditions on which the new organisation and the new way of working are based, with scope for self-service for the clients and improved IT-based support for the staff, are still not in place. Telephone services for clients are another key aspect of enhancing the efficiency of activities. These services have not functioned as intended, although the situation has improved. All in all, this means that it has not yet been possible to realise the anticipated efficiency gains on which the current dimensioning of the workforce is based. In the view of the Agency for Public Management it is vitally important, for several reasons, for the Social Insurance Agency to fulfil its plans to create a coherent view of the clients among the administrators and increased self-service for the clients. These aspects are required not only for improved efficiency, but also to ensure services that are as good as possible for the clients. The Social Insurance Agency should ensure that the Customer Centre, which is responsible for the telephone services, has the means of providing them in an entirely satisfactory way. This has not always been the case up to now. The lack of a coherent view of the clients is one example.

More strategic control required

The Agency for Public Management finds that the Social Insurance Agency continuously implements changes in the organisation, modifies occupational roles and interfaces, and develops various types of support for administrators in order thereby to improve the organisation’s functioning. In the assessment of the Agency for Public Management it is, however, a matter of minor adjustments of the organisation and its way of working. In this Agency’s view, considerably more strategic control of further development is required. The Social Insurance Agency’s management needs to carry out an in-depth analysis of what support, management and work conditions in general the customer relations organisation needs. As mentioned above, some of the preconditions for the organisation and the new way of working, i.e. the IT-based systems that are to permit the customers’ self-service and simplify administration for the organisation, are still lacking. The development areas and projects representing the greatest benefits to activities must, accordingly, be given clear priority. According to the assessment of the Agency for Public Management, the above-mentioned self-service for the customers and IT-based support in the case management are areas of this kind.

Work on the dental-care reform inadequate but better than before

In this final report, the Agency for Public Management also aims to carry out an overall assessment of the Social Insurance Agency’s implementation of the reform of dental care. In the past few years, the Agency for Public Management has issued five interim reports about this work, and its assessment is that the Social Insurance Agency has implemented the reform inadequately in several respects. These inadequacies relate to management, control and follow-up of the implementation. In the view of the Agency for Public Management, the Social Insurance Agency has misjudged the consequences of the decision taken to replace the technical platform. The choice of technical platform has resulted in massive increases in costs (expenses five times higher than according to the original plan) and delays (of IT support and the content of various supplies). The change of technical platform also entailed a major need for collaboration with the care providers and their system suppliers. The assessment of the Agency for Public Management is that the Social Insurance Agency, in the course of its implementation, failed to engage in this collaboration properly. One objective of the reform was to reduce the administrative burden on the care providers. This objective has not yet been achieved and, in the assessment of the Agency for Public Management, it is unlikely that this objective will be achieved. This Agency nevertheless considers that the Social Insurance Agency’s management, control and follow-up of the implementation of the dental-care reform has improved substantially since, in October 2008, on behalf of the Swedish Government, the Social Insurance Agency drew up an action plan. Since then, the Social Insurance Agency has worked systematically in the areas identified as ‘development areas’.

Further development required to achieve aims of reforms

In its Annual Report for 2008, the Social Insurance Agency summarises the points of departure for the overall quality of its work as follows: case management should be implemented without unnecessary delays (fast); social insurance should be applied in the correct manner (correct) and the contacts between the Agency and its clients should be adapted, in general, to the clients’ needs (simple). The Agency for Public Management states, by way of summary, that the Social Insurance Agency’s case management has not yet fully attained these values.

Since the Social Insurance Agency has, since 1 January 2005, been a mono-agency the requisite organisational preconditions are now in place and its way of working has been made more efficient and professionalised. However, it is essential for the Social Insurance Agency henceforward to ensure that the gains from being a public agency, and being able to make full and free use of its own organisation, are utilised to the full. The reorganisation efforts are to continue until 2012. Nevertheless, in the assessment of the Agency for Public Management, the objectives of reform will not be realised unless the Social Insurance Agency completes the task of developing the preconditions for the new organisation and way of working; remedies remaining problems; and eliminates risks of efficiency losses and shortcomings in the rule of law. The Agency for Public Management has found that many of the problems besetting the customer relations organisation cannot be solved at the local level or among organisational units. Rather, solving them calls for strategic management and governance on the part of the Social Insurance Agency.