KordaMentha say Central Adelaide Local Health Network is the most broken organisation they’ve ever witnessed

Administrators brought in to rein in ballooning debt at the Central Adelaide Local Health Network say it is the worst case they have seen.

• City hospital emergency departments in meltdown
• Two KordaMentha auditors paid $220k for two weeks work at RAH
• Plan for KordaMentha to run finances at CALHN
• KordaMentha placed in charge of health network’s budget

Administrators brought in to reduce ballooning debt at the Central Adelaide Local Health Network say it is the worst case they have seen.

Mark Mentha, of KordaMentha, told State Parliament’s Budget and Finance Committee the blowout, approaching $300 million a year, was a “shameful waste of taxpayers’ money”.

CALHN chief executive Lesley Dwyer described the network as “broken” but vowed to turn around the culture as well as finances. CALHN runs both the Royal Adelaide Hospital and The Queen Elizabeth Hospital.

CALHN runs the Royal Adelaide Hospital and The Queen Elizabeth Hospital. Picture: Matt Loxton

In a sometimes tense hearing where KordaMentha’s Chris Martin repeatedly corrected Labor’s Kyam Maher, who was asking probing questions, it was revealed:

CALHN officials expect to have more full-time employees, by cutting back on casuals, agency nurses and overtime.

KORDAMENTHA’S one- year, $18.9 million contract will grow to $43 million if extended for the full three-year recovery plan period.

INSUFFICIENT efforts to “code” procedures to recover millions of dollars in payments from federal authorities meant the always full RAH, on paper, appears to be only as busy as Mt Gambier Hospital.

“SERIOUS” breaches of purchasing policies including $160 million outside normal guidelines have been referred to integrity authorities.

SUGGESTIONS KordaMentha could be sold while the contract was in force were bluntly batted away by Mr Mentha, who said: “I can categorically state KordaMentha is not for sale”.

CLAIMS individual KordaMentha staff may be being paid $1 million under the contract were rejected by the administrators.

CALLS to the new whistleblower hotline are at one every two days – 40 so far – centred on bullying and “harassment where people feel they are not in a safe environment to speak up, where there will be retribution”, Ms Dwyer said.

STAFF from KordaMentha are working on a fly-in, fly-out basis but their travel and accommodation expenses are within the overall contract.

Mark Mentha of KordaMentha said the blowout approached $300 million a year was a “shameful waste of taxpayers’ money.”

The restructuring plan is on track to meet the initial target of reducing the overspend by $41 million by June 30.

“We are seeing early signs that give me some confidence,” Ms Dwyer said.

KordaMentha’s three-year plan aims to rein in the overspend by $277 million.

A key aspect will be cutting the average length of stay, a major factor in clogging EDs.

As revealed by The Advertiser on Monday, demand in January at the RAH and TQEH was at record levels.

Despite this, the hearing heard that 25 beds “flexed up” at Hampstead Rehabilitation Centre to meet winter demand had not been opened to meet the even higher summer demand being driven by “frail elderly” people and the heat.

Ms Dwyer said improving patient flow in major hospitals was the key to relieving pressure on EDs.

She is hosting a summit on Thursday aimed at finding ideas to stop ramping at CALHN hospitals.

KordaMentha partner Mark Mentha, CALHN chief executive Lesley Dwyer, CALHN deputy chairman Mick Reid and KordaMentha partner Chris Martin at a parliamentary committee hearing. Picture: Brad Crouch

It came towards the end of a two-hour Budget and Finance Committee interrogation of CALHN and KordaMentha officials, but when the opportunity arose KordaMentha principal Mark Mentha didn’t mince words.

Asked by SA Best’s Frank Pangallo if the situation was worse than he expected, Mr Mentha let fly.

“In my 40 years of experience, this would be the most broken organisation I have ever witnessed, both financially and culturally, and I think in terms of the clinical and non- clinical outcomes that we have witnessed and continue to witness and benchmark against other peer hospitals,” he said.

“This is a failing organisation. This is a shameful waste of taxpayers’ money. To think … $300 million (CALHN’s budget blowout) can build three new high schools in the city of Adelaide, build a new QEH, in perpetuity, every year – imagine what that money could do if we could put it into community care.

“We have people in that hospital who should not be there, and finding ways to accommodate them in a community setting takes them away from the risk we have identified in hospital, of reinfection, of patients being treated with agency staff who are there today and gone tomorrow.” Mr Mentha said in some wards up to 25 per cent of staff were agency workers and part of the solution was “getting rid of expensive agency workforce” which in turn meant more full-time staff being hired.

He noted at the Whyalla steelworks, where KordaMentha was also brought in, cutting overtime resulted in more employment and an extra shift.

“We created employment, got great efficiency, better health and wellbeing outcomes, better safety outcomes,” he said. “Sometimes the obvious answer is not cuts but getting rid of the expensive workforce.”

CALHN chief Lesley Dwyer said: “On almost every parameter there is work to be done”. She noted there was greater risk of harm to elderly patients stuck in hospitals.

In brighter news, Ms Dwyer said there were “green shoots” of change in CALHN’s culture.

Jos Valdman’s cartoon on the KordaMentha audit of CALHN.

Hospitals will get more staff

Authorities expect to have more full-time employees at the Royal Adelaide Hospital and The Queen Elizabeth Hospital as part of the recovery plan aimed at reducing overspending by $277 million over three years.

As well as cutting costs by slashing overtime and agency staff, the move is aimed at easing the strain on doctors and nurses. Their unions say they suffer fatigue from stressful long hours, putting patients at risk and causing some staff to quit. As revealed by The Advertiser on Monday, demand on EDs at both hospitals reached record levels in January – even higher than the usual winter peak – and has continued into February causing chronic ambulance ramping.

CALHN chief Lesley Dwyer told Parliament’s Budget and Finance Committee she expected the number of full-timers to rise as the financial overhaul cut down on casuals, agency staff and overtime.

Ms Dwyer said the KordaMentha plan to cut average length of patient stays was a key part of reforming the system, and that 50 per cent of beds were occupied by people staying more than seven days. That slowed access for people being admitted via the ED.