KordaMentha vow to fix Adelaide health network’s budget blowout by 2021, but warn of ‘adverse reaction’
Administrators brought in on a $18.9 million, one-year contract to overhaul SA Health’s troubled central network have vowed to turn around its ballooning deficit by 2021 — but warn it comes with a risk of “an adverse reaction on clinical performance”.
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- Today: Auditors in charge of health agency’s budget mess
- Analysis: Biggest risk in curing health is the game of politics
- November 25: New boss Lesley Dwyer on how she’ll tackle budget
- November 20: CALHN inefficiencies revealed in KordaMentha report
- November 15: KordaMentha auditors paid $220k for 10 weeks
- October 19: Plan to put CALHN into effective administration
Administrators brought in on a $18.9 million, one-year contract to overhaul SA Health’s troubled central network have vowed to turn around its ballooning deficit by 2021 — but warn it comes with a risk of “an adverse reaction on clinical performance”.
In a massive reform plan for the Central Adelaide Local Health Network, run by Lesley Dwyer, consultants KordaMentha outlined plans to save $276 million in three years.
Measures range from faster discharge to actively trying to keep people out of hospital.
The “financial recovery plan” includes:
SLASHING patients’ length of stay by an average of 1.5 days, saving $130 million over three years and freeing up 65,000 “occupied bed days” a year
CUTTING agency nurses by half to save $10 million and trying to reduce nurses’ sick leave to levels comparable to interstate hospitals to save $9.7 million
OVERHAULING rosters and cutting overtime
GAINING greater revenue from privately insured patients
IMPROVING efficiency in the cost of delivering health services to national benchmark standards
IMPROVING financial efficiency in statewide services as SA Pathology, which Treasurer Rob Lucas has already put on notice for privatisation, if costs are not cut
STRICTER controls on purchasing;
IMPLEMENT a strategy to “minimise unnecessary hospital admissions.”
KordaMentha were paid $2 million to investigate CALHN’s finances and found an entrenched culture of overspending, waste, lack of accountability and inefficiency was sending its annual deficit beyond $300 million.
It since won the tender to implement its own recommendations, as foreshadowed by The Advertiser last month, handing them control of CALHN’s finances for at least a year while new chief executive Lesley Dwyer and her team retain clinical control.
The consultants plan to have a team of 23 on the reform plan.
The report refers to its release on Monday as Day Zero of the financial recovery plan, with immediate new controls on buying and overtime, but it notes an interim strategy already in place plans to “flex down” 90 beds by next June to save $7.9 million.
The report stresses that “patient care and health outcomes remain the primary focus of CALHN, ” a principle echoed by Health Minister Stephen Wade.
He accused Labor of having its “head in the sand” over CALHN’s growing financial crisis while it was in office.
“We have drawn a line in the sand,” he said.
“We have inherited a financial and organisational mess from the former Labor government but we now have launched a responsible road map back to stability and excellence — this is good news,” he said.
Mr Wade was confident the plan could be implemented without affecting patient care and noted that reducing the length of patient stay at the RAH to the levels already in place at Flinders Medical Centre would help patients avoid infections and muscle wastage.
He noted factors delaying discharge when patients were clinically ready to leave included lack of staff on weekends, nurses not being authorised to discharge, and lack of suitable places for some aged and special needs patients.
CALHN chief executive Lesley Dwyer also said the financial rescue plan could achieve its aims without adversely affecting patients — or with any plans to cut frontline staff.
“This will not only benefit our patients but also our staff and I firmly believe that better planning and better outcomes for the network will ultimately result in better health for all South Australians,” she said. The reform plan aims to save $41 million by the middle of next year and restore a balanced budget by 2021, with savings of $101 million 2019-20 and $134 million in 2020-21.
As reported by The Advertiser, the KordaMentha report found $112 million of purchases not done through the regular channels; Mr Wade indicated some of these are being further investigated for possible maladministration. The report also found the RAH’s cost for health services was running at up to 29 per cent higher than the national benchmark.
“What this shows is that $105 million is being spent on services that do not improve clinical outcomes,” the report states.
“This puts a dollar figure on the money that is being spent on inefficiency.”
KORDAMENTHA’S STRATEGY
■ Develop a new strategy to minimise unnecessary hospital admissions
■ Test and expand new methods for discharging patients
■ Speed up assessment and treatment of emergency department patients
■ Improve links with services that care for patients after hospital discharge
■ Raise more money from private patients treated in public hospitals
■ New controls on recruitment, rostering and payroll management
■ Better planning for rosters to use staff efficiently
■ Create new system to deal with bed and staff use during “Christmas ramp down”
■ Implement a system to ensure equal care and decision-making on weekends
■ Create more flexibility in bed use to cater for times of high demand
■ Use equipment more efficiently
■ Improve IT services, including a new electronic patient records system
■ More training for staff working on special projects
■ Create new strategies to hire and keep good staff
■ Implement talent management and succession planning
■ Streamline payroll services
■ New organisational structure to improve bureaucratic accountability
■ Fix failing duress alarm system
■ Improve data reporting to speed up patient flow
■ Monthly reporting on costs of key health activities
WHAT THE CALHN RUNS
■ Royal Adelaide Hospital
■ Hampstead Rehabilitation Hospital
■ The Queen Elizabeth Hospital
■ GP Plus Health Care Centres
■ Breastscreen SA
■ Prison Health Services
■ SA Dental Services
■ SA Pathology
■ SA Imaging
■ SA Pharmacy
■ SA Biomedical Engineering
■ Sterilisation
■ Clinical and Corporate Support Services
■ Planning and Performance Directorate
■ Sub-acute and mental health services
Doctors must drive efficiency, not accountants: AMA
DOCTORS and nurses say they are willing to work with the State Government to cut health system waste, but warn patient care must not be compromised by the reform plan.
Australian Nursing and Midwifery Federation SA secretary Elizabeth Dabars said she welcomed the KordaMentha report, and had long urged changes to discharge practices that would reduce the risk of ramping.
Ms Dabars said many problems in the system were created by a lack of proper patient flow, which led to poorer outcomes and higher costs.
“It does actually repeat many of the central themes that we have been raising for months, if not years” she said.
“It actually picks up on lots of the solutions we have been raising, like better discharge planning and patient flow.”
Ms Dabars said health staff had been lacking a clear plan for a long time, and it was possible to save taxpayer money without harming patients.
“There is waste occurring,” she said.
“The system isn’t operating in an efficient and effective way. Patients lose out, when they can’t get in the front door or languish in an emergency department for hours.”
Australian Medical Association SA president William Tam said he did not want to see bed closures or a reduction in services to the community.
“If you are talking about improving efficiency that needs to be driven by clinicians, doctors and others in the health team, not accountants,” he said. “Doctors know what is working well and what isn’t at their services and they want to see improvements. Too often they are not listened to.”
Dr Tam said aspects of the new plan were “reminiscent of transforming health again”, referring to the hospital network restructure pursued by the former Labor state government.
Opposition Leader Peter Malinauskas, who was health minister before the state election in March, said the new Government planned major cuts that would hurt patients.
“Embedded in this report is a $277 million cut to our health system,” he said.
“That runs a very real risk of having adverse clinical outcomes on our patients.
“Our health service should be a premium health service, we should not be orienting it around decisions being made by corporate liquidators.”
The KordaMentha report says goodwill from the health workforce will be critical in delivering the savings plan.
— Daniel Wills
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