Poor culture, no financial control: report lashes agency behind new Royal Adelaide Hospital
The agency responsible for the new Royal Adelaide Hospital has a cost blowout of more than $300 million, a report has found.
The health agency responsible for the new $2.4 billion Royal Adelaide Hospital has a cost blowout of more than $300 million, poor culture and no financial control, a scathing independent report has found.
Corporate advisory firm KordaMentha presented an initial report to the Marshall government in September that forecast overspending of $303m by the Central Adelaide Local Health Network in 2018-19 unless urgent corrective action was taken.
State Treasurer Rob Lucas said at the time that anticipated savings from moving to the nRAH had not been achieved. He said costs had increased as a result of the move to the new hospital.
Today the government and KordaMentha’s top executives released reports in a carefully stage managed media event in Adelaide.
Health Minister Stephen Wade said some of the financial issues raised by KordaMentha could see health executives and staff face maladministration investigations by the state’s Independent Commissioner Against Corruption.
Mr Wade said there was now a “comprehensive” plan to turn around South Australia’s largest health network relating to both patient care and finances.
He added the reports showed CALHN “has fallen into financial disrepair”.
The Health Minister said the former Labor government was given a damning report in 2012 that warned of the impending financial disaster but did nothing.
“We are drawing a line in the sand,” he said.
“We must deliver a circuit breaker for our central hospital network.”
KordaMentha has won an $18m contract to help deliver the first stage of the turnaround plan.
The first stage of the plan aims to save $41m by July next year and restore a balanced budget by 2021.
The plan aims to achieve savings of $101m in 2019-20 and a further $134m in 2020-21.
Key savings initiatives include improving efficiency of care; shorter hospital stays; better workforce planning and greater financial controls and accountability.
New CALHN chief executive Lesley Dwyer acknowledged that “this will be a challenging time for all of us”.
More to come
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