Implementing a Single Statewide Pathology Service Key Challenges Keys to Success Professor Ruth Salom August 29, 2013

Implementing a Single Statewide Pathology Service

Key ChallengesKeys to Success

Professor Ruth Salom

August 29, 2013

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The Journey : SA Pathology 2008 – 2012

2008 – 2012:

Inaugural Executive Director, SA Pathology

17 hospital laboratories; 2000 staff; $280M budget;

comprehensive pathology services; selected clinical services; research & teaching

2012 – current:

KPMG: Director NAT Health and Human Services

Melbourne Health: Non-Executive Director

Monash University: Professor




2008 - SA Government Proclaimed the formation of SA Pathology, a Single Statewide Pathology Service

Mandated Project Quality Key Performance Indicators

• Restructure from existing budget • Budget savings of $1.5M in the first year 2012: > $30M recurrent savings • Retain private market share 33% 2012: 37.5% • 60% of staff are satisfied with the transition process 85% @ 12 months • Hospital CEOs and clinicians are satisfied with the new service with fee reduction from 100%

MBS to 85% MBS • Fee for service established for CMBS and NCMBS across all hospitals




Productivity Analysis

5 yr changeCompound Annual Growth

Change in Activity (natural growth + new hospital + increased private market share)

45% 7.7%

FTE Increase 13.3% 2.5%

Activity per FTE 17.3% 3.2%

Revenue per FTE 29.5% 5.3%



The Journey : Major Initiatives Resulting in Productivity Gains

Labour Utilisation Initiatives

• [70% of budget related to staff cost]

• discipline based org structure

• rigorous process for employing staff

• cultural change to utilisation of special leave

• rotation of staff / leave cover

• right people for right job at right classification

Procurement Initiatives

• [long term saving initiative]

• purchasing power• improved

processes• improved contract

management

Consolidation & Optimisation

•[LEAN/ process improvements including financial, IT & automation ]

•budgets•services•tests•platforms

Governance

• [underpins all other initiatives]

• policies• procedures• financial & HR

delegations• education



•Research Director•Deputy Director• Chief Pathologist• Chief Scientist

• Business and Governance Director• Commercial Contracts and Proposal Management Director• Laboratory Operations Director• ICT Director• Business Change Director• Marketing and Communications Director

• Automated Laboratory• Chemical Pathology• Cytopathology• Genetics & Molecular Pathology• Haematology• Immunology• Microbiology & Infectious Diseases• Regional Services• Surgical Pathology

Executive Director

ResearchGovernance

ServiceDirectorates

ClinicalGovernance

CorporateGovernance

The Journey: Organisational Restructure



TQEH

LYELL M MODBURY FMC WCH RAH

HEAD OF DEPT / LAB MGR





HEAD OF DEPT/ LAB

MGR

























LAB MGR X 13 REGIONAL LABS

FMC LMH TQEH WCH RAH






HEAD OF DEPT/ LAB

MGR

























LAB MGR X 13 REGIONAL LABS

Mod

The Journey: Organisational Restructure

Discipline leadership across the state, not site based.



Key challenge 1 : Negative feelings / feedback by impacted staff

At start of the process - most enthusedAs the project progresses - negative feelings

Staff impacted...either by a direct challenge to their employment or to the way that they have been used to working.

Key to Success■CE / Ministerial support. Well informed

stakeholders. Planning for negative impact.

make sure that you go up

the ladders and don’t slide

down the snakes“



Key challenge 2 : Governance of Multiple projects during the transformation

Key to Success

■Established an effective Project Management Office.

■Maintained a strong management group

■Met regularly and signed off recommendations

■ All projects governed by the ‘Quality Lens’



down the snakes“



Note: (a) [...].

Source: [...].

SA PATHOLOGY MANAGEMENT GROUP 2012

Key challenge 2 : Governance of Multiple projects during the transformation



Key challenge 2 : Governance of multiple projects during the transformation

Quality Reporting Established across the State



Key challenge 3: Implementation of Uniformity, Transparency and Equity

Key to SuccessExtensive due diligence of current state processes in order to:

■Establish one common and transparent pathologist private practice arrangement across the organisation

■Establish organisational structure that is equitable across the organisation

■Establish common test nomenclature and cost structure for all hospitals

■Capture all costs relating to pathology in a uniform way (including overheads)



down the snakes“



Key challenge 4: The Transformation Process to a Single State Service

Key to Success

■Speed of implementation (< 6/12)■Advertised / Matched roles not

individuals to grades and job requirements, appointed the best

■Built specifications that defined the service need rather than favoured a particular technology or discipline

■Identified the real-estate required to host the service through a transparent process.



down the snakes“



Key challenge 5: Stakeholder Management

Key to Success

■Engaged with all stakeholders (including staff, customers, unions, government etc)

■Communicated widely and regularly with all groups.–newsletters, website, road-shows–engaged with representatives of the new

groups / unions / clinicians etc.

■Celebrated achievements / milestones



down the snakes“



Our Research



National & International Benchmarking of Government Pathology Integration ......................Little Information Available

• Qld Pathology; PathWest (WA); NSW Health Pathology ....no information availableAustralia:

• Lord Carter Review 2006, Transforming pathology recommendations ........2013 lack of information and progress

• GST/Serco venture reported cost of £10 M to implement a transformation program, did not achieve savings, new management 2011UK:

•Calgary Lab Services (three consolidations since mid-1990s) ......? 15 year transformation, no financial dataCanada:



The integration challengeMore than two thirds of North American private deals fail to deliver value

30%

31%

39%

Enhance value

Value neutral

Reduce value

Less than 1/3 of deals enhance value What would companies do differently next time?

Better due diligence and planning

Faster implementation and

integration

More attention to HR and culture matters

Findings from KPMG’s global 2011 mergers and acquisitions survey: “A new Dawn”



Measuring Success of Public Pathology Consolidation ....Pre and Post integration Key Performance Indicators

•Pathology operating cost as a % of 100% of CMBS

•Charge to hospital / LAHN as a % of 100% CMBS

Financial KPI’s (pathology only, exclude cost of clinical and other services)

•Activity per FTE at organisational and at discipline level

• Revenue per FTE at organisational and at discipline level

Productivity KPI’s

•Turn around time across all laboratories and disciplines

•Errors, client satisfaction, call centre performance

Quality KPI’s

An amazing journey.........

Q & A

THANK YOU



Key Achievements for each Stakeholders:

Patients / Clinicians / Hospitals Standardised processes ; Improved Quality Systems – Q Pulse / ISO introduced / State quality reports; Decreased pathology cost to Local Health Networks; Maintained bulk billing for South Australian population through competing in the private pathology market sector; introduced state based registrar training in AP & Haem

The State >$30M recurrent savings ; increased productivity; Increased private pathology market share / revenue; Commercialised IP with net worth to state of $90M; gifts given to charity

The Staff Additional 1/52 leave for 24/7 lab staff, Training & Travel Fund, Uniformity of Classifications , Improved Staff Career Progression, Established Staff Common Room / Cafe / Improved Lab Facilities

Research & Education Establishment of Centre of Cancer Biology; (2012: $17.2M in competitive grants); Establishment of Genomics Facility; Improved IP&C Management, Improved researcher salaries•

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Implementing a Single Statewide Pathology Service Key Challenges Keys to Success Professor Ruth Salom August 29, 2013