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Learnings from 2016 and focus for 2017
22nd May 2017Charles Strickland(acting) Health Sector Director
Better public services
Agenda
Learnings from our financial audit of Hospital and Health Services
Learnings from our performance audit of high value equipment
Focus areas for 2017
Report to parliament
Hospital and Health Services: 2015–16 results of financial audits(Report 9: 2016–17)
Tabled 31 January 2017
Sector results
Increasing demand creates financial pressures for HHSs.
Financial performance
HHSs need to understand the incremental cost of additional activity
Sustainability
Three HHSs have exhausted their surpluses built up over previous years (evidenced by a negative four-year average).
Figure notes:• Arrows signify change (positive or negative) compared to 2014–15• Traffic lights represent QAO’s assessment criteria (Appendix D)
Internal controls
HHSs are not resolving audit issues in a timely manner.
55 per cent of internal
control deficiencies
reported in 2015–16
relate to prior years
The future
Hospital and health services face a number of financial challenges due to increasing demand for services.
Factors driving growth:
increasing population
admission rates
older Queenslanders.
Changing funding arrangements with the Australian Government
new national cap of 6.5 per cent growth per year
The future
Hospital and health services also face a number of operational challenges.
Maintaining ageing infrastructure
half of the HHSs did not achieve their targeted spend in 2015–16
need to balance asset maintenance and clinical services
Changing technology—‘digital hospitals’
two hospitals went digital in 2015–16
five digital hospital implementations underway
Report to parliament
Efficient and effective use ofhigh value medical equipment(Report 10: 2016–17)
Tabled 9 February 2017
High value equipment
The health system can better use high value medical equipment in delivering services to patients.
What’s needed:
better coordination of strategic asset management
sufficient funding for the replacement of health technology
equipment
coordination of how equipment is utilised and monitored
documented justification for procurement, including costs and value
for money.
Strategic asset management (contd)
There is a lack of understanding over actual cost of replacement
documentation is either absent or limited
systems do not provide a consolidated overview
Findings
Findings
Replacement funding
Two-year cycle replacement funding is capped, and insufficient to
meet growing cost of replacing equipment
legacy agreement has not been reviewed
growth in health service and lack of asset management understanding
of cost
Replacement funding (contd)
Forecast shortfall of $390 million by 2018–20
exploring leasing options
Findings
Recommendations
We recommend that the Department of Health undertakes:
a stocktake of health technology equipment that the health system holds, and determines whether the existing asset information system is suitable for managing this equipment
a review of the replacement funding program, to account for the continuing growth of existing equipment and identify the most suitable arrangement for replacement.
Some equipment is well utilised; others show room for efficiency
improvement
better consideration required of spare capacity
links to lack of overall understanding
Findings
Achieving value for money
A lack of documentation to demonstrate value-for-money decisions
are being made
responsibilities for replacement vs new documentation
unclear total cost of ownership consideration
service need works on ‘we’ve always needed it’ approach
confusion over who should own the funding for replacement and
therefore negotiate the value for money solution
Findings
Recommendations
We recommend that the Department of Health—in collaboration with Hospital and Health Services:
standardise performance metrics and utilisation reporting to identify available capacity and system-wide improvements
improve transparency and rigour in how replacement decisions are made to ensure value-for-money outcomes.
Focus areas for 2017
Financial sustainability
Payroll management
Asset management
Achieving health
outcomes
Performance audits in the health sector
Rolling strategic audit plan lists:• our current performance audits• planned performance audits for the next three years
Updated each year
Available on our website www.qao.qld.gov.au
Sent to accountable officers
Government
Parliament
Public services
Relevance
How we assesses topics
The idea is assessed using a robust and disciplined approach.
Financial
Economic
Social
Environment
Significance
Assurance
Insight
QAO value
Sector priorities
Performance gap
Timing
Priority
Q&A
For more information on what we raised in this presentation:
Hospital and Health Services: 2015–16 results of financial audits (Report 9: 2016–17)
Efficient and effective use of high value medical equipment (Report 10: 2016–17)
www.qao.qld.gov.au/reports-resources