Annual Performance Management Framework

Transcription

1 Annual Performance Management Framework

2 Department of Health, State of Western Australia (2015). Copyright to this material is vested in the State of Western Australia unless otherwise indicated. Apart from any fair dealing for the purposes of private study, research, criticism or review, as permitted under the provisions of the Copyright Act 1968, no part may be reproduced or re-used for any purposes whatsoever without written permission of the State of Western Australia. Important Disclaimer: All information and content in this Material is provided in good faith by the WA Department of Health, and is based on sources believed to be reliable and accurate at the time of development. The State of Western Australia, the WA Department of Health and their respective officers, employees and agents, do not accept legal liability or responsibility for the Material, or any consequences arising from its use. Owner: Contact: Department of Health, Western Australia Performance Directorate Version: 4.0 Approved by: Professor Bryant Stokes, A/Director General Date: 26 June 2015 Links to: Performance Management Framework Performance Management Framework Performance Management Framework Performance Management Framework Performance Management Framework ( 2

3 Contents 1 Overview Aim Strategic Directions Background Structure of the PMF Service Agreements Process of the Performance Management Framework Policy Drivers WA Health Strategic Direction National Health Reform Hospital Accreditation and Licensing Mental Health Commission and the Office of Mental Health Aboriginal Health Services State Governance Arrangements Roles and Responsibilities Role of the System Manager Role of the Health Service Provider Performance Reporting, Monitoring and Evaluating Performance Reporting Performance Indicator Targets Performance Thresholds Performance Monitoring and Evaluating Performance Management Elements of Performance Management Intervention Levels Actions Arising from Performance Assessments Standard Monitoring Assistance Required Incentives and Premium Payment Program Performance-based Premium Payments Program Safety and Quality Investment for Reform (SQuIRe) Lessons Learned Mid Staffordshire NHS Foundation Trust Public Inquiry Next Steps Health System Governance

4 9 Glossary of terms Schedule A. Interim Health Service Performance Report : Performance Indicator Targets, Target Source, and Thresholds Appendix I. Principles of Performance Management Processes within the PMF Document control References

5 Acronyms AAR ABF/M ACSQHC CE COAG CSF DOH DRG DQS ED HCN/HIN HISWA HSPR ICT IHPA LARU LHN NEC NEP NHPA NHRA NSQHS PAF PAQ PMF SA YTD Annual Achievements Review Activity Based Funding and Management Australian Commission on Safety and Quality in Health Care Chief Executive Council of Australian Governments Clinical Services Framework Department of Health WA Diagnosis Related Group Data Quality Statement Emergency Department Health Corporate Network/Health Information Network Healthcare Infection Surveillance Western Australia Health Service Performance Report Information Communication and Technology Independent Hospital Pricing Authority Licensing and Accreditation Regulatory Unit Local Hospital Network National Efficient Cost National Efficient Price National Health Performance Authority National Health Reform Agreement National Safety and Quality Health Service Performance and Accountability Framework Performance Activity and Quality Performance Management Framework Service Agreement Year to Date 5

6 1 Overview 1.1 Aim The Annual Performance Management Framework (PMF) is aligned to the WA Health Strategic Intent i, the National Health Reform Agenda, and the WA Health Reform program. The PMF aims to support the Department of Health s vision to deliver a safe, high quality, sustainable health system for all Western Australians. The PMF provides the health care system with a common set of performance objectives and targets across WA Health. There is considerable pressure on health systems world-wide to contain costs, improve performance and maximise value for money. ii The PMF enables Service Providers within WA Health to address these challenges by identifying performance improvement opportunities. Additionally, the PMF facilitates a cultural transformation within the health system that empowers not only the WA Health leadership but every member of staff to collaboratively work towards achieving better value health care. The PMF comprises a suite of performance indicators that are aligned to the 4 priorities and 7 enablers detailed in the WA Health Strategic Intent Each indicator is an integral part of WA Health s performance management cycle. The performance indicators and targets that form the PMF are detailed in Schedule A. The PMF delivers the health system in Western Australia with a transparent reporting, monitoring, evaluation and intervention framework to drive improvement and achieve better outcomes. The principles of performance management processes contribute to the realisation of the aim of the PMF. Figure 1 defines each of the principles of the performance management process and the application of these principles within the PMF. The detailed alignment of the principles of the performance management processes to the key PMF attributes are provided in Appendix I. Figure 1: Principles of Performance Management Processes Transparency Accountability Recognition Consistency Integrated Service Improvement Focus Escalation Process Clear and agreed performance targets and thresholds and well-defined intervention processes to address poor performance. Clearly defined roles and responsibilities to deliver health services at agreed standards and volumes. Recognition and reward for performance that is sustained and outstanding. Consistency with National and State health service delivery objectives, priorities and outcomes. A balanced approach that has clear linkages to clinical planning, budget, activity, and safety and quality priorities. A strong focus on mechanisms to enhance service delivery and health care outcomes. Well-defined escalation processes and recovery pathways for performance concerns. 6

7 1.2 Strategic Directions Since the early 2000s the legal and administrative authority of the WA Health system is vested in the Office of the Director General. A model of more devolved governance is currently under consideration as a part of the WA Health Reform program to improve the integration and sustainability of the health system by empowering Health Services to be able to be more responsive to the changing needs of the local community. The ABF/M Performance Management Strategic Directions and Beyond Consultation Framework (the Strategic Framework) provides stakeholders with the strategic directions for future Performance Management Frameworks. To further develop the maturity of the PMF six key strategic directions have been adopted and aim to: Consolidate State and National based policies alignments Enhance performance measurements Expand public disclosure of performance 1 Improve performance reporting Strengthen performance management Foster workforce engagement. 1.3 Background This document presents the PMF and consolidates work undertaken in previous PMFs. Activity Based Funding and Management (ABF/M) commenced on 1 July 2010 for the Western Australian health system (WA Health). ABF/M provides a more transparent and accountable way of funding health service delivery. The framework of the WA Health ABF/M is consistent with the Council of Australian Governments (COAG) Activity Based Funding initiative which commenced in 2008 under the National Partnership Agreement and is now part of the National Health Reform Agreement 2011 (NHRA) iii. The NHRA details the implementation of the National Efficient Price (NEP) and the National Efficient Cost (NEC), which is set by the Independent Hospital Pricing Authority (IHPA). The impact of the NEP and NEC determinations on the Commonwealth revenue to Western Australia commenced in The PMF continues as a Service Agreement between the purchaser and the provider of services and is based on a performance management cycle, including a system of reporting performance against specified performance indicators. The PMF was introduced in for ABF funded hospitals 2 in WA and consolidates performance reporting, monitoring, evaluation, management and intervention. The PMF has matured to become a system wide performance management framework focussed on enabling WA Health to achieve key priority areas as well as ensuring the WA health system is sustainable into the future and continues to deliver safe, high quality care for all Western Australians. 1 An example is the Our Hospitals and Health Services website which is publically available from: 2 Note: ABF funded hospitals include the metropolitan hospitals and the WA Country Health Service regional resource centres and integrated district health centres. 7

8 The PMF continues to be aligned to State and National strategic priorities. The WA Health Funding Policy and Guidelines helps translate strategic priorities and policy into purchasing and performance management. Accordingly, the PMF should be read in conjunction with other Department of Health (the Department) documents and publications including the following: 1. ABF/M Annual Performance Management Framework Health Service Performance Report Performance Indicator Definitions Manual Performance Reporting and Data Quality within the PMF 4. ABF/M Performance Management Strategic Directions and Beyond Consultation Framework 5. The Role of Analysis within the Performance Management Framework 6. Workforce Engagement within a Performance Management Framework Setting 7. WA Health Strategic Intent i 8. WA Health Clinical Services Framework iv 9. WA Health Funding Policy and Guidelines Admission, Readmission, Discharge and Transfer Policy for WA Health Services. All published performance-related documents will be available from the Performance Directorate intranet website at: and the Department s Performance website 8

9 2 Structure of the PMF 2.1 Service Agreements The PMF forms the Health Services Service Agreements (SAs) between the Director General of Health as the System Manager and the Health Services. The SAs, in turn, form the basis of the Personal Performance Agreements between the Director General of Health and Health Service Chief Executives (CEs) who have a direct accountability for delivery of health services. Service Providers operate in an environment of delivering the services set out in the SA. The SA is informed by the WA Health Clinical Services Framework iv (CSF ), specifying the scope of services and target levels of activity for a facility. The SAs ensure that the Governments policy objectives on service delivery are clearly set out and provide the basis for both payment and evaluation of performance. The performance management of the SAs is undertaken as prescribed in the PMF. 2.2 Process of the Performance Management Framework The PMF is based on a performance management cycle and consolidates performance reporting, monitoring, evaluation and management (including intervention). The PMF involves a system of reporting performance against specified performance indicators for each Service Provider. Reporting on the performance of Service Providers against the performance indicators occurs on a regular basis, with the level of performance assessed against an agreed target. If the level of performance against the target is unacceptable, an intervention process will commence to bring the performance back on track. The intervention will be tailored to the specific circumstances of the non-performing area to ensure an agreed and workable solution can be implemented. Figure 2 depicts the structure of the PMF schematically. Figure 2: Process of the Performance Management Framework 9

10 3 Policy Drivers The PMF continues to be aligned with the Strategic Intent i for the WA Health System and is consistent with the strategic policies and priorities of the Department, State priorities negotiated with the WA Government, and agreements negotiated by the WA Government via the COAG. Within the policy cycle, the PMF is firmly placed between State and National priorities, and the performance management outcomes. Figure 3 demonstrates the position of the PMF within the policy cycle and the linkages to the State and National policy agendas. Figure 3: The Performance Management Framework Policy Cycle Performance Management Framework WA Health Strategic Intent National Priorities Performance Management Outcomes Policy Agenda COAG State Government 3.1 WA Health Strategic Direction At a State level, WA Health is responsible for delivering a safe, high quality, sustainable health system for all Western Australians. This responsibility cascades down through the core policy drivers that impact on health service delivery, effectiveness and efficiency. WA Health s Strategic Intent i provides four strategic priorities. Within each of these strategic priority areas are policy initiatives such as providing more effective and efficient hospital services through improving clinical and non-clinical processes across health services. In addition to these, the goal and two desired outcomes of the State Government are specified in the Western Australian State Government Budget Papers published by the Department of Treasury. 10

11 Government Goal Greater focus on achieving results in key service delivery areas for the benefit of all Western Australians. Desired Outcomes Restoration of patients health, provision of maternity care to women and newborns, and support for patients and families during terminal illness Enhanced health and well-being of Western Australians through health promotion, illness and injury prevention and appropriate continuing care. Funding of the WA Health system will be guided by the higher level policy objectives outlined above and the suite of services and programs that are aligned to them. 3.2 National Health Reform Under clause 8 (a) of the National Health Reform Agreement the role of States as the System Managers of public hospitals is acknowledged. The System Manager responsibilities include: Establishing legislative basis and governance arrangements Planning and managing performance of system-wide public hospital services Purchasing and monitoring of public hospital services purchased. The National Health Performance Authority (NHPA) is one of the independent agencies established under the National Health Reform Act As part of its role, the NHPA is responsible for publicly reporting on the performance of all Local Health Networks, public and private hospitals and primary health care organisations. The PMF continues to maintain policy based alignments with the National health priority areas through the National agreements. Hospital Accreditation and Licensing WA Health s Licensing and Accreditation Regulatory Unit (LARU) is responsible for regulating the accreditation scheme. Following each organisational wide accreditation survey and midcycle assessment, health services are required to provide a copy of their written report to LARU within 10 working days. 3.3 Mental Health Commission and the Office of Mental Health The Mental Health Commission (MHC) was established in 2010 in conjunction with the creation of a dedicated Ministerial portfolio for mental health. The MHC, as WA s primary purchaser of Mental Health Services, is responsible for strategic policy, planning, purchasing and monitoring of Mental Health Services. In addition, the MHC seeks to raise public awareness of mental wellbeing and promote the social inclusion of people with mental health problems and/or mental illness. The Western Australian Mental Health, Alcohol and Other Drug Services Plan has been developed by the MHC and Drug and Alcohol Office, with support from the Department of Health. The Plan provides a blueprint for the investment required in mental health, alcohol and other drug services until

12 The Office of Mental Health (OMH) was established in 2013 to implement the Government s mental health reform and legislative agenda, including addressing the recommendations of the Stokes Review (2012) and the new Mental Health Act The OMH, on the behalf of the Department of Health as WA s principal provider of Mental Health Services, is responsible for co-ordinating the establishment of policies, procedures and protocols that determine the budget setting, communications, compliance, reporting and governance within the WA mental health system. The establishment of both the MHC and the OMH is a new collaborative way of working to undertake service planning, budget setting, data sharing, service improvement initiatives and the creation of Service Agreements within WA s mental health system. 3.4 Aboriginal Health Services Aboriginal 3 Health is a statewide office within WA Health responsible for facilitating a collaborative and coordinated approach within WA Health s public health system to improve health outcomes for all Aboriginal people living in Western Australia. The WA Aboriginal Health and Wellbeing Framework was launched in March The framework identifies key guiding principles, strategic directions and priority areas for the next 15 years, to improve the health and wellbeing of Aboriginal people in Western Australia. The release of the WA Health Strategic Intent acknowledges Aboriginal Health as a priority area which is strongly aligned to the WA Aboriginal Health and Wellbeing Framework The framework has been developed for Aboriginal people by Aboriginal people and was informed by an extensive consultation program. It has a strong focus on prevention and acknowledges culture as a key determinant of health. The strategic directions within the framework have been developed to support evidence-based best practice, re-empowerment of Aboriginal people, and a service system in which the health and wellbeing of Aboriginal people is everybody s business. The framework s strategic directions include the following: Promote good health across the life course Prevention and early intervention A culturally respectful and non-discriminatory health system A strong, skilled and growing Aboriginal health workforce Equitable and timely access to the best quality and safe care. 3 Within Western Australia, the term Aboriginal is used in preference to Aboriginal and Torres Strait Islander, in recognition that Aboriginal people are the original inhabitants of Western Australia. No disrespect is intended to our Torres Strait Islander colleagues and community. 12

13 4 State Governance Arrangements It is recognised that the WA Health system is undergoing unprecedented change, with a considerable program of work underway in metropolitan and regional infrastructure development, clinical service reconfiguration, ICT development, as well as a reform of procurement, governance and hospital revenue generation. The WA Health Transition and Reconfiguration Steering Committee (Steering Committee) has been established to provide advice to the Government on key aspects of the transformation to ensure the achievement of key budget, infrastructure, clinical and workforce milestones. The Committee comprises the Directors General of WA Health and the Department of the Premier and Cabinet, the Under Treasurer, the Mental Health Commissioner and a former Secretary of the Victorian Department of Health in an expert advisor capacity. The Committee will guide and inform the considerable reform and change management agenda across WA Health, whilst promoting health budget stability and sound fiscal management. The structure of WA Health encompasses five key governance processes with a strong focus on quality and service standards. Figure 4 depicts the structure and processes for safeguarding quality standards within WA Health. Figure 4: Governance Structure and Key Processes within WA Health 13

14 4.1 Roles and Responsibilities To improve accountability within WA Health and to support the development of a system of operational autonomy over the short to medium term, the PMF provides clearer delineation of roles and responsibilities for applicable organisations within WA Health for Role of the System Manager The Department, as System Manager, is responsible for the overarching management of the WA Health system, including: 1. Ensuring the delivery of agreed high quality services and performance standards across the WA Health system, within the approved budgets set by the Western Australian Government 2. Allocating the financial resources provided by Government to Health Service Providers and Support Service Providers in a manner which is both fair and transparent 3. Progressing a structure which empowers and incentivises Health Service Providers and Support Service Providers to deliver high quality services which increase system capacity 4. Issuing policy guidance, regulations and other requirements which support the role of Health Service Providers and Support Service Providers in the delivery of approved services to approved State standards 5. Collecting and analysing data provided by Health Service Providers and Support Service Providers, to support the objectives of comparability and transparency, and to ensure that information is shared in a manner which promotes better State health outcome 6. Monitoring the performance of Health Service Providers and Support Service Providers against the agreed performance monitoring measures specified in the PMF Reporting to the community on the high-level performance of Health Services Providers and Support Service Providers throughout, and at the end of, each financial year 8. Developing system-wide policy and planning for major infrastructure to support the delivery of hospital services across the State 9. Addressing salary and industrial relations matters, such as negotiating enterprise bargaining agreements and establishing remuneration and employment conditions 10. Managing health legislation and processes to enact legislative change 11. Managing and coordinating matters of corporate governance, contract management, disaster management and the development of unified ICT systems throughout WA Health 12. Engaging with relevant stakeholders to ensure their views are considered when advising Government on health matters or making decisions in the areas listed above. 14

15 Role of the Health Service Provider The Health Service Provider is responsible for health service delivery within their geographical boundary (including services provided via Statewide Service Providers such as the State Adult Burns Service, State Hyperbaric Service, State Rehabilitation Service and State Trauma Service), including: 1. Delivering agreed high quality health services and performance standards within an agreed budget, based on annual strategic and operational plans 2. Implementing clinical quality standards in accordance with Department policy 3. Implementing the National Safety and Quality Health Service Standards and ensuring that all hospitals are accredited under the Australian Health Service Safety and Quality Accreditation Scheme 4. Providing hospitals with annual activity, expenditure and FTE limits, and requiring that they develop robust monthly profiles to manage within annual resource allocations 5. Improving local patient outcomes and responding to local issues 6. Ensuring accountable and efficient provision of health services, consistent with relevant State financial management and audit legislation and regulations 7. Monitoring the performance of hospitals against the agreed performance monitoring measures in the PMF Managing the hospital and service delivery performance as identified in Section 6.2 of the PMF Providing timely information to the Department to support compliance with obligations under national agreements, to meet the requirements of whole of government processes and to support effective management of the health system 10. Managing the implementation and local planning for minor capital items 11. Engaging with stakeholders to enable their views to be considered when making decisions on local service delivery 12. Complying with statutory and contractual requirements applicable to Health Service Providers 13. Adhering to budget and other financial requirements of the Department as set out in Service Agreements between the Department of Health and each Health Service 14. Assisting the Department by contributing expertise, local knowledge and other relevant information to service and infrastructure planning arrangements. WA Health is undergoing reform and the roles, responsibilities, accountabilities and authorities across the WA health system will be reviewed in line with best practice and the needs of the Western Australian community. 15

16 5 Performance Reporting, Monitoring and Evaluating 5.1 Performance Reporting The PMF is monitored through the monthly Health Service Performance Report (HSPR) The HSPR is aligned to the strategic priorities and enablers detailed in the WA Health Strategic Intent The four strategic priorities comprise: Prevention and Community Care Services Health Services Chronic Disease Services Aboriginal Health Services. To ensure that strategic priorities are achievable, the WA Health Strategic Intent has identified seven enablers. These enablers include: Workforce Accountability Financial Management Partnerships Infrastructure Information and Communication Technology (ICT) Research and Innovation. The HSPR provides targeted and timely information and analysis to assist in managing performance. For further information on the HSPR indicators, targets and thresholds refer to Schedule A. The PMF is a strategic policy that monitors the performance of Health Services. While the reporting obligations for all performance indicators within the PMF apply broadly to all Service Providers, the indicators are defined by the scope, to suit the specific circumstances and clinical service obligations of the four Health Services: Child and Adolescent Health Service North Metropolitan Health Service South Metropolitan Health Service WA Country Health Service. 16

17 The diagram in Figure 5 illustrates the relationship between the integrated components of the PMF and the pivotal role of performance reporting though the Performance Reports. Figure 5: Performance Management Framework Components Performance Management Framework Performance Reports Performance Indicators Performance Target & Thresholds Performance Indicator Targets The performance indicator targets and thresholds in the PMF play a pivotal role in performance reporting. In consultation with key stakeholders, the suite of performance indicators, targets and thresholds have been endorsed by the Director General. Targets have been established by adopting the most appropriate alignments to WA Health s strategic objectives by considering the following: 1. Existing National policy based targets 2. Existing State policy based targets 3. Previous performance baselines, the results of the stress testing methodology, or expert advice from data custodians/providers. Performance Thresholds The performance evaluation involves an assessment for each of the performance indicators at four levels of performance thresholds: Highly Performing Performing Under-Performing Not Performing. 17

18 Performance thresholds, measured against the relevant target, have been set for each performance indicator following rigorous stress testing and consultation with data stakeholders. These thresholds establish the levels of performance which forms the criterion for whether any action needs to be taken in relation to identifying and resolving poor performance, or acknowledging excellent performance. 5.2 Performance Monitoring and Evaluating The performance of Service Providers is monitored regularly against the performance indicators, targets and thresholds specified in the HSPR Performance review meetings are held monthly between the Department of Health, as the System Manager, and each Health Service, as the Service Provider. The performance review meeting is held as part of the monthly Board meetings. Sustained high performance may lead to less frequent performance review meetings. More frequent meetings are held where there are emerging performance deterioration or significant, continuous under performance. The meetings aim to assist Service Providers to proactively manage issues, with appropriate support to achieve performance targets and avoid the need for further action. The discussion is interactive and enables Service Providers to raise relevant issues. The meetings cover previously agreed actions, flag potential or emerging performance issues, and identify risks affecting future performance. Actions and requirements of the Service Providers and the Department of Health are clearly recorded. All WA Health staff can access the HSPR via the Performance Directorates intranet website at 18

19 6 Performance Management 6.1 Elements of Performance Management Performance management will involve: On-going review of the performance of Service Providers Identifying a performance concern and determining the appropriate response to this concern Determining when a performance recovery plan is required and the level of intervention required Determining when the performance intervention needs to be escalated or can be deescalated Determining when a Service Provider is no longer on performance watch. Figure 6 shows schematically how performance management operates within the PMF. Figure 6: Operation of Performance Management Escalate level of intervention Yes Assessment of performance Performance concern identified? Yes Assess severity of performance concern Intervention required? Yes Implement level of intervention Performance concern persisting? No No No Performance exceeded expectations? Yes Performance recognition No Maintain monthly evaluation & review De-escalate level of intervention 19

20 6.2 Intervention Levels Responsive regulation v is the intervention model that has been adopted by the PMF. The model is a collaborative approach that enables accountability through agreed mechanisms that are responsive when performance issues have been identified. Responsive regulation is a supportive approach to assist Health Services to maintain and improve performance. Standard Monitoring and Assistance Required are the two proposed intervention levels in the financial year. The level of intervention dictates the action required by the Service Providers and/or the Department. The Director General has the discretion to escalate or deescalate concerns to higher or lower levels based on an assessment of progress with the recovery plan. Each Service Provider will: 1. Ensure timely responses to the Department requests for performance information 2. Meet all reporting requirements specified in the PMF 3. Demonstrate that they have comparable frameworks/processes, which map as close as possible to measures included in their SA, down to facility and clinical network/cluster or division levels for monitoring performance and identifying and managing emerging performance issues 4. Identify delegates responsible for service delivery against performance indicators 5. Have in place processes and procedures to identify risk including a process to report this risk to the Department 6. Report promptly to the Department any emerging or potential performance issue and/or performance risk including immediate actions taken and/or an early assessment of action that may be required to prevent the issue from deteriorating 7. Work in partnership with the Public Health Division to achieve performance against the population health based performance indicators 8. Establish and maintain a culture of performance improvement by: Promoting the PMF at all levels within the Health Service Identifying shortfalls in relation to performance and devising and implementing appropriate support and development arrangements to facilitate long-term and sustainable delivery Providing relevant managerial staff (administrative and clinical) with training, mentoring and learning and development opportunities in performance management and improvement. This includes providing relevant managerial staff with the tools to enable them to have an effective performance improvement role Ensuring that key staff understand their performance responsibilities and the consequences of not effectively executing these responsibilities 9. Work collaboratively with the Department to achieve improved performance 20

21 10. Manage contractual obligations relating to performance and report these to the Department as required. Actions Arising from Performance Assessments The Department of Health will determine the subsequent actions required to monitor performance or correct any performance concerns standard monitoring or assistance required. The level of intervention is based on: The seriousness of performance concerns The likelihood of rapid deterioration The level of support required to sustain health service operations or manage risks Progress towards existing recovery plans Persistent and emerging financial risk Other demonstrated performance deficits. The level of intervention dictates the action required by Health Services and/or the Department. In responding to sustained poor performance the objective is to build capacity and sustainability where appropriate. Standard Monitoring Performance review meetings are held monthly with each Health Service as part of the Board meetings. Sustained high performance may lead to less frequent performance review meetings. Core attendees include Department and Health Service Executives. The basis of discussion will be the information and analysis provided in the HSPR Health Services are expected to undertake their own analysis in preparation for the performance review meetings. The meetings aim to assist Health Services to proactively manage issues, with appropriate support to achieve performance targets and avoid the need for further action. The discussion will be interactive and enable Health Services to raise issues. The meeting will cover previously agreed actions, flag potential or emerging performance issues, and identify risks affecting future performance. Actions and requirements of Health Services and the Department will be clearly recorded. Assistance Required The point of escalation for Assistance Required is emerging performance deterioration or significant, continuous under performance. A range of responses may be applied: More frequent meetings between the Department and the Health Service Development of recovery plans by the Health Service to address performance concerns, including analysis of the drivers of poor performance, mitigation strategies and implementation plans. Recovery plans must be approved by the Director General Appointment of external resources, parties and expertise to assist the Health Service to address performance concerns 21

22 Implementing a peer collaboration model whereby Health Services assist each other in regards to addressing performance concerns A requirement to undergo a department-sanctioned audit Independent reviews, the scope of which is determined as appropriate to address the performance concerns, but which may include a review of the Health Service s management capability. 6.3 Incentives and Premium Payment Program The ABF/M Review of Incentives and Pay for Performance in the Health Industry is a discussion paper that examined the evidence for use of incentive schemes in the health industry across the public and private sectors, both in Australia and overseas. The move to an ABF/M system involves incentives and penalties based on the level of performance relative to specified targets and thresholds of performances. Key financial incentives are embedded in the ABF pricing structure. Under the funding arrangements for inpatient separations, ED attendances and outpatient occasions of service, Service Providers are paid at a rate based on a standard rate for the appropriate classification. ED attendances are classified according to Urgency Related Groups (URGs) and outpatient occasions of service are classified according to Tier 2 Non-Admitted Care Services. Inpatient separations are classified according to a given Diagnostic Related Group (DRG) 4 for cases within 'length of stay' boundaries 5. Under this approach the incentive is for Service Providers to reduce the average length of stay for inpatients, thereby reducing the cost of delivering care. Where a Service Provider identifies projected efficiency savings, the revenue may continue to be expended during that financial year. Service Providers are encouraged to invest in strategies that further improve productivity. Performance-based Premium Payments Program In addition to the other quality improvement work already happening across the system, the Performance-based Premium Payment Program (the Program) is designed to encourage, and improve sustainability of, clinical practice improvements within an ABF/M environment. The Program was piloted in and it is anticipated that it will continue in with no changes to the payments: Fragility Hip Fracture Treatment Stroke Model of Care Acute Myocardial Infarction. The Program is open to ABF funded hospitals. Participation is not mandatory; sites and services will be eligible for payment only if the required data is submitted. The Program has been designed to: Recognise and reward services which provide a very high level of best evidence-based care 4 Note: Diagnostic Related Group coded under the AN-DRG Version Note: this approach ensures that exceptional episodes will be identified and appropriately funded. 22

23 Reimburse Service Providers for any additional costs and tasks associated with participation in the scheme, including data collection and submission. Clinical areas have been, and will continue to be, selected for inclusion in the Program using the following criteria: A strong evidence base and clinical consensus on the characteristics of best practice High impact, i.e. variation in practice, gap between best evidence and current practice, high volumes or significant impact on outcomes Availability and quality of data. Each year, the performance-based premium payments and incentive models are reviewed and assessed for their effectiveness in creating and maintaining clinical practice improvements in high priority care areas. These reviews can result in adjustments to existing payments, and the introduction of new payments for priority clinical areas. Details of the Performance-based Premium Payments Program will be provided in the Information Pack, which will be available from the safety and quality intranet page in the near future - Safety and Quality Investment for Reform (SQuIRe) In Health Services will continue to receive funding for the safety and quality improvement activities as part of the ABF price. It is expected that Health Services will use this funding to: Develop and maintain clinical governance systems and processes Incorporate safety and quality activities into permanent roles Maintain accreditation against the Australian Health Service Safety and Quality Accreditation Scheme Implement State and National safety and quality policies and programs, including those initiatives developed by the Australian Commission on Safety and Quality in Health Care and endorsed by the Council of Australian Governments (COAG) Health Council Continue existing clinical governance activity and reporting arrangements in line with the WA Health Operational Plan and the WA Strategic Plan for Safety and Quality in Health Care vi. 7 Lessons Learned Health systems world-wide have embraced quality, efficiency and equity goals to manage performance. ii The prominent recurring theme internationally is for greater provider accountability, better processes of care, improved clinical outcomes and greater operational efficiency. The Mid Staffordshire Inquiry in the UK highlights the consequences when a balanced approach is not adopted. 23

24 7.1 Mid Staffordshire NHS Foundation Trust Public Inquiry The final report of the Mid Staffordshire NHS Foundation Trust Public Inquiry vii highlights the appalling and unnecessary suffering when cost control is put ahead of patients and their safety. To address the lessons learned, the report put forward key recommendations to establish: A structure of clearly understood fundamental standards and measures of compliance Openness, transparency and candour throughout the system Support for compassionate caring and committed nurses Strong patient centred healthcare leadership Accurate, balanced, useful and relevant information. The report emphasises the need for a balanced, open and transparent approach to performance management in a health system setting to avoid significant community harm and deaths. 8 Next Steps 8.1 Health System Governance System sustainability is a challenge that is being faced by health systems world-wide. ii The WA Health Transition and Reconfiguration Steering Committee has identified that reform of the governance of the WA health system is a critical enabler to ensuring the continued ability of the WA health system to deliver safe, high quality care for all Western Australians. Governance comprises several key components such as performance management, risk management, contract management and regulation. The governance model establishes the roles and accountabilities of the purchaser (System Manager) and providers of health care services in line with relevant legislation. The adopted governance model for WA Health drives the relevant governance components of the PMF. WA Health has embarked on an integrated reform program which is being led by senior leaders in both the Department and Health Services. The program aims to provide better care and better value for all Western Australians. The program will ensure that every person working in the health system is able to perform at their best by harnessing new levels of ownership, productivity and innovation. Health reform initiatives that relate to the performance management components of governance will be implemented throughout and incorporated into the PMF once they have been finalised. 24

25 9 Glossary of terms Access describes how easily the community can obtain a service. Access has two main dimensions, undue delay (timeliness) and undue cost (affordability). Activity Based Funding (ABF) refers to a funding model where budget is linked to activity based on an efficient price. Activity Based Management (ABM) will be the approach used by WA Health to plan, budget, allocate and manage activity and financial resources to ensure delivery of safe, high-quality health services to the WA community. This includes both setting targets and performance management. Appropriateness describes how well services meet client needs. Appropriateness indicators also seek to identify the extent of any under servicing or over servicing including for example separation rates for selected procedures. Benchmarking involves the collection of performance information to undertake comparisons of performance with similar organisations. Clinical Services Framework refers to the CSF which outlines the network of services that the public health system plans to provide to the community of WA over the next 10 years. Council of Australian Governments (COAG) is the peak intergovernmental forum in Australia, comprising the Prime Minister, State Premiers, Territory Chief Ministers and the President of the Australian Local Government Association (ALGA). Dashboard (Performance Dashboard) and Scorecard are terms often used synonymously. While the literature notes some subtle distinctions, in reality many organisations are referring to something similar when using both terms. A performance dashboard is a visual display, usually a single-screen, of critical information about an organisation s performance against selected performance indicators. At the heart of any effective dashboard is the selection of relevant Scorecard performance indicators. It should also be noted that a performance dashboard may also be referring to the Information Technology system that an organisation uses to provide performance information against performance indicators. This business technology often includes alerts, snapshots, and drill-down capability as well as the single-screen dashboard. Diagnosis Related Groups (DRGs) are a patient classification system that provides a clinically meaningful way of relating the types of patients treated in a hospital to the resources required by the hospital. Effectiveness is the term used to describe performance indicators measures of how well the outputs of a service achieve the stated objectives of that service, for example unplanned readmission rates. The reporting framework groups effectiveness indicators according to characteristics that are considered important to the service. The dimensions of effectiveness include access, appropriateness and/or quality. Efficiency is the term used to describe overall economic efficiency, which requires satisfaction of technical, allocative and dynamic efficiency: Technical efficiency requires that goods and services be produced at the lowest possible cost 25

26 Allocative efficiency requires the production of the set of goods and services that consumers value most, from a given set of resources Dynamic efficiency means that, over time, consumers are offered new and better products, and existing products at lower cost. Emergency Department (ED) means the dedicated area in a hospital that is organised and administered to provide a high standard of emergency care to those in the community who perceive the need for, or are in need of acute or urgent care, including hospital admission. Escalation usually refers to the process of escalating poor performance results to an individual or group for intervention. Increasingly organisations are developing transparent rules-based processes that outline how an area s performance results will be categorised; and when and how under performance will be escalated for intervention to support performance recovery. Escalation processes are part of an organisation s overall performance management framework. Equity identifies the gap in service delivery outputs and outcomes between special needs groups and the general population. They will measure how well a service is meeting the needs of particular groups in society with specific needs. Governance refers to the system by which entities are directed and controlled. This will encompass the processes, procedures and systems that have been put in place to ensure that organisations are managed appropriately. This can relate to clinical systems in Clinical Governance or corporate systems in Corporate Governance. An effective governance system ensures the integration of both system components. Health Corporate Network (HCN) provides Human Resources, Supply, Finance and Reporting and Business Systems services to WA Health. Health Information Network (HIN), which was established to drive the Information, Communications and Technology reform program, provides a focus on the importance of health information in our system and enables efficient and integrated technology services. Healthcare Infection Surveillance Western Australia is a program that provides a collection of key healthcare associated infection data and reports for all public hospitals and licensed private healthcare facilities that provide services for public patients in Western Australia. Health Service Performance Report is a report that refocuses performance expectations around a core set of performance indicators which underpin an effective purchaser provider relationship. Operational plans cascade from the organisation s strategic plan and outline how each Division and Health Services will contribute to the organisation s objectives. Organisational objectives are outlined in the Strategic Intent and are long term goals achieved over a number of years. The objectives should align with Government ambitions and targets and incorporate other commitments made through Intergovernmental Agreements and National Partnership Agreements. Outcome describes those indicators that provide information on the impact of a service on the status of an individual or a group, and on the success of the service area in achieving its objectives. Outputs describe the actual services delivered. 26

27 Performance Indicator provides an indication of progress towards achieving the organisation s objectives or outputs. Performance Management is the management and governance system that regulates and addresses poor performance. Performance Thresholds are the clearly defined limits at which a performance indicator measurement will trigger an action, response or intervention. Personal Performance Agreement (PA) identifies and documents the key accountabilities of WA Health Executives (SHEF members). It is the key accountability document between WA Health Executives and the Director General, and sets the agenda for the coming year. Quality describes the extent to which a service is suited to its purpose and conforms to specifications including for example service accreditation to a defined standard. Recovery Plan is a plan put in place to remediate poor performance. Scorecard see Dashboard. Service Agreement (SA) is the annual Agreement between the Director General of Health and the CEOs/Executive Directors of the Service Providers. The agreement will include a Statement of Priorities directing policy, service targets, budgets and performance measures as performance indicators. Service Provider is the term used to describe all agencies, Health Services and/or Department divisions. State Health Executive Forum (SHEF) is the principal advisory body to the Director General and assists the Director General to manage the WA Government Health System through discussion of, and provision of advice to the Director General on strategic service, policy and administrative issues. Statistical validity is a statistical term used to describe the extent of accuracy of a concept, conclusion or measurement. Targets for performance indicators are generally established and agreed as part of the Executive s annual PA. Targets are based on current government priorities and commitments, historical performance and trends, agency capability and consumer demand. Targets may be expressed as absolute numbers, ratios, and percentages; or as a range (such as 75% to 85%, rather than just a single figure of 80%). Targets should be challenging but achievable 27