Picture of Health Minister Michelle O’Byrne and Premier Lara Giddings: Rob Walls, http://robertwalls.wordpress.com/
A Legislative Council Sub-Committee investigating the cost reduction strategies of the Department of Health and Human Services has been unreasonably hindered by the Minister for Health, Treasurer, Department of Treasury and Finance and Department of Health and Human Services in obtaining information in a timely manner during the course of its inquiry, leaving the Sub-Committee with no option but to issue summonses as it tried to shine light on a matter of concern for most Tasmanians.
“We invited the Minister for Health to a hearing to discuss her decisions as the responsible Minister but she has to date refused to participate in the inquiry process. The Sub-Committee has found the Minister is either unwilling or unable to account for her actions as the responsible Minister. In addition, it was necessary to issue summonses for the provision of information that the Department of Health and Department of Treasury and Finance had refused to provide and there were significant delays in the provision of a range of other information,” Sub-Committee Chairperson Ruth Forrest said.
The Sub Committee was formed from the Leg Council’s Sessional Committee ‘A’ into Government Administration. The Member for Hobart Mr Valentine was elected and appointed to Committee ‘A’ after the inquiry had started and as a consequence did not sit on the Sub-Committee, and the Member for Launceston, Mrs Armitage, was unable to find time in her busy schedule which includes a second job as Division Assistant for the Northern Division of the AMA. Sharing the work of the Sub-Committee with Ms Forrest were Mr Harriss, Dr Goodwin and Mr Wilkinson.
The Sub-Committee’s interim report found:
• Patient outcomes have been adversely affected by the budget cuts including the significant impact on elective surgery.
• Budget cuts are not sustainable.
• There was an alarming lack of documentation and Government strategic direction associated with the development of the strategy.
• The Department was given insufficient time or strategic direction by the Government to develop a sustainable strategy.
• The Department could not provide documentation in support of the full range of savings options that were assessed and did not consult appropriately with stakeholders.
• A culture has developed over time within the Department whereby additional funding from the Government has been taken for granted which meant cost savings initiatives were not taken seriously.
• There was a failure of a clear communication strategy within the Department in the development of the strategy. The Chief Executive Officers of the three Area Health Services were effectively muzzled by the Minister and not allowed to appropriately consult with stakeholders during the development of the strategy.
• There was an absence of clear health planning as the task was primarily motivated by the requirement to find cash savings in a restricted timeframe
• The newly created Tasmanian Health Networks (THO) model may create ‘perverse incentives’ over time due to the fact that the three THOs will compete against each other for funded activity.
• Departmental and Ministerial Officers do not appear to have an appropriate level of knowledge or understanding of the functions and powers of the Parliament and their obligations in performing their duties to the Parliament as public servants.
Appendix E of the Interim Report contains the full correspondence with Ministers and Department Heads as the Committee tried to extract information from a reluctant Government.
The full findings and recommendations of the Report are reproduced below.
FINDINGS
The Sub-Committee is deeply concerned about the significant impact of the Government’s cost savings strategy on the public health system and on communities across Tasmania.
The Sub-Committee has noted that the Budget cuts are likely to have caused long term damage to the Department’s performance and reputation.
The Sub-Committee sought to discuss a range of serious concerns with the Minister for Health and is disturbed by her decision not to participate in the inquiry as the responsible Minister.
The Sub-Committee has concluded the Minister’s lack of cooperation with this parliamentary inquiry demonstrates a failure of responsible Government on the part of the Minister, on the basis that she is either unwilling or unable to account for her actions as the primary decision maker in relation to the Department’s budget cuts.
The Sub-Committee makes the following interim findings:
1. The work of the Sub-Committee has been hindered by the lack of full cooperation on the part of the Department of Health and Human Services, Department of Treasury and Finance, Treasurer and Minister for Health, which has caused unnecessary delay and difficulties in the inquiry process;
2. The Budget savings task for the Department was too severe and not achievable, particularly under year 1 of the strategy for 2011-12,
3. The timeframe given by the Government for the Department to develop its cost reduction strategy, did not allow for an appropriate and considered structural review within the Department to be completed, in order to deliver a package of sustainable cost savings.
4. The Department did not respond in a timely manner to the task of developing the savings strategy. A culture had developed over time within areas of the Department, whereby extra funding was taken for granted rather than the Department operating within its allocated annual Budget;
5. The Government failed to provide adequate strategic direction to the Department in relation to the prioritisation of its services and programs in light of the imposed budget cuts;
6. Patient outcomes have been adversely affected by the strategy;
7. Elective surgery volumes have dramatically decreased as a result of the strategy;
8. Ward closures have increased the incidence of bed blockages within the major hospitals;
9. Decisions associated with the strategy have been primarily based upon short term financial considerations;
10. The Government’s 2011-12 Budget did not take into account a sustainable level of funding for the Department of Health and Human Services;
11. While the strategy may have delivered some short term savings, the long term costs associated with the strategy are likely to be much higher;
12. The Government does not currently have a sustainable funding model in place for the provision of public health services in Tasmania;
13. The Minister for Health initially claimed there would be significant consultation with stakeholders in the development the strategy but this did not eventuate;
a. There was no consultation process agreed upon within the Department in the development of the strategy;
b. The Chief Executive Officers of the Area Health Services were significantly hindered in their ability to identify sustainable cost saving initiatives as a result of the restrictions placed upon their ability to consult with stakeholders;
c. The Sub-Committee was unable to ascertain who made the decision to restrict consultation and how that decision was communicated;
d. The Government failed to engage appropriately with the community and key health sector stakeholders in order to find solutions to the current funding crisis; and
e. The Government has failed to communicate the Department’s strategy effectively with stakeholders, which has caused confusion and uncertainty.
14. The Minister for Health was the decision maker in relation to the final cost saving initiatives that formed the basis of the strategy;
15. The Department was unable to produce documentation that supported any analysis or modelling of the full range of cost savings options having been completed. Consequently, the Sub-Committee is unable to conclude whether the full range of savings options were in fact appropriately considered by the Department in the development of the Strategy;
16. Given the size of the cost savings task, the lack of documentation supporting the task is incomprehensible;
17. The strategy details savings tasks for the ‘Operational Units’ and ‘Local Hospital Networks’;
18. It is not possible to scrutinise savings tasks for the ‘Central Agency’ due to the lack of detail in the strategy. It is therefore difficult to scrutinise savings in non-clinical areas of the Department;
19. The Business Control Team was a unique arrangement amongst the Departments in response to the 2011-12 Budget savings task and included representatives from the Department of Treasury and Finance and Department of Premier and Cabinet;
20. The Business Control Team was not involved in the identification of cost savings options;
21. There was little evidence of the oversight role of the Business Control Team ensuring the savings strategy was achievable;
22. The Department’s workforce has been adversely affected by the strategy, which has led to significant retention and morale issues. This risks the ability of the Department to maintain and attract a quality health workforce into the future;
23. Medical accreditation for areas of the health workforce has been put at risk through the reduction in surgery volumes;
24. The ability to attract and retain a quality health workforce is at risk in both the public and private health systems as many health practitioners work in both private and public practice in Tasmania;
25. The strategy has highlighted the ongoing challenges associated with the mix of Commonwealth and State public health funding in Tasmania. This continues to result in ad hoc funding interventions by the Commonwealth Government that are not based upon long term strategic health planning in consultation with the State Government;
26. There was no evidence of the Government having articulated a revised health policy in light of its budget position in which health and other programs were prioritised at a strategic level;
27. According to the advice of the Department of Treasury and Finance, the three Tasmanian Health Organisation (THO) model was not the most cost efficient model that was considered by the Government;
28. The THO model that has been established may create ‘perverse incentives’ over time due to the fact that the THOs will compete against each other for funded activity;
29. Departmental and Ministerial Officers do not appear to have an appropriate level of knowledge or understanding of the functions and powers of the Parliament and their obligations in performing their duties to the Parliament as public servants;
RECOMMENDATIONS
In consideration of the evidence received to date, the Sub-Committee makes the following preliminary recommendations.
1. The Government adopt a long term strategic approach in relation to the delivery of health services in Tasmania, including:
a. A review of the Tasmanian Health Plan to support the delivery of sustainable health services into the future and ensure that periodic reviews are undertaken to ensure a long term strategic direction is adopted;
b. An independent assessment of the Department’s ‘List of Cost Savings Strategies’ to ensure all possible options for savings measures have been identified and evaluated.
c. Access to elective surgery be prioritised to reduce additional costs to the Department’s budget in coming years;
d. An appropriate ongoing consultation process with all relevant stakeholders;
e. A taskforce to develop a sustainable health workforce strategy in light of the significant impact the budget cuts have had on the morale, retention and recruitment of the public health workforce and that membership include employee, education, health and other stakeholders;
f. In light of the complexity, size and increasing demand for public health services, a Business Control Team be established on a permanent basis to provide additional oversight and advice in relation to the Department’s ongoing budget;
2. The Government continue to assess the funding arrangements and work to reduce the cost shifting that currently occurs through the dual funding model, and work with the Commonwealth Government to achieve a single funder model;
3. The Department of Treasury and Finance undertake a cost benefit analysis of a one versus three THO model;
4. The Government review the record management procedures for the Department in response to the apparent lack of record keeping associated with the development of the ‘List of Cost Savings Strategies’;
5. The Secretary of the Department review his communication and reporting structures with the senior management group of the Department, including with the newly established THOs, to ensure actions and directions are clearly documented and communicated to the leadership team;
6. Government Ministers cooperate fully with the business of Parliamentary Committees and attend Committee hearings when requested to do so in order to assist the Legislative Council fulfil it roles and functions under the concept of responsible Government;
7. Department and Ministerial Officers undertake training in relation to the functions of the Parliament of Tasmania and their responsibilities as public servants in responding to requests for information.
Further information about the Inquiry including terms of reference, transcripts, published evidence and the Interim Report can be found at:
www.parliament.tas.gov.au/ctee/Council/GovAdminA_Health.htm
