Annual Performance Management Framework 2011-2012 v1

improving care | managing resources | delivering quality

ANNUAL PERFORMANCE MANAGEMENT FRAMEWORK 2011-2012

Activity Based Funding and Management Program

© Department of Health, State of Western Australia (2010). Copyright to this material produced by the Western Australian Department of Health belongs to the State of Western Australia, under the provisions of the Copyright Act 1968 (C‟wth Australia). Apart from any fair dealing for personal, academic, research or non-commercial use, no part may be reproduced without written permission of the Performance Activity and Quality Division, Western Australian Department of Health. The Department of Health is under no obligation to grant this permission. Please acknowledge the WA Department of Health when reproducing or quoting material from this source. 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.

Contents

PERFORMANCE MANAGEMENT FRAMEWORK AT A GLANCE ............................................................................................ I

ACKNOWLEDGMENTS ............................................................................................................................................................. III

ACRONYMS .............................................................................................................................................................................. IV

1 STRUCTURE OF THE PERFORMANCE MANAGEMENT FRAMEWORK ...................................................................... 1

1.1 SERVICE AGREEMENTS .......................................................................................................................................... 1

1.2 CHANGES AND DEVELOPMENT OF PMF FOR 2011-12 ........................................................................................ 2

1.3 KEY PERFORMANCE INDICATORS ......................................................................................................................... 4

1.4 PERFORMANCE TARGETS AND THRESHOLDS .................................................................................................... 5

1.5 PERFORMANCE REPORTING, MONITORING AND EVALUATION ........................................................................ 5

1.5.1 FREQUENCY ............................................................................................................................................................. 5

1.5.2 INTEGRATED REPORTING FRAMEWORK .............................................................................................................. 5

1.5.3 MONITORING AND EVALUATION ............................................................................................................................ 6

2 PERFORMANCE MANAGEMENT .................................................................................................................................... 7

2.1 ELEMENTS OF PERFORMANCE MANAGEMENT ................................................................................................... 7

2.2 INTERVENTION LEVELS ........................................................................................................................................... 8

3 SCOPE AND IMPLEMENTATION OF THE PERFORMANCE MANAGEMENT FRAMEWORK ...................................... 8

3.1 SCOPE ....................................................................................................................................................................... 8

3.2 IMPLEMENTATION .................................................................................................................................................... 9

3.3 INCENTIVES ............................................................................................................................................................ 10

4 WA HEALTH POLICY DRIVERS..................................................................................................................................... 11

5 GOVERNANCE ............................................................................................................................................................... 12

6 PERFORMANCE MANAGEMENT FRAMEWORK REVIEW CYCLE ............................................................................. 12

6.1 GAPS IN PERFORMANCE REPORTING ................................................................................................................ 13

SCHEDULE A. DEPARTMENT OF HEALTH 2011-12 STATEMENT OF PURCHASING PRIORITIES .................................. 14

SCHEDULE B. KPI SCOPE AND REPORTING FREQUENCY ................................................................................................ 16

SCHEDULE C. TARGETS AND THRESHOLDS ...................................................................................................................... 20

SCHEDULE D. GENERIC SERVICE AGREEMENTS .............................................................................................................. 25

SCHEDULE E. PERFORMANCE MANAGEMENT PROCESSES ........................................................................................... 28

SCHEDULE F. GLOSSARY OF TERMS .................................................................................................................................. 32

DOCUMENT CONTROL ........................................................................................................................................................... 36

I

Performance Management Framework at a Glance

The Western Australian Department of Health (WA Health) has moved to a more accountable way of funding health service delivery. The new system is aligned to the Council of Australian Governments (COAG) Activity Based Funding (ABF) initiative under the National Partnership Agreement1 and will be tailored to meet the needs of the health system in Western Australia (WA). ABF is a management tool that will enhance accountability to the WA public and improve the efficiency and effectiveness of WA health services. The application of ABF in WA is complemented by Activity Based Management (ABM). In practice this requires a Performance Management Framework (PMF) designed to drive better patient outcomes and more efficient service delivery. The Annual WA Health PMF is set out in this document and forms the basis of the performance agreements for Chief Executives with a direct accountability for delivery of frontline health services. The implementation of the Annual PMF 2010-2011 included inpatients, ambulatory surgery initiative patients, and emergency department attendances, both for metropolitan hospitals and the 21 WA Country Health Service Regional Resource Centres and Integrated District Health Centres. In addition, the PMF also covered other services provided by Area Health Services (AHS). For 2010-11, the first year of operation, the PMF did not apply to Dental Health and Public Health and other shared services such as Health Corporate Network (HCN) and Health Information Network (HIN), and other non-AHS budget holders. Dental Health and Public Health are to be rolled into the PMF in 2011-2012, while HCN and HIN will be rolled into the PMF in 2012-2013. The Annual PMF 2011-2012 includes: • AHS and Agency reporting obligations for 2011-12; • Key Performance Indicators (KPI), targets and thresholds; • Performance monitoring and evaluation; • Management interventions; and • Governance. It establishes the KPI to be used, the reporting obligations, the processes for monitoring and review of health service performance, and the thresholds for rewards and potential remediation of poor performance during 2011-12. The Annual PMF 2011-2012 is aligned with the Strategic Intent2 for the WA Health system and is consistent with the policies and priorities of the system that have been agreed by the State Government through its involvement with COAG. The Health Activity Purchasing Intentions 2011-20123 provides details on the priorities and policy drivers for WA Health. The PMF also complements activity based funding,

1 National Partnership Agreement on Hospital and Health Workforce Reform Schedule A Activity Based Funding (2008) 2 WA Health Strategic Intent 2010-2015 3 Health Activity Purchasing Intentions 2011-2012

II

safety and quality priorities, and is an integral part of delivering on the Government's economic audit recommendation to improve the value for money the community gets from our health services. A summary of the Department of Health‟s Statement of Priorities can be found at Schedule A.

III

Acknowledgments

This document was developed by the Activity Based Funding and Management Team within the newly established Performance Activity and Quality Division of WA Health.

This document has also been developed with reference to other jurisdictions that have introduced a Performance Management Framework approach to their health system including Victoria, New South Wales, Queensland and South Australia. We thank them for their willingness to share ideas and lessons.

Finally, the purpose of performance management and activity based health improvement reform is to improve health services and hospitals for WA patients, communities and populations. We acknowledge and thank them as our partners in improvement.

Performance Activity and Quality Division

May 2011

http://activity/

http://activity/

IV

Acronyms

ABF Activity Based Funding

ABM Activity Based Management

ABF/ABM Activity Based Funding and Management

AHS Area Health Service

C.Diff Clostridium difficile

CAHS Child and Adolescent Health Service

CE Chief Executive

COAG Council of Australian Governments

CSF Clinical Services Framework

DG Director General

DHS Dental Health Service

DOH Department of Health

DRG Diagnosis Related Group

DTF Department of Treasury and Finance

ED Emergency Department

HAPI Health Activity Purchasing Intentions

HCN Health Corporate Network

HIN Health Information Network

HSMR Hospital Standardised Mortality Ratio

IRF Integrated Reporting Framework

KPI Key Performance Indicators

MRSA Methicillin-resistant Staphylococcus aureus

NHCDC National Hospital Cost Data Collection

NHPA National Health Performance Authority

NMAHS North Metropolitan Area Health Service

PA Personal Performance Agreement/s

PAS Patient Administration System

PAQ Performance Activity and Quality

PHD Public Health Division

PMF Performance Management Framework

ROGS Report on Government Services

SHEF State Health Executive Forum

SA Service Agreement/s

SMAHS South Metropolitan Area Health Service

WA Western Australia

WACHS Western Australian Country Health Service

YTD Year to Date

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1 Structure of the Performance Management Framework

The basis of the Performance Management Framework (PMF) is typically a Service Agreement (SA) between the purchaser and the provider of services, herein the 'Service Providers'. The PMF involves a system of reporting performance against specified Key Performance Indicators (KPI), customised to the particulars for each facility. For example, if a facility does not have an emergency department (ED), there will not be a requirement to report that KPI. All other indicators would still need to be reported against agreed targets and thresholds.

Reporting of Service Providers against the PMF KPI will be produced 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. Although the intervention will follow a transparent and set process, it will be tailored to the specific circumstances of the non-performing area to ensure an agreed and workable solution can be implemented.

Figure 1 below shows the structure of the PMF schematically.

Figure 1 Structure of Performance Management Framework

1.1 Service Agreements

Service Providers will operate in an environment of delivering the services set out in the SA. The SA will be informed by the WA Health Clinical Services Framework 2010-2020 (CSF 2010),4 specifying the scope of services and target levels of activity for each facility. The SA will ensure that the Governments‟ policy objectives on service delivery are clearly set out and provide the basis for both payment and evaluation of performance.

As outlined in Health Activity Purchasing Intentions (HAPI) 2011-2012, SA will initially be partitioned into five components to reflect the phased 'roll-in' of the Activity

4 WA Health Clinical Services Framework 2010- 2020 www.health.wa.gov.au/publications/documents

Service Providers (Undertake routine activity within the parameters of

the SA)

Performance Reporting

(KPI reported to DOH)

Service Agreements (Between DOH & AHS/Hospitals)

Performance Monitoring

& Evaluation (Performance evaluated

against targets and thresholds)

Performance Management

(Incentives, remediation, penalties)

Personal Performance Agreements

(CEs)

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Based Funding (ABF) and the role of the Mental Health Commission as a purchaser of services.

1. The first component will be based on inpatient services (including mental health) and Ambulatory Surgery Initiative.

2. The second component will be based on ED services.

3. The third component of the SA will encompass outpatient services funded under ABF and block funding.

4. The fourth component will cover non-admitted Mental Health services. These will be clearly identified in reporting and funds will be explicitly quarantined.

5. The fifth component will relate to special purpose funding. For example funding of the Closing the Gap on Indigenous Health Outcomes etc.

SA will outline the services to be provided by the relevant parties, including access standards5 for a given level of ED presentations, ED target activity and target activity levels for acute and sub-acute inpatient services. The agreements will also inform the linkages between SA, the PMF and the personal Performance Agreements (PA) for Chief Executives (CE).

The SA will also specify other services provided by Service Providers. Although specifying volumes may not be feasible in some contexts, the nature of the service to be provided, standard of the service and objective outputs or 'deliverables' will be included in the SA.

A generic SA is provided at Schedule D. The final form of SA will be specific to the Service Provider to which they apply.

1.2 Changes and Development of PMF for 2011-12

Effective performance management requires clear and consistent messages which clarify requirements and expectations for stakeholders and the individuals working within them. In particular, it is important that Service Providers have absolute clarity on assessment of performance and that any requirements placed upon them are not complicated by inconsistent or contradictory communication.

In order to achieve this, the Performance Activity and Quality (PAQ) Division has worked with various stakeholders within WA Health to ensure clarity, efficiency and effectiveness of performance management through a coordinated and integrated perspective on performance issues reflecting the breadth of priorities.

In September 2010, PAQ released the Consultation Draft 2011-2012 PMF and accompanying Consultation Paper for a period of five weeks for key stakeholders comment. The consultation period was extended to 30 November and then, further extended to a few selected areas.

5 Note :For example, the 4 Hour Rule program establishes access standards. These will be contained within SAs.

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The consultation process requested responses to a standard set of questions on the Draft 2011-2012 PMF and the Performance Management Triennial Strategic Directions Consultation Framework. The responses received were collated, responded to and the final design and approach to performance management for 2011-2012 was determined through this process of collaboration and consultation.

Specifically the consultation focussed on:

Reporting obligations for 2011-12;

KPI, targets and thresholds;

Performance monitoring and evaluation;

Management interventions; and

Governance.

The PAQ Division also met with a number of stakeholders to facilitate the process and to ensure stakeholders were well informed of the changes and/or additions from the inaugural 2010-2011 PMF to 2011-2012 PMF.

Health Corporate Network (HCN) and Health Information Network (HIN) stakeholders engagement identified the need to defer inclusion in 2011-12, while Public Health Division (PHD) and Dental Health Services (DHS) have been included.

A total of 60 KPI were consulted on. 31 of these KPI were shortlisted for the 2011-2012 PMF, which is an increase of 22 KPI compared to the 2010-2011 PMF. The consultation process identified a need for a change to the title of KPI 5 „Expenditure to date – distance to budget‟ in the 2010-2011 PMF. This has been amended to „Year to Date (YTD) Distance of Net Cost of Service to Budget‟ for the 2011-2012 PMF. In addition to the change in title of this KPI, a further two related KPI were included to complement this KPI – „YTD Distance of Own Sourced Revenue to Budget‟ and „YTD Distance of Expenditure to Budget‟.

The changes to the Finance KPI and the development of new indicators have been supported by a rigorous process of defining, stress-testing and elimination to ensure that the selected indicators and targets are robust in measuring those areas that are of high priority and that can assist strategic changes and/or decisions. As in 2010-11, where an indicator is a national measure it is included wherever possible.

Stress testing on the 2011-2012 Activity Based Funding and Management (ABF/ABM) KPI consisted of analysing historical data to determine the number and percentage of performance results (highly performing, performing, under performing, not performing) for each in-scope hospital, for each KPI. The 2011-12 methodology also specified which KPI were relevant for which hospitals, for example KPI 1 – „Proportion of emergency patients seen within recommended times‟ was not applicable for hospitals without an ED such as Bentley Hospital. The 2011-12 stress testing methodology also included data quality and target and threshold assessments.

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Targets have been established by adopting existing policy based targets, previous performance baselines or via expert advice from data custodians. Tests were undertaken on the historical data to evaluate the baseline performance against the proposed target.

1.3 Key Performance Indicators

The 31 KPI approved for the 2011-2012 PMF cover the following five domains of performance:

1. Effectiveness

2. Efficiency

3. Equity

4. Sustainability

5. Processes

The first three measures relate specifically to patient care and outcomes delivered and achieved by Service Providers. The „Sustainability‟ performance domain is to ensure the system‟s ongoing viability is not compromised by short-term expediency. The inclusion of the 'Processes' domain is to maintain the integrity of the ABF/ABM system, particularly in relation to the accurate and timely coding of patient cases, as these are pivotal to performance measurement, payments to Service Providers and financial probity.

The approved KPI have been determined in consultation with State Health Executive Forum (SHEF) members. They have been chosen to ensure that Service Providers place appropriate emphasis on the ongoing standards and viability of services and not just the cost of delivering services. 10 of these KPI were monitored and evaluated in 2010-11.

Each KPI can be identified by its unique number (eg KPI 1, KPI 2 etc) as well as an alpha-numeric code. The alpha-numeric system has been introduced in 2011-12 with the intention to replace the unique KPI numbering system from 2012-13 onwards. The alpha-numeric code is based on the Domains and Dimensions of the framework for which the KPI relates to. For example, the KPI – „Proportion of emergency department patients seen within recommended times‟ is allocated an alpha-numeric code of EA1 as this KPI is within the domain of Effectiveness (E), dimension of Access (A) and is the first indicator. The benefit of the alpha-numeric code system is that it will allow future changes to be made to KPI without a distortion of the domain/dimensions framework.

The list of 31 KPI and the Reporting Frequency for 2011-12 can be found at Schedule B.

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1.4 Performance Targets and Thresholds

For each KPI, performance targets have been set. The targets are based on one of the following approaches:

previous performance levels;

peer best performance;

system average; and

'aspirational target' linked to a policy objective.6

The approach used to determine the performance target depends on whether it is appropriate for a specific KPI and the service context. This means that while some targets are set as aspirational targets, others are set at peer best performance. This may change over time as performance management will be responsive to outcomes and changing policy directions.

Performance thresholds, measured against the relevant target, have also been developed for each KPI following rigorous stress testing and consultation with data stakeholders. These establish the criterion for whether any action needs to be taken in relation to identifying and resolving poor performance, or acknowledging excellent performance.

The agreed Targets and Thresholds for each KPI are provided at Schedule C.

1.5 Performance Reporting, Monitoring and Evaluation

1.5.1 Frequency

Reporting will occur on a monthly basis and will be automated to minimise the resources required to facilitate the reporting function by Service Providers and the Department of Health WA (DOH). Some KPI have initially been set for quarterly, bi-annual and annual reporting cycles in recognition of their complexity and the existing processes used in their construction.

The frequency for the reporting obligation for each KPI is outlined in Schedule B.

1.5.2 Integrated Reporting Framework

While the shortlist of KPI for the PMF may be desirable and appropriate for the purpose of a balanced dashboard/scorecard and performance management, it does not replace the current or future obligatory reporting requirements that DOH has to external stakeholders.

The wider suite of indicators for all stakeholders will remain in the Department's Integrated Reporting Framework (IRF) and will continue to be monitored by the Department to ensure a more detailed and comprehensive view of performance is

6 Note: In some instances these will be targets established by the Commonwealth Government's Department of Health and

Ageing.

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available as required. The current and future reporting obligations include, but are not limited to:

ABF/ABM Performance Management Reporting;

DG Monthly Performance Report7;

WA Health Dashboard Report8;

Western Australian State Government Budget Papers9;

The Annual Reports of DOH, Metropolitan Health Services and Western Australian Country Health Service (WACHS)10;

The DOH Operational Plan11;

Productivity Commission Report on Government Services (ROGS)12; and

Council of Australian Governments (COAG) Reform Council performance report on the National Health Care Agreement12.

Service Providers will still be required to meet their ongoing reporting requirements for existing reports. The Performance Report has been constructed in a way that leverages off existing measures as much as possible. Over time these reports will continue to be harmonised to reduce duplication and enhance the efficiency of reporting functions.

1.5.3 Monitoring and Evaluation

Each month the PAQ Division will provide the DG and Service Providers with a balance scorecard report of Service Provider performance against each of the KPI combined with appropriate detailed reporting to support the evaluation.

The evaluation will involve an assessment for each of the KPI at four levels of performance:

1. Highly Performing

2. Performing

3. Under-Performing

4. Not Performing

7 Note: Required by the State Health Executive Forum (SHEF).

8 Note: Required by SHEF, the Department of Treasury and Finance (DTF) and the Minister for Health.

9 Note: Required by DTF.

10 Note: Required by the Office of the Auditor General and SHEF.

11 Note: Required by SHEF.

12 Note: Required by the Council of Australian Governments.

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The performance assessment will provide the basis for whether any performance management or other remedial action is required to be undertaken. Details of how performance management will operate in practice are provided in Section 2.

2 Performance Management

2.1 Elements of Performance Management

Performance management will involve:

On-going review of the performance of Service Providers;

Identifying a performance issue and determining the appropriate response to this issue;

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 de-escalated; and

Determining when a Service Provider is no longer on performance watch.

Figure 2 below shows schematically how performance management will operate.

Figure 2 Operation of Performance Management

Escalate Level of

Intervention

Yes

Poor Performance

Persisting

No

De - Escalate Level of Intervention

Implement Recovery Plan

Determine Level of

Intervention

Assess Severity of Performance

Issue

Performance Recognition

Yes

Yes

Performance Issue identified ?

Exceeded Expectation

Maintain Monthly Meeting

Assessment of Performance

No

No

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2.2 Intervention Levels

There are three intervention levels. The level of performance response and intervention dictates the action required by the Service Providers and/or the Department. The DG has the discretion to escalate or de-escalate issues to higher or lower levels based on an assessment of progress with the recovery plan.

Details of Performance Management Processes are provided at Schedule E.

3 Scope and Implementation of the Performance Management Framework

3.1 Scope

The measures provided in the Annual PMF 2010-2011 were focussed entirely on the acute sector, with emphasis on inpatients and ED. The services that fell within the scope of the Annual PMF 2010-2011 were the North Metropolitan Area Health Service (NMAHS), the South Metropolitan Area Health Service (SMAHS), the WACHS and the Child and Adolescent Health Service (CAHS). The comprehensive Annual PMF for 2011-2012 will also cover shared services such as PHD and DHS.

Public health, like many other areas of health, is not a discipline that has easily defined boundaries, but includes a focus on populations and prevention. It includes classical communicable disease control, environmental health, disaster preparedness and management, epidemiology and data linkage, chronic disease and injury prevention, screening and genomics. In addition, there are many overlaps with the work of other government departments in areas such as chronic disease prevention and disaster preparedness and management.

Conversely, Dental health is a field that has an easily defined boundary, facilitating general dental care for financially or geographically disadvantaged persons in the community and other specific groups of people, such as school aged children. However, it also includes a key focus on populations and prevention, while also on the individual. The Dental Health Service does lend itself to an ABF approach and targets and thresholds have been developed for 2011-12.

A more comprehensive suite of indicators tailored to outpatient and community based services along with other areas of health intervention, health policy objectives and state-wide health system efficiency, will need to be determined for 2012-13 and beyond. To achieve this requires a detailed statement on the full range of health policy and service delivery contexts. For example:

o HCN; and

o HIN

The Australian Health Ministers endorsed the recommendation by the Australian Commission on Safety and Quality in Health Care for a set of core safety and quality indicators, comprising:

whole of system indicators of health care quality; and

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hospital-level outcome indicators for supportive feedback and routine review at jurisdiction and facility level.

Of the six hospital-level outcome indicators, the following have been included in the Annual PMF 2011-12:

1. Hospital standardised mortality ratio (HSMR); and

2. Healthcare associated Staphylococcus aureus bacteraemia infections, including Methicillin-resistant Staphylococcus aureus (MRSA).

The following remaining four indicators are planned for adoption in 2012-13:

3. In-hospital mortality rates for: acute myocardial infarction; heart failure; stroke; fractured neck of femur; and pneumonia;

4. Death in low-mortality Diagnosis Related Groups (DRG);

5. Unplanned hospital re-admissions of patients discharged following management of: acute myocardial infarction; heart failure; knee and hip replacements; depression; schizophrenia; and paediatric tonsillectomy and adenoidectomy; and

6. Clostridium difficile (C.Diff) infections.

While the processes and reporting obligations for all KPI within the PMF 2011-12 will apply uniformly to all Service Providers, the specific indicators, benchmarks, and thresholds are tailored to suit the specific circumstances and clinical service obligations of each Service Provider. For example, some KPI for WACHS will not have an equivalent application for CAHS and vice versa.

The PMF 2011-2012 incorporates nine KPI which relate to population based health outcome measures. Seven of these KPI will be reported under the AHS based on the geographical location of the population being measured, whilst the remaining two KPI will be reported at a Statewide level. As these are population based health outcome measures, accountability for meeting the required targets will be a joint responsibility between the Service Provider and the PHD. It should also be noted that other service providers will have a role in achieving health outcomes for populations. Into the future, this work will potentially become a focus for collaboration under the National Health Reforms where Medicare Locals and Local Hospital Networks may work together.

3.2 Implementation

The phased implementation of the PMF has been structured to complement the phased implementation of activity based funding. This allows both Service Providers and the Department to adjust to the new system and ensures that it is not too onerous in terms of reporting requirements or complexity.

The implementation of the tailored interventions will occur over the two year timeframe between July 2011 and June 2013. This will position the WA Health system for the implementation of the Commonwealth's ABF reforms, scheduled to

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commence in July 2012. Further details of the implementation schedule are provided below.

The proposed implementation of the PMF 2011-2012 and 2012-2013 will occur over the following timeframes:

2011-12

14 KPI reported by facility;

14 KPI reported by AHS (of which 7 are population health based);

3 KPI reported statewide (of which 2 are population health based);

Monitoring at the Agency, facility and AHS level;

Performance evaluation only at the AHS level;

Level 1-3 interventions will apply; and

Rewards and penalties may apply.

2012-13

KPI reported by facility, AHS and statewide (where applicable);

Monitoring at the Agency, facility and AHS level;

Performance evaluation at the Agency, facility and AHS level;

Level 1-3 interventions will apply; and

Rewards and penalties system will apply.

3.3 Incentives

The move to an ABF/ABM system will involve incentives and penalties based on the level of performance relative to specified targets and thresholds of performances. The PMF is based on a balanced scorecard approach addressing financial, workforce, activity, access, quality and safety domains. Other jurisdictions with ABF/ABM in place build their KPI-Balanced Scorecard around a statement of policy objectives and also involve intervention for non-performance. The structure, intent and processes for incentives and penalties will be determined by the ABF/ABM Steering Committee in conjunction with SHEF.

In the interim the key financial incentive is embedded in the pricing structure. Under the new funding arrangements for inpatient separations and ED attendances, Service Providers are paid at a rate based on the average length of stay for a given DRG13 for cases that are within the 'length of stay' boundaries.14 Under this approach the incentive is for Service Providers to reduce the average length of stay,

13

Diagnostic Related Group coded under the AN-DRG Version 6. 14

Note that this approach ensures that exceptional episodes will be identified and appropriately funded.

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thereby receiving more revenue than the cost of delivering care. Where a Service Provider identifies projected efficiency savings, the revenue may be expended during that financial year. Service providers are encouraged to invest in strategies that further improve productivity.

Examples of activities that can be carried out include service improvement initiatives, staff training and development, equipment refresh and the provision of additional revenue generating services. For 2011-12 all potentially surplus funds can be expended in this way. Service Providers are required to itemise the activities that the funds were put towards and the expenditure against these activities. No surplus generated is able to be carried over to the next financial year.

4 WA Health Policy Drivers

The ABF/ABM program is part of the broader policy context for the WA Health system. This includes, for example, the COAG agreed initiatives such as 'Closing the Gap' on Indigenous health outcomes and the 'National Action Plan on Mental Health'.

At the meeting of COAG on 13 February 2011, all State/Territory Governments and the Commonwealth Government reached agreement on national health reform. A key component of the National Health Reform agreement includes the establishment of the National Health Performance Authority (NHPA). The NHPA will monitor and report on the performance of every health and hospital system including the provision of comparative analysis across jurisdictions. The NHPA will also be responsible for the development of performance indicators as required15.

At a State level, WA Health is responsible for the health and wellbeing of all people residing within WA. This responsibility cascades down through the core policy drivers that impact on health service delivery, effectiveness and efficiency.

WA Health‟s “Strategic Intent” provides four strategic priorities under which programs, initiatives and targets are outlined. Within each of these strategic priority areas are a suite of specific or targeted policy initiatives such as the '4 Hour Rule', and delivery of care closer to home.

In addition to these, there are also two Department of Health‟s outcomes specified in the Western Australian State Government Budget Papers published by the Department of Treasury and Finance (DTF), including:

Outcome 1: Restoration of patients‟ health, provision of maternity care to women and newborns, and support for patients and families during terminal illness‟; and

Outcome 2: Enhanced health and well-being of West Australians through health promotion, illness and injury prevention and appropriate continuing care‟.

15

http://www.federalfinancialrelations.gov.au/content/related_agreements/NHHN_Agreement.rtf

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Funding of the WA Health system will be guided by the higher level policy objectives outlined above and the suite of programs that are aligned to them.

The WA Health‟s reporting and PMF has been structured in a way that supports the measurement of progress against these outcomes and other specific government or health service policy initiatives. The annual review cycle for the PMF provides the flexibility to accommodate changes in direction and policy over time and reflect this in reporting and performance measures.

The links between the PMF and Government's desired health outcomes are shown in the document Performance Management Triennial Strategic Directions 2011-12 to 2013-14 Consultation Framework16.

5 Governance

As finances and funding are integrally linked to activity under Activity Based Funding, the importance of proper audit and probity arrangements in the recording, measurement and reporting of activity assumes an even greater importance than it has in the past.

Under the ABF/ABM framework, the role of reporting on activity and performance is crucial to the success of the program. The information systems and processes provide the data that facilitates payments for activity as well as incentive payments for meeting and exceeding policy targets and benchmarks.

Reporting standards have moved from semi-formal to a more rigorous governance model that is transparent and amenable to regular audit and review. Appropriate governance to ensure compliance with timeliness of coding, and consistency of coding between sites performed to a specified standard will be put in place by Service Providers.

The features of the reporting system include:

High levels of compliance with standard rules on data input (e.g. coding & costing), including timeliness and accuracy; and

High levels of transparency, open to audit and review.

These features are essential if stakeholders are to have any confidence in the ABF/ABM system and have become a critical element of the WA Health financial governance requirements.

6 Performance Management Framework Review Cycle

The KPI and other reporting requirements will be reviewed annually to ensure continuing alignment with Government and Departmental policy objectives and national reporting requirements. The annual review will provide the basis for revised

16

http://activity/category/Performance.aspx

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targets and related KPI, potentially the removal of redundant indicators and incorporate refinements while ensuring that KPI continue to reflect the national and local priorities in subsequent years.

Changes arising from the annual review process will be incorporated into the PMF and reflected in new SA and PA with CE and Executive Directors for the subsequent year/s.

6.1 Gaps in Performance Reporting

There are a number of gaps in the existing reporting undertaken by WA Health that will be addressed in the 2011-2012 PMF review in readiness for the 2012-13 funding cycle. Some that have been identified include:

Equity – there are limited purpose built measures of equity, capturing for example Indigenous access, or health outcomes and access for Culturally and Linguistically Diverse groups. However, a number of initial rate ratio measures are introduced in the Annual PMF 2011-2012. The rate-ratio measure will initially enable comparison between the non-Indigenous and Indigenous populations.

Facilities & Equipment – there are limited measures capturing the expenditure and/or required funds for improvement in facilities and equipment to maintain an effective and efficient health service. Further investigation on measures will be undertaken in 2011-12 for the Annual PMF 2012-2013.

Diagnostics – A limitation remains in the provision of PathWest diagnostic services. Not all PathWest activity is recorded as a test or panel and is not provided on a site based approach due to the operating structure of PathWest.

It continues to be recognised that PathWest activities are a critical input for timely and quality provision of services. They are provided across numerous sites and may drive variation in outcomes for average cost across specific DRGs and in aggregate. The Annual PMF 2011-2012 average costs per occasion of services are provided at a WA statewide level.

DOH Divisions – there are limited measurements capturing the responsibilities of centralised services. Further investigation on measures will be undertaken in 2011-12 for the Annual PMF 2012-2013.

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Schedule A. Department of Health 2011-12 Statement of Purchasing Priorities

WA Health defines purchasing as the “detailed planning, specification, contracting and distribution of activity allocation and budget [funding] for provision of planned services, to required quality and safety parameters, respecting available funding limits” 17.

The WA Health Clinical Services Framework 2010-2020 (CSF 2010)18 outlines the network of services that the public health system plans to provide to the community of WA over the next 10 years. This framework is based on a number of principles that have underpinned reform initiatives for service provision. These were outlined in Health Activity Purchasing Intentions 2010-1117 and have been further developed in the Health Activity Purchasing Intentions 2011-12.19

The key principles relevant to purchasing services include:

Providing appropriate care closer to where people live;

Increasing the emphasis on more cost-effective primary and community care to reduce demand for hospital services;

Ensuring value for money and financial sustainability; and

Facilitating transparency and accountability.

The CSF 2010 focuses much attention on hospital services in recognition of the significant share of health resources that go towards operating public hospitals. In both the metropolitan area and country WA, the CSF includes greater detail on what these hospitals can provide, to the extent of defining roles for rural Integrated Care Centres and Regional Resource Centre facilities. The CSF 2010 also expands its coverage of the non-hospital sector, given the significant contribution of this sector to keeping the community healthy within limited resources.

WA has a number of health reform drivers, similar to those of other jurisdictions and nations, which include:

A growing and ageing population;

Escalating demand for emergency care and hospital beds;

Costly advances in medical technology and pharmaceuticals;

Persistent inequity in health status;

Current and projected workforce shortages; and

Increasing community expectations.

17

Health Activity Purchasing Intentions 2010-2011

18 WA Health Clinical Services Framework 2010- 2020 www.health.wa.gov.au/publications/documents

19 Health Activity Purchasing Intentions 2011-2012

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To address these issues, purchasing services will be aligned with the CSF 2010, the health reform agenda and incorporate the following objectives to:

Provide safe, high quality, evidence-based health care;

Promote a patient centred continuum of care;

Keep patients out of tertiary hospitals and make better use of more cost-effective secondary hospitals including those in country WA;

Manage demand; and

Achieve resource efficiencies.

Focus on Data Integrity

The Department is focusing on reforming the way data is collected, managed and reported including audits to support the implementation of Activity Based Funding and Management (ABF/ABM). This will involve the development of improved functionality and management capability consistent with the ABF/ABM project. This will include, but not be limited to:

Developing the classification and costing for non-inpatient services as well as refining aspects of the inpatient services costing;

Replacing the Clinical Costing System and Patient Administration System (PAS) across WA Health; and

Continuing to focus on regular and transparent performance monitoring, and the review and evaluation of service delivery and outcomes.

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Schedule B. KPI Scope and Reporting Frequency

Table 1 KPI Scope and Reporting Frequency

ABF/ABM Framework KPI NUMBER

KPI CODE

DOH PERFORMANCE MANAGEMENT KPI

SCOPE OF KPI

REPORTING FREQUENCY Domain Dimension

EFFECTIVENESS

Access

1 EA1 Proportion of emergency department patients seen within recommended times

Facility Monthly

a) % Triage Cat 1 - 2 mins

b) % Triage Cat 2- 10min

c) % Triage Cat 3- 30 min

d) % Triage Cat 4- 60 min

e)% Triage Cat 5- 2 hours

2 EA2 NEAT % of ED Attendances with LOE <=4 hours Facility Monthly

3 EA3 Elective surgery median wait time of cases remaining over boundary by category

a) over 30 days for Cat 1 b) over 90 days for Cat 2 c)over 365 days for Cat 3

AHS Monthly

4 EA4 Elective surgery patients waiting within boundary times: Facility Monthly

a) % Cat 1 < 30days

b) % Cat 2 < 90 days

c) %Cat 3 < 365 days

Appropriateness

5 EAP1 Rate of selected potentially preventable chronic condition hospitalisations (for specified chronic conditions)

Whole of population (reported at AHS level)

Annually

6 EAP2 Adult immunisation: percentage of people aged 65 years and over immunized against Influenza


Annually

17


KPI CODE


SCOPE OF KPI


7 EAP3 Obesity: percentage of population who are overweight or obese: Whole of population (reported at

Statewide level

Annually

a) Adults

b) Children

8 EAP4 Tobacco: percentage of adults who are current smokers Whole of population (reported at

Statewide level

Annually

Quality

9 EQ1 Age-Adjusted Rate (AAR) of avoidable deaths Whole of population (reported at AHS level)

Annually

10 EQ2 Percentage of Emergency Department Attendances which are unplanned re-attendances in less than or equal to 48 hours of previous attendance.

Facility Monthly

11 EQ3 Staphylococcus aureus bloodstream infection per 10,000 patient days

Facility Annually

12 EQ4 Rate of Severity Assessment Code (SAC) 1 clinical incident investigation reports received by Patient Safety Directorate (PSD) within 45 working days of the event notification date

AHS Quarterly

13 EQ5 Hospital standardised mortality ratio

Facility Annually

14 EQ6 Hospital accreditation

Facility/WACHS Regions

Annually

EFFICIENCY Inputs per output

unit

15 EI1 Volume of weighted activity year-to-date: a) inpatients (variance from target) b) ED attendances (variance from target) c) Outpatients (variance from target)

Facility Monthly

16 EI2 Elective surgery day of surgery admission rates Facility Monthly

18


KPI CODE


SCOPE OF KPI


17 EI3 Average cost per test panel for PathWest Statewide Monthly

18 EI4 YTD Distance of Expenditure to Budget AHS Monthly

19 EI5 YTD Distance of Own Sourced Revenue to Budget AHS Monthly

20 EI6 YTD Distance of Net Cost of Service to Budget AHS Monthly

21 EI7 School Dental Service ratio of examinations to enrolments Whole of population (reported at AHS level)

Annually

EQUITY Access

22 EQA1 Standardised Mortality Ratio (SMR) of deaths among Aboriginal children (0-4 years) and non-Aboriginal children (0-4 years)


Annually

23 EQA2 Standardised Rate Ratio of Hospitalisations of : a) Aboriginal People compared to non-Aboriginal People. b) Aboriginal children (0-4 years) compared to non-Aboriginal

children (0-4 years)


Annually

24 EQA3 Childhood immunisation: percentage of children fully immunised at 12-15 months:

a) Aboriginal b) Total


Quarterly

SUSTAINABILITY Workforce

25 SW1 Proportion of medical graduates (and other categories of medical staff) to total medical staff

Facility Quarterly

a) Interns (graduate)

b) Resident Medical Officers

c) Registrars

d) Consultants

e) Other

26 SW2 Proportion of nursing graduates (and other categories of nursing staff) to total nursing staff

Facility Quarterly

a) Graduate

b) Junior

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KPI CODE


SCOPE OF KPI


c) Experienced

d) Senior

e) SRN and above

27 SW3 Staff turnover Facility Monthly

28 SW4 Injury management: AHS Bi-annually

a) Lost time injury severity rate

b) Rate of managers trained in occupational safety and health (OSH) and injury management responsibilities

Facilities & Equipment

PROCESSES Coding

29 PC1 Percentage of cases coded by end of month closing date Facility Monthly

30 PC2 Percentage of cases coded within boundary a) 80% of cases within 2 weeks of discharge b) remaining cases within 4 weeks of discharge

Facility Monthly

Finance 31 PF1 Patient fee debtors AHS Monthly

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Schedule C. Targets and Thresholds

Table 2 KPI Targets and Thresholds

KPI Number

Domain Code

Indicator Target Thresholds

Not Performing Under Performing

Performing Highly Performing

1a EA1a Proportion of Triage Cat 1 ED patients seen within 2 minutes 100% <95% >=95% and <100%

=100%

1b EA1b Proportion of Triage Cat 2 ED patients seen within 10 minutes 80% <75% >=75% and <80% >=80% and <85% >=85%

1c EA1c Proportion of Triage Cat 3 ED patients seen within 30 minutes 75% <70% >=70% and <75% >=75% and <80% >=80%

1d EA1d Proportion of Triage Cat 4 ED patients seen within 60 minutes 70% <65% >=65% and <70% >=70% and <75% >=75%

1e EA1e Proportion of Triage Cat 5 ED patients seen within 2 hours 70% <65% >=65% and <70% >=70% and <75% >=75%

2 EA2 NEAT % of ED Attendances with LOE <=4 hours 85% < 80% >=80% and <85% >=85% and <90% >=90%

3a EA3a Elective Surgery: Median wait time over 30 days for Cat 1 cases over boundary

10 days >15 <=15 and >10 <=10 and >5 <=5

3b EA3b Elective Surgery: Median wait time over 90 days for Cat 2 cases over boundary

30 days >45 <=45 and >30 <=30 and >15 <=15

3c EA3c Elective Surgery: Median wait time over 365 days for Cat 3 cases over boundary

90 days >180 <=180 and >90 <=90 and >30 <=30

4a EA4a Elective Surgery: % of Cat 1 cases within 30 days 100% <70% >=70% and <95% >=95% and <98% >=98%

4b EA4b Elective Surgery: % of Cat 2 cases within 90 days 100% <70% >=70% and <95% >=95% and <98% >=98%

4c EA4c Elective Surgery: % of Cat 3 cases within 365 days 100% <70% >=70% and <95% >=95% and <98% >=98%

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KPI Number

Domain Code




5 EAP1 Rate of selected potentially preventable chronic condition hospitalisations

Baseline Significant20 increase compared

to baseline

No significant20 change compared

to baseline

Significant20 decrease compared

to baseline

6 EAP2 Adult immunisation: percentage of people aged 65 years and over immunized against: Influenza

70% Target > Upper +95% Confidence

Interval

Target >= Lower -95% Confidence Interval, and <=

Upper +95% Confidence Interval

Target < Lower -95% Confidence

Interval

7 EAP3 Obesity: percentage of population who are overweight or obese: a) adults b) children

No more than 105% of Baseline

N/A

105% of Baseline

< Lower -95% Confidence

Interval

105% of Baseline >= Lower -95%

Confidence Interval

N/A

8 EAP4 Tobacco: percentage of adults who are current smokers 15.5% (2% reduction

from 2007 National NDSHS

baseline)

N/A

Target < Lower -95% Confidence

Interval

Target >= Lower -95% Confidence

Interval

N/A

9 EQ1 Age-Adjusted Rate (AAR) of avoidable deaths Baseline Significant20 increase compared

to baseline


to baseline


to baseline

10 EQ2 Percentage of Emergency Department Attendances which are unplanned re-attendances in less than or equal to 48 hours of previous attendance

Baseline > 100.5% of baseline

> 100% of baseline and <=100.5% of

baseline

>= 95% of baseline and <=100% of

baseline

< 95% of baseline

11 EQ3 Staphylococcus aureus bloodstream infection per 10,000 patient days

0 > 1.25 per 10,000 patient days

< =1.25 per 10,000 beddays and > 0

per 10,000 patient days

= 0 per 10,000 patient days

12 EQ4 Rate of Severity Assessment Code (SAC) 1 clinical incident investigation reports received by Patient Safety Directorate (PSD) within 45 working days of the event notification date

100% < 75% > = 75% and < 100%

100%

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KPI Number

Domain Code




13 EQ5 Hospital standardised mortality ratio National Peer Rate

National Peer Rate < Lower -

95% Confidence Interval

National Peer Rate >= Lower -95%

Confidence Interval, and <= Upper +95% Confidence Interval

National Peer Rate > Upper +95%

Confidence Interval

14 EQ6 Hospital accreditation Full accreditation Not accredited Accredited

15a EI1a Volume of weighted activity year-to-date: inpatients (variance from target)

+/- 2% <-2% or > 2%

>=-2% and <= 2%

15b EI1b Volume of weighted activity year-to-date: ED attendances (variance from target)

+/- 2% <-2% or > 2%

>=-2% and <= 2%

15c EI1c Volume of weighted activity year-to-date: outpatients (variance from target)

+/- 2% <-2% or > 2%

>=-2% and <= 2%

16 EI2 Elective surgery day of surgery admission rates 95% <85% >=85% and <95% >=95% and <98% >=98%

17 EI3 Average cost per test panel for PathWest 24 > 30 > 26 and <= 30 >=20 and <=26 < 20

18 EI4 YTD Distance of Expenditure to Budget Actual equals Budget

< -2% >= -2% and < -0.75%

>= - 0.75% and <= 0%

> 0%

19 EI5 YTD Distance of Own Sourced Revenue to Budget Actual equals Budget

< -2% >= -2% and < -0.75%

>= - 0.75% and <= 0%

> 0%

20 EI6 YTD Distance of Net Cost of Service to Budget Actual equals Budget

< -2% >= -2% and < -0.75%

>= - 0.75% and <= 0%

> 0%

21 EI7 School Dental Service ratio of examinations to enrolments 102% of baseline < 98% of baseline >= 98% of baseline and < 100% of baseline

>= 100% of

baseline and <= 102% of baseline

> 102% of baseline

22 EQA1 Standardised Mortality Ratio (SMR) of deaths among Aboriginal children (0-4 years) and non-Aboriginal children (0-4 years)


to baseline


to baseline


to baseline

23

KPI Number

Domain Code




23a EQA2a Standardised Rate Ratio of Hospitalisation of Aboriginal People compared to Non-Aboriginal People


to baseline


to baseline


to baseline

23b EQA2b Standardised Rate Ratio of Hospitalisation of Aboriginal Children (0-4 years) compared to Non-Aboriginal Children (0- 4) years

Baseline Significant20

increase compared to baseline


to baseline


to baseline

24 EQA3 Childhood immunisation: percentage of children fully immunised at 12-15 months: a) aboriginal b) total

90% <88% >=88% and <90% >=90% and <=92% >92%

25 SW1 Proportion of medical graduates (and other categories of medical staff) to total medical staff a) Proportion of medical graduates to total medical staff (b) Proportion of resident medical officers to total medical staff (c) Proportion of registrars to total medical staff (d) Proportion of consultants to total medical staff (e) Proportion of other medical staff to total medical staff

+/- 10% of Baseline

< 90% of baseline Or

> 110% of baseline

>= 90% of baseline and <= 110% of

baseline

26 SW2 Proportion of nursing graduates (and other categories of nursing staff) to total nursing staff (a) Proportion of nursing graduates to total nursing staff (b) Proportion of junior nursing to total nursing staff (c) Proportion of experienced nursing to total nursing staff (d) Proportion of senior nursing to total nursing staff

+/- 10% of Baseline

(a) nursing graduates:

< 90% of baseline

(b, c, d, e) : < 90% of baseline

Or > 110% of baseline

(a, b, c, d, e): >= 90% of baseline

and <= 110% of baseline

(a) nursing graduates:

> 110% of baseline

20 The term ‘significant’ refers to an interpretation of statistical data that indicates that an occurrence was probably the result of a causative factor and not simply a chance result

24

KPI Number

Domain Code




(e) Proportion of SRN and above nursing to total nursing staff

27 SW3 Staff turnover 1.2% >1.7% <=1.7% and >1.2%

<=1.2% and >1.0% <=1.0%

28a SW4a Lost time injury severity rate - 10.0% of baseline

> 100% of baseline > 90% of baseline and <= 100% of

baseline

> 85% of baseline and <=90% of

baseline

<= 85% of baseline

28b SW4b Rate of managers trained in occupational safety and health (OSH) and injury management responsibilities

80% < 75% >= 75% and < 80%

>= 80% and <= 90%

> 90%

29 PC1 Percentage of cases coded by end of month closing date 100% <100% =100%

30a PC2a Percentage of cases coded - 80% of cases within 2 weeks of discharge

80% <75% >=75% and <80% >=80% and <85% >=85%

30b PC2b Percentage of cases coded - remaining cases within 4 weeks of discharge

100% <85% >=85% and <95% >=95% and <98% >=98%

31 PF1 Patient fee debtors 60 days > 80 days > 70 days and <= 80 days

> 60 days and <= 70 days

<= 60 days

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Schedule D. Generic Service Agreements

Service Agreements (SA) are tailored to each Service Provider's specific circumstances and are in alignment with the WA Health Clinical Services Framework 2010-2020 (CSF 2010). The SA will identify the parties to the agreement and formalise the service expectations and funding obligations of the Department in relation to each Service Provider.

Each SA will include the following schedules:

Parties to the Agreement

The parties to each agreement will be the Chief Executive/Executive Director of the Service Provider and the Director General.

Activity and Funding

This schedule will detail the activity levels as informed by the CSF 2010 for emergency departments (ED) and Inpatients and the total funding provided to meet the specified level of services.

Other non-ED and inpatient services to be provided will be shown for each facility, along with the funding allocation at the Service Provider level (i.e. the aggregate funding). The Service Provider will have flexibility as to how that funding is applied across and within facilities to meet the service provision requirements to the total Area Health Service (AHS) catchment.

This schedule will detail the outpatient allocation, with the funding level for outpatients being based upon expected activity levels. The basis for the outpatient activity classification will be National Hospital Cost Data Collection (NHCDC) Tier 2 clinics for the metropolitan hospitals and NHCDC Tier 1 clinics for Western Australian Country Health Service (WACHS) hospitals.

This schedule will also detail specific Mental Health Services to be purchased from the Service Provider.

In addition, any other specifically funded State Government initiative established in the 2011-12 Budget will be included in this schedule.

Reporting Obligations

This schedule provides the detailed Key Performance Indicators (KPI) to be reported for each facility, the frequency of reporting, and the accompanying reference to data specifications. These are shown in Table 1 at Schedule B of the 2011-2012 Performance Management Framework (PMF).

Service Provider Performance

This schedule outlines the performance targets/benchmarks and the threshold levels for intervention in 2011-12 for each Service Provider. The 2011-2012 schedule is shown in Table 1 at Schedule C of the 2011-2012 PMF.

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DOH Intervention Schedule

This schedule will detail the processes and approach to intervention to be applied uniformly across all Service Providers. The details are provided at Schedule E of the 2011-2012 PMF. It should be noted that Level 1, 2 and 3 interventions will apply in 2011-12 and performance evaluation will be at the AHS level.

Service Provider Governance Accountabilities

The Service Provider will ensure structures and processes are in place to fulfil its statutory obligations and to ensure good corporate governance, as outlined in relevant legislation, Western Australian Department of Health operational directives, and policy and procedure manuals and technical bulletins.

Reportable Items for 2011-12

Service Providers are to report compliance with relevant governance standards as established within Western Australian legislation, Western Australian Department of Health operational directives, and policy and procedure manuals and technical bulletins. Governance reporting will be undertaken on a self-reporting basis and examine compliance with the following key governance responsibilities:

A. Compliance with the WA Health Risk Management Policy and Framework - The Framework describes the management structures through which risks are to be managed.

B. Governance Standards – Internal Audit Checklist: Operational Circular OP 1989/05

1. General governance and oversight: Service Provider must have clearly defined roles and authorities for its senior executives and management and must ensure systems and processes are in place to set and review the strategic direction of the organisation.

2. Clinical governance: Service Provider must have systems and processes in place to ensure the effective governance of their clinical responsibilities including a clinical governance unit that reports to the Chief Executive of the organisation; clearly defined clinical management structures; and clear protocols and systems for managing incidents and complaints. This requirement is set out in the Clinical Risk Management Guidelines for the WA Health system.21

3. Finance and performance management: A committee, responsible for the oversight of financial and performance planning, management and reporting for the organisation must be established for each Service Provider.

4. Professional and ethical conduct: Service Provider must have systems and processes in place to ensure that all staff and contractors are aware of and abide by the WA Health Code of Conduct and relevant professional

21

http://www.safetyandquality.health.wa.gov.au/clinical_incid_man/clinical_risk_man.cfm

27

registration requirements and to ensure that any breaches are managed appropriately and reported to the relevant authority.

5. Stakeholder engagement: Service Provider must have systems and processes in place to ensure the rights and interests of key stakeholders are incorporated into the key plans of the organisation and that they are provided access to balanced and understandable information about the organisation and its proposals.

6. Audit and risk management: An audit and risk management committee, responsible for the oversight of internal and external audit; regulatory compliance management; and for risk management activities must be established for each Service Provider.

C. Disaster preparedness:

1. Maintain current understanding of WA Health disaster management policy and practice in light of Commonwealth and State developments and advances in disaster medicine and technology.

2. Undertake ongoing assessment of preparedness for disasters.

3. Regularly exercise and review response capacity in concert with other emergency service agencies.

Governance Reporting Processes

Governance requirements will be assessed at the annual review of the PMF.

The Service Provider is to report by exception, to the best knowledge and belief of the organisation, progress in implementing the WA Health Risk Management Policy and Framework and any non-compliant items from the Governance Statement.

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Schedule E. Performance Management Processes

Principles of Performance Management Processes

1. Transparency:

Clear, agreed Key Performance Indicators (KPI), targets and responses to poor performance.

2. Accountability:

Clear roles and responsibilities at Department of Health (DOH) and Service Provider level for delivering services to agreed standards and volumes; supporting and implementing performance improvement.

3. Recognition:

Sustained and outstanding performance is recognised and rewarded.

4. Consistency:

Responses to poor performance are appropriate to the issue being addressed.

5. Integrated:

The Performance Management Framework (PMF) is linked to clinical planning, budget, activity and safety and quality.

6. Focus on service improvement:

The PMF enables a clear mechanism for health care improvement.

These principles are appropriate for the current governance model where the Director General (DG) is accountable for health purchasing and health service provision. Should this governance model change, for example with the introduction of local Boards or Local Health Networks (as proposed by the Commonwealth), then these principles may require revision.

Process for Escalation in Response to Performance Concerns

The performance of Service Providers will be monitored regularly against the KPI, benchmarks and thresholds specified in the PMF.

The following outlines the DOH intervention levels that will be in place to respond to performance concerns identified through the reporting/monitoring process. The DOH response to poor performance is based on three levels of intervention:

1. The lowest level requires the Service Provider to account for under performance in relation to achievement against the performance evaluation thresholds.

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2. The intermediate level requires the Service Provider to undertake an in-depth assessment and provide the Department with a detailed recovery plan and timetable for resolution.

3. The intervention methodology applied at the highest level will be at the discretion of the DG based on an assessment of the performance concern for the particular Service Provider.

The PMF will be subject to annual review. The review will encompass KPI, targets and thresholds, intervention processes and service agreements.

It is possible that a fourth level of intervention could be introduced into the future. At this level the DOH assumes control of the Service Provider. This is a feature of the Performance Frameworks operating in other Australian jurisdictions and has already been applied to address chronic under-performance.

Level 1 Intervention: Under Review

The Service Provider will be required to provide formal advice on the reasons that led to the performance issue, and whether any action is required and if so, the intended action.

Level 2 Intervention: Underperforming

The Service Provider will be required to undertake an in-depth assessment and formally meet with the Department and present options to redress the problem and a detailed recovery plan and timetable for resolution. A schedule of meetings will be set to monitor progress of the recovery plan. The plan will be approved by the DG.

Level 3 Intervention: Seriously Underperforming

The DG will determine the appropriate course of action to be taken to redress the problem on a case by case basis. The course of action will be tailored to the specific circumstances of the non-performing area and may involve one or more of the following actions:

1. Assigning a Department lead to work collaboratively with the Service Provider to develop and implement a recovery plan as well as direct Service Provider staff as required. A joint taskforce will be established by the Department to oversee the work and a schedule of meetings set to monitor progress.

2. Assigning an expert advisor appointed by the Department to review the root cause(s) of poor performance and provide a series of recommendations for implementation by the Service Provider.

3. Implementing a peer collaboration model whereby Service Providers within the peer group who are rated as performing or highly performing provide support and assistance to the Service Provider.

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It is important to note that escalation and de-escalation through the levels outlined above may not be sequential:

The initial level of intervention and the level of escalation will be based on the seriousness of the performance issue, the likelihood of rapid deterioration and the magnitude of the issue;

There may be circumstances where the level of intervention moves directly from Level 1 to Level 3. For example, a Service Provider breaches a designated KPI that warrants a Level 1 intervention but which on further assessment, reveals serious misreporting of multiple performance issues that warrants a Level 3 intervention;

The rate of de-escalation will be determined by an assessment of the complexity of the underlying issues and of the likelihood that the recovery plan will be sustained; and

The period for KPI to show improvement after implementation of improvement plan may require more than one month's data before direct intervention of penalties apply.

There will always be a period of monitoring following the Service Provider returning to an acceptable level of performance before they are taken off performance watch.

Governance Arrangements

Roles and Responsibilities

SHEF

The State Health Executive Forum (SHEF) is the principal advisory body to the DG and assists with the management of the WA Government Health System by advising the DG on strategic service and policy issues. The DG considers advice and recommendations from SHEF and takes this into account when making a final decision.

Currently SHEF monitors and evaluates the achievement of WA Health‟s key performance targets. This role will continue under the new PMF.

SHEF Performance and Reporting Governance Sub-Committee

This SHEF sub-committee currently has accountability for oversight of the governance of the data collection, information management and reporting for WA Health. This role will continue under the new PMF.

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The Department of Health

All DOH Divisions will work closely together to ensure a coordinated approach is taken by the DOH under the PMF. The Performance Activity and Quality Division (PAQ) will be responsible for overall coordination of the DOH activities under the PMF. This will be undertaken in consultation with the relevant Divisions and Directorates who may be responsible for actioning interventions for non-performance under the PMF.

Service Providers

Each Service Provider will:

1. Ensure timely responses to the DOH requests for performance information;

2. Meet all reporting requirements specified in the PMF;

3. Have in place internal governance arrangements for performance management and improvement that identify roles and responsibilities;

4. Identify delegates responsible for service delivery against Key Performance Indicators;

5. Have in place processes and procedures to identify risk including a process to report this risk to the Area Chief Executive;

6. Work in partnership with the Public Health Division to achieve performance against the population health based outcome measures;

7. Establish and maintain a culture of performance improvement; and

8. Work collaboratively with the DOH to achieve improved performance.

Reporting to the Minister for Health and Treasury

The DG will provide the Minister for Health and the Department of Treasury with regular reports on the performance of Service Providers and will also advise when a performance issue has been escalated or resolved.

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Schedule F. Glossary Of Terms

Access describes how easily the community can obtain a service, for example Emergency Waiting Times. Access has two main dimensions, undue delay (timeliness) and undue cost (affordability).

Activity Based Funding refers to a funding model where budget is linked to activity based on an efficient price. Initially the WA Health model will be based on an average price.

Activity Based Management 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 WA Health Clinical Services Framework 2010-2020 (CSF 2010) 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 Key Performance Indicators (KPI). At the heart of any effective dashboard is the selection of relevant „Scorecard‟ KPI.

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 KPI. This business technology often includes alerts, snapshots, and drill-down capability as well as the single-screen dashboard.

Diagnosis Related Group (DRG) are a patient classification system that provide 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 KPI 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

33

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:

goods and services be produced at the lowest possible cost;

allocative efficiency requires the production of the set of goods and services that consumers value most, from a given set of resources; and

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.

Government targets set specific, observable and measurable goals for improvement in key policy areas. Government targets provide Government direction for agencies by establishing clear, measurable goals for agencies to collectively pursue. They also give the community a benchmark against which to judge the Government‟s performance as well as their own.

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.

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Key Performance Indicator (KPI) is a measure that provides an „indication‟ of progress towards achieving the organisation‟s objectives. KPI usually have targets attached that define the level of performance expected against the KPI. KPI are open to audit by the WA Auditor General.

Operational plans cascade from the organisation‟s strategic plan and outline how each Division and AHS 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 describes the actual services delivered.

Personal Performance Agreement 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 (DG), and sets the agenda for the coming year. The Agreement ensures there is a clear understanding between the DG and WA Health Executives on their organisational priorities, action plans and expected outcomes.

Performance Management is the management and governance system that regulates and addresses poor performance.

Performance Thresholds are the clearly defined limits at which a KPI measurement will trigger an action, response or intervention.

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. Scorecard may also refer to the list of core or critical KPI that have been selected by the organisation as providing a broad overview of performance. The core KPI may also be allocated a weighting and subsequent numerical score, allowing for the calculation of a total performance score.

Service Agreement is the annual Agreement between the Director General of Health and the Chief Executives/Executive Directors of the Service Providers. The agreement will include a Statement of Priorities directing policy, service targets, budget and performance measures as KPI.

State Health Executive Forum (SHEF) is the principal advisory body to the DG and assists the DG to manage the WA Government Health System through discussion of, and provision of advice to the DG on strategic service, policy and administrative issues.

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Strategic planning is a management term to describe the process by which organisations identify what they want to achieve in the future and how they are going to get there. The WA Health Strategic Intent 2010-2020 articulates the strategic priorities for WA Health clearly to staff and the public and ensures that our objectives and activities are aligned with the priorities of the State and Commonwealth Governments.

Service Provider is the term used to describe all agencies, area health services and/or DOH divisions.

Statement of Priorities outlines the policy and strategic initiatives that are deemed to be the priority for the service provider over the year to come.

Targets for KPI are generally established and agreed as part of the Executive‟s annual personal performance agreement. 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.

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Document Control

VERSION DATE AUTHOR COMMENTS

1.0 01/07/2011 Karen Lennon First published version.

1.1 01/09/2011 Karen Lennon Revision made to page 20. Target for KPI 2a changed from 95% to 98% to align with the target set within the Four Hour Rule Program.

1.2 14/11/2011 Karen Lennon Revision made to page 20. Thresholds for KPI 2a changed to align with the Four Hour Rule Program updates. Stage 3 facilities separated from KPI 2b to form KPI 2c with a target change (from 85% to 95%) and associated threshold changes to align with the Four Hour Rule Program updates.

1.3 20/12/2011 Karen Lennon KPI 2 targets and thresholds for all facilities changed to align with the Four Hour Rule Program updates.

Page 16. KPI 2 removal of a) & b) reference to stages.

Page 20. KPI 2a and 2c rows removed. KPI 2b changed to KPI 2, domain code EA2b changed to EA2, reference to Stage 1b, 2 facilities removed.

Page 24. Notes for KPI 2 removed.

Wording change KPI EA4 page 16, from seen within boundary time to waiting within boundary time.

1.4 17/02/2012 Karen Lennon KPI 2 title (referred to on pages 16 & 20) changed to “NEAT % of ED Attendances with LOE <=4 hours”

1.5 19/03/2012 Karen Lennon KPI 28b target and thresholds changed to align with the Public Sector Commissioner‟s Circular 2009-11 Occupational Safety and Health, Western Australian Public Sector target for the 2011/12 financial year reporting period.

KPI 12 title change to: Rate of Severity Assessment Code (SAC) 1 clinical incident investigation reports received by Patient Safety Directorate (PSD) within 45 working days of the event notification date

Documents

Annual Performance Management Framework 2011-2012 v1