Tagged: governance

Governance for safety and quality in health service organisations: where does the budget come in?

The first of the Australian National Quality and Safety Health Service Standards (2012) is “Goverance for Safety and Quality in Health Service Organisations”. There is little doubt that the processes of governance for clinical safety and quality are critical for health service organisations to achieving clinical excellence. But this standard seems to exist in isolation from the reality of running a health service organisation – in particular large public hospitals. Hospitals have budgets with finite sources of revenue and huge capacity to generate expense in excess of revenue.

Health services organisations should have governance processes that have consider safety and quality as well as the relevant budgetary considerations. By this I do not mean that cost should necessarily be taken in to consideration as a matter of primacy. Cost, efficiency, productivity, safety and quality all interact closely in a complex system and the governance processes should be designed to manage this complexity to produce the best overall outcome. Currently, in many institutions, these matters are considered in isolation and without understanding the whole system or model of care in question. The consequence is that when cost savings need to be made then it is largely expressed in terms of disinvestment rather than reviewing practice and considering reinvestment for net gain (or savings). The consequence is a cycle of deteriorating then improving budgetary positions trailed by deteriorating and improving performance in quality and safety KPI.

The governance models that will facilitate a global view of the organisation need to be models that reduce asymmetries of information. In too many organisations the managerial staff don’t understand the perspective of the front-line staff and visa versa. Too little of the data needed to manage organisations is used and when it is it is presented in ways that don’t favor analysis and interpretation. Activity based funding is an incentive to better use the big data available to hospital governance – it is time this data was readily available and we had training how to use it.

A step forward for overall health care in Australia is not just good governance for safety and quality but also for fiscal effectiveness.

Public hospitals also need governance standards for budgets and finance

So one of the Australian National health care standards is having adequate governance structures in hospital to support quality and safety of healthcare. Notably, however, public hospitals are more likely to appear on the cover of the newspaper for the state of their finances rather than quality of safety.

My hospital network has had its’ financial position downgraded by the Ministry of Health as unexpectedly it is in deficit – or at least more deficit than anticipated. So the consultants have been brought in to assist in saving dollars and recovering the financial position.

What bothers me is there is no governance standard for budgets and finance in our public hospitals. Now whilst I acknowledge that in a public health system we will never actually go out of business there is no reason why we shouldn’t have financial standards that resemble of those of corporations, but perhaps without the legal ramifications. The NGO I work with needs to comply with the Corporation Act and not trade as an insolvent entity. This concept can’t really apply to public hospitals but they should be accountable for their financial management.

Despite this the financial management of hospitals and the governance of this management seems to be ad hoc and left to the local sites. My experience of this is that all finance & budgeting is hospitals is forensic rather than planned and projected.

Hospital staff need to demand good governance practices for hospital budgets and ideally these standards should be harmonized between hospitals. I should be able to turn up to an administrative meeting and see a balance sheet that I understand and can react to in a timely and appropriate manner. As it stand we chase our tails.