o f f i c e o f t h e auditor general of british columbia 1 oag review of the performance agreements...
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O F F I C E O F T H E
Auditor Generalof British Columbia
OAG Review of the Performance Agreements
between MoHS and Health Authorities
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O F F I C E O F T H E
Auditor Generalof British Columbia
Lines of Business
Examining financial statements
Reviewing the quality of broader performance information
Assessing how well government manages key risks
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O F F I C E O F T H E
Auditor Generalof British Columbia
Reasons for the Review
Performance agreements need to succeed as drivers of change
Performance agreements are emerging as an accountability tool
Provide legislators and the public greater insight
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O F F I C E O F T H E
Auditor Generalof British Columbia
New Performance Agreements
July 2002 – first performance agreements signed
PAs part of major restructuring of regional healthcare system
Mechanism to increase accountability for the 6 new large health authorities
$6 billion managed through new entities
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O F F I C E O F T H E
Auditor Generalof British Columbia
Background
Purpose: to determine if the agreements are effective
Scope: all 6 performance agreements
Criteria:• governance • accountability • performance measurement
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O F F I C E O F T H E
of British ColumbiaAuditor General
Performance Agreements
Governance
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O F F I C E O F T H E
Auditor Generalof British Columbia
Purpose
Clarify the agreements’ purpose
• Common understanding of purpose is lacking
• Need to consider whether agreements are:• service contracts• organizational performance agreements• individual performance agreements• business plans• issues management tracking documents
• Recommend purpose be clearly defined and agreements be designed around that purpose
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O F F I C E O F T H E
Auditor Generalof British Columbia
Roles and Responsibilities
Need Consistency with Governance Roles
• The ministry has taken on a “stewardship” role and delegated responsibility for service delivery to health authorities
• However, in practice, these roles and responsibilities are still somewhat ambiguous
• Recommend that agreements be better structured to reflect this distinction in roles
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O F F I C E O F T H E
Auditor Generalof British Columbia
Decision-Making Authority
Clarity needed as to who can make what decisions
• Health authorities need the authority to make decisions
• Uncertainty as to who – the Minister, DM, HA Board or CEO – can make what decisions
• This uncertainty is evident across Canada
• Recommend developing a decision-making framework
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O F F I C E O F T H E
Auditor Generalof British Columbia
Key Parties Accountable
Signatories to the PAs should be consistent with governance roles
• Minister and Board are ultimately accountable
• Mixed accountabilities and reporting lines among the current four signatories
• Recommend that only the Minister and Board Chair (on behalf of the Board) sign the agreements
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O F F I C E O F T H E
Auditor Generalof British Columbia
Relationship Management
Move to greater partnership
• Ministry service plan for 2002/03-05/06 emphasizes exerting control through the agreements
• Relationship needs high degree of trust, cooperation and mutual respect to succeed
• Intent is to move towards a greater partnership
• Recommend that agreements be further developed to be consistent with this partnership approach
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O F F I C E O F T H E
Auditor Generalof British Columbia
Board Performance
Boards should be assessed for how well they are managing their key responsibilities
• PAs lack a board assessment provision
• Boards intend to self-assess
• Recommend moving towards an independent third-party board assessment
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O F F I C E O F T H E
of British ColumbiaAuditor General
Performance Agreements
Accountability
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O F F I C E O F T H E
Auditor Generalof British Columbia
Commitment and Leadership
Demonstrated commitment to accountability
• PAs reflect intent to promote a culture of accountability and performance management
• Significant leadership step towards enhancing accountability
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O F F I C E O F T H E
Auditor Generalof British Columbia
Accountability: Elements
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O F F I C E O F T H E
Auditor Generalof British Columbia
Objectives
Need clear objectives
• General repository of expectations
• Identify, distil or prioritize from among the “givens” into objectives
• Recommend developing objectives as the single biggest improvement to turn agreements into the key accountability documents
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O F F I C E O F T H E
Auditor Generalof British Columbia
Effective Strategies/Management Systems
Progress has been made to align strategies and management systems with PAs
• Planning – short term and long-term linkages needed
• Operations and Capacity – internal operations and capacity need to be strengthened
• Recommend continued improvements, in particular long term linkages
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O F F I C E O F T H E
Auditor Generalof British Columbia
Collaborative Process
Need a more collaborative, two-way process
• Process to develop the agreements was rushed and relatively top-down
• Limited input by the HAs
• Recommend a more inclusive process that is more considered and strategic, so that agreements are fair and realistic
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O F F I C E O F T H E
of British ColumbiaAuditor General
Performance Agreements
Performance Measurement and Reporting
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O F F I C E O F T H E
Auditor Generalof British Columbia
Eclectic Gathering
Unclear Purpose Led to Eclectic Gathering• Issues, processes, and results
• Schedule A more specific, but not balanced or comprehensive—focus on short-term priorities
• Schedule B focuses on unresolved issues - a tracking tool
• Recommend work to bring focus
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O F F I C E O F T H E
Auditor Generalof British Columbia
Short-Term and Long-Term
Need Long-Term Measures As Well As Short-Term Priorities
• Absence of long-term strategic context
• Measures focus on short-term improvements
• Recommend agreements include long-term measures of success
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O F F I C E O F T H E
Auditor Generalof British Columbia
Guiding Principles and Framework Needed
Health care measurement extremely complex Many jurisdictions struggling Need for careful, systematic approach Select a guiding set of principles Create a measurement framework Sound methods of choosing within framework Use logic models as a support tool
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O F F I C E O F T H E
Auditor Generalof British Columbia
Conceptual Framework Suggestions
Service levels and access
Service quality and appropriateness/client outcomes
Client satisfaction
Financial results
Efficiency/productivity
Sustainability/ capacity
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O F F I C E O F T H E
Auditor Generalof British Columbia
Targets
Often Vague, Not A “Stretch”
• Current set lack clarity, lack motivational dimension
• Will need to create and assess baseline information, and negotiate stretch targets
• Ensure targets are measurable and clear
• Recommend clear measurable targets
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O F F I C E O F T H E
Auditor Generalof British Columbia
Reporting
Requirements Are Not Specific
• Agreements do not set out specific requirements
• Reporting requirements can become onerous, costly, if not managed
• Recommend reporting provisions based on decision-making, emerging technologies
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O F F I C E O F T H E
Auditor Generalof British Columbia
Audit
No provision for audit /independent review
• Information users need assurance
• Audit is traditional source of assurance
• Need broad scope assessments to complement indicators
• Recommend joint program of independent audits and evaluations
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O F F I C E O F T H E
Auditor Generalof British Columbia
Incentives and Consequences
Incentives are insufficient • CEO performance pay only incentive• Need comprehensive, effective
incentives• Variety being used in other countries• Need consequences if performance
problems persist• Recommend adequate package of
incentives graduated consequences
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O F F I C E O F T H E
Auditor Generalof British Columbia
Conclusion
Provided 20 recommendations, emphasize the following ones:
• Purpose• Roles and responsibilities • Objectives• Performance measures• Incentives and consequences
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O F F I C E O F T H E
Auditor Generalof British Columbia
Moving Forward
Will take concerted effort, many will be complex to implement
Believe commitment is there to turn the agreements into effective tools for a more transparent and accountable healthcare system
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O F F I C E O F T H E
Auditor Generalof British Columbia
OAG Review of the Performance Agreements
between MoHS and Health
Authorities