O F F I C E O F T H E Auditor General of British Columbia 1 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

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