OAG Review of the Performance Agreements between MoHS and Health Authorities

1. OAG Review of the Performance Agreements between MoHS and Health Authorities

2. Lines of Business • Examining financial statements • Reviewing the quality of broader performance information • Assessing how well government manages key risks

3. 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

4. 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

5. Background • Purpose: to determine if the agreements are effective • Scope: all 6 performance agreements • Criteria: • governance • accountability • performance measurement

6. Performance Agreements Governance

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. Performance Agreements Accountability

14. 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

15. Accountability: Elements

16. 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

17. 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

18. 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

19. Performance Agreements Performance Measurement and Reporting

20. 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

21. 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

22. 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

23. Conceptual Framework Suggestions • Service levels and access • Service quality and appropriateness/client outcomes • Client satisfaction • Financial results • Efficiency/productivity • Sustainability/ capacity

24. 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

25. 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

26. 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

27. 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

28. Conclusion • Provided 20 recommendations, emphasize the following ones: • Purpose • Roles and responsibilities • Objectives • Performance measures • Incentives and consequences

29. 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

30. OAG Review of the Performance Agreements between MoHS and Health Authorities