1. 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

2. O F F I C E O F T H E Auditor General of British Columbia 2 Lines of Business Examining financial statements Reviewing the quality of broader performance information Assessing how well government manages key risks

3. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 5 Background Purpose: to determine if the agreements are effective Scope: all 6 performance agreements Criteria: governance accountability performance measurement

6. O F F I C E O F T H E of British Columbia Auditor General 6 Performance Agreements Governance

7. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E of British Columbia Auditor General 13 Performance Agreements Accountability

14. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 15 Accountability: Elements

16. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E of British Columbia Auditor General 19 Performance Agreements Performance Measurement and Reporting

20. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 23 Conceptual Framework Suggestions Service levels and access Service quality and appropriateness/client outcomes Client satisfaction Financial results Efficiency/productivity Sustainability/ capacity

24. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 28 Conclusion Provided 20 recommendations, emphasize the following ones: Purpose Roles and responsibilities Objectives Performance measures Incentives and consequences

29. O F F I C E O F T H E Auditor General of British Columbia 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. O F F I C E O F T H E Auditor General of British Columbia 30 OAG Review of the Performance Agreements between MoHS and Health Authorities