Page 4779 - Week 15 - Thursday, 8 December 1994
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PUBLIC ACCOUNTS - STANDING COMMITTEE
Report on Review of the Financial Management of ACT Health -
Government Response
Debate resumed from 8 December 1993, on motion by Mr Berry:
That the Assembly takes note of the paper.
MRS CARNELL (Leader of the Opposition) (11.13): Mr Deputy Speaker, this report is now quite old. I think the report was tabled in August 1993 when Mr Berry was still Minister, and the Government response was made exactly 12 months ago, in December 1993. Since then we have had a number of other reports of varying magnitude in the health area, the major one being the Arthur Andersen report.
Rather than spend a large amount of time going through this report, as I know that time is short today, I think it is worth making the same points that Arthur Andersen made. The Arthur Andersen report cost the ACT Government some $170,000 and it has been picked up in total by the ACT Government, so I am sure that they would not argue with any of the issues that have been raised. Arthur Andersen suggested that the major deficiency identified in ACT Health - remember that this was after the Auditor-General's report - was its poor budget performance, and its inability to explain the causes of budget overruns was unacceptable. I think we would all agree with that. There was a lack of financial accountability and budget responsibility. They went into the details of why that was the case. There were poor financial management systems; there was inadequate financial management reporting; there was significantly higher than benchmark costing.
We know that the ACT still has costings of some 30 per cent above the national average. In fact, the comment made by Arthur Andersen was that operating costs in ACT Health overall, and Woden Valley Hospital in particular, were significantly higher than the benchmark. In fact, the figures they use, interestingly, are $26.5m to $32.9m above New South Wales and Victorian sample hospital benchmark operating costs. They are interesting figures. Analysis of the key areas contributing to this cost position was provided in the bulk of this report. It was interesting to see that the major areas are the ones that we know about; they are doctors; they are nurses; they are administration, and other costs as well. Even our drug costs in the ACT are higher than the national average.
Arthur Andersen went on to say that there is ineffective cost reduction, planning and implementation. We know that this Government report came down at the time that Mr Berry had his infamous $3m savings in the budget of last year. Arthur Andersen went on to say that there was absolutely no way that that particular $3m could be saved, because there was absolutely no way that Health had the management systems in place to be able to identify even where it could possibly be saved. They are not my words. Arthur Andersen was - - -
Mr Berry: We identified one, but the doctors would not let us do it.
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