Fiona Stanley Hospital: Auditor General’s report says South Metro Health Services not tracking cost performance effectively

Fiona Stanley Hospital.
Fiona Stanley Hospital.

AN audit of Fiona Stanley Hospital’s non-clinical services showed while it has met contractual requirements, South Metro Health Services (SMHS) is not tracking overall cost performance effectively.

The Health Minister of the time Kim Hames and Serco Australia Pty Ltd – known as the facilities manager (FM) – signed the non-clinical services contract in July 2011.

The report said actual costs over the last two years were $24.6 million higher than base estimates when the contract was approved in 2011, and patient numbers at Fiona Stanley Hospital have grown faster than planned, increasing service demand and costs.

Current contract disputes could also become an issue, with resolution proving to be a lengthy process, according to Auditor General Colin Murphy’s report.

“Although service delivery has not yet been affected, the longer the disputes are, the greater the risk to service continuity,” the report read.

“While adhering to the contract, SMHS and the FM need to find more efficient ways to resolve the disputes.”

There are more than $10 million in financial claims that are not resolved.

SMHS has rejected $8 million of these claims but the FM does not agree, and may escalate the claims to dispute resolution.

The report recommended that by July next year, SMHS would drive cost-effectiveness of the contract, and improve the reliability of reporting and identify opportunities for service improvements.

In its response included in the report however, Serco said the actual costs were $2.1 million higher than the initial estimate on a like-for-like basis.

“The analysis used by the Auditor General in comparing the estimated and actual costs is not consistent with the methodology applied to the initial estimate,” Serco’s response read.

“The report states that the actual cost of services over the past two years are $1.6 million above the Annual Service Plan estimate. Serco does not agree with this.

“The analysis that Serco provided to the Auditor General confirms that the cost of services was $10.6 million lower than the Annual Service Plan forecast provided to the Auditor General and Department of Health over the same period.”

SMHS indicated it was confident that it was already effectively using the reporting and data provided by Serco to monitor and drive performance.

“SMHS is committed to identifying further opportunities for improvement and ensuring highly reliable, accurate and appropriate reporting under this contract,” the response read.

The response said services delivered by Serco supported the high volumes of patients which are treated at Fiona Stanley Hospital, including more than 102,000 patients through the Emergency Department, 51,000 admitted inpatients, performing more than 34,000 operations and more conducting more than 540,000 outpatient appointments.

The audit is being tabled in State Parliament today.

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