CALHN Transformation Case Study
CALHN was an organisation facing significant financial and operational challenges, with a projected annual budget shortfall of $274 million. Following a diagnostic and planning phase, KordaMentha was appointed as State Administrator to lead a comprehensive turnaround program.
Related Services
Performance ImprovementCentral Adelaide Local Health Network (CALHN) is one of Australia’s largest public health networks, employing over 14,000 staff and managing a $1.8 billion budget. KordaMentha conducted a diagnostic review that revealed systemic financial, operational, and cultural issues. For FY19, CALHN was forecast to exceed its budget by $274 million.
Recognising the scale of the challenge and its impact on the state’s government and community, KordaMentha developed a three-year Organisational and Financial Recovery Plan. We were subsequently appointed as State Administrators to implement the plan.
How we helped
Objectives
The primary goal was to transform CALHN into a high-performing, accountable healthcare network delivering world-class care in a sustainable and efficient manner. This objective aligned with the internationally recognised ‘Triple Aim’ of healthcare: improved health and wellbeing, enhanced quality of care, and long-term sustainability.
- Deliver better patient outcomes
- Operate a modern health service
- Be a great place to work and learn
- Provide better leadership of Adelaide’s health
- Sustainably allocate resources
Our approach
Diagnose (2 months): Conducted a detailed diagnostic review to identify and quantify systemic issues.
Plan (2 months): Defined a three-year implementation roadmap for CALHN’s recovery.
Implement (14 months): Delivered the plan through four aligned workstreams:
- Finance and Performance
- People, Industrial Relations and Workforce Optimisation
- Service Delivery and Efficiency
- Information, Evidence, and Insights
Outcomes acheived
By February 2020, we improved CALHN’s annual budget variance by over $150 million. We designed and implemented a new organisational structure, appointing 40 new leaders across key executive and management roles.
We established a disciplined cost control environment, significantly reducing uncontrolled labour and procurement spend, and reviewed over $350 million in purchase requests.
We embedded performance accountability by implementing a ‘board to ward’ framework, driving responsibility across all levels of the organisation.
Efficiency gains were sustained, reducing the National Efficient Price (NEP) from 132% to 122%, with a trajectory to reach 109% by year-end 2022.
