Central Adelaide Local Health Network

Central Adelaide Local Health Network (CALHN) is one of the largest public health networks in Australia, with over 14,000 staff and a budget of $1.8 billion. CALHN had incurred total budget overruns of $645 million over a five-year period and was forecast to under perform against budget by $274 million in 2019.

Background

KordaMentha was engaged to undertake a diagnostic review of South Australia’s largest public healthcare network, Central Adelaide Local Health Network (CALHN), a $2 billion organisation with five main hospitals.

The review uncovered a distressed organisation, facing systemic financial, operational and cultural issues. Forecasts indicated the funded position would be exceeded by $274 million.

The magnitude of the problem faced by the South Australian government and community was clear. In response, KordaMentha developed a three-year Organisational and Financial Recovery Plan and were engaged as State Administrators to implement. The plan was designed to reposition CALHN as a modern, high-functioning network, delivering sustainable care for the community. 

High-performing staff from across CALHN were identified and seconded to each workstream to build engagement and leverage corporate knowledge within CALHN.

How we helped

The transformation journey

First 6 weeks	Year 1	Year 2	Year 3
Stabilise the organisation, engage the workforce, deliver priority changes with minimal roadblocks.	Implement core controls and enablers including organisation redesign, zero-base budget, performance framework.	Stabilise the organisation, engage the workforce, deliver priority changes with minimal roadblocks.	Finalise changes; embed performance culture.

 

Objectives

The Recovery Plan outlined five strategic objectives, targeting an end-to-end transformation of CALHN to:

• Deliver better patient outcomes.
• Operate a modern health service.
• Be a great place to work and learn.
• Better the leadership of Adelaide’s health.
• Sustainably allocate resources.

Our response in action

Diagnose (two months) – A detailed diagnostic review to uncover and quantify systemic financial, operational and cultural issues.

Plan (two months) – Construction of a three-year implementation plan for CALHN’s Organisational and Financial Recovery Program.

Implement (14 months) – Aligned our delivery into four workstreams to stabilise the organisation and address key issues of:

• Finance and performance
• Service delivery
• People, industrial relations and workforce optimisation
• Information, evidence and Insights 

Result

• $105 million improvement in first six months
• 11,000 reduction in patient record backlog
• >60 beds hospital capacity created
• 21% reduction in emergency wait times
• 40 new leadership positions recruited
• 38% reduction in agency spend
• 1,400 staff engaged in clinical organisation design workshops
• 10% improvement in financial performance against National Efficient price
• 120 Emerging Leaders engaged in leadership development program.