MIDCENTRAL DISTRICT HEALTH BOARD STATEMENT OF INTENT 2010/2011
Our Vision:
Contact Information
MidCentral District Health Board PO Box 2056 Palmerston North 4440 www.midcentraldhb.govt.nz
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 2 Contents
Contents ...... 3
Executive Summary...... 1
1. Operating Environment ...... 2
2. What We Do ...... 5
3. Outcomes and Priorities ...... 8
4. Output Classes & Statement of Forecast Service Performance ...... 12
5. Organisational Capability ...... 31
6. Financial Performance ...... 35
Appendix 1 – List of Acronyms ...... 38
Appendix 2 – Sector Led Definitions: Output Classes ...... 39
Appendix 3 – Glossary of Terms ...... 40
Appendix 4, Financial Statements ...... 43
Appendix 5, Statement of Accounting Policies ...... 50
Appendix 6, Allied Laundry Services Limited ...... 60
Appendix 7, Performance Improvement Actions ...... 62
Executive Summary
In the current economic climate of increasing fiscal restraint, this Statement of Intent (SOI) sets out the District Health Board’s strategic direction for the next three years. This includes the outcomes we aim to deliver and the investment we will make in our organisation to make this successful. We aim to actively support our population towards achieving healthier and more independent lives – both by working with other organisations, promoting self- responsibilities and healthy lifestyles, and providing services. This Statement of Intent has been developed in conjunction with government expectations, local priorities, legislative compliance and public sector accountability.
Phil Sunderland Chairman
Ann Chapman Deputy Chair 21 June 2010
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 1 1. Operating Environment
1.1 Strategic Context
MidCentral DHB is responsible for ensuring the people of its district have access to a wide range of health and disability support services. It is responsible for “improving, promoting and protecting” the health of its people and the health of the communities in which they live. This involves assessing the health status of the district, and determining what funds should be directed to preventing illness (via primary health and public Four Iwi have manawhenua status within health services) while continuing to the district: Muaupoko; Ngati Kahungunu; provide and improve existing hospital and Ngati Raukawa; and Rangitaane. specialist services. (Manawhenua status means that the Iwi is recognised as having tribal authority 1.2 Population Environment within a region.) and Health Profile Muaupoko and Ngati Raukawa Iwi are located on the western side of the 1.2.1 Geographic Area mountain ranges and Ngati Kahungunu Iwi is located on the eastern side. MidCentral District Health Board serves a Rangitaane Iwi covers both sides of the wide geographical district stretching ranges from the Manawatu district across the North Island from the west to (including Palmerston North) across to the east coast and is distinguished by the Pahiatua and Dannevirke areas. Tararua and Ruahine ranges that traverse the centre of the district. MidCentral’s 1.2.2 Health Profile district comprises the following territorial local authority districts: MidCentral DHB’s health profile is gained through a comprehensive Health Needs • Horowhenua district Assessment (HNA) that describes our population and their health status. The • Manawatu district health and disability status of the population in our district, together with • Palmerston North City input from community and stakeholders, help ensure that MidCentral DHB will • Tararua district select long-term strategic outcomes to • Otaki ward of Kapiti Coast district meet the health needs of our population. Our local strategic priorities are based on a health needs assessment, and these are documented in our District Strategic Plan which was developed in 2006 and responds to the Act and addresses local needs and priorities. MidCentral district's health status is similar to the national average.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 2 The District’s population is estimated to compared to national growth of 18.9%. grow over the next 20 years, but at a (NB: this is based on 2006 census data.) slower rate than the national average. Between 2006 and 2012, the local MDHB has a higher older population population is forecast to grow by 2.7% compared to NZ, particularly in (NZ – 5.6%). By the year 2026, population Horowhenua, Kapiti and Tararua. It also growth of 8.8% is forecast locally, has a higher Maori population than the national average.
MidCentral DHB’s Population Profile at a Glance (based on 2006 Census Results) NZ MDHB Manawatu PN City Tararua Horowhenua Kapiti* Total 4,027,947 158,838 28,251 75,540 17,631 29,865 7,551 Age 65+ No. 495,603 22,347 3,636 8,748 2,460 5,979 1,524 % 12.3% 14.1% 12.9% 11.6% 14.0% 20.0% 20.2% Gender No Female 2,062,326 81,837 14,199 39,192 8,859 15,564 4,023 % Female 51.2% 51.5% 50.3% 51.9% 50.2% 52.1% 53.3% No Male 1,965,618 77,007 14,055 36,348 8,775 14,301 3,528 % Male 48.8% 48.5% 49.7% 48.1% 49.8% 47.9% 46.7% Ethnicity By No: European 2,609,592 113,472 21,552 52,512 12,927 21,555 4,926 Maori 565,326 26,715 3,867 11,316 3,489 6,078 1,965 Pacific People 265,974 4,608 408 2,754 225 1,011 210 Asian 354,552 7,002 351 5,409 225 765 252 MELAA 34,746 963 45 801 33 69 15 Other 430,881 19,971 4,338 9,225 2,154 3,396 858 By %: European 67.6% 73.4% 77.9% 71.4% 75.4% 74.4% 68.0% Maori 14.6% 17.3% 14.0% 15.4% 20.4% 21.0% 27.1% Pacific People 6.9% 3.0% 1.5% 3.7% 1.3% 3.5% 2.9% Asian 9.2% 4.5% 1.3% 7.4% 1.3% 2.6% 3.5% MELAA 0.9% 0.6% 0.2% 1.1% 0.2% 0.2% 0.2% Other 11.2% 12.9% 15.7% 12.5% 12.6% 11.7% 11.8% Household Income Median $51,400 $47,700 $47,800 $41,100 $33,100 $37,800 *MidCentral DHB portion only MELAA = Middle Eastern, Latin American, African Note: this data has been randomly rounded to protect confidentially. Individual figures may not add up to totals and values for the same data may vary in different components of the table. For the ethnicity data, a person can have more than one ethnicity, so the total number of ethnicity responses will be more than the total number of people living in that geographical location.
MidCentral DHB’s Health Needs This is increased collaboration between Assessment can be accessed from our primary and secondary care sectors. website, www.midcentraldhb.govt.nz Within MidCentral DHB’s district a major project is underway for “better, sooner, 1.3 DHB Operating more convenient primary health care Environment services”. Standards of care, particularly nursing The District Health Board is operating in care, within aged residential care are an environment of fiscal constraint. inconsistent across the district. It is also operating in an environment of Key internal factors that have potential collaboration and regionalisation. DHBs significant impact on our performance are: are working together to establish services at risk of workforce and other pressures, • funding restrictions on a regional basis. Many “back-office” • period of change services are being established on a regional or national basis. MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 3 1.4 Summary of Operating Environment
External & Internal Environmental Factors Potential Impact on DHB Economy and State Budget 1. Fiscal constraint Increases for health sector will be modest, ie future funding track provisions Demand on the DHB for salaries, prices, etc will likely exceed available funding Health Sector Environment 2. Regionalisation and Collaboration More regional clinical networks will be established Residents have to travel further for some services Services sustainability will require a regional model Workforce planning on a regional basis Joint community with Whanganui DHB 3. Reconfigured primary health care sector Move to integrated family health centres Devolution of services from secondary care to primary sector Community based services integrated into family health centres Issues with Service Providers 4. Aged Residential Care Standards Increased number of rest homes with workout plans Rest home closures Consistency of standards Internal Factors 5. Fiscal constraint Service changes or reductions. Changes to access/threshold levels. Public resistance to change. Changes to the internal configuration and staffing of services 6. Period of change Staff resistance to change
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 4 2. What We Do
2.1 DHB Performance • to foster community participation in health improvement, and in planning Objectives for the provision of services and for significant changes to the provision of The objective of MidCentral DHB is to services contribute to the outcomes that cover the • to uphold the ethical and quality promotion and provision of health and standards commonly expected of disability services as set out in the NZ providers of services and of public Public Health and Disability Act 2000 sector organisations (sections 22 & 23). The main way DHBs deliver on the outcomes identified below • to exhibit a sense of environmental is through planning and funding, in responsibility by having regard to the consultation with stakeholders and our environmental implications of its community. We plan the strategic operations direction, fund and manage the contracts • to be a good employer. we have with health and disability service providers, to ensure the health needs of our community are met. 2.2 The Scope of Work These objectives are: MidCentral DHB receives population- • to reduce health inequalities by based funding from the Government. This improving health outcomes for Maori means funding is allocated on the basis of and other population groups the following: • to reduce, with a view to eliminating, • the number of people living in our health outcome inequalities between district various population groups within New Zealand, by developing and • the populations historic utilisation of implementing, in consultation with the health services groups concerned, services and • the ethnicity and socio-economic status programmes designed to raise their as measured using the New Zealand health outcomes to those of other New Deprivation Score (2006 census) their Zealanders rurality and an adjuster for ‘unmet • to improve, promote, and protect the need’. health of people and communities The DHB’s planning and funding role is • to improve integration of health responsible for planning, promoting and services, especially primary and undertaking service contracting with secondary health services organisations including our own hospital • to promote effective care or support services (Horowhenua Health Centre and for those in need of personal health Palmerston North Hospital). Our DHB services or disability support services also contracts services from other providers, including other DHBs who • to promote the inclusion and often provide more specialist services. participation in society and One example is the provision of specialist independence of people with paediatric treatment, only offered at some disabilities hospitals. Some services are funded and • to exhibit a sense of social contracted directly by the Ministry, for responsibility by having regard to the example breast and cervical screening as interests of people to whom it provides, well as the provision of disability support or for whom it arranges the provision services for people aged less than 65 years. of services Our DHB is responsible for monitoring and evaluating service delivery, and
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 5 includes auditing the full range of funded The role of our DHB covers most of the services. health and disability services provided in our district. In this section we detail our Each year, as part of its annual planning agreed priority areas. These areas of focus process, MidCentral DHB provides a are based on the directions identified in schedule of all contracted providers, and our DSP and on findings from our HNA. details of the services they are contracted For example, we have prioritised primary to provide. This information is issued as a health care as an area that influences the companion document to the District health of New Zealanders. Annual Plan and is entitled, “Funding Arrangements Document”. The 2010/11 Regional Services Funding Arrangements Document can be accessed from MidCentral DHB’s website MidCentral DHB’s provider division, – www.midcentraldhb.govt.nz The main MidCentral Health, provides a number of categories of providers are: services on a regional basis. These include: regional cancer treatment • Primary health organisations services, breast screening services, public • Pharmacies health services, and haematology. • Optometrists Enable New Zealand • Laboratory services A division of MidCentral DHB, Enable • Dentists New Zealand, is a national provider of • Non-government organisations disability support and information services. • Aged residential care providers It provides housing modification and • Maori health providers rehabilitation equipment services to ACC on a national basis. It also provides these • Public hospitals services for the Ministry of Health for the majority of NZ. It also managed their In 2010/11 MidCentral DHB expects to hearing aid subsidy and children’s spend $543.6m on purchasing health and spectacle subsidy for NZ. disability services. MidCentral Health, the DHB’s provider arm is the largest provider, 2.3 Ownership Interests receiving $276m.
The table overleaf identifies the services MidCentral District Health Board has a purchased by key category, and by part ownership in the Central Region’s provider type. Technical Advisory Service (TAS) and Allied Laundry Services. All MidCentral DHB contracts require providers to regularly report on their activities. All providers have a nominated Portfolio Manager within the DHB, and these people keep in regular contact with providers. In addition to routine contact monitoring, MidCentral DHB has a formal audit programme which is managed by the Central Region’s Technical Advisory Service using a team of auditors who are qualified to carry out service-based, financial or cultural audits. Audits are of two types: routine audits which are expected to occur at least every three years, and special and issue based audits which occur at the request of the DHB, usually in response to an emerging issue.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 6 Where our money goes:
2008/09 2009/10 2010/11 Ac t ual Budget Budget
Hospital Based Services 59.4 63.6 65.1 Surgical Specialties/ICU/Anaesthetics 44.5 43.3 45.2 Medical Services 31.7 31.7 33.3 Regional Cancer Treatment Service 29.6 30.1 27.7 Elderly Health / Rehabilitation & Therapy 27.7 26.9 27.6 Women/Children's Health 27.0 26.3 26.6 Mental Health 12.2 13.0 13.4 Emergency Department 7.2 8.4 7.7 Clinical Support 6.5 7.6 7.0 Public Health 2.9 3.2 3.5 Dental Health 1.7 1.3 1.6 Rural Health 14.2 8.8 17.8 Other 264.6 264.2 276.5 Total Hospital Based Services
Community Based Services 40.2 43.9 44.5 Pharmaceuticals 34.3 36.4 37.4 Residential Care 23.5 27.2 28.0 Primary Practice 9.4 9.6 9.9 Laboratories 9.2 9.6 9.9 Home Support 8.5 10.7 9.2 Mental Health 4.2 4.4 4.5 Chronic Disease Management 23.1 26.3 27.2 Other 152.4 168.1 170.6 Total Community Based Services
23.6 24.1 44.7 Disability Services, Needs Assessment
42.1 45.6 46.4 Inter District Flows
5.7 5.5 5.4 Governance
488.4 507.5 543.6 Total DHB Expenditure
Allocation of Expenditure by Provider Group - $m's
264.6 264.2 276.5 MidCentral Health
152.4 168.1 170.6 Primary Health Providers
42.1 45.6 46.4 Other DHB's
23.6 24.1 44.7 Enable New Zealand
5.7 5.5 5.4 MidCentral DHB - Governance
488.4 507.5 543.6 Total DHB Expenditure
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 7 3. Outcomes and Priorities
3.1 Key Outcomes and the disabled to participate fully in society and enjoy maximum Priorities for our DHB independence • oral health is improved Key outcomes sought by MidCentral DHB are: • people’s journey through the health system is well managed and informed. • people enjoy healthy lifestyles within a healthy environment These outcomes are based on MidCentral DHB’s health needs assessment, and a • the healthy will remain well “whole of continuum approach”. The continuum of health and wellbeing is a • health and disability services are model that covers a number of different accessible and delivered to those most elements and linkages. As a system, it in need both guides and tracks an individual patient/client through a comprehensive • the health and wellbeing of Maori is array of health services and improves the improved health of the population as whole. The • the quality of life is enhanced for continuum of health and wellbeing people with diabetes, cancer, approach incorporates the physical, respiratory illness, cardiovascular mental, social and spiritual aspects of disease and other chronic (long health and wellbeing and spans all levels duration) conditions of care. One of its core aims is to ensure that people receive seamless coordinated • people experiencing a mental illness services, most probably from a range of receive care that maximises their different providers, as their individual independence and wellbeing needs change over time. People may access the continuum at any point because • the needs of specific age-related episodes of illness or injury may occur groups, eg older people, that demand services other than at the children/youth, are addressed beginning of the continuum. Various • the wider community and family stages of the continuum are also engaged supports and enables older people and at different times, not necessarily in a fixed order.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 8 3.2 How we aim to meet the • improved hospital productivity Government Priorities • implementation of the primary care plan “The Minister of Health’s annual ‘Letter of • improved local and regional co- Expectations’ is sent to all DHBs and ordination of services identifies the Minister’s specific expectations and priorities for the coming • quality improvement initiatives aimed year. These expectations, in addition to at reducing preventable and adverse national health and disability strategies events and our strategic priorities (set out in the District Strategic Plan (DSP), enables our • improved purchasing and established DHB to plan and prioritise activity for of shared back-office functions. 2010/11. Our DHB undertakes a number of activities and performs a wide range of Our SOI aligns with Government priorities. interventions that lead to services These priorities are closely aligned with provided to our people. The vast majority our vision and long term strategy to of these are delivered consistently every improve the health and well-being of our year and can be considered to be ‘Business community. as Usual’. This SOI will outline a framework to measure the The Minister of Health has agreed to a set benefits/impacts of these interventions as of national Health Targets to focus the well as those newly funded which will efforts of DHBs and make more rapid assist in improving the quantity, quality progress against key national priorities. and coverage of services funded and These Health Targets are included within provided by our DHB over time. the selection of performance measures and are also clearly identified in our DAP These outcomes are consistent with the 2010/11. purposes of the Crown Entities Act 2004 and, the New Zealand Public Health and Health Targets Disability Act 2000”. • Shorter stays in Emergency Departments 3.3 Key Mechanisms for • Improved access to elective Intervention surgery
• Shorter waits for cancer treatment Our DHB: • Increased immunisation • Better help for smokers to quit • FUNDS health and disability services • Better diabetes and cardiovascular through contracts with providers services • PROVIDES hospital and specialist services that covers medical and Our DAP also sets out the work to be surgical services, mental health, older undertaken in the short term (one to three person’s health years) to achieve the DHB’s vision and long term strategy. This includes • PROMOTES community health and Performance Improvement Actions and wellbeing through health promotion, these are contained in Appendix 7. health education and population health programmes. To ensure our interventions are relevant to our communities, co-ordinated and ensure best value for money, before making Based, on these Government priorities and funding, provider or promotion decisions local health needs our DHB seeks to we: achieve the following outcomes:
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 9 • PLANS in consultation with key stakeholders (Iwi, primary health organisations and providers) and our community, the strategic direction for health and disability services within our district • PLANS in collaboration with other DHBs, regional and national stakeholders. How We Measure our Progress – DHB Main Intervention Logic
All DHBs follow an intervention logic that encourages cost at the public health end of the models of care, because these interventions are less expensive and cover more of the total population
MidCentral DHB’s intervention logic is • ensure effective screening and early outlined below, using diabetes as an diagnosis to reduce diabetes impact on example. wellbeing The DHB’s health needs analysis • ensure effective support, treatment identified that the prevalence of diabetes and palliative care to enhance quality is growing. The main increase is in Type of life. II diabetes, and this is substantially preventable through healthy lifestyle • improve diabetes management choices. through a responsive workforce
Diabetes can increase the risk of a person • improve the integration of diabetes suffering from other serious illnesses. through planning, innovation and Complications can include renal failure, quality monitoring. stroke, foot ulceration, ischaemic heart disease, blindness and lower limb amputation. MidCentral DHB’s diabetes strategy has been to invest in all areas of the continuum of health and wellbeing to:
• reduce the incidence of diabetes through prevention and health promotion strategies
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 10 Intervention Logic: Logic: Intervention Outcome: Inputs Outputs
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 11 4. Output Classes & Statement of Forecast Service Performance
4.1 Output Classes DHB will evaluate and assess what services and products we deliver to others in 2010/11. The four Output Classes are relevant for DHBs to provide the story regarding the The performance measures chosen are not ‘impacts’ their PBF allocation decision, a comprehensive list and do not cover all Government Priorities and national of the activity of the DHB, but they do decision-making has on the ‘Health of the reflect a picture of our activity against local DHB Population’. Overtime through and national strategies and priorities. ensuring Nationwide Service Framework Library (NSFL) and associated services’ Where possible, we have included past Purchase Unit Codes (PUCs) align to one performance (baseline data) along with of the four output classes, it will be each performance target to give context of possible, through using this framework to what we are trying to achieve and to demonstrate ‘shifts’ in resources from one better evaluate our performance. end of the population health continuum of care to another over time. 4.2 Formation of an Output- For example, by having expert knowledge Focused Statement of Forecast supporting the care of patients with early Service Performance diabetes in the community, we can prevent people from requiring in-hospital MidCentral DHB has four output classes services with increased services then being being: public health services; primary and provided in Primary and Community community health services; hospital versus Hospital. services; and support services. For the 2010-13 SOI the output classes It has developed a Statement of Forecast above will be required (aggregated similar Service Performance for each of these, outputs). based on the level of planned activity, the General Manager Planning and Funding results expected, and the actions which and Chief Financial officers supported by will be taken to achieve those results. the Ministry of Health and DHBNZ have Details of expenditure against these been working on developing a process for output classes is contained in Appendix 4, ‘mapping current Purchase Unit Codes and is summarised below: (PUCs) to each of the ‘Output Classes.
For each output class (refer to summary Revenue and Expenditure by Output Class above) there are agreed national 2010/11 2010/11 performance measures and targets of the Budget Budget Revenue Expenditure desired outcomes and objectives. $000 $000 Summary Within these output classes our DHB has Hospital Services 278,012 277,228 Primary & Community Services 146,995 149,882 prioritised a number of outputs. How Public Health Services 8,961 8,990 these outputs contribute to our Support Services 105,925 107,532 intermediate outcomes is detailed below Total 539,893 543,632 on an output class by output class basis. One of the functions of this SOI, and in particular the Statement of Forecast Service Performance is to show how the
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 12 NB: The intervention framework is being developed nationally Eligible population supported to Eligible population supported Eligible populationsupportedin People receiveaccess timely to Improved long termcondition Improved emergency & acute treatment emergency & Eligible populationimmunised timely, tailored palliativecare Oral healthchecks completed
Eligible populationscreened. and further B4 school checksschool completed B4 Patientssafe havequality & Access to 24/7 first point of point of first to 24/7 Access More peoplereceive timely Infectious & environmental day respite programmes & Eligible population receive work is
health risks managed planned. maintain functional elective services contact services contact residential care that they need independence services support
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 13
Overview of MDHB’s Statement of Service Performance & Long Term Vision
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 14 4.3 Public Health Services – DHB has a “healthy eating, healthy action” plan which is implementing, Output Class 1 which includes things such as green prescriptions, smoking cessation, and Public health services are the domain of working through workplaces, health many organisations across the region: providers and education settings to create environments which support healthy • Ministry of Health, principally as a choices and wellbeing. funder of public health services, and A key focus of MidCentral DHB’s plans also a regulator and planner for child and oral health is immunisation • Regional Public Health, as a provider and improved oral hygiene. of services Immunisation aims to prevent the spread • District Health Boards, in both funding of vaccine preventable diseases in a and provision community and protect children against a • Primary Health Organisations, mainly range of serious diseases, such as measles, in the area of provision of primary mumps and rubella. MidCentral DHB health care services, but with some aims to achieve the national target of 95% public health functions of two year old children being fully up to • A significant array of private and non- date with their immunisation by 2010, and government organisations, including we are making good progress in this Maori and Pacific providers regard. • Regional Sports Trusts The other key area of focus is a reducing • Local and regional government in the number of children/youth with dental caries. Diseases of the gums and A Regional Public Health Services is teeth are among the most common health owned and operated from its base at problems experienced by New Zealanders, MidCentral DHB. This provides the and poor oral health can lead to poor majority of public health services to the overall health. Encouraging children to district. The remaining services are have good dental hygiene and delivered by other providers. These preventative dental care will promote services include environmental health, good oral health for life. Measuring the communicable disease control, tobacco number of children who are caries-free, control and health promotion programmes. and those who have decayed, missing or filled teeth is a good indicator of oral Twelve public health units (PHUs) provide health. more than half the country’s public health services. MidCentral DHB believes it investment in child immunisation and oral health, and Primary health care includes a broad range healthy lifestyles will help it achieve the of first-level services (although not all of following six of its 10 long term outcomes: these are government funded), including: “health improvement and preventive • People enjoy healthy lifestyles within a services, such as screening. healthy environment. Local Priorities and Strategies • The healthy remain well.
Fundamental to the DHB’s plans in its 10 • Health and disability services are priority areas is “healthy lifestyles”, and accessible and delivered to those in the DHB is committed to supporting need. individuals to take simple steps which will • The health and wellbeing of Iwi Maori improve their health and reduce diseases is improved. that are largely preventable. Things like exercising regularly, eating a healthier diet, • The needs of specific age-related quitting smoking, and getting regular groups, eg older people, health checks. Maori, children, and people children/youth are addressed. with long term chronic conditions, are priority population groups. MidCentral • Oral health is improved for people within MidCentral’s district. MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 15
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 16
Statement of Forecast Service Performance
1. Public Health Services Output Class*
*see definition appendix 2
This section outlines the Public Health services we intend to deliver our population. These outputs are aggregated into the following main areas of performance in the Public Health service output class: Health Promotion and Education Services; Statutory and Regulatory Services; Population Based Screening Programmes and Immunisation services. Total budgeted expenditure for Public Health Services is $8.9m. Sub Outputs Output Volume and Standard Baseline Targets Indicative Measures 2010/11 Out-years Health Promotion and Number of health promotion and 9 9 8 Education Services education programmes • Healthy communities Number of groups and organisations 5 6 7 supported to implement nutrition and • Health promoting schools physical activity programmes • Nutrition and physical Number of new referrals to Green 68 71 ≥ 71 activity Prescription programme (average per • Sexual health month) • Mental health Number of Health Promoting Schools 10 12 >12 in MidCentral’s district • Refugee health % hospitalised smokers provided with 3 mths to 90% 95% • Prevention of alcohol and advice and help to quit 31.12.09: other drug related harm 24.4% • Injury prevention • Tobacco control Statutory & Regulatory Communicable disease notifications 50.6 ≤ 50.6 ≤ 50.6 Services per 10,000 population Number of Early Childhood Centre 2009: 12 12 ≥ 12 inspections Number of controlled purchase As at Jan 80 ≥ 80 operations carried out on tobacco 2010: 49 retailers Number of alcohol licensees 189 ≥ 180 ≥ 180 visited/inspected as per contract (Contract 180) % of approved Vertebrate Toxic Agent 30% 30% 30% operations audited Population Based Screening Breast screening programme: Number 2009: 15,396 16,609 16,990 Programme of eligible women, aged 45-69 yrs, screened National Cervical Screening Feb 2009: ≥110 ≥110 programme: Average number of first 112 event screenings, per month (aligned to contract) Breast screening 2 year coverage rate, As at 70% 70% for women aged 45 – 69 years 31.12.09: 66% Cervical screening 3 year coverage March 2009: 75% 75% rate, for women aged 20 – 69 years 72.2%
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 17 Immunisation Services Number of eligible children fully 12 mths to 12 mths 2,188 vaccinated at 24 months of age 31.12.09: to 1,916 31.12.10: 2,162 % of eligible children fully vaccinated 12 mths to 90% 95% at 24 months of age 31.12.09: 80% Number of people aged 65+ years 9 mths to 17,054 >17,054 receiving flu vaccination 30.9.09: 14,837 % of Primary Health Organisation 9 mthsto 75% >75% enrolled population aged 65+ years 30.9.09: receiving flu vaccination 52.5% % of students receiving Year 7 12 mths to 60% 63% vaccination 31.12.09: 57%
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 18 4.4 Primary and Community • optometrists -contact lens benefit service laboratory – primary care Services – Output Class 2 diagnostics • dentists – publicly funded oral/dental A strong primary health care system (as services for children/adolescents and outlined in the Primary Health Care emergency dental services for low Strategy) is central to improving New income adults Zealanders’ overall health, and to reducing health inequalities between • non-government owned organisations different groups. New Zealand is – range of services including but not experiencing a growing prevalence of limited to health information, health long-term conditions including diabetes promotion, immunisation, primary and cardiovascular disease. Some groups care nursing, pregnancy and parenting of New Zealanders suffer from these education, healthy lifestyle services, conditions more than others, for example, and community referred radiology Maori and Pacific people, older people services. and those on lower incomes. Long-term Significant additions to the clinical conditions require an increased focus workforce and the benefits of these are across the primary/secondary interface to now being seen, such as a rise in the ensure that they are recognised early and number of people on the Diabetes Get managed effectively. Checked Programme. The three key goals from the national Many new services are now available in Primary Health Care Strategy are: the community, focusing on identifying and managing chronic (long term) • Transparent national priorities – DHBs, conditions such as diabetes, cardiovascular Primary Health Organisations (PHO) disease and cancer. These include a and the Ministry focused on national number of services previously provided in health priorities and working a hospital setting. collaboratively to improve sector performance. The district has four geographically based Primary Health Organisations (PHOs). • Collective stewardship and governance These are well established and generally – Communities and PHOs engaged to working well, supported by a shared identify population needs and target Management Services Organisation. responses consistent with national priorities. Government initiatives have reduced the cost of accessing general practice and • Enhanced delivery – A continuum of utilisation rates have improved. accessible services focused on reducing the incidence and impact of chronic MidCentral DHB’s primary health care conditions. nursing development programme is a real Locally, the primary health sector has strength and has supported primary developed well over the last four years. nurses in taking on new responsibilities
• There are four Primary Health Local Priorities and Strategies Organisations which cover the geographical area of MidCentral’s MidCentral DHB’s health needs district. These organisations are assessment identifies four chronic (long responsible for co-ordination and term) conditions which are having a delivery of general practice and detrimental impact on the district’s health: specialised services designed to improve access to primary health care • Cardiovascular disease is the highest for their enrolled populations. cause of deaths for MDHB’s residents, and the leading cause of • Also contracted to provide primary hospitalisation (excluding pregnancy health care are: and childbirth). • pharmacies - community • Cancer is the second most common pharmaceuticals cause of death within the district. MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 19 • Respiratory disease is the third most Needs Assessment has shown that people common cause of death within the in outlying areas (Tararua, Horowhenua, district and many risk factors are Otaki) that have difficulty accessing preventable. hospital-based services, have poorer health outcomes than people living close • The prevalence of diabetes is growing to the hospital. Those areas have been and it can increase the risk of a person provided with improved access to suffering from other serious illnesses. diagnostic tests, including ECGs, Exercise The main increase is in Type II Treadmill Tests, and access to portable diabetes and this is substantially Echocardiograph tests. Cardiologist preventable. appointments have also been introduced Maori feature highly in these disease in these areas. groups and are a specific area of focus for In addition to chronic disease MidCentral DHB. management, the DHB is focused on easy MidCentral DHB’s is investing in these and early access to primary health care chronic conditions as a means of services, particularly in rural areas. improving the district’s overall health MDHB has invested in primary care status. It has established chronic care capacity and capability. The bulk of the teams and other community-based new investment has been in primary services. These new services are linked health organisations. The four PHOs in strongly to, and supported, by specialist MidCentral DHB’s district are now taking hospital based services. the next step in their development. As part of a national initiative, they have This work is expected to result in long established a business case to provide term benefits in the health of the district “better, sooner, more convenient primary as the incidence and impact of these health care” for the district. The business diseases is reduced. case has the following key elements and implementation of these will be a key For example, diabetes is a condition that priority for 2010/11: requires constant attention, and if well managed people can lead a healthy life. • the establishment of five integrated Measuring the number of people who family health centres have an annual check and regular eye screening, and their blood glucose levels • increased collaboration across the gives a good indication of the effectiveness health continuum of diabetes management. • better management of acute demand Another example is early identification • improved models of care for older and treatment of cardiovascular disease. people MidCentral has provided GPs with “Best Practice” decision support software, which • improved access and utilisation of works hand-in-hand with patient record health services amongst whanau systems that are used by each GP. The
Risk Assessment module calculates the • planned clinical leadership absolute risk that any individual will have development a “cardiovascular event”, such as a heart attack, in the next 5 years. It then MidCentral DHB believes its investment in provides information about treatment that chronic diseases and primary health research has shown to be the most capacity will help it achieve the following effective to reduce that level of risk. five of its 10 long term outcomes: People found to have increased risk of heart disease can be referred, free of • Quality of life is enhanced for people charge, to teams in each district who with diabetes, cancer, respiratory provide free dietary, smoking cessation, illness, cardiovascular disease and and physical activity advice. People with other chronic (long duration) diseases. other diseases that may accelerate heart disease, such as diabetes, can receive help • Health and disability services are from community-based diabetes nurse accessible and delivered to those in specialists. MidCentral DHB’s Health need. MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 20 • The health and wellbeing of Iwi Maori is improved.
• The healthy remain well.
• People’s transition through the health and wellbeing continuum is well managed and informed.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 21
Statement of Forecast Service Performance
2. Primary Health & Community Services Output Class*
*see definition appendix 2
This section outlines the primary and community services we intend to deliver to our population. Some of these services are provided by us while others are funded by us through a range of contracts and provided by Primary Health Organisations (PHOs) and other Non Government Organisations (NGOs). These services include personal health services, mental health services, Maori and Pacific health services. These outputs are aggregated into the following main areas in the primary and community services output class: oral health services, primary and community care programmes, community mental health, Maori health, community pharmacy and laboratory services, and, community referred tests and community radiology services provided by the hospital. Total budgeted expenditure for this output class is $149.8m. Sub Output Volume and Standard Measures Baseline Targets Indicative Outputs 2010/11 Out-years Primary Number of MidCentral people enrolled with a As at 1.1.10: As at 1.1.11: ≥ 158,000 Health Care Primary Health Organisation (any PHO) 154,214 ≥ 158,000 Services % DHB population enrolled with Primary As at 1.1.10: 95% (capitation/ ≥ 95% Health Organisations 92.5% first contact) (pop 166632) Ratio of GP utilisation for high needs people 6 mths to ≥ 1.00 ≥ 1.00 30.06.09: 1.08 Ambulatory sensitive (avoidable) hospital 12 mths to Maori: ≤70.7 Maori: ≤70.7 admissions (indirectly standardised ASH Dec09: Other: ≤95.5 Other: ≤95.5 discharge ratio) 0-74 yrs Maori: 70.7% Other: 95.5% Oral Health Number of children aged under 5 years 2009: 4,040 2010: 6,794 ≥ 6,794 Services enrolled with DHB funded dental services (aged 2½ to 5 yrs (aged 0 to 5 only) yrs) Number of 5 year old children examined 2009: 1,619 2010: ≥ 1,619 2011: ≥ 1,619 Number of Year 8 children examined 2009: 2,000 2010: ≥ 2,000 2011: ≥ 2,000 % children caries free at five years of age 2009: 57.1% 58% 60% % of 13-17 year old adolescents utilising DHB 2008: 78% 2010: 78% 2011: 80% funded dental services (Pop:11,340) Mean score of permanent teeth of children 2009: 1.48 1.45 <1.45 with decayed, missing or filled permanent teeth at year eight – all areas Primary & % of Primary Health Organisation enrolled As at 31.12.09: ≥4.5% ≥5.0% Community population registered with Chronic Care 3.7% Care Teams Programmes Number of people with diabetes accessing 2008/09: 4,249 5,734 ≥ 5,734 free annual checks Number of community paediatric service 2009/10 4,125 4,300 contacts projected: 3,850 % of hospital discharged patients seen by 2008/09: 12.3% 15% ≥15% District Nursing domiciliary service in same year % of people with diabetes who have 2008/09 satisfactory or better diabetes management, ie Maori: 60% Maori: ≥ 72% Maori: ≥ 76% HBA1c ≤8% Total: 73% Total: ≥ 80% Total: ≥ 82% % of eligible adult population who have had Dec 2009: Total: >83% Total: 85% their cardiovascular disease risk assessed in Total: 82.9% last five years Mental Number of clients seen by Mental Health 12 mths to Sep 4,583 4,998
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 22 Health Services 2009: 4,173 Services Number of GP Shared Care Mental Health As at 31.12.09: As at ≥150 clients 144 30.6.11: ≥150 % of DHB population seen on average per 12 mths to Sep 2.75% 3.0% annum (access rates) 09: 2.50% (pop: 166632) % of people with long term mental illness 6 mths to Dec 95% 95% with crisis/relapse prevention plans 09: 88% Maori Health % of total clients seen by Chronic Care Teams As at 31.12.09: ≥ 20% ≥ 25% Services who are Maori 19.9% Total expenditure for contracts provided by 2008/09: $5.4m ≥ $5.4m ≥ $5.4m Maori Health providers Increase Maori enrolment with PHOs by 10% Dec 2009: 26,400 >26,400 24,000 Community Number of items dispensed 2008/09: ≤ 2,799,712 ≤ 3,065685 Pharmacy 2,556,815 Services Expenditure on community pharmaceuticals 2008/09: $308 ≤ $340 ≤ $371 per enrolled population Community Number of laboratory tests 2008/09: ≤ 881,837 ≤ 890,655 Laboratory 872,242 Services Expenditure on community laboratory 2008/09: $60.9 ≤ $62.0 ≤ $63.0 services per enrolled population Community Number of community referred tests 2008/09: Referred (MidCentral Health) : Tests • cardiology 3,850 3,281* ≥3,281 • audiology 1,012 1,037 ≥1,037 • neurology 284 278 ≥278 Community Number of community radiology 2008/09: 34,200 35,617 ≥35,617 Radiology examinations (relative value units) *Community cardiology service undertaking some community-referred tests for cardiology which were previously undertaken at MidCentral Health. This is part of the aim to provide services closer to home.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 23
4.5 Hospital Services – 2009/10. Workforce requirements are discussed under the workforce section of Output Class 3 this Plan.
MidCentral Health is the key provider of Concurrent with the development of the secondary care (hospital) services in the Clinical Services Plan is the establishment district. These are provided from two key of a regional clinical services plan. All facilities, being Palmerston North Hospital DHBs in the Central Region are facing and Horowhenua Health Centre. increased demand for hospital services. Palmerston North Hospital is a Level 5/6 The regional plan looks at how collectively facility, providing full range of secondary all DHBs can ensure their populations care services (including diagnostic have access to secondary care services, support), emergency and ICU care, and and, the sustainability of these services in some tertiary level services. It has 259 face of workforce shortages and cost beds. Horowhenua Health Centre has 24 pressures. assessment, treatment & rehabilitation MidCentral Health is also establishing beds and four primary maternity beds. clinical services on a sub-regional basis as MidCentral Health also provides a part of its alliance with Whanganui DHB. regional cancer treatment service, and the This aims to improve the health status of DHB has three linear accelerators (linac) to its joint communities. provide radiation therapy. (NB: currently utilising fourth linac which is to be Elective (non-urgent) services are hospital reviewed for decommissioning in the near services for people who do not need future.) These, together with the three immediate medical treatment, such as a linear accelerators at Wellington Hospital, hip replacement or cataract operation. serve the Central Region and beyond. Acute (urgent) services refers to conditions that, if left untreated, may MidCentral DHB has already made result in death or considerable disability, substantial investments in secondary care eg head trauma, certain cardiac conditions. services through initiatives in the diabetes, cardiovascular, respiratory and cancer MidCentral DHB’s investment in primary service plans. Developments have mainly care services is aimed at reducing the level focussed on delivery of secondary services of acute demand on hospital services. in the community setting, particularly in outlying and high-needs areas; and on (NB: Acute services are for illnesses that integration of primary and secondary care have an abrupt onset. It is usually of short delivery. A notable exception was stroke, duration, rapidly progressive, and in need for which service enhancements were of urgent care. delivered within the hospital. Concurrent with this, it is also looking at Local Priorities and Strategies how it can maximise the use of its capacity (staff, beds, and equipment), and its MidCentral DHB investment in public and discharge practices. Several quality community health services will help initiatives are planned. It is also focused people remain well, and reduce the on improving the financial sustainability of incidence and impact of disease. However, its provider arm. no matter how well this is done people will require access to hospital services. The DHB is responsible for ensuring The DHB is committed to ensuring it can mental health services are in place to care provide timely access to hospital care. for the 3% of the population who are diagnosed as having a severe mental The DHB has a Clinical Services Plan illness. These services go across the full which sets out the investment required in continuum of care, including health hospital models of care, buildings, promotion, early detection/intervention, workforce and information systems to diagnosis/treatment, meet future demand. Work on models of support/habilitation/rehabilitation, and care and information systems is underway, research. MidCentral DHB’s plans aim to and building plans will commence in ensure people with an experience of mental health and addiction maintain their MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 24 own wellbeing and participate in society help it achieve the following three of its 10 and in the everyday life of their long term outcomes: communities and whanau. Timely access to mental health service is fundamental, • Health and disability services are and MidCentral DHB focus is on accessible and delivered to those in enhancing local crisis respite services, need. implementing a new model of care for sub-acute mental health services, and, • People experiencing a mental illness reconfiguring and developing child, receive care that maximises their adolescent and family mental health independence and wellbeing. services to prepare for planned growth in • People’s transition through the health this area. It is also focused on kaupapa and wellbeing continuum is well Maori mental health services. managed and informed. MidCentral DHB believes it investment in hospital and mental health services will
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 25
Statement of Forecast Service Performance
3. Hospital Services Output Class*
*see definition appendix 2
This section outlines the hospital services we intend to deliver our population. It also outlines those hospital services we intend to fund others to provide for our population. Hospital services include personal health services, mental health services, services for older people and disability support services provided through MidCentral DHB’s hospital provider and through other DHBs via inter-district flows (IDFs). These outputs are aggregated into the following main areas of performance in the hospital services output class: elective services, acute services (medical, surgical, emergency medicine, oncology, paediatric services) maternity services, and assessment, treatment & rehabilitation services for the elderly. Total budgeted expenditure for hospital services is $277.2m. Sub Output Volume and Standard Measures Baseline Targets Indicative Outputs 2010/11 Out-years Elective Number of discharges (MidCentral residents) 2008/09: 5,174 5,567 5,619 Surgical Number of costweighted discharges (local 2008/09: 5,033 5,570 ≥5,570 Services only) (inpatient & Number of First Specialist Assessments (all 2008/09: 11,545 11,546 ≥ 11,546 outpatient) surgical services excluding gynaecology – MidCentral Health) Compliance with Elective Services 62.5% 100% 100% Performance Indicators (ESPIs)* Day of surgery admission rate** 2008/09: 94% ≥ 90% ≥ 90% % elective surgery undertaken as a daycase 2008/09: 59% ≥ 60% ≥ 60% Standardised intervention rate (surgical 2008/09: 265 292 ≥ 292 diagnostic relating groups), per 10,000 population % patient overall satisfaction rate (all 2008/09: 86.9% 87.5 87.5 services) Acute % of Emergency Department (ED) 6 mths to 95% 95% Services attendances with an ED length of stay equal 31.12.09: 76.6% to or less than 6 hours • Emergency department Number of acute inpatient discharges 2008/09: 12,093 12,618 12,896 • Medical Number of acute beddays 2008/09: 57,852 55,645 51,711 Number of Medical (including oncology) first 2008/09: 7,687 8,684 9,895 • Surgical specialist assessments • Paediatric % of acute readmission to hospital 2008/09: 10.25% ≤ 10% ≤ 10% • Oncology Acute inpatient average length of stay 2008/09: 4.79 4.41 days 4.01 days days % MidCentral patients starting radiation 12 mths to 6 mths to 100% (4 oncology treatment within timeframes 31.12.09: 88.7% 30.06.11: 100% weeks) (6 weeks) (4 weeks) Maternity Number of maternity inpatient costweighted 9 mths to 1,982 1,982 Services discharges 31.3.10: 1,506 Number of DHB non-specialist post-natal 9 mths to 1,607 ≥ 1,607 contacts 31.3.10: 1,449 Caesarean section rate (acute) 12 mths to <25% <25% 31.12.09: 20% Established breastfeeding at discharge 12 mths to ≥ 81% 90% 31.12.09: 81% % of women rating their post natal length of 5mths to ≥95% ≥95% stay as “just right” 30.4.10: 95%
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 26 Assessment, Number of inpatient discharges (geriatric 2008/09: 799 853 938 Treatment & AT&R) Rehabilitation Number of accredited equipment 2008/09: 628 531 537 (AT&R) assessments, aligned to purchased level Services % inpatients discharged to home 2008/09: 85% ≥ 85% 90% *Eight criteria for elective services have been established nationally. These monitor the quality aspects of the service, including the way patients are managed from the time of referral to the point of treatment. The criteria covers all parts of the journey, including: timely acknowledgement of referrals; waiting times for first specialist assessment; prioritisation of patients; waiting times for treatment; regularly assessment of patients classified “active review”; use of national assessment processes and tools. **National definition amended to include arranged admissions. Baseline data based elective only in line with definition at that time.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 27 4.6 Support Services – In line with the Government’s priorities, MidCentral DHB aims to improve the Output Class 4 quality of nursing care within aged residential care facilities. Additional The district has a large number of aged funding is being provided to age residential care facilities that provide rest residential care providers for this purpose. home care (general care, hospital level Through improved nursing care, continuing care, psycho-geriatric residents’ health will be regularly continuing care, and dementia services, as reviewed and treatment plans adjusted, well as respite and day care). The resulting in maximum independence and providers generally operate good quality quality of life. All providers of aged facilities and the standard of their care is residential care must be certified by the subject to regular audit. Enable New Ministry of Health that they meet the NZ Zealand is also a provider of disability Health & Disability Standards 2008. health information and assessment, and is Providers cannot operate nor receive a division of MidCentral DHB. funding subsidies unless certified. All providers are required to undergo a The district has a robust needs assessment surveillance audit 18 month’s post and service co-ordination service (NASC), certification, and a further routine audit and a range of home based support takes place three year’s post certification. organisations. This is provided by In addition to this process, MidCentral Supportlinks which is part of the DHB. DHB undertakes special audits each year. It also has a comprehensive palliative care MidCentral DHB has invested in a service throughout the district, with all comprehensive palliative care service to providers adopting the Liverpool Care of support people with chronic conditions as the Dying Pathway, to ensure consistent appropriate, and those in the final stages support to those who are imminently of their life. One component is the dying. Palliative care is largely provided Liverpool Care of the Dying Pathway through the local hospice. A small which aims to ensure people can receive secondary care level service is provided by consistent specialist palliative care MidCentral Health. regardless of their location (home, hospital, hospice, community or rest home). Local Plans & Strategies MidCentral DHB has funded specialist palliative care practitioners, a clinical MidCentral DHB aims to improve and pharmacist, and training programme, with support independence and choices for the aim that all primary, secondary and older people, fostering their ability to live aged residential care facilities are capable at home or in their place of choice longer. of delivering the LCP. (NB: There are approximately 90 facilities in the district.) A key to achieving MDHB’s aims is a It is expected this will result in more robust needs assessment and service co- people being able to receive community ordination process. MidCentral DHB is care within a community setting of their investing in a new information choice. management tool, InterRAI, to assist with the assessment process. Linked to this is MidCentral DHB believes it investment in a need to review the configuration and support health services will help it achieve resourcing of the local NASC service. the following four of its 10 long term outcomes: Through the timely turnaround of need assessments the DHB can ensure early • Health and disability services are identification of older peoples’ level and accessible and delivered to those in type of functional loss and need for need. support or services in the community and/or entry to residential care, is • The needs of specific age-related identified early. This will result in older groups, eg older people, are addressed. persons maintaining maximum independence and quality of life.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 28 • The wider community and family supports and enables older people and the disabled to participate fully in society and enjoy maximum independence. People’s transition through the health and wellbeing continuum is well managed and informed.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 29
Statement of Forecast Service Performance
4. Support Services Output Class*
*see definition appendix 2
This section outlines the support services we intend to deliver our population. Each aggregate includes people with long-term impairment or disabilities; people with a mental illness, services for the elderly and those who have aged related disabilities and care of the dying. These outputs are aggregated into the following main areas of performance in the support service output class: Needs Assessment & Service Coordination (NASC) services, palliative care services, rehabilitation services, home based support services, aged residential care bed services and life long disability services. Total budgeted expenditure for this output class is $107.5m. Sub Outputs Output Volume and Standard Measures Baseline Targets Indicative Output Standard Measures 2010/11 Out-years Needs Assessment Average number of new referrals received per Jan 2010: 250 ≤270 and Service month 233 Coordination % of MidCentral Health referrals of eligible 30.5% 100% 100% (NASC) Services inpatients aged 65+yrs seen within 3 days Palliative Care Number of palliative care community services’ 2008/09: 460 475 Services clients 449 Number of Stage 2 aged residential care facilities Not 14 14 in DHB region receiving End of Life Care applicable education sessions by Arohanui Hospice Education & Research Unit. (NB: new programme to be introduced in 2010/11.) Rehabilitation Number of medical rehabilitation inpatient bed 2008/09: 2,305 2,305 Services days (aligned to purchase level) 2,508 Number of rehabilitation outpatient clinic 2008/09: 2,008 ≥ 2,008 attendances, aligned to purchased level 2,436 Home Based % of people receiving ≥ 8 hours of home based 59% 65% ≥65% Support Services support services Total spend on home based support services as 18% ≥18% ≥18% a proportion of total spend on aged residential care Aged Residential Number of subsidised beds: As at Jan As at June As at June Care (ARC) 2010: 2011: 2012: Services • Stage II rest home 938 938 938 • Hospital care 456 456 456 • Dementia 174 174 174 • Psychogeriatric 16 16 16 Aged residential care beds per 1,000 population 64.6 62.7 60.9 over 65 years of age (NB: bed levels remain constant. Aged population increasing.) Number of issue based audits of aged 10 <5 <5 residential care facilities % of aged residential care beds occupied As at Jan ≥ 85% ≥ 85% 2010: 82% Life Long Number of people aged under 65 years As at 10 As at 30 As at 30 Disability Services receiving Life Long Disability Support Services May 2010: June 2011: June 2012: (under 65 years of via Supportlinks (Needs Assessment & Service 1,285 1,307 ≥1,307 age) Co-ordination agency)
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 30 5. Organisational Capability
5.1 Human Resources, Workforce Development & Staff Group Staff Staff Stability Turnover 08/09y Organisational Health 08/09 Medical* 4.64% 99.81% The provision of effective health care Nursing & 7.86% 99.78% across the MidCentral district depends, Midwifery inter alia, on an appropriately skilled Allied Health 10.54% 99.74% workforce of the right size. MidCentral Support 14.29% 99.70% DHB takes it role as a good employer Management/ 6.05% 100.00% seriously, as is evidenced by the Administration implementation of its workforce Total development strategy. The Board ensures *Excludes junior medical staff. Their national a comprehensive range of human resource training programmes requires them to move between policies are in place including, but not DHBs to complete their curriculum. restricted to: recruitment/appointment, Note: Staff stability is calculated as Average of orientation, leave, continuing education, Monthly Staff Stability Rates credentialing, performance management, Excludes casual and temporary staff code of conduct/disciplinary procedures, whistle-blowing, harassment and bullying prevention, health and safety, impaired Within MidCentral Health a staff, work and family, workplace clinical:management partnership exists, rehabilitation, and our equal employment with each major service line being led by a opportunities (which underpins all our HR Clinical Director, Operations Director, policies and procedures). Director of Nursing, Allied Health Director and Midwifery Director as appropriate to The DHB is a member of the ACC the line. For most specialities within a Partnership Programme and has been service line, there is a Medical Head. accorded tertiary status – the highest level MidCentral DHB has a strong professional possible. nursing structure. A professional advisory function is in place for medicine, MidCentral DHB employs around 2,100 nursing, allied health, and clerical. This staff (full time equivalents). Over half are includes professional advisor roles and of NZ European ethnicity, and 6% are reference groups. Clinical governance Maori. The majority of staff employed are within MidCentral Health is led by its health professionals: Clinical Board.
MDHB 2009/10 1 July 2009 2010/11 Change from Change from Within the secondary care (hospital) Budget Actual Budget 2009/10 Budget 1 July Actual health services, the workforce is ageing. Medical 259 257 290 31 33 Nursing & The average age of MidCentral DHB’s Midwifery 901 954 915 14 -39 workforce is 45.2 years. (December 2007: Allied Health 363 377 404 41 27 43.8 years.) Our recruitment initiatives, Support 45 43 46 1 3 together with the global recession has led Mgmt/Admin 521 518 517 -4 -1 a positive impact on our overall vacancy TOTAL 2,089 2,149 2,172 83 23 levels. However there continues to be Within MidCentral Health, the DHB’s international workforce shortages for some provider arm, the staff turnover and staff appropriately skilled health professionals, stability rates are very good, averaging mostly within medical specialities. DHBs 7.95% and 99.81% per year respectively: in the Central Region have developed a Regional Clinical Services Plan which looks at ensuring sustainability of services into the future, including workforce arrangements. This will require MidCentral DHB to forecast its future workforce requirements in light of new MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 31 regional arrangements and local demand, 5.2 National, Regional and and plan, recruit and train accordingly. Cross-Sector Collaboration In addition to the DHB staff there is many other people working in primary health Working collaboratively with others, both care, aged residential facilities, and other across the sector and with other health non-government owned health and social service providers is integral to organisations. Information regarding this the success of MidCentral DHB in non-DHB workforce is not detailed, but achieving the goals set out in our District there are around 150 practice nurses, 30 Strategic Plan. We are committed to Maori health nurses working for Maori sharing resources with regional DHBs and providers, 256 people working in providers as well as collaboration with the residential care facilities, and 140 general Ministry, DHBNZ, and providers in order practitioners. Clinical governance within to achieve specific outcomes. the primary sector is led by the combined PHOs Clinical Board. A professional All DHBs within the central region development nursing team also works recognise the need for greater with general practice. collaboration and have established a Regional Clinical Services Plan. This is a General Practitioners are currently the conceptual document setting out the critical professional group in terms of vision for the future to the year 2020 and primary health care services. They need provides the framework for the region’s to be present in sufficient numbers, they future service development and need to possess an appropriate range of investment. The Plan looks at how the skills, and they need to be distributed in region can ensure access to secondary care such a way that they are accessible to the services, and, the sustainability of these in people who need their help. face of workforce shortages. The On a district-wide basis, two key implementation of the Regional Clinical mechanisms have been established to Services Plan will get underway in 2009/10 ensure clinical involvement in decision and will see the establishment of more making. One is a Clinical Council for the clinical networks. DHB which covers both primary and A regional Asset Management Plan and a secondary health professionals, a lay Regional Information Strategic Plan have person, and a Maori representative. For been developed. each of MDHB’s priority health areas a district management group exists, MidCentral DHB has established an comprising representatives from primary alliance with Whanganui DHB. The aim and secondary care, consumers, and of this initiative, called the centralAlliance, providers. These oversee the is to develop a consistent, combined implementation of these service plans. districts approach to health and disability Regionally, clinical networks continue to service planning which will result in be established – refer Regional health gains for our populations. Collaboration section. Under the alliance we will remain The DHBs have a national workforce autonomous organisations, but will development strategy and work together collaborate further on an integrated regarding workforce issues, particularly approach to common strategic and determining current and future workforce operational responsibilities. An example trends and requirements, recruitment, and is our current joint project around negotiation of multi-employer collective women’s and children health services. agreements of multi-employer collective We are also currently working on shared agreements. corporate and commercial support services. As part of its district strategic planning process, MidCentral DHB will be engaging and/or consulting with key stakeholders and the community about the centralAlliance and the Regional Clinical
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 32 Services Plan, and what they mean for the implementation. MidCentral DHB will district. work at both the national collective level and at the DHB level to deliver the QIC 5.3 Building Capacity programme over the next 2-3 years. It is implementing a component of the “optimising the patient journey” project The district’s public health, primary and and is also doing the training component secondary care services are supported by a of the new incident management database. robust infrastructure, including information technology, buildings and MidCentral DHB participates in the NZ equipment. MidCentral DHB has an health accreditation programme. This is Asset Plan, and will be working with an independent review of the DHB’s other DHBs in the central region to systems and processes. In addition, it is develop a Regional Asset Plan during reviewed by the Ministry of Health to 2009/10. ensure compliance (certification) under the Health & Disability Sector (Safety) Act Significant investment and development 2000. work has taken place over the last five years. The National Service Framework provides nationally consistent service specifications, The DHB’s building stock is in good repair. quality specifications, purchase units The main facility, Palmerston North (including purchase unit definitions) and Hospital, is scheduled for reconfiguration prices. It aligns with the Service Coverage over the next three years so that it can Schedule and Operational Policy meet further growth. Framework documents, which, together, define the baseline services which District The DHB has a robust capital expenditure Health Boards must make sure are programme which enables new and available to their populations. All District replacement equipment to be purchased as Health Boards use the National Service required. Framework, and it is maintained through the collaborative efforts of the Ministry of 5.4 Information Systems Health, District Health Boards’ New Zealand, and the District Health Boards. The DHB’s Information Systems Strategic MidCentral District Health Board is Plan (ISSP) is being progressively committed to participating in the implemented. One of the key systems is development and maintenance of the the patient management information National Service Framework and using it system and this is scheduled for a major to structure the services the District Health upgrade in 2010. Supporting (feeder) Board funds. Providers will be contracted systems have been upgraded in readiness. under the National Service Framework The investment in information technology wherever there are suitable service has included the primary sector, with specifications and purchase units. All funding provided for disease-state providers are expected to comply with the decision software. Funding has also been quality specifications in the Operational provided for general practices to look at Policy Framework. the feasibility of larger, collective primary Many primary health care providers are care practices. paid under regulatory arrangements based Work on establishing a regional on national frameworks. These are Information Systems Strategic Plan will get typically fee for service arrangements. underway in 2009/10. The DHB monitors service performance in these areas through statistical reports, many of which are produced by Central 5.5 Quality and Safety Region’s Technical Advisory Service (TAS), on behalf of MidCentral DHB. The MidCentral DHB’s quality plan is closely performance of DHB-owned providers aligned to the national Quality (such as MidCentral Health) is monitored Improvement Committee’s (QIC) through an internal reporting framework. programme which is in year two of its MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 33 In addition to routine contract monitoring, 5.6.2 Allied Laundry Services the DHB also has a formal audit Limited programme which is managed by TAS using a team of auditors who are qualified MidCentral District Health Board is part to carry out service-based, financial or owner of Allied Laundry Services Limited, cultural audits. Audits are of two types: a limited liability company established in routine audits which are expected to occur 2002 under the Companies Act 1993. The at least every three years and Special and company is equally owned by four Issues based audits which occur at the participating DHBs, being Taranaki, request of the DHB, usually in response to Whanganui, Hawke’s Bay and MidCentral an emerging issue. Health District Health Boards 5.6 Subsidiaries The purpose of Allied Laundry Services Limited is to provide laundry services in this region. The regional laundry facility is MidCentral District Health Board has a based on Palmerston North Hospital part ownership in the Central Region’s campus. Technical Advisory Service (TAS) and Allied Laundry Services. Allied Laundry Services Limited’s key output for 2010/11 is the processing 5.6.1 Central Region’s Technical (collection, laundering and delivery) of Advisory Service Limited around 2.7m kgs of laundry to its four shareholding DHBs, and Wairarapa DHB.. The Central Region’s Technical Advisory Service Limited (TAS) was established Details of this company’s financial with Ministerial approval in 2001 as a forecasts and accounting statements are limited liability company under the contained in this document – refer Companies Act 1993 and is jointly and Appendix 6. equally owned by the six District Health Boards in the Central region. Each District Health Board participates in its governance through the board structure. The purpose of TAS is to provide the central region’s District Health Boards with expert advisory services through health information, service planning and external service audit functions to support local District Health Board decision- making. It does not have a mandate to make purchasing decisions. TAS also undertakes audit services for District Health Boards - reviewing and monitoring the contract performance of service providers, with the emphasis on quality and patient/community outcomes. TAS issues its own Statement of Intent each year.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 34 6. Financial Performance
6.1 Financial Statements 6.4 Financial Assumptions
MidCentral DHB is forecasting a small National Assumptions deficit in 2010/11 and 2011/12 and breakeven in outer year. The deficit in the General Assumptions first two years includes $1m which relates to the Assessment, Treatment & • Interest rates are assumed to remain at Rehabilitation Service Review for people 2009 levels until mid 2010 when they aged 65 years and over being suspended, are expected to rise. with National Health Board support, while • Exchange rate fluctuations may an Integrated Family Health Centre is materially impact the cost of supplies established based on Horowhenua Health and will be offset by clinical supply Centre. (See Appendix 4 for detailed saving initiatives, and the use of financial tables.) hedging contracts by suppliers. 6.2 Capital Expenditure • No change in capital charge rate of 8%. • All changes resulting from MidCentral DHB is planning to contain implementation of the Ministerial capital expenditure as far as possible in Review Group’s recommendations order to reduce operating costs. All items including any devolution during the critical to the operation of the DHB will be term of the plan will be at least cost given priority. neutral or better to MidCentral DHB. This includes the impact of the 6.3 Disposal of Land establishment of the National Health Board (NHB) and National Shared Services Establishment Board (NSSEB). Asset sales planned over coming years Future impacts of the NHB and NSSEB are: are not able to be factored into DAPs, including planning and funding of 2010/11 national services, ICT and workforce. • Kimberley Centre property • Revenue for capital and operating costs, as detailed in MidCentral DHB’s • Portion of Horowhenua Hospital business case for Child & Adolescent Surplus Land (to St John Ambulance Oral Health Services will be provided Service) from national funds. 2011/12 • Material compliance costs arising from regulatory and legislative changes are • Horowhenua Hospital Surplus Land not budgeted. The DHB is required to seek the Minister • No material costs have been included of Health’s approval regarding proposed for a pandemic. disposal of property. At the time of writing this Statement of Intent, • Savings identified from Performance MidCentral DHB expected to be consulting Improvement Actions totalling $6.8 the Minister in 2010/11 regarding the sale million, of which $4.588m fall in of surplus land, such as portion of the 2010/11, have been incorporated into Horowhenua Hospital campus, and financial assumptions: possibly Clevely Centre. (NB: Clevely Performance Improvement Action Impact Centre may be retained depending upon 2010/11 the outcome of a primary care initiative.) $000
MidCentral DHB: 2010/11 Statement of1 Intent, Achieve Financial28 June Security 2010 3,088 Page 35 2 Improve Productivity and Quality -
3 Enhance Regional Cooperation 1,500 flows with no significant impact on net Personnel costs. • Inter-district flows for MidCentral • Workforce costs have been budgeted at Health’s Regional Cancer Treatment actual known costs including step Service have been based on 50% actual increases. and 50% historic levels for 2010/11, and • Future increases in workforce costs 100% actual in 2011/12. have been budgeted based on national • Price Volume Schedule will be employment relations strategies. accommodated within the application Policy of the service level agreement (SLA) rules with the Funding Division. Any • Budgeted on current Government new or additional costs will be offset policy settings and known by equivalent cost reductions Government health service initiatives. elsewhere in MidCentral Health. • The impact of changes to the income • No new ownership investments in and asset testing regime will be cost other businesses are included in this neutral, with revenue equating to Plan. current costs. • Shared services: Allied Laundry will • The impact of changes to the national not require any funding in the 2010/11 Travel & Accommodation Policy year. Central TAS Service Level (announced March 2009) will be at Agreement will not require any least cost neutral to MidCentral DHB. increase in SLA funding in the 2010/11 year. Regional/Local • Any collaborative regional and sub- General Assumptions regional initiatives will be cost-neutral • No external deficit funding will be • Land-holding costs associated with required during the planning period. Kimberley Centre will continue to be National Health Board support for a met by the Ministry of Health. (NB: deficit of $1m in 2010/11 and 2011/12 is this property is being disposed off via assumed, and relates to the AT&R the Crown land disposal process.) service review being suspended. Personnel • Early payment of funding from the Ministry of Health will continue. • Any restructuring costs will be met from budgeted operating costs. • Total capital expenditure of up to $16 million is planned for 2010/11 • Administration/management numbers will not exceed the established cap of • MidCentral DHB’s land and buildings 535 FTEs except by agreement of the are re-valued every three years. The Minister of Health. last revaluation occurred on 30 June Demand for Services 2009. A further valuation is planned for 2010 on an Optimised Depreciated • MidCentral DHB will live within its Replacement Costs basis and this is budget. expected to be cost neutral. • Overall acute demand will be similar • MidCentral DHB’s share of the or less to that of 2009/10, thus allowing national population based funding planned levels of elective procedures formula will be 4.16%. 4.15% and to be undertaken. 4.15% in 2010/11, 2011/12 and 2012/13 respectively. • Elective throughput will be in accordance with the Elective Services • Inter-District Flows. MidCentral DHB Plan. will use its funding envelope as a base. There will be marginal changes to • All elective surgical work will be intervention rates and inter-district performed in-house.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 36 • Central Region DHBs will meet the process or specifically included in a Minister of Health’s requirement to service contract. clear the backlog of women waiting for delayed breast reconstructions from elective services plans. Contracted Providers: Pricing
• For 2010/11 no price increases will be applied to external providers unless directed by the Minister or Ministry of Health, agreed through a national
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 37 Appendix 1 – List of Acronyms
CE Crown Entities Act CFA Crown Funding Agreement DAP District Annual Plan DHB District Health Board DSP District Annual Plan GAAP Generally accepted accounting principles HNA Health Needs Assessment IQ Improving Quality LTSF Long Term System Framework MoH Ministry of Health NZPHD New Zealand Public Health and Disability Act OAG Office of the Auditor General SCS Service Coverage Schedule SFSP Statement of Forecast Service Performance SOI Statement of Intent SSC State Services Commission
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 38 Appendix 2 – Sector Led Definitions: Output Classes
Hospital Services Comprise services that are delivered by a range of secondary, tertiary and quaternary providers using public funds. These services are usually integrated with ‘facilities’ classified as hospitals to enable co-location of clinical expertise and specialized equipment. These services are generally complex and provided by health care professionals that work closely together. They include: • Ambulatory services (including outpatient, district nursing and day services) across the range of secondary preventive, diagnostic, therapeutic, and rehabilitative services • Inpatient services (acute and elective streams) including diagnostic, therapeutic and rehabilitative services Emergency Department services including triage, diagnostic, therapeutic and disposition services
Primary and Comprise services that are delivered by a range of health and allied health Community Healthcare professionals in various private, not-for-profit and government service Services settings. Include general practice, community and Maori health services, Pharmacist services, Community Pharmaceuticals (the Schedule) and child and adolescent oral health and dental services. These services are by their nature more generalist, usually accessible from multiple health providers and from a number of different locations within the DHB.
Public Health Services Are publicly funded services that protect and promote health in the whole population or identifiable sub-populations comprising services designed to enhance the health status of the population as distinct from the curative services which repair/support health and disability dysfunction. Public health services address individual behaviours by targeting population wide physical and social environments to influence health and wellbeing. Public Health services include health promotion to ensure that illness is prevented and unequal outcomes are reduced; statutorily mandated health protection services to protect the public from toxic environmental risk and communicable diseases; and, individual health protections services such as immunisation and screening services.
Support Services Comprise services that are delivered following a ‘needs assessment’ process and coordination input by NASC Services for a range of services including palliative care services, home-based support services and residential care services.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 39 Appendix 3 – Glossary of Terms
Activity What an agency does to convert inputs to Outputs.
Capability What an organisation needs (in terms of access to people, resources, systems, structures, culture and relationships), to efficiently deliver the outputs required to achieve the Government's goals.
Crown agent A Crown entity that must give effect to government policy when directed by the responsible Minister. One of the three types of statutory entities (see also Crown entity; autonomous Crown entity and independent Crown entity)
Crown entity A generic term for a diverse range of entities within 1 of the 5 categories referred to in section 7(1) of the Crown Entities Act 2004, namely: statutory entities, Crown entity companies, Crown entity subsidiaries, school boards of trustees, and tertiary education institutions. Crown entities are legally separate from the Crown and operate at arms length from the responsible or shareholding Minister(s); they are included in the annual financial statements of the Government.
Effectiveness The extent to which objectives are being achieved. Effectiveness is determined by the relationship between an organisation and its external environment. Effectiveness indicators relate outputs to impacts and to outcomes. They can measure the steps along the way to achieving an overall objective or an Outcome and test whether outputs have the characteristics required for achieving a desired objective or government outcome.
Impact Means the contribution made to an outcome by a specified set of goods and services (outputs), or actions, or both. It normally describes results that are directly attributable to the activity of an agency. E.g. The change in the life expectancy of infants at birth and age one as a direct result of the increased uptake of immunisations. (Public Finance Act 1989)
Impact measures Impact measures are attributed to agency (DHBs) outputs in a credible way. Impact measures represent near-term results expected from the goods and services you deliver; can be measured after delivery, promoting timely decisions; reveal specific ways in which managers can remedy performance shortfalls. (http://www.ssc.govt.nz/upload/downloadable_files/performance- measurement.pdf)
Input The resources such as labour, materials, money, people, information technology used by departments to produce outputs, that will achieve the Government's stated outcomes. (http://www.ssc.govt.nz/glossary/)
Intervention An action or activity intended to enhance outcomes or otherwise benefit an agency or group. (refer (http://www.ssc.govt.nz/glossary/)
Intervention logic A framework for describing the relationships between resources, activities and model results. It provides a common approach for integrating planning, implementation, evaluation and reporting. Intervention logic also focuses on being accountable for what matters – impacts and outcomes
Intermediate See Outcomes outcome Management Are the supporting systems and policies used by the DHB in conducting its systems business. Measure A measure identifies the focus for measurement: it specifies what is to be measured
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 40
Objectives This term is not defined in the legislation. The use of this term recognises that not all outputs and activities are intended to achieve “outputs” . E.g. Increasing the take-up of programmes; improving the retention of key staff; Improving performance; improving relationships; improving Governance…etc are ‘internal to the organisation and enable the achievement of ‘outputs’.
Outcome Outcomes are the impacts on or the consequences for, the community of the outputs or activities of government. In common usage, however, the term 'outcomes' is often used more generally to mean results, regardless of whether they are produced by government action or other means. An intermediate outcome is expected to lead to a end outcome, but, in itself, is not the desired result. An end outcome is the final result desired from delivering outputs. An output may have more than one end outcome; or several outputs may contribute to a single end outcome. (Refer http://www.ssc.govt.nz/glossary/) A state or condition of society, the economy or the environment and includes a change in that state or condition. (Public Finance Act 1989)
Output agreement Output agreement/output plan - See Purchase Agreement (refer to http://www.ssc.govt.nz/glossary/) An output agreement is to assist a Minister and a Crown entity (DHB) to clarify, align, and manage their respective expectations and responsibilities in relation to the funding and production of certain outputs, including the particular standards, terms, and conditions under which the Crown entity will deliver and be paid for the specified outputs (see s170 (2) CE Act 2004
Output classes Output classes are an aggregation of outputs. (Public Finance Act 1989) Outputs can be grouped if they are of a similar nature. The output classes selected in your non-financial measures must also be reflected in your financial measures (s 142 (2) (b) CE Act 2004). are groups of similar outputs (Public Finance Act 1989)
Outputs Outputs are final goods and services, that is, they are supplied to someone outside the entity. They should not be confused with goods and services produced entirely for consumption within the DHB group (Crown Entities Act 2004)
Ownership The Crown's core interests as 'owner' can be thought of as: Strategy - the Crown's interest is that each state sector organisation contributes to the public policy objectives recognised by the Crown; Capability - the Crown's interest is that each state sector organisation has, or is able to access, the appropriate combination of resources, systems and structures necessary to deliver the organisation's outputs to customer specified levels of performance on an ongoing basis into the future; Performance - the Crown's interest is that each organisation is delivering products and services (outputs) that achieve the intended results (outcomes), and that in doing so, each organisation complies with its legislative mandate and obligations, including those arising from the Crown's obligations under the Treaty of Waitangi, and operates fairly, ethically and responsively. (refer http://www.ssc.govt.nz/glossary/)
Performance Selected measures must align with the DHBs DSP and DAP. The use four or measures five key outcomes with associated outputs for non-financial forecast service performance are considered adequate. Appropriate measures should be selected and should consider quality, quantity, effectiveness and timeliness. These measures should cover three years beginning with targets for the first financial year (2010/11) and show intended results for the two subsequent financial years. (refer to www.ssc.govt.nz/performance-info-measures)
Priorities Statements of medium term policy priorities
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 41 Purchase A purchase agreement is a documented arrangement between a Minister and a agreement department, or other organisation, for the supply of outputs. Some departments piloting new accountability and reporting arrangements now prepare an output agreement. An output agreement extends a purchase agreement to include any outputs paid for by third parties where the Minister still has some responsibility for setting fee levels or service specifications. The Review of the Centre has recommended the development of output plans to replace departmental purchase and output agreements. (refer http://www.ssc.govt.nz/glossary/)
Results Sometimes used as a synonym for 'Outcomes'; sometimes to denote the degree to which an organisation successfully delivers its outputs; and sometimes with both meanings at once. (http://www.ssc.govt.nz/glossary/)
SMART S.M.A.R.T refers to the acronym that describes the key characteristics of meaningful objectives, which are Specific (concrete, detailed, well defined), Measureable (numbers, quantity, comparison), Achievable (feasible, actionable), Realistic (considering resources) and Time-Bound (a defined time line). Lets look at these characteristics in more detail. SMART objective then are the stepping stones to the achievement of our goals
Standards of Measures of the quality of service to clients focus on aspects such as client Service Measures satisfaction with the way they are treated; comparison of current standards of service with past standards; and appropriateness of the standard of service to client needs.
Statement of A document that identifies, for the medium term, the main features of Intent intentions regarding strategy, capability and performance. SOIs are developed after discussion between an entity and its Minister(s). Crown entities on the Sixth Schedule to the Public Finance Act prepare an SOI that covers medium term financial and performance intentions. After being finalised, the SOI is tabled in Parliament. (http://www.ssc.govt.nz/glossary/)
Statement of Government departments, and those Crown entities from which the service Government purchases a significant quantity of goods and services, are required performance (SSP) to include audited statements of objectives and statements of service performance with their financial statements. These statements report whether the organisation has met its service objectives for the year. (http://www.ssc.govt.nz/glossary/)
Strategy See Ownership (http://www.ssc.govt.nz/glossary/) Targets Targets are agreed levels of performance to be achieved within a specified period of time. Targets are usually specified in terms of the actual quantitative results to be achieved or in terms of productivity, service volume, service- quality levels or cost effectiveness gains. Agencies are expected to assess progress and manage performance against targets. A target can also be in the form of a standard or a benchmark.
Values The collectively shared principles that guide judgment about what is good and proper. The standards of integrity and conduct expected of public sector officials in concrete situations are often derived from a nation's core values which, in turn, tend to be drawn from social norms, democratic principles and professional ethos. (http://www.ssc.govt.nz/glossary/)
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 42 Appendix 4, Financial Statements
Revenue & Expenditure by Output Class
Revenue and Expenditure by Output Class
2010/11 2010/11 Budget Budget Rev enue Expenditure $000 $000 Hospital Services Surgic al Spec ialties / ICU / Anaesthetic s 65,603 65,118 Internal Medicine 48,808 45,244 Regional Cancer Treatment Serv 37,034 33,312 Women's & Children's Health 29,069 27,595 Emergency 13,789 13,410 Elderly Health 12,505 11,985 Clinic al Support 8,733 7,658 Mental Health 4,489 4,335 Other Services 11,624 22,213 Inter District Flows 46,358 46,358 Total Hospital Services 278,012 277,228
Primary & Community Services Pharmaceuticals 44,460 44,460 Primary Health Organisations 26,892 26,892 MidCentral Health Mental Health 23,094 22,302 Laboratories 9,906 9,906 MidCentral Health Rehab & Therapy 4,351 5,237 Chronic Disease Management and Education 4,477 4,477 MidCentral Health Dental Health 2,874 3,548 Community Residential Beds & Servic es 2,815 2,815 Dental Services 1,810 1,810 MidCentral Health Rural Health 46 1,569 General Medical Subsidy 1,344 1,344 Child and Youth 1,305 1,305 Other Services 23,621 24,217 Total Primary & Community Services 146,995 149,882
Public Health Services MidCentral Health Public Health 6,946 6,954 Immunisation 731 731 Other Servic es 1,284 1,305 Total Public Health Services 8,961 8,990
Support Services Disability Servic es (Enable NZ) 44,913 44,713 Residential Care 36,773 36,773 MidCentral Health Rehab & Therapy 8,726 10,502 Home Support 10,065 10,065 Palliative Care 2,512 2,512 Other Servic es 2,936 2,967 Total Support Services 105,925 107,532
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 43 Financials by Legislative Output Class
Consolidated Position
Statement of Financial Performance MidCentral DHB
Actual Forecast Budget Budget Budget ($'000's) 2008/09 2009/10 2010/11 2011/12 2012/13
Revenue 478,397 504,122 539,893 553,820 567,843 % change 5.38% 7.10% 2.58% 2.53%
less Expenditure Personnel 160,117 167,700 174,627 178,964 183,336 Outsourced Services 25,229 20,861 16,512 16,923 16,236 Clinical Supplies 39,919 46,116 45,929 47,063 48,207 Infrastructure & Non-Clinical 58,790 57,276 79,286 79,614 81,555 Financing Charges 9,742 10,252 10,331 10,590 10,851 External Provider Payments 152,476 165,088 170,589 174,074 178,717 Inter-District Payments 42,073 46,709 46,358 47,638 48,924 Corporate costs --- --
488,346 514,002 543,632 554,866 567,826 % change 5.25% 5.76% 2.07% 2.34%
Operating Surplus/(Deficit) (9,949) (9,880) (3,739) (1,046) 17
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 44
Statement of Financial Position MidCentral DHB
Actual Forecast Budget Budget Budget ($'000's) 2008/09 2009/10 2010/11 2011/12 2012/13
Current Assets 44,727 34,280 31,756 30,078 26,963 Current Liabilities 58,941 58,941 58,941 58,941 58,941 Working Capital (14,214) (24,661) (27,185) (28,863) (31,978)
Non current assets 164,748 166,456 166,496 166,496 168,996
Assets Employed 150,534 141,795 139,311 137,633 137,018
Non Current Liabilities 52,013 52,013 52,013 52,013 52,013 Equity 98,521 89,782 87,298 85,620 85,005
Funds Employed 150,534 141,795 139,311 137,633 137,018
Statement of Cashflows MidCentral DHB
Actual Forecast Budget Budget Budget ($'000's) 2008/09 2009/10 2010/11 2011/12 2012/13
Total Receipts 470,329 502,718 538,397 552,270 566,237 Total Payments (465,978) (497,596) (525,665) (536,100) (548,760)
Operating Cash flow 4,351 5,122 12,732 16,170 17,477
Investing Cashflow (10,079) (13,120) (12,922) (13,627) (16,371) Financing Cashflow (3,763) (2,450) (2,334) (4,221) (4,221)
Net Capital Cashflow (13,842) (15,570) (15,256) (17,848) (20,592)
Net Cashflow (9,491) (10,448) (2,524) (1,678) (3,115) Opening Cash 35,615 26,124 15,676 13,152 11,474 Closing Cash 26,124 15,676 13,152 11,474 8,359
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 45
Statement of Debt & Equity MidCentral DHB
Actual Forecast Budget Budget Budget ($'000's) 2008/09 2009/10 2010/11 2011/12 2012/13
Debt : Fac ility Utilised: Working Capital - - - - - Long-Term Debt 54,700 54,700 54,700 54,700 54,700 54,700 54,700 54,700 54,700 54,700
Fac ility Available: Crown 56,700 56,700 56,700 56,700 56,700 Private Sector 15,000 15,000 15,000 15,000 15,000 71,700 71,700 71,700 71,700 71,700
Unused Facility 17,000 17,000 17,000 17,000 17,000
Equity: Opening 89,620 98,521 89,782 87,298 85,620 Net Surplus/(Defic it) (9,949) (9,880) (3,739) (1,046) 17 Revaluation Reserve 18,974 - - - - Equity Injection/(Repayment) (124) 1,141 1,255 (632) (632) 98,521 89,782 87,298 85,620 85,005
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 46 Statement of Comprehensive Income MidCentral DHB
Actual Forecast Budget Budget Budget ($'000's) 2008/09 2009/10 2010/11 2011/12 2012/13
Revenue 478,397 504,122 539,893 553,820 567,843 % change 5.38% 7.10% 2.58% 2.53% less Expenditure Personnel 160,117 167,700 174,627 178,964 183,336 Outsourced Services 25,229 20,861 16,512 16,923 16,236 Clinical Supplies 39,919 46,116 45,929 47,063 48,207 Infrastructure & Non-Clinical 58,790 57,276 79,286 79,614 81,555 Financing Charges 9,742 10,252 10,331 10,590 10,851 External Provider Payments 152,476 165,088 170,589 174,074 178,717 Inter-District Payments 42,073 46,709 46,358 47,638 48,924 Corporate costs - - - - -
488,346 514,002 543,632 554,866 567,826 % change 5.25% 5.76% 2.07% 2.34%
Operating Surplus/(Deficit) (9,949) (9,880) (3,739) (1,046) 17
Revaluation of land and buildings 18,974 - - - -
Total comprehensive income for 9,025 (9,880) (3,739) (1,046) 17 the year
Statement of Changes in Equity MidCentral DHB
Actual Forecast Budget Budget Budget ($'000's) 2008/09 2009/10 2010/11 2011/12 2012/13
Balance at 1 July 89,620 98,521 89,782 87,298 85,620 Total c omprehensive inc ome 9,025 (9,880) (3,739) (1,046) 17 Equity Injection 508 1,773 1,887 - - Equity Repayment (632) (632) (632) (632) (632) Balance at 30 June 98,521 89,782 87,298 85,620 85,005
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 47 Provider Division
Statement of Financial Performance Provider
Actual Forecast Budget Budget Budget ($'000's) 2008/09 2009/10 2010/11 2011/12 2012/13
Revenue 277,757 287,968 318,835 326,691 334,625 % change 3.68% 10.72% 2.46% 2.43%
less Expenditure Personnel 151,479 158,859 165,992 170,091 174,224 Outsourced Services 24,581 20,237 15,793 16,184 15,477 Clinical Supplies 39,901 46,108 45,924 47,058 48,202 Infrastructure & Non-Clinical 54,531 52,995 75,085 75,206 76,924 Financing Charges 8,249 8,820 9,298 9,528 9,760 Corporate costs 9,323 9,677 9,163 9,494 9,837
288,064 296,696 321,255 327,561 334,424 % change 3.00% 8.28% 1.96% 2.10%
Operating Surplus/(Deficit) (10,307) (8,728) (2,420) (870) 201
Funding Division
Statement of Financial Performance Funder
Actual Forecast Budget Budget Budget ($'000's) 2008/09 2009/10 2010/11 2011/12 2012/13
Revenue 419,601 450,957 461,813 474,522 487,284 % change 7.47% 2.41% 2.75% 2.69%
less Expenditure Provider and Governance Divisions 224,667 239,130 245,366 252,138 258,946 External Providers 152,476 165,088 170,589 174,074 178,717 Inter-District Outflows 42,073 46,709 46,358 47,638 48,924
419,216 450,927 462,313 473,850 486,587 % change 7.56% 2.53% 2.50% 2.69%
Operating Surplus/(Deficit) 385 30 (500) 672 697
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 48 Governance Division
Statement of Financial Performance Governance
Actual Forecast Budget Budget Budget ($'000's) 2008/09 2009/10 2010/11 2011/12 2012/13
Revenue 5,706 4,327 4,611 4,778 4,950 % change -24.17% 6.56% 3.62% 3.60%
less Expenditure Personnel 8,639 8,841 8,635 8,947 9,270 Outsourced Services 648 624 719 745 772 Clinical Supplies 188555 Infrastructure & Non-Clinical 4,259 4,519 4,201 4,353 4,512 Financing Charges 1,493 1,194 1,033 1,070 1,109 Corporate costs (9,324) (9,677) (9,163) (9,494) (9,837)
5,733 5,509 5,430 5,626 5,831 % change -3.91% -1.43% 3.61% 3.64%
Operating Surplus/(Deficit) (27) (1,182) (819) (848) (881)
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 49 Appendix 5, Statement of Accounting Policies
Reporting Entity Standards (NZ IFRS), and other applicable Financial Reporting Standards as MidCentral District Health Board appropriate for Public Benefit Entities. (MidCentral DHB) is a Crown entity in terms of the Crown Entities Act 2004, is The financial statements are presented in owned by the Crown, and is domiciled in New Zealand Dollars (NZD), rounded to New Zealand. MidCentral DHB was the nearest thousand. The financial created under the New Zealand Public statements are prepared on the historical Health and Disability Act 2000, effective 1 cost basis except that the following assets January 2001. and liabilities are stated at their fair value: land and buildings, and derivative The group consists of MidCentral DHB, financial instruments (foreign exchange associated entity Allied Laundry Services contract). Limited (ALSL) (25.0% owned) and an investment in Central Region’s Technical The accounting policies set out below have Advisory Service Limited (TAS) (16.7% been applied consistently to all periods owned). In addition, the group includes presented in these consolidated financial wholly owned subsidiary Enable New statements. Zealand Limited, which is non-trading. As of November 2002 all the assets, liabilities The preparation of financial statements in and activities of Enable New Zealand Ltd conformity with NZ IFRS requires were vested in the MidCentral District management to make judgements, Health Board. estimates and assumptions that affect the application of policies and reported The financial statements and group amounts of assets and liabilities, income financial statements of MidCentral DHB and expenses. The estimates and have been prepared in accordance with associated assumptions are based on the requirements of New Zealand Public historical experience and various other Health and Disability Act 2000, the factors that are believed to be reasonable Financial Reporting Act 1993, the Public under the circumstances, the results of Finance Act 1989, and the Crown Entities which form the basis of making the Act, 2004. judgements about carrying values of assets and liabilities that are not readily apparent MidCentral DHB is a public benefit entity, from other sources. Actual results may as defined under NZ IAS1 - Presentation differ from these estimates. of Financial Statements. The estimates and underlying In addition, funds administered on behalf assumptions are reviewed on an ongoing of patients have been reported as a note to basis. Revisions to accounting estimates the Financial Statements. are recognised in the period in which the estimate is revised if the revision affects MidCentral DHB’s activities involve only that period, or in the period of the delivering health and disability services revision and future periods if the revision and mental health services in a variety of affects both current and future periods. ways to the community. Judgements made by management in the Statement of Compliance and application of NZ IFRS that have Basis of Preparation significant effect on the financial statements and estimates with a significant The consolidated financial statements have risk of material adjustment in the next been prepared in accordance with year are discussed in Note 26. Generally Accepted Accounting Practice in New Zealand (NZ GAAP). They comply with the New Zealand equivalents to International Financial Reporting
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 50 Basis for Consolidation liabilities denominated in foreign currencies that are stated at fair value are Associates translated to NZD at foreign exchange rates ruling at the dates the fair value was Associates are those entities in which determined. The associated foreign MidCentral DHB has significant influence, exchange gains or losses follow the fair but not control, over the financial and value gains or losses to either the operating policies. ALSL is an associate Statement of Financial Performance or company of MidCentral DHB. directly to equity. The consolidated financial statements Budget Figures include MidCentral DHB’s share of the total recognised gains and losses of The budget figures are those approved by associates on an equity accounted basis, the health board in its District Annual from the date that significant influence Plan and included in the Statement of commences until the date that significant Intent tabled in Parliament. The budget influence ceases. When MidCentral DHB’s figures have been prepared in accordance share of losses exceeds its interest in an with NZ GAAP. They comply with NZ associate, MidCentral DHB’s carrying IFRS and other applicable Financial amount is reduced to nil and recognition Reporting Standards as appropriate for of further losses is discontinued except to public benefit entities. Those standards are the extent that MidCentral DHB has consistent with the accounting policies incurred legal or constructive obligations adopted by MidCentral DHB for the or made payments on behalf of an preparation of these financial statements. associate. Property, Plant and Equipment Transactions Eliminated on Consolidation Classes of Property, Plant & Equipment
Intragroup balances and any unrealised The major classes of property, plant and gains and losses or income and expenses equipment are as follows: arising from intragroup transactions, are eliminated in preparing the consolidated • freehold land financial statements. Unrealised gains • freehold buildings arising from transactions with associates and jointly controlled entities are • plant, equipment and vehicles eliminated to the extent of MidCentral DHB’s interest in the entity. Unrealised • work in progress losses are eliminated in the same way as • unrealised gains, but only to the extent fixtures and fittings. that there is no evidence of impairment. Owned Assets Foreign Currency Transactions Except for land and buildings and the Transactions in foreign currencies are assets vested from the hospital and health translated at the foreign exchange rate service (see below), items of property, ruling at the date of the transaction. plant and equipment are stated at cost, Monetary assets and liabilities less accumulated depreciation and denominated in foreign currencies at the impairment losses. The cost of self- balance sheet date are translated to NZD constructed assets includes the cost of at the foreign exchange rate ruling at that materials, direct labour, the initial estimate, date. Foreign exchange differences arising where relevant, of the costs of dismantling on translation are recognised in the and removing the items and restoring the Statement of Financial Performance. Non- site on which they are located, and an monetary assets and liabilities that are appropriate proportion of direct overheads. measured in terms of historical cost in a foreign currency are translated using the Land and buildings are revalued to fair exchange rate at the date of the value as determined by an independent transaction. Non-monetary assets and registered valuer every three years.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 51 Valuations undertaken in accordance with retains the risks and rewards of ownership, standards issued by the New Zealand are recognised in a systematic manner Property Institute are used where available. over the term of the lease. Leasehold Otherwise, valuations are conducted in improvements are capitalised and the cost accordance with the Rating Valuation Act is depreciated over the lease or the 1998, which have been confirmed by an estimated useful life of the improvements, independent valuer. Any increase in value whichever is the shorter. of a class of land and buildings is recognised directly in equity unless it Subsequent Costs offsets a previous decrease in value recognised in the Statement of Financial Subsequent costs are added to the Performance. Any decreases in value carrying amount of an item of property, relating to a class of land and buildings plant and equipment when that cost is are debited directly to the revaluation incurred if it is probable that the service reserve, to the extent that they reverse potential or future economic benefits previous surpluses and are otherwise embodied within the new item will flow to recognised as an expense in the Statement MidCentral DHB. All other costs are of Financial Performance. recognised in the Statement of Financial Performance as an expense as incurred. Additions to property, plant and equipment between valuations are Depreciation recorded at cost. Depreciation is charged to the Statement Where material parts of an item of of Financial Performance using the straight property, plant and equipment have line method. Land and work in progress is different useful lives, they are accounted not depreciated. for as separate components of property, plant and equipment. Depreciation is set at rates that will write off the cost or fair value of the assets, less Rental property is included in property their estimated residual values, over their plant and equipment in accordance with useful lives. The estimated useful lives of NZ IFRS as the rental property is held for major classes of assets and resulting rates strategic and social purposes rather than are as follows: for rental income, capital appreciation or both. Class of Asset Estimated Life Freehold Buildings 1 to 80 years Disposal of Property, Plant & Equipment Plant, Equipment and 3 to 20 years Motor Vehicles Where an item of plant and equipment is Fixtures and Fittings 3 to 25 years disposed of, the gain or loss recognised in the Statement of Financial Performance is The residual value of assets are reassessed calculated as the difference between the annually. net sales price and the carrying amount of the asset. Work in progress is not depreciated. The total cost of a project is transferred to the Leased Assets appropriate class of asset on its completion and then depreciated. Leases where MidCentral DHB assumes substantially all the risks and rewards of Accumulated depreciation at revaluation ownership are classified as finance leases. date is eliminated against the gross The assets acquired by way of finance carrying amount so that the carrying lease are stated at an amount equal to the amount after revaluation equals the lower of their fair value and the present revalued amount. value of the minimum lease payments at inception of the lease, less accumulated For each property, plant and equipment depreciation and impairment losses. The project, borrowing costs incurred during capitalised values are depreciated over the the period required to complete and period in which the DHB expects to prepare the asset for its intended use are receive benefits from their use. Operating expensed. leases, where the lessor substantially
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 52 Intangible Assets financial asset and of allocating interest income over the relevant period. The Intangible assets that are acquired by effective interest rate is the rate that MidCentral DHB are stated at cost less exactly discounts estimated future cash accumulated amortisation and impairment receipts through the expected life of the losses. financial asset, or where appropriate, a shorter period, to the net carrying amount Subsequent Expenditure of the financial asset.
Subsequent expenditure on intangible Loans & Receivables assets is capitalised only when it increases the service potential or future economic Cash, short term deposits and trade and benefits embodied in the specific asset to other receivables with fixed or which it relates. All other expenditure is determinable payments that are not expensed as incurred. quoted in an active market are classified as loans and receivables. Loans and Amortisation receivables are initially recognised at fair value and subsequently measured at Amortisation is charged to the Statement amortised cost using the effective interest of Financial Performance on a straight-line method, less any impairment. Interest basis over the estimated useful lives of income is recognised by applying the intangible assets unless such lives are effective interest rate method. indefinite. Intangible assets with indefinite useful lives are tested for impairment at Held to Maturity Investments least annually to determine if there is any indication of impairment. Other intangible Term deposits with fixed or determinable assets are amortised from the date they payments and maturity dates that the are available for use. The estimated useful group has the positive intent and ability to lives are as follows: hold to maturity are classified as held to maturity investments. Held to maturity Type of Asset Estimated Life investments are initially recorded at fair Software 6 to 10 years value and subsequently measured at amortised cost using the effective interest method, less any impairment, with Realised gains and losses arising from revenue recognised on an effective interest disposal of intangible assets are recognised method. Investments are classified as in the Statement of Financial Performance “held to maturity” investments. in the period in which the transaction occurs. Investments in Equity Securities
Financial Assets and Liabilities Investments in associates and subsidiaries are measured at cost. Financial Assets Impairment of Financial Assets Financial assets are classified into the Financial assets other than those at fair following specified categories. Financial value through profit or loss are assessed assets “at fair value through profit or loss”, for indicators of impairment at each “held to maturity” investments, “available balance sheet date. Financial assets are for sale” financial assets, and “loans and impaired where there is objective evidence receivables”. The classification depends on that as a result of one or more events that the nature and purpose of the financial occurred after the initial recognition of the assets and is determined at the time of financial asset the estimated future cash initial recognition. At balance date flows of the asset have been impacted. For MidCentral DHB had “held to maturity financial assets carried at amortised cost, investments” and “loans and receivables”. the amount of impairment is the Effective Interest Method difference between carrying amount and the present value of the estimated future The effective interest method is a method cash flows, discounted at the original of calculating the amortised cost of a effective interest rate. MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 53 The carrying amount of the financial asset Subsequent to initial recognition, is reduced by the impairment loss directly derivative financial instruments are stated for all financial assets with the exception at fair value. The gain or loss on of trade receivables where the carrying remeasurement to fair value is recognised amount is reduced through the use of an immediately in the Statement of Financial allowance account. Subsequent recoveries Performance. The fair value of forward of amounts previously written off are exchange contracts is their quoted market credited against the allowance account. price at the balance date, being the Changes in the carrying amount of the present value of the quoted forward price. allowance account are recognised in profit or loss. Inventories Held for Distribution If in a subsequent period, the amount of Inventories held for distribution are stated the impairment loss decreases and the at the lower of cost and current decrease can be related objectively to an replacement cost. event occurring after the impairment was recognised, the previously recognised Cash & Cash Equivalents impairment loss is reversed through profit or loss to the extent that the carrying Cash and cash equivalents comprises cash amount of the investment at the date of balances, call deposits and deposits with a impairment is reversed does not exceed maturity of no more than three months what the amortised cost would have been from the date of acquisition. Bank had the impairment not been recognised. overdrafts that are repayable on demand and form an integral part of MidCentral Other Financial Liabilities DHB’s cash management are included as a component of cash and cash equivalents Other financial liabilities including trade for the purpose of the Statement of Cash and other payables and interest bearing Flows. loans and borrowings are initially measured at fair values, net of transaction Impairment of Other Tangible Assets costs. Other financial liabilities are subsequently measured at amortised cost The carrying amounts of MidCentral using the effective interest rate method, DHB’s assets other than inventories and with interest expense recognised on an inventories held for distribution are effective yield basis. reviewed at each balance date to determine whether there is any indication The effective interest method is a method of impairment. If any such indication of calculating the amortised cost of a exists, the assets’ recoverable amounts are financial liability and of allocating interest estimated. expense over the relevant period. The effective interest rate is the rate that If the estimated recoverable amount of an exactly discounts estimated future cash asset is less than its carrying amount, the payments through the expected life of the asset is written down to its estimated financial liability, or, where appropriate a recoverable amount and an impairment shorter period, to the net carrying amount loss is recognised in the Statement of of the financial liability. Financial Performance. Derivative Financial Instruments For intangible assets that have an indefinite useful life and intangible assets MidCentral DHB uses foreign exchange that are not yet available for use, the contracts to manage its exposure to recoverable amount is estimated at each foreign exchange risks arising from balance sheet date. investing activities. An impairment loss on property, plant Derivatives that do not qualify for hedge and equipment revalued on a class of accounting are accounted for as trading asset basis is recognised directly against instruments. any revaluation reserve in respect of the same class of asset to the extent that the Derivative financial instruments are impairment loss does not exceed the recognised initially at fair value.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 54 amount in the revaluation reserve for the amount is determined for the cash- same class of asset. generating unit to which the asset belongs. When a decline in the fair value of an For non-cash generating assets that are available-for-sale financial asset has been not part of a cash generating unit value in recognised directly in equity and there is use is based on depreciated replacement objective evidence that the asset is cost (DRC). For cash generating assets impaired, the cumulative loss that had value in use is determined by estimating been recognised directly in equity is future cash flows from the use and recognised in the Statement of Financial ultimate disposal of the asset and Performance even though the financial discounting these to their present value asset has not been derecognised. The using a pre-tax discount rate that reflects amount of the cumulative loss that is current market rates and the risks specific recognised in the Statement of Financial to the asset. Performance is the difference between the acquisition cost and current fair value, less Impairment gains and losses, for items of any impairment loss on that financial asset property, plant and equipment that are previously recognised in the Statement of revalued on a class of assets basis, are also Financial Performance. recognised on a class basis. The recoverable amount of MidCentral Reversals of Impairment DHB’s receivables carried at amortised cost is calculated as the present value of Impairment losses are reversed when estimated future cash flows, discounted at there is a change in the estimates used to the original effective interest rate (ie the determine the recoverable amount. effective interest rate computed at initial recognition of these financial assets). An impairment loss on an equity Receivables with a short duration are not instrument investment classified as discounted. available-for-sale or on items of property, plant and equipment carried at fair value Impairment losses on an individual basis is reversed through the relevant reserve. are determined by an evaluation of the All other impairment losses are reversed exposures on an instrument by instrument through the Statement of Financial basis. All individual trade receivables that Performance. are considered significant are subject to this approach. For trade receivables which An impairment loss is reversed only to the are not significant on an individual basis, extent that the asset’s carrying amount collective impairment is assessed on a does not exceed the carrying amount that portfolio basis based on numbers of days would have been determined, net of overdue, and taking into account the depreciation or amortisation, if no historical loss experience in portfolios with impairment loss had been recognised. a similar amount of days overdue. Borrowing Costs Calculation of Recoverable Amount Borrowing costs are recognised in profit or The estimated recoverable amount of loss in the period in which they are receivables carried at amortised cost is incurred. calculated as the present value of estimated future cash flows, discounted at Employee Benefits their original effective interest rate. Receivables with a short duration are not Defined Contribution Plans discounted. Obligations for contributions to defined Estimated recoverable amount of other contribution plans are recognised as an assets is the greater of their fair value less expense in the Statement of Financial costs to sell and value in use. Value in use Performance as incurred. is calculated differently depending on whether an asset generates cash or not. There are a small number of employees For an asset that does not generate largely that are part of a state defined benefit independent cash inflows, the recoverable superannuation plan. The DHB has no legal or constructive obligation to pay MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 55 future benefits, the Crown guarantees where appropriate, the risks specific to the these benefits and as a result the plans are liability. accounted for as a defined contribution plan. Restructuring Long Service Leave, Sabbatical Leave and A provision for restructuring is recognised Retirement Gratuities when MidCentral DHB has approved a detailed and formal restructuring plan, MidCentral DHB’s net obligation in and the restructuring has either respect of long service leave, sabbatical commenced or has been announced leave and retirement gratuities is the publicly. Future operating costs are not amount of future benefit that employees provided for. have earned in return for their service in the current and prior periods. The Revenue Relating to Service Contracts obligation is calculated using the projected unit credit method and is discounted to its MidCentral DHB is required to expend all present value. The discount rate is the monies appropriated within certain market yield on relevant New Zealand contracts during the year in which it is government bonds at the balance sheet appropriated. Should this not be done, the date. contract may require repayment of the money or MidCentral DHB, with the Annual Leave, Conference Leave, Sick agreement of the Ministry of Health, may Leave & Medical Education Leave be required to expend it on specific services in subsequent years. The amount Annual leave, conference leave, sick leave unexpended is recognised as a liability and medical education leave are short- where there is sufficient certainty of a term obligations and are calculated on an specific obligation to repay. actual basis at the amount MidCentral DHB expects to pay. MidCentral DHB Other Liabilities & Provisions accrues the obligation for paid absences when the obligation both relates to Other liabilities and provisions are employees’ past services and it recorded at the best estimate of the accumulates. expenditure required to settle the obligation. Liabilities and provisions to be Termination Payments settled beyond 12 months are recorded at their present value. Termination Payments are recognised in the Statement of Financial Performance Insurance Contracts only where there is a demonstrable commitment to either terminate MidCentral DHB belongs to the ACC employment prior to normal retirement Partnership Programme whereby it date or to provide such benefits as a result accepts the management and financial of an offer to encourage voluntary responsibility for employee work related redundancy. Termination benefits settled illnesses and accidents. Under the in 12 months are reported as the amount programme MidCentral DHB is liable for expected to be paid, otherwise they are all its claims costs for a period of two reported as the present value of the years up to a specified maximum. At the estimated future cash flows. end of the two year period, MidCentral DHB pays a premium to ACC for the Provisions value of residual claims, and from that point the liability for ongoing claims A provision is recognised when passes to ACC. The liability for the ACC MidCentral DHB has a present legal or Partnership Programme is measured using constructive obligation as a result of a past actuarial techniques at the present value of event, and it is probable that an outflow of expected future payments to be made in economic benefits will be required to settle respect of the employee injuries and the obligation. If the effect is material, claims up to the reporting date. provisions are determined by discounting Consideration is given to anticipated the expected future cash flows at a pre-tax future wage and salary levels and rate that reflects current market rates and, experience of employee claims and injuries. MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 56 Expected future payments are discounted obligations and all conditions have been using market yields on government bonds satisfied by MidCentral DHB. at balance date with terms to maturity that match, as closely to possible, the Rental Income estimated future cash outflows. Rental income from strategic assets/assets Taxation held for social benefit is recognised in the Statement of Financial Performance on a Income Tax straight-line basis over the term of the lease. Lease incentives granted are MidCentral DHB is a crown entity under recognised as an integral part of the total the New Zealand Public Health and rental income over the lease term on a Disability Act 2000 and is exempt from straight- line basis. income tax under section CW38 of the Income Tax Act 2007. Expenses Goods & Services Tax Operating Lease Payments
All amounts are shown exclusive of Goods Payments made under operating leases are and Services Tax (GST), except for recognised in the Statement of Financial receivables and payables that are stated Performance on a straight-line basis over inclusive of GST. Where GST is the term of the lease. Lease incentives irrecoverable as an input tax, it is received are recognised in the Statement recognised as part of the related asset or of Financial Performance over the lease expense. term as an integral part of the total lease expense on a straight line basis. Revenue Finance Lease Payments Crown Funding Minimum lease payments are apportioned The majority of revenue is provided between the finance charge and the through an appropriation in association reduction of the outstanding liability. The with a Crown Funding Agreement. finance charge is allocated to each period Revenue is recognised monthly in during the lease term on an effective accordance with the Crown Funding interest basis. Agreement payment schedule, which allocates the appropriation equally Net Financing Costs throughout the year. Revenue from the supply of goods and services is measured Financing costs comprise interest paid and at the fair value of consideration received. payable on borrowings calculated using the effective interest rate method. Goods Sold & Services Rendered The interest expense component of finance Revenue from goods sold is recognised lease payments is recognised in the when MidCentral DHB has transferred to Statement of Financial Performance using the buyer the significant risks and rewards the effective interest rate method. of ownership of the goods and MidCentral DHB does not retain either continuing Non-Current Assets Held For Sale & Discontinued Operations managerial involvement to the degree usually associated with ownership nor Immediately before classification as held effective control over the goods sold. for sale, the measurement of the assets Revenue from services is recognised, to (and all assets and liabilities in a disposal the proportion that a transaction is group) is brought up-to-date in accordance complete, when it is probable that the with applicable NZ IFRS. Then, on initial payment associated with the transaction classification as held for sale, a non- will flow to MidCentral DHB and that current asset and/or a disposal group is payment can be measured or estimated recognised at the lower of its carrying reliably, and to the extent that any amount and its fair value less costs to sell.
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 57 Impairment losses on initial classification Indirect costs are those costs that cannot as held for sale are included in the be identified in an economically feasible Statement of Financial Performance, even manner with a specific output class. when the asset was previously revalued. The same applies to gains and losses on Cost Drivers for Allocation of Indirect subsequent remeasurement. Costs A discontinued operation is a component The cost of internal services not directly of MidCentral DHB’s business that charged to outputs is allocated as represents a separate major line of overheads using appropriate cost drivers business or geographical area of such as actual usage, staff numbers and operations or is a subsidiary acquired floor area. exclusively with a view to resale. Statement of Cash Flows Classification as a discontinued operation occurs upon disposal or when the The statement of cash flows is prepared operation meets the criteria to be classified exclusive of GST, which is consistent with as held for sale, if earlier. the method used in the Statement of Financial Performance. Contingent Assets & Contingent Liabilities GST inflows and GST outflows in the Cash Flow Statement have been shown Contingent liabilities and contingent assets net as the Board does not believe that are recorded in the Statement of showing gross cash flows provides more Contingent Liabilities and Contingent useful information given that GST is paid Assets at the point at which the net each month. contingency is evident. Contingent liabilities are disclosed if the possibility Definitions of the terms used in the that they will crystallise is not remote. statement of cash flows are: Contingent assets are disclosed if it is probable that the benefits will be realised. Cash includes coins and notes, demand deposits and other highly liquid Cost of Service (Statement of Service investments readily convertible into cash Performance) and includes all call borrowings such as bank overdrafts used by the organisation. The cost of service statements, as reported in the statement of service performance, Operating activities include all report the net cost of services for the transactions and other events that are not outputs of MidCentral DHB and are investing or financing activities. represented by the cost of providing the output less all the revenue that can be Investing activities are those activities allocated to these activities. relating to the acquisition and disposal of current and non current investments and Cost Allocation any other non-current assets.
MidCentral DHB has arrived at the net Financing activities are those activities cost of service for each significant activity relating to changes in the equity and debt using the cost allocation system outlined capital structure of the organisation and below. those relating to the cost of servicing the organisation’s equity capital. Cost Allocation Policy Reclassification Direct costs are charged directly to output classes. Indirect costs are charged to Balances relating to prior years have been output classes based on cost drivers and reclassified in order to achieve consistency related activity and usage information. in disclosure in the current year. Criteria for Direct & Indirect Costs
Direct costs are those costs directly attributable to an output class. MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 58 New Standards & Interpretations • NZ IFRS 3, Business Combinations Approved But Not Yet Adopted (revised 2008) – (effective from annual periods beginning on or after 1 July Certain new standards, amendments and 2009). interpretations to existing standards have been published that are not yet effective • Improvements to New Zealand for the year ended 30 June 2009, and have Equivalents to International Financial not been applied in preparing these Reporting Standards 2008 – (effective financial statements. The adoption of the various)*. following standards is not expected to Other standards/interpretations that are have a material impact on MidCentral not included above have been reviewed DHB’s financial statements. and are not considered relevant to MidCentral DHB. • NZ IAS 1, Presentation of Financial Statements (revised 2007) – (effective *The effective date and transitional from annual periods beginning on or provisions vary by Standard. Most of the after 1 January 2009). improvements are effective for annual periods beginning on or after 1 January • NZ IAS 23, Borrowing Costs (revised) 2009, with earlier adoption permitted, and – (effective from annual periods they are to be applied retrospectively. beginning on or after 1 January 2009). • NZ IAS 27, Consolidated and Separate financial statements (revised 2008) – (effective from annual periods beginning on or after 1 July 2009).
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 59 Appendix 6, Allied Laundry Services Limited
Allied Laundry Services Ltd Actual Forecast Budget Statement of Financial Performance 2008/09 2009/10 2010/11 $000 $000 $000
Revenue 6,270 6,509 6,374
Expenditure Processing 4,223 4,202 4,105 Service Items 590 663 711 Delivery 669 681 689 Selling / Administration 222 245 220 Overhead Allocation 236 238 238 Total Linen Supply Expenditure 5,940 6,029 5,963
Linen Supply Surplus 330 480 411
Non-operating Expenditure 358 87 309
Net Surplus / (Deficit) (28) 393 102
Allied Laundry Services Ltd Actual Forecast Budget Statement of Financial Position 2008/09 2009/10 2010/11 $000 $000 $000
Current Assets 471 712 818 Current Liabilities 1,333 1,107 1,067 Working Capital (862) (395) (249)
Non current assets 4,740 4,721 4,472
Assets Employed 3,878 4,326 4,223
Non Current Liabilities 878 933 728 Equity 3,000 3,393 3,495
Funds Employed 3,878 4,326 4,223
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 60
Allied Laundry Services Ltd Actual Forecast Budget Cash Flow 2008/09 2009/10 2010/11 $000 $000 $000
Total Receipts 6,524 6,509 6,374 Total Payments (4,962) (4,941) (5,037)
Operating Cashflow 1,562 1,568 1,337
Investing Cashflow (2,935) (1,156) (986)
Financing Cashflow 805 162 (245)
Net Cashflow (568) 574 106 Opening Cash 235 (333) 241 Closing Cash (333) 241 347
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 61 Appendix 7, Performance Improvement Actions
MidCentral DHB has identified five areas in which it seeks to improve performance with the aim of freeing up money for front-line resources and/or improving value for local health dollars. The areas are:
• improved hospital productivity • implementation of the primary care plan • improved local and regional co-ordination of services • quality improvement initiatives aimed at reducing preventable and adverse events • improved purchasing and establishment of shared back-office functions. • The local improvement actions are aligned to the Government’s health priorities and targets. For each target area for improvement there are several strategies which will be implemented over the planning period. • Savings identified from Performance Improvement Actions totalling $6.8 million, of which $4.588m fall in 2010/11, have been incorporated into financial assumptions:
Performance Improvement Action Impact 2010/11 $000
1 Achieve Financial Security 3,088
2 Improve Productivity and Quality -
3 Enhance Regional Cooperation 1,500 •
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 62 Summary of MidCentral DHB’s Improvement Action Areas for 2010/11:
SHORT TERM LOCAL IMPROVEMENT ACTIONS ACTIONS Objective One: 1. Achievement of the national health targets for emergency Improved hospital productivity – focus on theatre utilization, hospital wards. department, elective services and cancer waiting times. Rationale: A focus on hospital productivity will free up resources to enable patients to be seen faster and 2. Achievement of financial improvement of MidCentral Health (the diagnosis intervention to occur in a timelier manner. DHB’s provider arm). Objective Two: 3. Support the implementation of MidCentral PHOs’ primary health Primary Care implementation action plan – strengthen focus on chronic disease care proposal through: management, acute demand and reducing hospital admissions. the establishment of five integrated family health centres Rationale: more services closer to community will keep our community well and out of hospital. It will increased collaboration across the health continuum enable early intervention, particularly chronic conditions, thus reducing unnecessary progression/side better management of acute demand effects of disease and hospital admissions. The elderly are a target population as they accessing high cost secondary services because alternative better targeted community services are not available. improved models of care for older people improved access and utilisation of health services amongst whanau planned clinical leadership development 4. Improved accessibility and capability of mental health services 5. Achievement of the national health targets for diabetes and cardiovascular, immunisation, and smoking cessation. Objective Three: 6. Implementation of the Regional Clinical Services Plan, with a Improved local and regional co-ordination of services to minimize and eliminate vulnerable focus on vulnerable services (radiology and women’s health), services and deliver improved service coverage. cardiology and renal services. Rationale: Moving services to a regional model of care will reduce vulnerable services, enabling services 7. Establishment of shared clinical services arrangements with to be provided to the community on a sustainable basis. It will also ensure the scarce specialist Whanganui DHB (as part of centralAlliance). workforce is used to best effect. 8. Improve access to DHB funded dental services for children and adolescents. Objective Four: 9. Implementation of quality initiatives to improve standard of care, Quality improvements including reductions and then elimination of preventable and including Optimising the Patient Journey, Releasing Time to Care, adverse events NZ Incident Management System accreditation/ certification, medicines reconciliation, and consumer participation. Rationale: Adverse events in hospital, which are potentially preventable, are costly, both to the patient and the sector. Through implementing new systems and culture, we will reduce personal and cost 10. Implementation of information systems (sterile tracking, and, impact. business intelligence). Objective Five: 11. Implementation of regional information systems strategic plan. Improve purchasing, including smarter contracting, collective procurement and shared back- 12. Establish and implementation of a regional asset management office functions. plan. Rationale: By establishing shared procurement and back-office functions, resources will be freed up for 13. Implementation of shared corporate (back-office) and governance front-line health services. functions with Whanganui DHB (as part of centralAlliance).
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 63 14. Participation in regional and national procurement initiatives. 15. Support the development of a unified system. MEDIUM TERM LOCAL IMPROVEMENT ACTIONS STRATEGIES Regional service structure in place ensuring service coverage and vulnerable services 16. Ongoing implementation of Regional Clinical Services Plan strengthened. Hospital productivity at optimum levels. 17. Ongoing implementation of Optimising the Patient Journey Achievement of National Health Targets. 18. Ongoing implementation of health target initiatives. Integrated primary/secondary care structure in place. 19. Ongoing implementation of Sooner, Better, More Convenient Primary Health Project
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 64
www.midcentraldhb.govt.nz
MidCentral DHB: 2010/11 Statement of Intent, 28 June 2010 Page 65