ANNUAL REPORT 2010-2011

Better Health in Our Community. About Southern Health

Southern Health is Victoria’s most integrated public health service. We uniquely provide health care across the entire lifespan – from newborns and children, to adults, the elderly, their families and carers.

We improve the health of our community through: Our Vision Prevention Better health in our community. Early intervention Our Purpose Community based treatment and rehabilitation To plan and deliver quality, person-centred health care Highly specialised surgical and medical and services, education and research that meets the diagnosis, treatment and monitoring services needs of our community. Hospital and community based mental health services Our Values Comprehensive aged care programs We remain firmly committed to our ICARE values of:

Palliative care Integrity ompassion Research C Accountability

Education Respect Excellence

MELBOURNE CBD Hospitals

Greater Dandenong Community Health Service

Cardinia Casey Community Health Service

Monash Monash Medical Centre Medical Centre Clayton Moorabbin

Springvale Kingston Cockatoo Centre Dandenong Hospital Dandenong Doveton

Berwick

Casey Hospital

Pakenham

Cranbourne

Cranbourne Integrated Care Centre

2 2010-2011 at a glance

Total episodes of care episodes 1.51 million more than 1.51 million episodes of care provided across our services to the community

193,000 people Hospital admissions more than 193,000 people admitted to our hospitals

Emergency people 172,000 more than 172,000 people came to our three emergency departments for treatment

Ambulance arrivals 44,000 arrivals almost 44,000 ambulance arrivals handled by our emergency departments

43,000 operations Surgical operations more than 43,000 operations performed

Outpatient services occasions 626,000 more than 626,000 occasions of service provided by our 375 outpatient clinics

Births babies 8,600 more than 8,600 babies delivered

Children 29,000 admissions more than 29,000 admissions of children under age 19 to our children’s wards and neonatal units

Mental Health 194,000 people more than 194,000 client contacts

Community health services 194,000 hours more than 194,000 hours of direct primary care and Home and Community Care services provided in our community

Southern Health Annual Report 2010-2011 1 Report of the Chair of the Board and Chief Executive

We have an incredible number of achievements

“to be proud of, we also know we have many

more opportunities to

serve our community and to further our reputation

as an industry leader. “ Our commitment to you is that we will continue to focus on these.

In accordance with the Financial Management Act 1994, we are pleased to present the Report of Operations for Southern Health for the year ending 30 June 2011.

We are proud to report an overall We were extremely pleased to receive Leading Edge Facilities $2.8 million surplus for the 2010-2011 the 2010 Australian Business of the financial year. Our operating result of Year Award for Public Service in the We continued our extensive facility a $2.9 million deficit was delivered health industry in recognition of the improvement program to build capacity against record levels of care to our leadership and achievements of the and upgrade infrastructure with all communities. this outstanding health service and projects progressing high quality new its people. facility outcomes, being completed In 2010-2011 we responded to the in a timely manner within budget and significant growth in demand for our focused on the needs of our patients. services, including a 7% increase Patient Centred Care This major public investment of close to in emergency presentations, an 8% $190m is already giving our community increase in separations, a 7% increase The patient is at the centre of our care, improved access to better health in surgical operations and a 15.5% and the focus on this important goal services in mental health, aged care, increase in mental health inpatients. In has increased this year. acute health services and car parking. total we provided more than 1.51 million episodes of care - including hospital Our Board and Executive At Kingston Centre, Stage 2 of a and community based services. Management Team are committed significant redevelopment program to make this something that is nearing completion and will deliver Challenges remain in consistently underpins and informs everything state-of-the-art facilities for our aged meeting some of our access we do at Southern Health. care and rehabilitation communities at performance targets, but in most we the Cheltenham site. have been ahead of or close to our goals. We embrace these challenges At Dandenong Hospital, the new and have responded with innovation Emergency Department has improved and an ongoing strong commitment both our capacity and greatly to safety and quality. enhanced the patient care environment at one of Victoria’s busiest emergency care facilities.

2 Report of the Chair of the Board and Chief Executive

The first stage of our redevelopment served on the Board Quality and and expansion of mental health Audit Committees; and Ms Faye facilities at Dandenong has delivered Burton who chaired the Kitaya a leading edge design in partnership Board, and served on the Community with our patients, with an emphasis Advisory Committee. on an environment conducive to patient recovery. We are very fortunate at Southern Health to have a strong and committed We welcome the commitment of clinical leadership across medicine, the incoming State Government nursing and allied health, leadership to develop the Monash Children’s that is recognised locally, nationally Hospital, and look forward with and internationally. Outstanding enthusiasm to delivering a truly examples of these achievements are great service. included within this report. In addition, we acknowledge the Contents Monash Health support of the Victorian Government, Department of Health and Foundation Commonwealth Government in their ongoing funding and support We acknowledge and thank our ifc About Southern Health of our operations and initiatives. generous donors and supporters who continue to help us in so many ways 1 2010-2011 at a glance to help us provide patient-centred care to our community. In summary 2 Report of the Chair of the In early 2011 the Board was pleased We have an incredible number of Board and Chief Executive to support the establishment of achievements to be proud of, we the Monash Health Foundation to also know we have many more opportunities to serve our community 4 Achievements against our assist us increasing opportunities Strategic Goals for the community, philanthropists, and to further our reputation as an businesses, patients and families to industry leader. Our commitment to support our services, new programs you is that we will continue to focus 24 Our sites and services and research. on these. We give you the absolute commitment 28 Governance of our Board and Executive to achieve

Thank you the goals of our strategic plan leading 34 Statutory Compliance up to 2013, and improve or exceed Our success depends on the strong our service targets in the coming year. governance and commitment of our 35 Disclosure Index Board members; our strong Executive Management and Senior Leadership 37 Key Financial and Service teams; the skills, knowledge and Performance Reporting dedication of our staff; the guidance provided so generously by the members of our Community Advisory 41 Summary of Financial Results Committee and consumer panels; Barbara Yeoh and the generosity and loyalty of our 42 Financial Summary volunteers and auxiliary members. Chair, Board of Directors We thank each of these people for their contribution. 43 Financial Statements and Explanatory Notes We thank our retiring Board members for their contribution: 44 Declaration Mr Peter Hansen, for his work chairing the Finance Committee, and as a member of the Audit Shelly Park 99 Independent Auditor’s Report Committee; Dr Ronald Carson who Chief Executive

Southern Health Annual Report 2010-2011 3 Achievements against Strategic Goals

The Strategic Plan 2010-2013 focuses us clearly on patient-centred care as we deliver better health in our community.

The Strategic Plan was developed in consultation with staff and volunteers, community and consumer representatives, service delivery partners and government to develop a shared understanding of the key challenges Southern Health faces and define comprehensive and creative strategies in a plan which is realistic and achievable. During 2010-2011, we have successfully worked to achieve our Strategic Goals:

1: Safe and effective patient-centred care 2: Responsive and accessible services 3: Collaboration and engagement 4: Financial accountability 5: Workforce, innovation and knowledge

We are pleased to highlight some of our achievements against our Strategic Goals.

Strategic Goal 1: Safe and effective patient-centred care

Our patients are our number one priority and we are committed to providing an environment that delivers safe and effective care.

Safe and effective patient-centred care Highlights from 2010-2011

A 16 bed general medicine Acute Assessment Unit opened at Dandenong Hospital which allows us to provide early assessment and treatment and in turn reduces crowding in the Emergency Department

We hosted an industry visit for healthcare leaders that showcased our Target Best Care Program during the 7th Australasian Redesigning Health Care Summit

A new entertainment system is progressively being introduced in patient wards. Initially this involves new televisions and programs at the bedside, including children’s channels. In the longer term patients will also be able to access internet services.

4 Achievements against Strategic Goals

Target Best Care Since the launch of the Target Best Target Best Care – a case study Care program, we have begun more than 120 projects across 33 wards The Chemotherapy Day Unit at Monash Medical Centre Moorabbin and have trained 2000 staff. identified a communication gap between themselves and our on-site partner, the Peter Mac Cancer Centre, for patients receiving combined These projects have focused on chemotherapy and radiotherapy. This communication gap led to a clinical risk areas such as medications and falls, communication and supply high number of cancellations and delays for patients. chain management. Based on Lean The Target Best Care project group created a joint working party to methodology, Target Best Care unites us through a single framework on all review our communications. The group designed a form that is used wards, empowering and encouraging to exchange information, such as medical reviews, cancellation of our own people to develop and share treatment and new medications commenced between the two units. sustainable improvements to improve patient care. The result is significantly fewer cancellations and reduced delays for patients. There has been a 100% improvement with the communication The Target Best Care program aims between our services, with enhanced staff morale. to deliver sustainable, high quality patient-centred care within all wards. To achieve this, we also aim to increase our time spent on direct patient care, improve patient safety, drive efficiencies and create an environment that improves the experience for all patients and staff.

Building on the success of the program to date, we have completed significant work on a patient co-design project to be launched in the second half of 2011. The project emphasises the patient experience by ensuring a strong patient centred approach to all improvement work.

Nursing and Midwifery seamless and efficient communication Control Program Hôpitaux Universitaires Governance Framework system, will ensure that best practise de Genève. Improving Hand Hygiene is used at all times to care for Southern among healthcare workers is the single We have strengthened The Health patients. most effective intervention to reduce the Nursing and Midwifery Governance risk of hospital-acquired infections. Framework as a key component of the Nursing and Midwifery Strategic International recognition Our infection control unit submitted Direction 2010-2013. for our commitment to a portfolio of hand hygiene initiatives hand hygiene implemented across Southern Health We are committed to ensuring good in areas such as training and education, governance underpins all patient care Our infection control team, on promotion of hand hygiene and system as we align and standardise our behalf of the clinical areas at change. practice across the organisation. Southern Health, received global recognition when they were This included innovative new programs The work which includes trialling a awarded the Asia Pacific Hand such as the Southern Health annual more formalised approach to ward and Hygiene Award. hand hygiene credentialing and our unit nursing and midwifery meetings, patient information leaflet ‘Just Ask’. developing a suite of generic position This annual award is open to all Wards at Monash Medical Centre descriptions that apply throughout the hospitals within the region and is Clayton were also visited by an organisation and linking together the endorsed by the Asia Pacific Society assessment panel who assessed our components of governance into a of Infection Control and Infection hand hygiene initiatives in practice.

Southern Health Annual Report 2010-2011 5 Achievements against Strategic Goals

Establishing the ICARE values and are based on as a benchmark to ensure everything ‘Foundations of Care’ for delivering safe and effective patient- we do is focused on the best outcomes nursing and midwifery centred care. Our ‘Foundations of for the people we care for. They provide Care’ are: a framework to explore innovative ways As the largest workforce within of delivering care and will be used to Southern Health, it is vital that our Nutrition support continued development of best 6,000 nurses and midwives have practice in nursing and midwifery. Hydration a clearly articulated direction, with all staff working to an agreed and Elimination Central Production Kitchen aligned set of principles that guides the way we deliver care. Comfort internationally recognised Our Central Production Kitchen based Between November 2010 and June 2011 Hygiene at the Kingston Centre provides we consulted nurses and midwives to Mobility meals to all Southern Health sites establish the ‘Foundations of Care’. and speciality meals to Austin and We asked our nurses and midwives Psychosocial Peninsula Health, several Councils “What does good nursing and midwifery and other large facilities. patient care look like for Southern Environment Health?” Responses were then matched During the year it achieved an Advocacy with our ICARE values and with best internationally recognised standard practise evidence and standards on Care Planning of food safety management - Hazard patient care. From this process we Analysis and Critical Control Point. built a list of ten ‘Foundations of Care’. The Foundations provide a base for all The Kitchen will now be audited every These foundations complement our nursing and midwifery care and will act six months by external HACCP auditors.

New paediatric menu

Following consultation with parents, a new These new changes were noticed and appreciated by menu is now available for our young patients at all stakeholders, especially the parents. Monash Children’s. One parent emailed, “I am so happy that it (the Parent feedback highlighted that the old menu and menu) has changed, as I am sure that the parents use of commercially branded food for babies and that have very sick children who frequent the toddlers was not acceptable - and we listened. hospital are also happy. Keep up the great work and thanks again for listening to all the parents”. We formed a taskforce with representatives from dietetics, food services and nursing to improve The new menu has been successfully introduced at children’s menus. The taskforce consulted parents Monash Medical Centre Clayton and will soon be to understand what they expected from the menu available at Dandenong and Casey Hospitals. and how existing menus could be improved. In consultation with the Central Production Kitchen at the Kingston Centre, a new menu for babies and toddlers was created that replaced all commercially branded baby food.

The Kitchen now produces a range of food with texture options for babies aged 4-5 months and 6-12 months. This menu provides five different choices for lunch and dinner every day. Chips and other unhealthy options were also replaced by healthier food.

6 Achievements against Strategic Goals

Stepping Stones Pastoral care, occupational therapy sensory room and community care staff successfully initiated the project. The poster is now State-of-the-art A positive, warm, optimistic, on permanent display in the ladies catheter laboratory calming and recovery-oriented lounge room where it can be viewed therapeutic environment is now by patients, carers, visitors and staff. One of only two in Australia, available in Monash Medical a new state-of-the-art biplane Centre Clayton’s adolescent inpatient unit, Stepping Stones. Scanned medical records cardiac catheterisation All patient documentation is now laboratory is giving people Young people with a mental illness scanned at both Monash Medical in Melbourne’s south east often feel high levels of anxiety and Centre Clayton and Casey Hospital. even better access to world have difficulty regulating their emotions class cardiac services at and managing stress. This project means a patient’s medical MonashHeart. records can be easily read by doctors The sensory room provides a and other key staff via a computer supervised, interactive environment The laboratory provides very rather than a paper-based record. where young people can explore Record scanning is also progressing high quality images and analysis the use of lighting, visual projected at our other hospital sites. to enable clearer diagnosis and images, sounds, touch, taste and treatment of cardiac patients. smell on their mood and sense of wellbeing. The room is intended to Fully electronic patient It is used for high-end prevent dysregulated behaviours, management tool for interventional cardiac de-escalate crises and promote Emergency Departments recovery and wellness. procedures and those involving The successful rollout of a multiple teams and equipment. The sensory room was built by new system in our Emergency The laboratory’s new equipment staff with significant input from Departments is allowing doctors, includes an integrated artist-in-residence Ms Efterpi Soropos. nurses and other key staff to table-mounted intra-vascular create and access patient records ultrasound, optical coherence electronically. Butterfly of hope - patient’s tomography and quantitative journey to wellness Following the successful trial of coronary analysis. The butterfly is a powerful symbol of the system in 2009, it was further transformation. During Mental Health enhanced to include nursing Week 2010 clients from Monash e-notes, an electronic nursing Medical Centre Clayton’s adult documentation that covers nursing mental health service took part in the care and assessments of the patients’ Butterfly Project, where they used a Emergency Department journey. craft exercise to depict the struggles Through extensive collaboration with and triumphs of living with mental Emergency Department Nurse Unit illness, in particular the emergence Managers and nursing educators and from a dark place to one of optimism our Information Technology team, we and light, and the ability to transform developed a system that is purpose one’s life. built for nursing in our Emergency Clients worked individually to create Departments. The system provides and decorate a butterfly from paper user-friendly access, the ability to input and these were used to create a accurate and timely documentation at poster of a large butterfly from the the bedside, as well as providing useful many individual ones. The poster was prompts and quick navigation through considered the best poster at the the electronic record. annual Southern Alliance Conference. The conference focuses on mental health opportunities in Southern Melbourne and the poster team received a $1000 Educational Grant.

Southern Health Annual Report 2010-2011 7 Achievements against Strategic Goals

Information Technology This system allows clinicians to Monash Children’s renal investment have access to the latest clinical service acknowledged information at the patient bedside, This year has seen a continued in the operating theatre, or in the The Renal Society Australia (RSA) investment in Information emergency department. Victorian Branch awarded the Monash Technology to better support our Children’s Renal Service as the winner clinicians and provide improved The system also helps our junior of the RSA Victorian Branch Award. outcomes for patients. doctors by providing access to the resources of the Monash University The award recognises our demonstrated Key achievements included the Clinical School. In the future, our high standards of professional practice rollout of wireless networks across system will also allow patients to stay and outstanding and continued the health service including a in touch with their friends and family commitment to the RSA. state-wide first with the commissioning and enable our younger patients to The RSA Victorian Branch will now of an advanced wireless system for continue their education at hospital nominate Monash Children’s as Casey Hospital. via the School in the Hospital program. their candidate for the RSA Federal Award 2011.

Strategic Goal 2: Responsive and accessible services

We ensure that we have the right services, in the right place, delivered in a timely way that are accessible for our diverse community.

Responsive and accessible services Highlights from 2010-2011

Monash Medical Centre Clayton was recognised as one of the top ten Australian hospitals in regards to organ donation consent by the Australian Organ Transplant Authority

Our Diagnostic Imagining department at Monash Medical Centre Clayton acquired a new Philips Ingenuity CT Scanner – one of only four currently installed globally

We opened a 23 Hour Ward at Monash Medical Centre Clayton.

Nurse Practitioner We currently have three endorsed Project funding from the Nurse Policy Program boost Nurse Practitioners and five Nurse branch of the Department of Health Practitioner candidates. enabled us to develop three new roles: We are proud to have two new endorsed Nurse Practitioners Our Nurse Practitioner candidates in Mental Health and Eating Disorders and three new candidates who diabetes and chronic heart failure were Nurse Practitioner are leading change across the recently endorsed by the Nursing and Mental Health and Addiction Medicine organisation. Midwifery Board of Australia. They join our emergency Nurse Practitioner Nurse Practitioner The Nurse Practitioner Program as recognised leaders in their fields Oncology Nurse Practitioner addresses service gaps by across the organisation. creating innovative nursing roles Candidates have been recruited to these and models of care. roles, joining our two renal candidates and are working towards endorsement.

8 Achievements against Strategic Goals

Introducing the new Early in health services to parents and infants, The nominees were judged on Life Mental Health Service children, adolescents and youth (less their contribution to the delivery of than 25 years of age). high-quality public oral health services In response to the Victorian in Victoria and their contribution to The new approach was developed with Government Mental Health Reform improving the capacity of Victoria’s input from young people, their families, Strategy 2009-2019 – ‘Because Mental public oral health workforce. Health Matters’ – our Mental Health and service providers over three years. Program is undertaking large-scale We are excited to introduce this new The awards were established to mark service review and redevelopment. service that offers care options designed the 120th anniversary of the Royal specifically for young people and their Dental Hospital of Melbourne, which families – including both inpatient and We have embraced the challenge to was also the beginning of public improve our mental health services for community-based services. dentistry in Victoria. young people by developing a new directorate - the Early in Life Mental Victoria Oral Healthcare Award The awards pay tribute to the work Health Service. This amalgamates the being done by public oral health existing Child and Adolescent Mental We are immensely proud to have care professionals. Health Services and several adult received Victoria’s first Public Oral services that provide tertiary mental Healthcare Award.

International recognition for our online presence

www.secasakids.com.au www.monashheart.org.au The South Eastern Centre Against Sexual Assault MonashHeart, in association with web design (SECASA) Kids website won the Interactive Media agency Brightlabs, won the prestigious 2010 Awards - Outstanding Achievement Award in the Interactive Media Award (IMA) - Outstanding ‘Youth’ category. Achievement Award. This award is the second highest honour bestowed The award is international recognition of the and an extremely challenging award to win. The award MonashHeart website and the outstanding noted that the website excelled in all areas of our achievement award is the second highest honour judging criteria and represents a very high standard of planning, execution and overall professionalism. bestowed and an extremely challenging award to win. The website, which uses internet technologies to engage with 12-17 year olds who have experienced The website excelled in all areas of judging criteria, sexual assault or family violence, was funded by a particularly in feature functionality, content, design $60,000 grant from the Lord Mayor’s Charitable and usability - representing a very high standard of Fund. New information is created for the site to cover planning, execution and overall professionalism. questions asked on SECASA’s Facebook and MySpace sites, Yahoo Answers and the Government website Somazone. The grant is also being used to develop an online counselling facility for young people who are unable or unwilling to access face to face counselling.

Southern Health Annual Report 2010-2011 9 Achievements against Strategic Goals

Focussing on health Horizon scanning reports, alerts Casey Hospital Special promotion and recalls are also included. Care Nursery opening We are responsible for providing An email service allows clinicians Casey Hospital is now better health services to one of the largest to receive tailored information to equipped to care for our premature areas of population growth in Victoria. their specific interest areas straight babies with the opening of a new to their desktop every week. Special Care Nursery. To ensure our community is aware of our services and to equip them with The $4.2 million expansion has lifted knowledge and information for sustained Improving accessibility the number of cots from six to twenty. health we have appointed a Health This expansion will future-proof Casey Promotion Executive Officer. through development Hospital and allow us to cater for an estimated 1000 additional births The Officer is working directly with Theatre expansions annually and to deliver the services our local community to identify needed in this district of rapid growth. opportunities to match our services New operating theatres at Dandenong with community needs, and to recognise Hospital and Monash Medical Centre our community’s needs through Clayton mean patients are receiving Kingston redevelopment more timely emergency care. enhanced health promotion. As the Kingston Centre celebrates The ninth theatre at Monash Medical its centenary in 2011 it is fitting that Introducing the Evidence Centre Clayton has been specifically a new development will ensure the Dissemination Service designed for booked obstetrics tradition of care can continue. cases. This decreases demand on the The Centre for Clinical Effectiveness emergency theatre and also allows Work is progressing on a new two-storey has developed an Evidence more obstetric cases to receive their building that will provide the opportunity Dissemination Service. treatment in the designated theatre. to implement a new model of sub acute care. The 64 new inpatient beds will The service supports clinicians in their An eighth theatre at Dandenong consist predominately of single rooms decision making by providing high Hospital is dedicated to emergency with a few double rooms on each of quality evidence about therapeutics, orthopaedic and plastics cases. the two inpatient wards. Each ward technologies and clinical practices These units see the majority of will have dining and lounge facilities at Southern Health. This high quality emergency cases at Dandenong providing open areas for the support of evidence includes systematic reviews, Hospital, and the additional theatre patients undergoing rehabilitation and health technology assessments allows the units to meet emergency sub acute care. and evidence-based guidelines. and elective surgery demand.

Dandenong Hospital Emergency Department opening

The new Dandenong Emergency Department The new department provides a light, bright, open is a true reflection of the high quality care environment with greatly improved amenities for all that patients receive when they come to patients and visitors, making the trip to emergency less Dandenong Hospital. traumatic for patients and their families, as well as a more beneficial working environment for the staff. The new department is designed to streamline care by catering to the specific needs of the person on presentation to the department.

All patient cubicles now contain a full range of equipment for all types of presentations. The medical teams have easy access to a range of equipment at the bedside including a computer in each cubicle to access patient records and results, and cardiac monitors.

10 Achievements against Strategic Goals

A new inpatient therapy unit providing dietetics, physiotherapy, music therapy, podiatry, social work, occupational Monash Children’s development therapy and psychology will also The Victorian Government announced in the 2011-2012 Victorian support the inpatients. The ground floor of the building provides a new Budget that it will invest $8.5 million to support the building of hydrotherapy pool, alongside a new the Monash Children’s Hospital as part of its broader $250 million Community Rehabilitation Centre. commitment to this important project.

The new hospital will allow us to provide treatment to an additional PARCS Clayton 7,300 patients each year. Babies and children will receive their care Southern Health, in conjunction more quickly, closer to home and closer to their families. with ermha, a community based organisation that supports people The new facility will have 230 beds, three operating theatres, a who are experiencing the effects of procedure room, imaging services, outpatient facilities, a new child a severe mental illness, has opened protection unit, a new neurodevelopment unit, a 20-bed adolescent a second Prevention and Recovery Care Services (PARCS) facility in mental heath unit, state-wide sleep school and research space. Bettina Street, Clayton. The interim development at Monash Children’s, Monash Medical PARCS are just one of the programs Centre Clayton (artist’s impression pictured below) is well underway. ermha deliver to support people who This project will create an additional ten paediatric beds, five neonatal experience severe mental illness. intensive care cots and five paediatric intensive care beds. It offers community based short- term residential support for people with mental illness. The Clayton site complements our first such facility located in Springvale.

The Clayton site cares for up to ten residents at a time in a single-storey residential property, and offers 24 hour a day, seven days a week, supervised care for people from within our local community. The maximum length of stay is four weeks.

The service provides step down / step up care for residents in a safe and supportive environment. Residents are people who, while no longer needing hospital care for mental illness, need temporary support to allow them to continue their lives within their homes and communities. Other residents are people who, with additional support provides, can avoid hospitalisation.

The model of care includes tailored recovery care planning and implementation, and day to day support and recovery services, plus supervision and monitoring by mental health care specialists.

Southern Health Annual Report 2010-2011 11 Achievements against Strategic Goals

Strategic Goal 3: Collaboration and engagement

As we strive for excellence, we depend on strong partnerships, both within our organisation and with our external stakeholders.

Collaboration and engagement Highlights from 2010-2011

We received in excess of $5 million in cancer research grants in collaboration with our research partners

In a joint collaboration with Alfred Health and Monash University we are working together to establish an Academic Health Science Centre in Melbourne’s south east. The Centre will be the first of it’s kind in Australia, combining world-class research with leading edge clinical services, education and training; with the aim of improving patient care in our community

Collaboration on a range information technology services is underway with Monash University. A new system has been implemented which allows clinicians and staff to access Southern Health and Monash University systems from a single computer.

Back on Track DVD launch The events were attended by Victorian Mental Health representatives from Victoria Police, Reform Strategy 2009-2019 South Eastern Centre Against Sexual Victorian Paediatric Forensic Medical Assault launched a DVD that follows a Service, WAYSS, Windermere, AFL, We have been actively engaged in group of men who have experienced Department of Human Services and the Victorian Mental Health Reform childhood sexual assault. the Department of Justice. Strategy 2009-2019.

“Back on Track” is a 31 minute film that To date we have enhanced documents the healing journeys of the New BreastScreen clinic existing programs and undertaken men during a weekend retreat. The demonstration projects with the support Southern Health, BreastScreen annual retreat is run with Mr Mike Lew an of Department of Health funding. American expert on male sexual assault. Victoria and Holmesglen Institute The film has also been entered into a of TAFE have joined forces to open The Strategy identified eight areas number of film festivals and is to be a new breast screening clinic in of reform, and Southern Health screened on Channel 31. Fletcher Street, Moorabbin. has embraced this approach. Examples include: The clinic has state-of-the-art digital Original land owners imaging equipment and each year The Early in Life Mental Health acknowledged provides free screening mammograms Program has an active Child and to 6,500 women from Melbourne’s Adolescent Mental Health Service at The South Eastern Centre Against south east. School Early Action program Sexual Assault acknowledged the original owners of their East Bentleigh The clinic has replaced BreastScreen The inpatient and community service site with two plaque unveiling events. Victoria’s mobile screening unit and is is being redesigned to provide a clear staffed by experts from Monash Medical focus on the 0-25 year age group The site borders land of the Wurundjeri Centre Moorabbin. people and the Boon Wurrung language Employing a Youth Justice mental group, both of whom were formally health worker acknowledged at the events.

12 Achievements against Strategic Goals

Our Psychiatric Triage Service MonashHeart wins ACHS The network team launched a website provides 24-hour a day mental Award for medical personnel and parents health assessment, advice and of children with orthopaedic problems information MonashHeart’s MonAMI project to gain relevant information and parent won a prestigious Australian Council handouts (www.health.vic.gov.au/ As a partner in the system-wide, of Healthcare Standards award. vpon/index.htm). Tailored and Enhanced Packages of Support Project, we are engaged The project is improving the time it takes The network was established in with four funded reform demonstration for heart attack patients to receive the collaboration with the Victorian projects. A Forensic Clinical Specialist life-saving care they need. Government, the Royal Children’s is appointed and we manage four Hospital, Barwon Health and The project – more technically known Secure Extended Care Unit Diversion Western Health. as improving door to balloon times for and Substitution packages. The ST elevation myocardial infarction - Mental Health Program is actively runs in collaboration with Ambulance engaged in the other two aligned Men’s Shed project provides Victoria. It won the Clinical Excellence funded initiatives managed by a local vital community support and Patient Safety 2010 Quality Psychiatric Disability Rehabilitation Improvement award from 54 Our community health services and Support Service submissions from across Australia. are partnering with local churches, community houses, township We are developing enhanced Each year only three awards are given committees, MIND Australia, and the screening of the physical health and to important achievements in quality Victorian Men’s Shed Association support of mental health clients improvement initiatives. steering committee to deliver the We are rebuilding the Dandenong Victorian Men’s Shed Project. This is a fantastic achievement and psychiatric precinct recognition of MonashHeart’s efforts to The project recognises that having The Mental Health Program is active be innovative in improving heart attack healthier and happier men they are in the Southern Region Community patient care and patient outcomes. helping to strengthen the participants, Mental Health Planning and Service their families and the community. Coordination Initiative. Playing a part in new We proudly hosted the Association’s In early 2011 the Mental Health Program orthopaedic network March 2011 quarterly meeting at our Cockatoo Community Health Service, Executive mapped, rated and ranked Monash Children’s orthopaedic which offered men the opportunity to priority areas for 2011-2012. team is proud to be a part of meet and share ideas and experiences the new Victorian Paediatric with over one hundred other Victorian Orthopaedic Network. Men’s Shed users.

Ronald McDonald Family Room

The Ronald McDonald Family Room at Monash Medical Centre Clayton is providing much needed respite for parents and carers of our young patients.

The room provides a place in which parents and carers can escape the hustle and bustle of the ward. They can retreat to the room to have a shower, take a nap, enjoy some quiet time, make themselves a meal or do some washing in the laundry.

The Family Room is staffed and managed by Ronald McDonald House Monash.

Southern Health Annual Report 2010-2011 13 Achievements against Strategic Goals

Art helps alleviate pain The grant acknowledges our commitment to increase medical, Casey Hospital Palliative care patients at McCulloch nursing, and allied health placements. House are benefiting from a unique Emergency arts project, the ‘Disambiguation The grant will support innovations Department Room’ which has been developed in inter-professional learning, so over several years by artist in students from multiple healthcare Nepal trip residence Ms Efterpi Soropos. disciplines can learn side-by-side.

Staff from Casey Hospital The room features light, sound and Emergency Department film to create a relaxing and peaceful Historical collection undertook a humanitarian environment. It provides a safe and awarded grant mission to Nepal in early 2011 relaxing place for palliative care patients and their families, to alleviate Southern Health is the custodian of and following fundraising pain and anxiety at end of life. a very important part of Australia’s efforts, Southern Health is cultural heritage, inherited from now a part owner of a medical A $12,000 grant from the Collier Trust our predecessors which include clinic in the Himalayas. enabled equipment to be updated and the Queen Victoria Hospital, Prince supported additional training for clinical Henry’s Hospital, Monash Medical The Everest Base Camp staff in use of the room. Planning is Centre Moorabbin, Dandenong Hospital, McCulloch House and the Annapurna Volunteer Aid underway to adapt the room concept into a transportable installation that can Kingston Centre and its forebears. Expedition allowed our staff be set up around a hospital bed for to build and run a field-base those patients that are unable to visit We received a $4,600 federal Community Heritage Grant to assess medical clinic in a village on the room. the flank of Annapurna trek the preservation needs of our historical collection. This grant will fund an expert circuit. The group travelled to Launch of local research in collection preservation to advise us surrounding villages to provide partnership to drive primary on how best to preserve our nationally consultations and treatment health care reform significant collection of more than to local people. The team 3,000 boxes of documents, 4,000 Leading international and also volunteered at the Mt photographs and dozens of objects. Australian primary care researchers Everest base camp where they and policy makers launched the The Grants Program is managed by treated local Sherpa people Southern Academic Primary Care the National Library. It is funded by and climbers while observing Research Unit. the Australian Government through and learning more about high the Department of Prime Minister The Unit is a formal partnership and Cabinet, Office for the Arts, the altitude medicine. between the Dandenong Casey National Archives of Australia, the General Practice Association, Southern Southern Health staff will National Film and Sound Archive, the Health and Monash University. National Museum of Australia and provide ongoing support to the the National Library. clinic for the next few years. The partnership enables researchers and policy makers to come together to discuss how to implement Research Week 2011 evidence-based health reform to Research Week 2011 was an benefit the local community. opportunity to celebrate and At the launch, the unit released its first showcase research being piece of research, the Refugee Health undertaken across Southern Health Needs Assessment for South-East and its Monash Health Translation Melbourne. Precinct partners: Prince Henry’s Institute, Monash Institute of Medical Research and Monash University; Southern Clinical School and its close association with the receives $1 million grant Deakin-Southern Health Nursing Research Centre. Monash University’s Southern Clinical School, based at Southern The week began with the annual Health, was awarded a $1.1 million debate chaired by Professor Stephen grant from the Commonwealth Holdsworth, as surgeons battled Government Increased Clinical against physicians on the topic ‘to cut Training Capacity Fund. is to cure’.

14 Achievements against Strategic Goals

Professor Graeme Clark delivered an Monash Health Foundation The Hartley Family raised $25,000 insightful and inspiring keynote address through a special dinner for on his journey of surgical innovation Monash Health Foundation is the Dandenong Hospital which led to the development of the new name for the Development and Cochlear implant. A variety of seminars Fundraising Unit of Southern Health. Baileys Day raised $195,000 for the and presentations were also held during The Monash Health Foundation is Children’s Cancer Centre and during the week including a keynote address responsible for the development of the 6 years of holding the event, by Professor Lloyd Sansom on philanthropy across Southern Health’s Patrick and Kerryn Tessier have raised ‘Medicines subsidy in Australia – services and facilities. over $1 million its strengths and challenges.’ Total gross fundraising revenue in 2010 - The City Life Church donated $30,000 The event also included the 2011 totalled in excess of $2,400,000. to Dandenong Hospital announcement of the 2011 Emerging Many generous individual and community The KOALA Foundation continued its Researcher Fellows (Further information donors held wonderful fundraising events generous support of the Children’s is detailed on page 21) and the annual poster competition which had over throughout the year including: Cancer Centre 140 entries. The Chain Reaction Bike Ride, held Zouki continued its strong support The 2010 Research Report was in conjunction with the Starlight including a significant donation to launched during Research Week Foundation which raised $300,000 Monash Cancer Centre and is available for download Equilibrium Gym raised over $10,000 Local Rotary Clubs and Lions Clubs from www.southernhealth.org.au. for the Children’s Cancer Centre continue to provide generous support The Research Report highlights some across all Southern Health sites. of the recent research achievements that are directly benefiting the health care needs of people living in Melbourne’s south-east.

Thank you to our major supporters

Major supporters Covidien Lions Club Clarinda Rotary Club of Noble Park Bayside Blue Healers Dacou Aboriginal Art Gallery Lions Club Dandenong RSL Bentleigh RSL Clayton Bailey’s Day Dandenong CIU Lions Club Mansfield Dulux RSL Dandenong/Cranbourne Chain Reaction Lions Club Moorabbin Equilibrium Gyms Lions Club Victoria RSL Highett Koala Foundation Glaxosmithkline Lions Club Wheelers Hill Sanofi Aventis Zouki Enterprise Giving Hope Maxxia Sarina Russo Job Agency Zouki Monash Global Quality Cakes Pty Ltd Med Tronic Semaphore Consulting Good Guys Dandenong Medicare Dandenong Siemens Foundation supporters Sue Weeks Personnel Grant Thornton Medicraft Hill Rom Allianz Thiess Services Pty Ltd Health Super Melbourne Welsh Church Ansell Healthcare Toshiba HESTA MTAA Superannuation Asko United Way Melbourne Hilton Manufacturing Origin Healthcare Berwick Opportunity Shop Westpac Bank Hospital Promotions Blue Ribbon Foundation Pacific Trends HUGS Bounty Services Police Credit Philanthopic supporters Iveco Trucks Dandenong Prime Group Brookfield Multiplex The Collier Trust Construction Jefferson Ford Mentone Ricoh The Ian and Nelleke Clark Karista Developments Bunnings Dandenong Ride on Entertainment Encouragement Fund Kids with Cancer Foundation Bunnings Group Ritchies Community Ian Rollo Currie Estate Bunnings Mentone Kingston Heath Golf Club Benefit Program Foundation Bunurong Land Council Lions Club Dromana Rotary Club of Berwick Honda Foundation Casco Blu Lions Club Hampton Park Rotary Club of Bayswater MAD Foundation City Life Church Lions Club Noble Park Rotary Club of Emerald Louis and Lesley Nelken Trust City of Monash Lions Club Oakleigh Rotary Club of Glen Waverley State Trustees

Southern Health Annual Report 2010-2011 15 Achievements against Strategic Goals

Art Beat: Bringing the arts Consumer participation training Community partnerships to life at Southern Health sessions conducted during the year were well received by managers, The rich diversity of our community Southern Health’s Art in Health and the participants are successfully shapes the development and delivery program, Art Beat, continues to take implementing their learnings across of our services. the evidence of the benefits of the the organisation. Our community health services are arts for community building and extremely active in partnering with other individual wellness and apply them A number of our Community Advisory agencies in the community with a priority directly to the health setting. Committee and Consumer Participation Registry members have also been focus on improving awareness and Art Beat effectively creates a platform involved in presenting their work and access to health services for socially for engaging our communities in a Southern Health as a leader in consumer disadvantaged and at risk groups in dynamic yet tangible way through art. participation through conference our communities. Highlights include: presentations and also through their A 12 month pilot of a Police and In the last few years, our art collection involvement in national, state, Southern Community Triage program in has grown significantly and now Health and local area committees contains close to 600 items. It is the partnership with Victoria Police. best hospital based public art collection Our Cultural Responsiveness The program aims to reduce repeat in Australia. Committee advises the Executive contacts with emergency services for Management Team on issues that vulnerable members of the community Musicians perform regularly at Monash contribute to a health service that by providing a pathway from police Medical Centre Clayton and a staff choir respects and responds to the cultural contact to relevant health services. has also been successfully established. and linguistic diversity of our community. A monthly feature on Casey Radio’s The Committee comprises staff from An exhibition gallery has been Living Life program: ‘Health matters all sectors of the organisation and established with a rotating series of with Southern Health’ (97.7FM). representatives of local peak culturally exhibitions for all visitors to the hospital. Southern Health staff discuss health and linguistically diverse organisations. A highlight is the annual Staff Arts issues, raise awareness and promote Exhibition, which receives nearly 200 We provide care to many people from our services and facilities. Our guest entries each year. the Aboriginal and Torres Strait Islander speakers have included staff from communities in both our metropolitan MonashHeart, Community Health, Monash Cancer Centre, Monash Consumer participation and rural catchments. We also operate programs specifically targeted to this Children’s and the Monash Health We actively engage with our community. The Aboriginal Health Foundation. community to ensure our services Steering Committee is committed to The South Eastern Centre Against are responsive to the needs of our improving the health of our indigenous Sexual Assault (SECASA) run a diverse population and barriers to local communities. The committee Joint Legal Clinic with Monash access removed. works to ensure our services are University Law Faculty and Springvale culturally sensitive and delivered in The members of our Community Community Legal Service. The Clinic an environment that is welcoming for Advisory Committee continued to make provides a service for SECASA Aborigines and Torres Strait Islanders. a significant contribution to Southern clients who wish to apply to the Health and the improvement of health In mental health, our Consumer Victim of Crime Assistance Tribunal services in their community. and Carer Consultants draw on their using lawyers who do pro bono work experience to support clients and with law students. The Law Faculty The Committee have been actively carers and increases opportunity for provides final year law students involved in our capital projects planning consumer input into service planning. and a clinic supervisor; Springvale and they also generously provided their Community Legal Service donate their perspective to Board deliberations and There has also been significant premises; and SECASA refers clients, to management. commitment to ensure that our provides training about sexual assault committees work together to achieve and counsellors to assist with clients We continued to seek the input from the targets outlined in our Community who find it difficult to attend a legal consumers to inform project teams Participation Plan. clinic alone. in areas such as the development of new models of care and service improvement initiatives. Our quality improvement processes ensure we learn from consumer feedback to identify and implement improvements.

16 Achievements against Strategic Goals

Volunteers’ invaluable contribution Our volunteers win Minister’s Award

The dedication and support of our Dedicated couple Peter and Beth MacDonald were recognised for large team of volunteers is a wonderful their outstanding achievements by the Minister for Health and example of how our community values our services. Ageing the Honourable David Davis at a ceremony held in May 2011.

Over 300 dedicated volunteers from Beth and Peter are tireless Southern Health volunteers supporting many cultural backgrounds and ages people who have been affected by mental illness either as carers or are an integral part of the caring team consumers. Both have been deeply committed to bring about change at Southern Health. to mental health services. Working alongside our staff, volunteers Peter chairs the Southern Secure Extended Care Unit Model of Care help in areas as diverse as pre-admission clinics, emergency departments, Steering Committee and Beth is a long term member of our Carer rehabilitation and children’s wards. Support Brokerage Fund Committee. They help us deliver extra care in many ways - playing with young patients, They have instigated and attended many support groups and Beth guiding visitors and patients around was a founding member of the volunteer carer telephone support line our hospitals, assisting in community based at the Southern Clinic in Hampton. rehabilitation - adding their special talents to the professional care we offer. Other Southern Health volunteers honoured with a nomination for an award were Mrs Ruth Hartnett (Dandenong Hospital), Ms Pat Hart Caroline Chisholm awards (Kingston Centre) and the team from the Kingston Adult Activity for two stalwarts Support Service (Kingston Centre). Two of our living treasures, auxiliary Congratulations to Beth and Peter, our other nominees and all our members Maria Carter and Beaty Davis, dedicated volunteers. have been honoured in the Caroline Chisholm Awards.

The awards are presented annually by the Federal member for Chisholm, Anna Burke, MP, in honour of the pioneering Australian community worker.

Maria has been serving our community for decades. In 1978, she joined the Committee of the Monash Medical Mothers’ Auxiliary, raising funds for medical students attending Monash University. In 1985, she formed an auxiliary to support Monash Medical Centre Clayton, and in 1987, became a delegate to the Central Council of Auxiliaries, serving as Secretary since 1994.

Beaty Davis has been volunteering with the Monash Kids Support Group for 16 years. The Monash Kids Support Group provides support to Monash Children’s. Beaty has served as secretary since 1998. She is always willing to take on multiple tasks and has been particularly active in fundraising. In addition to her support for Monash Children’s, Beaty volunteers with the Oakleigh Evening View Club and has been active with Neighbourhood Watch.

Congratulations to these two special women.

Southern Health Annual Report 2010-2011 17 Achievements against Strategic Goals

Auxiliaries inspire

We are fortunate to have a dedicated Moorabbin Auxiliary 36 years and counting group of Auxiliaries that raise funds The Moorabbin Auxiliary has raised more than $1.2 million for for much-needed medical equipment Monash Medical Centre Moorabbin since its inception 36 years ago. and to support important programs across Southern Health. From a group of 20 founding members the Auxiliary grew to 140 members at its peak, and today comprises around 60 members, In a year that has seen many natural largely drawn from the local community. disasters shake the world, it is truly exceptional that our Auxiliaries have Congratulations to Auxiliary President Mrs Pat Huggins, OAM and maintained their levels of support. her fellow supporters for their fantastic contribution. It is a true reflection of their dedication and hard-work at a grass-roots level Thanks to Friends of Queen Vic Auxiliary of fundraising. In 2010-2011 our Auxiliaries provided us with more After 25 years of dedication, the Friends of Queen Vic Auxiliary than $47,000 in donations. was disbanded In November 2010.

We sincerely thank: The Auxiliary was established in 1985 to support the work of Monash Medical Centre Clayton. It grew out of the Monash Clayton Auxiliary Medical Mothers Auxiliary, which had formed initially to promote McCulloch House Auxiliary the transfer of the Queen Victoria Medical Centre to Clayton. Moorabbin Auxiliary Of the original members, nine remained active throughout the whole 25 years. The Auxiliary donated close to $40,000 since its

Monash Kids establishment. Seasons Group Thank you to all members of the Friends of Queen Vic Auxiliary who Friends of Queen Vic Auxiliary truly made a wonderful contribution over the 25 years.

Strategic Goal 4: Financial accountability

As a publicly-funded health service we demonstrate high standards of accountability and efficiency.

Financial accountability Each year, Southern Health implements that will not adversely affect Southern a budget improvement initiative program Health’s ability to service the needs of its The Department of Health has that is a financial strategy designed patients or meet the service standards been working in partnership with to assist Southern Health achieve its agreed with the Department of Health. the Victorian public health sector financial targets as agreed with the to ensure the long term financial Department of Health. In 2010-2011 Southern Health set a sustainability and improvement in target of $12.2 million in its budget the financial performance of the The underlying thrust of the strategy improvement initiative program which public health sector. is to identify achievable revenue is $2.0 million higher than achieved enhancement and cost saving initiatives previously. Against this target, we achieved an outcome of $13.3 million.

18 Achievements against Strategic Goals

Environmental The projects included: sustainability Initiatives in action Retro fitting of high efficient Southern Health continued to play fluorescent tubes to 75% of older Our MonashHeart team are a leadership role in improving light fittings, saving up to 30% leading the way in precise environmental performance at a energy use per tube monitoring of consumable local, state and international level. Three high efficiency chillers and device use in their cardiac We continue to be actively engaged replaced older units saving up to catheterisation laboratories. in Sustainability Victoria’s Resource 500 kW per hour during summer Smart Healthcare Program, peak times or up to $50 per hour The hTrak point-of-care data continuing to implement a number of New boiler units are now running capture system uses a handheld waste and environmental strategies at 97% efficiency compared to mobile scanner to automatically to reduce environmental impact and 72% for the old units. This is expenditure. These include initiatives capture consumables used for reducing gas consumption by 25%, in energy management, waste each patient. approximately 24,000,000 MJ or conservation and management and $100,000 per annum. This new recycling and a health service wide The technology enables system also has variable speed communication strategy. Annual pin-point management of drives on the pump system saving cost savings through these various stock, procedure costing, up to a further 870,000 kW per strategies are estimated at $835,000. stocktaking, prosthesis and annum or up to $90,000 In March 2011, we began an recall management with Air-conditioning run times have education program ‘One Small Step’ intelligent, high level patient been reviewed and reduced in to reduce the clinical waste produced activity reporting and costings. areas that do not require 24 hour/7 across Southern Health. In just two days a week use. Where possible, Importantly the scanning months, we reduced waste by after hours start buttons have been system has not only enabled 2,000 kilograms per month by installed for staff to manually use if MonashHeart to correctly educating staff on the best way to they are in early or late identify prosthesis rebates due dispose of packaging and other from private health funds but non-clinical items. The operating theatre air- conditioning plant at Monash to also greatly reduce stock By reducing the amount of clinical Medical Centre Clayton is currently holding due to optimum waste disposed of we are reducing being modified to use return air re-ordering processes available our environmental footprint, as clinical with the HEPA filters project, saving through hTrak. waste uses more natural resources to about 25% of their energy usage. dispose of compared with recycled and general waste. The program The new Emergency Department will be rolled out across all Southern and Mental Health buildings Health sites in 2011-2012. at Dandenong Hospital have incorporated rain water harvesting. Our engineering team made several Many other water saving projects improvements to buildings, plant, were completed at other Southern infrastructure and equipment to Health Sites – such as, rain water reduce energy consumption and harvesting, recovery from kidney increase efficiency and reliability. dialysis and steriliser vacuum pump cooling water recovery.

Southern Health Annual Report 2010-2011 19 Achievements against Strategic Goals

Strategic Goal 5: Workforce, innovation and knowledge

We are committed to providing opportunities to develop our people to meet our changing service needs while ensuring that innovation and knowledge is captured and shared across the organisation.

Workforce, innovation and knowledge Highlights from 2010-2011

We received over 250 nominations in our staff Recognition and Reward Award program

Our researchers had over 800 publications including journal articles in peer reviewed journals, book chapters and books

We welcomed 75 interns, 114 nursing graduates and 32 midwifery graduates in early 2011

We won the Institute of Public Administration Australia Health and Safety Performance Improvement Award.

Nurses embrace the This innovative program addresses a new training initiative for our Patient Transition to Specialty the increasing need for specialty Services Assistants and Environmental Practice program knowledge and skills within our nursing Services staff. This initiative involved workforce. Nurses undertaking the credentialing for Support Services 145 of our nurses are undertaking program are supported via study days, staff who clean the rooms of patients our Transition to Specialty Practice education, and clinical and academic with VRE. program. assessment to develop their capability to contribute within a specialty area. In total, 318 Patient Services The program allows nursing staff to The majority of these programs form Assistants and Environmental Services develop the skills and knowledge the basis for formal post-graduate staff have attended these education needed when providing care within studies with partner universities and sessions, delivered by the Infection our specialist units. It provides an many participating nurses choose to Control team. Some 70% of these introduction to a specialty area and undertake further study. staff have now completed Support a chance to ‘test-drive’ post-graduate Services credentialing. level study. Committed to cleanliness The aim of this project is to increase Transition to specialty programs awareness of the strict contact With the increased use of antibiotics are run throughout the year across precaution requirements to optimise the number of people carrying ten specialty areas: intensive care, patient care. multi-resistant organisms such as paediatric intensive care, newborn Vancomycin Resistant Enterococci A program of using a fluorescent services, coronary care, emergency, (VRE) also increases. This has led marker as a teaching tool and quality peri-operative, neurology, renal, to a shift in cleaning techniques and improvement indicator is also being medical/surgical and paediatrics. our staff are embracing the change. introduced. This has the potential to measure compliance with cleaning Our Support Services and Infection requirements and to benchmark Control teams successfully introduced improvements.

20 Achievements against Strategic Goals

Electronic rostering The Kronos electronic rostering Celebrating our people system has been successfully rolled out to over 70% of staff. We take great pride in recognising and celebrating the The introduction of the Kronos system achievements of our staff, volunteers and supporters. has enabled all timesheets to be During 2010-2011 a number of our team members were electronic and populated directly from a recognised for their outstanding achievements including: staff member’s schedule or roster, with no paper timesheets. The system also Dr Annie Moulden allows staff to check their schedules, Deputy Clinical Quality Director, Quality who was recognised rosters and timecards from home and view accruals online. in the Queen’s Birthday honours Ms Lynne Bickerstaff Emerging researchers Operations Director Kingston Centre, Director of Nursing recognised Rehabilitation and Aged Care Services and Medicine Southern Health’s annual Emerging Program, who won Deakin University’s ‘Excellence in Research Fellowship program aims to Nursing and Midwifery Leadership in an Urban Healthcare develop the research capability and Environment’ Award knowledge of our young clinicians. Winners of the 2011 Fellowships are: Professor Ian Meredith Dr Darcy Holt, Ms Donna Markham Director of MonashHeart, who joined the National Heart and Dr Jimmy Shen. Foundation Board Dr Darcy Holt is a gastroenterology and clinical nutrition fellow, he will Ms Colleen White use his fellowship to research Midwifery Unit Manager, who was named Southern Health’s ‘The role of Visceral Fat and Nurse/Midwife of the Year Adipocytokines in Crohns Disease’ Dr Arthur Nasis Ms Donna Markham is a Team Leader Care Coordinator in the who was awarded the Senior Medical Staff Research Fellowship. Emergency Department at Monash The Fellowship will allow Dr Nasis to complete his PhD Medical Centre Clayton; she will use examining novel imaging techniques in the diagnosis of her fellowship to research patients coronary artery disease and myocardial ischaemia who frequently present to the Emergency Department with a range Norman Gibbs aka ‘Zodo the Clown’ of recurrent psychiatric and chronic one of our long standing volunteers at Monash Children’s, was respiratory problems honoured on Australia Day with an Order of Australia Medal Dr Jimmy Shen is an advanced trainee in the diabetes and Volunteer Ruth Hartnett endocrinology department, he who was named the City of Dandenong’s Citizen of the Year will use his fellowship to research ‘Macrophage MR signaling Ms Laura Caire regulated systolic blood pressure Mental Health Speech Pathologist, who obtained a Creswick and cardiovascular remodelling’. Foundation Fellowship in child and adolescent development, specifically in speech pathology and youth justice

Associate Professor Terry Haines, Director Allied Health Clinical Research Unit, who was the winner of the Social and Community Services (SACS) Award for Leadership in the State Government Sector.

Southern Health Annual Report 2010-2011 21 Achievements against Strategic Goals

Safety and wellbeing of staff

Southern Health takes a holistic approach to providing high quality care to patients whilst ensuring staff safety and wellbeing.

This approach incorporates the integration of three programs; SmartMove! (our Manual Handling program), Occupational Violence and Aggression (our program to manage and prevent violence and aggression), and Healthy Opportunities (a program which identifies, promotes and provides staff with opportunities to access a wide range of health and wellbeing initiatives).

Recognition for the above approach and the success of the programs saw Southern Health win the Health and Safety Performance Improvement Award through the Institute of Public Administration Australia (Victoria), under their Leadership in Public Sector Awards 2010.

Listening to our staff Finding new employees Leadership in Action We conduct exit and entry surveys Advertising to recruit new members This year saw the launch of the with staff to learn more about to the Southern Health team is Leadership in Action series for our employees’ experiences at designed to attract new starters such the Top 50 leaders from across Southern Health. as graduate nurses and midwives, the organisation, in recognition junior medical officers, specialist of their pivotal role in steering a Participants rate a number of statements nurses and a range of other roles culture of exemplary healthcare on their work experiences using an necessary for our continued delivery at Southern Health. online feedback survey. Areas evaluated of services. include recruitment and orientation, In partnership with The Advisory Board role and expectations, communication, Our work has included feature Company, a series of high-impact work environment, management advertisements in Melbourne Age interactive workshops were developed effectiveness, morale and values. supplements covering medical careers, to assist our senior team in expanding allied health, graduate nurse/ midwives their capacity to deliver clear and We now have 12 months of data and International Nursing/ Midwifery effective direction. Topics from problem available from theses surveys. Day. Our feature advertising showcases definition and root cause analysis, to Feedback is positive, with the surveys our staff and promotes career, diversity change leadership and accountability, telling us new starters feel welcomed, and personal growth opportunities engaged this group in action learning personal and patient safety receives at Southern Health. We continue to practice that they were then able to high priority, and we provide valuable use online job boards such as SEEK apply to day-to-day activities in setting learning experiences. and MyCareer, with good results also direction, making decisions and coming from our own career’s page. executing our strategic plan.

22 Achievements against Strategic Goals

Development of our staff Supporting Managers – To underpin and support these tools, iCAN tools iCAN Manage forums have also been Southern Health is applying an launched. These forums provide integrated approach to development To support our line managers in managers with the opportunity to and learning for our staff. people management we developed participate in a targeted session a suite of online tools called iCAN Our Human Resources team are that enables them to understand Manage and iCAN Understand. sharing their expertise across the the value of the tools and workshop current matters. organisation by delivering development These tools provide clarity in relation to programs and targeted workshops human resources processes and ensure at a time and with a topic that works that the supporting information is easy with current schedules and projects. to understand and use. Managers and The offering also includes accredited staff have access to over 50 online tools; learning programs and change ranging from template letters, tips for management tools for staff who are managers, frequently asked questions leading operational change across and checklists. the organisation.

Staff numbers* at 30 June 2011

Category 2011 2010

Nursing 4174 4025 Administrative/Clerical 1353 1341 Medical and Support 1837 1710 Hotel and Allied 841 818 Senior Medical Staff 183 168 Hospital Medical Officers 859 805 Sessional Medical 249 231 TOTAL 9496 9098

*Full time equivalents staff at Southern Health and Jessie McPherson Private Hospital

WorkCover claims

2010/ 2009/ 2008/ 2007/ 2006/ 2005/ 2004/ 2003/ 2011 2010 2009 2008 2007 2006 2005 2004

Number of standard 151 152 165 174 171 184 164 155 Claims

Claims per $ million 0.22 0.24 0.303 0.333 0.344 0.396 0.396 0.392 of remuneration

Claim costs per $ 1.071 0.83 0.880 1.316 1.288 1.363 1.020 1.192 million remuneration

*Based on data provided by the Southern Health WorkCover Agent as at 30 June 2011. Data may change due to claims received after this date.

Southern Health Annual Report 2010-2011 23 Our sites and services

As the largest metropolitan health service in Victoria, Southern Health provides services to more than 20 per cent of metropolitan Melbourne. We also play a significant role in providing regional and state-wide specialist services.

Our sites We provide quality public health care in our community from over 40 care locations across south eastern Melbourne, including major tertiary and secondary hospitals, aged residential care centres and an extensive network of rehabilitation, community health and mental health facilities.

Monash Medical Centre Clayton Services include general medical and Aged residential care is provided for 165 is a 640 bed teaching and research surgical including orthopaedic services residents requiring high care at Allambee hospital of international standing providing and plastics services, an intensive care Nursing Home, Cheltenham; Chestnut a comprehensive range of specialist unit, emergency department, MonashHeart Gardens Aged Care, Doveton; Yarraman surgical, medical, allied health and mental cardiac care centre; rehabilitation and aged Nursing Home, Noble Park. Mooraleigh health services to our community. services, pathology, radiology, maternity Hostel, East Bentleigh and AG Eastwood unit, special care nursery, children’s Hostel, Cheltenham are home to 129 This tertiary site is a designated national services, mental health services and allied residents requiring low level care. provider of renal and pancreatic health services. transplants, and statewide provider Mental health services are provided of thalassemia and children’s cancer Casey Hospital is a 243 bed hospital through hospital and community based services. It is also the base for serving one of the fastest growing areas facilities. Our comprehensive range of MonashHeart, a centre of excellence in Melbourne’s outer south east. Services services for children, youth and adults in cardiac assessment, treatment and include an emergency department, general experiencing mental health issues include research, and Monash Children’s, the medical, mental health, rehabilitation, the South East Alcohol and Drug Service; third largest provider of paediatric services surgical and ambulatory care services, a telephone psychiatric triage service; in Australia. Uniquely offering maternity maternity and a special care nursery. community and inpatient perinatal, child and newborn services integrated on the The hospital is a provider of paediatric and youth services; crisis assessment one site, Monash Medical Centre Clayton services for Monash Children’s and gives and treatment teams and enhanced crisis provides one of Victoria’s largest women’s access to the leading cardiac services of assessment and treatment teams (Monash health services. It is also renowned for MonashHeart. Medical Centre Clayton, Dandenong Hospital, Casey Hospital); consultation men’s health services and ambulatory liaison psychiatry; primary mental health models of care. Cranbourne Integrated Care Centre provides a range of same-day acute and teams; community care teams; mobile McCulloch House, located on site, is sub-acute services including surgery, renal support and treatment services; acute a 16 bed facility providing palliative care dialysis, specialist consulting services, inpatient care; secure extended care for people within our catchment area with regional ophthalmology services and services; mothers and babies unit; advanced progressive disease. mental health services. It also provides the eating disorders services; prevention local community with access to community and recovery care service; community Monash Medical Centre Moorabbin is health services and a community residential and rehabilitation services. a 147 bed hospital incorporating Monash rehabilitation centre. Cancer Centre, one of Victoria’s leading Community Health Services (Greater cancer treatment centres operating in Kingston Centre is a 192 bed Dandenong and Cardinia Casey) partnership with Peter Mac Cancer Centre. sub-acute facility specialising in high collaborate with individuals, communities The hospital also offers elective surgery, quality rehabilitation, function restoration, and organisations to enhance the health independence and wellbeing of the diverse short-stay care and dialysis. Home to transitional care, aged care and aged and most vulnerable community members Victoria’s first Patient Simulation Centre, mental health. Its highly regarded with a particular focus on ensuring access the hospital plays a major role in the rehabilitation program focuses on for those with or at risk of poorest health education and training of undergraduate restoring function after illness or injury status and those most in need. Programs and postgraduate medical students, with the full range of allied health services seek to enhance illness prevention, nurses and allied health professionals. provided to adults of all ages. The centre provide early intervention and improve The hospital hosts the Southern Melbourne provides specialist services for older general wellness and are delivered across Integrated Cancer Services and is a people including Aged Care Assessment, eight locations – two in Dandenong and centre for research, in particular a major Cognitive Dementia and Memory Services. one in Springvale, Berwick, Cockatoo, contributor to cancer related research. It also offers, a Falls and Balance Clinic, Cranbourne, Doveton and Pakenham. Pain Clinic, Clinical Gait Analysis and Dandenong Hospital is a 520 bed acute continence service. It is at the forefront of Community rehabilitation services are hospital providing a wide range of health research into movement and gait disorders, provided from centres at Parkdale, Clayton, services to the people living and working aged mental health and geriatric medicine. Springvale, Dandenong, Cranbourne and in Dandenong and surrounding areas. Pakenham and in clients’ homes through the Rehabilitation in the Home services.

24 Our sites and services

Our services

We uniquely provide our community integrated primary, secondary and tertiary health care in one organisation, offering over 250 different programs and services.

Allied Health Community Nursing Critical Care Program General Manager Community Rehabilitation Program Director Ms Athina Georgiou Continence Clinic Dr Bill Shearer

Aboriginal Health Counselling and Casework Director of Nursing Ms Jane Poxon Allied Health Domestic Violence Support

Allied Health Clinical Research Unit General Practitioner Liaison Anaesthesia

Dietetic Services Falls and Balance Clinic Emergency Medicine

Exercise Physiology Family Planning Intensive Care

Interpreter Services Financial Counselling Operating Theatres

Music Therapy Health Information and Referral Pharmacy Services

Occupational Therapy Health Promotion and Education

Orthotics Hospital In The Home Medicine Program Program Director Physiotherapy Hospital Admissions Risk Program Associate Professor Richard King (HARP) Podiatry Director of Nursing Housing Psychology Ms Lynne Bickerstaff In-reach Social Work Aged Persons Mental Health Intake Services South Eastern Centre Against Aged Persons Residential Care Sexual Assault Medical Clinical Haematology Speech Pathology Men’s Health Clinical Immunology Movement Disorders Clinic Clinical Nutrition and Metabolism Ambulatory Care Optometry Cognitive Dementia and Memory General Manager Oral Health (Dental) Service Greg Young Outpatient Services Specialist Clinics Day Treatment Centre Aboriginal Health Services Planned Activity Groups Dermatology Acquired Brain Injury: Slow to Diabetes Recover Program Post-Acute Care Diabetes Education Aged and Disability Support Post Sub-Acute Care Diagnostic Imaging Aids for Disabled People Primary Care Endocrinology Birthing Support Refugee Health Gastroenterology Children’s Early Intervention Rehabilitation In The Home General Medicine Cognitive Dementia and Respite Service Memory Service Self Management Programs Geriatric Medicine Outpatient Clinic

Community Access Service Young Adults Transition Service Infectious Diseases and Clinical Epidemiology Community Aged Care Packages Youth Health

Southern Health Annual Report 2010-2011 25 Our sites and services

Interventional Radiology Renal Surgery Lactation Consultant

Medical Assessment and Stroke Maternal Fetal Medicine Planning Unit Thoracic Surgery Menopause Service Medical Oncology Menstrual Management Monash Ageing Research Surgery Program Centre (MONARC) Midwifery Care Unit Medical Director Midwives In Partnership Oncology Day Care Mr Al Saunder

Pathology Multiple Pregnancy Service Director of Nursing

Primary Care Ms Shirlee Graham Obstetric Metabolic Service Pelvic Floor Disorders Supportive and Palliative Care Audiology Perinatal Services Refugee Medicine Colorectal Surgery and Stoma Therapy Respiratory and Sleep Medicine Reproductive Medicine (Adult) Dental Services Victorian Fetal Therapy Unit Rheumatology Endocrine Surgery

Sub-Acute Inpatient Services Ear, Nose and Throat Surgery Monash Children’s Program Adolescent Medicine Thalassemia Gastrointestinal Surgery Children’s Cancer Centre Vascular Medicine and Hypertension General Surgery Cardiology Maxillofacial Surgery Child and Adolescent Psychiatry Specialty Program Plastic and Reconstructive Surgery Program Director Developmental Disabilities Orthopaedic Surgery Professor Julian Smith Dental Urology Director of Nursing Diabetes

Ms Sharon Wood Vascular and Transplant Surgery Eating Disorders Breast Services Women’s and Children’s Ear, Nose and Throat Cardiac Catheterisation Program Emergency Cardiology Medical Director Endocrinology Cardiothoracic Surgery Professor Nick Freezer Forensic Medicine Service Coronary Care Director of Nursing Gastroenterology Ms Kym Forrest Echocardiography General Paediatrics Haemodialysis Women’s Program Genetic Services Interventional Cardiology Birth Centre Team Growth and Development Nephrology Contraceptive Counselling Haematology Neurology Delivery Suite Hearing Services Neuropsychology Endometriosis Service Imaging Neurosurgery Fetal Diagnostic Infectious Diseases Ophthalmology General Obstetrics Intensive Care Pacing Gynaecology Monash Children’s at Home Peritoneal Dialysis Gynaecology Endoscopy (formerly Carelink)

Renal and Pancreatic Transplantation Gynaecology Oncology Monash Newborn

26 Our sites and services

Neurology Early In Life Mental Mental Health Consumer Neurosurgery Health Service and Carer Relations Youth Inpatient Unit Administration of the Carer Brokerage Orthopaedics Fund Plastics Adolescent Recovery Centre - Day Program Consumer Consultants Quality Community Teams - Dandenong, Director of Consumer Carer Relations Rehabilitation Casey, Frankston Parent / Carer Consultants

Renal and Continence Specialist Team - incorporating Renal Transplantation Hospital Consultation Liaison, Crisis Clinicians (Monash, Community Access Respiratory Medicine Dandenong, Casey, Frankston) Partnerships and Neuro Developmental Rheumatology Adult Hospital Consultation Liaison - Assessment Clinic (Endeavour) Monash and Dandenong Melbourne Children’s Sleep Centre Stepping Stones Adolescent Inpatient Community Development - Mental

Surgery Unit including Educational Service - Health Promotion, General Practice Lyndale Secondary School Urology Liaison Clinicians, Mental Health Nurses in General Practices Intensive Mobile Youth Outreach Service Mental Health, Alcohol Gender Dysphoria Service and other Drugs Program Stepping Stones Transition Primary Mental Health Teams - Middle (Step up/Step down) Program South, South East Medical Director (acting) Dr David Huppert Butterfly Eating Disorder Day Program South Eastern Alcohol and Other Drugs Service Director of Nursing Integrated Perinatal and Infant Mental Ms Jakqui Barnfield Health Team (outpatient team) Acquired Brain Injury Programs

Mother and Baby Unit Addiction Medicine Unit - hospital Adult Mental Health – Acute liaison, outpatients and shared care Eating Disorder Service

Crisis Assessment and Treatment Culturally and Linguistically Diverse Early Psychosis - Recovery and Teams Community Programs. Prevention of Psychosis Service Enhanced Crisis Assessment and Drink Drive Programs Treatment Teams Mental Health Education, Forensic Intervention Unit Inpatient Units Training and Research Koori Alcohol and Drug Programs Adult Acute Inpatient Units Centre for Developmental Psychiatry and Psychology, Monash University Needle Exchange Program Psychiatric Triage Service Centre for Psychological and Pharmacotherapy Outpatient Clinic Behavioural Medicine, Monash Adult Mental Health Services University Regional Dual Diagnosis Program Clozapine Clinic Southern Synergy; The Southern Withdrawal Programs - residential Community Care Units - Doveton Health Adult Psychiatry Research, based and outpatient/home based and East Bentleigh Training and Evaluation, Monash Youth Drug and Alcohol Program, University Continuing Care Teams - Middle including supported accommodation South, Clayton, Dandenong, Casey g Precept - Nursing training and and outreach education team Mobile Support and Treatment Teams Adult Counselling Services - Middle South, Dandenong, Casey Tele-psychiatry

Secure Extended Care Unit - Wirringga

Psychiatric Assessment and Recovery Care Service – Springvale and Clayton

Southern Health Annual Report 2010-2011 27 Governance

Southern Health is a public health service; a body corporate established under Section 65P of the Health Services Act 1988 as amended in 2004, and listed in Schedule 5 of that Act. The Minister for Health, The Honourable David Davis is the responsible Minister.

Clinical Governance Board of Directors

Clinical governance is the system by which the Southern Health Board, managers The Board of Directors of Southern and clinicians share responsibility and are held accountable for patient care, Health is appointed by the Governor in minimising risk to consumers and continuously monitoring and improving the Council on the recommendation of the quality of care. Minister for Health in accordance with the Health Services Act 1988. The clinical governance framework is implemented through the organisation’s management structure, job descriptions and supporting committee structures. The functions of the Board are: This framework complements other governance frameworks including the Occupational Health and Safety Framework. To monitor the performance of Southern Health

To appoint and determine the employment terms (including The clinical governance framework is based around four key elements: remuneration) of a Chief Executive

To oversee the management of Leadership Southern Health and monitor the performance of the Chief Executive 1 Managers and leaders within the organisation have clear responsibilities, accountabilities and deliverables expressed in their To develop statements of priorities position descriptions. Business and quality planning throughout all and strategic plans for the operation sectors of the health service ensure that our strategic objectives of Southern Health and monitor their translate into practice. compliance

To develop financial and business plans, strategies and budgets to Risk management ensure accountable and efficient Robust risk management systems promote the identification, analysis provision of health services by 2 and mitigation of risk as a core business function within each area Southern Health and its long term and at an organisation wide level. financial viability, as well as to ensure they are adhered to

To establish and maintain effective Stakeholder relationships systems to ensure that the health 3 Relationships are integrated and supported through Southern services meet the needs of the Health’s Community Participation Plan, Community Advisory community served by Southern Committee, Primary Care and Population Health Advisory Committee Health and that the views of users and the various consumer feedback networks and relations with and providers of health services are internal and external communications policies and planning. taken into account

To ensure that Southern Health operates within its budget and that Performance enhancement its systems accurately reflect its 4 This is monitored through performance management systems at both financial position and viability individual and team levels. Key clinical and performance indicators are monitored throughout all stages of the governance process.

28 Governance

To ensure effective and accountable Finance Committee Board Advisory systems are in place to monitor and improve and quality and effectiveness The role of the Finance Committee is Committees of health services provided by to advise the Board of Directors on Southern Health matters relating to the financial strategy, direction, performance and reporting of Community Advisory To ensure that any problems finance. The Finance Committee assists Committee identified with the quality and in the development of Southern Health’s The Community Advisory Committee effectiveness of health services financial strategy; reviews financial assists the Board to appropriately are addressed in a timely manner policies in accordance with government integrate consumer and community and that Southern Health strives to requirements and relevant accounting views at all levels of Southern Health’s continuously improve quality and standards and recommend to the operations. The Committee has the foster innovation Board of Directors of Southern Health responsibility to advise on governance, for approval. The Finance Committee policy and strategy in relation to To develop arrangements with other also examines and reviews the annual community participation and its impact agencies and health service providers operational budgets and business on health service outcomes. The two key to enable effective and efficient plans ensuring these plans align with roles of the Southern Health Community service delivery and continuity of care key strategic priorities and performance Advisory Committee are to provide objectives for Board approval. To establish the organisational direction and leadership in relation structure, including the management to the integration of consumer, carer structure, of Southern Health and community views into all levels of Quality Committee health service operations, planning and To establish and ensure the policy development and to advocate to The purpose of the Quality Committee effectiveness of a Finance Committee, the Board of Directors on behalf of the is to support the Board’s function of an Audit Committee and a Quality community, consumers and carers. providing strategic leadership in relation Committee and other Committees to the clinical governance of quality and considered appropriate safety at Southern Health. It serves to Primary Care and Population To facilitate health research and ensure, on behalf of the Board, that the Health Advisory Committee education and any other functions following broad objectives are fulfilled: conferred on the Board by or under The Primary Care and Population Health Effective and accountable systems the Act. Advisory Committee provides strategic are in place to monitor and improve advice to the Board on matters specific the quality and effectiveness of health to primary care and population health Board Committees services provided by Southern Health with a particular focus on improving the health status of our community in Any problems identified with the The following committees support the areas such as the hospital – primary quality or effectiveness of the health functions of the Board of Directors: care interface, mental health wellbeing, services provided are addressed in a health promotion, health independence timely manner programs, research and education and Audit Committee Southern Health continuously strives the health of refugees, Aboriginal and The role of the Audit Committee is to to improve the quality of the health Torres Straight Islanders and culturally advise the Board of Directors on audit services it provides and to foster and linguistically diverse communities. matters and matters relating to the innovation. financial, accounting and legislative compliance and the operational effectiveness and efficiency of Southern Remuneration Committee Health. The Committee also advises The principal role of the Southern the Board on the level of business risk Health Remuneration Committee is or exposure to which Southern Health to advise the Board of Directors on might be subject and oversight of matters relating to the organisation’s internal and external audit activities. remuneration policies and practices.

In addition, the Southern Health Remuneration Committee will provide oversight with respect to Succession Planning for the Chief Executive and senior executive positions.

Southern Health Annual Report 2010-2011 29 Governance

Members of the Board of Directors

Ms Barbara Yeoh Ms Faye Burton Dr Ronald Carson BSc (Hons), FAICD BEc, MAICD BSc (Hons), MSc, PhD

Chair of the Southern Chair, Board of Kitaya Audit Committee Health Board 1 Holdings Quality Committee Chair, Remuneration Community Advisory Committee Committee Dr Carson has worked extensively overseas in research Finance Committee Ms Burton is a former as the head of laboratories at Ms Yeoh has over 20 years Executive Director of the Office Seattle Reproductive Medicine experience as a director in the of Science and Technology at and IVF America. He was also health and higher education the Department of Innovation, the Manager of Research and sectors, combined with an Industry and Regional Development for Monash IVF executive career in the finance Development. She specialises and a consultant for the World sector. She is Director of the in government policy and Health Organisation. Victoria State Emergency administration; strategic Service, Deputy Chair of the planning, budget, finance and Civil Aviation Safety Authority risk management. Board Audit Committee, Member of the Gambling and Lotteries Licence Review Panel (Victoria), Member of the Statutory Fishing Rights Allocation Review Panel (Commonwealth) and Principal Associate of PhillipsKPA.

Mr David Cowlishaw Mr Peter Hansen Dr Errol Katz FAIBF BEc, FAICD MBBS (Hons), LLB (Hons), MPP Chair, Audit Committee Chair, Finance Committee Chair, Quality Committee Community Advisory Audit Committee Primary Care and Population Committee Health Advisory Committee Mr Hansen has a broad finance, Member, Board of Kitaya strategy and public relations Remuneration Committee Holdings Pty Ltd1 background. He worked with ACI Dr Katz returns to Southern Health International in senior roles for Mr Cowlishaw retired from the as a Board member, having been 27 years before being appointed National Australia Bank in 2001 a medical student at Monash the Victorian Agent-General in following an extensive and varied Medical Centre Clayton. He London in 2000. Since returning career. His senior appointments currently works in private equity in 2004, he has been the included: District Manager and investments with Co-Investor Executive Director at PALTECH Metropolitan Melbourne, Capital Partners. Past experience Pty Ltd, a communications and Head of Credit Victoria and includes The Boston Consulting human resources consultancy. Tasmania, General Manager of Group, Visy Industries, and The Mr Hansen is a Fellow of the the National Australia Bank’s Alfred, where he worked as a Australian Institute of Company US operations based in New doctor. Dr Katz was previously a Directors, and is a Director of York, Managing Director National Board member at Dental Health City West Water. He holds a Australia Trustees. Services Victoria, where he was Bachelor of Economics from Chair of the Population Health Monash University. Committee. He was recently appointed to the Board of Primary Health Care Limited. He has degrees in Medicine and Law from Monash University, and a Masters in Public Policy from Harvard.

30 Governance

Ms Helen Owens Mr David Taylor Ms Debbie Williams BEc (Hons), MEc BA Econ, DPM, FAICD MBA, ME, BCom, GAICD

Chair, Primary Care and Finance Committee Finance Committee Population Health Member, Board of Kitaya Primary Care and Advisory Committee Holdings Pty Ltd1 Population Health Advisory Quality Committee Committee Mr Taylor has extensive Ms Owens is a health economist commercial experience with Ms Williams is a health care and has spent much of her a banking and marketing strategy consultant who brings career in the public sector. background. Since retiring as extensive experience in health She is a Director of MediVac Head of the Bankwest Business care management, corporate Limited and member of the Bank in 1999, he has progressed governance, business strategy Consultative Council of the a career in corporate governance management, mental health Victorian Cancer Agency. with appointments to the boards management and financial Previous positions held include of listed and unlisted public management. Ms Williams is Commissioner, Productivity companies and government a Board member of the Inner Commission; Member, business enterprises. He is East Mental Health Services Commonwealth Grants immediate past Chairman of both Association and Chair of its Commission; and expert Perth Market Authority and WA Board’s Finance and Risk strategic advisor to the Victorian Forest Products Commission Management Committee. Department of Premier and and is currently a non-executive Cabinet on health reform. She director of Agrifood Skills has recently worked as an Australia Ltd. Mr Taylor is a independent consultant through Fellow of the Australian Institute PriceWaterhouse Coopers. She of Company Directors. has held a number of academic positions at Monash and Melbourne Universities, including Associate Professor, National Centre for Health Program Evaluation, Monash University.

1 Kitaya Holdings Pty Ltd operates Jessie McPherson Private Hospital.

Southern Health Annual Report 2010-2011 31 Governance

Organisational structure at 30 June 2011

Advisory Committees Board of Directors Board Committees

Community Chair, Ms Barbara Yeoh Audit

Primary Care and Ms Faye Burton Mr David Cowlishaw, Chair Population Health Dr Ron Carson Dr Ron Carson Mr David Cowlishaw Mr Peter Hansen Mr Peter Hansen Mr John Thompson Mr David Taylor (independent member) Dr Errol Katz Finance Ms Helen Owens Quality Ms Debbie Williams Remuneration

Office of the Chief Executive

Corporate Counsel John Snowdon Executive Director Financial & Business Chief Executive Improvement & Procurement John Sutherland Ms Shelly Park General Manager Allied Health (Professional Governance) Athina Georgiou Chief Information Officer Philip Nesci

Executive Director Executive Director Executive Director Chief Operating Medical Services Nursing & Midwifery Mental Health Officer & Quality & Support Services

Siva Sivarajah Anne Doherty Wayne Ramsey Cheyne Chalmers

Major facilities: Mental Health Program: Medical Workforce Nursing & Midwifery Strategic Directorate Casey Hospital Adult Medical Education Cranbourne Integrated Child & Adolescent Quality Nursing & Midwifery Care Centre Community & Research Directorate Education and Strategy Dandenong Hospital Rehabilitation Simulation Centre Infection Control

Kingston Centre Alcohol & Drugs Centre for Clinical Support Services Monash Medical Centre Mental Health Education, Effectiveness Clayton Training & Research Library Emergency Management Monash Medical Centre Centre Moorabbin Community Health Clinical Support Services Capital & Infrastructure Professional governance: Professional governance: Professional governance: Engineering Services Psychology Medical Workforce Nursing & Midwifery

32 Governance

Executive Director Executive Director Executive Director Performance, Executive Director Public Affairs & Human Resources Strategy & Finance Communication Innovation

Basil Ireland Fiona Prestedge Adam Horsburgh Andrew Williamson

Finance Human Resources Strategy & Planning Media Relations Contracts coordination Consulting Organisational Innovation External Communication Business Manager’s Occupational Health & Redesign professional support and Safety Jessie McPherson Private Internal Communication

Organisational Hospital Community Relations Development and Performance Reporting

Learning & Improvement Volunteers & Auxiliaries Recruitment & Retention Systems Art & Historical Industrial Relations Collections

Payroll Monash Health Foundation

Southern Health Annual Report 2010-2011 33 Statutory Compliance

Compliance with the Report for all properties owned by Internal Reviewers Southern Health. This is confirmation Building Act 1993 that all essential services are operational Vicky Hammond, Legal Counsel; at the required level of performance. John Snowdon, Corporate Counsell Our facilities are managed through Records and reports are retained on site inspections, risk assessments the premises for inspection by all relevant and independent audits, with authorities. Merit and Equity annual essential safety measures maintenance and reporting. Merit and equity principles are Risk assessment encompassed in employment and diversity management activities Building standards and Victorian Managed Insurance Authority throughout Southern Health. condition assessments (VMIA) conducts detailed Site Risk Assessments (SRS) at Monash Medical The condition of our buildings is Centre Clayton, Monash Medical Centre assessed through site inspections and Moorabbin, Kingston Centre and Whistleblowers existing condition reviews by architects Dandenong Hospital. Protection Act 2001 and consultant engineers. Fire audits Risk Treatment Options generated from and risk assessments are undertaken Southern Health had no notifications the SRS are monitored through Southern by consultant fire risk engineers in under the Whistleblowers’ Protection Health risk action plans until they are compliance with the Department Act 2001 during the year ended completed. of Health Fire Risk Management 30 June 2011. Engineering Guidelines Series 7. Recommendations from fire audits Freedom of Information National Competition and risk assessments are actioned Act 1982 through a series of projects developed Policy in conjunction with the Department of Summary of requests received under the Southern Health continued to comply Health to maintain a high degree of Act between 1 July 2010 to 30 June 2011 the fire safety. All bed-based facilities with the Victorian Government’s are audited at intervals of at least five Number of requests 2093 Competitive Neutrality Policy. In addition, years. Monash Medical Centre Clayton, Access in full 1629 the Victorian Government’s Neutrality Dandenong Hospital, Monash Medical Access in part 31 Pricing Principles for all relevant Centre Moorabbin, Casey Hospital Access denied in full 3 business activities have been applied and Clayton residential flats were last Other 430 by Southern Health since 1 July 1988. audited in 2007. Kingston Centre was - this includes: audited in 2004 with further reviews withdrawn 79 and assessments undertaken in 2006, not proceeded with 38 Victorian Industry 2008 and all previous reports were no documents 31 Participation Policy consolidated in to a final report in 2010. not yet finalised 282 A plan is in place to guide and prioritise Exemptions cited – total 60 Southern Health complies with the intent actions arising from these reviews. Clause: of the Victorian Industry Participation Health services at Yarraman, Mooraleigh, 25A(1) 9 Policy Act 2003 which requires, wherever Doveton and the Western Port Drug 30(1) 1 possible, local industry participation and Alcohol Unit were audited in 2008, 32(1) 1 in supplies; taking into consideration with Middle South audited in 2009. 33(1) 20 the principle of value for money and 33(4) 1 transparent tendering processes. 34(1)(a) 3 Essential Safety Measures 34(4)(a) 2 Maintenance 35(1)(a) 18 Additional Information Contracts are in place to maintain all 35(1)(b) 4 Essential Safety Measures elements at 36(1)(b) 1 In compliance with the requirements of Southern Health major sites. Audits were Fees and charges $98,973.11 the Standing Directions of the Minister performed at four major sites by external Fees collected $69,996.81 for Finance, details in respect of the consultants to ensure compliance with Fees waived $28,976.30 items listed in Finance Regulation 22B Essential Safety Measures Maintenance have been retained by Southern Health requirements and plans to rectify and are available to the relevant Minister, Initial Decision Makers defects located during the audit are in members of Parliament and the public place. In accordance with regulatory Maija Dimits, FOI Operations Manager; on request (subject to the freedom of requirements, service and maintenance Lorna Knight, FOI Clerk; Jan Cremer, information requirements, if applicable). records are kept to enable completion FOI Clerk; John Snowdon, Corporate of an annual Essential Safety Measures Counsel; Vicky Hammond, Legal Counsel.

34 Disclosure Index

The Annual Report of Southern Health is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the health service’s compliance with statutory disclosure requirements.

Legislation page Legislation page Legislation page

Ministerial Directions FRD 22B Details of 41 Financial Statements consultancies under $100,000 Report of Operations 2-42 Financial statements 43-100 FRD 22B Major changes or 42 required under Charter and purpose factors affecting performance Part 7 of the FMA FRD 22B Manner of 28 SD 4.2(a) Statement of changes 47 establishment and FRD 22B Occupational health 42 in equity the relevant ministers and safety FRD 22B Objectives, functions, 28 SD 4.2(b) Operating statement 45 FRD 22B Operational and 23 powers and duties budgetary objectives SD 4.2(b) Balance sheet 46 FRD 22B Nature and range of 24 and performance services provided against objectives SD 4.2(b) Cash flow statement 48 FRD 22B Significant changes 37 Management and structure in financial position Other requirements FRD 22B Organisational structure 32 during the year under Standing Directions 4.2 FRD 22B Statement of 42 Financial and other information availability of other SD 4.2(a) Compliance with 49 FRD 10 Disclosure index 35 information Australian accounting standards and FRD 11 Disclosure of ex-gratia NA FRD 22B Statement of National 34 other authoritative payments Competition Policy pronouncements

FRD 15B Executive officer 95 FRD 22B Subsequent events 34 SD 4.2(c) Accountable officer’s 44 disclosures declaration FRD 22B Summary of financial 41 FRD 21A Responsible person 94 results for the year SD 4.2(c) Compliance with 49 and executive officer Ministerial Directions disclosures FRD 22B Workforce Data 23 Disclosures including SD 4.2(d) Rounding of amounts 62 FRD 22B Application and 34 a statement on the operation of Freedom application of employment of Information Act 1982 and conduct principles Legislation 34 FRD 22B Application and 34 FRD 25 Victorian Industry 34 Freedom of Information Act 1982 34 operation of Participation Policy Whistleblowers disclosures Whistleblowers Protection Act 2001 34 Protection Act 2001 SD 4.2(j) Sign-off requirements 2 Victorian Industry Participation 34 FRD 22B Compliance with 34 Policy Act 2003 building and SD 3.4.13 Attestation on Data 36 maintenance provisions Integrity Building Act 1993 34 of Building Act 1993 SD 4.5.5 Attestation on 36 Financial Management Act 1994 34 FRD 22B Details of 41 Compliance with consultancies over Australian/New Zealand $100,000 Risk Management Standard

Southern Health Annual Report 2010-2011 35 Attestation on Data Integrity

I, Shelly Park, certify that Southern Health has put in place appropriate internal controls and processes to reasonably assure the quality of data reported. Southern Health has critically reviewed these controls and processes during the year.

Shelly Park Chief Executive

Melbourne 18 August 2011

Attestation on Compliance with Australian / New Zealand Risk Management Standard

I, Barbara Yeoh, certify that Southern Health has risk management process in place consistent with the Australian/ New Zealand Risk Management Standard and an internal control system is in place that enables the executives to understand, manage and satisfactorily control risk exposures. The audit committee verifies this assurance and that the risk profile of Southern Health has been critically reviewed within the last 12 months.

Barbara Yeoh Chair

Melbourne 12 August 2011

36 Key Financial and Service Performance Reporting

Statement of Priorities: Part A

Part A: Strategic Priorities for 2010-2011

Strategic Priorities Deliverables Outcomes

Southern Health Achieve milestones outlined within Completed 1 Strategic Plan the Southern Health Business Plan 2010-2013 2010-2011. This will demonstrate achievement against each of Southern Health Strategic Goals for the year.

Monash Children’s Complete the final business case for Completed and submitted 2 the proposed Monash Children’s wing by October 2010.

Kingston Review the masterplan Completed and submitted Redevelopment 3 Complete the business case for future stages of redevelopment by November 2010

Monash Medical Complete Service Plans for both Masterplanning undertaken and 4 Centre Clayton and sites by September 2010 will be completed quarter one Moorabbin 2011-2012 Complete masterplanning of both sites by June 2011

Casey and Dandenong Complete Service Plans for both Service plan is completed Hospitals Planning sites by March 2011 5 Masterplanning team has been Commence masterplanning of appointed both sites

South East Growth Complete the South East Growth This project is in progress and will be Corridor Corridor Service Plan – focusing on carried forward into 2011-2012 6 non tertiary service requirements within for completion. that region.

Mental Health Complete the Strategic Service Plan It was determined that this project 7 Program Strategic for the Mental Health Program by was superseded by and therefore Service Plan May 2011. subsumed within the work undertaken in relation to Mental Health Matters.

Lead the development The Paediatric Integrated Cancer Service This project is in progress and will 8 of the Paediatric Governance Executive Committee continue into 2011-2012. Integrated Cancer agreed that Southern Health should lead Services Plan this project. The project will include a workforce plan. Project to be completed by June 2011.

Southern Health Annual Report 2010-2011 37 Key Financial and Service Performance Reporting

Statement of Priorities: Part B

Part B: Performance Priorities

Financial performance

Operating result 2010-2011 2010-2011 Target Actuals Annual Operating result ($m) 0 -2.89

Cash management/liquidity 2010-2011 2010-2011 Target Actuals Creditors < 60 days 37 Debtors < 60 days 55

Service performance

WIES activity performance 2010-2011 2010-2011 Target Actuals WlES (public and private) performance to target (%) 98 to 102 102%

Elective Surgery 2010-2011 2010-2011 Target Actuals Elective surgery admissions – quarter 1 5,834 5,495 Elective surgery admissions – quarter 2 5,565 5,655 Elective surgery admissions – quarter 3 5,205 4,952 Elective surgery admissions – quarter 4 5,654 5,746

Critical Care 2010-2011 2010-2011 Target Actuals lCU minimum operating capacity – Monash Medical Centre Clayton 18 18 (ICU minimum operating capacity includes capacity for 5 PICU beds) lCU minimum operating capacity – Dandeong Hospital 10 10 NlCU usual operating capacity and flex capacity 20-22 21

Quality and Safety 2010-2011 2010-2011 Target Actuals Health service accreditation Full compliance Full compliance Residential aged care accreditation Full compliance Full compliance Cleaning standards Full compliance Full compliance Submission of data to VICNISS (%) 100 100 VICNISS Infection Clinical Indicators (Outliers) 0 37 Hand Hygiene Program compliance (%) 65 66 SAB rate (OBDs) Less than 2/10,000 1.05 Victorian Patient Satisfaction Monitor (VPSM) 73 74.4

Maternity 2010-2011 2010-2011 Target Actuals Postnatal home care 90 98.4

NOTE: Performance data is based on best available information at the time of reporting.

38 Key Financial and Service Performance Reporting

Part B: Performance Priorities (cont.)

Service performance (cont.)

Mental Health 2010-2011 2010-2011 Target Actuals 28 day readmission rate (%) 14 12.4 Post-discharge follow-up rate (%) 75 87.9 Seclusion rate (OBDs) Less than 20/1,000 10.1

Access Performance

Emergency Care 2010-2011 Southern Casey Clayton Dandenong Target Health 2010-2011 Actuals

Percentage of operating time on 3 1.7 0.0 2.5 2.7 hospital bypass

Percentage of emergency patients 80 66.7 74.3 67.1 63.3 admitted to an inpatient bed within 8 hours

Percentage of non-admitted 80 75.3 76.6 76.1 72.9 emergency patients with length of stay of less than 4 hours

Number of patients with length of 0 18 7 0 11 stay in the emergency department greater than 24 hours

Percentage of Triage Category 1 100 100.0 100.0 100.0 100.0 emergency patients seen immediately

Percentage of Triage Category 2 80 85.2 88.7 88.9 77.2 emergency patients seen within 10 minutes

Percentage of Triage Category 3 75 60.2 65.9 57.1 60.3 emergency patients seen within 30 minutes

Elective surgery 2010-2011 2010-2011 Target Actuals Percentage of Category 1 elective patients admitted with in 30 days 100 100 Percentage of Category 2 elective surgery patients waiting less than 90 days 80 65 Percentage of Category 3 elective surgery patients waiting less than 365 days 90 90 Number of patients on the elective surgery waiting list 5,900 6,735 Number of Hospital Initiated Postponements (HiPs) per 100 scheduled admissions 8 5.7

NOTE: Performance data is based on best available information at the time of reporting.

Southern Health Annual Report 2010-2011 39 Key Financial and Service Performance Reporting

Statement of Priorities: Part C

Part C: Activity and Funding

Activity 2010-2011 Achieved Activity

Acute Inpatient Weighted Inlier Equivalent Separations (WIES)* WIES Public 126,219 WIES Private 9,985 Total WIES (Public and Private) 136,204 WIES Renal 1,932 WIES DVA 1,003 WIES TAC 600 WIES TOTAL 139,739

Sub Acute Inpatient CRAFT 1,202 Rehab L1 (non DVA) 144 Rehab L2 (non DVA) 5,989 Rehab - Paediatric 876 GEM (non DVA) 34,700 Palliative Care - Inpatient 6,196 Transition Care (non DVA) – bed day 17,582 Restorative Care 1,396 Rehab 2 - DVA 866 GEM -DVA 1,610 Palliative Care – DVA 94

Ambulatory VACS – Allied Health 65,427 VACS - Variable 194,966 Transition Care (non DVA) - Homeday 10,005 SACS – Non DVA 60,598 SACS - Paediatric 4,079 Post Acute Care 4,944 VACS – Allied Health - DVA 17 VACS - Variable - DVA 135 SACS - DVA 644 Post Acute Care – DVA 329

Aged Care Aged Care Assessment Service 3,641 Residential Aged Care 94,223

Mental Health MH – Inpatient 55,365 MH – Ambulatory 116,333

Community Health/Primary Care Community Health – Direct Care 3,641 Community Health/Primary Care Programs (hours of service) 194,716

NOTE: *Estimate based on best available data at time of reporting.

40 Summary of Financial Results

Financial Indicators 2010-2011 2009-2010 2008-2009 2007-2008 2006-2007 2005-2006 $’000 $’000 $’000 $’000 $’000 $’000

Total Expenses 1,267,748 1,173,541 1,056,921 954,215 882,371 823,220

Total Revenue 1,270,596 1,144,842 1,052,668 958,039 875,709 825,634

Net result 2,848 (28,698) (4,253) 3,824 (6,662) 2,414

Retained Surplus / (Accumulated Deficit) (92,329) (94,743) (67,698) (63,241) (66,823) (59,970)

Total Assets 992,008 971,186 972,779 727,341 664,908 656,661

Total Liabilities 359,758 341,786 314,514 294,445 281,737 271,585

Net Assets 632,250 629,400 658,265 432,896 383,171 385,076

TOTAL EQUITY 632,250 629,400 658,265 432,896 383,171 385,076

Average Collection Days 2010-2011 2009-2010 2008-2009 2007-2008

Private 63 59 60 62

Transport Accident Commission (TAC) 166 74 104 92

Victorian Workcover Authority (VWA) 102 140 150 97

Psychiatric 16 17 25 25

Nursing Home 29 26 30 29

Inpatient < 30 Days 31-60 Days 61-90 Days > 90 Days 2010-2011 2009-2010 2008-2009 debtors ageing $’000 $’000 $’000 $’000 $’000 $’000 $’000

TAC 153 7 1 99 260 137 87

Private 8,654 461 267 658 10,040 8,374 7,954

VWA 206 54 65 172 497 506 429

Nursing Home 256 86 29 289 660 328 212

TOTAL 9,269 608 362 1,218 11,457 9,345 8,682

Consultants 2010-2011 2009-2010 2008-2009

Consultants’ cost 1,867,162 1,835,840 1,720,760

Total Number of Consultants 132 133 137

Consultants paid over $100,000 Amount

Ernst & Young (Internal Auditor) 162,468

Resolutions Australiasia Pty Ltd (Workplace Health) 137,074

The Strategy Team Pty Ltd (Fundraising & Dev) 237,649

Southern Health Annual Report 2010-2011 41 Financial Summary

The 2010-2011 financial year saw continued growth in demand for services across Southern Health.

The key financial performance measure monitored by Southern Health management and the Department of Health is the ‘Net Result Before Capital and Specific Items’. In 2010-2011 Southern Health achieved a deficit result of $2.894 million compared with a deficit result of $5.989 million in 2009-2010. The major reason for a deficit result in 2010-2011 was attributable to increased patient services demand.

Southern Health’s ‘Comprehensive Result’, which includes capital and specific items, was a surplus of $2.848 million in 2010–2011 compared to a deficit of $28.865 million in 2009-2010.

Total revenue from all services for the 2010 - 2011 financial year totalled $1,270 million which is an increase of $125 million or 10.9 per cent compared with the previous year. In the same period total expenditure was $1,268 million which is an increase of $94 million or 8.0 per cent.

Southern Health’s cash reserves as at 30 June 2011 were $7.172 million compared with $7.366 million as at 30 June 2010. The improvement in cash flow from operations was offset by the repayment of loans and the capital expenditure program undertaken to meet the needs of the health service.

Basil Ireland Executive Director Finance

Melbourne 12 August 2011

42 Financial Statements and Explanatory Notes

Southern Health Annual Report 2010-2011 43 DeclarationSouthern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Southern Health Board member’s, accountable officer’s and chief finance and accounting officer’s declaration

44 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Southern Health Comprehensive Operating Statement For the Year Ended 30 June 2011

Note Parent Entity Parent Entity Consolidated Consolidated

2011 2010 2011 2010 $'000 $'000 $'000 $'000

Revenue from Operating Activities 2 1,137,895 1,049,810 1,175,062 1,084,951 Revenue from Non-operating Activities 2 1,231 1,139 1,231 1,139 Employee Expenses 3 (863,703) (800,062) (880,187) (815,646) Non Salary Labour Costs 3 (16,281) (18,114) (16,756) (18,637) Supplies and Consumables 3 (176,268) (171,442) (178,842) (173,886) Other Expenses From Continuing Operations 3 (86,475) (67,567) (103,453) (83,950) Share of Net Result of Associates & Joint Ventures Accounted for using the Equity Method 10 51 40 51 40

Net Result Before Capital and Specific (3,550) (6,196) (2,894) (5,989) Items

Capital Purpose Income 2 94,221 58,715 94,252 58,712 Depreciation and Amortisation 4 (74,985) (69,538) (75,086) (69,617) Finance Costs 5 (4,504) (4,628) (4,504) (4,628) Expenditure using Capital Purpose Income 3 (8,915) (7,340) (8,921) (7,343)

NET RESULT FOR THE YEAR 2,268 (28,987) 2,848 (28,865)

COMPREHENSIVE RESULT FOR THE YEAR 2,268 (28,987) 2,848 (28,865)

This Statement should be read in conjunction with the accompanying notes.

Southern Health Annual Report 2010-2011 45 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Balance Sheet As at 30 June 2011

Note Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Current Assets

Cash and Cash Equivalents 6 7,172 7,366 7,172 7,366 Receivables 7 31,373 28,412 36,804 32,774 Inventories 8 20,439 16,589 20,439 16,589 Other Current Assets 9 1,642 1,439 1,642 1,439 Total Current Assets 60,626 53,805 66,057 58,168

Non-Current Assets

Receivables 7 23,339 19,778 23,339 19,778 Investments Accounted for using the Equity Method 10 3,283 3,233 3,283 3,233 Property, Plant & Equipment 11 886,654 878,551 887,786 879,663 Intangible Assets 12 11,450 10,252 11,450 10,252 Other Non-Current Assets 9 93 93 93 93 Total Non-Current Assets 924,819 911,906 925,951 913,018 TOTAL ASSETS 985,445 965,712 992,008 971,186

Current Liabilities

Payables 13 64,141 60,156 60,565 56,072 Borrowings 14 3,907 3,776 3,907 3,776 Provisions 15 169,916 154,920 169,916 154,920 Other Liabilities 16 5,101 6,181 5,101 6,181 Total Current Liabilities 243,066 225,033 239,489 220,949

Non-Current Liabilities Borrowings 14 87,891 90,525 87,891 90,525

Provisions 15 32,378 30,312 32,378 30,312

Total Non-Current Liabilities 120,269 120,837 120,269 120,837

TOTAL LIABILITIES 363,335 345,869 359,758 341,786 NET ASSETS 622,111 619,843 632,250 629,400

EQUITY Property, Plant & Equipment Revaluation Surplus 17a 319,318 319,318 319,487 319,487 Restricted Specific Purpose Surplus 17a 3,197 2,761 3,197 2,761 Contributed Capital 17b 401,893 401,893 401,895 401,895 Accumulated Surpluses/(Deficits) 17c (102,297) (104,130) (92,329) (94,743) TOTAL EQUITY 622,111 619,842 632,250 629,400

Commitments for Expenditure 20 Contingent Assets and Contingent Liabilities 26

This Statement should be read in conjunction with the accompanying notes.

46 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements - - - - Total $'000 2,269 2,850 (28,987) (28,865) - - - - 436 436 $'000 4,581 648,829 4,581 658,265 2,761 619,842 3,197 622,111 2,761 629,400 3,197 632,250 (1,820) (1,820) Surplus Specific Purpose Restricted

------$'000 Surplus 319,318 319,487 319,318 319,318 319,487 319,487 Equipment Revaluation

Property, Plant & ------$'000 Result Comprehensive

(436) (436) $'000 2,269 2,850 1,820 1,820 (28,987) (28,865) by Owners Contributions

------$'000 (76,963) 401,893 - (67,698) 401,895 - (76,963) 374,726 (76,963) 376,559 (67,698) 374,850 (67,698) 377,264 (Deficits) Surpluses/ Accumulated

17c 17c 17c 17c 17c 17c 17c 17c Note Note y Statement of Changes in Equity For the Year Ended 30 June 2011 Consolidated Balance at 1 July 2009 Balance at 1 July 2009 Balance at 30 June 2010 Balance at 30 June 2011 Balance at 30 June 2010 Balance at 30 June 2011 Parent Entit Transfers Net result for the year the for result Net Transfers Net result for the year the for result Net Transfers Transfers Net result for the year the for result Net Net result for the year the for result Net This Statement should be read in conjunction with the accompanying notes accompanying the with conjunction in read be should Statement This

Southern Health Annual Report 2010-2011 47 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Cash Flow Statement For the Year Ended 30 June 2011

Note Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 CASH FLOWS FROM OPERATING ACTIVITIES Operating Grants from Government 998,169 912,399 999,372 912,399 Patient and Resident Fees Received 15,137 21,143 15,137 21,723 Private Practice Fees Received 54,778 35,754 91,877 70,895 Donations and Bequests Received 2,381 1,785 2,381 1,785 GST Received from Australian Taxation Office 29,856 24,612 29,856 24,612 Recoupment from private practice for use of hospital facilities 15,073 8,029 15,073 8,029

Interest Received 1,621 1,211 1,621 1,211 Other Receipts 51,680 45,314 47,121 45,855 Employee Benefit Paid (858,425) (815,381) (875,384) (831,488) Payments for Supplies and Consumables (209,573) (176,058) (226,116) (178,502)

Other Payments (96,223) (68,208) (96,437) (85,909) Cash Generated from Operations 4,474 (9,399) 4,501 (9,389) Capital Grants from Government 82,206 47,725 82,206 47,725

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 21 86,680 38,326 86,707 38,336

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Property, Plant and Equipment (84,676) (88,673) (84,703) (88,683) Proceeds from Sale of Property, Plant and Equipment 156 438 156 438 NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES (84,520) (88,235) (84,547) (88,245)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Car Park Loan - 19,600 - 19,600 Repayment of Car Park Loan (1,274) - (1,274) Repayment of Loan to Department of Health (1,800) (1,769) (1,800) (1,769) NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES (3,074) 17,831 (3,074) 17,831 NET INCREASE/(DECREASE) IN CASH HELD (914) (32,078) (914) (32,078) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,985 35,063 2,985 35,063 CASH AND CASH EQUIVALENTS AT END OF PERIOD 6 2,071 2,985 2,071 2,985

This Statement should be read in conjunction with the accompanying notes

48 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 1: Summary of Significant Accounting Policies (a) Statement of compliance These financial statements are a general purpose financial report which have been prepared in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards (AASs) and Australian Accounting Interpretations and other mandatory requirements. AASs include Australian equivalents to International Financial Reporting Standards.

The financial statements also comply with relevant Financial Reporting Directions (FRDs) issued by the Department of Treasury and Finance, and relevant Standing Directions (SDs) authorised by the Minister for Finance.

Southern Health is a not-for profit entity and therefore applies the additional Aus paragraphs applicable to “not-for-profit” Health Services under the AASs.

The annual financial statements were authorised for issue by the Board of Southern Health on 12 August 2011.

(b) Basis of accounting preparation and measurement Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2011, and the comparative information presented in these financial statements for the year ended 30 June 2010.

The going concern basis was used to prepare the financial statements.

These financial statements are presented in Australian dollars, the functional and presentation currency of Southern Health.

The financial statements, except for cash flow information, have been prepared using the accrual basis of accounting. Under the accrual basis, items are recognised as assets, liabilities, equity, income or expenses when they satisfy the definitions and recognition criteria for those items, that is they are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

The financial statements are prepared in accordance with the historical cost convention, except for the revaluation of certain non-financial assets and financial instruments, as noted. Particularly, exceptions to the historical cost convention include: • Non-current physical assets, which subsequent to acquisition, are measured at valuation and are re-assessed with sufficient regularity to ensure that the carrying amounts do not materially differ from their fair values; and • The fair value of assets other than land is generally based on their depreciated replacement value

Historical cost is based on the fair values of the consideration given in exchange for assets.

Southern Health Annual Report 2010-2011 49 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

In the application of AASs management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision, and future periods if the revision affects both current and future periods. Judgements made by management in the application of AASs that have significant effects on the financial statements and estimates, with a risk of material adjustments in the subsequent reporting period, are disclosed throughout the notes to the financial statements.

The nature of significant assumptions, judgements and estimates are disclosed throughout the notes to the financial statements.

(c) Reporting Entity The financial statements include all the controlled activities of Southern Health.

Its principal address is: 246 Clayton Road Clayton Victoria 3168

A description of the nature of Southern Health’s operations and its principal activities is included in the report of operations, which does not form part of these financial statements.

(d) Principles of Consolidation

The assets, liabilities, incomes and expenses of the controlled entity of Southern Health have been included at the values shown in their audited 30 June 2011 Annual Financial Statements. Subsidiaries are entities controlled by Southern Health; control exists when Southern Health has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. All material inter-entity transactions and balances have been eliminated on consolidation. The consolidated financial statements include the audited financial statements of Kitaya Holdings Pty Limited. Intersegment Transactions Transactions between segments within Southern Health have been eliminated to reflect the extent of Southern Health’s operations as a group.

Associates Investments in associates are accounted for using the equity method of accounting. Under the equity method for accounting, Southern Health’s share of the post- acquisition profits or losses of associates is recognised in the net result and its share of post-acquisition changes in revaluation surpluses and any other reserves are recognised in both the comprehensive operating statement and the statement of changes in equity.

50 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

(e) Scope and presentation of financial statements Fund Accounting Southern Health operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds. Southern Health’s Capital and Specific Purpose Funds include unspent capital donations and receipts from fund-raising activities conducted solely in respect of these funds. Services Supported By Health Services Agreement and Services Supported By Hospital and Community Initiatives Activities classified as Services Supported by Health Services Agreement (HSA) are substantially funded by the Department of Health and includes Residential Aged Care Services (RACS) and are also funded from other sources such as the Commonwealth, patients and residents, while Services Supported by Hospital and Community Initiatives (H&CI) are funded by the Health Service's own activities or local initiatives and/or the Commonwealth. Comprehensive operating statement The Comprehensive operating statement includes the subtotal entitled ‘Net result Before Capital & Specific Items’ to enhance the understanding of the financial performance of Southern Health. This subtotal reports the result excluding items such as capital grants; assets received or provided free of charge, depreciation, and items of an unusual nature and amount such as specific income and expenses. The exclusion of these items is made to enhance matching of income and expenses so as to facilitate the comparability and consistency of results between years and Victorian Public Health Services. The ‘Net result Before Capital & Specific Items’ is used by the management of Southern Health, the Department of Health and the Victorian Government to measure the ongoing performance of Health Services in operating hospital services. Capital and specific items, which are excluded from this sub-total, comprise: • Capital purpose income, which comprises all tied grants, donations and bequests received for the purpose of acquiring non-current assets, such as capital works, plant and equipment or intangible assets. It also includes donations of plant and equipment (refer Note 1 (g)). Consequently the recognition of revenue as capital purpose income is based on the intention of the provider of the revenue at the time the revenue is provided. • Specific income/expense, comprises the following items, where material: o Voluntary departure packages o Write-down of inventories • Impairment of financial and non-financial assets, includes all impairment losses (and reversal of previous impairment losses), which have been recognised in accordance with Note 1 (h) and (i) • Depreciation and amortisation, as described in Note 1 (g) • Assets provided or received free of charge (refer to Note 1 (f) and (g)) • Expenditure using capital purpose income, comprises expenditure which either falls below the asset capitalisation threshold or doesn’t meet asset recognition criteria and therefore does not result in the recognition of an asset in the balance sheet, where funding for that expenditure is from capital purpose income. Balance sheet Assets and liabilities are categorised either as current or non-current.

Southern Health Annual Report 2010-2011 51 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Statement of changes in equity The statement of changes in equity presents reconciliations of each non-owner and owner equity opening balance at the beginning of the reporting period to the closing balance at the end of the reporting period. It also shows separately changes due to amounts recognised in the comprehensive result and amounts recognised in other comprehensive income related to other non-owner changes in equity. Cash flow statement Cash flows are classified according to whether or not they arise from operating activities, investing activities, or financing activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows.

(f) Income Recognition Income is recognised in accordance with AASB 118 Revenue and is recognised as to the extent that it is probable that the economic benefits will flow to Southern Health and the income can be reliably measured. Unearned income at reporting date is reported as income received in advance.

Amounts disclosed as revenue is, where applicable, net of returns, allowances and duties and taxes. Government Grants and other transfers of income (other than contributions by owners) In accordance with AASB 1004 Contributions, government grants and other transfers of income (other than contributions by owners) are recognised as income when Southern Health gains control of the underlying assets irrespective of whether conditions are imposed on Southern Health’s use of the contributions.

Contributions are deferred as income in advance when Southern Health has a present obligation to repay them and the present obligation can be reliably measured. Indirect Contributions from the Department of Health – Insurance is recognised as revenue following advice from the Department of Health. – Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in LSL liability in line with the arrangements set out in the Metropolitan Health and Aged Care Services Division Hospital Circular 14/2009. Patient and Resident Fees Patient fees are recognised as revenue at the time invoices are raised. Private Practice Fees Private practice fees are recognised as revenue at the time invoices are raised. Revenue from commercial activities Revenue from commercial activities such as commercial laboratory medicine is recognised at the time invoices are raised. Donations and Other Bequests Donations and bequests are recognised as revenue when received. If donations are for a special purpose, they may be appropriated to a reserve, such as the specific restricted purpose surplus. Dividend Revenue Dividend revenue is recognised on a receivable basis. Interest Revenue Interest revenue is recognised on a time proportionate basis that takes in account the effective yield of the financial asset. Sale of investments The gain/loss on the sale of investments is recognised when the investment is realised.

52 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

(g) Expense Recognition Expenses are recognised as they are incurred and reported in the financial year to which they relate.

Cost of Goods Sold Costs of goods sold are recognised when the sale of an item occurs by transferring the cost or value of the item/s from inventories.

Employee expenses Employee expenses include: • Wages and salaries; • Annual leave; • Sick leave; • Long service leave; and • Superannuation expenses which are reported differently depending upon whether employees are members of defined benefit or defined contribution plans.

Defined contribution plans In relation to defined contribution (i.e. accumulation) superannuation plans, the associated expense is simply the employer contributions that are paid or payable in respect of employees who are members of these plans during the reporting period. Contributions to defined contribution superannuation plans are expensed when incurred.

Defined benefit plans The amount charged to the comprehensive operating statement in respect of defined benefit superannuation plans represents the contributions made by Southern Health to the superannuation plans in respect of the services of current Southern Health staff during the reporting period. Superannuation contributions are made to the plans based on the relevant rules of each plan, and is based upon actuarial advice. Employees of Southern Health are entitled to receive superannuation benefits and Southern Health contributes to both the defined benefit and defined contribution plans. The defined benefit plan(s) provide benefits based on years of service and final average salary.

The name and details of the major employee superannuation funds and contributions made by Southern Health are as follows:

Fund Contributions Paid or Payable for the year 2011 2010 $’000 $’000 Defined benefit plans: State Superannuation Fund 554 574 Health Super 2,509 2,768 Hesta - 4 Defined contribution plans: Health Super 43,209 41,143 Hesta 22,529 20,002 VicSuper and Other 67 62 Total 68,868 64,553

Southern Health Annual Report 2010-2011 53 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Depreciation Assets with a cost in excess of $1,000 are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost or valuation over their estimated useful lives. Depreciation is generally calculated on a straight line basis, at a rate that allocates the asset value, less any estimated residual value over its estimated useful life. Estimates of the remaining useful lives and depreciation method for all assets are reviewed at least annually, and adjustments made where appropriate. This depreciation charge is not funded by the Department of Health. Depreciation is provided on property, plant and equipment, including freehold buildings, but excluding land and investment properties. Depreciation begins when the asset is available for use, which is when it is in the location and condition necessary for it to be capable of operating in a manner intended by management.

The following table indicates the expected useful lives of non-current assets on which the depreciation charges are based.

2011 2010 Buildings - Structure Shell Building Fabric 40 to 70 years 40 to 70 years - Site Engineering Services and Central Plant 22 to 30 years 22 to 30 years Central Plant - Fit Out 22 to 30 years 22 to 30 years - Trunk Reticulated Building Systems 22 to 30 years 22 to 30 years Plant and Equipment 3 to 10 years 3 to 10 years Medical Equipment 3 to 10 years 3 to 10 years Computers and Communication 3 years 3 years Furniture and Fitting Up to 10 years Up to 10 years Motor Vehicles 4 years 4 years Intangible Assets 5 years 5 years Leased Buildings 45 years 45 years Leased Medical Equipment 3 to 10 years 3 to 10 years

As part of the Buildings valuation, building values were componentised and each component assessed for its useful life which is represented above.

Amortisation Amortisation is allocated to intangible assets with finite useful lives on a systematic (typically straight-line) basis over the asset’s useful life. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually or whenever there is an indication that the asset may be impaired. The useful lives of intangible assets that are not being amortised are reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. In addition, Southern Health tests all intangible assets with indefinite useful lives for impairment by comparing the recoverable amount for each asset with its carrying amount:

54 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

• Annually; and • Whenever there is an indication that the intangible asset may be impaired. Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss.

Intangible assets with finite useful lives are amortised over a 5 year period (2010:5 years).

Finance Costs Finance costs are recognised as expenses in the period in which they are incurred. Finance costs include: – interest on bank overdrafts and short-term and long-term borrowings; – amortisation of discounts or premiums relating to borrowings; – amortisation of ancillary costs incurred in connection with the arrangement of borrowings; and – finance charges in respect of finance leases recognised in accordance with AASB 117 Leases.

(h) Financial assets Cash and Cash Equivalents Cash and cash equivalents comprise cash on hand and cash at bank, deposits at call and highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short term cash commitments rather than for investment purposes, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as current borrowings in the balance sheet.

Receivables Receivables consist of: - Statutory receivables, which includes predominantly amounts owing from the Victorian Government and GST input tax credits recoverable; and - Contractual receivables, which include mainly debtors in relation to goods and services, loans to third parties, accrued investment income and finance lease receivables.

Trade debtors are carried at nominal amounts due and are due for settlement within 30 days from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and debts which are known to be uncollectible are written off. A provision for doubtful debts is recognised when there is objective evidence that an impairment loss has occurred. Bad debts are written off when identified.

Receivables that are contractual are classified as financial instruments. Statutory receivables are not classified as financial instruments.

Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less any accumulated impairment.

Investments and Other Financial Assets Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs.

Southern Health Annual Report 2010-2011 55 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Investments are classified in the following categories: - Financial assets at fair value through profit or loss; and - Loans and receivables.

Southern Health classifies its other financial assets between current and non-current assets based on the purpose for which the assets were acquired. Management determines the classification of its other financial assets at initial recognition. Southern Health assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

All financial assets, except those measured at fair value through profit or loss are subject to annual review for impairment.

Financial assets at fair value through profit or loss Financial instruments at fair value through profit or loss are initially measured at fair value and attributable transaction costs are expensed as incurred. Subsequently, any changes in fair value are recognised in the net result.

Loans and receivables Trade receivables, loans, term deposits with maturity greater than three months and other receivables are recorded at amortised cost, using the effective interest method, less impairment. Term deposits with maturity greater than three months are also measured at amortised cost, using the effective interest method, less impairment.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Impairment of Financial Assets At the end of each reporting period Southern Health assesses whether there is objective evidence that a financial asset or group of financial asset is impaired. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 90 days overdue, and changes in debtor credit ratings. All financial instruments assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

Bad and doubtful debts for financial assets are assessed on a regular basis. Those bad debts considered as written off and allowance for doubtful receivables are recognised as expenses in the net result.

The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

Where the fair value of an investment in an equity instrument at balance date has reduced by 20 percent or more than its cost price or where its fair value has been less than its cost price for a period of 12 or more months, the financial asset is treated as impaired.

In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.

56 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Net Gain/(Loss) on Financial Instruments Net gain/(loss) on financial instruments includes: - realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading; - impairment and reversal of impairment for financial instruments at amortised cost; and - disposals of financial assets.

Revaluations of Financial Instruments at Fair Value The revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned on financial assets.

(i) Non-Financial Assets Inventories Inventories include goods and other property held either for sale, consumption or for distribution at no or nominal cost in the ordinary course of business operations. It includes land held for sale and excludes depreciable assets.

Inventories held for distribution are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured at cost.

The bases used in assessing loss of service potential for inventories held for distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired.

Cost for all other inventory is measured on the basis of weighted average cost. Inventories acquired for no cost or nominal considerations are measured at current replacement cost at the date of acquisition.

Inventories acquired at no cost or for nominal consideration are measured at current replacement cost at the date of acquisition.

Property, Plant and Equipment All non-current physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Crown Land is measured at fair value with regard to the property’s highest and best use after due consideration is made for any legal or constructive restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset(s) are not taken into account until it is virtually certain that any restrictions will no longer apply.

Land and Buildings are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment.

Land Under Declared Roads acquired subsequent to 1 July 2008 is measured at fair value. Land under declared roads acquired on, or after 1 July 2008 is measured initially at cost of acquisition and subsequently at fair value.

Plant, Equipment and Vehicles are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Depreciated

Southern Health Annual Report 2010-2011 57 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

historical cost is generally a reasonable proxy for fair value because of the short lives of the assets concerned.

Cultural, Collections, Heritage Assets and Other Non-Current Physical Assets that the State intends to preserve because of their unique historical, cultural or environmental attributes are measured at the cost of replacing the asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset.

Restrictive nature of cultural and heritage assets, Crown land and infrastructure assets During the reporting period, the Health Service may hold cultural assets, heritage assets, Crown land and infrastructure assets.

Such assets are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. The nature of these assets means that there are certain limitations and restrictions imposed on their use and/or disposal.

Revaluations of Non-current Physical Assets Non-current physical assets are measured at fair value and are revalued in accordance with FRD 103D Non-current physical assets. This revaluation process normally occurs at least every five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values.

Revaluation increments are credited directly to the asset revaluation surplus, except that, to the extent that an increment reverses a revaluation decrement in respect of that same class of asset previously recognised as an expense in net result, the increment is recognised as income in the net result.

Revaluation decrements are recognised immediately as expenses in the net result, except that, to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of assets, they are debited directly to the asset revaluation surplus.

Revaluation increases and revaluation decreases relating to individual assets within an asset class are offset against one another within that class but are not offset in respect of assets in different classes.

Revaluation surpluses are normally not transferred to accumulated funds on derecognition of the relevant asset.

In accordance with FRD 103D, Southern Health’s non-current physical assets were assessed to determine whether revaluation of the non-current physical assets was required.

Intangible Assets Intangible assets represent identifiable non-monetary assets without physical substance such as patents, trademarks, and computer software and development costs (where applicable).

Intangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to Southern Health.

58 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Other non-financial assets Prepayments Other non-financial assets include prepayments which represent payments in advance of receipt of goods or services or that part of expenditure made in one accounting period covering a term extending beyond that period.

Disposal of Non-Financial Assets Any gain or loss on the sale of non-financial assets is recognised at the date that control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value of the asset at that time. Impairment of Non-Financial Assets Apart from intangible assets with indefinite useful lives, all other assets are assessed annually for indications of impairment, except for: • inventories; and • financial assets.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written-off as an expense except to the extent that the write-down can be debited to an asset revaluation surplus amount applicable to that same class of asset.

If there is an indication that there has been a change in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.

(j) Liabilities Payables These amounts consist predominantly of liabilities for goods and services. Payables are initially recognised at fair value, and then subsequently carried at amortised cost and represent liabilities for goods and services provided to Southern Health prior to the end of the financial year that are unpaid, and arise when Southern Health becomes obliged to make future payments in respect of the purchase of these goods and services.

The normal credit terms are usually Nett 30 - 35 days.

Borrowings Borrowings in the balance sheet are recognised at fair value upon initial recognition. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in the net result over the period of the borrowing using the effective interest method. Fair value is determined in the manner described in Note 19.

Provisions Provisions are recognised when Southern Health has a present obligation, the future

Southern Health Annual Report 2010-2011 59 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, using a discount rate that reflects the time value of money and risks specific to the provision.

When some or all of the economic benefits required to settle a provision are expected to be received from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

Employee Benefits Wages and Salaries, Annual Leave and Accrued Days Off Liabilities for wages and salaries, including non-monetary benefits, annual leave accumulating and accrued days off which are expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee’s services up to the reporting date, and are classified as current liabilities and measured at their nominal values.

Those liabilities that are not expected to be settled within 12 months are also recognised in the provision for employee benefits as current liabilities, but are measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

Long Service Leave The liability for long service leave (LSL) is recognised in the provision for employee benefits.

Current Liability – unconditional LSL (representing 10 or more years of continuous service) is disclosed in the notes to the financial statements as a current liability even where Southern Health does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

The components of this current LSL liability are measured at: • present value – component that Southern Health does not expect to settle within 12 months; and • nominal value – component that Southern Health expects to settle within 12 months.

Non-Current Liability – conditional LSL (representing less than 10 years of continuous service) is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. Conditional LSL is required to be measured at present value.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates of Commonwealth Government guaranteed securities in Australia.

60 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Termination Benefits Termination benefits are payable when employment is terminated before the normal retirement date or when an employee accepts voluntary redundancy in exchange for these benefits.

Liabilities for termination benefits are recognised when a detailed plan for the termination has been developed and a valid expectation has been raised with those employees affected that the terminations will be carried out. The liabilities for termination benefits are recognised in other creditors unless the amount or timing of the payments is uncertain, in which case they are recognised as a provision.

On-Costs Employee benefit on-costs, such as payroll tax, workers compensation and superannuation are recognised together with provisions for employee benefits.

Superannuation liabilities Southern Health does not recognise any unfunded defined benefit liability in respect of the superannuation plans because Southern Health has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance administers and discloses the State’s defined benefit liabilities in its financial statements.

Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised as an expense in the estimated consolidated comprehensive operating statement.

(k) Leases Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership.

Leases of property, plant and equipment are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Finance Leases Finance leases are recognised as assets and liabilities at the present value of the minimum lease payment, each determined at the inception of the lease. The lease asset is depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Minimum lease payments are apportioned between reduction of the outstanding lease liability, and the periodic finance expense which is calculated using the interest rate implicit in the lease, and charged directly to the comprehensive operating statement.

In 2005, Southern Health entered into a finance lease arrangement for the establishment costs of Casey Hospital. The construction and fit out of Casey Hospital was undertaken as part of a Public Private Partnership. The project agreement was between the State of Victoria and Progress Health Pty Ltd. The State of Victoria is obligated to fund quarterly service payments under the Project Agreement for the life

Southern Health Annual Report 2010-2011 61 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

of that agreement, a period of up to 25 years. Southern Health is responsible for operating Casey Hospital and has recognised the leased asset and associated interest bearing liabilities (Note 14).

Operating Leases Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease.

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset.

Leasehold Improvements The cost of leasehold improvements are capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.

(l) Equity Contributed Capital Consistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD 119 Contributions by Owners, appropriations for additions to the net asset base have been designated as contributed capital. Other transfers that are in the nature of contributions or distributions that have been designated as contributed capital are also treated as contributed capital.

Property, Plant & Equipment Revaluation Surplus The asset revaluation surplus is used to record increments and decrements on the revaluation of non-current physical assets.

Specific Restricted Purpose Surplus A specific restricted purpose surplus is established where Southern Health has possession or title to the funds but has no discretion to amend or vary the restriction and/or condition underlying the funds received.

(m) Commitments for expenditure Commitments for expenditure are not recognised on the balance sheet. Commitments for expenditure are disclosed at their nominal value and are inclusive of the GST payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated.

(n) Contingent assets and contingent liabilities Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of note and, if quantifiable, are measured at nominal value. Contingent assets and contingent liabilities are presented inclusive of GST receivable or payable respectively.

(o) Goods and Services Tax (‘GST’) Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

62 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as an operating cash flow.

Commitments for expenditure and contingent assets and liabilities are presented on a gross basis.

(p) Events after the reporting period Assets, liabilities, income or expenses arise from past transactions or other past events. Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting period and before the date the financial statements are authorised for issue, where those events provide information about conditions which existed in the reporting period. Note disclosure is made about events between the end of the reporting period and the date the financial statements are authorised for issue where the events relate to conditions which arose after the end of the reporting period and which may have a material impact on the results of subsequent reporting periods.

(q) Foreign currency All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the transaction.

(r) Rounding Of Amounts All amounts shown in the financial statements are expressed to the nearest $1,000.

Figures in the financial statements may not equal due to rounding.

(s) New Accounting Standards and Interpretations Certain new Australian accounting standards and interpretations have been published that are not mandatory for the 30 June 2011 reporting period.

As at 30 June 2011, the following standards and interpretations had been issued but were not mandatory for the reporting period ending 30 June 2011. Southern Health has not and does not intend to adopt these standards early.

Standard/Interpretation Summary Applicable Impact on public sector entity for annual financial statements reporting periods beginning on AASB 9 Financial instruments This standard simplifies Beginning Detail of impact is still being requirements for the classification 1 Jan 2013 assessed. and measurement of financial assets resulting from Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement). AASB 124 Related Party Government related entities have Beginning Preliminary assessment suggests the impact is insignificant. Disclosures (Dec 2009) been granted partial exemption with 1 Jan 2011 certain disclosure requirements. However, the service is still assessing the detailed impact and whether to early adopt.

Southern Health Annual Report 2010-2011 63 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Standard/Interpretation Summary Applicable Impact on public sector entity for annual financial statements reporting periods beginning on

AASB 1053 Application of This Standard establishes a Beginning 1 The Victorian Government is currently Tiers of Australian Accounting differential financial reporting July 2013 considering the impacts of Reduced Standards framework consisting of two Disclosure Requirements (RDRs) for tiers of reporting requirements certain public sector entities and has for preparing general purpose not decided if RDRs will be financial statements. implemented to the Victorian Public Sector.

AASB 2009-11 Amendments This Standard gives effect to Beginning Detail of impact is still being to Australian Accounting consequential changes arising from 1 Jan 2013 assessed. Standards arising from the issuance of AASB 9. AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 and 1038 and Interpretations 10 and 12] AASB 2009-12 Amendments This standard amends AASB 8 to Beginning The amendments only apply to those to Australian Accounting require an entity to exercise 1 Jan 2011 entities to whom AASB 8 applies, Standards [AASB 5, 8, 108, judgement in assessing whether a which are for-profit entities except for- 110, 112, 119, 133, 137, 139, government and entities known to profit government departments. 1023 and 1031 and be under the control of that Detail of impact is still being Interpretations 2, 4, 16, 1039 government are considered a single assessed. and 1052] customer for purposes of certain operating segment disclosures. This standard also makes numerous editorial amendments to other AASs.

AASB 2009-14 Amendments Amendments to Interpretation 14 Beginning Expected to have no significant to Australian Interpretation – arise from the issuance of 1 Jan 2011 impact. Prepayments of a Minimum prepayments of a minimum funding Funding Requirement requirement. [AASB Interpretation 14]

AASB 2010-2 Amendments to This Standard makes amendments Beginning 1 Does not affect financial measurement Australian Accounting to many Australian Accounting July 2013 or recognition, so is not expected to Standards arising from Standards, including Interpretations, have any impact on financial result or Reduced Disclosure to introduce reduced disclosure position. May reduce some note Requirements requirements to the disclosures in financial statements. pronouncements for application by certain types of entities. AASB 2010-4 Further This Standard makes numerous Beginning No significant impact on the financial Amendments to Australian improvements designed to enhance 1 Jan 2011 statements. Accounting Standards arising the clarity of standards. from the Annual Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13]

64 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Standard/Interpretation Summary Applicable Impact on public sector entity for annual financial statements reporting periods beginning on AASB 2010-5 Amendments to This amendment contains editorial Beginning No significant impact on the financial Australian Accounting corrections to a range of Australian 1 Jan 2011 statements. Standards [AASB 1, 3, 4, 5, Accounting Standards and 101, 107, 112, 118, 119, 121, Interpretations, which includes 132, 133, 134, 137, 139, 140, amendments to reflect changes 1023 & 1038 and made to the text of IFRSs by the Interpretations 112, 115, 127, IASB. 132 & 1042] AASB 2010-6 Amendments to This amendment adds and changes Beginning This may impact on departments and Australian Accounting disclosure requirements about the 1 July 2011 public sector entities as it creates Standards – Disclosures on transfer of financial assets. This additional disclosure for transfers of Transfers of Financial Assets includes the nature and risk of the financial assets. [AASB 1 & AASB 7] financial assets. Detail of impact is still being assessed.

AASB 2010-7 Amendments to These amendments are in relation to Beginning This amendment may have an impact Australian Accounting the introduction of AASB 9. 1 Jan 2013 on departments and public sector Standards arising from AASB bodies as AASB 9 is a new standard 9 (December 2010) [AASB 1, and it changes the requirements of 3, 4, 5, 7, 101, 102, 108, 112, numerous standards. 118, 120, 121, 127, 128, 131, Detail of impact is still being 132, 136, 137, 139, 1023 & assessed. 1038 and Interpretations 2, 5, 10, 12, 19 & 127]

(t) Category Groups Southern Health has used the following category groups for reporting purposes for the current and previous financial years.

Admitted Patient Services (Admitted Patients) comprises all recurrent health revenue/expenditure on admitted patient services, where services are delivered in public hospitals, or free standing day hospital facilities, or alcohol and drug treatment units or hospitals specialising in dental services, hearing and ophthalmic aids.

Mental Health Services (Mental Health) comprises all recurrent health revenue/expenditure on specialised mental health services (child and adolescent, general and adult, community and forensic) managed or funded by the state or territory health administrations, and includes: Admitted patient services (including forensic mental health), outpatient services, emergency department services (where it is possible to separate emergency department mental health services), community- based services, residential and ambulatory services.

Outpatient Services (Outpatients) comprises all recurrent health revenue/expenditure on public hospital type outpatient services, where services are delivered in public hospital outpatient clinics, or free standing day hospital facilities, or rehabilitation facilities, or alcohol and drug treatment units, or outpatient clinics specialising in ophthalmic aids or palliative care.

Southern Health Annual Report 2010-2011 65 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Emergency Department Services (EDS) comprises all recurrent health revenue/expenditure on emergency department services that are available free of charge to public patients.

Aged Care comprises revenue/expenditure from Home and Community Care (HACC) programs, Allied Health, Aged Care Assessment and support services.

Primary Health comprises revenue/expenditure for Community Health Services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy.

Off Campus, Ambulatory Services (Ambulatory) comprises all recurrent health revenue/expenditure on public hospital type services including palliative care facilities and rehabilitation facilities, as well as services provided under the following agreements: Services that are provided or received by hospitals (or area health services) but are delivered/received outside a hospital campus, services which have moved from a hospital to a community setting since June 1998, services which fall within the agreed scope of inclusions under the new system, which have been delivered within hospitals i.e. in rural/remote areas.

Residential Aged Care including Mental Health (RAC incl. Mental Health) referred to in the past as psychogeriatric residential services, comprises those Commonwealth-licensed residential aged care services in receipt of supplementary funding from the Department of Health under the mental health program. It excludes all other residential services funded under the mental health program, such as mental health funded community care units (CCUs) and secure extended care units (SECs).

Other Services excluded from Australian Health Care Agreement (AHCA) (Other) comprises revenue/expenditure for services not separately classified above, including: Public health services including Laboratory testing, Blood Borne Viruses / Sexually Transmitted Infections clinical services, Kooris liaison officers, immunisation and screening services, Drugs services including drug withdrawal, counselling and the needle and syringe program, Dental Health services including general and specialist dental care, school dental services and clinical education, Disability services including aids and equipment and flexible support packages to people with a disability, Community Care programs including sexual assault support, early parenting services, parenting assessment and skills development, and various support services. Health and Community Initiatives also falls in this category group.

66 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements 40 91 166 (295) 6,518 8,191 9,527 6,723 6,346 3,349 4,629 2,306 2,043 2,109 1,785 8,029 1,139 1,139 47,725 11,117 14,687 11,930 20,902 17,361 14,340 14,174 34,864 25,561 58,712 21,989 18,276 61,157 869,486 913,289

51 92 774 (140) 7,096 9,860 3,648 2,717 2,387 3,346 2,384 1,231 1,231 23,168 10,434 82,206 11,412 16,724 16,586 10,809 37,167 18,535 94,252 25,816 64,588 998,236 1,270,596 1,175,062 1,144,842

1,084,951

------91 166 (295) 8,191 9,527 6,723 3,349 2,306 2,109 1,785 1,139 1,139 47,725 11,117 14,687 14,174 34,864 16,298 58,712 61,157 173,955 114,103

19,229

948,246 7,710

15,667 3,561

4,704

21,111

9,108

------92 774 (140) Consolidated 11,000 64,588 210,623 115,139

------40 2010 2011 2010 2011 2010 HSA H&CI H&CI Total Total 6,518 6,346 4,629 2,043 8,029 9,263 11,930 20,902 17,361 14,340 21,990 - 18,276 869,486 HSA H&CI H&CI Total Total 2010 2011 2010 2011 2010 913,289

94,252

1,231

82,206 11,412

7,096 10,434 16,586

9,860

3,648

2,717

3,346 10,809 2,384

37,167

1,231 ------51 2011 HSA 7,710 3,561 4,704 2,387 9,108 7,535 15,667 23,168 21,111 16,724 25,815 19,229 948,246 2011 998,236 970,887

970,847

- 40 91 166 (293) 6,518 8,191 6,723 9,527 3,349 6,346 2,306 4,629 2,109 2,043 1,785 8,029 1,139 1,139 47,725 11,117 14,687 11,930 20,902 17,361 14,340 13,897 25,561 58,715 21,989 18,276 60,880 869,486 913,289 1,059,923

1,059,974

- 51 92 726 (124) 7,096 9,860 3,648 2,717 3,346 2,387 2,384 1,231 1,231 10,434 82,206 11,412 16,586 23,168 16,724 10,809 18,535 94,221 25,816 64,588 998,236 1,233,397 1,137,895 1,109,704

1,049,810

------91 166 (293) 8,191 6,723 3,349 9,527 2,306 2,109 1,785 1,139 1,139 47,725 11,117 14,687 13,897 16,298 58,715 60,880 78,962 138,816

19,229

948,246 7,710

15,667 3,561

4,704 21,111

9,108

------Parent 92 726 (124) 11,000 64,588 77,972 173,423

------40 2010 2011 2010 2011 2010 HSA H&CI H&CI Total Total 6,518 2,043 6,346 4,629 8,029 9,263 20,902 14,340 11,930 17,361 18,276 869,486 HSA H&CI H&CI Total Total HSA 2010 2011 2010 2011 2010 913,289

94,221

1,231

7,096 9,860 82,206 11,412

10,434 16,586 3,648

2,717

3,346 10,809 2,384

1,231 ------51 2011 HSA $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 4,704 7,710 2,387 3,561 9,108 7,535 23,168 21,111 16,724 15,667 25,816 21,990 19,229 948,246 HSA 2011 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 998,236 1,059,974 1,059,923 970,887

970,847

s s e p ose Fund y s ) s ose Incom p ed Care Subsid Care g ed ital Pur p Grants ( Recurrin g p eratin g Activitie Note 2: Revenue Total Revenue (refer to note 2a) Sub-Total Revenue from Capital Purpose Income Revenue from O Total Government Grants Total Indirect Contributions by Department of Health Total Patient and Resident Fee Total Business Units and S p ecific Pur Revenue from Non-O p eratin g Activitie Sub-Total Revenue from Operating Activities Sub-Total Revenue from Non-Operating Activities Revenue from Ca - Department of Human Services Human of Department - Victoria Services Health Dental - - PBS Grants PBS - Business Units & Specific Purpose Funds Purpose Specific & Units Business Fees Activities Patient Other and Practice Private - - Car Park Car - State Government Capital Grants Capital Government State Equipment and Works Capital Targeted - - Funding for Casey Hospital Casey for Funding - Other Capital Purpose Income Purpose Capital Other Net Gain/(Loss) on Disposal of Non-Current Assets (refer note 2c) note (refer Assets Non-Current of Disposal on Gain/(Loss) Net Share of Net Result of Associates & Joint Ventures Accounted for Accounted Ventures Joint & Associates of Result Net of Share 10) note (refer Model Equity the using Government Grants Health of Department - - Commonwealth Government Commonwealth - A Residential - - Other - - Laboratory Medicine Laboratory - - Diagnostic Imaging Diagnostic - - Pharmacy Services Pharmacy - Indirect Contributions by Department of Health of Department by Contributions Indirect - Insurance - Long Service Leave Service Long - - Property Income Property - - Cafeteria - Patient and Resident Fees 2b) note (refer Fees Resident and Patient - - Residential Aged Care (refer note 2b) note (refer Care Aged Residential - - Research - - Other - Donations and Bequests and Donations Recoupment from Private Practice for Use of Hospital Facilities Hospital of Use for Practice Private from Recoupment Private Hospital Fees (refer note 2b) note (refer Fees Hospital Private Other Revenue from Operating Activities Operating from Revenue Other Interest and Dividends and Interest

Southern Health Annual Report 2010-2011 67 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements ------51 2011 7,535 9,108 1,231 2,384 64,588 37,167 11,000 94,252 25,815 998,236 210,622 1,059,974 1,270,596

------51 2011 Other Total 7,535 6,721 1,231 1,937 2,384 1,676 64,588 37,167 11,000 94,252 17,920 228,543

19,229

------332 2011 Health 18,293 Primary 18,625 18,625 210,623

------189 2011 8,302 8,491 8,491

------586 2011 2,387 4,704 Health Aged Care Mental 25,633 33,310 33,310 RAC incl.

------612 2011 1,621 Health ning the operating result for year by recording them as revenue and expenses. Mental 91,398 93,630 93,630

------2011 1,244 77,908 79,151 79,151

------EDS Ambulatory 311 2011 41,061 41,371 41,371

------294 2011 1,037 63,945 65,276 65,276

------2011 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 17,786 14,651 e Patients Outpatients 669,761 Admitted 702,198

y Sourc ose Funds ose Funds ose p ital ) p p ) ) ( non ca ecific Pur ecific Pur p p y sis of Revenue b q uests ( refer note 2e ( refer note 2e p ital Fees p ecific Income Note 2a: Anal Revenue from Services Supported by Health Services Agreement Sub-Total Revenue from Services Supported by Hospital and Community Initiatives Sub-Total Revenue from Services Supported by Health Services AgreementRevenue from Services Supported by Hospital and Community Initiatives 702,198 Total Revenue Government Grants Government Other Revenue from Operating Activities Operating from Revenue Other Private Hos Interest and Dividends Other Capital Purpose Income (refer note 2) S Indirect contributions by Department of Health Interest and Dividends Capital Purpose Income (refer note 2) note (refer Income Purpose Capital Donations and Be Business Units and S Recoupment from Private Practice for Use of Facilities Hospital Patient & Resident Fees (refer note 2b) note (refer Fees Resident & Patient Donations and Bequests (non capital) Business Units and S S p ecific Income Share of Net Result Associates & Joint Ventures Accounted for using the Equity Model (refer note 10) (based on the consolidated view of note 2) Indirect contributions by Department of Health: Department of Health makes certain payments on behalf Southern Health. These amounts have been brought to account in determi

68 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 2b: Patient and Resident Fees

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Patient and Resident Fees Raised Recurrent: Acute – Inpatients 17,786 14,324 17,786 14,324 – Outpatients 1,037 1,152 1,037 1,152 – Other 1,360 1,196 1,360 1,196 Residential Aged Care – Generic 143 142 143 142 – Mental Health 4,561 4,486 4,561 4,486 Mental Health 612 170 612 170 Other 316 518 316 518 Total Recurrent 25,815 21,989 25,815 21,989

Non-HSA Patient Fees Raised Kitaya Pty Ltd - - 37,167 34,864 Total Non-HSA Patient Fees Raised - - 37,167 34,864

Note 2c: Net Gain/(Loss) on Disposal of Non-Current Assets

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Proceeds from Disposals of Non-Current Assets Plant and Equipment 1 3 1 3 Medical Equipment 12 3 12 3 Computers and Communication 1 2 1 2 Motor Vehicles 142 430 142 430 Total Proceeds from Disposal of Non- Current Assets 156 438 156 438

Less: Written Down Value of Non-Current Assets Sold Plant and Equipment 6 27 6 28 Medical Equipment 140 362 156 363 Computers and Communication 29 3 29 3 Motor Vehicles 105 339 105 339 Total Written Down Value of Non-Current Assets Sold 280 731 296 733

Net gains/(losses) on Disposal of Non- Current Assets (124) (293) (140) (295)

Southern Health Annual Report 2010-2011 69 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements - 257 287 802 4,428 4,939 9,778 1,672 6,516 7,493 9,132 7,623 1,882 7,343 4,628 7,343 7,343 31,395 11,930 10,970 39,096 10,930 21,174 96,171 64,553 21,129 10,551 69,617 18,637 83,950 74,245 719,412 173,886 815,646 1,173,707

- 386 315 656 4,397 4,933 1,789 9,040 6,511 8,149 7,223 1,384 8,921 4,504 8,921 8,921 42,316 11,929 12,026 38,665 11,531 98,266 69,200 10,405 20,435 75,086 16,756 79,590 780,147 178,842 880,187 103,453 1,267,749

- - - 0 30 16 14 19 11 156 452 371 957 318 822 739 523 981 852 (944) 6,567 6,068 7,343 1,983 4,628 6,681 7,343 7,343 16,997 70,150 69,617 19,515 79,182 74,245 187,819

15,668

23,869

- - - 1 0 32 14 14 11 130 509 403 284 879 781 451 924 735 6,818 1,053 8,921 6,228 1,898 4,504 6,812 (1,119) 15,999 73,101 CONSOLIDATED 18,712 82,152 CONSOLIDATED 196,924

------257 257 646 2010 2011 2010 2011 2010 2010 2011 2010 2011 2010 HSA H&CI H&CI Total Total HSA H&CI H&CI Total Total 5,372 4,922 9,325 1,658 7,474 5,559 8,815 7,100 1,870 9,571 24,828 11,929 10,599 38,274 21,174 79,174 10,190 58,486 19,146 77,269 17,785 649,262 154,371 736,464 985,890

8,921

8,921 79,590

75,086 ------386 283 526 HSA HSA 2011 2011 5,516 4,919 1,775 9,029 5,458 7,866 6,772 1,384 9,480 35,498 11,420 15,667 11,623 37,785 23,869 82,267 10,750 62,972 18,537 96,641 16,022 707,046 160,129 798,035 1,070,827

- 257 257 764 4,411 4,936 9,747 1,672 7,493 5,825 9,132 7,100 1,882 7,340 4,628 7,340 7,340 15,425 11,930 10,676 38,446 21,174 10,347 95,651 63,519 20,812 10,388 69,538 67,567 18,114 74,166 705,344 171,442 800,062 1,138,691

- 386 293 655 4,380 4,929 1,789 9,040 5,819 8,125 6,772 1,384 8,915 4,504 8,915 8,915 25,729 11,896 11,711 37,941 10,918 97,721 68,128 20,108 10,246 74,985 86,475 16,281 79,489 765,221 176,268 863,703 1,231,129

- - - - - 0 13 14 77 19 11 118 422 266 172 318 156 817 329 (961) 6,271 5,033 1,666 7,340 4,628 Y 5,973 7,340 7,340 16,477 56,082 69,538 17,071 63,598 74,166 168,476

15,668

23,869

- - - - 1 0 10 10 14 88 11 129 476 361 156 259 168 766 259 6,440 8,915 5,156 1,571 4,504 6,042 (1,136) 15,454 58,176 PARENT ENTIT 16,138 65,668 PARENT ENTITY 176,510

------257 257 646 2010 2011 2010 2011 2010 2010 2011 2010 2011 2010 HSA H&CI H&CI Total Total HSA H&CI H&CI Total Total 9,153 5,372 4,922 9,325 1,658 7,474 5,559 8,815 7,100 1,870 9,571 11,929 10,599 21,174 79,174 38,274 10,190 58,486 19,146 61,595 17,785 649,262 154,371 736,464

8,915

8,915 79,489

74,985

------386 283 526 HSA HSA 2011 2011 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 5,516 4,919 1,775 9,029 5,458 7,866 6,772 1,384 9,480 19,290 11,420 15,667 11,623 23,869 82,267 37,785 10,750 62,972 18,537 80,433 16,022 707,046 160,129 798,035 970,215 1,054,619

enses p Total Other Expenses from Continuing Operations - Other Other Administrative Expenses Audit Fees - VAGO Audit of Financial Statements Total Supplies and Consumables Lease Expenses Total Non Salary Labour Costs Bad and Doubtful Debts Patient Transport Total Employee Benefits Total Other Expenses Repairs and Maintenance Total Expenditure using Capital Purpose Income Other Expenses Motor Vehicle Expenses Insurance costs funded by Department of Health Fuel, Light, Power and Water Domestic Services and Supplies Drug Supplies S100 Drugs Food Supplies Medical, Surgical Supplies and Prosthesis Pathology Supplies Agency Costs - Other Agency Costs - Nursing Superannuation Fees for Visiting Medical Officers Departure Packages Long Service Leave - Other Salaries and Wages WorkCover Premium Note 3: Ex Other Expenses from Continuing Operations Supplies and Consumables Non Salary Labour Costs Expenditure using Capital Purpose Income Total Total Expenses Employee Expenses Depreciation and Amortisation Finance Costs

70 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements 735 Total 8,921 4,504 6,812 8,921 18,712 16,022 75,086 96,641 82,152 798,035 160,129 188,002 1,267,749 1,070,827

735 364 4,724 2,565 3,407 14,695 21,031 147,590

------75 661 661 1,135 2,228 Health Other 16,564 Primary 20,664 20,003 8,921 117,638

8,921 18,712 4,504

6,812

82,152 ------23 302 718 302 8,129 2,233 11,406 11,104 Aged Care

------289 3,490 3,240 Health Mental 34,540 25,281 34,540 66,839 32,300 RAC incl.

------1,200 3,325 7,025 9,607 Health Mental 3,325 76,060 97,218 93,893

------933 2,819 6,384 2,819 61,491 10,976 82,602 79,783

------EDS Ambulatory 2,537 1,669 6,792 6,026 2,537 57,328 74,351 71,814

------1,915 1,720 9,051 1,915 30,623 12,806 56,114 54,199

Outpatients

------2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 9,749 24,264 57,074 24,264 Patients 507,865 112,016 Admitted 710,967 686,703

y Source g reement y Health Services A y sis of Ex p enses b pp orted b Note 3a: Anal Sub-Total Expenses from Services Supported by Capital Resources Services Supported by Capital Sources Total Expenses Sub-Total Expense from Services Supported by Hospital and Community Initiatives Services Su Sub-Total Expenses from Services Supported by Health Services Agreement Services Supported by Hospital and Community Initiatives Other Expenses from Continuing Operations Other Expenses Other Supplies and Consumables Depreciation and Amortisation (refer note 4) note (refer Amortisation and Depreciation Finance Costs (refer note 5) Employee Expenses Employee Non Salary Labour Costs Labour Salary Non Supplies and Consumables and Supplies Other Expenses from Continuing Operations Non Salary Labour Costs Labour Salary Non Employee Benefits (based on the consolidated view)

Southern Health Annual Report 2010-2011 71 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 3b: Analysis of Expenses by Internal and Restricted Specific Purpose Funds for Services Supported by Hospital and Community Initiatives

Parent Parent Entity Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Private Practice and Other Patient Activities 9,137 8,130 9,137 8,130 Laboratory Medicine 2,449 2,004 2,449 2,004 Diagnostic Imaging 8,300 7,822 8,300 7,822 Property Expenses 59 59

Other - Bequests and Donations 118 227 118 227 - Breastscreen service 2,792 2,847 2,792 2,847 - Cardiology 4,551 4,157 4,551 4,157 - Carer crisis (5) (5) - DHS Special Projects (13) (13) - Mobility Impaired Services 3,190 4,133 3,190 4,133 - Special Purpose Medical 7,571 7,072 7,571 7,072

Other Activities Fundraising and Community Support 1,520 969 1,520 969 Research and Scholarship 3,141 4,117 3,141 4,117 Other 1,164 220 1,164 220 TOTAL 43,921 41,752 43,921 41,752

72 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 4: Depreciation and Amortisation

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Depreciation Buildings 50,969 49,738 50,969 49,738 Plant and Equipment 1,548 1,429 1,554 1,432 Medical Equipment 8,870 7,917 8,931 7,672 Computers and Communication 2,743 2,351 2,744 2,353 Furniture and Equipment 133 135 136 138 Motor Vehicles 632 710 632 710 Leased Building 4,959 4,959 4,989 4,959 Leased Plant and Equipment 26 27 26 27 Leased Medical Equipment 1,138 1,139 1,138 1,155 Leased Furniture and Equipment 1 1 1 1 Total Depreciation 71,020 68,407 71,121 68,486

Amortisation Software 3,965 1,131 3,965 1,131 Total Amortisation 3,965 1,131 3,965 1,131

Total Depreciation and Amortisation 74,985 69,538 75,086 69,617

Note 5: Finance Costs

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000

Finance Charges on Finance Leases 4,504 4,628 4,504 4,628

TOTAL FINANCE COSTS 4,504 4,628 4,504 4,628

Southern Health Annual Report 2010-2011 73 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 6: Cash and Cash Equivalents

For the purposes of the cash flow statement, cash assets includes cash on hand and in banks, and short-term deposits which are readily convertible to cash on hand, and are subject to an insignificant risk of change in value, net of outstanding bank overdrafts.

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Cash on Hand 78 134 78 134 Cash at Bank 7,094 7,232 7,094 7,232 TOTAL CASH AND CASH EQUIVALENTS 7,172 7,366 7,172 7,366

Represented by:

Cash for Health Service Operations (as per Cash Flow Statement) 2,070 2,985 2,071 2,985

Cash for Monies Held in Trust - Cash at Bank 5,101 4,381 5,101 4,381 TOTAL 7,172 7,366 7,172 7,366

74 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 7: Receivables Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 CURRENT Contractual Inter Hospital Debtors 941 2,046 941 2,046 Trade Debtors 3,299 3,249 3,299 3,249 Patient Fees 12,300 9,196 17,376 13,137 Accrued Revenue - Other 13,117 8,597 13,485 9,031 Less Allowance for Doubtful Debts Trade Debtors (65) (92) ( 65) (92) Patient Fees (832) (865) (845) (876) 28,760 22,132 34,191 26,495 Statutory Accrued Revenue - Department of Health - 3,525 - 3,525 GST Receivable 2,613 2,754 2,613 2,753 2,613 6,279 2,613 6,278 TOTAL CURRENT RECEIVABLES 31,373 28,412 36,804 32,774 NON CURRENT Statutory Long Service Leave - Department of Health 23,339 19,778 23,339 19,778 TOTAL NON-CURRENT RECEIVABLES 23,339 19,778 23,339 19,778 TOTAL RECEIVABLES 54,713 48,190 60,143 52,552

(a) Movement in the Allowance for doubtful contractual receivables

Balance at beginning of year 957 1,037 968 1,048 Amounts written off during the year (688) (897) (688) (936) Increase/(decrease) in allowance recognised in net result 628 817 630 855 Balance at end of year 897 957 910 968

(b) Ageing analysis of receivables Please refer to note 19(b) for the ageing analysis of contractual receivables. (c) Nature and extent of risk arising from receivables Please refer to note 19(b) for the nature and extent of credit risk arising from contractual receivables.

Southern Health Annual Report 2010-2011 75 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 8: Inventories

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Pharmaceuticals At cost 6,071 5,756 6,071 5,756 Medical and Surgical At cost 12,675 9,212 12,675 9,212 General Stores At cost 628 600 628 600 Pathology At cost 1,058 1,012 1,058 1,012 Gift Shop At cost 7 10 7 10 TOTAL INVENTORIES 20,439 16,589 20,439 16,589

Note 9: Other Assets

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 CURRENT Prepayments 1,642 1,439 1,642 1,439 TOTAL CURRENT OTHER ASSETS 1,642 1,439 1,642 1,439

NON-CURRENT Investment in Evivar Medical Pty Ltd 93 93 93 93 TOTAL NON-CURRENT OTHER ASSETS 93 93 93 93 TOTAL OTHER ASSETS 1,735 1,531 1,735 1,531

76 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 10: Investments Accounted for Using the Equity Method

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Investment in Associates 3,283 3,233 3,283 3,233 TOTAL INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD 3,283 3,233 3,283 3,233

Ownership Interest Published Fair Value Country of 2011 2010 2011 2010 Name of Entity Incorporation %%$'000 $'000 Monash Health Research Precinct Pty Ltd Australia 20.33 20.33 3,283 3,233

The principal activity of the entity is property investment.

Note 10: Investments Accounted for Using the Equity Method (Continued)

Consolidated Consolidated 2011 2010 $'000 $'000 Summarised Financial Information of Associates:

Current Assets 605 498 Non-Current Assets 3,727 3,833 Total Assets 4,332 4,331

Current Liabilities 76 71 Non-Current Liabilities 972 1,028 Total Liabilities 1,048 1,099 Net Assets 3,283 3,232

Share of Associates Net Assets Total Income 301 291 Net Result 51 40

Share of Net Result of Associates accounted for using the Equity Method 51 40

Dividends Received from Associates During the year, Southern Health received dividends of $0 (2010: $0) from its associates.

Contingent Liabilities and Capital Commitments There are no contingent liabilities or capital commitments arising from associates.

Southern Health Annual Report 2010-2011 77 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 11: Property, Plant and Equipment

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Land Land at Valuation 120,587 120,587 120,798 120,798 Total Land 120,587 120,587 120,798 120,798

Work in Progress Buildings Under Construction 76,916 53,749 76,916 53,749 Software 2,466 5,535 2,466 5,535 Total Work in Progress 79,382 59,284 79,382 59,284

Buildings Building at Cost 125,605 83,677 125,605 83,677 Less Accumulated Depreciation (4,008) (883) (4,008) ( 883) Buildings at Fair Value 484,590 484,590 484,590 484,873 Less Accumulated Depreciation (96,437) (48,593) (96,437) (48,876) Total Buildings 509,750 518,791 509,750 518,791

Plant and Equipment Plant and Equipment at Fair Value 22,333 21,821 22,434 21,910 Less Accumulated Depreciation (14,122) (12,853) (14,196) (12,927) Total Plant and Equipment 8,211 8,969 8,238 8,982

Medical Equipment Medical Equipment at Fair Value 120,953 109,281 121,758 110,080 Less Accumulated Depreciation (62,720) (56,371) (63,217) (56,902) Total Medical Equipment 58,233 52,910 58,541 53,178

Computers and Communication Computers and Communication at Fair Value 26,353 25,922 26,435 26,065 Less Accumulated Depreciation (22,903) (21,456) (22,984) (21,598) Total Computers and Communication 3,450 4,466 3,450 4,467

Furniture and Fittings Furniture and Fittings at Fair Value 2,017 1,840 2,049 1,884 Less Accumulated Depreciation (1,357) (1,232) (1,384) (1,268) Total Furniture and Fittings 660 608 666 615

Motor Vehicles Motor Vehicles at Fair Value 9,151 2,042 9,151 2,042 Less Accumulated Depreciation (7,970) (428) (7,970) ( 428) Total Motor Vehicles 1,181 1,615 1,181 1,615

Cultural Assets Cultural Assets at Fair Value 2,567 2,564 2,567 2,564 Total Cultural Assets 2,567 2,564 2,567 2,564

Leased Assets Building Leased at Fair Value 108,972 108,972 108,972 108,972 Less Accumulated Amortisation (9,919) (4,959) (9,919) (4,959) 99,053 104,013 99,053 104,013

Building Leasehold Improvements - - 893 893 Less Accumulated Amortisation - - (313) ( 284) - - 580 610

Plant and Equipment at Fair Value 317 327 317 327 Less Accumulated Amortisation ( 238) (223) (238) ( 223) 79 104 79 104

Medical Equipment at Fair Value 11,381 11,385 11,381 11,385 Less Accumulated Amortisation (7,885) (6,749) (7,885) (6,749) 3,496 4,636 3,496 4,636

Computers and Communications at Fair Value 961 1,080 961 1,080 Less Accumulated Amortisation ( 961) (1,080) (961) (1,080) - - - -

Furniture and Fittings at Fair Value 14 14 14 14 Less Accumulated Amortisation (9) (8) (9) (8) 4 6 5 6 Total Leased Assets 102,632 108,758 103,213 109,368

TOTAL PROPERTY, PLANT AND EQUIPMENT 886,654 878,551 887,786 879,663

During the year 30 June 2005, Casey Hospital commenced operation. Construction and fit out of Casey Hospital was funded as a Public Private Partnership under a Project Agreement between the State of Victoria and Progress Health Pty Ltd. Southern Health is responsible for operating Casey Hospital and has recognised the leased asset and associated interest bearing liabilities (Note 14). The State of Victoria is obligated to fund quarterly service payments due to the Project Agreement for the life of that agreement, a period of up to 25 years.

78 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements - (296) (733) Total 79,796 79,540 887,786 879,663 869,087

- - - - $'000 $'000 7,398 62,067 79,382 59,284 51,886 Progress

(71,121) (68,487)

- - - (1) (5) $'000 (6,155) (6,143) 103,212 109,368 115,516

(41,969)

Leased Assets Work in - - - - - 6 3 $'000 Assets 2,567 2,564 2,558

- 622 303 (105) (339) (632) (710) $'000 1,181 1,615 2,042

Motor Vehicles Cultural - - (7) 75 187 666 615 685 (136) (138) $'000 Fittings Furniture and

n Health's land and buildings acquired 12 months prior to 30 June 2009. ed in accordance with FRD103D Non-Current Physical Assets. (3) 41 (29) $'000 2,753 1,715 3,450 4,467 4,070 (2,744) (2,353) ious and current financial year is set out below. p uters and Com Communication

- (155) (363) $'000 (8,931) (7,972) 14,449 17,323 Medical 58,541 53,178 44,190 Equipment

- (6) (16) 816 $'000 3,031 8,238 8,982 7,399 (1,554) (1,432) Equipment

- - - $'000 41,928 48,588 509,750 518,791 519,942

------Land Buildings Plant & $'000 120,798 120,798 120,798

(50,969)

(49,739)

g s carried at valuation y 2009 Note 11: Property, Plant and Equipment (Continued) Land and buildin Balance at 30 June 2011 Balance at 1 July 2010 Balance at 1 Jul Reconciliations of the carrying amounts each class asset for consolidated entity at beginning and end prev In accordance to FRD103D, the Victorian Valuer-General engaged Charter Keck Cramer to perform fair value evaluations on Souther on evaluations value fair perform to Cramer Keck Charter engaged Valuer-General Victorian the FRD103D, to accordance In perform been has valuation The 2011. June 30 at as performed was buildings and land Health's Southern of valuation managerial A Disposals Depreciation and Amortisation (note 4) (note Amortisation and Depreciation Disposals Depreciation and Amortisation (note 4) (note Amortisation and Depreciation Capitalisation of Work In Progress Additions Additions

Southern Health Annual Report 2010-2011 79 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 12: Intangible Assets

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Software 19,322 14,159 19,322 14,159 Less Accumulated Amortisation (7,872) (3,907) (7,872) (3,907)

TOTAL INTANGIBLE ASSETS 11,450 10,252 11,450 10,252

Reconciliation of the carrying amounts of intangible assets at the beginning and end of the previous and current financial year:

Parent Entity Consolidated $'000 $'000

Balance at 1 July 2009 2,495 2,495 Additions 8,888 8,888 Amortisation (note 4) (1,131) (1,131) Balance at 1 July 2010 10,252 10,252 Additions 5,163 5,163 Amortisation (note 4) (3,965) (3,965) Balance at 30 June 2011 11,450 11,450

80 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 13: Payables Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Contractual Trade Creditors 28,626 29,955 28,630 30,213 Accrued Expenses 20,792 17,277 21,127 17,531 Payment Doctors 40 28 40 28 Superannuation accrual 7,013 6,542 7,013 6,542 Inter-entity Loan to Kitaya 3,860 4,599 - - Prepaid Revenue - Department of Health 1,780 - 1,780 - Other 2,030 1,755 1,975 1,759 TOTAL PAYABLES 64,141 60,156 60,565 56,072

(a) Maturity analysis of payables Please refer to Note 19(c) for the ageing analysis of contractual payables. (b) Nature and extent of risk arising from payables Please refer to note 19(c) for the nature and extent of risks arising from contractual payables.

Southern Health Annual Report 2010-2011 81 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 14: Borrowings Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000

CURRENT Australian Dollar Borrowings

(i) – Finance Lease Liability 2,219 2,088 2,219 2,088 – Treasury Corporation of Victoria Carpark Loan 1,688 1,688 1,688 1,688 Total Australian Dollars Borrowings 3,907 3,776 3,907 3,776 Total Current Borrowings 3,907 3,776 3,907 3,776

NON CURRENT Australian Dollar Borrowings (i) – Finance Lease Liability 70,393 72,613 70,393 72,613 – Treasury Corporation of Victoria Carpark Loan 17,498 17,912 17,498 17,912 Total Australian Dollars Borrowings 87,891 90,525 87,891 90,525 Total Non-Current Borrowings 87,891 90,525 87,891 90,525 TOTAL BORROWINGS 91,798 94,301 91,798 94,301

(i) During the year ended 30 June 2005, Casey Hospital commenced operation. Construction and fit out of Casey Hospital was funded as Public Private Partnership under a Project Agreement between the State of Victoria and Progress Health Pty Ltd. Southern Health is responsible for operating Casey Hospital and has recognised the leased asset (Note 11) and associated interest bearing liabilities. The State of Victoria is obligated to fund quarterly service payments due under the Project Agreement for the life of that agreement, a period of up to 25 years.

(a) Maturity analysis of borrowings Please refer to note 19(c) for the nature and extent of risks arising from borrowings.

(b) Nature and extent of risk arising from borrowings Please refer to note 19(c) for the nature and extent of risks arising from borrowings.

(c) Defaults and breaches During the current and prior year, there were no defaults and breaches of any of the loans.

82 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 15: Provisions

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000

CURRENT Employee Benefits (i) - Unconditional and expected to be settled within 12 months (ii) 83,081 76,147 83,081 76,147 - Unconditional and expected to be settled after 12 months (iii) 86,834 78,773 86,834 78,773 Total Current Provisions 169,916 154,920 169,916 154,920

NON-CURRENT Employee Benefits (i) 32,378 30,312 32,378 30,312 Total Non-Current Provisions 32,378 30,312 32,378 30,312 TOTAL PROVISIONS 202,294 185,232 202,294 185,232

(a) Employee Benefits and Related On-Costs

Unconditional LSL Entitlement - Short-term benefits at nominal value 9,328 9,153 9,328 9,153 - Long-term benefits at present value 76,790 68,851 76,790 68,851 Annual Leave Entitlements - Short-term benefits at nominal value 54,538 51,415 54,538 51,415 - Long-term benefits at present value 8,273 8,315 8,273 8,315 Accrued Wages and Salaries 14,716 11,794 14,716 11,794 Accrued Days Off 3,234 2,626 3,234 2,626 Total 166,880 152,153 166,880 152,153

Non-Current Employee Benefits and related on- costs Conditional Long Service Leave Entitlements (iii) 32,378 30,312 32,378 30,312 Total 32,378 30,312 32,378 30,312

On-Costs Current On-Costs 1,264 1,159 1,264 1,095 Non-Current On-Costs 1,771 1,607 1,771 1,693 Total 3,036 2,766 3,036 2,788 Total Employee Benefits and Related On-Costs 202,294 185,231 202,294 185,253

Notes:

(i) Provisions for employee benefits consist of amounts for annual leave and long service leave accrued by employees, not including on-costs.

(ii) The amounts disclosed are nominal amounts (iii) The amounts disclosed are discounted to present values

(b) Movements in provisions Movement in Long Service Leave: Balance at start of year* 109,892 98,081 109,892 98,081 Provision made during the year 20,442 21,100 20,442 21,100 Settlement made during the year (10,095) (9,289) (10,095) (9,289) Balance at end of year* 120,239 109,892 120,239 109,892

*Balances are inclusive of on-costs and agree with disclosures in Note 15(a).

Southern Health Annual Report 2010-2011 83 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 16: Other Liabilities

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Monies Held in Trust* - Patient Monies Held in Trust* 231 216 231 216 - Accommodation Bonds (Refundable Entrance Fees)* 4,871 4,165 4,871 4,165 Department of Health Loan - 1,800 - 1,800 TOTAL OTHER LIABILITIES 5,101 6,181 5,101 6,181

* Total Monies Held in Trust Represented by the following assets:

Cash Assets (refer to Note 6) 5,101 4,381 5,101 4,381 TOTAL 5,101 4,381 5,101 4,381

84 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 17: Reserves Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 (a) Reserves Property, Plant and Equipment Revaluation Surplus

Balance at the beginning of the reporting period (i) 319,318 319,318 319,487 319,487 Balance at the end of the reporting period* 319,318 319,318 319,487 319,487

* Represented by: - Land 66,462 66,462 66,631 66,631 - Buildings 252,092 252,092 252,092 252,092 - Cultural Assets 447 447 447 447 - Motor Vehicles 317 317 316 317 319,318 319,318 319,487 319,487

Restricted Specific Purpose Surplus Balance at the beginning of the reporting period 2,761 4,581 2,761 4,581 Transfer to and from accumulated funds 436 (1,820) 436 (1,820) Balance at the end of the reporting period 3,197 2,761 3,197 2,761 Total Reserves 322,515 322,079 322,684 322,248

(i) The physical assets revaluation surplus arises on the revaluation of land and buildings, cultural assets and motor vehicles.

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 (b) Contributed Capital Balance at the beginning of the reporting period 401,893 401,893 401,895 401,895 Balance at the end of the reporting period 401,893 401,893 401,895 401,895

(c) Accumulated Surpluses/(Deficits) Balance at the beginning of the reporting period (104,130) (76,963) (94,743) (67,698) Net Result for the Year 2,269 (28,987) 2,850 (28,865) Transfer from Restricted Specific Purpose Reserve (436) 1,820 (436) 1,820 Balance at the end of the reporting period (102,297) (104,130) (92,329) (94,743)

Total Equity at end of financial year 622,111 939,160 632,250 948,887

Southern Health Annual Report 2010-2011 85 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 18: Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Net Result for the Year 2,269 (28,987) 2,850 (28,865) Depreciation and Amortisation 74,985 69,538 75,086 69,617 Amortisation of interest free loan - 103 - 103 Provision for Doubtful Receivables (60) (81) (58) (81) Net Loss from Sale of Plant and Equipment 124 293 140 295 Net Movement in Finance Leases (2,219) (1,956) (2,219) (1,956) Change in Operating Assets & Liabilities (Increase)/Decrease in Receivables (5,415) (9,158) (5,906) (9,436) (Increase)/Decrease in Other Assets (4,398) (40) (4,398) (40) (Increase)/Decrease in Prepayments (203) 1,606 (203) 1,606 Increase/(Decrease) in Payables 3,888 8,828 3,706 8,914 Increase/(Decrease) in Provisions 21,559 2,796 21,559 2,796 Increase/(Decrease) in Inventories (3,850) (4,616) (3,850) (4,617) NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 86,680 38,326 86,707 38,336

86 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 19: Financial Instruments

(a) Financial Risk Management Objectives and Policies Southern Health's principal financial instruments comprise of: - Cash Assets - Receivables (excluding statutory receivables) - Payables (excluding statutory payables) - Finance Lease payables - Accommodation Bonds

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements.

The main purpose in holding financial instruments is to prudentially manage Southern Health's financial risks within the government policy parameters.

Categorisation of financial instruments Parent Entity Parent Entity Consolidated Consolidated Carrying Carrying Carrying Carrying Amount Amount Amount Amount 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Financial Assets Cash and cash equivalents 7,172 7,366 7 ,172 7,366 Receivables 52,100 41,910 57,530 46,274 Total Financial Assets (i) 59,272 49,276 64,702 53,640

Financial Liabilities Payables 64,141 60,156 60,565 56,072 Interest Bearing Liabilities 91,798 94,301 91,798 94,301 Accommodation Bonds 4,871 4,165 4 ,871 4,165 Other Liabilities 231 2,016 231 2,016 Total Financial Liabilities 161,041 160,637 157 ,464 156,554

(i) The total amount of financial assets disclosed here excludes statutory receivables (i.e. GST input tax credit recoverable)

Net holding gain/(loss) on financial instruments by category Parent Entity Parent Entity Consolidated Consolidated Carrying Carrying Carrying Carrying Amount Amount Amount Amount 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents (i) 1,620 1,418 1,620 1,418 Receivables (i) (338) (544) (338) (544) Total Financial Assets 1,282 874 1 ,282 874

Financial Liabilities Payables (ii) 288 347 288 347 Interest Bearing Liabilities (ii) (4,504) (4,628) (4,504) (4,628) Accommodation Bonds (ii) 90 144 90 144 Other Liabilities - (103) - (103) Total Financial Liabilities (4,126) (4,240) ( 4,126) (4,240)

(i) For cash and cash equivalents, loans and receivables, the net gain or loss is calculated by taking the movement in the fair value of the asset, interest revenue, plus or minus foreign exchange gains or losses arising from revaluation of the financial assets, and minus any impairment recognised in the net result.

(ii) For financial liabilities measured at amortised cost, the net gain or loss is calculated by taking the interest expense or losses arising from the revaluation of financial liabilities measured at amortised cost.

Southern Health Annual Report 2010-2011 87 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 19: Financial Instruments (continued)

(b) Credit Risk

Credit risk arises from the contractual financial assets of Southern Health, which comprise cash and deposits and non- statutory receivables. Southern Health’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to Southern Health. Credit risk is measured at fair value and is monitored on a regular basis.

Credit risk associated with Southern Health’s contractual financial assets is minimal because the main debtor is the Victorian Government. For debtors other than the Government, it is Southern Health’s policy to only deal with entities with high credit ratings of a minimum Triple-B rating and to obtain sufficient collateral or credit enhancements, where appropriate.

In addition, Southern Health does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. As with the policy for debtors, Southern Health’s policy is to only deal with banks with high credit ratings.

Provision of impairment for contractual financial assets is recognised when there is objective evidence that Southern Health will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 90 days overdue, and changes in debtor credit ratings.

Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents Southern Health's maximum exposure to credit risk without taking account of the value of any collateral obtained.

Credit quality of contractual financial assets that are neither past due nor impaired

Financial Government Government Other Total institutions agencies agencies (min BBB (AAA credit (AAA credit (BBB credit credit rating) rating) rating) rating) 2011 $'000 $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents 7,114 58 - - 7,172 Receivables - Trade Debtors 11,839 737 - - 12,576 - Other Receivables (i) - 23,339 - - 23,339 Total Financial Assets 18,953 24,134 - - 43,087

2010 Financial Assets Cash and Cash Equivalents 7,308 58 - - 7,366 Receivables - Trade Debtors 7,670 786 - - 8,456 - Other Receivables (i) - 19,778 - - 19,778 Total Financial Assets 14,978 20,622 - - 35,600

(i) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and GST input tax credit recoverable).

Ageing analysis of Financial Asset as at 30 June

Consolidated Not Past Due Past Due But Not Impaired Impaired Carrying and Not Less than 1 1-3 Months 3 months - 1 1-5 Years Financial Amount Impaired Month Year Assets

2011 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents 7,172 7,172 - Receivables (i) 57,530 35,915 12,704 6,241 1,976 694 - Total Financial Assets 64,702 43,087 12,704 6,241 1,976 694 -

2010 Financial Assets Cash and Cash Equivalents 7,366 7,366 - - - - - Receivables (i) 46,274 28,233 12,533 3,356 2,107 45 - Total Financial Assets 53,640 35,600 12,533 3,356 2,107 45 -

(i) Ageing analysis of financial assets exclude statutory financial assets (i.e GST input tax credit)

88 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 19: Financial Instruments (continued)

(c) Liquidity Risk

Liquidity risk is the risk that Southern Health would be unable to meet its financial obligations as and when they fall due.

Southern Health’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet. Southern Health manages its liquidity risk via daily cash flow forecasts and the active management of projected working capital needs.

The following table discloses the contractual maturity analysis for Southern Health's financial liabilities. For interest rates applicable to each class of liability refer to individual notes to the financial statements.

Maturity analysis of Financial Liabilities as at 30 June Maturity Dates Consolidated Contractual Less than 1 1-3 Months 3 months - 1 1-5 Years Over 5 Years Carrying Cash Flows Month Year Amount 2011 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial Liabilities Payables 60,565 60,565 44,229 15,628 708 - - Interest Bearing Liabilities 91,798 91,798 542 972 2,392 21,811 66,081 Other Financial Liabilities (i) - Accommodation Bonds 4,871 4,871 - 53 159 2,117 2,542 - Other 231 231 231 - - - - Total Financial Liabilities 157,464 157,464 45,002 16,653 3,259 23,928 68,624

2010 Financial Liabilities Payables 56,072 56,072 54,863 1,209 - - - Interest Bearing Liabilities 94,301 94,301 - 2,070 6,210 41,402 44,619 Other Financial Liabilities (i) - Accommodation Bonds 4,165 4,165 - 45 136 1,810 2,174 - Other Liabilities 2,016 2,016 216 - 1,800 - - Total Financial Liabilities 156,554 156,554 55,079 3,324 8,146 43,212 46,793

(i) Ageing analysis of financial liabilities excludes statutory financial liabilities (i.e GST payable)

Southern Health Annual Report 2010-2011 89 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 19: Financial Instruments (continued)

(d) Market Risk Southern Health's exposures to market risk are primarily through interest rate risk with only insignificant exposure to foreign currency and other price risks. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraph below.

Currency Risk Southern Health is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount of purchases denominated in foreign currencies and a short timeframe between commitment and settlement.

Interest Rate Risk Exposure to interest rate risk might arise primarily through Southern Health's interest bearing liabilities. The interest bearing liabilities is made up of a finance lease agreement and loan agreement with Treasury Corporation Victoria. As the interest component of these agreements are known and fixed, Southern Health is able to manage this commitment and not be exposed to interest rate risk.

Other Price Risk Southern Health is not subject to any other price risks. Interest Rate Exposure of Financial Assets and Liabilities as at 30 June Weighted Consolidated Interest Rate Exposure Average Carrying Fixed Variable Non- Effective Amount Interest Interest Interest Interest Rate Rate Bearing 2011 Rate (%) $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents 4.56 7,172 - 7,172 - Receivables(i) 57,530 - - 57,530 64,702 - 7,172 57,530 Financial Liabilities Payables 60,565 - - 60,565 Interest Bearing Liabilities 6.66 91,798 91,798 - - Accommodation Bonds 5.00 4,871 4,871 - - Other Liabilities 231 - - 231 157,464 96,669 - 60,795 2010 Financial Assets Cash and Cash Equivalents 3.61 7,366 - 7,366 - Receivables(i) 46,274 - - 46,274 53,640 - 7,366 46,274 Financial Liabilities Payables(i) 56,072 56,072 Interest Bearing Liabilities 7.35 94,301 94,301 - - Accommodation Bonds 4.40 4,165 4,165 - - Other Liabilities 2,016 - - 2,016 156,554 98,466 - 58,088

(i) The carrying amount excludes statutory financial assets (i.e. GST input tax credit)

90 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 19: Financial Instruments (continued)

(d) Market Risk (continued) Sensitivity Disclosure Analysis

Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, Southern Health believes the following movements are 'reasonably possible' over the next 12 months (Base rates are sourced from Treasury Corporation of Victoria)

- A shift of +0.25% and -0.25% in market interest rates (AUD) from year-end rates of 5.00%; - A parallel shift of +1% and -1% in inflation rate from year-end rates of 2%. The following table discloses the impact on the net operating result and equity for each category of financial instrument held by Southern Health at year end as presented to key management personnel, if changes in the relevant risk occur.

Consolidated Interest Rate Risk Other Price Risk

Carrying -0.25% +0.25% -1% +1% Amount Profit Equity Profit Equity Profit Equity Profit Equity 2011 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents(i) 7,172 (18) (18) 18 18 - - - - (18) (18) 18 18 - - - -

-1.26% +1.26% -1% +1% 2010 Financial Assets Cash and Cash Equivalents 7,366 (93) (93) 93 93 - - - - (93) (93) 93 93 - - - -

Southern Health Annual Report 2010-2011 91 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 19: Financial Instruments (continued)

(e) Fair Value

The fair values and net fair values of financial instrument assets and liabilities are determined as follows: • Level 1 - the fair value of financial instrument with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices; • Level 2 - the fair value is determined using inputs other than quoted prices that are observable for the financial asset or liability, either directly or indirectly; and • Level 3 - the fair value is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using unobservable market inputs.

Southern Health considers that the carrying amount of financial instrument assets and liabilities recorded in the financial statements to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full.

The following table shows that the fair values of most of the contractual financial assets and liabilities are the same as the carrying amounts. Comparison between carrying amount and fair value

Consolidated Fair value Consolidated Fair value Carrying Carrying Amount Amount 2011 2011 2010 2010 $'000 $'000 $'000 $'000 Financial Assets Cash and Cash Equivalents 7,172 7,172 7,366 7,366 Receivables (i) 57,530 57,530 46,274 46,274 Total Financial Assets 64,702 64,702 53,640 53,640

Financial Liabilities Payables 60,565 60,565 56,072 56,072 Interest Bearing Borrowings 91,798 91,798 94,301 94,301 Accommodation Bonds 4,871 4,871 4,165 4,165 Other Liabilities 231 231 2,016 2,016 Total Financial Liabilities 157,464 157,464 156,554 156,554

(i) The carrying amount exclude statutory financial assets (i.e. GST input tax credits).

92 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 20: Commitments for Expenditure

Parent Entity Parent Entity Consolidated Consolidated 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Capital expenditure commitments Payable: Land and Buildings 40,189 68,313 40,189 68,313 Plant and Equipment 1,366 5,617 1,366 5,617 Total capital expenditure commitments 41,555 73,930 41,555 73,930 Land and Buildings Not later than one year 40,189 34,543 40,189 34,543 Later than 1 year and not later than 5 years - 33,770 - 33,770 Plant and Equipment - - - Not later than one year 1,366 5,617 1,366 5,617 Total 41,555 73,930 41,555 73,930

Other expenditure commitments Payable: Contracted Services 89,640 36,908 89,640 36,908 Total other expenditure commitments 89,640 36,908 89,640 36,908 Not later than one year 29,022 15,362 29,022 15,362 Later than 1 year and not later than 5 years 48,584 21,546 48,584 21,546 Later than 5 years 12,034 - 12,034 TOTAL 89,640 36,908 89,640 36,908

Operating Leases Cancellable Not later than one year 2,714 3,411 2,714 3,411 Later than 1 year and not later than 5 years 3,803 4,944 3,803 4,944 Later than 5 years 365 668 365 668 Sub Total 6,882 9,023 6,882 9,023

Facility Management (Casey Hospital)* Payable: Not later than one year 2,219 2,088 2,219 2,088 Later than 1 year and not later than 5 years 10,361 9,749 10,361 9,749 Later than 5 years 60,032 62,864 60,032 62,864 TOTAL 72,613 74,701 72,613 74,701

Total Commitments for Expenditure (inclusive of GST) 210,690 194,562 210,690 194,562 less GST recoverable from the Australian Tax Office (19,154) (17,687) (19,154) (17,687) Total Commitments for Expenditure (exclusive of GST) 191,536 176,874 191,536 176,874

All amounts shown in the commitments note are nominal amounts inclusive of GST.

* Fully funded by Department of Health

Southern Health Annual Report 2010-2011 93 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 21a: Responsible Persons Disclosures In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994 , the following disclosures are made regarding responsible persons for the reporting period. Period Responsible Ministers: The Honourable Daniel Andrews, MLA Minister for Health 1/07/2010 - 1/12/2010 The Honourable David Davis, MP, Minister for Health and Ageing 2/12/2010 - 30/6/2011 The Honourable Lisa Neville, MLA, Minister for Mental Health 1/07/2010 - 1/12/2010 The Honourable Mary Wooldridge, MLA, Minister for Mental Health 2/12/2010 - 30/6/2011 Governing Boards Ms Barbara Yeoh 1/07/2010 - 30/06/2011 Ms Debbie Williams 1/07/2010 - 30/06/2011 Mr Peter Hansen 1/07/2010 - 30/06/2011 Dr Ronald Carson 1/07/2010 - 30/06/2011 Ms Faye Burton 1/07/2010 - 30/06/2011 Ms Helen Owens 1/07/2010 - 30/06/2011 Mr David Cowlishaw 1/07/2010 - 30/06/2011 Dr Errol Katz 1/07/2010 - 30/06/2011 Mr David Taylor 1/07/2010 - 30/06/2011

Accountable Officers Ms Shelly Park 1/07/2010 - 30/06/2011 Remuneration of Responsible Persons The number of Responsible Persons are shown in their relevant income bands; Parent Entity Consolidated 2011 2010 2011 2010 Income Band No. No. No. No. $20,000 - $29,999 - 1 - 1 $30,000 - $39,999 8 7 8 7 $60,000 - $69,999 1 1 1 1 $340,000 - $349,999 - 1 - 1 $400,000 - $409,999 1 - 1 - Total Numbers 10 10 10 10 Total remuneration received or due and receivable by Responsible Persons from the reporting entity amounted to ($'000): $726 $685 $726 $685 Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and Cabinet

Other Transactions of Responsible Persons and their Related Parties. - - - -

Transactions with Controlled entity

Kitaya Holdings Pty Ltd operates Jessie McPherson Private Hospital. Southern Health is reimbursed by its controlled entity, Kitaya Holdings Pty Ltd, for the provision of goods and services required to run the private hospital. The fee includes charges for labour, power, food, cleaning and other services. All transactions are conducted on normal commerical terms and conditions.

The aggregate amounts broght to account in respect of the following types of transactions were: 2011 2010 $'000 $'000 Rental income paid to its controlled entity 1,034,279 1,034,382 Rental income received from its controlled entity - 24,485 Contracted Goods & Services provided to its controlled entity 35,454,189 33,829,899

Amounts owing at Balance Date Amount owing to controlled entity 3,910,122 4,599,582

94 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 21b: Executive Officer Disclosures

Executive Officers' Remuneration The numbers of executive officers, other than Ministers and Accountable Officers, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands.

The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long-service leave payments, redundancy payments and retirement benefits.

PARENT ENTITY CONSOLIDATED Total Remuneration Base Remuneration Total Remuneration Base Remuneration 2011 2010 2011 2010 2011 2010 2011 2010 No. No. No. No. No. No. No. No. $20,000 - $29,999 - 1 - 1 - 1 - 1 $120,000 - $129,999 - 1 - 1 - 1 - 1 $170,000 - $179,999 - - 1 - - - 1 - $180,000 – $189,999 1 1 2 1 1 1 2 1 $190,000 - $199,999 1 - - - 1 - - - $200,000 – $209,999 1 1 2 1 1 1 2 1 $210,000 – $219,999 - - 1 1 - - 1 1 $220,000 – $229,999 - 1 - 2 - 1 - 2 $230,000 – $239,999 - 1 1 - - 1 1 - $240,000 – $249,999 3 1 1 - 3 1 1 - $250,000 – $259,999 - - 1 2 - - 1 2 $260,000 – $269,999 1 2 - - 1 2 - - $270,000 – $279,999 1 - - 1 1 - - 1 $280,000 - $289,999 - - 1 - - - 1 - $290,000 – $299,999 1 - - - 1 - - - $300,000 – $309,999 - 1 - - - 1 - - $320,000 – $329,999 1 - - - 1 - - - $350,000 - $359,999 - - 1 - - - 1 $330,000 – $339,999 - 1 - 1 - 1 - 1 $400,000 – $409,999 1 - - - 1 - - - Total 11 11 11 11 11 11 11 11 Total Remuneration ($,000) $ 2,888 $ 2,413 $ 2,534 $ 2,296 $ 2,888 $ 2,413 $ 2,534 $ 2,296

Southern Health Annual Report 2010-2011 95 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements ) ) ) ) ) - - - - 6 40 2010 '000 (802) $ 1,139 (7,343) (4,628) 58,712 (6,366) (69,617) 28,865 185,232 156,554 ( 971,18 ( ( 1,084,951 ( 341,786 (1,091,317) 1,084,951 1,091,317 (

82,913 888,273 ) ) ) - - - - 2 8 51 2011 '000 (656) $ Consolidated 1,231 2,848 (8,921) (4,504) 94,252 (3,520) (75,086) 202,294 157,464 992,00 ( ( 1,175,062 ( 359,758 ) (1,178,582) 1,175,06 1,178,582 (

104,222 887,786 ) ) ) ) 2010 '000 $ 76,804 ( 156,554 ( 123,629 233,358 ( ( 47,350 141,323 128,439 82,913 1,139 58,410 58,712 4,810 128,439 (123,629) (7,343) 40 (4,578) (4,628) (802) ) ) ) Other 51 2011 '000 (656) $ 1,231 4,228 (8,921) (4,724) (4,504) 94,252 83,242 80,957 ( 133,011 157,464 (128,783) 160,071 133,011 128,783 ( ( ( 240,706 )

104,222 55,849 ) ) ) ) 2010 '000 $ 2,118 3,856 2,118 ( ( ( 11,753 ( 3,688 8,189 - - 3,688 - (3,564) - 8,189 (11,753) - - - (292) - - ) ) ) ------2011 '000 (302) Aged care $ 8,491 2,247 3,565 8,491 2,915 ( (2,613) ( ( 2,247 ) (11,104) 11,104 (

- 3,565 ) ) ) ) 2010 '000 $ 2,681 4,601 2,681 ( ( ( 21,804 ( 8,113 17,839 - - 8,113 - (3,965) - 17,839 (21,804) - - - (636) - - ) ) ) ------2011 '000 (661) $ 3,260 7,820 2,039 18,625 ( (1,378) ( ( 3,260 ) (20,003) 18,625 20,003 Primary Health (

- 7,820 ) ) ) ) 2010 '000 $ 3,615 12,099 ( 88,779 12,099 ( ( ( 40,161 88,312 - - 40,161 - - (467) - - 88,312 (88,779) - - - - (3,148) - - ) ) ) ------4 2011 '000 $ (263) 3,588 (3,325) 93,630 Mental Health 13,528 ( (93,893) 93,630 39,31 93,893 ( ( ( 13,528 )

- 39,314 - ) ) ) ) 2010 '000 $ 85,607 31,789 85,607 ( ( ( 814,823 ( 811,974 369,259 - - 369,259 - - (2,849) - 811,974 (814,823) - - - (28,940) - - ) ) ) ------6 6 2011 '000 Acute Health $ 93,917 (4,503) (31,535) 36,038 ( 887,996 ( ( 93,917 ) (892,500) 887,99 372,85 892,500 (

- 372,856 - ) ) ) ) 2010 '000 $ 5,923 5,923 ( ( 32,354 30,527 ( ( (330) 30,197 408,606 - - 408,606 30,197 - - (30,527) - - - (32,024) - - RAC ) ) ) ------2 2011 '000 $ 6,099 1,010 33,310 ( ( 6,099 ) 33,310 (32,300) (34,540) 32,300 33,530 ( ( 408,38

- 408,382 y r s s s p ense ital Grants ment Liabilities p reciation and amortisation p g g ment Assets p ense Note 22: Segment Reporting Total Revenu e Total Asset Total Ex REVENUE Net Result from ordinar activities OTHER INFORMATION Total Liabilitie EXPENSES Net Result for Yea Unallocated Revenues Unallocated Intersegment Revenue Ca Unallocated Assets Unallocated Expense External Segment Revenue Interest Income Se External Segment Expenses Intersegment Expenses Se Unallocated Liabilities Capital Purpose Expense Share of Net Result Associates and Joint Ventures using Equity Method ex Finance Costs Non cash expenses other than depreciation De

96 Financial Statements and Explanatory Notes Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Note 22: Segment Reporting (continued)

The major products/services from which the above segments derive revenue are:

Business Segments Types of services provided

Residential Aged Care Residential Aged Care services. Acute Health Acute Medical Care Unit, Emergency Medicine, General Medicine, Infectious diseases, Medical Oncology, Palliative Care, Respiratory Medicine Mental Health Adolescent Recovery Centre, Adult Inpatient Psychiatry Service, Crisis Assessment, Emergency Psychiatric Services, Mother and Baby Inpatient Unit

Primary Care Acquired Brain Injury, AIDS prevention, Allied Health and Rehabilitation, Birthing support, Community Nursing, Dental, Diabetes education, Hospital in the Home, Housing

Aged Care Aged Care services excluding Residential Aged Care Other Includes clinical support such as Pharmacy, Imaging, Pathology

Geographical Segment Southern Health operates predominantly in the South East of metropolitan Melbourne, Victoria.

Southern Health Annual Report 2010-2011 97 Southern Health Annual Report 2010-2011 Notes To and Forming Part of the Financial Statements

Notes To and Forming Part of the Financial Statements Southern Health Annual Report 2010/2011

Note 23: Events Occurring after the Balance Sheet Date

There have been no significant events after Balance Sheet date.

Note 24: Controlled Entities

Name of entity Country of Equity incorporation Holding

Kitaya Holdings Pty Ltd (trading as Jessie McPherson Private Hospital) Australia 100%

Note 25: Economic Dependency

Southern Health is wholly dependent on the continued financial support of the State Government and in particular, the Department of Health. The Department of Health has provided confirmation that it will continue to provide Southern Health adequate cash flow support to meet its current and future obligations as and when they fall due for a period up to September 2012.

Note 26: Contingent Assets and Contingent Liabilities

There are no contingent assets (2010: $0).

There is a contingent liability in respect of grants received from the Department of Health that may be subject to recall of $259,000 (2010: $1,200,000).

29 - 26

98 Financial Statements and Explanatory Notes Auditor-General’s Report

Southern Health Annual Report 2010-2011 99 Auditor-General’s Report

100 Southern Health – Corporate Office

246 Clayton Road, Clayton t: 03 9594 6666 e: [email protected] www.southernhealth.org.au

Casey Hospital Cardinia Casey Greater Dandenong

62-70 Kangan Drive Community Community Berwick Health Service Health Service t: 03 8768 1200 Berwick Springvale Dandenong 28 Parkhill Drive 55 Buckingham Avenue Berwick Springvale Hospital t: 03 8768 5100 t: 03 8558 9000 135 David Street Dandenong t: 03 9554 1000 Cockatoo Dandenong 7–17 McBride Street 229 Thomas Street Cockatoo Dandenong Monash Medical t: 03 5968 7000 t: 03 8792 2200 Centre Clayton

246 Clayton Road Cranbourne Dandenong Clayton 140-154 Sladen Street 135 David Street t: 03 9594 6666 Cranbourne Dandenong t: 03 5990 6789 t: 03 9554 8270

Monash Medical Doveton Centre Moorabbin 67 Power Road 823-865 Centre Road Doveton East Bentleigh t: 03 9212 5700 t: 03 9928 8111 Pakenham Kingston Centre Cnr Deveney Street and Princes Highway Cnr Kingston and Warrigal Roads Pakenham Cheltenham t: 03 5941 0500 t: 03 9265 1000

Cranbourne Integrated Care Centre

140-154 Sladen Street Cranbourne t: 03 5990 6789

Design: Dynamic Creations Southern Health Annual Report 2010-2011 101 www.southernhealth.org.au

Southern Health Corporate Office

Monash Medical Centre 246 Clayton Road, Clayton VIC 3168 Australia t: 03 9594 6666 e: [email protected]