Brennan Report - Department of Health and Children

Report of the Commission on Financial Management and Control Systems in the Health Service7.7 PERFORMANCE MANAGEMENTWe believe that an effective performance management system is essential if an organisation ascomplex as the health service is to be managed efficiently. In this report, we have identifiedareas in which the management of the health services needs to be improved andaccountability strengthened. To achieve this, effective performance appraisal systems areessential. It is important that good performance is rewarded and poor or underperformance isconfronted – a recent Finnish study concluded that acceptance of financial reporting in thehealthcare field may be accelerated by aligning the incentives of medical practitioners to theeconomic performance of the entity under their control 10 . An important and basic element ofperformance management is that an effective management information system is put in placeand that reporting deadlines are met.We strongly support the early implementation of the performance management scheme agreedin the recent national partnership negotiations as a means of achieving this goal. The text states:"A model of performance management, integrated with service planning and human resource planning,is currently being developed for the health service. This process will be expedited and the rollout of aperformance management scheme accelerated to successfully align effective utilisation of humanresources with strategic and operational performance priorities. The parties will work energetically todevelop and agree an appropriate national uniform system of performance management for the healthservice" 11We also believe that there is a need to develop the management skills of those charged withrunning the health service.Recommendation on Management Development in the Health ServiceR7.13 An accelerated management development programme should be put in place for senior managers in the healthservice.7.8 SUMMARYIn this Chapter, we have noted the difficulties which exist in relation to management andcosting of the pay budget, aspects of which were also referred to in Chapter 2. We have maderecommendations to improve the information flows consistent with the wider reportingframework recommended in Chapter 9. This is necessary to provide a more accurate basis formanpower policy considerations going forward – as the pay bill accounts for almost 70% ofcurrent expenditure in the health service, manpower management is an essential component ofthe overall management framework discussed throughout the report.We have made recommendations to improve the skills mix and management performanceacross the health service. This will help to maximise value for money and can also play a rolein changing the culture so that good financial management is not seen solely as a financefunction, in line with our core principles from Chapter 2.10Kurunmaki, L., Making an Accounting Entity:The Case of the Hospital in Finnish Health Care Reforms,The European AccountingReview (1999) 8:2 pp219-237.11Sustaining Progress; Social Partnership Agreement 2003-2005, page 102.98