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Adelaide health services 'most broken I’ve ever seen': KordaMentha

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UPDATED | KordaMentha director Mark Mentha says he has never seen an organisation so broken as the Central Adelaide Local Health Network in his 40 years working in professional services.

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Addressing parliament’s budget and finance committee this morning, Mentha told the committee: “This would be the most broken organisation I’ve ever witnessed, both financially (and) clinically. This is a failing organisation.”

CALHN runs the Royal Adelaide Hospital and the Queen Elizabeth Hospital, among a variety of other health services in central Adelaide on behalf of SA Health.

Referring to CALHN’s budget blowout of about $275 million a year – a figure repeatedly compared during this morning’s hearing to a complete rebuild of the Queen Elizabeth Hospital every year – Mentha said there had been “a shameful waste of taxpayers money”.

“Imagine what that money could do it we could put that into community care,” he said.

Mentha, whose corporate advisory firm was brought in to recover the parlous finances of the network that runs the Royal Adelaide Hospital and Queen Elizabeth Hospital late last year, also said KordaMenta had uncovered issues of “integrity” at CALHN.

Mentha’s firm has overseen some very broken organisations: KordaMentha was brought in as an administrator after the multi-billion-dollar collapse of Arrium, which had run the Whyalla steelworks.

Under questioning from SA Best MLC Frank Pangallo, Mentha said: “We have identified breaches of what would be policy within the CALHN network, and they (the alleged breaches) have been referred to the appropriate authorities”.

Asked whether those breaches involved “misappropriation”, Mentha said issues had been “identified around procurement which raise questions as to the integrity of process”.

He declined to elaborate on the behaviour to which he was referring.

CALHN CEO Lesley Dwyer said the health network was the first organisation that she had been involved in managing in which she had had to set up a whistleblower hotline.

She said the hotline had received about 40 complaints since it was set up late last year, most of which referred to bullying and harassment and some of which referred to staff believing they had been unfairly overlooked for promotion.

CALHN executive board deputy chair Mick Reid told the committee the organisation had “enabled” bullying and harassment at every level, and that the process of recovering its financial bearings had presented an opportunity to fix cultural issues.

Reid said CALHN had suffered from “poor leadership” – including going through 10 CEOs in 10 years – and a “poor culture”.

Dwyer said January this year had been the busiest month on record for the Royal Adelaide Hospital and the Queen Elizabeth Hospital, and that she would host a summit on Thursday this week in an attempt to reduce the problem of “ramping” – where patients are kept in ambulances because beds are not available in hospital.

“Whilst this is a $300 million overrun problem we’re addressing, this is also, at the core, an issue of poor leadership – 10 leaders in 10 years – (and) poor adherence to values, enabling those bullying and harassment processes at all levels of the organisation,” said Reid.

“We are now trying to identify and address bullying and harassment processes early.

“One of the fortunate things of a very unfortunate situation such as a significant budget deficit is you can use (the process to) bring the staff along around the values of the organisation.”

Dwyer said there were “pockets of sheer brilliance” within CALHN, but that on the other hand: “For a number of years, poor behaviour hasn’t been called out.”

“We are all part of the problem – we are all part of the solution.”

“No guarantee” for Hampstead as Labor questions bed closures

Dwyer has been under pressure over a decision to keep 25 rehabilitation beds at Hampstead Rehabilitation Centre closed since January, in what has been described – including by Dwyer – as a period of unprecedented demand in Adelaide’s major hospitals.

Dwyer conceded it “may be helpful” to open those beds in order to alleviate pressure on the system, but that it was a complicated decision.

“Ramping is not okay,” she said, adding that she said all clinical decisions were made by clinicians and KordaMentha had no involvement in the allocation of medical beds.

Asked by the committee chairman, Labor’s Kyam Maher, whether Hampstead Rehabilitation Centre will stay open, Dwyer said that she could provide no such guarantee.

“I don’t think I am in a position to guarantee (that),” she said.

However, she stressed: “The work that is done at Hampstead will continue”.

Moving rehabilitation services out of Hampstead in order to attach them to hospitals – meaning rehab is closer to where inpatients receive treatment – was among the key measures of the Weatherill Government’s hospital reform program Transforming Health.

Earlier in the hearing, Maher interrogated KordaMentha partner Chris Martin over the origins of his team and its cost to the taxpayer.

Martin said his staff flew in and out of Adelaide each week – economy class unless they chose to use Frequent Flyer points to upgrade – and stayed in serviced apartments while in South Australia.

But Mentha clarified that the firm absorbed much of the cost of transporting staff who are based interstate to and from Adelaide.

KordaMentha estimates it will earn about $43 million if it is retained following its initial 12 month contract, which will cost taxpayers $18.9 million.

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