| Background Formal planning for a replacement facility for the Royal Children's Hospital (RCH) commenced in 2003. Defining service needs and the robust analysis of options are critical factors in investment planning. This process also helps government to determine capital funding priorities for the delivery of services. Key findings • The service planning framework for the new RCH was comprehensive. • The government was given appropriate information and analysis at major decision points in the investment planning process. • The lack of a defined 'network response' for paediatric care in Victoria, and a lack of clarity about RCH's role in that network-together with delays in developing models of care for the new RCH-added to the complexity of the service planning process for the new hospital. However, this did not invalidate the planning outputs. • Models of care were sufficiently developed by the project brief stage and continue to evolve. • There is limited understanding within DHS of the development, operation or internal logic of the forecasting model used in the service planning process. • There is limited evidence that clinicians were involved in adjustments to future service demand projections to address known limitations in the forecasting model from which these projections were derived. • The data used in the service planning studies were based on a declining birth rate forecast made by Australian Bureau of Statistics (ABS), which was the most appropriate and up-to-date data source available at the time. However, the assumptions underlying population growth forecasts have changed, and are likely to change over time. More recent ABS data indicates that the actual birth rate has increased, not decreased, in Victoria over the period 2001 to 2005. • The new RCH will have 50 more beds than the existing RCH and DHS has demonstrated that this extra capacity-together with the inherent flexibility of the design of the new RCH-should be able to handle currently projected increases in service demand. |
| • A 'network response' to paediatric services in Victoria has been identified as a key strategy to meet observed increases in service demand since 2002 but the detail of its implementation is still under consideration by DHS. Key recommendations It is recommended that: • DHS should develop and define models of care-beyond high level statements- at the service planning and business case stages for any future major hospital investments. This will make sure that investment decision-making processes are better informed by the service delivery strategy expected to be adopted. (Recommendation 4.1) • DHS develop a more comprehensive understanding of its current service forecasting model-which is a statewide and not hospital specific forecasting tool. This will help DHS to better understand the model's limitations and impacts when forecasting demand for future service delivery. (Recommendation 4.2) • DHS expedite the development of a strategic 'network response' framework for the future development of paediatric health services in Victoria. (Recommendation 4.3) • RCH consider the implications of a strategic 'network response' framework for the future development of paediatric health services in Victoria when finalising its current service plan review. (Recommendation 4.4) • DTF amend its guidance to require that agencies implementing Partnerships Victoria projects: • conduct and document quality assurance reviews of PSC estimates and related financial models-irrespective of whether they are internally or externally prepared-to reduce risks of error or inaccuracy, and to ensure that the state has sufficient understanding of these highly complex financial models. • maintain adequate documented evidence to support all costings and PSC calculations contained in a business case. (Recommendation 4.5) |