Requires each state hospital to develop a robust lean performance management plan to be overseen by the superintendent of the state hospital in collaboration with the department of social and health services.

Requires the state hospital performance management plans to conform to the Baldrige excellence framework most applicable to state hospital operations.

Requires the state auditor to conduct a performance audit of the state hospitals' management systems and metrics one year after their implementation.

Requires the department of social and health services to study the application of the Baldrige quality management framework or an equivalent performance management system to its own activities and report its findings to the governor and the relevant legislative policy and fiscal committees.

Establishes and permanently locates the child study and treatment center at Fort Steilacoom, Pierce county.