NHS Fife chairman Allan Burns says the health board is recovering from what has been a tough year.
Mr Burns said work was under way to address shortcomings in accident and emergency waiting times, treatment time targets and hospital discharges.
During his address to the board’s annual review in Stratheden Hospital, Cupar, he said there had already been “considerable improvement” in NHS Fife’s performance but there were challenges ahead.
He said: “Our challenge remains twofold. Firstly, to sustain that performance throughout the year. Secondly, to remain under a tight fiscal environment.
“Delayed discharges continue to provide a challenge for NHS Fife and the council, and that is a challenge we have not mastered.
“The commitment of NHS Fife and Fife Council towards integration of care should go a long way to mastering this mutual challenge.”
While 96.6% of cancer patients had been treated within 31 days of diagnosis, against a national target of 95%, NHS Fife had missed the target for 62 days from referral to treatment, with a figure of 90.3% against a target of 95%.
Mr Burns said the board should set its own performance targets rather than be pulled up by an external agency.
“That work goes on with our commitment to quality of care,” he added.
“Key to our performance is the quality of our staff at every level of the service. If we don’t have quality at all these levels, it is difficult to meet the challenges we face with a growing ageing population.
“We are very dedicated to the health of our community, but the community itself must be equally dedicated to supporting its own health.”
With NHS Fife’s finances under pressure from consultant vacancies and use of agency nurses, chief executive Paul Hawkins said more in-house staff would be recruited to drive down costs.
“We’re starting to push down on agency and push down on bank, and recruit permanently,” said Mr Hawkins.
Work at Stratheden Hospital was highlighted during the review.
From next spring, the hospital will host a new purpose-built intensive psychiatric care unit.
A spokesman for NHS Fife said: “This year’s review took the opportunity to highlight the importance of mental health services, the direction these services are headed and the life-changing impact they can have on people’s lives.”