Annual Health Strategy SummitAnnual Health Strategy Summit

D S h DDr Stephen Dunn,Director of StrategyNHS East of England

Twitter: #NTSummitTwitter: #NTSummit

Competition in theCompetition in the East of England

Dr Stephen DunnDr Stephen DunnDirector of Provider Development and StrategyNHS East of England

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East of England approach

• For the last four years we have been actively promoting competition to drive up quality and performancecompetition to drive up quality and performance

• Established Commercial Advisory Board & independent Competition Panel – only examples nationally

• One of the biggest users of Extended Choice Network• Identified £1.9bn tendering opportunities over three year

period undermined by NHS preferred provider policyperiod – undermined by NHS preferred provider policy• Run the first NHS competition to find a Foundation Trust

to take over failing NHS Trust – Beds and Luton• Run the first open process whereby public and private

sectors have competed to run a DGH - Hinchingbrooke

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We will deliver year on

A better patient experience Improving people’s health

We will ensure fewer

Reducing unfairness in health

Working with our partners, year improvements in patient experience

We will extend access guarantees to more of

people suffer from, or die prematurely from, heart disease, stroke and cancer

We will make our health

we will reduce the differences in life expectancy between the poorest 20% of our communities and theguarantees to more of

our services

We will ensure that GP practices improve

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We will make our health service the safest in England

We will improve the lives f th ith l t

communities and the average in each PCT

We will ensure healthcare is as available to marginalised groups and

access and become more responsive to the needs of all patients

We will ensure that

of those with long term conditions

g g plooked after children as it is to the rest of us

We will cut the number of smokers by 140,000

NHS primary dental services are available locally to all who need them

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We will halt the rise in obesity in children and then seek to reduce it

We are not ideological

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With QIPP we need fresh ideas

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NHS M&A

• Bedfordshire & Luton was a struggling Mental Health Trust with quality and safety issuesTrust with quality and safety issues

• An interim CEO was put in while we ran the first ever competition for another foundation trust to take it over• 20 Expression of Interest and 4 bidders• Robust evaluation with 24 skilled evaluators

D li d i j t i ht th• Delivered in just eight months• As part of their winning bid SEPT set out to invest £6.8m

in services and £13.5m in estates over next three years. y• There has already been a significant transformation in

commissioning and contractual arrangements

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Bringing in the best

SEPT have an outstanding track record:• their CEO being awarded NHS leader of the year 2010• their CEO being awarded NHS leader of the year 2010• one of first mental health trusts in the country to

achieve FT status• rated excellent / excellent in the Annual Health Check • rated eighth best healthcare organisation to work for• the first MH trust accredited at level 3 against risk

management standards by NHS LA • the first MH trust to achieve University Statusthe first MH trust to achieve University Status.

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Dealing with financial failure

• Hinchingbrooke is a financially challenged trust with a c£40m debt on a c£90m turnover.c£40m debt on a c£90m turnover.

• c66% of historic deficit (£25.6m) relates to the combination of the capped PbR transitional funding dj t t d tadjustments, and management errors.

• The deficit which incurred in 2005/06 (£7.8m) was partly as a result of the lower than projected activity to the newas a result of the lower than projected activity to the new Diagnostic Treatment Centre when it opened.

• Following a consultation in 2007, options were id d f i th hi t i d btconsidered for repaying the historic debt

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Objectives

• To secure a sustainable future for Hinchingbrooke’s services and staff and to deal with the hospital’sservices and staff and to deal with the hospital s historical financial issues, while maintaining quality for patients and securing value for money for tax payers

• To find a new partner to manage Hinchingbrooke hospital and provide the full range of modern acute hospital services under an innovative operatinghospital services, under an innovative operating franchise agreement

• To run an open and transparent competitive tenderTo run an open and transparent competitive tender process to find the best partner for the hospital from within the NHS, or from the independent or third sectors,

bi ti f th10

or a combination of them

Background

• A 2007 public consultation, run by NHS Cambridgeshire, on services to be provided at Hinchingbrooke, recommended that broadly the same range of services continue at the hospital site

• In May 2008 OBC recommending an operating franchise• In May 2008 OBC recommending an operating franchise for Hinchingbrooke was approved by SHA Board

• In July 2009, the DH confirmed its support to work with y , ppthe SHA to develop the operating franchise model

• The procurement of an operating franchise began in O t b 2009 f ll i titi di lOctober 2009 following a competitive dialogue process

• The competition was open to the NHS, independent and voluntary sectors

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voluntary sectors

The operating franchise

• The Trust will enter into an operating franchise agreement with the franchisee for a specified periodagreement with the franchisee for a specified period (between seven and ten years)

• Under the agreement, the franchisee will commit to gdelivering broadly the same range of services currently provided at the hospital (incl. A&E and maternity) but ultimately respond to commissioners’ evolving needsultimately respond to commissioners evolving needs

• The franchisee will pay the Trust a fee which will be used to contribute to repaying the historic deficit p y g

• Staff and assets remain within the NHS. The public will continue to receive NHS services

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What happens if franchisee fails?

• Commissioners will buy services from the franchisee and monitor performance and service qualitymonitor performance and service quality

• CQC and Monitor will ensure that national standards and quality are maintained through inspection and regulation

• In the event of financial failure, the franchisee has guaranteed to cover Trust debts up to £5m and pay a t i ti t f £2termination payment of £2m

• In the event of termination, staff and assets will remain with the Trust Board which will use the terminationwith the Trust Board, which will use the termination payment to secure essential service continuity

• If Trust Board fails Monitor will be the ultimate backstop

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If Trust Board fails, Monitor will be the ultimate backstop

Major engagement

• 17 staff briefings held at Hinchingbrooke• 10 public newsletters• 10 public newsletters• 6 independently chaired stakeholder panel meetings• 11 press releases issuedp• 9 newspaper adverts placed• 49 patients and carers visited Q&A stalls at the hospital• 56 evaluators scrutinised the bids for local people• 11,118 visits to Hinchingbrooke Next Steps web pages

4 i d d tl h i d bli ti• 4 independently chaired public meetings• 4 presentations given to patients’ and parish groups • 7 council scrutiny committee meetings

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• 7 council scrutiny committee meetings • 31 interviews on TV and radio

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A rigorous process

• Bid involved two stages of dialogue. Dialogue 1 confirmed Bidders’ capability and capacity. Dialogue 2 demonstrated p y p y gthat Bidders’ cost saving initiatives were deliverable, clinically safe and aligned with workforce and IM&T strategies

• 56 evaluators drawn from NHS Cambridgeshire• 56 evaluators, drawn from NHS Cambridgeshire, Hinchingbrooke HCT, NHS East of England, legal & financial advisers and stakeholders, involved in assessing submissions

• Bidders interviewed by project board on 7th September, the stakeholder panel sub group on the 8th, and GPs on the 9th

• Circle and Serco Health progressed to ITT on 27 September• Circle and Serco Health progressed to ITT on 27 September. ITT submissions received from both bidders on 20 October.

• ITPD2 and ITT processes internally audited

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QIPP and GP consortia savings

Nominal £m ITT (7 years) ITT (10 years)

Breakeven £132.5m £227.6m

T C £97 6 £145 6Trust Comparator £97.6m £145.6m

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Outcome

• Process produced two credible potential partners, both of which secure the QIPP ask under contractof which secure the QIPP ask under contract

• Circle is planning to repay all of the debt over 10 years• Circle aims to do this by empowering clinicians to

improve productivity and reduce length of stay • Following interviews the Project Board, Stakeholder

Panel and GPs all recommended Circle and thePanel and GPs all recommended Circle and the Hinchingbrooke MD says Circle are the clinician’s choice

• At all stages of the procurement, bidders have had to satisfy financial and commercial criteria regarding their financial position

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Circle

• Circle is a part employee owned social enterprise that forms the largest partnership of clinicians in Europe -forms the largest partnership of clinicians in Europe over 2000

• Circle is co-owned and managed by the doctors, nurses d ll t ff h k i Ci l ’ h it l t t tand all staff who work in Circle’s hospitals, treatment

centres and clinics• Circle has significant experience of transforming NHSCircle has significant experience of transforming NHS

services from their Nottingham and Burton day surgery hospitals, where they treat around 130,000 NHS patients per annumper annum.

• Circle has delivered 20% improvements in productivity in its first years of operation

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Reform implications

• HNS and BLPT reflects many of the White Paper’s key prioritiespriorities• freeing up the provision of healthcare - any willing

provider, meeting NHS quality and price requirements • greater choice, innovation and improvement• no hidden bail-outs

• White Paper signals the end of NHS trust model • following White Paper clarification sought and• following White Paper, clarification sought and

exemption for Hinchingbrooke granted• Health bill includes provision for future franchises

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