Delivering the BEH Clinical Strategy
Outline Business Case for the expansion of acute and maternity services at North Middlesex University Hospital Edmonton, N18 Draft 17 March 2012
Contents Chapter
Page
0
Forward to the OBC
3
1
Executive Summary
5
2
Background to the Trust
15
3
Strategic Case: The BEH Clinical Strategy
21
4
Strategic Case: North Middlesex
41
5
Economic Case
57
6
The Case for Acceleration and Funding of Early Works
91
7
Commercial Case
101
8
Financial Case
112
9
Management Case
127
Appendices: 4.1 4.2 4.3 4.4 5.1 5.2 5.3 5.4 5.5A 5.5B 5.6 5.7 5.8 6.1 6.2 6.3 7.1 7.2 7.3 8.1 8.2 8.3 9.1 9.2 9.3 9.4 9.5 9.6
A&E Healthcare Planning Report Maternity Model of Care Estate Strategy Schedule of Accommodation OB Cost Forms Optimism Bias Life Cycle costs Transitional Costs GEM (Generic Economic Model) GEM Reconciliation Consumerism Development Control Plan Drawings - 1:100 layouts Early/Enabling Works Capital Costs Early/Enabling Works Programmes NHS London Clinical Review Treasury Qualitative Assessment BREEAM Report AEDET Report Balance Sheets – PDC basis Loan Affordability Calculations Independent Valuer’s report Programmes Letters of Support Risk Management Plan Gateway Risk Potential Assessment Benefits Realisation Plan Glossary
Outline Business Case for Implementing the BEH Clinical Strategy 2
0.
Forward to the Outline Business Case
0.1
After some years of development, consultation and reviews, the Secretary of State for Health formally announced support for the BEH Clinical Strategy on 12th September 2011. He stated that the implementation of the agreed Strategy should proceed with the next stage of the process, that being the development of an Outline Business Case (OBC) for each of the two main acute providers impacted by the changes, namely Barnet and Chase Farm Hospitals NHS Trust (BCF) and North Middlesex University Hospital NHS Trust (NMUH).
0.2
The 2007 commissioner led consultation on improvements to healthcare services across Barnet, Enfield and Haringey described the need for change, which was supported by reports from both the Kings Fund and Professor Sir George Alberti; they have stated that ‘no change is not an option’.
0.3
The Strategy is committed to providing: •
safer care through more consultants available 24/7;
•
care closer to home through more services based in the community; and
•
better care through earlier help and support for patients with long term health conditions.
0.4
Implementing the Clinical Strategy will improve the quality of healthcare services available to local residents across both primary and secondary care and will see investment across both the acute hospitals involved and in primary care services across Barnet, Enfield and Haringey.
0.5
Primary care services across the three boroughs have already shown improvement in recent years, with an increase in services and diagnostic tests available in the community and GP surgeries. Community Hospitals, such as Edgware and Finchley Memorial, and new primary and community healthcare centres are providing care closer to home. The North Central London Primary Care Strategy will continue to develop and strengthen primary care services across these three boroughs, which will be essential to supporting the implementation of the strategy. For secondary care investment is required at both B&CF and NMUH.
0.6
The investment at B&CF will include the expansion of A&E, maternity and paediatric services at Barnet Hospital (“BH”) and the development an Urgent Care Centre and an expanded elective surgery unit at Chase Farm Hospital (“CFH”). Once the strategy has been implemented CFH will no longer take major emergencies, which reduces the risk of surgery being cancelled and will help reduce the risk of hospital acquired infections for patients using CFH. Patients will also be able to continue using CFH for day surgery, outpatient appointments, diagnostics and rehabilitation.
0.7
NMUH will also receive investment to expand its emergency acute and maternity services. Alongside the recent PFI development this will provide space for more emergency and maternity services at NMUH and ensure that there is sufficient care available for all.
0.8
Whilst this business case has been developed in collaboration with B&CF in order to ensure a cohesive plan for implementation of the strategy, with activity calculations having been agreed between the two Trusts, the purpose of this OBC document is to describe the implications for the NMUH only and the wider health economy in undertaking the implementation of the BEH Clinical Strategy’ It highlights to the NMUH Trust Board, the North Central London (NCL) Cluster Board and the capital review structures at NHS London the case for the changes proposed within the BEH Clinical Strategy.
0.9
The case is for a scheme with a capital cost of £79m to deliver a complete solution by January 2015 following the normal business case and procurement procedures. Following the Secretary of State’s announcement on 12th September 2011, there was a recognition by all stakeholders in the BEH Strategy that any further delay to implementing change may be detrimental to patients and the services they access; the Trust has therefore developed an accelerated programme, which is included in Chapter 6 (the “case within a case”) of this OBC.
0.10
The preferred option base case will not deliver the full implementation of the BEH Strategy until January 2015, therefore this case sets out the rationale and justification, in terms of continuing clinical risks associated with three A&E departments and three maternity departments, for developing an accelerated programme to deliver the project fourteen months
earlier, i.e. by November 2013. The approach is supported by the independent Clinical Review recently undertaken by NHS London. 0.11
The accelerated programme involves both a faster form of construction and the provision of significant funding in advance of approval of the OBC by HM Treasury.
0.12
NHS London are being asked to approve this OBC and arrange for the early release of £12.0 million of PDC funding to continue with the design and enabling works that are necessary for the achievement of the accelerated programme and to confirm that the Trust should proceed to submission of a Full Business Case, incorporating fully developed plans, and an agreed commercial arrangement with contractors to deliver the buildings to the defined programme and costs.
Clare Panniker Chief Executive March 2012
Outline Business Case for Implementing the BEH Clinical Strategy 4
1.
Executive Summary
1.1
Introduction
1.1.1
This Outline Business Case (OBC) seeks to invest £79m of capital funding in the expansion of emergency acute and maternity services at North Middlesex Hospital (NMUH) to support the implementation of the Barnet, Enfield and Haringey (BEH) Clinical Strategy.
1.1.2
This Executive Summary provides an outline of the contents of the overall document, describing each section in order.
1.2
Background to the Trust
1.2.1
Chapter 2 describes the recent history of the development of the business case for the BEH Strategy, some background of the Trust, including the recent PFI-funded redevelopment and related works.
1.2.2
The Trust undertook a variation to its PFI contract in early 2009, whilst construction was in progress, in order to create the necessary additional capacity in the new A&E and Emergency Care Centre for the 22,000 expected additional attendees. The works included a new resus bay, consulting rooms, imaging rooms and a theatre suite, together with clinical support accommodation. This business case therefore deals only with the additional acute beds required, together with the maternity facilities.
1.3
Strategic Case: BEH Clinical Strategy
1.3.1
Chapter 3 of this OBC describes the background to the BEH Clinical Strategy in detail, how the original case for change relates to a range of local and national policies and is proposed to be implemented across the secondary care sector in Barnet, Enfield and Haringey. It also describes the history of how the strategy has been reviewed and validated from the original proposal in 2006 to the Secretary of State’s approval in September 2011.
1.3.2
The Pre Consultation Business Case (“PCBC”) for the BEH Clinical Strategy evaluated two main options; this OBC is based on the selected option from this case, the key elements of this option which are set out below:
1.3.3
•
planned and emergency services will be separated, with Barnet Hospital (BH) and NMUH providing major emergency services, urgent care centres for non-life threatening conditions and day surgery;
•
planned care expanded on Chase Farm Hospital (CFH) site to incorporate planned inpatient surgery moving from BH and some from NMUH;
•
day-time only urgent care centre based on CFH site, senior clinician-led;
•
Consultant-led paediatrics and elderly assessment units to be created at CFH;
•
Inpatient services for women and children and obstetrician-led maternity services based at BH and NMUH;
•
Intermediate/rehab care beds at CFH, to be used for admissions avoidance and to allow some patients to move closer to home once they are past their acute inpatient phase;
•
Midwife-led birthing unit (MLU) at CFH, to be considered in a later phase, following review;
•
Strengthening of community-based services, including urgent care centres, extending GPs practise hours, expanding intermediate care and creating new primary care centres for diagnostic and outpatients.
The economic justification of the options for consultation was based on a comparison of the impact on the health economy compared with a Do Minimum option, which comprised a large
Outline Business Case for Implementing the BEH Clinical Strategy 5
capital investment on the CFH site and no reduction in running costs. It therefore showed a net present value of -£295m, compared with +£52m for option 1, demonstrating a very clear value for money benefit of some £350m. 1.3.4
The assumptions in the two Trusts’ current OBCs were compared with those in the PCBC to determine whether there had been any material change to the economic justification. This review concluded that; •
there had been no material change in the level of activity transferred from CFH;
•
The combined capital expenditure had increased by £8m but this was immaterial in the context of the NPV difference of £350m;
•
The combined BEH income is currently £420m, representing an increase of just 5% over 2007/08, ie not a material change.
1.3.5
The Trust has therefore concluded that the rejection of the Do Minimum option in the PCBC remains valid and a further do nothing/do minimum option is not required in this OBC.
1.3.6
The Strategic Case goes on to detail the assumptions and outputs of the activity modelling that has been carried out and explain the changes in activity between both BH and CFH and the activity flows to NMUH.
1.3.7
The chapter was written jointly with BCF to ensure consistency across the two Trusts.
1.4
Strategic Case: North Middlesex University Hospital NHS Trust
1.4.1
Chapter 4 of the OBC describes the Trust’s approach, the objectives of the local health economy and the Trust’s plans, the NCL Commissioning Strategy and the QIPP programme.
1.4.2
The programme at NMUH involves both refurbishment of parts of the facilities in the Tower and Podium to facilitate the additional acute beds and a replacement maternity ward and a new building devoted to maternity services, with new theatres, consultant-led and midwife-led delivery suites, ante-natal care and an enlarged SCBU/NICU in accommodation that conforms to all modern standards of healthcare.
1.4.3
The need to reconfigure and modernise maternity services is driven by a demographic increase in demand as well as the BEH Strategy, improved standards of care required for all maternity units, such as the need to achieve a 1:30 midwife:births ratio and the need to implement a new model of care, which has been discussed with, and approved by, the NCL Maternity network
1.4.4
The case describes the steps the Trust is taking to improve emergency care and efficiency through the introduction of an ambulatory care unit and a real-time bed management system.
1.4.5
The modelling that underpins the BEH Clinical Strategy, undertaken by EC Harris in 2006, looked at how activity would disperse from CFH once the BEH Clinical Strategy was implemented. This modelling was refreshed in 2008 and again in early 2011 to give an accurate picture of how activity would disperse across the acute providers. The implementation of the Strategy will lead to an increase of around 22,000 A&E attendances at North Middlesex and just over 12,600 nonelective inpatients spells. This figure comprises around 7,700 non-elective adult spells, 2,000 non-elective children spells and 2,900 obstetric spells, including 1,850 births.
1.4.6
The additional activity described in the section leads to an increase in the level of inpatient beds as can be seen in the following table:
Outline Business Case for Implementing the BEH Clinical Strategy 6
Table 1.1 - NMUH Bed Numbers Post Implementation of the BEH Strategy NMUH Now
Total General & Acute Adult Beds ITU/HDU beds Maternity Children Total Beds
272 8 44 43 367
EC Harris Modelling 1
141 0 20 4 11 172
Planned Increase
Future Planned
117 4 3 17 21 159
389 12 61 64 526
2
1 Based on current LoS 2 Not modelled - Trust estimate 3 Based on Trust model of care 4 Excluding additional ten SCBU cots
1.4.7
This shows the impact of the additional emergency activity at NMUH as an increase from 367 beds to 526, an increase of 159 beds, of which 121 are adult acute beds and 38 maternity and children.
1.5
Economic Case
1.5.1
Chapter 5 presents the economic case: this describes the process undertaken to arrive at the most appropriate way to provide the additional capacity within the Trust’s estate in order to deliver the additional activity required by the strategy. The method followed is set out in the Department of Heath (DH) documents forming the Capital Investment Manual, supplemented by Treasury guidance, basing the case upon a detailed options appraisal.
1.5.2
In short, the Trust was required to determine its objectives, and evaluate how a series of options performed in addressing these, first by a qualitative assessment of the short-listed options undertaken at a workshop, then by a quantitative assessment, and by a risk assessment. These together provide the numerical data to create a cost:benefit analysis.
1.5.3
The Critical Success factors, by which the long-listed options were judged, are: •
Strategic fit and business needs
•
Potential Value for Money.
•
Potential achievability
•
Potential affordability
Objectives 1.5.4
The primary aim of the project is to provide safe and high quality clinical and other facilities necessary to support the implementation of the BEH Clinical Strategy. More detailed specific project objectives are to: •
Provide the facilities in the shortest possible time to minimise the risk identified in the BEH Strategy of the services becoming unsustainable, whilst minimising disruption to the clinical services;
•
Ensure the development is consistent with the Trust’s business and clinical strategies and supports the business model being produced for the Foundation Trust application enabling the Trust to achieve FT status by 31st March 2014;
•
Ensure the development is consistent with the wider health economy plans to implement the BEH Strategy by increasing emergency bed capacity by circa 120 beds, expanding overall maternity capacity by 17 beds and neonatal capacity by ten cots.
•
Ensure the quality and space of the clinical facilities meets modern healthcare standards as per the guidelines set in the relevant Health Building Notes apart from where otherwise derogated;
Outline Business Case for Implementing the BEH Clinical Strategy 7
•
Ensure that the design is sympathetic to, and has the potential to improve, patient pathways and working practices by providing facilities that benefit from appropriate adjacencies;
•
Ensure that the development is economically viable, being affordable to the local health economy in capital and revenue terms and gives best value for money for the Trust;
•
Ensure the development is sustainable by providing an environmentally sound infrastructure that achieves BREEAM Excellent for New Build elements and Very Good for refurbished elements in accordance with the Trust’s SDMP (“Sustainable Development Management Plan”);
•
Reduce associated backlog maintenance in terms of cost per square metre from the highest 33% of Trusts to the middle 34% of Trusts and associated estate-based risks.
Non-Financial Appraisal 1.5.5
1.5.6
The headline criteria (which were supported by detailed evaluation criteria) used to evaluate the short-listed options were as follows: 1.
Provide the space and facilities required to ensure the BEH clinical strategy is deliverable.
2.
Can be achieved in a timely manner whilst continuing to ensure operational and patient safety and achieving the earliest opportunity to reduce the existing clinical risk identified in the BEH strategy.
3.
Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices. In detail this is to provide facilities which support:
4.
Supports Trust staff policies and objectives
5.
Meets the needs of the local population, maintaining access, under all definitions:
6.
Supports the Trust’s Strategic Objectives:
7.
Quality of Designs, Environment & Consumerism
8.
Effective Use of the Estate
9.
Flexibility / Future Planning
Four options were short-listed •
Option 2 comprises a six storey (including a plant floor) new build to house consultant-led and midwife-led delivery suites, together with three 30-bed medical wards. The other 29 beds would be located in the Pymmes Building;
•
Option 4 comprises a four-storey new build for maternity inpatients, which has a similar template to Option 2 but contains a new 30 bed maternity ward to replace T4, with the acute beds being accommodated in the existing Tower Block in four wards of 22 beds – this would require a high level of refurbishment to ensure the additional beds met modern standards of clinical accommodation and consumerism;
•
Option 8 involves a new building of five storeys that would house all of the women & children inpatient facilities and, as with Option 4, the acute beds would be located in the Tower Block, entailing a high level of refurbishment. The children’s ward on T2 would be located in the new building along with the required additional beds;
•
Option 18 provides a new three-storey building located on the east side of the Tower/Podium and will accommodate a midwife-led birthing unit collocated with an
Outline Business Case for Implementing the BEH Clinical Strategy 8
adjoining induction suite, all fronted by a new maternity main entrance and prominent triage unit. The ground floor level provides consultant led delivery rooms, obstetric theatres, recovery and the Neonatal Unit. The ground floor of the new building is directly linked to the ground floor of the podium via a flying corridor offering good access to the new postnatal maternity ward located in the space made vacant through the relocation of the existing labour ward. The paediatric wards are on levels T1 and T2 of the Tower block, whilst the upper floors, as with Options 4 and 8, will accommodate 88 acute beds, 22 beds per floor. The balance of the acute beds would be provided in the Pymmes building with all of the necessary decants described in Option 2. 1.5.7
During the course of the Appraisal Workshop it was agreed that two further options be introduced in order to make them better comparable – options 2M and 18M were the same as Options 2 and 18 but with the additional re-provision of the T4 maternity ward, which was a significant feature of the other two options – thus six options were scored altogether.
1.5.8
The weighted scores are summarised as follows: Table 1.2: Weighted Scores Option Option Option Option Option 2 2M 4 8 18 Totals Rankings
1.5.9
Option 18M
698.9
754.4
711.6
765.1
737.1
802.0
6
3
5
2
4
1
The outcome of the analysis showed that Option 18M, is the preferred option. This option has therefore been designed to a greater level of detail in collaboration with clinical staff to deliver the following changes to the estate as outlines below. •
Reconfiguration and expansion of Women’s & Children’s services to provide additional paediatric and maternity beds, triage and related assessment facilities, together with a new Midwife-led maternity Unit in recognition of the Model of Maternity Care developed by the Trust (See Appendix 4.2) ;
•
Increased general and acute bed capacity to cater for the expected increase in nonelective inpatients;
•
Provision of sufficient additional administration space to cater for the displacement of such space by the new clinical facilities;
•
An improvement of both clinical and functional adjacencies to allow the new service to be delivered efficiently;
•
Additional car parking for patients, visitors and staff;
•
Ensuring adequate expansion space is retained for ‘future proofing’
Economic Appraisal 1.5.10 The breakdown of capital costs of the six options is set out below: Table 1.3: Short-Listed Options – Capital Costs
Total cost for GEM Planning Contingency TOTAL for approval Optimism Bias Inflation adjustments
Option 2 53,544 4,869 58,413 5,467 4,850
Option 2M 59,352 5,065 64,417 6,088 5,388
Outline Business Case for Implementing the BEH Clinical Strategy 9
Option 4 54,340 4,828 59,168 5,897 4,934
Option 8 57,375 5,027 62,402 6,250 5,243
Option 18 52,927 4,672 57,599 6,232 2,278
Option 18M 24,294 4,685 58,979 6,390 2,793
Total cost to outturn VAT Total including VAT
68,730 11,042 79,772
75,893 12,145 88,038
69,999 10,901 80,900
73,895 11,650 85,545
66,109 10,306 76,415
68,162 10,610 78,772
1.5.11 The capital costs, life-cycle costs, property-related costs, clinical and non-clinical costs were assessed and modelled and incorporated in the Generic Economic Model (“GEM”) which calculates the net present cost and equivalent annual cost for each option. 1.5.12 Risks were separately assessed and added to the economic model. A cost benefit exercise was carried out whereby the economic costs were divided by the qualitative scores to obtain a net present cost per point. The option with the lowest cost per point was deemed to deliver the best value for money. The resulting summary of value for money table shows: Table 1.4: Value for money summary
£ millions Net Present Cost Adjustment for risk Value of benefits Total net present cost Weighted Scores NPC per unit score £m Ranking
Option 2
Option 2M
Option 4
Option 8
Option 18
Option 18M
4,026.3
4,033.2
4,014.1
4,022.7
4,013.5
4,017.1
5.8
5.9
5.6
5.8
5.5
5.5
(6.7)
(9.1)
(9.8)
(9.1)
(11.5)
(11.7)
4,025.4
4,030.0
4,009.9
4,019.4
4,007.5
4,011.0
698.9
754.4
711.6
765.1
737.1
802.0
5.76
5.34
5.64
5.25
5.44
5.00
6
3
5
2
4
1
1.5.13 Again, Option 18M, although not quite the cheapest option, clearly delivers the best value for money and becomes the Preferred Option. 1.5.14 A benefits realisation plan has been created to ensure that all aspects of the programme objectives are followed through to implementation and evaluation. 1.5.15 A risk management plan has been developed in order to both evaluate the options and provide a management tool for the development and implementation of the programme. 1.5.16 The Economic Case goes on to describe the Preferred Option in some detail.
1.6
The Case for Acceleration and Funding of Early Works
1.6.1
As indicated in the introduction, it is a feature of this OBC that the continuing issues with patient safety caused by spreading resources across three 24-hour A&E departments instead of two have compelled the commissioners and the Strategic Health Authority to require that both Trusts move to implement the BEH Clinical Strategy as soon as possible.
1.6.2
An independent Clinical Review was commissioned by NHS London in January 2012 to: 1.
2.
Assess the clinical risks of sustaining services in their current locations, taking account of: •
mitigation requirements, including additional staffing and physical capacity; and
•
impact of accreditation and training requirements.
Assess the clinical risks associated with transferring emergency services and women’s and children’s services at different times, including consideration for whether the preferred option is to sustain services for longer in order to move them at the same time rather than move one service sooner.
Outline Business Case for Implementing the BEH Clinical Strategy 10
3.
Consider the clinical case for accelerating implementation of the strategy.
4.
Consider staffing requirements required for each workforce group to implement the changes safely.
1.6.3
The full report of the review is at Appendix 6.3. The report concluded that there is a very strong case for fully implementing the strategy as soon as possible and wholly endorses the approach taken by the Trusts to accelerate the programme.
1.6.4
The Base case results in the BEH Strategy being fully implemented in January 2015, almost three years from the date of this OBC and the Trust has identified measures to shorten this development period by fourteen months through two measures:
1.6.5
•
Use of a modular build technique that has the potential to shorten the construction period by up to six months; and
•
Securing funding to continue with the design development and enabling works in advance of approval of the FBC and the OBC.
The funding required is shown in the table below: Table 1.5: Fees and early works funding requirement
Design & project management to complete OBC Project management & Procure 21+ Fees to complete FBC Site enabling works Decanting and enabling works Total
Commitment £1,925 £3,907 £1,467 £7,950 £15,249
Expenditure £1,925 £3,907 £1,467 £6,633 £13,932
1.6.6
Of the above expenditures, £1.7m was funded up to the end of 2011 and the DH agreed a further £1.5m to provide funds to continue design and small works until April 2012. The additional funds requested of £12.0m include £2.9m of fees to develop the Full Business Case and a guaranteed maximum price and £9.1m to undertake a number of enabling works that will enable the main works to commence immediately after approval of the FBC.
1.6.7
Appendices 6.1 and 6.2 respectively provide details of the cost of the various fees and works and three high level programmes that show the differences between the base, accelerated and intermediate options.
1.6.8
The costs set out are all included in the capital cost of the scheme so there is no additional cost involved in bringing the works forward. On the other hand the level of revenue support required from commissioners is over £7m higher under the base case than under the accelerated case, which demonstrates a substantial financial benefit to commissioners in accelerating the programme by over a year.
1.7
Commercial Case
1.7.1
Chapter 7 presents the commercial details of how the chosen option for delivery of the building schemes can be procured. An analysis of the procurement options demonstrated that Procure 21+provides the greatest certainty of meeting the programme objectives.
1.7.2
It has also been agreed that the Trust will work with BCF to jointly procure and appoint P21+ partner(s).
1.7.3
The case considers other commercial issues, including the implications for procurement of services, approach to sustainability and planning implications.
Outline Business Case for Implementing the BEH Clinical Strategy 11
1.8
Financial Case Introduction
1.8.1
The Trust has assessed the affordability for the expansion of acute and maternity services at North Middlesex Hospital, in respect of the implementation of the Barnet, Enfield & Haringey Clinical Strategy. Long term financial models (LTFMs) have been constructed for the period 2011-12 to 2020-21. The plans have been produced by estimating income and costs based on the Safe & Financially Effective (SaFE) assumptions generated by NHS London in September 2011, and incorporating changes in SLA income from Commissioners based upon NCL strategic commissioning plans. Timing Options
1.8.2
The financial affordability has been considered within the context of three different timing options. The Base Case sees Acute and Maternity patient services transferring to North Middlesex University Hospital from January 2015. The Accelerated and Intermediate cases see patient services transferring in November 2013 and April 2014 respectively. Funding of the Capital Cost
1.8.3
The Preferred Option has a Capital Cost of £78.8m including inflation in respect of the Base and Accelerated cases and £79.6m in respect of the Intermediate Case. The funding Options explored within the OBC are: •
•
PFI
•
•
Loan
•
•
PDC
1.8.4
The project is not suitable for PFI funding for several reasons; notably that it would breach the Trusts borrowing powers under the Prudential Borrowing Limit (PBL) rules, but also the new build element (that is suitable for a PFI route) is less than £70m. The Department of Health is no longer issuing deeds of safeguard for PFI schemes under £70m.
1.8.5
The Trust has extensively explored the possibility of full or part of the capital cost being funded by a loan. Detailed LTFMs on a loan funded basis have been constructed for each timing option. A loan for the full capital cost is not a possibility due to breaches of the PBL ratios and/or Monitor’s Liquidity ratio
1.8.6
In respect of possible part loan funding, the minimum debt service PBL rule is already breached prior to any part loan funding for this OBC being considered. This is in respect of the years 201112, 2012-13 and 2013-14 for all timing options, when capital needs to be expended on the Project. It is not possible for the project to be partly funded by the loan method, except for a small amount (£3m) in 2014-15 in respect of the Accelerated Case. Therefore, the Trust has concluded that the only funding method for the project is by the PDC method. Revenue Affordability
1.8.7
The Trust’s LTFM’s for each timing option demonstrate that the scheme is affordable for both the transferred activity and in the context of the Trust’s overall finances.
1.8.8
The timing at which the BEH Clinical Strategy Activity transfers to the Trust is a critical element within the affordability assessment. As the activity transferring generates a significant contribution to the Trust’s bottom line, the earlier this is effected, the quicker the Trust is able to meet required standards in respect of affordability and key Monitor metrics that would allow it to progress towards FT status. Therefore, the Accelerated Case has a better affordability position and adherence to Monitor requirements compared to the Base and Intermediate Cases.
1.8.9
All the requirements for financial risk ratios and PBL rules necessary to successfully construct an application for Foundation Trust status are met, except for a temporary liquidity issue as at 31st March 2013 and 31st March 2014.
Outline Business Case for Implementing the BEH Clinical Strategy 12
Summary of Preferred Option Costs and Funding Capital 1.8.10 The total capital cost of the preferred option is £78.8m for both the Base and Accelerated Cases and £79.6m for the Intermediate Case. PDC funding is required. Implementation & Transitional Costs and NCL Revenue Support 1.8.11 In respect of the Base Case, a total of £19.3m is required for implementation & transitional costs and in respect of planned revenue support, mainly during 2012-13 and 2013-14. The funding required for the Accelerated Case is £12.2m and for the Intermediate Case £17.7m. These costs and planned revenue support are to be funded by NHS North Central London. Impairments 1.8.12 Under current rules impairments have no impact on break-even duty and therefore no funding is required. Recurrent Revenue Costs 1.8.13 The recurrent revenue running costs will be funded by the Trust from PbR income. Conclusion 1.8.14 The Preferred Option (Base, Accelerated and Intermediate Cases) is affordable in respect of the transferred activity and in the context of the Trust’s overall finances. The requirements for financial risk ratios and PBL rules necessary to construct an application for Foundation Trust status are also achieved, except for a temporary liquidity issue as at 31st March 2013 and 31st March 2014. The Accelerated Case has a better affordability position and adherence to Monitor requirements compared to the Base and Intermediate Cases.
1.9
Management Case
1.9.1
The final section of the OBC is the Management Case. This details how the Trust proposes to manage the project through a governance regime in accordance with good practice guidance.
1.9.2
The costs of managing the project implementation have been estimated as £1.68m over the period to 2014/15. These costs are included in the non-works capital costs of the preferred option identified in the Economic Case.
1.9.3
The section also sets out the methodology for managing risk and the methods by which it has been evaluated in developing the OBC. The highest risks identified are in relation to the occasional issues with winter pressures but also with regard to workforce planning
1.9.4
The Chapter discusses in some detail how the change management process is to be addressed and the workforce planning strategy will be taken forward.
1.9.5
The chapter contains a detailed description of the Workforce Planning undertaken by NMUH and in conjunction with B&CF.
1.9.6
It also includes a description of the communications strategy developed in conjunction with NCL.
1.9.7
The section concludes with a description of the Benefits realisation Plan and details about how the project will be evaluated in use to ensure that the identified benefits of the programme schemes are realised.
1.10
Conclusions and Recommendations
1.10.1 The approval bodies are asked to: •
Formally consider and approve this OBC and recommend this action to the other approval bodies.
Outline Business Case for Implementing the BEH Clinical Strategy 13
•
Support the request for advanced funding of £12.0 million for early and enabling works, as well as fees, to enable the project to meet the accelerated programme timescales and thereby allowing the strategy programme milestone dates to be achieved;
•
Confirm that work should now begin to develop a Full Business Case.
Outline Business Case for Implementing the BEH Clinical Strategy 14
2.
Background to the Trust
2.1
Introduction
2.1.1
This Outline Business Case (“OBC”) relates to the provision of additional accommodation to cater for an expansion of acute and maternity services to be provided at NMUH as a result of implementing the Barnet, Enfield and Haringey Clinical Strategy (the “BEH Strategy”).
2.2
NMUH’s Approach
2.2.1
Following acceptance by the Secretary of State in September 2008, the Trust began to develop an OBC to implement the BEH Strategy at the NMUH site; the options considered were based on the activity modelling data provided for the PCTs and BEH Board by the consultants, RKW, in 2008 (which were subsequently reviewed and confirmed by the acute trusts and PCTs in June 2009).
2.2.2
This OBC (the “May 2009 OBC”) described the process of developing and evaluating the options, setting out the preferred option with a capital cost of £73m including VAT, which was approved by the Trust Board on 6th May 2009 and subsequently submitted to NHS London for approval.
2.2.3
At the same time, “B&CF was developing, in outline, a capital scheme for the corresponding reconfigurations at both of its sites. This scheme was initially costed at £83m, making a combined total capital cost of £156m, compared with £104m in the Pre-consultation Business Case (“PCBC”).
2.3
Local Implementation Strategy
2.3.1
Whilst NMUHs Case was robust and well received it was clear that, in the current financially constrained climate, there were insufficient capital funds to undertake all the investments required at the three hospitals in totality.
2.3.2
Discussions between acute Trusts, the commissioning PCTs and NHS London concluded that the scheme should be implemented on a phased basis and that Phase 1 would comprise the relocation of Women & Children’s services only, with the re-provision of additional non-elective beds being undertaken after Phase 1 had been completed, i.e. beyond 2011/12.
2.3.3
At a meeting of the BEH Clinical Strategy Implementation Project Board (“BEH CSIPB”) on 3rd July 2009, it was agreed that BCF would assess the potential to reduce its capital cost, whilst NMUH would rework a lower cost option of around £24m capital value.
2.3.4
The intention would be to implement the changes to women & children’s services at the earliest possible date without detriment to either trust’s ability to deliver the whole BEH strategy from an estates perspective.
2.3.5
Both trusts produced Outline Business Cases for delivering these changes, which were approved by NHS London in early 2010. Since the confirmation by NHS London in January 2011 that the four tests had been met, the BEH Clinical Strategy Board has determined due to concerns at the time about the ability to continue to provide safe emergency care services at CFH that, rather than continue with the phased implementation of plans already developed, the trusts should work together to develop a local strategy for implementing all the changes in a single phase.
2.3.6
Following publication of the Operating Framework 2011/12 the five PCTs (Barnet, Camden, Enfield, Haringey & Islington) began working together in April 2011 and published their North Central London Primary Care Strategy 2012 to 2016 at the end of January 2012.
Outline Business Case for Implementing the BEH Clinical Strategy 15
The underpinning strategy aims to improve the health and wellbeing of residents as well as raising the standard of services and enhancing patients’ experience of the NHS, This is one part of the five year commissioning strategy for North Central London which also embraces the Barnet Enfield & Haringey Clinical Strategy.
2.4
Purpose of the Business Case
2.4.1
This Outline Business Case therefore sets out an alternative approach to those options presented in the May 2009 OBC based on the constraints of: a site fully reconfigured upon completion of the PFI project; • Programme for transferring both acute and maternity services simultaneously rather than • in two phases as previously planned. It sets out the additional facilities which will be required and the means of procuring them.
2.4.2
The purpose of this OBC is to: •
confirm the impact of the BEH Clinical Strategy on the North Middlesex site and in particular on the required changes to acute services and the increased number of beds;
•
confirm the impact of the BEH Clinical Strategy upon maternity service provision required at NMUH;
•
identify the preferred option for providing these services that is affordable;
•
gain approval from NMUH Trust Board and NHS London to proceed with these service developments;
•
gain approval of the Department of Health for the service developments and the preferred source of funding;
2.5
North Middlesex University Hospital Trust
2.5.1
NMUH provides high quality emergency and elective services to the local population in the Boroughs of Enfield and Haringey. The consultant-led emergency care service, which is supported by an intensive care unit, is continuing to grow. With a combined total of some 140,000 A&E and Urgent Care attendances per annum, the hospital is one of the busiest emergency centres in London, with attendances continuing to rise year-on-year.
2.5.2
The Trust also provides a range of specialist services, which reflect the needs of the local population. These include maternity, cardiology, haematology, diabetes, oncology, renal services and HIV services. NMUH also provides access through clinical networks to a 24-hour stroke care service, emergency balloon angioplasty for heart attacks and major trauma care such as neurological surgery. NMUH is an accredited Stroke and Trauma Unit.
2.5.3
The Trust is a university hospital and works closely with the Royal Free and University College Medical School, Middlesex and City Universities to provide medical and nursing undergraduate and post-graduate training.
2.5.4
Strong clinical performance, coupled with the fact that the Trust has posted a financial surplus for the last five years, provides a very solid base for the Trust to build upon for the future. This progress, along with growing demands for health services at NMUH will place the Trust at the centre of delivering healthcare for North London in the future. The Trust operates as a provider of secondary care services within NHS North Central London, a cluster of five PCTs – Haringey, Enfield, Barnet, Camden & Islington. It was established in 1991 and serves a diverse population of around 260,000 people. It is located in Edmonton, on the Enfield/Haringey border, on the south side of the North Circular Road.
2.5.5
2.5.6
The map below illustrates the local health economy, showing the PCT boundaries for Barnet, Enfield and Haringey, with Camden and Islington to the south, and the locations of the relevant hospitals.
Outline Business Case for Implementing the BEH Clinical Strategy 16
Figure 2.1: Map of Local Health Economy
2.5.7
The nearest NHS providers of acute services are Barnet and Chase Farm Hospitals NHS Trust to the west, Whipps Cross University Hospital NHS Trust to the east, and the Whittington Hospital NHS Trust to the south.
2.5.8
The Trust’s recent financial performance and key clinical activity are set out below: Table 2.1 – Trust Profile
£ 000s Income (excl Impairment Funding) Surplus/(Deficit) Staff Numbers Elective Spells Non-Elective Spells Total Spells A&E Attendances Urgent Care Attendances Total Outpatient Attendances Total Births 2.5.9
2006/07 138,831 84 2,054 19,900 26,500 46,400 115,600 36,768 152,368 192,600 3,509
2007/08 145,086 3,019 1,979 20,401 27,668 48,069 112,116 30,198 142,314 191,361 3,511
2008/09 155,644 5,031 2,037 21,153 27,219 48,372 110,395 36,624 147,019 207,483 3,497
2009/10 168,126 6,044 2,145 19,853 24,028 43,881 112,106 35,195 147,301 219,655 3,358
2010/11 180,593 3,103 2,272 21,172 23,534 44,706 112,759 23,163 135,922 232,752 3,646
Some of the Trust’s key achievements in recent years include: •
Significant progress in reducing incidence of MRSA and C Diff infection rates;
•
Strong track record in delivery of access standards, in particular strong performance in respect of the 4 hour wait, despite being one of the busiest single site A&E departments in London;
•
National reference cost position consistently below national average;
Outline Business Case for Implementing the BEH Clinical Strategy 17
•
Delivery of financial plans and consistent surplus since 2006/07;
•
Continued investment in high quality facilities and estate, most recently delivering a major new PFI scheme, on time and on budget;
•
Improved patient safety and mortality rates.
2.6
New Hospital Development
2.6.1
In August 2007, the Trust entered into a contract with the Bouygues Consortium to design, build, finance and operate a new hospital facility on the NMUH site over a concession period of 34 years. The new building re-provides approximately half of the estate, including A&E, Diagnostics and Theatres, surgical in-patients, intensive care and a Diagnostic and Treatment Centre.
2.6.2
The core deliverables from the £118m construction project were: •
New building to house three main care centres:
•
Emergency Care including A&E and separate Children’s A&E, Walk-in Centre, Emergency Imaging and an Emergency Assessment and Admissions Unit (48 beds) for short stays (up to 72 hours);
•
Acute and Critical Care Centre comprising four theatres with supporting theatres with supporting facilities, High Dependency Unit with twelve beds and 90 in-patient surgical beds;
•
Diagnostic and Treatment Centre comprising three day theatres, endoscopy, Planned Imaging Unit, Outpatients Department and separate Children’s Outpatients;
•
New Energy Centre and Estates facility;
•
Whole-site upgrade to grounds and gardens, including a design to accommodate the bus routes that pass through the hospital site, and fully refreshed car parking to provide the 698 spaces permitted by the outline planning consent.
2.6.3
As part of the Trust’s efforts to reduce the overall cost of the redevelopment scheme and meet the ratio of 15% laid down by the NHS Operating Plan 2006/07, a number of features were removed from the deal, including the shell space and all backlog maintenance.
2.6.4
The new facility was designed to meet the planned activity without any additions from CFH as it was felt that this would pre-empt the outcome of the clinical strategy consultation. In order to provide the necessary capacity to deliver the BEH Clinical Strategy therefore, the Trust will need to embark on further major capital investment.
2.6.5
The new building design did, however, incorporate a level of flexibility that would allow certain spaces (within the A&E department for example) to be reconfigured to provide some additional clinical facilities. In 2008 the Trust initiated a variation to secure the optimal reconfiguration within the new PFI building to enable it to absorb the additional activity coming from CFH, including extra A&E bays, an extra theatre, more x-ray rooms and an additional 29-bed ward. The displaced administrative facilities have been relocated within the retained estate.
2.6.6
The PFI-funded project was completed on time. The new building, incorporating all the changes mooted by the variation, was handed over to the Trust in April 2010 and, following a period of Trust commissioning and decanting, was fully open for business in June 2010.
2.6.7
Since then the Trust has undertaken a series of refurbishment works to allow all the [nonclinical] services that are not relocating to the new hospital to be decanted into the former Outpatients Building and other existing buildings, enabling Bouygues to demolish the Old Nurses Home and construct roadways and car parks and complete the landscaping of the site.
2.6.8
The final phase of the PFI works was completed in July 2011; the Trust has agreed terms of a further variation to the PFI contract to vary the external works to allow for the works
Outline Business Case for Implementing the BEH Clinical Strategy 18
contemplated by this business case to take place; the estimated associated cost of this variation, £87k, is included in the capital costs. 2.6.9
The PFI scheme was planned to replace practically all of the Edwardian buildings that dated back to 1908. The remainder of the estate (known as "the retained estate”) comprises the newer buildings, although most of these are over thirty years old. The Tower and Podium, which make up 75% of the retained estate, were built in 1974, whilst the Outpatients building dates from 1960 and the Pymmes building from 1988.
2.7
Surplus Land
2.7.1
Part of the Trust strategy towards funding the PFI investment, as set out in the 2007 FBC, was to utilise the value of two parcels of land that would, under the proposals, become surplus to requirements. These parcels had been valued at £13m, on the basis of residential redevelopment, in early 2007. The land comprised: •
An area to the west of the main hospital site (Watermill Lane) where the former estates department and boiler house are currently situated. Following implementation of the PFI scheme, this land is no longer required;
•
Most of the eastern part of the main site containing all of the Edwardian buildings that would be decanted into the new hospital building.
2.7.2
With respect to the Watermill Lane parcel, the land remains available for disposal and is due to be sold in March 2012.
2.7.3
The Trust Board has taken a decision not to dispose of the latter parcel in order to be able to implement the BEH Clinical Strategy on this site. The need to retain some of the old buildings in order to provide administrative accommodation displaced by the BEH Strategy has created an “island” of buildings in the middle of the site, rendering the small area between this and the Pathology Building value-less. The remaining land to the north will be needed for additional parking demanded by the local authority in the light of the proposed expansion of services.
2.7.4
The FBC for the PFI contract contemplated that the two parcels of land would be sold once external works for the new hospital and all decanting were complete, during 2011/12. The proceeds would be used to repay a short-term loan taken out to cover payments to Project Co under the contract for the provision of a linear accelerator bunker and for equipment for the new hospital.
2.7.5
The reduction in potential land sales proceeds necessitated the Trust seeking alternative funding sources; a 15-year £13.2 million loan was approved by the DH and drawn down in September 2010 to fund the provision of the bunker and equipment for the new hospital. Repayment of the loan is included in the LTFM.
2.8
Variation to the PFI Contract
2.8.1
In February 2009, the Trust entered into a Deed of Variation to the Project Agreement with Bouygues. The intention, which was supported by Enfield PCT on behalf of the BEH Clinical Strategy Board and by NHS London, was to make use of a window of opportunity within the PFI construction programme to make certain specific changes to the accommodation being constructed, as outlined above, without delaying practical completion of the new building itself.
2.8.2
The changes will enable the A&E Department to cope with the significant increase in the number of seriously ill patients arriving at A&E and being admitted to hospital. They will also ensure that the “ripple effect” can be absorbed, i.e. that there would be, for example, sufficient theatres, x-ray rooms, an additional 29 inpatient beds and mortuary fridges, to provide the necessary higher levels of clinical services once the emergency activity begins to be transferred from CFH.
2.8.3
The capital cost of the variation was £5.3m and was approved by NHS London in December 2008 and by the Department of Health in January 2009. The key benefit from having undertaken this variation is that the changes will not now need to be made after building
Outline Business Case for Implementing the BEH Clinical Strategy 19
completion, thus securing a very much lower cost and avoiding a potential further delay to implementing the BEH Clinical Strategy.
2.9 2.9.1
Foundation Trust Application The Trust has established a pathway to becoming a Foundation Trust by September 2014, as described in its Tripartite Formal Agreement (TFA) published on the Trust’s web-site. Subsequently, and in the context of Secretary of State approval to implement the Barnet Enfield & Haringey (BEH) clinical strategy, further work has taken place at the request of the Secretary of State to explore alternative organisational forms. Inter alia, this identified that: •
The BEH strategy implementation should ensure that both acute trusts have a sufficient “critical mass” to be considered clinically viable
•
Neither trust demonstrated within the scope of the study a sufficiently robust financial downside case to instigate their own, independent FT application; and
•
There was no obvious merger solution or an alternative basis on which either Trust could progress confidently towards FT authorisation in line with their TFA.
2.9.2
Further work is now in train which will extend the earlier analysis and explore further options and mitigations; this work is to be completed in April for approval by NHS London in May 2012. This will either (1) confirm the approach described in existing trust TFAs, by identifying additional mitigations or (2) identify a future transaction that will require agreement of a new TFA and pathway to FT.
2.10
Related Activities
2.10.1
This OBC is for the NMUH’s required investment to implement the BEH Clinical Strategy. B&CF is developing parallel plans to reconfigure acute and maternity services across CF and BH. Commissioners are developing their plans to ensure a greater proportion of care is provided in the community and primary care but those investments do not form part of this business case.
2.10.2
The Trust continues to monitor changes within the local health economy and this drives the need for a flexible solution for the NMUH.
Outline Business Case for Implementing the BEH Clinical Strategy 20
3.
Strategic Case: The Barnet, Enfield and Haringey Clinical Strategy
3.1
Introduction
3.1.1
This section sets out the case for change and details of the options that were considered in developing the BEH Clinical Strategy. It also sets out the history of the development and approval process between 2006 and 2011 in getting to the stage of the submission of OBCs from both BCF and NMUH for implementing the BEH Clinical Strategy.
3.1.2
The requirement for the capital investment set out in this OBC originates from the development of the Barnet, Enfield and Haringey (BEH) Clinical Strategy which started in 2006. This strategy was consulted on in 2007 and prior to the consultation a Pre-Consultation Business Case (“PCBC) was prepared. This PCBC acts as the SOC for this investment and a summary of it, together with the consultation process and subsequent review, is set out below. The remainder of this strategic case then sets the investment in the context of current national and local policies and strategies.
3.1.3
This section also sets out the agreed activity assumptions, activity and bed numbers that both acute trust’s OBCs are based upon.
3.1.4
Barnet, Enfield and Haringey (“BEH”) Clinical Strategy National Context - Our Health, Our Care, Our Say
3.1.5
At the time the BEH clinical strategy was being developed the major policy context was the Our health, our care, our say White Paper which was issued in 2005. This set out a new vision for community services, the main points of which were: •
change the way these services are provided in communities and make them as flexible as possible;
•
provide a more personal service that is tailored to the specific health or social care needs of individuals;
•
give patients and service users more control over the treatment they receive;
•
work with health and social care professionals and services to get the most appropriate treatment or care for their needs.
Local Context 3.1.6
As well as implementing the move of care from acute to community setting the local health economy was faced with three further issues that were driving the need for substantial reconfiguration of health services. These relate to the fact that all three local hospitals Barnet, Chase Farm and North Middlesex are relatively small District General Hospitals. These factors, which are common to smaller DGHs, were: •
clinical safety of the configuration of emergency, maternity and paediatric services across the three local hospitals;
•
the increasing clinical specialisation taking place that undermined the sustainability of small departments and their ability to maintain quality and safety standards. This emphasised the need to create larger Departments to concentrate expertise and these should serve larger catchment populations;
•
the continued implementation of the European Working Time Directive (EWTD) and associated increase in senior staffing levels required, creating difficulties in managing rotas around the clock on three sites.
Outline Business Case for Implementing the BEH Clinical Strategy 21
This includes the particular problems that the EWTD would present in staffing three A&E Departments locally with sufficient senior doctors to provide round the clock cover, 7 days per week in future and in addition the effect of the EWTD on Women’s and Children’s services where sufficient doctors would also be required to provide the necessary hours of consultant cover per week to the labour ward based on the number of deliveries as stipulated by the RCOG. This in turn would require the clinicians to have ongoing exposure to a range of cases large enough to maintain their clinical skills which implied the need to reduce the existing units from 3 to 2 through amalgamation. 3.1.7
The local health economy was also facing financial challenges despite the above average growth that the NHS was receiving at the time. It was recognised that when funding levels returned to trend growth the then service configuration was unlikely to be financially sustainable. The development of the strategy was before the identification of the “Nicholson Challenge” (2008/09) that the NHS collectively would need to deliver £15bn to £20bn savings over 5 years.
3.1.8
Finally whilst the fabric of BH was in good condition due to the recently completed (2003) PFI redevelopment, both NMUH and CFH suffered from facilities with poor functionality and in poor condition. At NMUH this was in the process of being addressed through the major redevelopment of much of the hospital through a PFI scheme but CFH lacked plans for the investment required to upgrade its facilities. PCBC Development Process
3.1.9
In the light of the factors identified above the local health economy identified options for reconfiguring local services. This process involved preparing a PCBC. The concept of the PCBC was relatively new at the time and the BEH case was one of the first prepared for a reconfiguration in London.
3.1.10
The PCBC broadly followed standard business case practice except that the object was to identify one or more options on which to consult rather than to select a single preferred option.
3.1.11
The local health economy identified the following drivers for change:
3.1.12
•
to implement Our health, our care, our say;
•
to minimise impact of EWTD and Modernising Medical careers;
•
to improve the facilities at CFH;
•
to reduce number of A&E’s from three to two in line with recommended catchment population (450,000 to 500,000 – BEH 800,000);
•
to meet staffing requirements for obstetrics and paediatrics by concentrating these services on two sites;
•
to remove the underlying deficit from the health economy and release funding for investment in primary care; and
•
to accommodate increasing specialisation of acute services.
As part of developing the evidence base for change Professor George Alberti (National Director for Emergency Access) was asked to review services in the local health economy as part of the work to deliver the PCBC. He concluded, inter alia: “Put starkly, it is evident that safe, high quality modern care cannot be provided for all specialties in all three acute hospitals in the area. …Care of the standard that members of the public have a right to expect will require the centralisation of some specialties on two of the three hospital sites. Immediate care around the clock by experienced clinicians cannot be guaranteed whilst efforts are made to maintain all three sites as full acute hospitals.”
Outline Business Case for Implementing the BEH Clinical Strategy 22
3.1.13
3.1.14
Based on the drivers for change the objectives of the clinical strategy were set as: •
Objective 1 - To develop local health services to enable the transfer of appropriate services from an acute to a community and primary care setting;
•
Objective 2 - To re-organise the provision of acute services across the Barnet, Enfield and Haringey health communities;
•
Objective 3 - To ensure the continued clinical sustainability and safety of the service configuration after taking into account the implications of the next stage of the European Working Time Directive (EWTD) and the Modernising Medical Careers policy; and
•
Objective 4 - To address the underlying financial deficit of the health economy and Barnet & Chase Farm Trust in particular.
Initially ten scenarios were considered in response to the drivers for change; these ranged from absolutely no change in services to one acute hospital being replaced by a primary care centre. These scenarios were assessed against five key criteria: •
Clinical viability and patient safety;
•
Accessibility;
•
Affordability and value;
•
Sustainability; and
•
Deliverability
3.1.15
The appraisal was carried out in deliberative events that included the public and clinicians and reduced the initial ten scenarios to four. These four were each subjected to detailed financial analysis the outcome of which was that two were determined to be affordable. The PCBC therefore set out two options plus a do minimum option for consultation.
3.1.16
Option 1 - Planned care is concentrated on the Chase Farm site: •
Planned Care would be expanded on the CFH site to incorporate planned inpatient surgery moving in from the Barnet site and some from NMUH, for treatment other than major surgery.
•
Planned and emergency services would be separated with BH and NMUH providing major emergency services, urgent care centres for non-life threatening conditions and day surgery.
•
A Local Accident and Emergency service (incorporating an urgent care centre) would be based at CFH, and would be senior clinician led.
•
Consultant led paediatric and older people’s assessment units at CFH would be created.
•
Inpatient services for women and children and obstetrician-led maternity services would be based at BH and NMUH.
•
Intermediate care beds would be provided at CFH, to be used for admission avoidance and to allow some patients to move closer to home once they are past their acute inpatient phase.
•
A Midwife-led Birth Unit could be located at CFH but this will be subject to further review following publication of ‘Healthcare for London’.
•
There would be a strengthening of services available in a community setting, building on changes already begun. Apart from the development of urgent care centres, these will include extending GPs’ practice hours, expanding intermediate care, and creating new primary care centres for diagnostic and outpatient services.
Outline Business Case for Implementing the BEH Clinical Strategy 23
3.1.17
Option 2 - Chase Farm becomes a community hospital: •
All inpatient and major emergency services would be concentrated at BH and NMUH.
•
Planned inpatient services would be provided at BH and NMUH but not at CFH.
•
CFH would provide day surgery and intermediate care beds.
•
A Local Accident and Emergency service (incorporating an urgent care centre) would be based at CFH and would be senior clinician led.
•
Consultant led paediatric and older people’s assessment units at CFH would be created.
•
Inpatient services for women and children and obstetrician-led maternity services would be based at BH and NMUH.
•
Intermediate care beds would be provided at CFH, to be used for admission avoidance and to allow some patients to move closer to home once they are past their acute inpatient phase.
•
A Midwife-led Birth Unit could be located at CFH but this will be subject to further review following publication of ‘Healthcare for London’.
•
There would be a strengthening of services available in a community setting, building on changes already begun. Apart from the development of urgent care centres, these will include extending GPs’ practice hours, expanding intermediate care, and creating new primary care centres for diagnostic procedures.
3.1.18
The PCBC also contained a do minimum option against which the options to be consulted on could be benchmarked. This is described as follows.
3.1.19
Option Do Minimum – no change to hospital services apart from making safe: •
This option maintains safe services without reconfiguration of any of them or changing the service model. There are therefore no changes to acute services across the three hospital sites.
•
All existing services remain on the CFH site and are provided in a clinically safe and acceptable environment.
•
Under this option it cannot be guaranteed that the clinical safety aspects are sustainable in the long term. This can only be achieved by an investment programme in the buildings on site and increased investment in consultant staffing. The cost of achieving this has been estimated, together with resultant adverse impact on primary and community services.
3.1.20
A financial analysis of all three options was undertaken. Activity analysis was done for each option tracking both the transfer of cases from acute to community and primary care settings as well as the transfer of activity between the three acute hospitals. The project team were supported by external consultants EC Harris for this work. The financial consequences of these activity changes were then modelled to determine the impact on the individual Trusts and PCTs and for the health economy as a whole.
3.1.21
The activity model was also used to determine the change in facilities required at each of the hospital sites. The major activity changes, in addition to the transfer of care to primary and community care settings, were:
3.1.22
•
Non-elective emergency and maternity services from CFH to NMUH and BH;
•
Transfer of elective care from BH and some from NMUH to CFH.
The costs of the capital requirements were determined with the assistance of quantity surveyors Davis Langdon.
Outline Business Case for Implementing the BEH Clinical Strategy 24
3.1.23
The net impact on each of the three options on the local health economy was calculated and is shown in the following three tables. Table 3.1: Net Impact of Option 1
Table 3.2: Net Impact of Option 2
Outline Business Case for Implementing the BEH Clinical Strategy 25
Table 3.3: Net Impact of Option Do Minimum
3.1.24
As can be seen, the analysis demonstrated that whereas options 1 and 2 are affordable to the health economy as a whole throughout the six year period analysed the do minimum left the health economy in deficit from 2010/11 onwards.
3.1.25
For option 1 all the Trusts and PCTs were in surplus by 2012/13 and for Option 2 all but Barnet and Chase Farm are.
3.1.26
This analysis was presented in the PCBC along with details of the capital investment, estimated at the time as £104m for Option 1, £130m for Option 2 and £137m for Do Minimum. The net impact on the health economy included the financial impact of this capital investment.
3.1.27
The options were economically appraised using a starting point of 1st April 2007 and using a 2006/07 prices base. A discount factor of 3.5% was applied to cash flows reflecting the guidance at the time on the cost of capital for public sector schemes. Project-related costs were used as the revenue consequences for each organisation. This ensured that any cost/revenue transfers between Trusts and PCTs are netted off against each other.
3.1.28
A 35 year appraisal period was used. This represented the average life of buildings and equipment as recommended at the time in the Capital Investment Manual. A capital cash flow was prepared by Davis Langdon, Quantity Surveyors, as part of their work in preparing estimated capital costs for the short listed scenarios. They also prepared life cycle cost estimates based on the aggregate asset replacement costs for the schemes at both B&CF and NMH.
3.1.29
The resulting net present value for each of the options is shown in the table below. Table 3.4: Net Present Values
3.1.30
This analysis was subjected to sensitivity testing but the significant difference in NPV values of Options 1 and 2 and the do minimum option was not significantly eroded under any of the three scenarios tested.
Outline Business Case for Implementing the BEH Clinical Strategy 26
Consultation and recommendations 3.1.31
The majority of respondents to the consultation were in favour of option one. The results of the public consultation were presented in a report to the BEH Project Board in December 2007, which recommended that “Option 1”, i.e. planned care to be concentrated at the CFH site, be taken forward; this decision was simultaneously confirmed by the individual boards of Barnet, Enfield and Haringey PCTs.
3.1.32
Subsequently the Secretary of State asked the Independent Reconfiguration Panel (IRP) for advice following a referral from the London Borough of Enfield’s Scrutiny Committee. The Panel was asked to advise whether it was of the opinion that the proposals for changes to the distribution of services between BH, CFH and NMUH and the associated development of primary and community care services will ensure the provision of safe, sustainable and accessible services for local people, and if not why not. The IRP was chaired by Dr Peter Barrett. The IRP’s recommendations were fully accepted by the Secretary of State and published on 4th September 2008.
3.1.33
The Panel accepted the proposals to centralise accident & emergency services at BH and NMUH, subject to a series of recommendations, and the BEH Clinical Strategy Implementation Programme Board (“BEH CSIPB”) began to implement the Strategy and recommendations.
3.1.34
Following the General Election in May 2010, a moratorium on reconfiguration schemes was announced. The Secretary of State made it clear that any changes to health services must be developed locally with GPs and be based on sound clinical evidence. He also stated that Londoners must have a bigger say on the shape of local services so that they are able to make informed choices on where to receive care. Confirmation of Strategy and the Four Tests
3.1.35
Following the issue to all NHS organisations of a requirement to assess development proposals against the four tests, NHS London established a Panel to discharge its obligations with regard to assessing the achievement of the requirements of the tests for the BEH Strategy. The Panel was chaired by Alastair Finney (Deputy Director, Strategy and Commissioning Development, NHS London). The local NHS developed a review process based on a Strategic Coordination Group, Borough-level review process, Clinical Review Panel and Business Case Review Group. On 26th January 2011 the NHS London Board authorised the paper presented at the meeting detailing the work of the Strategic Coordination Group and the Review Panel and confirmed that the Barnet Enfield and Haringey Clinical Strategy met the four tests for reconfiguration. The four tests laid out by the Secretary of State are that the proposals have: •
Support from GP commissioners
•
Strengthened public and patient engagement
•
Clarity around the clinical evidence base; and
•
Consistency with current and prospective patient choice.
Conclusion 3.1.36
On 26th January 2011 the NHS London Board authorised the paper presented at the meeting detailing the work of the Strategic Coordination Group and the Review Panel and confirmed that the BEH Clinical Strategy met the four tests for reconfiguration. The BEH Clinical Strategy Board was mobilised to implement the agreed strategy as quickly as possible. It was also determined at this time that, whereas the implementation plan prior to the moratorium had been to transfer maternity services in 2011 and acute services in 2013, the acceptance of the strategy and the clear case for change makes it highly desirable to implement the changes to both acute and maternity services as soon as possible and in one phase.
Outline Business Case for Implementing the BEH Clinical Strategy 27
3.1.37
Subsequent to NHS London’s approval, the Enfield Council Health Scrutiny Panel referred the matter to the Secretary of State stating its view that the four key tests had not been met. The Secretary of State requested advice on the matter from the IRP, which produced its initial assessment on 8th July 2011.
3.1.38
The IRP concluded that the process of applying the four tests to the BEH Clinical Strategy was robust and consideration of the evidence well balanced and thorough. Whilst sections of the clinical and wider community in Enfield are unhappy with aspects of the proposals, the Clinical Strategy is designed to best meet the needs of the wider population across the whole of Barnet, Enfield and Haringey.
3.1.39
The Secretary of State published his acceptance of the IRP advice on 12th September 2011, that the BEH Clinical Strategy should proceed. He also asked for a review of the feasibility of demerging CFH from B&CF and merging CFH with NMUH; this was submitted to him on 16th December 2011.
3.1.40
The IRP was not presented with evidence to assess the possible benefits of this organisational change [the transfer of CFH to NMUH] on service configuration. It is for local commissioners and providers of the services to explore this matter further, under the guidance of NHS London. The PCBC Updated
3.1.41
The Trust, in conjunction with B&CF, has compared the material assumptions underpinning the PCBC and their financial impact with the same assumptions in the OBCs in order to determine whether the significant net present cost of the do minimum option as compared with the implementation options remains broadly the same. In the PCBC the do minimum net present cost was approximately £350m higher than that of Option 1, the Option chosen for implementation and subject of this OBC.
3.1.42
An initial high level analysis was undertaken to determine whether any assumptions had changed sufficiently to materially impact the £350m difference in net present cost between Option 1 and the do minimum. Capital costs
3.1.43
In the PCBC the total capital costs for both Trusts of Option 1 were estimated at £104m at MIPS 497, equivalent to PUBSEC 179. The do minimum capital costs were for both Trusts were £138m at the same index.
3.1.44
The current capital costs for both Trusts are £112m at PUBSEC 178.
3.1.45
Capital costs have therefore increased by £8m which, given the expenditure occurs at the outset of the appraisal period, will reduce the difference in net present cost by approximately their full value. This is an immaterial reduction in the £350m difference set out in the PCBC. Activity
3.1.46
In the PCBC B&CF was projected to transfer approximately 12,000 spells of activity to NMUH. In the OBCs this transfer has increased by 500 spells to 12,500. This change represents approximately 0.5% of BCF residual total spells post implementation and 0.9% of NMUHs’. These changes in activity levels are considered immaterial and do not therefore undermine the conclusions of the PCBC. Income
3.1.47
In the PCBC total BEH income for 2007/08 for B&CF was £244m, whilst NMUH was £137m, a total of £381m. The tariff inflator between 2007/08 and 2011/12 provided an increase of around 5%, taking the total to £400m. In the current business, income for C&CF is shown as £350m in 2011/12, of which 70%, or £245m relates to the BEH PCTs; when combined with
Outline Business Case for Implementing the BEH Clinical Strategy 28
income of £175m for NMUH the total is £420m, representing an increase of just 5% over 2007/08, ie not a material change. Overall Conclusion 3.1.48
The Trust has therefore concluded that the rejection of the Do Minimum option in the PCBC remains valid and a further do nothing/do minimum option is not required in this OBC.
3.2
National Policy Frameworks and Policy Context Equity and Excellence: Liberating the NHS
3.2.1
3.2.2
The White Paper published in July 2010 heralded plans for a new direction for the NHS. Although the main changes will be to the organisation of the NHS, with GPs taking the commissioning lead in place of PCTs, changes will impact on the Trust in many ways. The principal emphases of the White Paper are: •
Putting patients and public first;
•
Improving healthcare outcomes;
•
Autonomy, accountability and democratic legitimacy;
•
Cutting bureaucracy and improving efficiency.
The impact of the White Paper is set out in greater detail in the Operating Framework 2011/12. The Operating Framework 2010/11
3.2.3
The third Operating Framework continued national policies originally set out in 2008/09, with a series of levers and enablers in place to support the delivery of those priorities. Objectives, which remain objectives for the future, included: •
Moving care closer to home;
•
Reducing the number of acute beds;
•
Reducing unit costs and variations;
•
Focusing on early intervention;
•
Encouraging people to take more responsibility for their health.
3.2.4
A major theme of the Operating Framework was the need to achieve £10 billion of efficiency savings by 2012/13 as an interim milestone against the £15-£20 billion to be achieved by 2013/14.
3.2.5
The BEH Clinical Strategy, and in particular the Trusts’ implementation of it, will make a considerable contribution to achieving the necessary efficiency gains required within Barnet, Enfield and Haringey. Revision to the Operating Framework 2010/11
3.2.6
The principal element of the revised Operating Framework is the new set of rules on reconfiguration, which specifically affects the BEH Clinical Strategy. All reconfiguration proposals need to demonstrate: •
Support from GP commissioners;
•
Strengthened public and patient engagement;
•
Clarity on the clinical evidence base; and
•
Consistency with current and prospective patient choice.
Outline Business Case for Implementing the BEH Clinical Strategy 29
3.2.7
The BEH Clinical Strategy has demonstrated compliance with the four tests, as set out in Section 3.1.35. The Operating Framework 2011/12
3.2.8
3.2.9
The backdrop to the Operating Framework for the current financial year is the implementation of changes from the 2010 White Paper, Equity and excellence: Liberating the NHS. The Framework focuses on three key themes: •
Transition and reform – what needs to happen in 2011/12 to begin to realise the challenges set out in the White Paper;
•
Transparency and local accountability – involving public and patients and strengthening local accountability;
•
Service quality – a service that focuses on outcomes rather than processes and efficiency gains that will release up to £20 billion more funding into front line services.
Specific components of the Framework that will impact on the acute trusts in the context of this business case include: •
Quality, Innovation, Productivity & Prevention (“QIPP”), where there will be close monitoring of progress against key performance indicators.
•
The need to reduce the number of readmissions to A&E within 30 days of discharge;
•
Acute providers will be responsible for post-discharge care for 30 days after the patient is discharged from 2012/13;
3.2.10
A significant part of the Operating Framework for 2011/12 is achievement of the Headline and Supporting Measures. These priorities include healthcare associated infections, A&E (including new Clinical Quality Indicators), referral to treatment times, cancer waits and mixed sex accommodation. The implementation of the clinical strategy will increase the volumes of A&E, acute admissions and deliveries undertaken at NMUH enabling greater economies of scale to be achieved, supporting the Trust’s and the cluster’s QIPP plans.
3.2.11
The greater critical mass will support further development of integrated care services and support for GPs and will improve the clinical viability and sustainability of some specialist services underpinning productivity improvements, primary care support and the ability to deliver care closer to home.
3.2.12
One key goal for both trusts will be the need to reach NHS Foundation Trust (FT) status as soon as possible, in line with the TFA. The Operating Framework 2012/13
3.2.13
3.2.14
This is the second year of the quality and productivity challenge and the final year of the transition to the new system. This year Operating Framework provides further information on the progress with structural change, and highlights interrelated challenges in four main areas: quality; reform; finance and business rules; and planning and accountability. The key objectives for the NHS in 2012/13 and in future include: •
Putting patients at the centre of decision making
•
Maintaining strong control over service and financial performance;
•
Increasing the pace of delivery of the quality and productivity (QIPP) challenge
•
Successfully completing the last year of transition to the new system and building CCG capacity
•
Focus on the care of elderly and vulnerable patients, and increased support for carer
Specific components of the Framework that will impact on the acute trusts in the context of this business case include:
Outline Business Case for Implementing the BEH Clinical Strategy 30
•
Quality, Innovation, Productivity & Prevention (“QIPP”), will remain a key theme and a challenging financial target in NCL;
•
Rigorous application of financial penalties / fines trough the NHS contract;
•
The need to reduce the number of readmissions to A&E within 30 days of discharge remains in place.
Healthcare in the Capital 3.2.15
3.2.16
3.2.17
NHS London developed a Framework for Action, published in July 2007, setting out a ten year vision for improving healthcare in London. This strategy envisaged: •
Routine care taking place as close to home as possible;
•
Emergency care being centralised at major acute hospitals;
•
Local hospitals to offer care for all but the most serious cases;
•
Separation of elective from emergency care to help improve clinical outcomes, increase day cases and reduce waiting times;
•
Establishment of polyclinics to provide a single access point to healthcare services. These polyclinics were planned to provide patient care on a level that falls between current GP practice and a traditional district general hospital.
More recently, NHS London has established London Health Programmes to identify the health needs of Londoners and to redesign services to improve the way healthcare is delivered in the capital. Major projects which London Health Programmes have developed including: •
Model of Care for Trauma: Bringing about a Major Trauma Network across London with commissioned five Major Trauma Centres across London;
•
Model of Care for Stroke: Bringing about a Stroke Network across London with the commissioning of a number of Hyper Acute Stroke Units (HASUs) and Stroke Units;
•
Model of Care for Cancer: Bringing about a number of Cancer Networks across London involving the consolidation of specialist cancers on to a small number of acute hospital sites across London;
•
Model of Care for Cardiovascular: Bringing about a number of Cardiovascular Networks across London involving the consolidation of specialist vascular surgery on to a small number of acute hospital sites across London;
•
Model of Care for Children and Young People: Bringing about a reduction in the number of paediatric inpatient units across London as well as the development of Paediatric Assessment Units (PAUs)
NHS London has consistently supported the recommendations of the BEH Clinical Strategy. NHS London Affordability Study
3.2.18
The current system of healthcare provision in London will not be affordable in the future given the tightening economic climate and ongoing underlying activity and cost inflation shifts with forecast expenditure reaching c£16.6bn in 2015/16 compared to a base case funding allocation of £12.6bn.
3.2.19
Over the period to 2015/16, underlying activity in London is forecast to grow at c4% per annum with 1% of this driven by population growth and 3% from residual factors (including consumer demand, policy changes, innovation / new technologies, and supplier induced growth). In contrast, over the same period funding allocations are forecast to grow by just less than 1% per annum (in the base case).
3.2.20
The gap in affordability remains even after including the expected productivity gains implied in the acute tariff which in themselves present a substantial challenge. Over the next 10 years,
Outline Business Case for Implementing the BEH Clinical Strategy 31
productivity improvements of between 3-4% per annum are expected as part of the national tariff. Over the period to 2015/16, this implies a £2.1bn forecast productivity gain within the acute sector. 3.2.21
The Strategy set out the way in which London can achieve the tripartite goals of improving access, raising quality of care, and increasing focus on prevention, whilst also ensuring that the system is economically sustainable. The figure below outlines the six affordability levers that need to be implemented in order to achieve a sustainable financial position in the future. Figure 3.1 NHS London Savings Strategy Savings sources Improved efficiency of acute sector Improved efficiency of non acute sector
Shift to lower cost setting LTC and case management Prevention
Decommissioning
Description
Commissioning levers
▪
Drive productivity improvements through more efficient deployment of staff, increased utilisation of asset base, improved purchasing, rationalisation of estate and operating services at scale
▪
Net tariff
▪
Drive productivity improvements through more efficient deployment of staff, increased utilisation of asset base, improved purchasing, rationalisation of estate and operating services at scale
▪
‘Price’ per unit activity
▪
Eliminate unnecessary and costly service overlaps (e.g., out-ofhours, extended hours, urgent care, A&E)
▪
Shift services that can be safely and more cost effectively provided out of the hospital closer to home
▪
Reduced unit price
▪
Provide proactive care for people outside of hospital to prevent use of hospital services
▪
Reduced acute activity
▪
Reduce demand for healthcare by addressing health behaviours to reduce risk of ill-health and by improved screening to detect ill health at an earlier stage
▪
Reduced acute activity
▪
Stop paying for low value added interventions (e.g., grommets, some joint replacements, some OP follow-ups)
▪
Reduced acute activity
3.2.22
Real change will be needed rapidly as the current system of healthcare will no longer be affordable from 2011/12. It will be vital to seize the changing external economic environment as a catalyst and driver for radical shifts in how services are provided and delivered.
3.3
National Service Framework for Children, Young People and Maternity Services
3.3.1
This is a 10-year programme to stimulate long-term and sustained improvement in children’s health. It aims to ensure that fair, high-quality and integrated health and social care is provided for mothers in pregnancy and children from birth through to adulthood.
3.3.2
The BEH Clinical Strategy sets out that inpatient services for women and children and obstetrician-led maternity services will be transferred from CFH to BH and NMUH. Towards Better Births - Healthcare Commission Review of Maternity Services in England
3.3.3
This report is the culmination of a programme of work by the Commission that incorporates the 2007 maternity services review. The report highlighted concerns that in some Trusts: •
Levels of staffing were well below the average, indicating that they may have been inadequate;
•
Consultant obstetricians did not spend the time recommended by their professional body on labour wards;
•
Doctors and midwives did not attend in-service training courses consistently across trusts;
Outline Business Case for Implementing the BEH Clinical Strategy 32
•
There was not adequate continuity of care for women;
•
Recommendations were not adequately adhered to for ante-natal care, particularly for those women whose pregnancies were likely to be more risky;
•
Women experienced poor communication, care and support after their babies were born.
Maternity Matters: Choice, Access and Continuity of Care in a Safe Service (2007) 3.3.4
The key aim of Maternity Matters is to improve the quality of service, safety, outcomes and satisfaction for all women through offering informed choice around the type of care that they receive, and improved access to services whilst ensuring continuity of care and support. This means providing high quality, safe and accessible services that are both women-focused and family-centred.
3.3.5
In 2005, the government committed to offer all women and their partners a wider choice of type and place of maternity care and birth, stating that four national choice guarantees would be available for all women by the end of 2009 and women and their partners will have opportunities to make well-informed decisions about their care throughout pregnancy, birth and post-natally. The four national choice guarantees are:
3.3.6
•
Choice of how to access maternity care;
•
Choice of type of ante-natal care;
•
Choice of place of birth;
•
Choice of place of post-natal care.
Maternity Matters describes a comprehensive programme for improving choice, access and continuity of care and it sets out a strategy that will put women and their partners at the centre of their local maternity service provision. It highlights how commissioners, providers and teams of maternity care professionals will be able to use the health reform agenda to shape the provision of services to meet the needs of women and their families. It emphasises the roles that each can play in providing women-focused, family-centred services and gives examples of what could be in place to achieve this. Healthcare for London: Meeting the health needs of London’s children and young people: case for change and model of care
3.3.7
The case for change and model of care has been developed by the Healthcare for London Children and Young People’s Project and endorsed by the Clinical Advisory Group and London Commissioning Group.
3.3.8
The model of care sets out to provide a seamless journey for children and young people through the traditional care settings by: •
creating more appropriate access points for urgent and unscheduled care and more appropriate facilities within hospitals for observation and treatment of children and young people without the need to admit to an inpatient ward in all instances;
•
creating multi-disciplinary teams of health professionals who work across the traditional care settings;
•
moving care closer to home for children and young people through providing much more planned care within the local community and investing in community teams to provide care for children with LTCs, complex health needs and the ill child.
3.3.9
The BEH Clinical Strategy proposed the closure of the paediatric inpatient unit at CFH and the development of PAUs on all three acute hospital sites.
3.4
National Policy Framework for Urgent Care National Emergency Care Policy
Outline Business Case for Implementing the BEH Clinical Strategy 33
3.4.1
There are two key principles emerging from national emergency care policy. Firstly, urgent and emergency care should be provided consistently and promptly as part of a whole system of coordinated activities that provides the most appropriate response to patients’ needs. Secondly, urgent and emergency care should be provided as close to people's own home as possible. Direction of Travel for Urgent Care (2006)
3.4.2
In Direction of Travel for Urgent Care (2006), urgent care is defined as “the range of responses that health and care services provide to people who require urgent advice, care, diagnosis or treatment. People using services and their carers should expect 24/7 consistent and rigorous assessment of the urgency of their care needs and an appropriate and prompt response to that need”. Emergency Access: Clinical Case for Change
3.4.3
In Emergency Access: Clinical case for change: Report by Sir George Alberti, the National Director for Emergency Access. (DH Dec 2006), Sir George noted that very few people who attend A&E departments have life-threatening conditions. Some are in pain, others are just uncertain. What is needed is a pyramid of accessible urgent care facilities that include GP outof-hours services, pharmacies, social services, mental health teams, urgent care centres (minor injury units and walk-in centres) and services offered by the voluntary sector. Healthcare for London’s ‘Commissioning a New Delivery Model for Unscheduled Care in London’
3.4.4
Healthcare for London’s ‘Commissioning a new delivery model for unscheduled care in London’ report focuses on improving the way in which the unscheduled care system (emergency and urgent care services) works as a whole, with the aim of improving care and patient experience and making better use of resources. The report highlights the need for an improvement in the accessibility and availability of urgent care to meet the needs of people attending A&E with primary and urgent care needs, and also the need for greater consistency in provision and equity of access.
3.4.5
The implication of this is that Urgent Care Centres (UCCs) should be established to deal with undifferentiated primary care and urgent care caseload at the front of A&E departments in hospitals. The UCCs should be integrated with the emergency department and operate within a common framework of standards and governance. UCCs should provide multi-disciplinary care, with GPs, nurses, midwives, emergency care practitioners, mental health practitioners and social care staff; and develop a strong interface with community services. Access to the same range of urgent care services is also required in the community to address inequalities in access, offer choice and meet rising demand.
3.4.6
The BEH Clinical Strategy proposes that at CFH the current A&E becomes a consultant-led UCC.
3.5
Regional Policy Framework - Objectives of the Local Health Economy
3.5.1
NHS North Central London (“NCL”) has published its Commissioning Strategy and QIPP Plan for the period 2011/12 to 2014/15. The Plan is written in the context of the white paper “Liberating the NHS” together with the Health & Social Care Bill 2011.
3.5.2
NHS North Central London is faced with considerable financial challenges in the next four years. This is clearly indicated by the fact that Barnet, Enfield and Haringey PCTs had a combined underlying deficit run rate of £81.3m as they entered financial year 2011/12.
3.5.3
The key priorities in NCLs plan include:
Outline Business Case for Implementing the BEH Clinical Strategy 34
Table 3.5: NCL Key Priorities 2012/13
Prevention
Closing the prevalence gap Risk stratification
Integrated care (also London priority)
Older people New pathways of care (LTCs and elective) Unscheduled care, including realising the benefits of 111 (London priority) Cancer (London priority) Mental health Commissioning approach
Primary Care (also London priority)
Transformational (5 years)
Clinical and cost effectiveness
Emergency medicine and surgery programme (London priority)
Incremental (1-2 years)
Continuing Care Procedures of limited effectiveness Productivity (London priority) Contract management Referral management Medicines management - acute and primary care Other Clinical Priorities
Maternity (London priority) Stroke trauma and CVD (London priorities) Paediatrics (London priority)
3.5.4
The commissioners are considering how the need to promote integrated working between health and social care and public health is being progressed as part of their current planning round. This case relies upon the successful implementation of initiatives that will strengthen the pathways between health and social care organisations, thus enabling more care to take place closer to home.
3.6
Primary and Community Services
3.6.1
It is acknowledged that development of primary and community care is integral to the successful implementation of the BEH Clinical Strategy.
3.6.2
Since the BEH consultation took place in 2007 progress has been made across all 3 boroughs. In Barnet the rebuilding of Finchley Memorial Hospital, together with the Edgware Community Hospital provides a strong base from which to develop community services. In Enfield a new Health Centre has been established in Edmonton Green and an additional 150,000 GP appointments have been commissioned across the Borough. GPs now have greater access to diagnostic tests such as MRIs and Echocardiogram tests.
3.6.3
New community services have been commissioned to provide care closer to home including pulmonary rehabilitation, ophthalmology, gynaecology and urology services. Other services
Outline Business Case for Implementing the BEH Clinical Strategy 35
provided in the community include musculoskeletal services, diabetic services, oral surgery, COPD and dermatology. 3.6.4
Haringey as an early implementer of the polysystems approach has new and modern estate in Hornsey Central, The Laurels and Lordship Lane and the potential for further investment in Tottenham and on the St Ann’s site.
3.6.5
To build on the progress that has been made, a primary care strategy across North Central London has been developed and Boroughs are developing local implementation plans.
3.6.6
Primary care services across North Central London remain variable in many ways. The quality and accessibility of primary care is variable across the area and within individual Boroughs. This strategy aims to raise the standard across the board, addressing quality, safety, and improving patient experience, to improve the health and wellbeing of the population and give all patients access to the very best in primary care.
3.6.7
This Primary Care Strategy is intended to underpin borough implementation plans which are currently being drawn up to specify the practical details. The combined strategy and implementation plans will determine how the NHS in North Central London will invest in primary care in each of the five Boroughs over the coming years.
3.6.8
To manage the risk of fragmented care, and promote the quality agenda the strategy proposes that practices work together to create integrated care networks that will work with community based clinicians along the patient pathway. This approach will see a continuation of the shift in setting, with an increased number of patients being treated outside the traditional hospital setting where this is appropriate and a move from the use of unscheduled care to more care that is managed and planned. It is intended to be complementary to the BEH Clinical Strategy, supporting the planned changes.
3.7
The Implementation of the BEH Clinical Strategy
3.7.1
Implementing the BEH Clinical Strategy will have an effect both on service provision across the healthcare community and on the demands of the estate across all acute trusts. Some planned surgery will move to CFH from BH and some from NMUH and there will be a significant increase in major emergency services at these two sites (NMUH and BH). Maternity and paediatric services will be reconfigured across the patch with inpatient activity transferring from CFH to NMUH and BH. Major capital investment will be required at all three sites – NMUH, BH and CFH – to ensure the healthcare estate is equipped to cater for the changes. Activity Assumptions
3.7.2
This sub-section summarises the activity and capacity planning that underpinned the BEH Strategy PCBC, as modified in August 2011, and agreed by the BEH Clinical Strategy Steering Group. These assumptions are overlaid onto each Trust’s latest planned activity figures and current bed numbers to determine the additional beds required by both trusts to support the service models for acute care and for women’s and children’s services.
3.7.3
The modelling of clinical activity for the BEH Clinical Strategy PCBC was undertaken by RKW (now part of EC Harris) on behalf of BCF and the three local PCTs using actual activity data for 2006/07; the modelling has been updated to reflect current activity levels based on out-turn for 2010/11.
3.7.4
The key assumptions and drivers for the inpatient activity modelling were: 1. Demography – Office for National Statistics (“ONS”) projections of demographic change by ward of residence on the patient activity occurring at the trust; 2. Model of Care, incorporating several parameters, including: • Admission Avoidance; • Day Case Rates and Performance;
Outline Business Case for Implementing the BEH Clinical Strategy 36
• Efficiency Improvements; • Admissions/Assessment Unit Utilisation; • Sub Acute Transfers; • Occupancy and Availability; 3. Clinical Options, now incorporating only the preferred Option 1; 4. Level of Patient Choice. 3.7.5
The outputs of the inpatient modelling, which was refreshed in July 2011, included analyses of clinical activity, occupied bed days and equivalent numbers of beds to be transferred to each of the provider hospitals to Barnet, Enfield & Haringey PCTs, namely BH, CFH (for electives only), NMUH and a number of hospitals in neighbouring boroughs.
3.7.6
The outpatient model assumed the same demographic changes as the inpatient model but that outpatients would continue at both BH and CFH - no outpatient activity would therefore transfer to NMUH or other hospitals. The level of outpatient activity includes reductions in line with commissioner QIPP assumptions.
3.7.7
The A&E modelling adjusted for demographic changes and identified for each A&E attendance using an algorithm based upon shortest travel times from the patients’ homes (identified by postcode) to hospital to determine to which hospital - BH, CFH (for minors), NMUH, or other nearby hospitals - the patient would be taken. For “majors” and most “minors” arriving by ambulance, it was assumed the emergency services would take the casualty to the nearest acute hospital with an Emergency Department. The HRG determined whether the emergency episode was a “major”, entailing a visit to BH or NMUH, or a [non-ambulance] “minor”, which would entail a visit to CFH’s UCC.
3.7.8
The modelling then used a number of assumptions about bed-occupancy levels and length of stay (using Dr Foster benchmarks to calculate the number of beds to be “transferred” from CFH to NMUH hospital and to BH for all specialties and in aggregate.
3.7.9
The latest modelling assumptions agreed with the PCTs, included: •
Activity profiles linked to the ONS demographic projection for all patient activity occurring at the Trust. The rates used are based on the Sub-national Population Projections for England applied at quinary age groups.
•
A&E attendances and non-elective activity are subject to the travel-times model. This is based on the shortest travel times between postcodes for all patients. It also assumes that patients living outside the boroughs of Barnet and Haringey will be redirected to other hospitals, such as Lister, Whittington, and Royal Free. A small proportion of non-elective patients will in future be treated at home or in the community.
•
The level of attendance in A&E generally is much lower over night and it has been agreed that CFH UCC will open from 9.00am to 9.00pm. Between 9.00pm and 9.00am patients will be redirected to BH or NMUH A&E departments or treated in the GP out-of-hours unit.
•
Efficiency improvements in terms of reduced length of stay have been benchmarked by reference to Dr Foster national practice benchmarks at an HRG level, with separate targets for elective/non-elective, and adults/children. Since the implementation of the BEH Strategy for acute care is due to take place during the financial year 2014/15, the improvements have been applied by each Trust according to its strategic planning assumptions.
•
Levels of occupancy assumed are broadly: elective inpatient beds 95%, non-elective beds 90%, maternity 65% and paediatric beds 85%.
•
Sub-acute transfers – for longer stayers, a portion of non-elective patients would transfer to a community-based site for their rehabilitation at the end of the acute phase of their
Outline Business Case for Implementing the BEH Clinical Strategy 37
treatment. Note this model is already applied by both trusts; CFH currently has 46 rehabilitation beds, which are used by patients from both NMUH and BH as well as existing patients from CFH. It is assumed the existing care pathway will continue with patients migrating from CFH returning for their rehabilitation following an acute phase at either BH or NMUH. 3.7.10
The output of the latest model provides the following distribution of activity based on the base data for 2010/11: Table 3.6: Activity in year one post implementation of the BEH Strategy (2012/13)
2010/11
Post BEH
Change
2010/11
Post BEH
Change
Activity at other sites 2010/11
In Patient Medicine Surgery Maternity Paediatrics Total
26,341 22,566 4,930 5,026 58,863
28,667 22,039 8,606 7,891 67,203
2,326 -527 3,676 2,865 8,340
14,999 22,734 4,966 4,924 47,623
5,804 19,176 0 1783 26,763
-9,195 -3,558 -4,966 -3,141 -20,860
0 0 421 60 481
4,888 2,855 2,889 2,002 12,634
Out Patient First Attendance
82,444
82,444
0
77,268
77,268
0
21,624
0
151,334
151,334
0
149,274
149,274
0
32,954
0
Attendances Major
31,419
39,772
-6,523
37,450
1,559
-34,368
0
14,603
Attendances Minor + Walk in
46,295
51,207
19,788
35,927
29,745
-7,705
0
7,576
Barnet Hospital
Follow Attendance
up
Chase Farm Hospital
NMUH Transfer Post BEH
A&E
3.7.11
The results of this activity dispersal leads to a change in the level of acute inpatient beds across the three hospital sites as can be seen in table 3.7 below:
Outline Business Case for Implementing the BEH Clinical Strategy 38
Table 3.7: Distribution of beds in year one post implementation of the BEH Strategy BGH 2010/11
CFH
Post BEH
Change
2010/11
Post BEH
Change
Transfer to NMH
In Patient Medicine
215
260
45
Rehabilitation
182
-182
46
Elderly Assessment Unit Medical Beds Surgery Gynaecology Surgical Beds
46
0
17
17
215
260
45
228
63
-165
96
78
-18
78
78
0
8
8
0
7
7
0
104
86
-18
85
85
0
6
8
2
11
114
27
Urgent Care ITU
-11
Enhanced Recovery HDU
4 6
8
2
34
34
0
19
46
50
4
30
4
Daycase
18
18
0
19
19
Maternity
36
54
18
44
A&E Ward)
(CDU/Holly
4 0 -19 -26
0
Other beds 0 -44
20
11
Children’s Paediatric
16
30
14
20
-20
&
20
30
10
10
-10
4
7
3
4
3
-1
Children’s beds & cots
40
67
27
34
3
-31
11
459
535
76
440
174
-266
172
NICU, NHDU SCBU (Cots) PAU
Total Beds
3.7.12
The table shows activity for B&CF for 2015/16 and 2020/21. Activity for those years for NUMH comprises: Table 3.8 – NMUH activity one and five years post-BEH completion Elective spells Non-elective spells Obstetrics spells Paediatric spells Total Spells Outpatients A&E/UCC
2015/16 20,464 21,883 6,972 3,901 53,220 245,561 125,328
Outline Business Case for Implementing the BEH Clinical Strategy 39
2020/21 21,876 22,866 7,257 4,034 56,033 262,716 132,517
3.7.13
3.7.14
The above assumptions have been tested to confirm the requirements in the light of: •
latest activity data from CFH as modelled by EC Harris.
•
changes to the bed-base in the last few years;
•
suitability of existing accommodation in the retained estate of all hospitals;
•
latest thinking around models of care for Women and Children’s and other services;
A letter from the BEH Project Board/NCL Cluster confirming their understanding of the activity assumptions will be included as Appendix 9.2 prior to taking the case to the Trust Board and SHA CIC.
Outline Business Case for Implementing the BEH Clinical Strategy 40
4.
Strategic Case: North Middlesex
4.1
NMUH Trust Clinical Strategy
4.1.1
The strategy of the Trust is wholly consistent with the BEH Clinical Strategy. The strategic direction is based on modest growth assumptions enhanced by the additional activity associated with the preferred option under the BEH strategy.
4.1.2
The Trust’s “Vision for the Future” is to be: The hospital of choice for our local community, providing first class patient care in state-of-the-art healthcare facilities. As a foundation trust NMUH proposes becoming one of the major acute hospitals in London that also offers primary and social care facilities on the hospital site.
4.1.3
There is wide support across the local health economy for this vision of NMUH. This is evidenced by commissioner and NHS London support for the PFI Full Business Case, which they approved in the spring of 2007, and the Trust’s participation in the BEH Clinical Strategy Project Board.
4.1.4
The approval of the PFI scheme re-confirms the already-held view of NHS London, of the North Middlesex’s site in Edmonton as a fixed point for the delivery of major acute care, including A&E services; the opening of the new hospital in 2010 and decanting of services out of the Edwardian buildings gives the Trust the opportunity to further develop the site on this basis. Objectives of Local Health Economy and Trust Contribution
4.1.5
4.1.6
The backdrop of PCTs that are extremely financially challenged defines commissioners’ key planning and service delivery assumptions. Their objectives include: •
Shift of service from hospital to primary care – developing services closer to people’s homes and plans for admissions avoidance, facilitating early discharge, managing followup out-patient care and developing more community-based service. The Trust is working with primary care to support development of urgent care hubs to reduce emergency admissions and exploring opportunities to shift some specific services to a community base;
•
Development and roll-out of GP consortia in 2012/13 supported by incentives for collaborative working between clinicians in primary and secondary care to develop improved integrated care pathways;
•
Development of ambulatory care to treat urgent but not life-threatening conditions. The Trust has just opened an ambulatory care facility on site for the new model of care, taking suitable patients directly from A&E via other protocols;
•
Continuing redesign of services to make them more patient-centred and streamlined. The Trust is developing nurse-led in-reach and out-reach service to reduce length of stay and improve patient experience;
•
Support the expansion of emergency activity driven by the implementation of the BEH Clinical Strategy.
The Trust and local commissioners are keen to work together to jointly develop plans for addressing the issues identified above, including: •
The improved management of emergency referrals in primary/community care settings, which is aimed at constraining growth in the rate of emergency medical admissions;
•
The implementation of the jointly agreed Urgent Care Centre model which involves GPs working in the Trust A&E department to reduce minor case activity;
•
The delivery of greater volume of routine outpatient activity within community and primary care setting, involving greater working of secondary clinicians outside of the traditional hospital environment.
Outline Business Case for Implementing the BEH Clinical Strategy 41
NCL Commissioning Strategy and QIPP Programme 4.1.7
The Trust has worked closely with the NCL London Cluster to agree the baseline activity for 2012/13 and ensure all activity assumptions for the next three years that are built into the Trust’s LTFM (long-term financial model) are discussed and agreed.
4.1.8
The Trust has reviewed its relevant NHS London SaFE (Safe and Financially Effective) assumptions, which together with the McKinsey Health-check and the Trust’s internal LTFM modelling all show similar potential productivity improvements; a total of between £21 and £24m over the next three years focused in length of stay reductions, admin and SP&T staff, theatre and outpatient productivity, back office programmes and procurement.
4.1.9
The SaFE analysis will help in:
4.1.10
•
Refining and further developing current QIPP plans going forward;
•
Emphasising the need for considered and rapid service reconfiguration in North Central London
A three-year programme was formally launched in November 2011 with a view to having three year plans with both a PID and a Quality and Equality Impact Assessment undertaken for every scheme and signed off by the Trust Board at the February 2012 Trust Board meeting. The plans being developed are in line with the commissioners’ QIPP ideas, the ongoing UCLP work and the key areas of productivity opportunity identified through the SaFE analysis. The local commissioning intentions are being factored in to this work. Each of the Trust’s Clinical Business Units (“CBUs”) will be working up their schemes with the support of the Trust wide Programme Management Office and key cross-Trust enabling schemes will be driven by one of the PMO Project Managers. Trust Plans for Maternity and Children’s Services
4.1.11
The Trust is expecting a substantial increase in the demand for maternity services, both as a result of the impact of population demographics, and as a result of the BEH Clinical Strategy.
4.1.12
The unit is expected to grow from approximately 3,700 births in 2011/12 up to around 6,000 births by 2016/17. As a consequence not only will the level of obstetric consultant cover substantially increase in line with national requirements, the level of midwives will also increase to sustain the national ratios expected of the unit. In addition, the provision of targeted antenatal services for specific ethnic minorities will continue to be developed along similar lines to the Turkish ante-natal services already provided.
4.1.13
The outcome of a full review of maternity services by the Health Care Commission (HCC) continues to form part of a wider Maternity Services Improvement Programme that the Trust and its commissioners are working in collaboration on. Set out below are the more detailed plans that the Trust is putting in place to deliver enhanced maternity care.
4.1.14
To achieve this target the Trust needs to have 1:30 ratio of midwives to births, as recommended by Birth Rate Plus and the HCC. The current ratio is 1:33 and planned to be 1:30 by the middle of 2012/13. Year on year investment has been identified by the Trust and in 2011/12 additional midwives will have been recruited to achieve these targets.
4.1.15
There has been further investment in maternity support workers and additional administrative cover for the unit to free up midwives’ time from non-midwifery duties. A new model of care has also been developed which will streamline the care pathway and make better use of triage and MDU (Maternity Day Unit) facilities to reduce the number of non-labouring women on labour ward. These strategies will increase the ability to provide 1 to 1 care within the current establishment of midwives.
4.1.16
The maternity service will have approved staffing levels for prospective consultant obstetrician presence on the labour ward, which are in line with Safer Childbirth (RCOG 2007) recommendations and will ensure it meets enhanced levels as the volume of deliveries increases.
Outline Business Case for Implementing the BEH Clinical Strategy 42
Calculation of Increase in Birth Rate 4.1.17
Calculations of increases in birth rate have been modelled including and excluding the potential change in local provision following the outcome of the BEH Clinical Strategy. Physical Capacity
4.1.18
In line with changes proposed in the local economy, (BEH Clinical Strategy) and the completion of the new PFI build in 2010, planning for different options to accommodate maternity services is underway. This centres around a new model of care including enhanced triage and an expanded MDU and includes provision of a new delivery suite and new midwifery-led birthing unit. This will provide capacity for expansion to accommodate an increase in the birth numbers. Children’s Services
4.1.19
As a consequence of the increased numbers of births within the Trust, the provision of neonatal cots will increase significantly. This will both support the maternity service and enable the critical mass of paediatric services to be well supported on the site. Working with primary care, the Trust will ensure that there are appropriate services provided in the community to support local secondary care services. Trust Model of Care and Plans for A&E and Emergency Services
4.1.20
To support the ED the Trust has introduced an Urgent Care Centre, working alongside local GP commissioning consortia, to ensure that only those patients who need acute care are admitted into the AMU and the wider Trust. This service improvement is also designed to preempt the shift of increased attendances as part of the BEH strategy.
4.1.21
The model of care for the expanded activity level will build on the current model of care and service delivery. The Acute Medical Unit (“AMU”) provides dedicated acute physician led care with focussed diagnostic support for the rapid assessment, diagnosis, treatment, discharge or admission of all medically referred patients and will be supported by an expanded medical bed base for longer stayers and for emergency surgical procedures an expanded set of emergency surgical pathways ensuring senior review within 12 hours and timely access to state of the art operating theatres. The capacity of the AMU and the adjacent medical beds means that the model of care can be flexed to ensure the unit operates at maximum efficiency.
4.1.22
The Trust has also implemented a new bed management system that allows real-time, electronic updating of patient status at ward level, by clinical staff. This enables the site and discharge team to maintain and monitor an accurate picture of the bed position across our wards and identify where patients are due for discharge and expedite the process of making beds available. Using this new technology, this co-ordination role has been made easier and more transparent for both managers and clinicians, meaning that it is easier to understand what steps need to be taken to ensure effective care for patients to support them going back home, to families or carers quicker than before.
4.1.23
The Trust is also supporting the existing operational procedures with an ambulatory care model to support patients who, although requiring consultant-led, urgent acute care may not require an overnight stay. Using protocols, clinicians are able to identify patients across nine care pathways in the ED and speed them along to the ambulatory care unit where they will receive treatment and either return as an outpatient or move into the care of the community teams for their follow up.
4.1.24
Taken together, the Trust is confident that this improvement in the existing care pathways as well as the introduction of new models to support better patient flow will improve the patient experience and efficacy of care and deliver sustainable improvements to length of stay.
4.2
New Hospital Development – PFI scheme
4.2.1
The Trust signed a thirty four-year agreement under the Private Finance Initiative with the Bouygues Consortium in August 2007.
Outline Business Case for Implementing the BEH Clinical Strategy 43
4.2.2
Construction work began in August 2007 and the new hospital building was handed over to the Trust in April 2010. After two months of commissioning the new building was fully open for business at the end of May 2010.
4.2.3
As described in the Introduction, the new hospital building was subject to a variation to incorporate the capacity changes necessary for the implementation of the BEH Clinical Strategy, including the addition of a 29-bed medical ward.
4.2.4
The final phase of the project (grounds, gardens, roads and car parks) was completed in July 2011. The Trust has agreed a minor variation with Project Co in respect of the external works in order to facilitate the new build necessary to achieve a complete solution to the BEH Strategy.
4.3
Impact of the BEH Clinical Strategy
4.3.1
The PCBC identified the additional accommodation requirements for NMUH as: •
Seven paediatric beds;
•
19 maternity beds;
•
5 NICU incubators;
•
120 general and acute beds;
•
one further operating theatre
•
two diagnostic imaging rooms;
•
two ITU/HDU beds; and
•
supporting accommodation
4.3.2
The above assumptions were subsequently tested to confirm the clinical requirements in the light of the re-modelling of activity by EC Harris based on latest reported out-turn at CFH for 2010/11.
4.3.3
The re-modelling undertaken by EC Harris indicates a marginal change in the total volumes of activity expected to transfer to NMUH when compared to the output supporting the PCBC. This is outlined below. Table 4.1 – BEH Modelling Outcomes
PCBC Modelling Maternity
Latest modelling 1
Trust’s estimate
Spells
Beds
Spells
2,218
19
2,889
20
2,002
11
7,743
141
Children
1,181
10
General Acute
8,213
124
3
Beds
ITU/HDU
2
17 11
4
117 4
SCBU/NICU Total
Beds
10 11,612
153
12,634
1 based on current LoS 2 see explanation of maternity beds at Table 4.6 3 all children, including Paediatric specialty 1,450 4 see explanation at Table 4.3
Outline Business Case for Implementing the BEH Clinical Strategy 44
172
159
4.3.4
In relation to the change in transfer volumes it is important to note that in the original modelling children spells where the care was not under a paediatrician were incorporated into the general and acute beds, whereas the latest modelling groups all children and young people together.
4.3.5
Although there has been some change in case-mix, the increase in the number of spells can be explained by the increase in obstetric spells largely as a result of the decision not to include a midwifery-led birthing unit at CFH.
4.3.6
In summary the net impact of the approved strategy (i.e. “Option 1”) as currently proposed by BEH, upon NMUH is to increase the level of clinical activity undertaken from January 2015 as follows: Table 4.2 – Summary of Inpatient Spells
Medical - elective Surgical - elective
NMUH 11/12 Spells 324 1,784
4.3.8
Total Spells
0 0
324 1,784
2,108 9,498 3,993
0 4,888 2,855
2,108 14,386 6,848
Total - non-elective
13,491
7,743
21,234
Total - Adults Children Obstetrics
15,599 2,153 4,360
7,743 2,002 2,889
23,342 4,155 7,249
Total Spells
22,112
12,634
34,746
Total - IP elective Medical - non-elective Surgical - non-elective
4.3.7
Transfer from CF Spells
Key features of the activity that is anticipated to transfer to the NMUH that are key to highlight include: •
Emergency-driven, non-elective adult in-patient spells increased by 7,700;
•
Increase of approx 2,000 non-elective in-patient spells involving children and young people under the age of 19;
•
Increase of approx 3,000 obstetrics spells, including around 1,850 births;
•
Note, although the BEH Strategy did not indicate any increase in ante-natal outpatients visits as a result of the increased number of births, the trust has made an allowance for an increased number in its design work for Women & Children;
The impact on NMUH beds of the activity and capacity planning is set out in the table below: Table 4.3: Impact on Beds Current Beds
Medical beds Surgical Beds Total general & Acute Adult Beds ITU/HDU Total Adult Acute Beds Maternity Children SCBU/NICU
213 59 272 8 280 44 25 18
Outline Business Case for Implementing the BEH Clinical Strategy 45
Projected Requirement
299 92 391 12 403 61 36 28
Capacity Planned
Planned Increase
300 89 389 12 401 61 36 28
87 30 117 4 121 17 11 10
Total beds 4.3.9
367
528
526
159
The small difference between projected is due to physical capacity being based on whole wards. The bed numbers are explained in the following sections. Bed Capacity Planning – Acute beds
4.3.10
This section outlines the additional bed requirements that are needed to accommodate the acute activity that will transfer, the Trust’s existing bed base and also incorporates planned length of stay improvements that are planned by the Trust to derive an over arching bed requirement post implementation of the strategy. As such the changes in bed numbers and bed utilisation are presented as a before and after implementation analysis for the existing NMUH workload and that transferring from CFH. These are then combined to give a combined position for NMUH after implementation.
4.3.11
The reason for this particular approach is that the existing models of care appear to be somewhat different and more importantly the ongoing care is also planned to be different. In particular, it is anticipated that the former CFH patients will only remain at NMUH for the acute part of their spell of care, returning to a local facility for ongoing care.
4.3.12
This is not felt to be appropriate for existing patients as NMUH is, by definition within their normal catchment area.
4.3.13
The workload transferring and performance have been defined in the baseline modelling undertaken by EC Harris as set out in Table 4.1. Revised Model of Care and Performance Improvement
4.3.14
Whilst it is determined that the current projected volume of activity transferring to NMUH would equate to an additional adult acute bed requirement of 141 based on existing length of stay at CFH, the impact once transferred needs to be calibrated for a number of items as detailed below:
4.3.15
It is important to reiterate that the single most powerful assumption from the EC Harris modelling is that 70% of all patients with a length of stay over 21 days will transfer at that point to an ongoing care facility, probably at CFH, for the remainder of their spell.
4.3.16
The EC Harris modelling also applied a performance improvement calculated against external benchmarking data. NMUH has validated this against Dr Foster Upper Quartile performance and is assured then when taken in combination with the over 21 day parameter this will result in a challenging but deliverable performance improvement.
4.3.17
NMUH intends to deliver this change through project managed initiatives including utilisation of Real Time bed management system in the same way that it has for its existing bed base.
4.3.18
The resulting occupied beds are then converted into a bed requirement using the occupancy rates specified in the EC Harris modelling (90% for adult acute, 85% for paediatric and 65% for obstetrics).
4.3.19
The table below shows the length of stay improvement and the revised bed requirement by specialty group. It must be emphasised that these lengths of stay are not directly comparable because after implementation a proportion of the patients will continue their care as inpatients but in another location. Table 4.4 – Lengths of Stay Specialty Groups Medical Surgery Total General & Acute
Occupied Beds
ALOS
149 56 206
5.5 3.0 4.8
Outline Business Case for Implementing the BEH Clinical Strategy 46
Benchmarked Occupied Beds 80 28 108
Benchmarked ALOS 2.9 1.6 2.6
Required Beds 88.5 31.5 120.0
4.3.20
Having incorporated reasonable length of stay efficiencies and when combined with a planned occupancy rate of 90%, the Trust anticipates an acute bed requirement of 120 in order to accommodate the activity that will transfer from CFH as a consequence of the implementation of the BEH Clinical Strategy. This is consistent with the 120 adult acute beds required for the transfer that was specified in the PCBC modelling. Existing North Middlesex Bed Base
4.3.21
This requirement needs to be overlaid on top of the Trust’s existing bed base. NMUH is currently treating around 16,000 patients with average occupied beds of 298 given the prevailing length of stay. This is shown in the table below: Table 4.5 – Existing Beds
Specialty Groups
Spells
LoS
Occupied Beds Required Beds *
Medical - elective
324
6.9
6
7
Surgical - elective
1,784
3.1
15
17
Total - IP elective
2,108
3.7
21
24
Medical - non-elective
9,498
7.8
203
225
Surgical - non-elective
3,993
4.0
44
49
Total - non-elective
13,491
6.6
247
274
Total adult acute
15,599
268
298
Occupancy rate – 90%
4.3.22
The challenge faced by NMUH, regardless of the BEH strategy is to improve its performance against length of stay metrics, with the aim of matching upper quartile performance nationally.
4.3.23
NMUH has established an ongoing project to reduce its length of stay with performance targets drawn from Dr Foster Upper Quartile benchmarking. Key elements of this length of stay improvement project are detailed below:
4.3.24
•
Development of ambulatory care unit to take admissions direct from A&E and some from IP beds for relevant conditions based on agreed pathways – opened mid-October 2011;
•
Use of agreed emergency surgical pathways for circa 20+ conditions to prevent admission and/or ensure speedier access to theatres to reduce LoS – implemented in September 2011;
•
Use of “RealTime” to assist with Estimated Discharge Date creation and decision making to support these – roll out completed in October 2011;
•
Focus on support required to ensure an increase in weekend discharges both internally and outside of normal provision of acute services from October 2011.
As a result of this work by time of the implementation of the BEH strategy NMUH expects to be delivering the same workload through a reduced complement of occupied beds. This is shown in the table below:
Outline Business Case for Implementing the BEH Clinical Strategy 47
Table 4.6 – Future Beds Specialty Groups
4.3.25
Spells
LoS
Occupied Beds
Required Beds *
Medical - elective
324
5.5
5
5
Surgical - elective
1,784
2.7
13
15
Total - IP elective
2,108
3.1
18
20
Medical - non-elective
9,498
7.1
185
206
Surgical - non-elective
3,993
3.7
41
45
Total - non-elective
13,491
6.1
226
251
Total adult acute
15,599
244
271
The resulting position is that NMUH can maintain its existing activity within its existing bed complement and also deliver reduced occupancy levels as identified in the EC Harris modelling for the transferring activity. This reduction releases sufficient beds to replace the existing winter pressure facilities on T5 and T6, which will be used to provide the refurbished capacity for the BEH implementation. NMUH Bed Strategy Post BEH Implementation
4.3.26
As identified in the paragraphs above, NMUH has identified the activity levels required following the BEH Strategy implementation and defined models of care and performance improvements to meet this demand efficiently and effectively.
4.3.27
The table below identifies these levels of activity, the required occupied and available beds to meet this demand and demonstrates that this is within the proposed bed complement. Table 4.7 – Aggregate Beds
Activity & Bed Numbers
NMUH
NMUH
Chase
Specialty Groups
Spells
Bed nos.
Chase
Spells
Bed nos.
Total
Total
Spells
Bed Nos.
Medical - elective
324
5
0
0
324
5
Surgical - elective
1,784
15
0
0
1,784
15
Total - IP elective
2,108
20
0
0
2,108
20
Medical - non-elective
9,498
206
4,977
89
14,475
294
Surgical - non-elective
3,993
45
2,761
32
6,754
77
Total - non-elective
13,491
251
7,738
120
21,229
371
Total adult acute
15,599
271
7,738
120
23,337
391
A&E and Related Areas 4.3.28
Further capacity modelling was carried out to determine what other modifications and/or additional accommodation would be required in order to conduct the full range of clinical services for the additional activity.
4.3.29
The Accident & Emergency Department was designed based on capacity planning assumptions that excluded the impact of the BEH Clinical Strategy. The number of A&E attendances for 2010/11 was approx 112,000, similar to previous years, with a further 23,000 urgent care attendances. With demand management measures taking effect, the level of attendances is expected to fall in 2011/12 and remain stable thereafter.
4.3.30
The EC Harris modelling gave an estimated figure of 22,000 attendances, which is an increase of 16% on the actual attendances for 2010/11; however since the increase is primarily “majors” and “blue-lights”, attendees will require a greater than average level of care and a high proportion of admissions - this is reflected in the 50% increase in non-elective in-patient spells.
Outline Business Case for Implementing the BEH Clinical Strategy 48
4.3.31
The Trust’s Healthcare Planning advisors have reviewed the planning assumptions made for the Full Business Case in 2007 and re-modelled the A&E capacity requirements. The summary report is included in Appendix 4.1 but the key findings were: •
Two additional A&E “majors” cubicles required;
•
One additional treatment room;
•
One additional Resus bay;
•
No additional rooms/spaces for children necessary as the Paediatric A&E area already includes spare capacity.
4.3.32
These additions were incorporated into the expanded A&E through the PFI variation.
4.3.33
Clearly a large increase in the number of serious casualties will mean that further emergency diagnostic facilities are required. The emergency imaging suite in the new hospital was designed to comprise: one CT room, MRI suite and two general x-ray rooms. The variation to the PFI scheme incorporated the further facilities required to service the additional activity: one additional general x-ray room was added, together with a further ultrasound room in the planned imaging suite.
4.3.34
The FBC modelling determined that the level of activity required two inpatient operating theatres for elective work and one for non-elective work. To fulfil the need to have an emergency theatre available at all times the new hospital design included four theatres altogether. The additional activity requires the equivalent of one additional theatre, making five in total. There is no impact on the Elective Theatres as there is only minor change in the amount of elective activity under the BEH Strategy.
4.3.35
There will be a small increased demand for endoscopy services. It is assumed that extended working hours will enable the elective work to be scheduled to allow for the intervening demand for emergency-led cases.
4.3.36
The activity modelling undertaken by RKW/EC Harris did not predict any additional outpatient attendances at NMUH, on the basis that outpatient clinics will continue to be held at CFH or transfer to the community.
4.3.37
The increased number of emergency-driven admissions will generate a greater mortality and a further eight body fridges were incorporated into the mortuary design.
4.3.38
Below is a summary of the changes made to the new PFI hospital as part of the variation: Table 4.8 – PFI Variation New Hospital Design
Chase Farm Increase
Upgraded Capacity
In-patient beds
90
29
119
Assessment Unit
48
0
48
Main Operating Theatres
4
1
5
Day Surgery (including Ophthalmology)
3
0
3
Total Theatres
7
1
8
Endoscopy Rooms
2
0
2
Critical care beds
12
0
12
Outline Business Case for Implementing the BEH Clinical Strategy 49
New Hospital Design
Chase Farm Increase
Upgraded Capacity
A&E: •
Assessment/streaming rooms
•
Exam/Treatment Rooms
8 24 5
0 3 1
8 27 6
9 ?
0 ?
9 ?
2 1 1
1 0 0
3 1 1
2 1 2 1 1 2
0 0 0 0 0 1
2 1 2 1 1 3
Procedure Rooms
3
0
3
DTC Consulting/Exam Rooms
28
0
28
Mortuary capacity (fridges/freezers)
36
8
44
• Resus bays Children’s A&E (excluding assessment) •
Exam spaces
•
Assessment Unit cots
Diagnostic Imaging (Emergency) •
General Rooms
•
CT
•
MRI
Diagnostic Imaging (Planned) •
General Rooms
•
CT
•
Fluoroscopy
•
Mammography
•
Mammography Ultrasound
•
Ultrasound
4.4
Conclusion
4.4.1
Whilst the recent variation to the PFI contract has dealt fully with the greater needs of the Emergency Care Centre within the new PFI building, the further requirements in terms of expanded maternity care facilities and additional acute beds are set out herein.
4.5
Maternity - Model of Care
4.5.1
The net impact of the approved Clinical Strategy (“Option 1”) upon NMUH as currently proposed by BEH, assuming closure of 24-hour A&E and emergency admissions at CFH, is to increase the level of maternity activity undertaken by 2014/15 as follows: •
Increase of approx 1,850 births, together with associated ante-natal spells relating to non-deliveries;
•
Proportionate increase in NICU/SCBU spells based on number of births;
4.5.2
Maternity services are currently delivered from the ground floor of the Podium, with the inpatient ward being located on T4 (fourth floor of Tower Block).
4.5.3
In order to modernise its maternity service, providing improved and expanded facilities and offering women the right degree of choice over how to access maternity care and place to give birth, the Trust is adopting many of the recommendations of best practice identified by, amongst others: •
The Birthplace Research Project;
•
Maternity Matters 2007
•
Safer Childbirth October 2007
•
Royal Colleges’ Standards for Maternity Care 2008
•
Towards better births, Healthcare Commission 2008
Outline Business Case for Implementing the BEH Clinical Strategy 50
4.5.4
•
National Service Framework for Children, Young People and Maternity Services
•
RCOG standards for consultant obstetrician presence on labour wards
The model of care for NMUH will be based upon providing women with a range of choices in relation to their confinement. For women at low risk of complications for delivery the options will be: •
Home birth – having the baby in their own home with the support of midwives from their name community team; with post-natal care being provided in the community, such as at home or in a Children’s Centre or local Primary care Health centres;
•
Midwife-delivered care in a “home-from-home” environment – having their baby in their own comfortable room with a home-from-home environment, supported by midwives from the hospital and community. This will be a midwifery-run unit collocated with the Maternity Service at NMUH. Post-natal care will be provided in the community.
•
Obstetric-led care in the Labour Ward – having their baby in their own room, supported by midwives and doctors from the hospital. Following birth, post-natal care will be provided in the hospital and continued in the community. Rooms on the Labour Ward will be individual with private facilities offering privacy and dignity. The patient’s pathway has been paramount in the design.
4.5.5
A proportion of women will experience unexpected complications prior to or at the time of their labour and may therefore have an elevated risk to themselves and their baby. For these women a smooth process will be in place to ensure that they receive all necessary attention and any transfer to the Obstetric Unit that might be required.
4.5.6
Care for women at higher risk of complications for delivery will essentially be delivered through the obstetric-led unit but women will have input from specialist multi-disciplinary teams that might include obstetricians, paediatricians, anaesthetists, haematologists, infectious diseases specialists and special care baby unit or neonatal intensive care. The adjacencies with the design ensure a reduction in the clinical risk to patients.
4.5.7
A fully equipped modern high dependency area will provide more intensive support for those women who need it. The Trust will, in advance of the activity transferring in August 2014, move to providing 98 hours per week of consultant obstetric time on its labour ward to provide specialist input and senior clinical leadership. Maternity - Capacity Planning
4.5.8
The predicted activity for maternity is based upon a range of predictions. High growth is based on Health Care for London’s Maternity Needs Assessment 2009, LHO data (London Health Observatory), which gave an average predicted increase in births in London of 2.9% per annum or 15% over five years.
4.5.9
The public health intelligence published by NHS Islington indicates growth in birth numbers of 4.9% in Haringey over the decade to 2018/19 and a reduction in the Borough of Enfield. The Trust understands that the growth in the wards to the south of Enfield is more likely to match that in Haringey and this is the basis of the “low growth” estimate.
4.5.10
More recent data from the GLA of projected London births by borough/ward shows an increase in Haringey of 8.8% from 2010 to 2016 (the planning horizon for this business case) and an increase in South Enfield of 9.7%. The middle growth estimate is therefore 9%; this gives the following range:
Outline Business Case for Implementing the BEH Clinical Strategy 51
Table 4.9: Maternity Activity – Predicted Deliveries
Low growth
Medium
Total deliveries 2010/11
3,646
3,646
3,646
Add Chase Farm
1,850
1,850
1,850
269
495
824
5,765
5,991
6,320
Growth to 2016/17 Total predicted deliveries 2016/17
High growth
4.5.11
The Trust is therefore planning for a future capacity of 6,000 based upon the) current GLA predicted growth rate to 2016/17 (the horizon year for the BEH modelling). There is also an assumption that a new maternity unit will tend to attract women who exercise choice of which hospital to give birth. The Trust is confident that the planned capacity can deliver the range of activity indicated above.
4.5.12
The activity is broken down as follows: Table 4.10: Maternity – Analysis of Activity
2010/11
2016/17
1,823
3,000
Caesarean Sections
911
1,500
Midwife-led deliveries
912
1,500
3,646
6,000
Vaginal Deliveries (consultant-led)
Total deliveries 4.5.13
Note that although a significant proportion of deliveries currently are midwife-led, the above table shows the number of midwife-led deliveries that is predicted for the new midwife-led unit.
4.5.14
A capacity of 6,000 deliveries leads to the following beds and facilities: Table 4.11 – Maternity Beds
Current Ante/Post Natal Beds
Planned
Additional
29
30
1
0
6
6
15
17
2
0
8
8
Total Maternity Beds
44
61
17
Triage Suite Couches
2
3
1
Maternity Day Unit Couches
3
6
3
Induction Suite
0
4
4
49
74
25
Transitional Beds Consultant-Led Delivery Suite Midwife-Led Birthing Unit
Total Beds/Couches 4.5.15
In deriving the bed numbers the Trust is assuming that its currently achieved lengths of stay, will be maintained slightly below the Dr Foster expected length of stay for the Trust, with further improvement driven by the increased scale and efficiency of the new maternity facilities.
4.5.16
The re-provided maternity beds and facilities will include: •
A transitional ward of six single rooms and cots for Caring Together Scheme;
•
A larger Maternity Day Unit with six cubicles/couches;
•
Triage unit with three consult/exam rooms each with a couch;
Outline Business Case for Implementing the BEH Clinical Strategy 52
•
Induction suite with four beds, also capable of delivery, PN and AN Care;
•
Mid-wife led delivery suite to comprise eight birthing rooms with en-suite facilities, including four birthing pools;
•
Enlarged obstetrician-led (high-risk) delivery suite of 17 rooms, each room with en-suite facilities, including four high dependency beds and a bereavement room.
•
Two dedicated emergency theatres, one of which will be used for elective and emergency caesareans, with a four-bedded recovery bay;
•
Larger ante-natal/outpatients area, including ultrasound, to cater for the proportionate increase in ante-natal visits
•
Replacement of the maternity ward with accommodation meeting current clinical standards for space, facilities and single rooms.
4.5.17
Discharge lounge comprising eight chairs, with two clinical examination rooms (including one for paediatricians), and facilities for mothers and babies who are ready to go home and don’t need to be admitted to the maternity ward.
4.5.18
Although the number of “beds” increases by 40%, the overall facilities (i.e. beds and couches) increases by over 50% and is commensurate with the expected levels of activity. The model of care and size of facilities allows beds to be used more flexibly and further pressure is removed by making use of a discharge lounge that provides facilities for a further eight mothers who would otherwise be occupying beds on the labour or post-natal ward.
4.5.19
The Outpatients area will incorporate gynaecology facilities, which will include clinic rooms, ultrasound and Colposcopy. The Early Pregnancy Unit is located in the new PFI hospital building. Rationale for Investment
4.5.20
The re-provision of most of the existing maternity accommodation at NMUH will be the next step in modernisation of the hospital and provide state-of-the art facilities to complement the new PFI building, which opened in 2010 and largely replaced the century old part of the estate. The main benefits that the investment will deliver for the Trust’s maternity services include: •
Modern facilities to replace existing facilities that were originally commissioned in 1970 and have not received any significant upgrade in standards since.
•
Expansion of facilities by around 50% overall to meet the additional demand arising from the BEH Strategy.
•
Better adjacencies of the different elements of the maternity service, improving patient flow, increasing flexibility, improving patient experience and reducing length of stay;
•
Better flow through ante-natal, labour ward, transitional beds and post-natal facilities;
•
Greater choice for women, with a separate larger midwife-led birthing unit, incorporating birthing pools and sensory rooms;
•
New facilities will help support changes in the model of care and reduce length of stay significantly and in line with the best of our peers.
Children & Young People - Model of Care 4.5.21
The children’s ward (“Rainbow Ward”) is located on T2 (second floor Tower Block). There is a separate Children’s A&E area adjacent to the adult A&E Department, in the new building, which operates 24/7; this incorporates a small paediatric assessment area, which provides scope to increase the children’s A&E capacity.
Outline Business Case for Implementing the BEH Clinical Strategy 53
4.5.22
The model of care therefore already fits into with the model envisaged by the Healthcare for London Children and Young People’s Project and the Trust’s intention is to ensure this model is replicated and enlarged for the BEH Clinical Strategy.
4.5.23
There is a separate Children’s Outpatients Department on the lower ground floor of the new PFI hospital, which also includes a day assessment unit. The Children’s A&E Department is located on the ground floor of the new building – A&E has a single entrance but adults and children are immediately separated, with children being directed into the Paediatric A&E area.
4.5.24
The Trust has identified a requirement for an additional 11 paediatric beds, which will comprise a Paediatric Assessment and short-stay Unit. The area identified for this is the first floor of the Tower Block, which is currently under-utilised and vertically adjacent to the existing children’s ward, which is on the floor above.
4.5.25
The Trust intends that the assessment unit should be operational 24 hours a day; this means that the assessment unit can become an observation and short-stay ward (replicating the adult model), and its collocation with the existing 25-bed inpatient ward means that it will be easier to maintain the requisite level of consultant cover at all times. The reason this works is that, whilst a large proportion of children coming from CFH will have to be admitted, there is a large cohort of patients that spend one day or less on the ward, who will be seen and treated in the EPAU/short-stay unit instead. Children - Capacity Planning
4.5.26
The following table shows the level of activity for children, which includes both those under the care of a paediatrician and children admitted under other specialities, such as trauma, for the Trust plus additional activity from CFH: Table 4.12: Children Activity
NMUH 2010/11
Chase Farm
Total 2010/11
2,038
1,646
3,684
599
354
953
2,637
2,000
4,637
Paediatric spells Children - other specialities Total Spells - children 4.5.27
This activity and the resulting bed numbers can be broken down further, showing the split between short-stay and inpatient spells, as follows: Table 4.13 Children – Analysis of Activity
NMUH 2010/11
Chase Farm
Total 2010/11
Spells – one day or less
1,336
1,800
3,136
Spells – two days or more
1,301
200
1,501
Total Spells
2,637
2,000
4,637
3
7
10
Beds – inpatient ward
23
2
25
Total beds
26
9
35
Beds – short stay
Children A&E Attendances 4.5.28
In 2010/11 there were 30,000 attendances at A&E by children and 4,000 attendances at the UCC. The modelling by EC Harris estimated that the BEH Clinical Strategy would deliver an additional 6,000 A&E attendances, an increase of 18%, including 2,000 attendances by ambulance.
Outline Business Case for Implementing the BEH Clinical Strategy 54
4.5.29
The additional activity arises because of closing CFH’s 24/7 A&E Department and emergency admissions. The BEH Clinical Strategy is for a Paediatric Assessment Unit to be maintained on the CFH site. This means that most attendances at CFH A&E, which will become a local A&E/Minor Injuries Unit/Urgent Care Centre, will be filtered through the assessment unit, with only patients requiring admission being transferred either to BH or to the NMUH, in addition to those coming by ambulance or upon urgent referral by their GP.
4.5.30
No specific changes to Children’s A&E, which could expand into the existing small assessment area, as the new model of care will admit a greater proportion of children to the new Assessment and short-stay Unit. Neo-Natal Intensive Care Unit (“NICU”)
4.5.31
The Trust’s Neo-natal Unit provides care for newborns up to Level 2 in a unit of 18 cots. Following a review of provision in the light of the significantly increased maternity activity, it was determined that a further ten cots could be provided within a new, larger neo-natal facility located in the new building.
4.6
Functional Requirements
4.6.1
In advance of the full implementation of the BEH Clinical Strategy, alterations to the new PFI Building to expand the capacity of the A&E Department were undertaken through a PFI Variation in 2010. The alterations would serve to satisfy the “ripple effect” of extra theatres and diagnostic facilities providing an additional 29 no acute beds and an extension to the A&E department and emergency facilities.
4.6.2
This business case sets out to fulfil the remaining requirements generated by the BEH Clinical Strategy. In summary these comprise; (a) Reconfiguration and expansion of Women’s & Children’s services to provide additional paediatric, neo-natal and maternity beds and related assessment facilities, together with a new Midwife-led maternity Unit in recognition of the Model of Maternity Care developed by the Trust (See Appendix 4.2) ; (b) Increased general and acute bed capacity to cater for the expected increase in nonelective inpatients; (c) Provision of sufficient additional administration space to cater for the displacement of such space by the new clinical facilities; (d) An improvement of both clinical and functional adjacencies to allow the new service to be delivered efficiently; (e) Additional car parking for patients, visitors and staff;
4.7
Retained Estate
4.7.1
During the period leading up to financial close in August 2007, the decision was made by the Trust to exclude some parts of the estate from the PFI arrangement.
4.7.2
The main non-PFI buildings comprising the “retained estate” and the amount of vacant floor space therein comprise:
Outline Business Case for Implementing the BEH Clinical Strategy 55
Table 4.14 – Retained Estate
Building Podium Block (maternity and maternity theatres, Radiotherapy, plant rooms) Day Surgery Unit (Oncology ward, unused upper storey) Outpatients Building (Restaurant, therapies, admin offices) Tower Block (Medical wards and specialities) Pymmes Building (Elderly wards, day hospital) Pathology Department Library, Learning Centre and others Former A&E Department (admin offices) Others Total enlarged retained estate
Total space 12,000 sq m
Vacant space 1,000 sq m
3,300 sq m
1,600 sq m
3,500 sq m
None
8,400 sq m 3,100 sq m 2,400 sq m 1,600 sq m 2,300 sq m 1,100 sq m 39,700 sq m
1,700 sq m None None None None 300 sq m 4,600 sq m
4.7.3
In addition to the above, there are a number of small buildings remaining, including the Walk-in Centre, X-ray dept and ICU buildings, that can be used for temporary decanting of some clinical services and then demolished
4.7.4
A six facet survey of the retained estate generally rated these buildings as Category C. Trust Estate Strategy
4.7.5
The Trust has developed a long term Development Control Plan which takes their vision of the new hospital site beyond 2015. The key to this plan is to ensure that the new PFI building and the retained estate are developed and well integrated so that patients perceive a unified and seamless service. The Trust’s design criteria is to avoid a ‘before and after’ public comparison between the new PFI and retained estate.
4.7.6
The development control plan has in part been implemented changing some of the function of the retained estate in preparation for the requirements of the BEH Clinical Strategy.
4.7.7
The University of Middlesex has recently withdrawn from the hospital site rationalising its Education services elsewhere in the borough which has released approximately 1,000m2 on the lower ground floor of the Podium (Level -1) for further hospital use.
4.7.8
The Trust has a Board-approved Estates Strategy and development control plan, which was last reviewed and approved in February 2012 and will be updated dependant upon the outcome of this business case. The Estate Strategy is included in Appendix 4.3.
4.7.9
The total cost of backlog maintenance as stated in the Estate Strategy is £24.2 million, including "on costs” for preliminaries, contingency, design & price risk, but excluding design fees and VAT. The figure has been stated at the equivalent of BIS PUBSEC 173, the current base index for capital costs in NHS business cases.
4.7.10
All options incorporate a significant amount of refurbishment, particularly in the Tower and Podium where it will be necessary to undertake infrastructure improvements and a key benefit accruing to each option is a significant reduction in the level of backlog maintenance outstanding at the end of the construction project.
Outline Business Case for Implementing the BEH Clinical Strategy 56
5.
Economic Case
5.1
Introduction
5.1.1
In accordance with the Capital Investment Manual and requirements of HM Treasury’s Green Book this section of the OBC documents the range of options considered in response to the potential scope for investment identified within the strategic case. The process of appraisal is described including: •
identifying the critical success factors and objectives for the investment;
•
generation of the long list of options and the process for establishing a short list;
•
descriptions of the short listed options and their costs;
•
the qualitative benefits appraisal;
•
the economic appraisal;
•
risk appraisal; and
•
the identification of the preferred option.
5.1.2
As explained in the Strategic Case the PCBC for the BEH Clinical Strategy constitutes the SOC for this investment. That business case demonstrated the case for implementing the BEH Clinical Strategy represented significantly better value than a do minimum option that made no change to acute service configuration but simply secured that the existing services could be delivered safely. In September 2011 the Secretary of State confirmed that the BEH Clinical Strategy should be implemented as soon as possible. Legal advice has been obtained that implementation is a legal requirement (unless the SoS were to change his mind) and it has therefore been agreed that a do nothing/do minimum option against which to test options for implementing the BEH Clinical Strategy is inappropriate in this case.
5.1.3
As the review of the PCBC in the Strategic Case has shown, the principle assumptions underlying the analysis that implementation was better value than do minimum have not changed materially. The benefits of implementation are therefore not further analysed.
5.1.4
This economic case is therefore confined to demonstrating that the Trust has selected the best capital solution to implement the BEH Clinical Strategy.
5.2
Critical Success Factors
5.2.1
The critical success factors for this project considered to be: Strategic fit and business needs - How well the option: • • •
meets the investment objectives; meets the clinical service requirements; supports the Trust’s clinical strategy and objective of becoming a Foundation Trust.
Potential Value For Money - How well the option supports service development and integration, the requirements of guidance, and optimises the potential return on expenditure. Potential Achievability - How well the option is likely to be delivered: •
in view of the Trust’s ability to respond to the required level of change, adapt its model of care and assimilate the additional activity;
Outline Business Case for Implementing the BEH Clinical Strategy 57
• •
in view of the Trust’ ability to enact workforce changes and recruit the additional staff required; in such a way as to minimise disruption to the Trust’s operations during construction .
Potential Affordability - How well the option: • •
matches the likely availability of funding enables the Trust to meet its key financial targets (including Monitor’s) in the medium to long term.
5.3
Project Investment Objectives
5.3.1
The primary aim of the project is to provide safe and high quality clinical and other facilities necessary to support the implementation of the BEH Clinical Strategy. More detailed specific project objectives are to: •
Provide the facilities in the shortest possible time to minimise the risk identified in the BEH Strategy of the services becoming unsustainable, whilst minimising disruption to the clinical services;
•
Ensure the development is consistent with the Trust’s business and clinical strategies and supports the business model being produced for the Foundation Trust application enabling the Trust to achieve FT status by 31st March 2014;
•
Ensure the development is consistent with the wider health economy plans to implement the BEH Strategy by increasing emergency bed capacity by 120 beds, expanding overall maternity capacity by 17 beds and neonatal capacity by ten cots.
•
Ensure the quality and space of the clinical facilities meets modern healthcare standards as per the guidelines set in the relevant Health Building Notes apart from where otherwise derogated;
•
Ensure that the design is sympathetic to, and has the potential to improve, patient pathways and working practices by providing facilities that benefit from appropriate adjacencies;
•
Ensure that the development is economically viable, being affordable to the local health economy in capital and revenue terms and gives best value for money for the Trust;
•
Ensure the development is sustainable by providing an environmentally sound infrastructure that achieves BREEAM Excellent for New Build elements and Very Good for refurbished elements in accordance with the Trust’s SDMP (“Sustainable development management plan”);
•
Reduce associated backlog maintenance in terms of cost per square metre from the highest 33% of Trusts to the middle 34% of Trusts and associated estate-based risks.
5.3.2
Many of these objectives for implementing the BEH Clinical Strategy, for example in making improvements to patient pathways, will in themselves support the Trust’s business strategy in providing opportunities to improve efficiencies and workforce productivity.
5.4
Long List of Options Considered
5.4.1
A long list of options was created by the Hospital Development Team including external advisors and contributions from the Executive Directors. These options include ‘do nothing’, ‘do minimum’ and ‘complete new redevelopment on a brown-field site’ and a range of new build and refurbishments to ensure that all possible options are considered. The following table sets out the range of options considered and the reasons for short-listing or rejecting when judged against the critical success factors. In some cases options were judged to meet the critical success factors but were similar and slightly inferior to other shortlisted options so were rejected too.
Outline Business Case for Implementing the BEH Clinical Strategy 58
Table 5.1: Long List of Options
Option Description / Reasons for accepting/rejecting
Potential Affordability
Strategic Fit
Potential VFM
Potential Achievability
No
N/A
N/A
N/A
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
No
Yes
No
Yes
Yes
Yes
Yes
Yes
1. Do nothing – this is not a viable option as it does not implement the BEH Strategy Rejected as not implementing the BEH Strategy is not an option 2. A new six-storey building, which will provide three wards with a total of 90 acute beds, new ante-natal obstetric beds, consultant-led and midwife-led delivery suites. The balance of acute beds would be located in Pymmes. Maternity outpatient/ante-natal facilities and NICU to be expanded within vacated existing accommodation in the Podium. Building would be located to the north of the Podium and require the demolition of the Library and Learning Centre Shortlisted as option 2. 3. A new five-storey building – solution similar to Option 2 except that only 60 acute beds would be provided; refurbishment of two floors of Tower Block to provide balance of 30 beds. This option provides optimal accommodation solutions but level of flexibility considerably reduced. Rejected as medical wards split into two distinct areas including 60 beds split over two floors making safe staffing difficult. 4. A new four-storey maternity in-patient building template as Option 2 but including replacement of existing maternity ward. The 90 acute beds would be located within four floors of the Tower Block. Maternity outpatients/NICU as per Option 2. Although this option provides optimal accommodation solutions, it requires the temporary decant of the renal unit and provides less flexibility. Option shortlisted as Option 4. 5. A new building with one floor of 30 acute beds, delivery suites and maternity outpatients as per Option 2. Post natal beds move from Tower Block T4 to old DSU. Refurbishment of four floors of Tower Block to provide a further 88 beds. Temporary modular building to provide ward for decant space, Stroke Unit remains in Pymmes. Requires additional physical links. Option rejected as inferior variant of option 8 due to splitting acute beds (inc into 1 ward of 30 beds) and women’s and children’s beds making achieving safe staffing levels difficult and relatively expensive to other options. 6. A new building with two floors of 60 acute beds, delivery suites and maternity outpatients as per Option 2. Post natal beds move from Tower Block T4 to old DSU and refurbishment of three floors of Tower Block to provide a further 72 beds, Stroke Unit remains in Pymmes. Option rejected as inferior variant of Option 3 due to splitting medical beds. 7. As per long-listed Option 2 but with the exception that the MLU is put in LGF of New Building with Obstetric Beds and Education backfills the space in the Podium level 0 left from the omission of the MLU. This removes the need for an interim MLU. Option rejected as now same as Option 2. Outline Business Case for Implementing the BEH Clinical Strategy
59
(within £100m capex)
Option Description / Reasons for accepting/rejecting
Potential Affordability
Strategic Fit
Potential VFM
Potential Achievability
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
No
No
No
8. Create a new Women’s and Children’s Centre and refurbish retained estate for the acute beds. The building would provide the same template as Option 3 but would feature a maternity ward and children’s ward in place of the two acute wards. The additional space created in the Tower Block would ensure that 88-96 acute beds could be provided in the Tower Block with T4 retained as a winter pressures/decanting ward. This was the highest scoring of the short-listed options from the previous Option Appraisal Workshop described in the April 2009 Outline Business Case. This option meets the flexibility but requires more complex decanting. Retain as short-listed Option 8. 9. Utilise the retained estate (Tower Block) for the additional acute beds, and infill the Podium courtyard to provide space for the additional Women’s services; This option fulfils the criteria for the accommodation and provides some flexibility in that it retains more of the existing buildings. The timetable could be achieved by using temporary modular buildings for the additional beds until final solution complete. This was the preferred option following the cost/benefit analysis from the April 2009 Outline Business Case. Rejected as very disruptive in construction terms thus not fully achieving CSF. 10. Do Minimum – This is similar to Option 9 but achieved with minimum refurbishment. Given the scale and complexity of Option 9, it was felt that simply reducing the level of refurbishment would be pointless. Option rejected. 11. High level of refurbishment of existing wards to create additional beds to optimum consumerism standards and a new building for inpatient Maternity Services adjacent to the Podium. This option differs from Option 8 in that the new build is limited to maternity inpatient accommodation only. This option was rejected as it is now the same as option 4 12. The option of relocating and re-providing the entire hospital to a green-field or brown-field site. No land is available within the locality for hospital use – in any case it is widely accepted that the North Middlesex is already optimally located. Planning and cost considerations (c£350m) make this option unrealistic and it was therefore rejected. 13. Replacement of Tower and Podium – this would enable acute and women’s & children’s services to be redesigned with the best possible standards of clinical accommodation and adjacencies. However, it is unrealistic to replace half of the hospital site following completion of the PFI scheme as the disruption to services would be catastrophic. In any event the option would be totally unaffordable. Outline Business Case for Implementing the BEH Clinical Strategy
60
(within £100m capex)
Option Description / Reasons for accepting/rejecting
Potential Affordability
Strategic Fit
Potential VFM
Potential Achievability
No
No
No
Yes
Yes
No
Yes
Yes
Yes
No
No
No
Yes
Yes
Yes
Yes
(within £100m capex)
Option rejected.
14. New acute centre to provide all 120 additional beds required. Maternity and children’s services would be in refurbished existing accommodation in the Tower and Podium. The complexities of implementing the women & children element would be insurmountable due to inability to achieve necessary clinical adjacencies between NICU, Theatres and Consultant Delivery. Option rejected due to not meeting CSFs. 15. New building to provide all the new beds and all women’s and children’s inpatient services in a new building. This would increase the height of the proposed new building and will require new planning consent process. Whilst offering perhaps one of the better clinical solutions, this option would result in an overprovision of accommodation on the site with five Tower floors empty. It is possible that planning approval would not be granted. Option rejected due to the proposal not representing a good use of the existing estate. 16. Demolish Pymmes building and re-provide four storey building adjacent to the new PFI building with eight x 30-bed wards. Maternity in Tower and Podium. This option provides optimal clinical adjacencies for medical ward but is impractical as temporary accommodation would have to be found for the four wards in Pymmes. Also not possible to achieve necessary clinical adjacencies between NICU, Theatres and Consultant Delivery. Option rejected due to not meeting CSFs. 17. Not used 18. A new two-storey building located on the east side of the Tower and Podium, which will provide: • On level -1 - Midwifery Led Unit and 13 additional beds maternity beds and Ante-natal clinics. • On level 0 - Consultant-led Unit and Neo-Natal Unit • The acute beds will be located on floors 5, 6, 7 and 8 (22 beds per floor) and Pymmes (29 beds). Stroke unit decanted to Podium 2. • HIV located to old Theatre 4 on the east end of the site. • Cardiology located to level 0 or -1 of the Podium • Education to level 0 Podium. Optimum accommodation including new neonatal unit and clinics. Fully utilises Tower. Minimizes disruption, no need to temporary decant Neo-natal unit, Ante-natal, Gynae and Ultra sound. Eradicates much of the Tower backlog. Timetable is compressed due to Outline Business Case for Implementing the BEH Clinical Strategy
61
Option Description / Reasons for accepting/rejecting
Strategic Fit
Potential VFM
Potential Achievability
Yes
Yes
Yes
Potential Affordability (within £100m capex)
minimal decanting. Acute beds can be delivered before new build completes. Risk: requires new planning application. Shortlisted as option 18. 19. A variant of Option 18. A new three-storey building as envisaged in Option 2, which will provide: • On level -1 - Midwifery Led Unit and 13 additional maternity beds and women’s clinics. • On level 0 – Consultant-led Unit and Neo-natal Unit • Level 1 women’s clinics • 120 acute beds as per option 18 in the Tower and Pymmes. • Cardiology to level 0 or -1 Podium • HIV to old Theatre 4. Optimum accommodation including new clinics. Fully utilizes Tower. Eradicates much of Tower backlog. Acute beds can be delivered before new build completes. Rejected as an inferior variant of 18
5.5
Short List of Options
5.5.1
The short-listed options selected from the long list are described below:
Yes
Option 2 – New Six-Storey Building Including Maternity and Acute Beds 5.5.2
This option utilises little of the retained estate in the Tower block and Podium, and involves construction of a new six-storey building to the north of the Podium on the site of the current library and education centre building. These services will be re-provided within a new bespoke Education centre in the lower-ground floor of the Podium comprising of a new library, state of the art training facilities to include a theatre simulation suite and a high profile entrance leading onto the landscaped courtyard adjacent to the East Rotunda. The new building will accommodate midwife led birthing unit co-located with low-risk antenatal beds and an adjoining induction suite all fronted by the new maternity main entrance and prominent triage unit. A maternity day unit will support the triage facility. Each department, whilst self contained will share core services maximising the use of the available footprint. Interconnecting circulation allows the spaces to be used flexibly. The ground floor linked by dedicated lifts to the lower ground floor entrance provides consultant led delivery rooms, obstetric theatres and recovery. The ground floor of the new building is directly linked to the ground floor of the Podium via an infill circulation core offering good access to the adjacent neonatal unit and the post-natal ward located in the tower. The first floor of the new building will be a technical services floor containing engineering plant and infrastructure only.
5.5.3
The remaining upper three floors will each accommodate 30 acute beds, with the balance of the required 120 acute beds located in a 29 bed ward template in the existing Pymmes building to the south of the Podium. Space for these will be created by relocating the Stroke unit which currently occupies a single ward template in the Pymmes building to Level 2 of the Podium. The new Stroke Unit will provide dedicated stroke services fully supported by a full complement of ‘on ward’ therapies.
5.5.4
On completion of the new building the existing labour ward will move from the Podium, releasing space to provide a new Gynaecology clinic and Colposcopy suite.
Outline Business Case for Implementing the BEH Clinical Strategy 62
5.5.5
A new 11-bed Paediatric Assessment and Short-stay Unit (“PAU”) is planned for level T1 of the Tower block which is currently occupied by HIV Outpatient services. HIV outpatients will be decanted from T1 to a new and dedicated centre constructed within the redundant Theatre 4 to the east of the campus.
5.5.6
Women’s ante-natal and outpatient services, together with the NICU/SCBU, will be expanded on the ground floor of the Podium making use of the space vacated by the existing delivery suite and obstetric theatres with the remaining space accommodating some the Trust’s administrative functions.
5.5.7
Women’s outpatients will temporarily decant to vacant and redundant buildings on the east of the campus returning to newly refurbished facilities on completion of the development. Neonatal services will temporarily relocate to Tower level T1 prior to the conversion to the PAU described above.
5.5.8
Postnatal beds will remain in the Tower in T4, and the Paediatric ward will remain in T2. Three wards in the Tower Block, T5, T6 and T7 will be left vacant and will be available for expansion. The Trust is considering the optimum use of this vacant space and recognise that it could house more beds, e.g. for winter pressures or future maintenance decanting, and/or be used to consolidate administrative departments currently located on the east of the site releasing further development opportunities. Option 4 – A New Four-Storey Maternity Inpatient Building
5.5.9
A new four-storey maternity in-patient building, template as per Option 2 but including the replacement of the existing maternity ward currently located on Level T4 of the tower to Level 2 of the new building. This provides optimum and compliant accommodation for all Women’s inpatient services.
5.5.10
The 88 acute beds would be located within four floors of the Tower Block on T4, T5, T6 and T7. The balance of the acute beds would be provided in the Pymmes building with all of the necessary decants described in Option 2.
5.5.11
A new 11 bed Paediatric Assessment and Short-stay Unit is planned for level T1 of the Tower block which is currently occupied by HIV Outpatient services. HIV outpatients will be decanted from T1 to a new and dedicated centre constructed within the redundant Theatre 4 to the east of the campus as Option 2. The Paediatric ward on Level T2 of the Tower block is retained.
5.5.12
Maternity outpatients and neonatal will be treated as per Option 2. Although this option provides optimal accommodation solutions, it requires the temporary decant of the renal unit and provides little space for flexibility within the main hospital buildings once complete. Option 8 - A New Five-Storey Women’s and Children’s Centre
5.5.13
Creates a new five storey Women’s and Children’s Centre and refurbishes retained estate for the acute beds. Accommodation for women’s inpatient services are all as per Option 4. Level 3, the top floor, will provide a new Paediatric Ward releasing Level T2 of the Tower block and a Paediatric Assessment and Short-stay Unit.
5.5.14
The additional space created in the Tower Block would ensure that 88 acute beds could be provided in the Tower Block on T2, T5, T6 and T7 with T1 and T4 retained for other uses including a winter pressures/decanting ward. This option provides some flexibility but requires more complex decanting. The balance of the acute beds would be provided in the Pymmes building with all of the necessary decants described in Option 2.
5.5.15
Maternity outpatients and Neonatal will be accommodated as described in Option 2. Option 18 New Three-Storey Building to the East of the Podium
5.5.16
This provides a new three-storey building located on the east side of the Tower/Podium and will accommodate on the lower ground floor Level -1 a midwife-led birthing unit collocated with an adjoining induction suite, all fronted by a new maternity main entrance and prominent triage
Outline Business Case for Implementing the BEH Clinical Strategy 63
unit. Women’s outpatient services will occupy the remainder of the floor. A maternity day unit will support the triage facility. 5.5.17
The ground floor Level 0 provides consultant led delivery rooms, obstetric theatres, recovery and the Neonatal Unit. The ground floor of the new building is directly linked to the ground floor of the podium via a flying corridor offering good access to the new postnatal maternity ward located in the space made vacant through the relocation of the existing labour ward and the paediatric wards on levels T1 and T2 of the Tower block.
5.5.18
The first floor of the new building will be a technical services floor containing engineering plant and infrastructure only although the Trust will consider the provision of expansion space at roof level.
5.5.19
A new 11-bed Paediatric Assessment and Short-stay Unit is planned for level T1 of the Tower block which is currently occupied by HIV Outpatient services. HIV outpatients will be decanted from T1 to a new and dedicated centre constructed within the redundant Theatre 4 to the east of the campus as per Options 2 and 4. The paediatric ward on level T2 of the Tower block is retained.
5.5.20
The Tower block will accommodate 88 acute beds, 22 beds per floor with levels T5, T6 & T7 providing three quarters of the requirement. To provide sufficient space in the Tower for the remaining 22 beds the Cardiology Clinic will be decanted to level -1 of the Podium complete with an entrance from the adjacent landscaped courtyard. . The balance of the acute beds would be provided in the Pymmes building with all of the necessary decants described in Option 2.
5.5.21
This option provides optimum accommodation including a new neonatal unit and outpatient clinics. It fully utilises the Tower Block, minimises disruption and eradicates much of the backlog maintenance. The need to temporarily decant the Neonatal unit, Ultrasound and the Antenatal and Gynaecology Clinics is removed and as a consequence the timetable is compressed. The acute beds can be delivered before new build completes as the space is available in the Tower at an earlier stage.
5.6
Benefits Criteria
5.6.1
The benefits criteria have been developed by the Project Team and agreed by the project stakeholders to reflect the Project Objectives.
5.6.2
The benefits were discussed, agreed and weighted by the attendees at the non-financial option appraisal on the 1st December 2011. The benefits criteria are set out below: 1. Provide the space and facilities required to ensure the BEH clinical strategy is deliverable • Ensure that the agreed level of maternity and paediatric service can be delivered to enable the transfer from CFH to take place; • Ensure that acute services are deliverable in association with A&E services to enable the re-designation of CFH as an urgent care centre and community hospital. 2. Can be achieved in a timely manner whilst continuing to ensure operational and patient safety and achieving the earliest opportunity to reduce the existing clinical risk identified in the BEH strategy. • Timescale: length of time to complete developments; • Matches the timescales for Barnet and Chase Farm Hospital developments; • Level of disruption to hospital services during the works; • Extent of decanting;
Outline Business Case for Implementing the BEH Clinical Strategy 64
• Proximity of occupied areas to construction sites. 3. Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices. In detail this is to provide facilities which support: • Effective clinical services including functional relationships, dependencies and quality of care; • Compliance with professional standards and guidelines; • Timeliness of clinical intervention by optimising patient pathways; • Minimised risks to patients; • Improvements in infection control; • Promotion of multi-disciplinary working; • Controls Assurance Standards.
recognising clinical
4. Supports Trust staff policies and objectives • Assists recruitment and retention of staff, contributing to high morale; • Makes efficient and effective use of staff time, supporting workforce planning; • Supports Education and Training: provides the facilities for teaching and research that assist with attracting high quality staff. 5. Meets the needs of the local population, maintaining access, under all definitions: • Good accessibility for the patient population: provides ease of access for patients, staff and visitors to the site and its buildings; accessibility from public transport; appropriate car parking provision for patients, staff and visitors; • Compliance with Disability Discrimination Act: simple and short travel distances between buildings, minimal external travel for patients, signing and accessibility for non-English speakers; • Easy access and routing for supply/disposal, including ease of compliance with manual handling regulations. 6. Supports the Trust’s Strategic Objectives: • Ensure that the development solution supports and enhances the Trust’s strategic direction; • Reflects the integrated business plan being produced to support the Trust’s Foundation Trust application; • Responsive to peaks in demand and able to change to suit future changes in the balance of services. 7. Quality of Designs, Environment & Consumerism • • • • • • • •
Meets consumerism standards; Achieves where appropriate a child and family-oriented environment; Provides a suitable visible statement of the value placed on our patients and staff; Achieves improved external outlook and access to external spaces from patient areas; Design and environmental impact are acceptable to the local community; Supports the principles of sustainable development; Achieves patient choice – is attractive to patients and other service users; Ensures privacy and dignity of patients.
8. Effective Use of the Estate • Acceptability to local stakeholders – residents and Planning Authority; • Optimise use of the estate: maximises opening hours within acceptable limits to staff and patients. Would relate to distribution of 24 hour and non-24 hour spaces; Outline Business Case for Implementing the BEH Clinical Strategy 65
• • 9. • • • 5.6.3
Support logistics across the estate; Reduce backlog maintenance and estate-based risk. Flexibility / Future Planning Flexible use of space to provide a range of services; Achieve the parameters of current activity; Is in accordance with the Development Control Plan and allows potential for future service flexibility.
These benefits criteria map to the Investment Objectives in the following way:
Table 5.2 - Mapped Investment Objectives and Benefits Criteria
Investment Objectives
Benefit Criteria
The primary aim of the project is to provide safe and high quality clinical and other facilities necessary to support the implementation of the Barnet, Enfield and Haringey clinical strategy. More detailed specific project objectives are to:
1. Provide the space and facilities required to ensure the BEH clinical strategy is deliverable
Provide the facilities in the shortest possible time to minimise the risk identified in the BEH Strategy of the services becoming unsustainable, whilst minimising disruption to the clinical services;
2. Can be achieved in a timely manner whilst continuing to ensure operational and patient safety and achieving the earliest opportunity to reduce the existing clinical risk identified in the BEH strategy.
Ensure the development is consistent with the Trust’s business and clinical strategies and supports the business model being produced for the Foundation Trust application enabling the Trust to achieve FT status by 31st March 2014;
6. Supports the Trust’s strategic objectives
Ensure the development is consistent with the wider health economy plans to implement the BEH Strategy by increasing emergency bed capacity by 120 beds, expanding overall maternity capacity by 17 beds and neonatal capacity by 10 cots.
5. Meets the needs of the local population, maintaining access, under all definitions
Ensure the quality and space of the clinical facilities meets modern healthcare standards as per the guidelines set in the relevant Health Building Notes apart from where otherwise derogated;
3. Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices.
Ensure that the design is sympathetic to, and has the potential to improve, patient pathways and working practices by providing facilities that benefit from appropriate adjacencies;
3. Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices.
Ensure that the development is economically viable, being affordable to the local health economy in capital and revenue terms and gives best value for money for the Trust;
4. Supports Trust staff policies and objectives
Ensure the development is sustainable by providing an environmentally sound infrastructure that achieves BREEAM Excellent for New Build elements and Very Good for refurbished elements in accordance with the Trust’s SDMP (“Sustainable development management plan”);
7. Quality of designs, environment & consumerism
Reduce backlog maintenance in terms of cost per square metre from the highest 33% of Trusts to the middle 34% of Trusts and associated estate-based risks.
8. Effective use of the Estate
Outline Business Case for Implementing the BEH Clinical Strategy 66
4. Supports Trust staff policies and objectives 9. Flexibility / Future Planning
9. Flexibility / Future Planning
9. Flexibility / Future Planning
5.6.4
Qualitative (Non-Financial) Option Appraisal
5.6.5
A workshop was held on 1st December 2011 to undertake a qualitative option appraisal for stakeholders in the project to rank the options in order to determine the best option for the hospital site. The appraisal was based on qualitative benefits without taking financial matters into consideration.
5.6.6
The workshop was attended by the following members of staff and other stakeholders: Table 5.3: Appraisal Workshop Attendees
Name Andrew Wildgust Arvind Shah Beat Norman Bill Mesquitta Catherine Barns Chin Okunuga Clare Panniker David Stoker Fiona Laird Hawa Musajee Jacqui Wilkie Joanne Middleton Joyce Aslan Kevin Howell Kwaku Adepong Lance McCarthy Layla Hawkins Mark Channell Mark Lydall Martyn Simpkin Meriel Clarke Norma French Oladapo Fafemi Paul Maxwell Paul Sukhu Peter Limb Peter Smith Phil Smith Richard Gourlay Richard Milner Stanley Okolo Sunaina Bhatia Susan Jubb Vikki Howarth 5.6.7
Role Facilitator Consultant Paediatrician Matron Project Director Senior Project Manager General Manager Chief Executive Consultant General Surgery Head of Midwifery Finance Manager Project Assistant General Manager Patient Forum Reps Director of Environment Business Partner Deputy CEO Head of Comms and Marketing A&E Manager Facilitator Deputy Director of Environment Matron Director of HR Clinical Director Clinical Lead HR Business Partner Advisor Patient Forum Reps Strategic Estates Advisor General Manager Director of PMO Medical Director General Manager Matron Matron
Department Cyril Sweett W&C W&C Ecovert Environmental Services Surgical Specialties Trust HQ General Surgery W&C Finance Environmental Services Emergency Access & Critical Care Patient Forum Trust HQ HR Trust HQ Communications A&E AHP Architects Environmental Services Trust HQ Surgical Specialties AMU HR Environmental Services Patient Forum Estates Specialist Medicine & Support Trust HQ Trust HQ W&C Specialist Medicine & Support Emergency Access & Critical Care
The draft benefits criteria were explained to the group and, following discussion, were agreed.
Outline Business Case for Implementing the BEH Clinical Strategy 67
5.6.8
The workshop then considered how benefits should be weighted in terms of the relative importance of individual criteria to the success of the project. The benefits were then weighted individually by the workshop attendees (excluding the facilitators) and the individual weightings were then averaged.
5.6.9
The average benefit weights are detailed in the table below. Table 5.4: Weighted Benefit Criteria
Criterion
Weight
1
Provide the space and facilities required to ensure the BEH clinical strategy is deliverable
23.4
2
Can be achieved in a timely manner whilst continuing to ensure operational and patient safety and achieving the earliest opportunity to reduce the existing clinical risk identified in the BEH strategy.
13.2
Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices.
15.6
3
4
Supports Trust staff policies and objectives
5
Meets the needs of the local maintaining access, under all definitions
6
Supports Trust’s strategic objectives
8.6
7
Quality of designs, environment and consumerism
6.2
8
Effective use of the Estate
7.1
9
Flexibility and Future Planning
7.4
population,
TOTAL
7.9 10.6
100.0
Scoring of Options 5.6.10
The short listed options were then individually scored by all group members. Scores of between 0 and 10 were allocated to each option against each criterion in a scientific manner whereby if an option was considered to meet a criterion twice as well as a different option then the score awarded was double. A score of zero indicated that the option failed to satisfy the criterion in any respect. A score of ten indicated that the option satisfied the criterion perfectly. The completed scoring tables based on average scores are shown in the table below. Additional, Variant Options
5.6.11
During the workshop, two variant options were identified by workshop participants. The variant options related to Options 2 and 18 and involved improving the quality of the post-natal ward, which was to be left largely untouched with purely cosmetic improvements on grounds of economy in both options. Options 2M and 18M were added to the shortlist and for Option 2M involved the creation of two 16-bed wards in T4 and T5 and in Option 18M creating a new postnatal ward either as part of the new building or in vacated accommodation in the Podium (since the evaluation it has been determined that the maternity ward should be in the Podium), leaving T5 free.
5.6.12
The table below shows the average, raw un-weighted scores.
Outline Business Case for Implementing the BEH Clinical Strategy 68
Table 5.5 Option Appraisal Unweighted Scores Option Option Option Option Option Option 2 2M 4 8 18 18M Provide the space and facilities required to ensure the BEH clinical strategy is deliverable
7.6
8.4
8.1
8.9
7.9
9.0
Can be achieved in a timely manner whilst continuing to ensure operational and patient safety and achieving the earliest opportunity to reduce the existing clinical risk identified in the BEH strategy.
6.1
5.9
7.4
7.1
8.3
7.7
Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices.
6.4
7.7
6.6
7.6
6.9
8.3
Supports Trust staff policies and objectives
7.2
7.4
7.1
7.4
7.2
7.4
Meets the needs of the local population, maintaining access, under all definitions
7.6
7.8
7.1
7.4
7.1
7.6
Supports Trust’s strategic objectives
7.5
7.7
7.2
7.5
7.5
7.7
Quality of designs, environment and consumerism
6.9
8.0
6.2
7.0
7.1
8.2
Effective use of the Estate
6.0
7.0
6.4
6.8
6.9
7.3
Flexibility and Future Planning
7.3
7.0
6.0
6.9
6.2
7.0
62.5
67.0
62.1
66.6
65.0
70.3
Totals
5.6.13
The table below shows the average, weighted scores. Table 5.6 – Weighted Scores Option Option Option Option Option 2 2M 4 8 18
Option 18M
Provide the space and facilities required to ensure the BEH clinical strategy is deliverable
179.2
198.0
190.1
208.5
185.0
211.0
Can be achieved in a timely manner whilst continuing to ensure operational and patient safety and achieving the earliest opportunity to reduce the existing clinical risk identified in the BEH strategy.
80.5
77.2
97.5
94.2
109.2
102.1
Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices.
98.9
120.4
102.8
118.9
107.8
129.1
Supports Trust staff policies and objectives
57.2
59.0
56.0
58.9
57.2
59.0
Meets the needs of the local population, maintaining access, under all definitions
80.2
82.8
74.9
77.9
74.9
80.0
Supports Trust’s strategic objectives
64.1
66.2
61.7
64.4
64.1
66.5
Quality of designs, environment and consumerism
42.7
49.5
38.4
43.8
44.2
51.2
Effective use of the Estate
42.4
50.0
45.7
48.0
49.0
51.9
Flexibility and Future Planning
53.7
51.3
44.5
50.5
45.5
51.3
698.9
754.4
711.6
765.1
737.1
802.0
6
3
5
2
4
1
Totals Rankings
Outline Business Case for Implementing the BEH Clinical Strategy 69
Option 2: 698.9 - Ranked 6th 5.6.14
This option involves construction of a six-storey building to accommodate acute beds and maternity services. Its scores reflected the following characteristics: • • • • • • • • •
It provides the most new facilities and space overall, allowing for maximum flexibility, although this could also be construed as an inefficient use of the estate. Women and Children’s service are split across two floors in two buildings. There is a relatively long distance between the medical beds in the new building and those in the PFI building. A new building would have a main entrance and would be connected to the Tower and Podium, improving access throughout the hospital. It helps address the backlog maintenance issues on the site. It achieves consumerism for most of the women’s departments (apart from the post-natal ward and clinics), which are services of choice. Planning consent has already been granted for this option. The option involves a substantial degree of complex decanting; This leads to the option having one of the longest timescales to complete.
Option 2M: 754.4 - Ranked 3rd 5.6.15
This option is very similar to Option 2. The scoring reflected the perceived improvements to the quality of space provided by the enhanced post natal ward. By using more of the existing space, it was seen as providing more effective use of the estate but also less flexibility for future plans. Option 4: 711.6 - Ranked 5th
5.6.16
Option 4’s scores reflected the following characteristics: • • • • •
It locates most maternity services in the same, new building, which will make the service more attractive to prospective patients. It is quicker to deliver than options 2, 2M and 8. Whilst there is limited disruption to maternity services during construction, it does require a temporary decant of the renal unit. It provides the least future flexibility of all options, filling the Tower Block, and splits the medical beds over four floors with relatively small bed numbers per floor/ward. It provides the lowest proportion of new building, making good use of the estate but leaving little space available for new service developments or expansion. Backlog in the tower would need addressing. A change in the planning consent would be required.
Option 8: 765.1 - Ranked 2nd 5.6.17
Option 8’s scores reflected the following characteristics: • • • • •
It locates all inpatient maternity services and a children’s ward in the same, new building (with outpatients in the retained estate), which will make the service more attractive to prospective patients. It is around the mid-range in terms of timescales. Whilst there is limited disruption to maternity services during construction, it does require a temporary decant of the renal unit. It provides a limited amount of future flexibility compared to other options, filling the tower, leaving just T4 retained as a winter pressure ward and splits the medical beds over four floors with relatively small bed numbers per floor/ward. It leaves a little space available for new service developments or expansion. Backlog in the Tower would need addressing. A change in the planning consent would be required.
Outline Business Case for Implementing the BEH Clinical Strategy 70
Option 18: 737.1 – Ranked 4th 5.6.18
Option 18’s scores reflected the following characteristics: • • • • • •
It locates maternity services across two floors and two buildings. It is one of the quickest solutions in terms of timescales. Whilst there is some disruption to maternity services during construction, the decanting is less complex than other options and it is the quickest option. It provides a limited amount of future flexibility compared to other options, filling the tower, leaving just T4 retained as a winter pressure ward and splits the medical beds over four floors with relatively small bed numbers per floor/ward. It leaves a little space available for new service developments or expansion. Provides greatest reduction in the backlog maintenance deficit of all the options other than 18M. Car parking would need to be re-provided further away from the Podium than at present.
Option 18M: 802.0 – Ranked 1st 5.6.19
Option 18M’s scores reflected the following characteristics: • • • • • • •
It is similar to option 18 but is improved by providing a fully refurbished post-natal ward on level 0 of the Podium, with good adjacencies to the new building – it locates maternity services across three floors and two buildings but the collocations are much improved. It would take slightly longer than option 18 to deliver. It provides some future flexibility, filling the Tower, leaving T4 free / for use as winter pressure wards and splits the medical beds over four floors with relatively small bed numbers per floor/ward. Generally good estate utilisation; It leaves a little space available for new service developments or expansion. Backlog reduction slightly higher than Option 18, with the extra refurbishment. Car parking would need to be re-provided further away from the podium than at present.
Sensitivity Analysis 5.6.20
The result of the Option Appraisal has been subjected to a sensitivity analysis using specialised software. This shows the minimum change required to individual weights or scores that would alter the outcome of the options appraisal. The outcome of this is shown below: Table 5.7: Sensitivities Criteria
Weightings 2 2m
Provide the space and facilities required to ensure the BEH clinical strategy is deliverable Can be achieved in a timely manner whilst continuing to ensure operational and patient safety and achieving the earliest opportunity to reduce the existing clinical risk identified in the BEH strategy. Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices. Supports Trust staff policies and objectives Meets the needs of the local population, maintaining access, under all definitions Supports Trust’s strategic objectives Quality of designs, environment and consumerism Effective use of the Estate Flexibility and Future Planning
Outline Business Case for Implementing the BEH Clinical Strategy 71
4
Options/Raw Score 8 18 18m
N/A
N/A
N/A
N/A
N/A
N/A
-1.6
N/A
N/A
3.67
N/A
2.78
N/A
-2.78
N/A
N/A
N/A
N/A
2.4
N/A
-2.4
N/A
N/A
N/A
N/A
N/A
N/A
-4.6
N/A
N/A
N/A
N/A
N/A
N/A
-3.5
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
-4.3 -5.9 -5.2 -5.0
5.6.21
This shows that a number of possible individual changes could affect the outcome of the options appraisal – decreasing the raw scores given to Option 18M in all criteria. Most of these changes required are significant and unrealistic when one considers what could change these in relation to other option scores. The smallest change required is the one that relates to the quality of facilities. A reduction to the average raw score of Option 18M of just 1.6 would leave Option 8 as the preferred option. The project team is therefore reasonably confident that the outcome is robust in terms of determining the best option in qualitative terms but will continue to monitor the key parameters during the FBC stage. Conclusion
5.6.22
In summary, the non-financial option appraisal identified Option 18M as the preferred option based on non-financial benefits alone and this was supported by the sensitivity analysis.
5.7
Benefits of the Preferred Option
5.7.1
In relation to the benefits criteria, the Trust’s preferred option will provide the following features and benefits: •
Space and facilities to deliver BEH – the solution will provide all of accommodation necessary for the implementation of the BEH Clinical Strategy.
•
Time constraints and implementation – the solution provides the shortest timescale to completion of all options, the new maternity ward can be provided after the transfer of activity from CFH. The provision of new build accommodation for most of the maternity service ensures that decanting space will become available whilst the refurbishment of the Tower Block to create beds can be accomplished more quickly than the new build;
•
Quality of the Clinical facilities – the solution will ensure that all facilities that are refurbished or re-provided will meet current standards of design, clinical functionality and consumerism, and that adjacencies and collocations are optimised, enhancing patient safety. In particular the solution delivers a separate midwife-led birthing centre, meeting the aspirations for choices for women as expressed in Maternity Matters;
•
Staffing policy and objectives – facilities have been planned to optimise adjacencies and therefore minimise the inefficiencies from services that would otherwise be disparate. The state of the art facilities will encourage more staff to remain with the Trust and attract other staff in the future. The adjacencies allow for enhanced training for staff within the work environment and mentoring of junior staff to be carried out without impact on activity.
•
Population needs and access – existing facilities will be modernised and the new building will be accessed from within the area of the Trust’s estate where the service is currently provided, i.e. a familiar environment with much better facilities will serve to maintain the patronage of the local population. A separate entrance to the maternity facilities will also improve access to the delivery suites.
•
Supporting Trust strategic direction – the redesigned facilities have been sized to provide capacity to meet the demands of the local health economy as set out in the BEH Clinical Strategy, and also to respond to further potential changes in national and local strategy;
•
Design quality of design and consumerism – all re-provided facilities in the final solution will meet the required standards of “consumerism”, including the proportion of single rooms and the spaciousness of the accommodation. The design fulfils criteria for sustainable development.
•
Effective use of the estate – use of existing space and the location of the new building ensure that the existing estate is better utilised, with reduced backlog maintenance.
Outline Business Case for Implementing the BEH Clinical Strategy 72
•
Flexibility / Future Planning – the relocation of the maternity ward provides space for a winter pressures/decanting ward or expansion of some clinical services, alternatively it could be used for construction of a “hot lab” if the decision is taken to rationalise Pathology services.
5.8
Economic Appraisal
5.8.1
This section provides an overview of the main costs associated with each of the options and explains how they were derived.
5.8.2
The economic appraisal is based on the whole-life costs and relevant property-related revenue/operating costs; thus it includes all capital costs, life-cycle costs, maintenance and FM costs, utilities, clinical and non-clinical operating costs, but excludes VAT, rates and capital charges.
5.8.3
It does also include the valuation of certain benefits and risks.
5.8.4
The outputs in terms of clinical functionality and capacity are considered to be identical for each option, albeit that the quality of the accommodation and the precise physical number of beds will vary slightly, enabling the Trust to deliver the same volume of service under each option. The Trust’s part in the BEH Clinical Strategy is broadly to deliver the necessary additional capacity through provision of more beds and related services and this is fully achieved under all the options; thus the extra income, clinical costs and overheads are assumed to be the same under all options, the only significant variable costs being those related to the estate itself.
5.8.5
The incremental income and additional clinical, non-clinical costs and overheads have been modelled for the purposes of the financial appraisal (see Financial Case). This model (the LTFM) calculates changes to current budgets arising from changing levels of activity. In addition, adjustments have been included to ensure that the clinical cost levels reflect the effect of certain changes to the model of care for maternity services as well as emergency care and the numbers of acute beds.
5.8.6
In practice there may be some clinical cost differences between options, although these are unlikely to be significant. Each solution provides a slightly different collocation of some elements of the services - Options 2 and 2M provide three medical wards in the new building but Options 4, 8, 18 and 18M focus on collocation of maternity services with acute beds located in the Tower Block. The number of beds is slightly different for each option, reflecting the configuration of wards. Option 2 delivers slightly more beds, 90 beds in three wards of 30 beds plus 29 in Pymmes, the other options have 88 beds in four wards of 22 beds plus 29 in Pymmes, and also retains the greatest flexibility to increase numbers of beds as well. The Nursing Directorate have modelled the alternative solutions for acute bed configurations and determined that the three ward configuration is slightly more expensive to run than the four smaller wards, i.e. a difference of £148k per annum.
5.8.7
These differences are reflected in the scoring of the non-financial appraisal and so have been taken into account in the evaluation, however, in the absence of the detailed workforce and FM services budgets it would be of little benefit to try to estimate any other more subtle comparative cost savings between the options.
5.9
Changes since the Pre-Consultation Business (“PCBC”) Case was produced
5.9.1
The capital cost for the NMUH scheme set out in the July 2007 Pre-consultation Business Case (“PCBC”) was £57.1m and this has increased for four main reasons: •
Firstly the refurbishment works were based on refurbishing only the amount of space needed for the additional beds and facilities. The solution did not consider the wider design issues, evolving models of care, in particular the need to create separate consultant-led and midwife-led delivery suites, and need to provide fully compliant clinical
Outline Business Case for Implementing the BEH Clinical Strategy 73
accommodation, which have now been addressed in detail by the preferred option in this outline business case.
5.9.2
•
Secondly the new build solution was conceived as a project that would be implemented on a relatively clean site as part of the PFI scheme that was signed in August 2007. Delays to the implementation of the BEH Strategy mean that the PFI building and associated works have been completed and the site configuration is now very different, with the result that the synergies of a larger concurrent scheme have been lost.
•
Thirdly, the complexities of the scheme require substantial enabling and decanting works to be undertaken before the main new build and refurbishment works can commence.
•
Fourthly the substantial refurbishment of the Tower Block means that a significant proportion of backlog maintenance will need to be incorporated into the works to ensure health and safety and proper functionality of services to the refurbished accommodation.
The principal differences between the PCBC and this OBC for NMUH are as follows: PCBC Capital costs Impact of PUBSEC indices (i.e. effect of inflation) Variation works already undertaken Increased scope and area maternity facilities Increase in decanting works not included in PCBC Increase in backlog maintenance included Total capital cost of OBC
£57m ( £5m) ( £1m) £12m £ 7m £ 9m £79m
5.9.3
Whilst this gives a rough indication of the main elements of change, the scheme is now quite different, due to its evolution through a phased scheme, which would have delivered the changes for maternity services first and therefore focused on creating a state-of-the art facility for maternity services.
5.10
Capital Costs
5.10.1
The Trust and its advisors have developed a schedule of accommodation and functional requirements based on the clinical requirements set out in the Strategic Case, together with a site development control plan and a design and construction and decanting programme.
5.10.2
The Trust’s technical advisors have used this information to estimate the capital costs in accordance with the new DH Estates guidance for capital reporting following the demise of Quarterly Briefing 19/2. Departmental costs were estimated utilising Departmental Cost Allowance Guidelines (“DCAGs”) and adjusted for project-specific items. On-costs and M&E costs were assessed using current prices and schedules of rates.
5.10.3
.It has been noted that the Healthcare Premises Cost Guides (HPCGs) substituted DCAGs in 2010 and indeed Sweett Group promoted the use of HPCG’s for all new business case submissions by Trusts to the Department of Health. In the course of implementing the BEH Clinical Strategy at NMUH, Sweett Group felt that having carried out a number of high level detailed estimates on the schedule of areas and the cost estimates for the on-costs with which Sweetts are familiar and with the intimate knowledge through the delivery of the PFI Scheme, the allowances were a close match to those informed by the DCAGs plus on-costs as opposed to the newly published HPCGs guidance. A parallel study using the same level of details confirmed the shortfall of around 3.5% to 5% to the estimates using the HPCGs. The use of the DCAGs has also ensured a consistent and accurate audit of the current proposal through its life. It should be noted that the initial OBC work for these proposals were carried out in 2009 prior to the issue of the new HPCGs in July 2010.
5.10.4
The location factor has been calculated using the BCIS detailed location factor quarterly report which shows an 8% factor for the NMUH location. The quarterly briefing factors are no longer issued and are therefore out of date. Our advisors have chosen to use the BCIS in lieu of the BIS as it is based on more data and is more specific to the locations.
Outline Business Case for Implementing the BEH Clinical Strategy 74
5.10.5
The fees have been benchmarked against recent schemes of this size. The benchmark range is typically from 9.5% to 13%. The fees for the NMUH BEH have been assessed at 13.1%. Costs are presented at current and out-turn prices utilising the Business Innovation and Skills PUBSEC Tender Price Index for non-housing and BIS PUBSEC Geographical Location Factors. The current PUBSEC index for business cases is 173.
5.10.6
The following table summarises the capital costs of options 2, 2M, 4, 8, 18 and 18M: Table 5.8 Capital Costs
Departmental Costs On Costs Total Works Cost Total Location adjustment (8%) Fees (13%) * Non-works costs Equipment Costs Planning Contingency TOTAL for approval Optimism Bias Inflation adjustments Total cost to outturn VAT Total including VAT
Option 2 25,125 17,206 42,331 2,010 5,817 1,687 1,699 4,869 58,413 5,467 4,850 68,730 11,042 79,772
Option 2M 28,403 18,682 47,085 2,272 6,495 1,687 1,813 5,065 64,417 6,088 5,388 75,893 12,145 88,038
Option 4 25,325 17,597 42,922 2,026 5,892 1,687 1,813 4,828 59,168 5,897 4,934 69,999 10,901 80,900
Option 8 27,456 17,970 45,426 2,196 6,253 1,687 1,813 5,027 62,402 6,250 5,243 73,895 11,650 85,545
Option 18 24,694 17,140 41,834 1,975 5,732 1,687 1,699 4,672 57,599 6,232 2,278 66,109 10,306 76,415
Option 18M 26,055 16,774 42,829 2,084 5,881 1,687 1,813 4,685 58,979 6,390 2,793 68,162 10,610 78,772
5.10.7
The detailed OB Forms for all options are included at Appendix 5.1.
5.10.8
The costs exclude the costs of the variation to the PFI contract, which was subject to a separate business case in 2009, the works for which were undertaken concurrently with the PFI construction project. Although part of the project to implement the BEH Clinical Strategy, these are sunk costs and form no part of this business case.
5.10.9
The non-works costs represent the costs of the Trust’s project management team throughout the design and implementation period. This line also includes the £87k cost of the PFI variation to external works to facilitate the BEH solution.
5.10.10 Equipment costs have been estimated using equipping schedules generated from the outputs of the architect’s ADB (Activity Database) system, which incorporates equipment on the room data sheets. Schedules of equipment for each department were compiled and the assumption made that for departments that need to be relocated the majority of equipment will be transferred, whereas for new capacity all equipment will need to be purchased. The equipment schedules were priced with reference to the equipment prices included in the recent PFI development scheme (which included several £million of equipment). The Trust will refine the schedules and pricing to provide a detailed equipping budget as part of the Full Business Case development 5.10.11 In addition to equipment for the expanded departments, the figures include the cost of the group 3 equipment required for some of the extra facilities that were created through the PFI variation, including Theatre 8 and some of the A&E facilities. The purchase of these items was deferred until the enlarged facilities were brought into use following the implementation of the BEH Clinical Strategy and the increased activity flow.
Outline Business Case for Implementing the BEH Clinical Strategy 75
5.10.12 The planning contingency is charged at between 9% and 10% for all options. The figures are derived from the costed risk register for capital risks as described in Section 5.17. This element of the capital cost is included in the generic economic model as risk. 5.10.13 Costs are stated at BIS PUBSEC 173, being the index for OBCs effective from 1st June 2011. Elements of the project are then uplifted to PUBSEC 182, being the value of the index at the beginning of the construction period (Q1/Q2 2013). 5.10.14 VAT is calculated at 20%. No VAT is charged on design and other fees, since this is generally recoverable. It is usually possible to recover a proportion of the VAT charged on refurbishment works, since part of these costs are considered maintenance, rather than “renewals”; it is assumed that 20% of the VAT on refurbishments is recoverable – i.e. a net rate of 16% on refurbishments. 5.10.15 Note that VAT is included in the cost table for completeness and because the gross cost is the basis for calculating capital charges in the financial appraisal; however the economic appraisal excludes VAT, which is a transfer cost within the public sector. 5.10.16 As the out-turn costs include inflation and the economic appraisal is based on real-terms costs, for the purposes of inputting the Generic Economic Model, the capital costs have been adjusted for inflation using the GDP deflator of 2½% . 5.10.17 A table showing the differences between the capital costs for the Financial Case and the inputs into the GEM is included at Appendix 5.5. 5.11
Optimism Bias
5.11.1
The basis for calculating Optimism Bias is described in the Management Case under Risk and Value Management and summarised below: Table 5.9 - Optimism Bias
Option 2
Option 2M
Option 4
Option 8
Option 18
Option 18M
Upper Bound Adjustment
34.0%
34.0%
34.0%
34.0%
34.0%
34.0%
Percentage Factors Contribute after Mitigation
32.0%
32.0%
34.0%
34.0%
37.0%
37.0%
Net adjustment for Optimism Bias
10.88% 10.88% 11.56% 11.56% 12.58% 12.58%
5.11.2
The detailed assessment of the Upper Bound, together with the estimation of the mitigation factors, is set out in Appendix 5.2; this was assessed by the Project Team collectively.
5.11.3
The level of Optimism Bias represents the level of unmitigated risk at this stage - the rate will be further reduced at FBC stage as and when the scope and design solution will be fully developed and reflected in the guaranteed maximum price.
5.11.4
The solution described in this business case is based on considerable work undertaken by the Trust to date, by the project team, advisors and the clinical user groups, to develop a new model of care and schedules of accommodation. This has led to fully worked-up 1:200 drawings and a substantive briefing for the Procure 21+ PSCP, which will be ready to implement immediately following OBC approval. The optimism bias therefore reflects the level of project development that is much more advanced than would normally be the case at OBC stage for a Procure 21+ project.
5.12
Land
5.12.1
A feature of the preferred option is the need to retain the area of land at the east end of the NMUH site that was earmarked for disposal and residential development under the PFI
Outline Business Case for Implementing the BEH Clinical Strategy 76
Business Case. In addition to retaining some of the buildings that were due to be demolished, the land will be required to provide space for additional car parking spaces needed to provide for the extra staff and visitors generated by a 50% increase in both non-elective and maternity activity. 5.12.2
Retention of the land will provide the Trust with the space to create new clinical space in the future, perhaps in the form of additional primary care facilities.
5.12.3
In accordance with the requirements of the Capital Investment Manual, the value of this land represents an opportunity cost as it has alternative utility. It is therefore included in the economic appraisal at its current estimated valuation of £5.5m; this value has been estimated by an independent valuer and is consistent with the fall in land values in the south-east since the beginning of 2007 and is a reduction of over 40% of the valuation of £9.4m included in the PFI FBC. This opportunity cost applies equally to all options.
5.12.4
The Trust will further develop the DCP prior to FBC submission and give due consideration to the recommendations received. This may involve, subject to Trust executive approval, the repatriation of onsite administrative accommodation currently located on the east of the campus to the vacant spaces within the podium. The Trust may however wish to retain this potential expansion space for future clinical service development due to its links to the Diagnostic services located in the PFI building.
5.13
Life Cycle Costs
5.13.1
The technical advisors have provided a high-level life cycle cost model, based on the capital costs above, and assessed over the life of the buildings and the electrical and mechanical plant. These costs cover the renewals of engineering elements according to their generally accepted useful lives and periodic redecoration of the building fabric. These are assessed over sixty years following completion, the normal appraisal period for new buildings and thirty years for refurbished areas
5.13.2
The life cycle cost profiles are included at Appendix 5.3.
5.14
Transitional Costs
5.14.1
This project is particularly complex and represents a significant level of change for the Trust. The transitional costs, i.e. the one-off costs incurred in developing, managing and implementing the project, are an important factor in affordability terms.
5.14.2
Transitional costs include: •
Decanting, commissioning and cost of moves;
•
Removals from CFH to NMUH;
•
Double running, Staff recruitment and overlapping employment costs;
•
Other implementation costs;
•
Interest on assets under construction (included for affordability purposes, but excluded from economic appraisal).
5.14.3
These costs are set out in Appendix 5.4.
5.15
Property-Related Revenue Costs
5.15.1
These include: Maintenance (Hard FM)
5.15.2
Under the terms of the PFI agreement, all maintenance services are to be provided to the whole of the Trust’s estate by Ecovert FM, a subsidiary of Bouygues UK and a member of the Bynorth (Project Co) Consortium. The service specification is the standard PFI model and includes all statutory, planned and preventative maintenance plus reactive maintenance,
Outline Business Case for Implementing the BEH Clinical Strategy 77
although repair costs over £1,000 for the retained estate (but not the PFI buildings) are payable by the Trust. 5.15.3
There are unlikely to be any savings on maintenance of the refurbished parts of the retained estate buildings, although to the extent their condition is improved and brought up to EstateCode Condition B the downside risk of failure will diminish.
5.15.4
However, the area of estate to be maintained will increase with the development of the new building and the retention of more of the existing buildings. A variation enquiry has been instigated to determine the terms of this additional maintenance
5.15.5
Maintenance (Hard FM) costs have been projected on the basis of the PFI-agreed charges per square metre for new and additional refurbished accommodation. Cost of services will be benchmarked to ensure that savings are identified reflecting the economies of scale from thi variation.
5.15.6
The actual cost of the additional hard maintenance will be worked up with Ecovert FM as part of the variation enquiry that has been issued to Project Co. Soft Facilities Management
5.15.7
The costs of most FM services will vary according to the number of beds and patients served, although others, such as cleaning, will largely depend on the areas to be cleaned. Costs have been projected against the current service budgets for the out-sourced services.
5.15.8
The Patient catering facility in the new hospital has been expanded as part of the PFI variation, whilst the variable costs are included in the cost of the additional FM services. Energy and Utilities
5.15.9
The cost of utilities for the new building has been estimated on a pro-rata basis to the current/planned costs of the new PFI hospital. Any new buildings will be expected to perform at least as well as the new PFI hospital, i.e. achieve an energy consumption level of less than 55 giga-joules per 100 m3, and in accordance with Part L2A of the 2010 Building Regulations.
5.15.10 For the purpose of the financial estimates, it is assumed that the electricity cost increase for the expanded space will be pro-rata to the increased area. 5.16
Rates
5.16.1
These are assumed to continue at the present level for all existing buildings and are calculated in respect of the new building at the same level per square metre as those already assessed for the new PFI building. Rates are excluded from the economic analysis (being a public sector transfer charge) but included in the financial analysis.
5.17
Clinical and Support Costs
5.17.1
These costs are driven by the SaFE assumptions agreed with NHS London and commissioners and have been derived from the LTFM (long-term financial model) as more fully set out in Chapter 8. The clinical costs are assumed to be the same for all options, except for the nursing costs, which are dependent on bed numbers and ward layouts. Clinical costs for Options 2 and 2M are therefore slightly higher than the other options.
5.18
Risks
5.18.1
The risks to the project as a whole have been identified and incorporated into a Risk Management Plan; the detailed methodology for this exercise is explained in the Management Case and Appendix 9.3.
5.18.2
The risks, which were identified during a risk identification workshop and subsequent discussions with the project team, were then considered for all of the options to determine which might vary according to the risks intrinsic to the particular option.
Outline Business Case for Implementing the BEH Clinical Strategy 78
5.18.3
A risk rating, being the product of the likelihood of occurrence of a risk and the impact if it did occur, was then calculated for each risk, for each short-listed option. This was then refined through further analysis with the team.
5.18.4
These figures are detailed in the full risk register in Appendix 9.3 and summarised in the table below: Table 5.10: Summary of Risk Analysis Risks
Option 2
Option 2M
Option 4
Option 8
Option 18
Option 18M
Sum of all risk ratings
419
419
417
419
413
413
Average per risk
7.9
7.9
7.9
7.9
7.8
7.8
Ranking
3
3
3
3
1
1
4,468
4,648
4,430
4,613
4,289
4,300
Total NPC of revenue risks
1,318
1,273
1,160
1,205
1,171
1,194
Total Risk
5,786
5,922
5,590
5,819
5,460
5,494
4
6
3
5
1
2
Total NPC of capital risks
Ranking
5.18.5
The risk review identified those clinical risks, which could impact on the performance and outcomes of the project; the pricing and programme risks that impact directly on the capital cost are incorporated in the contingency added to the capital costs within the OB forms, as discussed above. The probability and impact of each capital and revenue risk have been evaluated and mitigating actions assigned to individuals for each risk. These are detailed in the risk register.
5.18.6
The value of each capital and revenue risk was calculated using single point probability analysis - multiplying the mid-point of the probability range by the mid-point of the impact range.
5.18.7
The conclusion to be drawn from this analysis is that all Options carry a similar level of risk, though Option 2, with a high level of decanting is the riskiest and Option 18, in terms of potential cost, is the least risky option.
5.19
Evaluation of Key Benefits
5.19.1
Given that the benefits in terms of the implementation of the BEH Strategy are the same for all options`, this section focuses only on benefits that differentiate the options. Backlog maintenance is a significant issue for the Trust, standing at £24m currently; each of the options utilise the estate slightly differently and Options 4, 8, 18 and 18M make use of the Tower Block, with a consequent significant reduction in backlog maintenance for those options.
5.20
Economic Appraisal
5.20.1
In this section, the economic costs of the project are evaluated over the whole life of the project. The economic appraisal follows the guidance set out in the HM Treasury Green Book and guidance on public sector business cases. It is a means of determining the best value option - this is broadly the option with the lowest net present cost, taking into account the qualitative benefits determined by the non-financial appraisal. It compares the relevant cash flows of each option over the whole life of the project discounted to present day prices.
5.20.2
The modelling was undertaken using the Generic Economic model (“GEM”), the outputs of which are provided at Appendix 5.5.
5.20.3
The main principles/ assumptions used for the modelling were: •
The base year (i.e. Year 0) for the appraisal period is 2011/12, since this is also the base year for the financial appraisal and the year before any build costs are incurred;
•
Cash flows for the relevant capital and revenue costs as described above:
Outline Business Case for Implementing the BEH Clinical Strategy 79
5.20.4
•
Capital costs exclude contingency (which is included in risk), optimism bias inflation and VAT;
•
An adjustment for the differential effect of inflation is then added;
•
Optimism Bias is shown as a separate cash flow. All costs are expressed in real terms in 2011/12 prices, the effect of inflation is ignored so that it doesn’t distort the discounting of the cash flows. This means that the capital costs, which are expressed above in out-turn prices, should be adjusted for the assumed rate of future general inflation, i.e. GDP deflator at 2.5% per annum.
•
The preferred option includes significant new build and therefore it is appropriate to use an appraisal period of sixty years, in addition to the construction period;
•
The rate of interest used to discount the cash flows is 3½% for years 1-30, as laid down by HM Treasury, and 3.0% thereafter;
•
All capital costs exclude VAT and the cash flows exclude capital charges and rates;
•
Sunk costs, i.e. costs already incurred, such as the cost of the PFI variation, are excluded.
The results of the modelling for the three options are set forth in the following table: Table 5.11: Summary of the Economic Costs Undiscounted £ 000
Net Present Cost £ 000
EACs £ 000
Option 2 Opportunity cost - land
5,500
Construction costs
5,500
207
54,281
2,047
53,544
Inflation adjustment
427
Optimism bias
5,466
Life-cycle costs
45,141
15,014
566
218,191
96,061
3,622
Clinical Costs
6,374,566
2,761,052
104,121
Non-clinical costs
1,810,452
787,448
29,695
714,779
304,649
11,488
2,641
2,326
88
9,230,707
4,026,331
151,834
6,916
5,786
218
(7,587)
(6,651)
(211)
9,230,036
4,025,466
151,841
5,500
5,500
207
60,160
2,269
Other capital expenditure
Property-related revenue costs Transitional costs Total capital and revenue costs Risk Benefits Total including risk and benefits Option 2M Opportunity cost - land Construction costs
59,351
Inflation adjustment
476
Optimism bias
6,088
Life-cycle costs
47,263
15,996
603
218,191
96,060
3,622
Clinical Costs
6,374,566
2,761,052
104,121
Non-clinical costs
1,810,452
787,448
29,695
714,779
304,649
11,488
Other capital expenditure
Property-related revenue costs Outline Business Case for Implementing the BEH Clinical Strategy
80
Transitional costs Total capital and revenue costs
2,652
2,337
88
9,239,318
4,033,202
152,093
7,052
5,922
223
(10,425)
(9,138)
(290)
9,235,945
4,029,986
152,026
5,500
5,500
207
55,393
2,089
Risk Benefits Total including risk and benefits Option 4 Opportunity cost - land Construction costs
54,339
Inflation adjustment
424
Optimism bias
5,897
Life-cycle costs
39,719
14,011
528
218,191
96,061
3,622
Other capital expenditure Clinical Costs Non-clinical costs Property-related revenue costs
6,366,019
2,757,722
103,995
1,810,452
787,448
29,695
691,616
295,595
11,147
2,668
2,353
89
9,194,825
4,014,083
151,372
Transitional costs Total capital and revenue costs
6,524
5,590
211
(11,141)
(9,766)
(310)
9,190,208
4,009,907
151,273
5,500
5,500
207
58,395
2,202
Risk Benefits Total including risk and benefits Option 8 Opportunity cost - land Construction costs
57,376
Inflation adjustment
413
Optimism bias
6,250
Life-cycle costs
43,611
15,099
569
218,191
96,061
3,622
Clinical Costs
6,366,019
2,757,722
103,995
Non-clinical costs
1,810,452
787,448
29,695
703,214
300,136
11,318
2,667
2,350
89
9,213,693
4,022,711
151,697
6,840
5,819
219
Other capital expenditure
Property-related revenue costs Transitional costs Total capital and revenue costs Risk
(10,440)
(9,140)
(290)
9,210,093
4,019,390
151,626
5,500
5,500
207
53,662
2,024
Benefits Total including risk and benefits Option 18 Opportunity cost - land Construction costs
52,927
Inflation adjustment
(1,169)
Optimism bias
6,231
Life-cycle costs
38,809
13,393
505
218,191
96,061
3,622
Other capital expenditure Outline Business Case for Implementing the BEH Clinical Strategy
81
Clinical Costs
6,366,019
2,757,722
103,995
Non-clinical costs
1,810,452
787,448
29,695
696,207
297,339
11,213
2,658
2,410
91
9,195,825
4,013,535
151,352
6,415
5,460
206
(12,926)
(11,490)
(365)
9,189,314
4,007,505
151,193
5,500
5,500
207
54,907
2,071
Property-related revenue costs Transitional costs Total capital and revenue costs Risk Benefits Total including risk and benefits Option 18M Opportunity cost - land Construction costs
54,293
Inflation adjustment
(1,037)
Optimism bias
6,389
Life-cycle costs
40,056
14,000
528
218,191
96,061
3,622
Clinical Costs
6,366,019
2,757,722
103,995
Non-clinical costs
1,810,452
787,448
29,695
700,634
299,083
11,279
2,673
2,424
91
9,203,170
4,017,145
151,488
Other capital expenditure
Property-related revenue costs Transitional costs Total capital and revenue costs
6,485
5,494
207
(13,171)
(11,650)
(370)
9,196,484
4,010,989
151,325
Risk Benefits Total including risk and benefits
5.20.5
Note that the Capital Costs (from the OB Cost Forms) were adjusted for the purpose of the GEM as follows: Table 5.12: Reconciliation of OB Forms with GEM
Option 2
Option 2M
Option 4
Option 8
Option 18
Option 18M
Total for approval per table 5.7
58,413
64,417
59,168
62,402
57, 599
58,979
Less contingency
(4,869)
(5,065)
(4,828)
(5,027)
(4,672)
(4,685)
59,352
54,340
57,375
52,927
54,294
Capex per GEM
53,544
Cost Benefit Analysis 5.20.6
In order to determine which of the options represents the best value for money it is necessary to combine the financial and non-financial appraisals to see which generates the lowest net present cost per unit of value added. This combines the results of the DCF analysis above with the weighted scores from the appraisal workshop.
5.20.7
The following table summarises this comparison: Table 5.13: Value for Money Summary £ millions
Option 2
Option 2M
Option 4
Net Present Cost
4,026.3
4,033.2
4,014.1
4,022.7
4,013.5
4,017.1
5.8
5.9
5.6
5.8
5.5
5.5
Adjustment for risk
Outline Business Case for Implementing the BEH Clinical Strategy 82
Option
8
Option 18
Option 18M
Value of benefits Total net present cost Weighted Scores NPC per unit score £m
(6.7)
(9.1)
(9.8)
(9.1)
(11.5)
(11.7)
4,025.4
4,030.0
4,009.9
4,019.4
4,007.5
4,011.0
698.9
754.4
711.6
765.1
737.1
802.0
5.76
5.34
5.64
5.25
5.44
5.00
6
3
5
2
4
1
Ranking
5.20.8
The above table shows that Option 18M has the lowest net present cost per unit of benefit, as assessed by the workshop of Trust stakeholders. Sensitivity Analysis
5.20.9
The option ranking second scored 37 points less than Option 18 and was slightly more expensive in NPC terms. Analysis using “goal seek” indicates that Option 8 would need to have scored 804 points or cost £194m less to become the highest ranking option. Since the operating costs for all options are more or less the same apart from occupancy, it is unrealistic to consider that revenue costs for just one option could change by such an amount, similarly the capital cost is around £60 million in total, or only a third of the amount required to alter the rankings.
5.20.10 Option 18 has a lower net present cost than Option 18M but would require an increase in weighted score of 64 points or an increase in NPC of some £320m to become the highest ranking option. 5.20.11 The sensitivity to changes to scores is set out at paragraphs 5.6.17/18 – given the closeness in cost terms, such a change would also be similarly reflected in the value for money scores. Conclusions 5.20.12 Option 18M scored more highly than all other options and has the second lowest aggregate net present capital and running costs. Although the NPCs of both options 4 and 18 are slightly lower than those for Option 18M, it is clear that, within a reasonable range of sensitivities, Option 18M is the preferred option. 5.21
Preferred Option
5.21.1
Details of the design and proposed implementation of the preferred option are set forth in greater detail below. The affordability of the option is discussed in the Financial Case (Chapter 8). Functional Requirements
5.21.2
In advance of the full implementation of the BEH Clinical Strategy, alterations to the new PFI Building to expand the capacity of the A&E Department were undertaken through a PFI Variation in 2010. The alterations would serve to satisfy the “ripple effect” of extra theatres and diagnostic facilities providing an additional 30 acute beds and an extension to the A & E department.
5.21.3
The Preferred Option sets out to fulfil the remaining requirements generated by the BEH Clinical Strategy. In summary these comprise; (a) Reconfiguration and expansion of Women’s & Children’s services to provide additional paediatric and maternity beds and related assessment facilities, together with a new Midwife-led maternity Unit in recognition of the Model of Maternity Care developed by the Trust (See Appendix 4.2) ; (b) Increased general and acute bed capacity to cater for the expected increase in nonelective inpatients;
Outline Business Case for Implementing the BEH Clinical Strategy 83
(c) Provision of sufficient additional administration space to cater for the displacement of such space by the new clinical facilities; (d) An improvement of both clinical and functional adjacencies to allow the new service to be delivered efficiently; (e) Additional car parking for patients, visitors and staff; Summary of Preferred Option 5.21.4
The overall project provides significant refurbishment to around 9,320 sq m of the existing estate and approximately 7,975 sq m of new build to the east of the podium building.
5.21.5
The proposed layouts support the model of care by co-locating services for patients’ convenience and ensuring there are efficient functional service relationships within and between buildings. It also provides ground floor locations for relevant services, specific main entrance/reception focus, safe and secure environment, and scope for third party services.
5.21.6
In order to ensure that the enhanced clinical facilities meet, to the extent possible, modern healthcare planning standards in terms of space and consumerism, it will be necessary to undertake a heavy refurbishment of Levels 1, 5, 6. 7 and 8 of the Tower Block and over one third of the Podium Block which will require the replacement of much of the service infrastructure and plant to serve the newly reconfigured accommodation.
5.21.7
There is a considerable amount of decanting and enabling works involved, which is necessary in order to reconfigure the site to facilitate both the refurbishment and the new building. Acute Medical and Surgical Beds
5.21.8
The additional acute beds to support the additional A & E activity are provided in the ward templates on levels 5 through 8 of the Tower Block. The floors will be fully refurbished to provide 22 bedded wards with a programme of window replacement throughout the Tower to meet current regulations relating to carbon dioxide emissions. The new ward spaces will adopt current guidelines for working practices and within the restrictions imposed by the building envelope adhere where practicable to current Department of Health space requirements.
5.21.9
The balance of the beds for the A & E activity will be provided in a 29 bed ward template in the Pymmes building to the south of the Podium. Space for these will be created by relocating the Stroke unit, which currently occupies a single ward template in the Pymmes building to Level 2 of the Podium. The new Stroke Unit will provide dedicated stroke services fully supported by a full complement of “on ward” therapies. Women & Children’s Services
5.21.10 The Women & Children’s Service forms the cornerstone of the design for the overall BEH strategy with particular emphasis placed on the adjacencies and quality of clinical spaces provided in the planning of the reconfiguration. 5.21.11 The planning of the space has been completed in cooperation with the Women & Children’s Strategy Group which bought together clinicians, nurses and managers and reflects the new Model of Care adopted by the hospital which is borne of national guidance and from the School of Midwifery. This will ensure that the restrictions and compromises imposed through the use of the retained estate are clinically acceptable for service delivery and the increased activity. 5.21.12 The Delivery Suite, Neonatal Unit and Women’s Outpatient services are currently offered from the Upper floor of the podium Level 0 with the Inpatient beds located on the 4th floor of the main Tower block (Level T4). 5.21.13 The works associated with the new build maternity development comprise of a new three storey building to the east of the podium with a footprint of approximately 3,000 sq. metres, complete with a technical services floor covering approximately half of the footprint at first floor Outline Business Case for Implementing the BEH Clinical Strategy 84
level containing plant and services necessary to support the birthing areas and in particular, the operating theatres, together with potential expansion space. 5.21.14 The building is programmed to become available in 2015 and will comprise of the consultantled birthing unit, neonatal unit (NICU/SCBU) and obstetric theatres located at first floor level (Level 0). The ground floor (level -1) will provide the midwife-led birthing unit, triage & maternity day unit, women’s outpatient services and a main entrance. 5.21.15 The new building links to the Podium building at Level 0 with a flying corridor providing good access to the proposed postnatal and paediatric wards. 5.21.16 Significant refurbishment of the Tower and Podium is required to provide the balance of the women’s & children’s accommodation. A new post-natal ward will be provided on Level 0 of the Podium complete with an adjacent discharge lounge to ensure optimum management of the Trust’s inpatient beds. Level T1 of the Tower will be converted in part to provide an 11 bed paediatric assessment and short-stay unit to support the additional paediatric A&E activity. Level 2 of the Tower continues to accommodate the paediatric inpatient ward and will benefit from the window replacement programme and an aesthetic refurbishment. Displaced Services 5.21.17 Further decanting works are required to support the arrangements above and these briefly comprise of the following; • A reorganisation of the lower ground floor of the podium (Level -1) to provide a new cardiology clinic to support the need to vacate Level T8 of the Tower; • New offices to support the need to vacate Level T7 of the Tower; • HIV outpatients will be decanted from T1 to a new and dedicated centre constructed within the redundant Theatre 4 to the east of the campus. 5.21.18 Additional and associated parking to support the development is proposed to the east of the site within an area identified, in the application submitted and consented for the previous PFI development, as residential disposal land. The parking will be provided in a phased approach to meet the requirements of the development. Future Flexibility for Further Development 5.21.19 The preferred option offers significant flexibility to provide solutions for possible future changes. The size of the planned facilities is adequate for the levels of activity envisaged and more flexible working practices, such as extending the working day in the DTC, will provide opportunities for absorbing significant extra planned activity. The A&E department together with the assessment/admissions wards and the additional 29 Bed ward make for a very large department with scope for responding to innovative changes to the model of care. Site Issues 5.21.20 The preferred option requires a number of existing buildings on the disposal site to be retained. The packaged boiler plant installed by Project Co to serve the planned retention of the Pathology Building under the PFI agreement had sufficient capacity to serve additional buildings on the east of the site, including Theatre 4 housing HIV, and early Trust negotiations with Project Co secured heating for some of the buildings now retained. 5.21.21 The new building will be served by dedicated boiler plant located on the technical floor Level 1. The Trust will work with the PSCP to determine the benefits of this versus using spare capacity in the retained estate. It is envisaged that utilising existing plant may achieve considerable capital savings but it would not be possible to achieve a BREEAM score of excellent. This issue will be addressed in the FBC.
Outline Business Case for Implementing the BEH Clinical Strategy 85
5.21.22 Existing electrical substations and standby electrical generation plant will be replaced and supplemented as required. 5.22
DESIGN
Development Vision 5.22.1
The overarching principles of the PFI design vision have been fully adopted and developed in the BEH delivery strategy which stated; ‘North Middlesex University Hospital NHS Trust’s vision is for a hospital that provides a high quality environment, centred around the needs of patients. The design should provide patients with a sense of empowerment in a calm environment that is sensitive to their safety, privacy and dignity The space should be planned in such a way that it should be capable of meeting the Trust’s needs both now and in the future, successfully integrating new and existing buildings in such a way that supports the model of care, enables efficient working practices and is accessible and user friendly for patients and visitors. The design should support and inspire staff to strive for excellence through the enhancement of research and development, education and training facilities and the promotion of collaborative working. In enhancing the provision of robust and easily maintained clinical facilities, Information Communication Technology and medical equipment, the design should allow the Trust to provide a diverse health care service, which the local community deserve’ The New Building
5.22.2
The Trust’s vision for the development of the site is to achieve parity (within the restrictions imposed by the architectural styles of the retained estate), portraying a ‘One Hospital’ impression.
5.22.3
Given the wide range of architectural styles that exist on the hospital site, it was considered that the new building should be sympathetic to the existing, yet have a style that responds to its particular context. The existing Tower and Podium blocks that form the backdrop to the new building have become dated. The new building will have a significant and positive impact on the street scene offered from Sterling Way. Given the extensive utilisation of the Tower and Podium, the Trust has identified sums of money in the Cost Forms to replace the 1970s metalframed windows, which will have a positive impact on the street scene and contribute significantly to thermal efficiency of the retained estate and help to reduce the carbon footprint.
5.22.4
The external wall cladding to the new building will be in a contemporary style whose form will be largely a product of function and follow the principles adopted on the recently completed PFI building to the south and the Energy Centre to the West.
5.22.5
Modulating patterns of windows and cladding panels break up the visual mass of the building and counterpoint the rigid banding of glass and concrete in the tower and podium blocks. The orientation of the building is such that a minimum facade faces the North Circular Road thereby reducing noise levels the building will be subject to.
5.22.6
The fenestration of the new building has largely been dictated by environmental conditions and internal layout. Glazing will be a balance between maintaining privacy and thermal efficiency whilst providing a reasonable outlook for patients. The windows are positioned to suit the internal layouts, resulting in a seemingly random arrangement on the elevations.
5.22.7 The area of the new building’s footprint is dictated by healthcare design standards in terms of spatial requirements and functional adjacencies, whilst the shape of the building footprint is determined by site constraints.. Outline Business Case for Implementing the BEH Clinical Strategy 86
Refurbishment 5.22.8
The refurbishment of the retained estate provides an opportunity to upgrade both clinical and non clinical patient and staff environments. It is also necessary to demonstrate a new healthcare culture across the NMUH site and not just the PFI project.
5.22.9
Essentially exterior form and treatment is restricted by the use of the existing building stock however improvements to site wide key external elements; soft and hard landscaping good signposting and way-finding of pedestrian routes will improve the patient experience upon entry onto the hospital site.
5.22.10 The backdrop of the PFI Hospital and the proposed new building will provide a key visual amenity and in the majority of cases the start of the patient journey will commence in the primary public zone formed by the new hospital entrance. 5.22.11 The retained Podium and Tower Block are interlinked with the new hospital through several pedestrian nodes allowing ease of access to all levels of the Podium and Tower from where lifts provide access to all floors. 5.22.12 The key to the internal environment within the Podium and Tower is to make this a seamless transition from the new hospital areas particularly along the primary and secondary patient pathways. Interior design principles from the PFI building will be extended through these public areas and links to ensure interior design continuity. 5.22.13 The building will be provided with both a new emergency entrance and a general public entrance. The separation of these patient flows offers optimum privacy and dignity for patients arriving by ambulance as opposed to those attending for routine appointments. The building offers a dedicated entrance for women visiting the site with associated car parking . 5.22.14 The design process has where practicable within the constraints of the retained estate given careful consideration to the requirements of the relevant Health Building Notes and aligned the design to the particular services current at the time of design. 5.22.15 Schedules of accommodation have been produced noting the standard HBN areas, the proposed areas and where relevant the existing to provide a detailed comparison to demonstrate compliance with, or derogation from the functional requirement of each service. 5.22.16 Space planning of the Women’s and Children’s services has been completed to reflect the Women’s and Children’s services Model of Care Planning August 2008 – Accommodation Requirements. 5.22.17 An AEDET (Achieving Excellence Design Evaluation Toolkit) workshop has been undertaken by the Trust to benchmark the design quality of the proposals. An average rating of around 5.0 was achieved. 5.22.18 BREEAM Healthcare pre-assessments have been completed on both the new building and proposed refurbishment and achieve Excellent and Very Good ratings respectively. Backlog maintenance 5.22.19 In order to ensure the Tower Block and Podium are fit for purpose in the context of the significant refurbishment they will undergo, the preferred option addresses a considerable amount of the existing backlog maintenance deficit in these buildings and also in respect of the site infrastructure that will be renewed in order to facilitate the construction of the new maternity building. This is illustrated in the table below:
Building Library & Learning Centre
January 2012 Total Backlog 207,277
Outline Business Case for Implementing the BEH Clinical Strategy 87
Backlog reduction 0
Post-BEH Backlog remaining
Riskadjusted Backlog remaining
207,277
26,458
Old Admin Block
271,570
0
271,570
16,262
Outpatients
793,002
(1)
793,003
101,030
2,592,298
0
2,592,298
215,088
18,033,191
10,340,016
7,693,175
3,994,941
Pathology Podium & Tower Pymmes
623,220
0
623,220
26,053
Trust HQ & Admin (Old A & E)
180,000
0
180,000
5,309
PFI Building
0
0
0
0
PFI Energy Centre
0
0
0
0
Externals Total backlog works Fees at 13.1% Total backlog including fees
1,510,000
1,300,000
210,000
103,667
24,210,558
11,640,015
12,570,543
4,488,808
3,171,583
1,524,842
1,646,741
588,034
27,382,141
13,164,857
14,217,284
5,076,842
Access 5.22.20 The Trust commissioned a Transport Assessment completed in 2011 to establish the impact on the highways and transportation aspects of the proposed development on the existing Hospital site. 5.22.21 Scoping discussions with relevant officers from the London Borough of Enfield (LBE), who are the highway authority for the surrounding roads and TfL who are the Highway Authority for Sterling Way (A406) informed the preparation of the report. 5.22.22 The assessment, and thus the proposed development, has also given consideration to the prevailing government policy on Transport and has given due consideration to local policy including the Enfield Local Development Framework (LDF) and the London Plan. 5.22.23 Discussions with relevant officers of the LBE highway’s team focused on the sustainability of the development including proposed parking provision at the site as well as the requirement for the production of a robust site wide Travel Plan. 5.22.24 The site is well served by Public transport with a number of bus routes 491, 444 and 318 operating in the environs of the site, with both services 491 and 318 accessing the on-site bus stop/ lay-by area adjacent to the main hospital entrance at the western end of the site (Bull Lane). Onsite bus stop facilities include shelters, seating and lighting together with route information for use by passengers. 5.22.25 Network Rail services operate from Silver Street station. This station is served by National Express East Anglia, and provides train services between London Liverpool Street (to the south) and Cheshunt and Enfield Town to the north. 5.22.26 Pedestrian access to and from Silver Street station is convenient, being only 500m distance to the east of the Campus. The route is lit and located on busy thoroughfares. It is understood that current bid for funding to enhance pedestrian facilities in the vicinity of and along key links to, Silver Street Station, including access to and from the Hospital by the North London Transport Forum (NLTF) has been successful and works are to commence in the near future. 5.22.27 The Trust however also recognises that the additional activity generated through the BEH Clinical Strategy will require additional on site car parking capacity. 5.22.28 The retention of the land to the east of the site provides the opportunity to create a site wide parking strategy with patients and visitors being directed to the most appropriate car parking area for their visit. A minimum of 97 additional car parking spaces will be created allowing simple direct links to the hospital providing ease of access for patients, staff and visitors; the Trust will seek to maximise the number of spaces provided. The car park will be compliant with the requirements of the Disability Discrimination Act and well lit to provide a safe environment. Outline Business Case for Implementing the BEH Clinical Strategy 88
5.22.29 The area is significant in terms of initial patient experience and sense of arrival at the site. A high quality hard and soft landscaping scheme will be developed to ensure that views both to and from the hospital are utilised to their maximum potential. 5.22.30 Whilst there are no cycle routes indicated in the vicinity of the campus discussions with representatives of LBE have indicated that Bull Lane to the west of the site is proposed to form part of the “Greenway Cycle Route” planned for the Borough. 5.22.31 Cycle parking will be available at the hospital site in the form of two cycle sheds which accommodate 44 bicycles. One shed is situated adjacent to the western rotunda and main entrance, with the second shed located centrally to the east of the new main PFI building. 5.22.32 External way-finding will be developed as part of a Trust wide initiative which will integrate with the proposals of the PFI scheme. It is proposed that distinctive ‘land marks’ be incorporated into the design – the east rotunda of the PFI buildings being significant in this process. 5.22.33 Signposting to and from the car parking areas and the public transport nodes will be made clear and obvious developing the established way-finding strategy incorporated in the PFI building. Consumerism 5.22.34 This overarching concept of looking after the needs and desires of both patients and staff is in line with the Consumerism agenda for the NHS. It is about providing a service that recognises and meets the expectations of an individual rather than a generic group. Consumerism is about anticipating needs and delivering consistently high levels of service that satisfy those needs. 5.22.35 The Trust has great aspirations for the hospital and actively works to drive up quality. Ultimately, the Trust wants the hospital to be the local hospital of choice for patients and in the eyes of GPs and commissioners because it provides high quality specialist healthcare, over and above local standards. 5.22.36 A more detailed review of Consumerism Criteria and design response is included in Appendix 5.6. IM&T 5.22.37 The BEH Strategy implementation focuses only on installing the additional passive and active infrastructure to meet the increased level of demand from the expanded activity and is not concerned with upgrading or implementing new systems, which were significantly upgraded at the time of the PFI project, including, for example, the move to 100% digital imaging. 5.22.38 The IT data and voice network infrastructure for the BEH new building will follow the same design principles used for the new PFI building. The retained estate will be upgraded (e.g. fibre backbone, VoIP, network switches) as part of the refurbishment to meet the new design specifications. Privacy and Dignity 5.22.39 The requirements of the ‘NHS London Standard for Single Sex Accommodation’ have been considered and addressed within the design where an Estates solution is practicable. 5.22.40 The ‘race track’ layout of the wards provides an ideal opportunity for segregation. 5.22.41 The adult acute wards in the Tower Block have been designed to provide 33% single bedrooms; this is the standard achieved in the new PFI building. The ward configurations are organised to provide maximum facility for separation of sexes. Any number of single rooms may be apportioned to the particular gender allowing maximum flexibility in bed management. Furthermore the single bedrooms and multi-bed bays are all provided with en-suite Shower/W.C accommodation. Outline Business Case for Implementing the BEH Clinical Strategy 89
5.22.42 The reprovision of beds with single en-suite rooms is shown in the table below: Accommodation Post-natal beds Transitional beds Paediatric Unit Obstetric beds Acute adult beds Total
Beds 31 6 11 25 117 190
Single 11 6 5 25 41 88
% 35% 100% 45% 100% 35% 46%
5.22.43 The existing wards to the Pymmes Building are of an ‘L’ shaped ‘finger type’ layout and a minor refurbishment to provide single sex accommodation has been completed. The compliance works comprised the enclosure of the existing bed bays and the provision of en-suite Shower/WC’s within. The female accommodation is provided furthest from the ward entrance beyond the Staff base within each ward. A further en-suite single bedroom has been provided to the male section of the configuration to provide a balance of accommodation. Infection Control 5.22.44 The Infection Control team were engaged at feasibility stage to advise on ward and unit layouts and to discuss the operational issues around the design philosophies adopted. The team continues to be involved and are integral in the approval of the loaded layouts prepared for each of the projects. The design team has adopted and included the advice received through each of the projects and amended this to suit particular services and layouts. 5.22.45 As a result Infection Control checklists have been prepared by the Trust and its designers on each of the projects for further discussion and approval with the Infection Control team prior to proceeding to tender or detailed design. All tender documents include an appendix containing the Infection Control Checklist. A Schedule of derogation which includes references to HFN 30 – Infection Control in the built environment, where Trust approved derogations have been adopted and the reasoning to support these is also included as an appendix to the tender documents.
Outline Business Case for Implementing the BEH Clinical Strategy 90
6.
Case for Acceleration & Funding of Early Works
6.1
Introduction
6.1.1
Whilst this business case makes the case for capital funding of £79m to invest in the scheme to implement the BEH Clinical Strategy at NMUH, the Trust is requesting that the Department of Health provide an advance of funding for the scheme in order to accelerate the Strategy implementation in accordance with the wishes of the BEH Clinical Strategy Board and NHS London.
6.1.2
The background to this is that when the Secretary of State announced his decision on 12th September 2011 to approve the BEH Strategy,
6.1.3
it was recognised that any further delay to implementing change may be detrimental to patients and the services they access. The North Central London Cluster, being the commissioning body that has consolidated the Barnet, Enfield and Haringey PCTs is mindful of the continued risks to patient safety of maintaining three emergency sites, and three maternity units, instead of two, and has requested that both NMU and B&CF move to implement the Strategy at the earliest possible date.
6.1.4
The Base Case implementation programme cannot deliver the changes required until January 2015, due to: •
Length of time to reach Full Business case (“FBC”) approval;
•
Scale of the enabling works required; and
•
Length of the construction period
6.1.5
NHS London have also requested that the BEH Strategy be implemented as quickly as possible, in order to minimise risks to patient safety, and an accelerated programme is proposed that will, subject to advance funding being made available by the DH, enable the activity to transfer from CFH by November 2013, i.e. fourteen months earlier.
6.2
Case for Acceleration Introduction
6.2.1
As has been set out in the Strategic Case (see page 25) the original decision by the Barnet, Enfield and Haringey PCTs to implement the clinical strategy was taken in December 2007. This decision was referred to Secretary of State (SoS) who in turn commissioned an Independent Reconfiguration Panel (IRP) review. Implementation was further delayed following the General Election in 2010 and the requirement for all reconfigurations to be reviewed to ensure they met the four tests: •
support from GP commissioners;
•
strengthened public and patient engagement;
•
clarity on the clinical evidence base; and
•
consistency with current and prospective patient choice
6.2.2
The results of this review were further challenged so it was not until September 2011 that the Secretary of State took the final decision that the implementation of the strategy should go ahead at the earliest opportunity.
6.2.3
The Pre-Consultation Business Case (PCBC) envisaged that implementation would be completed during financial year 2010/11 and the first year of steady state post implementation would be 2011/12. This represents an elapsed period of four to five years between decision to proceed and implementation.
Outline Business Case for Implementing the BEH Clinical Strategy 91
6.2.4
Whilst the Trusts continued with some planning for the necessary capital investment during the period the implementation was under review, no business cases could be submitted for approval pending the final decision to implement.
6.2.5
Once the go ahead for implementation was given, the Trusts updated their implementation plans and commenced drafting these OBCs. In the course of this work it became apparent that following normal business case preparation and approval practice the earliest date that implementation of the emergency, maternity and paediatric service reconfigurations could be achieved (“activity transfer date”) is January 2015. Delivering the capital investment programme and activity transfer by this date forms the base case for implementation set out within this and B&CF’s OBCs.
6.2.6
Given the original implementation plan had activity transfer occurring in the fourth year following the decision to proceed the January 2015 implementation date is not surprising. The fixed element of delay is the time taken in actual construction. This amounts to 13 months for Barnet Hospital expansion works and 22 months for NMUH. The more variable element relates to the planning, approvals and procurement processes which account for the remaining time delay in implementation.
6.2.7
Whilst some truncation of these processes might be expected on the basis of the planning done during the implementation moratorium this has not been sufficient to significantly shorten the period required for implementation.
6.2.8
Recognising the delay introduced by the various reviews of the implementation decision and SoS’s requirement for implementation at the earliest opportunity it was decided that options for accelerating implementation should be explored. The Trusts have identified that activity transfer can be achieved by November 2013 subject to them receiving funding for the investment prior to the NMUH FBC being approved by HMT. Implementation by November 2013 forms the accelerated case within the Trusts’ OBCs.
6.2.9
In order to illustrate the impact of approval delay on the implementation date the Trusts have also modelled a further case under which advance funding is not available until HMT approves the NMUH OBC. This results in an activity transfer date of April 2014. Delivering to this timescale case constitutes the intermediate case within these OBCs.
6.2.10
This section of the economic case sets out: •
the case for acceleration;
•
the key approval and construction milestones for the accelerated and intermediate cases compared to the same milestones in the base case;
•
the funding required prior to NMUH FBC approval both in terms of commitment and actual cash expenditure.
The Case for Acceleration 6.2.11
The case for acceleration comprises two elements: •
the clinical case; and
•
the financial case.
Clinical Case for Acceleration 6.2.12
Part of the case for change within the BEH clinical strategy was that over time the current configuration of services would not be clinically sustainable and could give rise to clinical risks to the quality and safety of services at Chase Farm. Both Trusts maintain corporate risks registers and monitor the risks associated with the delay to the BEH implementation in line with trust processes.
6.2.13
In the light of the delay in implementing the strategy it was considered important to clinically review the transferring services to confirm whether any quality or safety issues had emerged. It
Outline Business Case for Implementing the BEH Clinical Strategy 92
was considered desirable that this review was conducted independently and NHS London agreed that they would organise the review. 6.2.14
In summary, the scope of the review was to: 5.
Assess the clinical risks of sustaining services in their current locations, taking account of: •
mitigation requirements, including additional staffing and physical capacity; and
•
impact of accreditation and training requirements.
6.
Assess the clinical risks associated with transferring emergency services and women’s and children’s services at different times, including consideration for whether the preferred option is to sustain services for longer in order to move them at the same time rather than move one service sooner.
7.
Consider the clinical case for accelerating implementation of the strategy.
8.
Consider staffing requirements required for each workforce group to implement the changes safely.
6.2.15
The full report of the review is at Appendix 6.3.
6.2.16
The review team considered three scenarios:
6.2.17
•
Option 1: Services remain in their current locations until all building works are completed in line with the OBCs base case (implementation in early 2015)
•
Option 2: Services remain in their current locations until all building works are completed but to an accelerated timeline (implementation in Autumn 2013)
•
Option 3: Some or all affected services relocate before final building works are completed, involving an interim transfer to sub-optimal accommodation, to mitigate risks (implementation of some or all changes before Autumn 2013)
Having considered the above options the review team made the following key recommendation: “There is a very strong case for fully implementing the strategy as soon as possible. As there is a feasible option that would achieve this by autumn 2013, the review team recommends that implementation is accelerated accordingly. This would send a very strong signal to clinical teams in particular as well as to other stakeholders. It will provide clear milestones to enable planning and has an end point that falls within the foreseeable future, which should boost morale significantly, yet is far enough away to ensure effective preparation. It is difficult to clearly distinguish clinical risks that may emerge up to autumn 2013 and between that date and January 2015. It is highly likely however that the risks which do exist will increase over time, require greater mitigation and become harder to address, which in turn risks unplanned consequences occurring. The longer timeframe also includes two further winter periods and whilst A&E/acute services are not currently at risk, this situation could change.”
6.2.18
The team also considered the interdependency of the emergency and maternity/neonatal services and recommended that that latter should transfer before, or at the same time as, the former.
6.2.19
The team made a series of recommendations for measures to ensure the services remain sustainable until autumn 2013. The Trusts intend to accept and implement these recommendations
6.2.20
The team made a set of further recommendations in respect of the overall planning and implementation of the changes and again the Trusts intend to implement these at the earliest opportunity.
Outline Business Case for Implementing the BEH Clinical Strategy 93
6.3
Proposal to Accelerate
6.3.1
The Preferred Option, despite being the quickest of all the options, cannot under normal circumstances be completed ready for activity to be transferred until January 2015. Given the continuing raised level of clinical risk due to sustaining three A&E departments where two have been shown [through the BEH Strategy] to be safer, it was agreed that over three years was not an acceptable timescale and measures should be put in place to reduce the programme as far as possible. The Trust is therefore proposing an accelerated programme which will deliver the benefits of the BEH Strategy more than one year earlier than the “base case”.
6.3.2
The strategy to accelerate is two-fold: firstly, the Trust is investigating the use of a modular building, which has the potential to shorten the construction period by up to five to six months, although potentially some related cost and risks may prove to be slightly higher than for a traditional build.
6.3.3
Secondly, the project has a complex critical path because of the need for a number of enabling works and decants and the fact that the building is adjacent to an operational hospital. This was reflected in the scoring of benefit criterion 2 (which demonstrated that the preferred option was less complex than all the other options). There are some substantial works that could be done in advance of placing the main building contract that would again shorten the construction period by up to between six and eight months; however, this does mean making substantial financial commitments, in addition to continuing the design work that is required for an FBC, in advance of OBC approval.
6.3.4
The Department of Health has already provided financial support for this approach to the project up to April 2012 when NHS London is expected to approve the outline business case. This comprised £1.7m of development costs up to the end of December 2011 and a further £1.5m agreed by the DH in February 2012 that would fund the ongoing design and some incidental works up to April 2012.
6.3.5
It should be stressed that the early design, decanting and enabling works contemplated by this business case do not involve any expenditure in addition to that set out in Chapter 5 the Economic Case - only bringing the same expenditure forward by several months.
6.3.6
Implementing the project will require creation of additional capacity at both NMUH and BH for women & children and to provide for the transfer of acute services. Part of the additional capacity for NMUH was provided through the variation to the PFI contracted new hospital completed during construction, which delivered the necessary emergency facilities to A&E, theatres, imaging, etc. The Trust’s preferred option for the full implementation is to build sufficient new capacity to ensure that the additional acute activity is delivered in inpatient accommodation that meets modern standards for healthcare facilities. With insufficient space available within the existing estate it will be necessary to embark on a substantial new build and refurbishment.
6.3.7
The overall total cost of the NMUH scheme is around £79m – the full cost of the early works that would need to be done in advance of FBC approval (i.e. the point in time when substantive works would ordinarily commence) to accelerate the programme is around £13.9m, including expenditure to date, these works include the creation of a new Stroke Unit in the old Day Surgery block, demolition of unwanted buildings, new car parking facilities to fulfil planning conditions and decanting of offices and the Cardiology clinic.
6.3.8
A summary of these costs/commitments to be incurred prior to FBC approval (in November 2012) is shown below:
Outline Business Case for Implementing the BEH Clinical Strategy 94
Table 6.1: Design and early works costs
Commitment Design & project management to complete OBC Project management & Procure 21+ Fees to complete FBC Site enabling works Decanting and enabling works Total
Expenditure
£1,925 £3,907
£1,925 £3,907
£1,467 £7,950 £15,249
£1,467 £6,633 £13,932
6.3.9
Some of the above costs have already been funded by the Department of Health; Costs to December 2011 amounting to £1.7m, plus a further £1.529m agreed by the DH in early February 2012. The Trust is therefore seeking further funding in advance of the approval of this business case in the sum of £12.02m to enable it to achieve the timetable set by NHS London.
6.3.10
Excluding the elements of cost necessary to generate the FBC, the total cost of works to be undertaken prior to FBC approval is £8.1m; the total commitment is higher, at £9.4m because some of the works straddle the FBC approval.
6.3.11
All of the above costs are included in the capital costs of the scheme. The works do not involve any additional expenditure – they are merely incurred earlier than under the base case preferred option.
6.3.12
The works packages described herein comprise a complete suite of works necessary to ensure that the main building works can commence immediately upon FBC approval. They are all on the “critical path”, that is to say they are all interdependent. Delay to any component will automatically cause at least an equivalent delay to the activity transfer date; although in practice the delays could be much greater if they involve standing down and remobilising contractors and advisors.
6.4
Trust Proposal and Business Case Solution
6.4.1
In order to accomplish the programme desired by the BEH Strategy Board and supported by NHS London, it is necessary to move forward with the design and procurement and to instigate elements of the solution in advance of business case approval to ensure target dates can be achieved. It will be necessary to secure funding for this.
6.4.2
The ability to undertake the early works without delay following OBC approval by NHS London means that the Trust will need to continue to develop design and technical solutions and engage with its Procure 21+ partner. Funding for this will be required for the period up until FBC approval. The main physical works would not commence until after OBC approval by the SHA, except for some small projects that are being prudently undertaken to “tidy up” the existing accommodation and reduce future risk to the timetable, such as creating a proper solution for Urology and removing asbestos from currently vacant areas.
6.4.3
The NMUH solution therefore comprises the following:
6.4.4
(a)
Construction of a two-storey (plus plant floor) building to the east of the Podium to house new consultant- and midwife-led delivery suites, two theatres, women’s ante-natal care and outpatients plus a larger neonatal unit adjacent the delivery ward;
(b)
Refurbishment of the upper part of the Tower Block to create four wards of 22 beds in the existing racetrack templates, - the other 29 beds required will be located in the Pymmes building;
(c)
Following the decant of existing departments into the new building, refurbishment of part of the Podium ground floor to provide a replacement for the maternity ward currently on T4.
The Trust recognises that none of these works can physically commence until the Full Business Case has been approved; however, there is a series of decanting moves and preparation works that are required before commencement of the main works in order to enable the above
Outline Business Case for Implementing the BEH Clinical Strategy 95
projects to happen on a timely basis once approval is given; these moves form part of the “critical path” and would need to be instigated at the earliest possible date. The Trust will have committed by the end of April 2012, with the approval of the Department of Health, some £3.2m to the development of the project and performance of a number of design and enabling activities. 6.4.5
A summary of the sequence of decants and enabling works over the period to FBC approval is set forth below: Decanting Works:
Refurbishment of the former Day Surgery Unit (vacated when services were decanted to the new PFI building in 2010) to facilitate the relocation of the Stroke Unit from the Pymmes building. Due to the nature of the construction of the Podium building, it will be necessary to decant the Oncology ward and outpatients from the floor below temporarily to one of the empty wards in the Tower Block; since these wards are required to deliver the BEH Strategy, it is clearly essential to undertake the temporary decanting works sufficiently in advance in order not to impede the commencement of the main works;
Refurbishment of the former School of Nursing on the lower ground floor of the Podium and the relocation of the cardiology suite on T8. At this stage it is not intended that the Cardiac Catheter Lab be re-provided unless a Trust business case demonstrates the need to renew this facility; however this decision will not delay the project works;
Refurbishment of part of T1 and the old Pharmacy Unit to relocate the offices that currently reside on T7.
Refurbish the former Theatre 4 and relocate HIV from T1.
Site Enabling Works
6.4.6
Ground, condition and asbestos surveys;
Asbestos removal in Tower and Podium and those buildings to be demolished;
Demolition of several Edwardian buildings on the east end of the site to facilitate:
Relocation of the Child Protection Unit; and
Creation of a new car parking area on the cleared site to the east of the proposed construction site;
In addition to the above works, the final solution needs to be progressed in several respects:
Getting the design solution to at least Stage D for the OBC;
Beginning the process of design and guaranteed maximum price (“GMP”) for the early works with the Trust’s P21+ partner;
Working with the Procure 21+ partner to develop the design and GMP for the main scheme, including the feasibility of the modular build solution.
6.4.7
The base case, accelerated and intermediate programmes are included in Appendix 9.1 for information; however the schematic at Appendix 6.2 shows the key differences between the base case, the accelerated and intermediate programmes. It also indicates the level of cost commitment compared with the base case (which is concerned only with getting to FBC); the cost of the early works being undertaken is therefore £9.1m.
6.4.8
There are two key differences: firstly the “start on site” date for the construction and refurbishment works moves from August 2013 in the base case to December 2012 as a result of having undertaken the enabling decanting and site works prior to FBC approval. If the intermediate case is adopted, the start on site date remains November 2012, although the subsequent programme is shorter.
Outline Business Case for Implementing the BEH Clinical Strategy 96
6.4.9
Secondly, the construction period is shortened by five months as a result of the use of the modular build technique. This also applies to the intermediate case.
6.4.10
Note that the underlying assumption is that the project will proceed with public dividend capital (“PDC”) funding. The qualitative assessment, together with changes to the Department of Health’s approach to deeds of safeguard, has established that it is not necessary to test for a PFI solution for this scheme.
6.4.11
A summary schedule of the early works with timescales, based on the critical path, and costs is shown in Appendix 6.1. It shows that the Trust requires immediate funding of £1.5m to complete elements of the design and works before OBC approval at the end of this April 2012 (this funding was approved by the DH in February 2012) and a further £12.0m for all other design and enabling works up to FBC approval in November 2012 (if early funding prior to OBC approval by DH/HMT is agreed) or March 2013 (if early funding is not agreed). If the timetable is to be met, the Trust will need to commit to spending these funds in advance of the programme for each set of works, as shown in Appendix 6.1. As all of the works are on the critical path, a delay to all or any of the works will translate directly into a delay to the activity transfer date.
6.4.12
If funding between OBC approval by NHS London and approval three months later by DH/HMT is not sanctioned, the completion of the project will be delayed by five months; this is because the programme is based on continuous activity – if the funding ceases, this will mean that the advisors and Procure 21+ partner will have to stop work and redeploy their workforce for a time and it will take several weeks at least to restart the project after a hiatus.
6.4.13
The costs and commitments under the intermediate case are identical to the accelerated case. In essence the costs and programme are exactly the same but delayed by five months. In order to achieve the shorter construction period it will still be necessary to complete the enabling works in advance of FBC approval.
6.5
Modular Build Solution
6.5.1
The base case shows the dates of completion as August 2014 for acute beds and January 2015 for maternity, although it would not be possible to implement the changes until the later date.
6.5.2
Even with the acceleration through early works sought by this business case, the substantial gap between the two completion dates would remain – this is because the programme for refurbishing the acute wards in the Tower Block is much shorter than that for the new building.
6.5.3
Apart from the speed of implementation, the main challenge for this project is to ensure that the dates for transfer of non-elective activity and for maternity are as close together as possible. This was not an issue when the priority expressed in the previous outline business cases was to implement the women and children solution first; however it is vital that any maternity unit is supported by the presence of an A&E department to provide back-up facilities and personnel in case of an emergency in the maternity department.
6.5.4
The clinical review recommended that, based on an assessment of current and reasonably anticipated risks, to transfer A&E/acute services in advance of maternity/neonatal services would incur unnecessary additional risks and therefore should be regarded as unacceptable. The programme therefore assumes that the new facilities for both acute/A&E and maternity/neonatal will come on stream at the same time.
6.5.5
The construction period for the refurbishment of the Tower Block wards is considerably shorter than that for the new building – indeed the base case shows a difference of five months (i.e. the acute beds could be completed in August 2014, whilst the maternity beds would not be available until January 2015).
6.5.6
The Trust will pursue all means of accelerating the construction programme with its Procure 21+ partner but one proposal in particular that has the potential to reduce the programme by up to five to six months is the use of the modular build technique. This means that the building is
Outline Business Case for Implementing the BEH Clinical Strategy 97
designed around a standard construction unit and each of these units is manufactured off-site by a specialist company. The units are assembled on site within a few days, cutting down the main on-site construction activity considerably. 6.5.7
The site would be prepared (excavation, piling, foundations, etc) in the usual way and the units erected on the prepared foundation; thereafter the necessary finishing can take place according to the design, e.g. addition of brick or other cladding, connection to site services, followed by the usual commissioning activities.
6.5.8
It should be pointed out that modular buildings as contemplated by this business case are not temporary structures or indeed inferior structures to traditionally-built buildings; manufacturers such as Yorkon and Premier Interlink work to a very high specification and claim that their products are able to meet all Health Building Notes and Building Regulations.
6.5.9
It has been generally believed that modular buildings were cheaper to construct than traditional buildings as well as being much quicker – hence their use for temporary structures; however there is generally a trade-off between speed of construction, quality and price and therefore in order to preserve the quality whilst accelerating the construction it is possible that the price for a modular building will be higher than that for a traditional building.
6.5.10
The Trust is working with its advisors and with the Procure 21+ partner and their modular build supply chain to determine what the impact on price may be. Kier’s supply chain includes Yorkon, one of the major modular build contractors, whose experience includes several hospital projects, including the recent development at Colchester Hospital, which was completed around six months earlier than the originally planned date. Note that the contract for the modular building will be subject to open market tender by the Procure 21+ partner.
6.5.11
At this early stage, the indications are that a modular building will be more expensive than traditional, although there may be measures available to mitigate against the increased cost – for example, an accelerated programme will result in a smaller inflation adjustment. The Trust nonetheless believes that a modular solution could be delivered within the cost envelope set by this OBC.
6.5.12
Given the stage of development, it is not feasible to conclude whether, and if so by how much, a modular build would be more expensive than traditional, although our advisors believe it could cost between £300k and £2.8m more. The following table indicates how the capital cost changes due to inflation between the three options: Base case
Intermediate case
Accelerated case
Cost
Complete
Cost
Complete
Cost
Complete
Traditional
£79m
Jan-15
£79m
Sep-14
£78m
Apr-14
Modular
£80m
Sep-14
£80m
Apr-14
£79m
Nov-13
6.5.13
This will be substantially clarified by the development of the guaranteed maximum price and an evaluation of the benefits and risks will be included in the Full Business Case. The Trust will, through its Procure 21+ partner, undertake a full market test for the modular build solution based on fully developed ERs (employer’s requirements) and compliance with HBNs, HTMs and all current NHS requirements. This will enable the Trust to evaluate the technical feasibility of the modular solution to be fully compliant compared with a traditional building, as well as identifying the additional costs, if any.
6.5.14
It is generally assumed (not necessarily correctly) by professional valuers that modular buildings have potentially shorter lives than traditional buildings and this could affect the level of capital charges. Life-cycle costs are generally about 10% to 15% higher.
6.5.15
For the purpose of the affordability of the Accelerated Case, the capital costs are assumed to be the same as for the base case preferred option. The costs were reduced by £1.3m due to lower inflation and this has been off-set by the inclusion of a further risk of about 2% of the
Outline Business Case for Implementing the BEH Clinical Strategy 98
capital cost to allow for a premium in the modular build price. The process by which the actual price is arrived at will be set out in the FBC. 6.5.16
The capital charges were assessed on the basis of a useful life of 45 years (as advised by Colchester General Hospital) rather than the more usual 60 years. The additional depreciation does not adversely affect the affordability position, although any extra capital expenditure on life-cycle cost will slightly reduce the pool of capital available to the Trust for investment in the future.
6.6
Description of the Works
6.6.1
The table in Appendix 6.1 shows the individual projects and tasks involved in moving the project forward. It shows the total cost, i.e. the total commitment required, for each project and the month by month expenditure, together with a brief description of each item.
6.6.2
The costs break down into two main components;
6.6.3
Design fees and project management required to achieve a developed design and a guaranteed maximum price (“GMP”). These costs are mainly time-based and, subject to the terms of the Procure 21+ contract, can be discontinued or suspended with a clear month’s notice; however there would be an additional cost and time delay involved in standing down or re-mobilising advisors and their teams.
6.6.4
Enabling/decanting project works. These comprise a series of contracts to which the Trust would have to fully commit from a date two months before commencement; the downside of early termination is that:
6.6.5
The Trust would have to compensate the contractor for loss of profit and for the cost of any materials ordered or subcontractors mobilised;
The Trust could be left with half finished work, requiring alternative resources to complete.
The currently envisaged timeline of the business case is: Table 6.2: Business Case timeline
Approval of OBC by NHS London Approval of OBC by DH Approval of OBC by HMT Approval of FBC by HMT Commencement of works
April 2012 May 2012 July 2012 November 2012 November 2012
6.6.6
Whilst the funding of the costs to April has been agreed by the DH, the next tranche of funding needs to cover the period between end of April and FBC approval in November. This is because the commitments required for the enabling projects will cover significant works over several months, not (as was the case for the previous £1.5m) small discrete items that did not necessarily involve further commitments. It is not possible to exclude any project and still maintain the timetable; the works are all part of a suite of packages required to deliver the programme.
6.7
Financial Case for the Accelerated Solution
6.7.1
The financial consequences of the three different cases are set out in Chapter 8. In summary, the capital costs of the base and accelerated case are the same, although the cost of the intermediate case is £800k higher because the five month delay attracts a higher inflation adjustment.
6.7.2
For the Trust, the transitional costs are about £400k less than the base case because of the constricted timescales, although the Intermediate Case is £900k more expensive due to the construction programme entering another financial year, with a consequent increase in the capital charges.
Outline Business Case for Implementing the BEH Clinical Strategy 99
6.7.3
The most significant benefit is the reduced level of planned revenue support required from commissioners. In the Base case this amounts to £14.5m, whilst for the Accelerated case it is £7.8m, a reduction of £6.7m. The Intermediate case is £2.5m less but the net benefit is reduced by the extra capital and transitional cost to £0.7m.
6.7.4
Under the Accelerated Case the financial benefit to commissioners is a reduction of £6.7m in the level of revenue support plus £400k reduction in transitional costs providing an overall benefit of £7.1m. In each case the capital/transitional/support costs for B&CF are the same so early implementation in accordance with the Accelerated programme delivers significant financial benefit to the health economy, whilst reducing operating costs more quickly and significantly reducing risks to patient safety over the period.
6.8
Conclusion
6.8.1
The Case for Acceleration has been shown to deliver clinical benefits and a significant financial gain, whilst maintaining the capital envelope. The early works contemplated by this OBC do not involve any expenditure over and above that set out in the Cost Forms.
6.8.2
The full implementation of the BEH Strategy can be obtained in November 2013, fourteen months earlier than can be delivered under the normal business case submission and approval procedures. The Trust therefore asks NHS London and the Department of Health to approve the implementation strategy for NMUH.
Outline Business Case for Implementing the BEH Clinical Strategy 100
7.
Commercial Case
7.1
Construction and Refurbishment Procurement Options
7.1.1
This section sets out an appraisal of the procurement options available to the proposed scheme based on the following assumptions:
7.1.2
•
The construction value of the scheme is in excess of £4,348,350 therefore is subject to EU procurement regulations (which can add a minimum of 6 months to a programme).
•
It is assumed that public funding through Public Dividend Capital will be available, or that Department of Health funding for a Trust loan can be obtained.
•
The following is based on the preferred option of a combination of new build and refurbishment of facilities within an operational hospital.
The preferred option requires works to be undertaken to create a substantial new clinical building and to refurbish existing buildings with the potential for more than one procurement route to be followed; for example a new building could be a suitable project for PFI whereas refurbishment would not. Given the numerous phases within the project, it was felt there may be options to procure elements of the works items separately if this were to provide better value for money and risk transfer for the Trust. Background to the Procurement Approach
7.1.3
The Trust recently completed a major PFI development, with Bouygues UK creating new facilities across the site. At the same time the PFI Agreement has involved the transfer of estates and facilities staff to EDTE (formerly known as Ecovert FM), Project Co’s subcontractor. Responsibility for the retained estate buildings has been transferred to Project Co under a risk sharing mechanism.
7.1.4
The Trust originally planned to procure a new building as a variation to its PFI contract. The rationale included:
7.1.5
The scheme was a smaller project, catering only for an extension of maternity services as part of the phased implementation. It anticipated, but did not include, an addition to the new building to complete the second phase of the new building. Additionally, the project was expected to go ahead during the existing PFI contract construction phase and it would not have been feasible for any other contractor to undertake. As such the Trust considered that the variation would not have been considered “material” either in the context of the original OJEU procurement begun in 2002 or as an alternative to a fresh procurement.
7.1.6
The Trust has also procured newly refurbished buildings via a Procure 21 procurement using Medicinq Osborne.
7.1.7
Following the approval of the Women & Children OBC at the beginning of 2010, the Trust had anticipated taking forward a lesser project which was planned to be started whilst both of these contractors were still active on the hospital site completing the final phase of the PFI project. A smaller new building than currently planned was to be provided under a PFI variation, whilst the refurbishment works for the tower and podium for this project had already been worked up with the P21 partner. As a result, the Trust had committed itself to the development of a suitable scheme with consequent design costs based partly upon the premise of using contractors who were already working on site thus benefiting from reduced prelims costs, their knowledge of the site and established, successful working relationships with the Trust.
7.1.8
The delay to the BEH Strategy implementation means that the PFI project is now complete so Bouygues UK have left site, the Trust has sought further legal advice in relation to the use of a
Outline Business Case for Implementing the BEH Clinical Strategy 101
variation and has concluded that the new building project, as now conceived, does not fulfil the criteria in relation to materiality and would therefore be subject to challenge by any potential contractor, including those who form part of the Procure 21+ national framework agreement. 7.1.9
The P21 partner, Medicinq Osborne, was not reappointed to the P21+ framework when it was re-tendered in 2010 and is not therefore eligible to take forward any additional works as originally planned. The Trust’s aim now is to use these design solutions to inform and speed up the new procurement in order to minimise abortive fee expenditure and reduce the scope of works required of the new contractor(s). Options
7.1.10
Given this level of advance preparation, the Trust undertook an options assessment to determine the most appropriate procurement approach to the scheme described in this business case.
7.1.11
The Trust considered the available options for the new build of facilities within an operational hospital. A long list of procurement options was considered. The table below looks at each option and the rationale for rejecting it or giving it further consideration. Table 7.1: Procurement Options
Option Traditional competitive tendering, standard form of building contract (NEC or JCT) The Trust appoints the design team, and a fully developed scheme is tendered to a number of contractors who provide a price for delivering the scheme, possibly on a 2 stage basis.
Benefits • The Trust retains control over design and quality. • Good price certainty • Easier to accommodate Trust changes. • Value for money through competitive procurement • Could be open book (NEC Option C target cost and activity schedule)
Detailed design and construct Trust novates design team to contractor who has been appointed on the basis of a two stage tender. Design Team retains some responsibility to Trust re cost and quality
•
•
Trust retains some control over the design as the design team can be novated to the contractor. Value for money to an extent (1st stage) through competitive procurement.
Outline Business Case for Implementing the BEH Clinical Strategy 102
Disadvantages • Significant design risk remains with the Trust. • This route has a poor track record of delivering projects on time and within budget. • A risk of claims if design information is not issued in time by the design team. • Time consuming as a full set of documents/design is to be produced before the works can be tendered and then the OJEU tendering process takes additional time, although time spent during the tender process should be seen as an investment. • The OJEU process applies although time spent during the tender process should be seen as an investment. • The contractor may price the risks involved and therefore the employer could be paying a premium for risk transfer. • Value for money of
Comments Discarded due to Trust retention of risk and potential for programme and cost over-run.
Shortlisted option due to the ability of the Trust to maintain continuity and control of the design.
Option
Benefits
Disadvantages final costs
Comments
Conventional Design & Build Contracting The Trust tenders on the basis of a performance based specification. The appointed contractor would provide a complete design and build package solution.
•
Risks are transferred to the contractor. Faster than traditional competitive tendering. A single point of responsibility for design. Much of the detailed design work can be carried out in parallel with the construction thus a start on site can be achieved quickly. Better cost certainty than traditional. Value for money through competitive procurement
• The OJEU process
Discarded due to Trust losing control of design.
Speed once contract in place Value for money on rates through competitive procurement.
• Could tender without
Suited to large, complex and fast moving projects where early completion is desirable. Integration between design and construction is achieved as the Management Contractor is involved during the design phase. Much of the detailed design work can be carried out in parallel with the construction thus a start on site can be achieved quickly. Value for money through competitive procurement
• The OJEU process
• • •
• •
Measured term Contract The Trust appoints a contractor purely on the basis of rates for identified building elements / items following a competitive procurement
•
Management Contracting The Trust appoints and manages the design team. A Management Contractor is incorporated into the team to procure and manage the construction works packages.
•
•
•
•
•
Outline Business Case for Implementing the BEH Clinical Strategy 103
applies although time spent during the tender process should be seen as an investment. • The Trust lacks control over detail. • The Trust QS has little negotiating room with respect to changes. • The contractor may price the risks involved and therefore the employer could be paying a premium for risk transfer: - not well suited to refurbishment design. • Design and unknown work item risks would remain with the Trust • Quantum risk remains with the Trust • Not suited to larger contracts and infrastructure works as unknown work items would not be priced.
• • •
• •
applies although time spent during the tender process should be seen as an investment. Cost certainty will not be achieved until late in the project. Risk lies mainly with the Trust. The Trust will require considerable in-house expertise and resources to undertake the high degree of involvement needed. The Trust lacks control over detail. Multiple packages not suited to refurbishment due to clashes
Discarded due to risk of cost increase if works rates and quantum are unknown.
Discarded due to lack of cost certainty, Trust retention of risk and the considerable in-house input required by the Trust.
Option
Benefits
ProCure21+ The Trust selects the preferred PSCP who will provide a suitable design and build solution at an agreed Guaranteed Maximum Price (GMP).
•
•
• •
• • New PFI procurement The Trust develops a public sector comparator to establish benchmark costs and a base unitary charge. Private consortia are then asked to bid to provide a scheme that is equal to or better than the Trust model. The Trust enters into a contract usually 25 to 30 years with the partner who delivers and maintains the unit.
•
Variation to existing PFI contract The Trust its existing PFI scheme by issuing a variation enquiry that the partner prices.
•
•
•
• •
The PSCP which includes a full design team and contractor are already pre-selected through OJEU selection therefore the procurement time and input is minimised. Cost certainty based on Guaranteed Maximum Price party due to the early involvement of the supply chain. The PSCP would hold the majority of the project risks. Time savings are achievable due to robust planning in the early stages. A 50:50 cost saving reward can be used as an incentive. Open book accounting Provides complete accommodation solution, including finance, construction and FM with guarantees on quality for 30 years. The costs and programme are fixed prior to commencement of construction with contractors incentivised to deliver construction on time. Risks are borne by the party most able to manage them appropriately.
Speed of procurement (no OJEU process). Working with an existing Trust partner. Risks are borne by the party most able to manage them appropriately.
Outline Business Case for Implementing the BEH Clinical Strategy 104
Disadvantages between work packages – Trust retains risk • Benchmarking is recommended to verify price competitiveness in the absence of a competitive tender. • Build quality may suffer to achieve the GMP in the event of an affordability issue. • Contractor – led design may affect functionality
Comments
• The OJEU process
Discarded due to the extended procurement process required, the unavailability of private funding in the current economic climate and the difficulty in implementing as explained in the Treasury Qualitative Assessment.
• • •
•
•
• •
•
applies. Extended, costly and complex procurement. Longest overall delivery programme. Treasury threshold of 15% of estates costs to income would be exceeded for a project of this value. Refurbishment works are generally deemed unsuitable for PFI procurement. Current concerns over availability of private finance due to the prevailing economic situation. It could be difficult to test value for money as there is no competition. The capital value of the variation is likely to be a “material change” within the procurement rules. Treasury threshold of 15% of estates costs to
Shortlisted option due to the reduced procurement time scales and cost certainty.
Discarded as it is likely that this is not a viable procurement route due to the materiality of the variation and risk of challenge
Option
Benefits
3rd Party Development Third party development with a lease plus contract
•
•
•
Provides complete accommodation solution, including finance, construction and FM with guarantees on quality for 30 years. The costs and programme are fixed prior to commencement of construction with contractors incentivised to deliver construction on time. Risks are borne by the party most able to manage them appropriately
Disadvantages income would be exceeded for a project of this value. • Refurbishment works are generally deemed unsuitable for PFI procurement. • The OJEU process applies. • Lack of clearly defined site boundaries affects ability to provide a clear lease • Current concerns over availability of private finance due to the prevailing economic situation, albeit such finance would not be required for at least 3 years.
•
Local Improvement and Finance Trust (LIFT) procurement private funding, procured under local LIFT arrangements
NMUH is not signed up to the local LIFT programme and therefore this is not a viable procurement route option.
Comments
Discarded due to the unavailability of private funding in the current economic climate.
Discarded as NMUH are not signed up to LIFT.
Note on Using a PFI Procurement Route 7.1.12
Given the capital value of the scheme, consideration has been given to whether PFI is a viable means of procuring the new facilities.
7.1.13
The question of “PFI-ability” is addressed in the Trust’s response to the Treasury Qualitative Assessment set out in Appendix 7.1. This is a questionnaire that Trusts are required to consider for any scheme with a capital cost of more than £20m, to determine whether it would be feasible to consider PFI as the procurement route.
7.1.14
The responses show that the project is well suited to a PFI environment but that undertaking a separate procurement would not deliver value for money due to the conflicting risks and responsibilities between a new PFI provider and the incumbent Service Provider for the existing PFI scheme.
7.1.15
Furthermore, the Department of Health has recently stated that it will continue to provide Deeds of Safeguard to support PFI schemes but only for those with a capital value of more than £70m. Since the project proposed in this OBC includes a new building of some £35m capital value, excluding VAT, for which a Deed of Safeguard would not be issued, it is highly unlikely that funding for a PFI scheme could be obtained on competitive terms and such a procurement could not deliver value for money.
Outline Business Case for Implementing the BEH Clinical Strategy 105
Findings 7.1.16
Following comparison of the procurement routes in the table above there appear to be two realistic options available to the Trust: 1. Detailed Design and Construct: Two Stage Tender This procurement route will allow the Trust to retain design control by novating their existing Design Team to the selected contractor. The selected contractor will then work through the detailed design stage with the client Design Team. The contractor would then price the construction works (without competition). Cost certainty would only be achieved after this stage; however a GMP could be agreed with a 50:50 cost saving incentive. The OJEU procurement process would apply to this procurement route. 2. Procure 21+ This procurement route would allow the swift selection of a PSCP pre-selected under a national framework, and avoid the OJEU process. The client’s design team can be novated into the PSCP to ensure that the client has control over the design. A GMP and incentive scheme will help to ensure best value, however the PSCP framework agreed rates would be used.
7.1.17
The decision tree shown below shows the decision making process that has determined the choice between the Design and Construct and Procure 21+ procurement options. It shows how the decision-making has been informed to an extent on the basis that the Trust wanted to benefit as far as possible from design work already completed and paid for, that the project will be conventionally funded and that the Trust wants to transfer design risk it is clear that both an OJEU and a Procure 21+ procurement are possible. This can be seen as Figure 7.1 below:
Figure 7.1 Procurement Decision Tree
Use designs: +Benefit from work com pleted +Faster program m e to com pletion +Cost benefit from fees to date
Designs exist from PFI + P21 contractors
Discard designs: -No benefit -Longer developm ent period -Aborted costs
Procurem ent options
New PFI: -Tim e to com plete -2 project com panies on site -Unsuitable for refurbishm ents
OJEU Design and Build: +Potentially lower headline price +Possible to benefit from contractors recently on site +Potential innovation benefit
Conventional / Treasury funded
Design risk transferred
PFI variation: – liable to high risk of procurem ent challenge Trust retains design risk
P21+ Design and Build: +DH/OGC approved +Potentially faster to GMP +Partnership route – less litigious route +Enables all schem es to be on 1 contract with risk transfer +Lower procurem ent cost +Contractor bound by reputational risk +Flexible- allows parts of schem e to be rem oved if costs too high/ changed circum stances Contractor m argins fixed for 5 years
Outline Business Case for Implementing the BEH Clinical Strategy 106
P21 extension: - No longer within scope of original contract
Traditional procurement: -Structure not contractor specific -Maxim um com petition -Contrary to national policy
Procurement Strategy 7.1.18
The Trust has decided to proceed with a Procure 21+ procurement due to some potential risks around an OJEU Design and Build procurement route beyond the identified benefits: • It cannot be started until this OBC has been approved, adding initial time delays to the process; • It is potentially ultimately, though not necessarily, more expensive and derives no benefit from the nationally negotiated P21+ Framework, which is the preferred procurement route of the DH in line with the Government’s Construction Strategy. • Once awarded, the contract is not flexible, without cost, requiring that all projects are completed as tendered, whereas the packages in a P21+ contract can be negotiated separately.
7.1.19
Following substantial discussions with several parties, including the P21+ team in Leeds, the PFU and others, it has been decided that the Trust, given the time constraints and the specifics of the project, will be entering into a P21+ project for the works at NMUH.
7.1.20
In addition to this, and following approval of both the Chief Executives, it was agreed that the two trusts would look for a single PSCP contractor who would deal with the works at both CFH and NMUH in a bid to ensure that best value for money is obtained and that there is continuity over both sites which are inextricably linked by the project programme.
7.1.21
Following discussions with the P21+ team in Leeds the P21+ HLIP (”High Level Information Pack”) was drawn up with the assistance of Cyril Sweett, technical advisors to both trusts, and utilising the Development Control Plans that have been put together by the architects on both sites. This was issued in November 2011 and interviews held with those four prospective PSCPs that responded with an Expression of Interest middle of December.
7.1.22
Following the interviews, the Trust selected Kier Health as its preferred partner. The choice was also ratified by B&CF and a letter of appointment was issued in January 2012.
7.1.23
The PSCP has approached the Trust and requested permission to appoint the Trust’s design team – the Trust has not raised any objection to this.
7.1.24
In accordance with Treasury guidance on Procure 21+ the PSCP will be expected to tender at least 80% of the work packages under the contract with the Trust.
7.2
Services Procurement Equipment
7.2.1
The Trust is working with its architects, using the Activity Database to develop room data sheets and 1:50 drawings in order to develop a Bill of Quantities for all equipment items required for this project.
7.2.2
From this a detailed equipping budget will be developed, ensuring that appropriate equipment is procured for each department, with maximisation of equipment transfer from existing inventories and any surplus of assets at CFH.
7.2.3
The Trust commissioning team developed considerable experience and expertise during the completion and commissioning of the new PFI hospital in 2009 and 2010. A working arrangement was set up with NHS Supply Chain for effective procurement of several thousand items of equipment and it is intended to replicate this arrangement.
7.2.4
It is expected that the development of the equipment procurement approach will be well advanced by the time of submission of the full business case. Hard FM
7.2.5
This is provided by EDTE (formerly Ecovert FM) under a PFI contract and includes both preventative and reactive maintenance, together with grounds and gardens, utilities
Outline Business Case for Implementing the BEH Clinical Strategy 107
management and a help desk service which provides the operating liaison between Trust departmental staff and the maintenance service provider, Ecovert FM. 7.2.6
Any extension of the scope will need to be subject to a variation request and, whilst the parties now have considerable experience of variations, the terms and price will have to be negotiated. A variation request has already been issued and will be concluded within the full business case.
7.2.7
The scope of the PFI contract covers the entire hospital site, including the retained estate, which is maintained under a shared risk arrangement whereby the first £1,300 or so of reactive maintenance cost is borne by Project Co, whilst any costs above this level, and all life-cycle replacement costs, are borne by the Trust.
7.2.8
This arrangement would be quite acceptable for the additional new build space as the risk of failure in the early years following completion would be quite low; however this would impose a risk on the Trust with respect to life-cycle maintenance that could be usefully transferred to Project Co.
7.2.9
The parties are in discussions with regard to the terms on which this could be achieved and one key aspect will be some involvement by ETDE in contributing to the development of the design specifications for the new building.
7.2.10
The employers requirements being developed by the Trust and the designers will specify that the new building and, where possible, the refurbished parts of the retained estate, are upgraded in line with the specifications of the new PFI building. This will ensure uniformity of service specification and reduction in the possibility of conflicts with service providers over maintenance and also soft service requirements.
7.2.11
At this stage, the Trust has assumed that life-cycle costs for the new building will be borne by the Trust but will work with Ecovert to identify a solution that transfers risk and delivers value for money. Soft FM
7.2.12
The Trust has out-sourced contracts with a number of service providers (not part of the PFI contract) for the provision of “soft” services, which include catering, domestics, portering, security, waste and laundry.
7.2.13
Each contract includes a variation mechanism and/or a “volume adjuster” whereby prices for significant changes in service volumes, such as numbers of patient meals, floor areas cleaned, etc can be agreed and adjusted for on a variation to contract basis for each variation.
7.2.14
For the purpose of this business case the additional cost has been estimated based on existing rates but the Trust will negotiate changes to the respective contracts, where necessary.
7.2.15
When the new building is complete, there will be an opportunity to secure a competitive price for the variation as a number of soft FM contracts will come up for renewal or re-tendering around that time. IM&T
7.2.16
The BEH Strategy implementation focuses only on installing the additional passive and active infrastructure to meet the increased level of demand from the expanded activity and is not concerned with upgrading or implementing new systems, which were significantly upgraded at the time of the PFI project, including, for example, the move to 100% digital imaging.
7.2.17
The IT data and voice network infrastructure for the BEH new building will follow the same design principles used for the new PFI building. The retained estate will be upgraded (e.g. fibre backbone, VoIP, network switches) as part of the refurbishment to meet the new design specifications.
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7.3
Sustainability & Environmental Impact
7.3.1
The preferred option includes a significant new building which will fully comply with and where practical exceed the requirements of Approved Document L2A 2010 of the Building Regulations limiting CO2 emissions however the planned internal refurbishment of the existing estate is also extensive.
7.3.2
For new buildings, the M&E design will comply with Part L 2010 Building regulations Target Emissions Rate (“TER”). In addition, consultations with Local Borough Councils, with regard to sustainable design and low & zero carbon technology use, will result in feasibility studies and energy strategies being implemented to determine the feasibility of providing a 25% reduction over PART L 2010 Buildings regulations TER to fulfil the requirements under the London Planning Document.
7.3.3
The age of the existing buildings present the opportunity to substantially improve thermal efficiency and performance by upgrading the facades with replacement windows and insulated spandrel panels on a significant percentage of the building envelope.
7.3.4
The new windows will be selected to improve thermal efficiency and limit the impact of solar radiation and heat gain. They will also be selected to avoid thermal bridging and to improve overall air tightness of the building envelope.
7.3.5
Engineering services in the existing buildings will be completely renewed as part of the refurbishment works and altered demands, to take advantage of improved technology in such item as lighting, refrigeration, electric motors, etc. The engineering services design will also benefit from the improved insulation and air tightness, resulting in smaller more efficient plant. The controls strategy will also provide more efficient building services operation leading to reduced energy consumption.
7.3.6
The refurbished buildings will comply fully with and exceed the recommendations of Approved Document L2B 2010 of the Building Regulations to limit CO2 emissions.
7.3.7
The M&E design will comply with Consequential Improvements under the PART L2B 2010 Building Regulations for Existing Buildings. In addition, consultations with Local Borough Councils, with regard to sustainable design and low & zero carbon technology use, will result in feasibility studies and energy strategies being implemented to determine a viable means of providing acceptable energy reduction for replacement plant to fulfil the requirements under the London Planning Document.
7.3.8
BREEAM Healthcare pre-assessments have been completed on both the new building and proposed refurbishment and the commitments established will be referenced to identify and drive energy efficiencies on all aspects of the building fabric and services. All new build proposals are expected to achieve an Excellent rating as required. This assessment has considered the level of renewably sourced energy and progress towards carbon neutrality.
7.3.9
Heating for the tower block and podium is provided under the PFI contract from the new energy centre by means of a new primary distribution system serving the existing plant rooms. Secondary plant and distribution will be renewed as part of the refurbishment of the retained estate.
7.3.10
Copies of the BREEAM Healthcare Assessments are attached at Appendix 7.2. Energy Efficiency
7.3.11
The M&E design will encompass the replacement of redundant services in existing buildings and areas which are being refurbished. The M&E services strategy will ensure energy efficient technology is employed, and the entire M&E services arrangement reviewed, to ensure the completed scheme will be lower than the 55 GJ per 100m3 maximum value stipulated for new buildings and 65 GJ per 100m3 for existing buildings under HTM 07-02: EnCO2de: Making energy work in healthcare.
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7.3.12
Where existing M&E services are assessed in proposed refurbished buildings and areas, and are deemed to be maintainable and easily adaptable to suit proposed plans; a feasibility study will be carried out to determine if employing more efficient technology would be economically viable, in terms of reasonable payback periods, when compared with the 55 - 65 GJ per 100m3 range annual energy consumption costs for the given area.
7.3.13
Further to the above, with regard to new build elements, which the M&E design strategy determines suitable for the viable use of existing heating sources; a feasibility study will be carried out to determine if employing dedicated heating plant would be economically viable, in terms of reasonable payback periods, when compared with the 35 - 55 GJ per 100m3 range annual energy consumption costs for the given element.
7.3.14
The M&E services strategy, for both new build and refurbished elements, will ensure energy efficient technology is employed, where economically feasible, and the entire M&E services arrangement reviewed. Therefore, where electrical consumption exceeds 6,000 MWh per annum, the completed scheme will ensure that levies incurred under the conditions of the CRC scheme will be kept to a minimum.
7.3.15
The M&E services strategy, for both new build and refurbished elements, will ensure energy efficient technology is employed, where economically feasible, and the entire M&E services arrangement reviewed. Therefore, where electrical consumption exceeds 6,000 MWh per annum, the completed scheme will ensure that levies incurred under the conditions of the CRC scheme will be kept to a minimum.
7.4
Phased Programme – Logistics of the Scheme
7.4.1
In order to facilitate the BEH project a considerable amount of departmental, staff and patient moves will be necessary.
7.4.2
A detailed decanting plan has been developed by the project team which will address the logistics of the proposals. It is a project objective where possible to relocate services permanently to their preferred location but recognise that this may not be possible in some instances. It is also acknowledged that providing a construction partner with larger ‘packages’ of work will be less disruptive for both patients and staff and this will be considered when developing the decant plan. It is also envisaged that there will be an economy of scale by tendering a larger construction package. Modular Building Solution
7.4.3
Adopting a modular build approach will shorten the programme by five to six months; the Trust is considering a modular build option in order to accelerate the programme.
7.4.4
It will be working with its preferred supply chain partner (“PSCP”) to identify suitable modular building companies who can both deliver in accordance with the programme whilst ensuring the appropriate level of competition. Town and Country Planning Act 1990
7.4.5
The Trust received a grant of approval from the London Borough of Enfield for the proposed six-storey building in the second quarter of 2011 planning reference TP/10/0339.
7.4.6
The consent is subject to a number of conditions which in brief relate to the following: (a) Approval of the materials used for the new building and external hard landscaping; (b) Timely provision of proposed additional car parking and cycle shelters; (c) Compliance with the agreed recommendations of the Environment Agency relating to flood risk and surface water run-off; (d) Submission and approval of the proposed planting scheme;
Outline Business Case for Implementing the BEH Clinical Strategy 110
(e) Submission and approval of the proposed lighting scheme for the car parking; (f) Contamination and remediation measures adopted; (g) Confirmation of the alternative arrangements for the routing of Bus 491; (h) Construction methodology and protection of local infrastructure; 7.4.7
The planning consent covers Options 2 and 2M. A new planning application is being prepared for submission in mid-March 2012. A pre-application consultation with the Head of Planning for the London Borough of Enfield suggests there would be no objection to a three-storey development to the east f the Podium as this reflects the established parameters outline in the Spatial Ziggurat Plan approved in 2002, subject to all the usual conditions.
7.4.8
Proposed planning application timetable:
Planning application submitted on 27th March 2012. Validation of application by LBE estimated to be w/c 16th April 2012. 13 week statutory consultation would end on 16th July 2012. Committee date whilst not currently published likely to be Tuesday 24th July 2012.
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8.
Financial Case
8.1
Introduction
8.1.1
This Chapter sets out the calculation of the affordability for the expansion of acute and maternity services at NMUH, in respect of the implementation of the BEH Clinical Strategy. The baseline for the revenue figures in this Chapter is at 2011/12 pay and prices. The I&E plans are then inflated from 2011-12 levels for estimated future impacts of income and expenditure changes. The plans have been produced by estimating income and costs based on the Safe & Financially Effective (SaFE) assumptions agreed with NHS London in September 2011, and incorporating expected changes in SLA income from Commissioners based upon NCL strategic commissioning plans for the same period
8.1.2
The Chapter considers financial affordability within the context of the three different timing options in respect of the capital build and transfer of service that have been outlined in the previous sections of the business case. Namely: • A conventional build option that sees Acute and Maternity Services transfers from January 2015 (Base Case); • An accelerated modular build option that sees Acute and Maternity Services transfers from November 2013. (Accelerated Case); • An accelerated modular build option that sees Acute and Maternity Services transfers from April 2014. (Intermediate Case).
8.2
Financial Performance of the NMUH
8.2.1
The income and expenditure outturns, as recorded in the last four sets of audited accounts are shown in the following table, together with the forecast outturn for 2011-12. The Trust achieved its plans for all four years and is on course to deliver a planned surplus of £0.5 million in 2011-12. Table 8.1: Trust Out-Turn
Underlying Surplus / (Deficit) Impairments Adj Financial Year Surplus / (Deficit) £000's £000's £000's 2007/08 3,019 0 3,019 2008/09 5,031 0 5,031 2009/10 1,917 4,127 6,044 2010/11 -73,494 76,597 3,103 2011/12 -15,533 16,033 500* * FOT as at Month 10 - 11/12 8.2.2
Following the successful delivery of a recovery plan, the Trust cleared its accumulated deficit in 2009-10, achieving break-even. By the end of 2010-11, the Trust had achieved a positive cumulative break-even position of in excess of £4 million. The Trust has successfully delivered its financial plans for the last 4 financial years. For the most recent year of 2010-11, the Trust achieved a financial surplus of £3.1 million, against a planned surplus of £3 million.
8.2.3
The Trust’s operating plan for 2011-12 at Month 10 confirms that it is on track to achieve its £0.5 million planned surplus.
8.2.4
The Trust has seen a steady improvement in its national Reference Cost Index (RCI) score position matching process from 2007/08 onwards, to generate surpluses to support the repayment of historic debt obligation. The latest RCI position for the Trust for 2010/11 was 92.
Outline Business Case for Implementing the BEH Clinical Strategy 112
8.3
Modelling the Financial Impact of the Clinical Strategy
8.3.1
The Trust has used the assumptions underpinning the SaFE evaluation undertaken by NHS London during the course of 2011, as the basis to model the financial impact of the implementation of the clinical strategy and the overall assessment of the affordability of the OBC. These same assumptions were applied in undertaking CFH feasibility modelling during the autumn of 2011.
8.3.2
Key Points to note in respect of overarching financial assumptions used by the Trust in the financial case include: • The Trust baseline clinical revenues have been modelled forwarded from an agreed 2012/13 start point with NHS North Central London. This matches the NCL ‘affordability envelope’ for 12/13 that was shared with the Trust in January 2012 - £133.4m. • The volume and composition of clinical activity that is assumed to transfer to NMUH from CFH as a result of the implementation of the strategy has been agreed and validated by commissioners. • The Trust has applied recognised 1.8% national tariff deflators to clinical revenue values over future periods. • The Trust financial case incorporates assumptions agreed with NHS North Central London in respect of the anticipated impact of general levels of activity and demand growth moving forward, as well as the impact of commissioner QIPP initiatives in the corresponding period. • The Trust has made assumptions in respect of general levels of pay and non pay inflation during this period that are in line with both national planning and SaFE evaluation expectations. • The Trust financial model reflects cost of capital impacts of the investment outlined in the business case, in respect of each of the three scenarios considered. • The Trust business case financial model includes assumptions in respect of underlying levels of cost releasing / productivity efficiency that could be delivered by the Trust in future periods. These have been based upon the benchmarked opportunity as evaluated through the SaFE analysis. • The financial model also assumes levels of investment in medical resource standards for key specialties (obstetric and emergency services) in line with the SaFE evaluation. • The financial analysis includes estimated transitional costs associated with the delivery of the clinical strategy. These includes decant and double running costs. These costs have been reviewed and agreed with commissioners and matching transitional funding is assumed within all scenarios. • The Trust has a PFI development which is accounted for under IFRS principles and the treatment has been agreed with its external auditors.
8.4
Revenue Income Transfer from CFH
8.4.1
The Trust has modelled the revenue impact associated with the transfer of activity associated with the implementation of the clinical strategy. Revenue income has been derived from the activity modelling undertaken by EC Harris on behalf of the NHS North Central London and Acute Trusts. The activity has been agreed by the NHS North Central London. The activity assumed to transfer is detailed below:
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Table 8.2: Activity Transfer
Specialty Groups Medical - Non Elective Surgical - Non Elective Paediatrics Obstetrics A&E Adult - CC Paeds - CC 8.4.2
Currency Spells Spells Spells Spells Atts Bed Days Bed Days
Volume 4,888 2,855 2,002 2,889 22,179 1,000 2,044
Naturally the timing of the activity transfer varies in relation to each of the options considered i.e. conventional build (base case), modular build (accelerated case) and delayed modular build (intermediate case). The varying pace of the activity and income transfer under each of these options is presented in the table below.
Intermediate Case
Accelerated Case
Base Case
Table 8.3: Activity Transfer Timing Specialty Groups Medical - Non Elective Surgical - Non Elective Paediatrics Obstetrics A&E Adult - CC Paeds - CC
13/14 0 0 0 0 0 0 0
14/15 1,222 714 501 722 5,545 250 511
15/16 4,888 2,855 2,002 2,889 22,179 1,000 2,044
Specialty Groups Medical - Non Elective Surgical - Non Elective Paediatrics Obstetrics A&E
13/14 2,037 1,190 834 1,204 9,241
14/15 4,888 2,855 2,002 2,889 22,179
15/16 4,888 2,855 2,002 2,889 22,179
Adult - CC
417
1,000
1,000
Paeds - CC
852
2,044
2,044
14/15 4,888 2,855 2,002 2,889 22,179 1,000 2,044
15/16 4,888 2,855 2,002 2,889 22,179 1,000 2,044
Specialty Groups Medical - Non Elective Surgical - Non Elective Paediatrics Obstetrics A&E Adult - CC Paeds - CC
13/14 0 0 0 0 0 0 0
8.4.3
The activity has been priced using 2011-12 payment by results tariffs and priced going forward as per national tariff deflator assumptions referenced above. In addition, there is £128,000 income from an extra 242 car parking spaces being provided as part of the capital works.
8.4.4
The scale and profile of the BEH income transfer to the Trust is illustrated in the graphical chart below. The chart shows the differential in timing of income receipts under each of the 3 build and transfer options considered.
Outline Business Case for Implementing the BEH Clinical Strategy 114
Figure 8.1: Income Transfer
8.4.5
The Trust has modelled corresponding increases in its operating costs associated with the transfer of the activity in line with its costing and service planning model. This has included cost of capital implications resulting from the design solution noted in other chapters, and is based upon assumptions in respect of inflation and productivity delivery noted above. The net contribution that is derived from the transfer after deducting expected costs from income value is detailed in the graph below and table below for each of the options under consideration. Figure 8.2: Net Contribution
Table 8.4: Composition of BEH Contribution (£m’s) Base Case Income Operating Cost Cost of Capital Contribution
12/13 0.0 0.0 0.0 0.0
13/14 0.0 0.0 0.0 0.0
14/15 11.0 -5.9 -0.7 4.5
15/16 34.4 -22.6 -3.6 8.2
16/17 33.8 -22.7 -3.6 7.4
17/18 33.1 -22.5 -3.7 7.0
18/19 32.5 -22.2 -3.7 6.6
19/20 32.0 -22.0 -3.7 6.2
20/21 31.4 -21.8 -3.7 5.9
Accelerated Income Operating Cost Cost of Capital Contribution
12/13 0.0 0.0 0.0 0.0
13/14 14.7 -8.7 -0.6 5.5
14/15 35.0 -23.0 -3.8 8.2
15/16 34.4 -23.1 -3.8 7.5
16/17 33.8 -22.8 -3.8 7.1
17/18 33.1 -22.6 -3.8 6.7
18/19 32.5 -22.3 -3.9 6.4
19/20 32.0 -22.1 -3.9 6.0
20/21 31.4 -21.9 -3.9 5.6
Intermediate Income Operating Cost Cost of Capital Contribution
12/13 0.0 0.0 0.0 0.0
13/14 0.0 0.0 0.0 0.0
14/15 35.0 -23.9 -2.8 8.3
15/16 34.4 -23.1 -3.8 7.5
16/17 33.7 -22.8 -3.8 7.1
17/18 33.1 -22.6 -3.8 6.7
18/19 32.5 -22.3 -3.8 6.4
19/20 32.0 -22.1 -3.9 6.0
20/21 31.4 -21.9 -3.9 5.6
Outline Business Case for Implementing the BEH Clinical Strategy 115
8.5
Revenue Affordability in the Context of the Trust’s Overall finances
8.5.1
The Trust has also considered the affordability of the Project in the context of the Trust’s overall finances. Detailed long term financial models have been constructed based on the Trust’s 2011/12 Annual Plan and including the assumptions outlined in section 6.3. The Trust’s Long Term Financial Models encompass the period 2011-12 through to 2020-21 and enable the cash flow & Balance Sheets to be projected and financial ratios (including PBL) to be calculated in accordance with Monitor’s current methodology. The LTFMs have been produced both on a PDC and Loan funded basis. A separate LTFM has been generated for each of the options under consideration i.e. conventional build (base case), modular build (accelerated case) and delayed modular build (intermediate case).
8.5.2
A summarised I&E account of the Trust LTFM for each of the options that includes the impact of the BEH clinical strategy is presented below. This is based upon a PDC funded basis. In addition, the Trust has also assessed financial performance including the impact of the BEH clinical strategy against Monitor Financial Risk Rating (FRR) metrics. The balance sheets for each timing option are enclosed at Appendix 8.1. Table 8.5: I&E Account – Conventional Build Option (Base Case)
Table 8.6: Monitor Risk Ratings – Conventional Build Option (Base Case)
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Table 8.7: I&E Account – Modular Build Option (Accelerated Case)
Table 8.8: Monitor Risk Ratings – Modular Build Option (Accelerated Case)
Table 8.9: I&E Account – Modular Build Option (Delayed) (Intermediate Case)
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Table 8.10: Monitor Risk Ratings – Modular Build Option (Delayed) (Intermediate)
8.5.3
The following table shows the surpluses expressed as percentages of total income for EBITDA in respect of each timing option: Table 8.11 EBITDA %
11/12
12/13
13/14
14/15
15/16
16/17
17/18
18/19
19/20
20/21
Base Case
8.2%
5.2%
6.4%
8.2%
11.0%
11.1%
11.1%
11.2%
11.4%
11.5%
Accelerated Case
8.2%
5.6%
8.8%
11.4%
11.6%
11.9%
12.0%
12.0%
12.2%
12.3%
Intermediate Case
8.2%
5.6%
7.1%
11.2%
11.3%
11.5%
11.6%
11.7%
11.9%
12.0%
As shown above, the trend is upward for all cases, following the transfer of the activity. 8.5.4
The graph below provides a summarised comparison of forecast levels of Trust retained surpluses for each of the options considered. Figure 8.3: Retained Surpluses Forecast Surplus Levels 6.0
Income Value (£m's)
5.0 4.0
Conventional Modular
3.0
Intermediate
2.0 1.0 0.0 12/13
13/14
14/15
15/16
16/17
17/18
18/19
19/20
20/21
8.6
Assessment of Revenue Affordability – PDC Funded Basis
8.6.1
The Trusts assesses that under a PDC funded option, on the basis of the financial assumptions employed and detailed above, that the scheme is affordable. This is within the context of its statutory financial duties and framework.
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8.6.2
Under the modular options considered (accelerated and intermediate cases), as part of this analysis, the Trust would be able to proceed towards FT status within agreed current Tripartite Formal Agreement timescales, subject to the resolving of a temporary liquidity issue as at 31st March 2013 and 31st March 2014. These dates are used to calculate the liquidity ratios for the following financial years (2013-14 and 2014-15). As these are the likely years before and during the first year of being a FT, the Trust is required to have 18 days positive liquidity. The accelerated option is currently planned to be 8.3 days and 13.5 days positive liquidity for 31st March 2013 and 31st March 2014 respectively. The comparative figures for the intermediate option are 6.9 days and 12.9 days.
8.6.3
Under a conventional build scenario (base case) the Trust would be challenged in respect of its liquidity position for a longer period. For instance, the LTFM indicates that the base case does not have a similar ability to support the Trust’s day to day capital programme for equipment purchases etc. The accelerated and intermediate cases are able to support £11m more day to day capital spending for the period 2011-12 to 2020-21, than for the base case.
8.6.4
The timing point at which BEH clinical strategy activity transfers to the Trust is a critical element within the financial model output. As the activity transferring generates a significant contribution to the Trust bottom line, the earlier this is effected, the quicker the Trust is able to meet required standards in respect of affordability and key metric delivery that would allow it to progress towards FT status.
8.6.5
It is important to emphasise assumptions that the Trust has made in its financial models in respect of planned support from commissioners. Under all build options in 2012/13 the Trust will move into a planned deficit position, this is a product of both an aggressive QIPP profile for the Trust targeted by NCL London in that period and also delays in the commencement of activity transfers associated with the BEH clinical strategy.
8.6.6
Over the time frame of the model this position reverses dramatically, when the Trust benefits from the full year impact of the activity transfer and the financial contribution that it attracts. The pace at which the Trust revenue position improves and the requirement for planned support is determined by the planned start point for clinical activity transfer. The planned support requirement in respect of each of the options is detailed below. Table 8.12: Planned Support
Base Case Accelerated Intermediate
12/13 6.3 6.5 6.5
13/14 5.4 1.3 5.5
14/15 2.9 0.0 0.0
15/16 0.0 0.0 0.0
Total 14.5 7.8 12.0
8.6.7
The Trust has discussed the issue with NHS North Central London with a view to requesting general planned revenue support from commissioners manage the issue. NCL London has confirmed support for this requirement. It should be emphasised that this requirement for general support is separate and distinct from specific transitional costs that are a product of the service move, such as decant, removal and double running costs that are separately noted in Section 8.10 below.
8.6.8
Historically the liquidity position of the Trust has been extremely challenged. The Trust long term financial model indicates that this will improve consistently post the implementation of the strategy and the flow of income and contribution that it entails. However, given the low baseline cash position for the Trust in 2011/12, in order to achieve acceptable liquidity ratings in the longer term, the Trust financial model assumes the sale of a surplus parcel of land on the eastern section of the hospital site during 2013/14. This will become available as a consequence of the planned rationalisation of pathology services. The plot has an estimated sale value of £4.0m. The receipt has been incorporated in the financial model.
Outline Business Case for Implementing the BEH Clinical Strategy 119
8.7
Assessment of Affordability - Loan Funded Option
8.7.1
Detailed assessments of affordability have also been carried out on the basis of the capital being provided wholly or partly by the loan funded method. This has included the production of LTFMs for this funding method on the basis of 25 year loans. The interest rate used in the financial modelling is 3.8% per annum (2.8% current National Loans Fund rate plus 1% buffer).
8.7.2
The key factors in assessing possible loan funding for this Trust are the debt service ratio assessment, as part of Monitor’s Prudential Borrowing Limits (PBL) and the effect on the Trust’s Liquidity ratio, due in both cases to the need to consume more cash in making loan repayments of principle and for interest payments.
8.7.3
The position in respect of the Trust’s PBL debt service ratio prior to any loan for the capital required for this business case is as follows: Table 8.13: Debt Service Ratio
11/12
12/13
13/14
14/15
15/16
Minimum Debt Service Cover Required
1.5
1.5
1.5
1.5
1.5
Base Case
0.9
1.3
1.3
1.4
1.8
Accelerated Case
0.9
1.3
1.5
1.9
1.9
Intermediate
0.9
1.3
1.4
1.8
1.8
8.7.4
The figures highlighted in bold above, indicate that there is no scope within the PBL limits to borrow in the years indicated. The Trust’s modelling indicates that the £3m capital projected to be spent in 2014-15 for the accelerated case could be borrowed in that year, keeping within the PBL ratios and the liquidity ratios would stay intact from 2015-16 onwards. There is no scope for any borrowing in respect of the base and intermediate cases.
8.7.5
Further details of the loan affordability calculations are enclosed in Appendix 8.2, including the projected Balance Sheets and position relating to PBLs and liquidity ratios.
8.8 8.8.1
Capital Investment Profile The Capital Investment Profile for the three timing options are shown with the Capital OB Forms in Appendix 5.1. The total for approval purposes at line 10 of form OB1 is £67.9m including equipment for the base case and £69.4m for both the accelerated and intermediate cases. The summary below includes optimism bias & outturn inflation and these figures have been used in the financial appraisal. Table 8.14: Capital Investment Profile Base Case Year £000 11/12 2,713 12/13 3,120 13/14 34,706 14/15 34,706 15/16 3,527 Total 78,772
8.8.2
Accelerated Case Year £000 11/12 2,713 12/13 44,592 13/14 28,444 14/15 3,023 15/16 0 Total 78,772
Intermediate Case Year £000 11/12 2,713 12/13 45,105 13/14 28,803 14/15 3,023 15/16 0 Total 79,644
Note that the capital cost of the Intermediate case is the same as for the Accelerated case, except that the inflation adjustment increases as a result of the five month delay.
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8.9
Impairments for the Expansion of Acute & Maternity Services Development
8.9.1
The Trust has obtained professional advice from an independent valuer, who has assessed the impairment levels to be included on the Trust’s Balance Sheet on an IFRS basis.
8.9.2
Based on the Independent Valuer’s report, the Trust will incur estimated revenue impairments of 22.5% on total works costs for the new build elements and 45% of total works costs on refurbishment works. The Valuer’s percentages have been used to assess the level of impairments in preparing the financial plans. Under Department of Health rules, impairments do not have an impact on break even duty and therefore, have no effect on the revenue affordability of the Project. The Independent Valuer’s report is enclosed at Appendix 8.3.
8.10 8.10.1
Transitional Costs Transitional costs, on a PDC funded basis have been identified for each timing option. They are specific and relate to issues such as decant, double running, removals etc. However, it is important to clarify that these transitional costs are separate and distinct from the general transitional revenue requirement that is identified at paragraph 8.6.6. The scheme specific transitional costs will be funded by NHS North Central London. The details of the transitional costs are shown in Appendix 5.4. The summary transitional requirement is detailed in the table below. Table 8.15: Transitional Costs
Option
2012-13
2013-14
2014-15
Total
£000
£000
£000
£000
150
1,248
3,422
4,820
Accelerated Case
1,303
2,979
125
4,407
Intermediate Case
1,290
3,200
1,244
5,734
Base Case
8.11 8.11.1
Impact of the Trust PFI Development The Trusts new PFI hospital was commissioned in April 2010. In line with current IFRS and Department of Health guidance the scheme has been included as on balance sheet from 2010-11. The full costs and impact of the PFI are included within the Trust affordability models as detailed above. The costs included for accounting for the PFI scheme on balance sheet are as follows (£m): Table 8.16: PFI Costs
PFI Interest & Contingent Rental Capital repayment Service Costs Depreciation Total PFI Costs (exc. dividend) 8.12 8.12.1
2011-12 5.2 4.3 5.1 1.3 15.9
2012-13 5.2 4.4 5.4 1.4 16.4
2013-14 5.3 4.4 5.7 1.4 16.8
2014-15 5.4 4.4 5.9 1.5 17.2
Trust Cost Improvement Scheme The Trust’s LTFM and assessment of scheme affordability is predicated upon the delivery of an achievable QIPP programme. The Trust has a strong track record of cost improvement programme (“CIP”) delivery in recent years as detailed in the table below:
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Table 8.17: CIPs Delivered
07/08 08/09 09/10 10/11 11/12
CIP Turnover % of Delivered £M's Turnover £M's 9.5 155.5 6.1% 8.2 155.6 5.3% 13.2 163.9 8.1% 12.0 180.5 6.6% 9.5 175.7 5.4%
8.12.2
Both the Trust’s internal LTFM and the London-wide SaFE initiative suggest an annual productivity opportunity of between 3.2% and 4.1% per annum between 2011/12 and 2014/15 was achievable for NMUH. This is supported by additional local analysis undertaken by McKinsey. The Trust assessment of affordability has been based upon delivery of a 4.1% annual savings programme over this period. This is also consistent with national tariff expectations around required efficiencies savings by NHS Trusts.
8.12.3
The Trust has established a three-year local QIPP programme that will drive delivery of savings of the value required contains a number of key components which are detailed below, together with the proportion that they will compose of the overall cost reductions:
8.12.4
•
Clinical productivity improvement (30% - 40%) Includes Length of Stay reduction toward national average by improving patient flow and discharge, outpatient utilisation improvement by improved planning and scheduling clinics and theatre productivity by start time, downtime and finish time
•
Back office consolidation/restructuring (20% - 25%) Membership of UCL Partner model and additional Trust-wide initiatives/shared business services
•
Procurement and purchasing (20% - 25%) Continued optimisation of Trust purchasing and supplies solutions. Joined-up work across London and with other NHS organisations
•
Workforce planning and performance management (15% - 20%) Includes review of medical staff cover arrangements and more closely matching job plans and operational arrangements to contract, improved sickness management, continued rigour on shift pattern analysis and temporary staff use
•
Private income generation (up to 5%) Establishing a private patient business at the Trust
•
Additional Departmental initiatives Other local initiatives within individual departments to improve productivity and efficiency.
The Trust has established a set of basic principles for the three-year plan that will continue to guide its QIPP planning over the period. Firstly, a more transformational and cross departmental / specialty approach to savings is required. Secondly, a longer-term view (rather than one-year) is necessary to genuinely transform service provision and generate sufficient cost reductions and improve quality of care. Thirdly, clinical frontline services must continue to be prioritised over non-clinical support expenditure and finally, emphasis should be placed upon making savings by minimising waste, improving productivity and enhancing value for money. Together, these support the basis of a QIPP programme that has staged financial
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goals, but that will ultimately deliver over a 3-year term, that tackles issues in a non-silo way and requires the Trust’s Clinical Business Units to work together to solve Trust-wide problems. 8.12.5
The Trust has sought to derive projects from internal knowledge (nursing and consultant teams have been involved in discussions about the rationale for the 3-year programme and potential schemes that they might lead) as well as good practice externally. Other sources for project ideas have included local Trusts, the NHS Institute and Kings Fund.
8.12.6
To ensure adequate focus on developing the programme and preparing the organisation for significant change, recognising the scale of the challenge, the Trust put in place a Programme Management Office (PMO) in 2011/12 drawn largely from existing staff members across Finance, Informatics and nursing teams. This model is envisaged as leading the planning, coordination and monitoring of the three-year QIPP programme.
8.12.7
The focus of delivery over the three-year period will be through projects identified and owned at Clinical Business Unit (CBU) level, supported and monitored by the PMO team. The PMO team lead on the co-ordination and oversight of the performance that projects are delivering, escalating excellent as well as underperformance through the governance forums.
8.12.8
The methodology for the operation of the Trust PMO team is summarized in the graphic below: Figure 8.4: PMO Methodology
CBU4
CBU5
CBU2
CBU3
CBU1
PMO support Length of Stay
Support CBUs during planning and implementation
Theatres
Improve analysis and assessment of feasibility Drive down risk across programme via planning, day‐to‐day monitoring and presence, challenging progress, defining remedial/alternative actions and escalating as needed
Outpatients Workforce
8.12.9
This approach ensures that CBUs are empowered to deliver the operational challenges within their unit, and that interdependency, co-ordination across CBUs and wider organisational knowledge transfer is the role of the PMO. The overall responsibilities are set out in the diagram below. Figure 8.5: PMO Responsibilities Process support Day‐to‐Day Operational support & presence
Project tracking, monitoring and redesign
?
Is sue check lists and templates
?
Provide training as required
?
Act a s ‘g ate keeper’ for initiative progres s
?
Ensure appropria te & uniform quality of initia tive delivera bles
?
Es tablish ta ilored training modules for initiative owners as required
Track & report ?
Decision facilitation
Project quality control ?
Assis t key stakeholder buy‐in for key decisions
?
Facilitate dispute resolution
?
‘Bubble up’ decis ions to steering committees
?
Manage project interdependencies
Risk management
Define baselines (financial and non‐financial)
?
?
Ensure project benefits locked into budgets
?
Press ure test all KPI’s
?
Develop and manag e financia l model to track project benefits and costs
?
Report prog ress CEO /board
?
?
T rack a nd a ssess key program risks
?
?
M anage program ris ks
123
?
Co‐ordinate project resourcing requirements centrally
?
Review project resource requirements on an ongoing ba sis
New idea support
E stablis h risk management process
Outline Business Case for Implementing the BEH Clinical Strategy
Resource planning
Become central repository for all new ideas ‘Prioritize a nd hand off’ or ‘park a nd monitor’ based on high level diag nostic
Document control ?
Produce admin reports
?
Keep hard copies of a ll deliverables
?
R ecord a genda and action lists
8.12.10
Within the context of the scale of savings opportunities targeted by NMUH and the framework and mechanism that the Trust is employing to deliver these savings, the Trust is confident that the cost improvement programme that underpins the overall assessment of affordability will be delivered.
8.12.11
The 3-year plan seeks to deliver control totals that are consistent with the NHSL/McKinsey SaFE expectations and that are also consistent with the business development plans of the Clinical Business Units (CBUs). The focus with CBUs has been to emphasise transformation that retains and improves the quality of care over the three-year period, rather than the traditional one-year “salami slicing” of resources that increasingly undermines the potential for sustainable change. A summary of the 3-year savings plan is shown below. Table 8.18: Summary of Three Year CIP CBU1 CBU2 CBU3 CBU4 CBU5 Corporate Total savings identified Control total required annually 10% headroom to offset downside Total savings requirement
2012/13 1051 634 1538 1480 594 2615 7912 7200 720 7920
2013/14 1031 644 1166 1160 330 3475 7806 7100 710 7810
2014/15 750 472 1051 370 360 5215 8218 7400 740 8140
8.12.12
The Trust has sought to lock in approximately 10% headroom into its deliverables year-onyear in order to offset the potential downside that may occur from slippage in projects. In addition, the Trust is identifying a range of mitigating schemes (drawing from the good practice and external schemes noted above) that would supplement CBU schemes in the event of underperformance. Further information is available in the appendices as regards the projects underpinning this summary.
8.12.13
All schemes have project initiation documents (“PID”s) to support them, detailing a high level project plan, financials and WTE values of savings, risks, interdependencies and KPIs. All schemes, or like schemes grouped together, have had a Quality and Equality Impact Assessment undertaken to ensure quality of care is maintained or improved by the implementation of all QIPP schemes. These have been signed off by the Medical and Nursing Directors of the Trust.
8.12.14
The governance process for these schemes will be monitored as part of the Trust’s monthly performance committees, with underperformance triggering additional project review (consistent with the “Gateway” project management approach, and remedial support and from the PMO and corporate support teams. This will include the development of alternative plans in the event of schemes slipping by a material amount.
8.13
PFI Funding Assessment
8.13.1
This section examines the possibility of PFI funding of the Project.
8.13.2
PFI funding has been considerably restrained since the advent of the credit crunch and turmoil in the world’s financial markets. Availability of funding is limited and larger credit margins are now likely which would cause the project to be unaffordable. The Trust is also already at the Department’s ratio limit for PFI schemes, in respect of its current PFI scheme commissioned in 2010. The need to make large interest and finance lease repayments for a further PFI scheme would also have an adverse effect on the Trust’s PBL ratios, particularly the debt service ratio. It would jeopardise the Trust’s ability to become a Foundation Trust. The
Outline Business Case for Implementing the BEH Clinical Strategy 124
expansion of Acute and Maternity Services scheme contains a sizeable element of refurbishment works which would not be normally recommended for a PFI funding route. Added to all of these factors, is the acute issue of timing and the need to get the project operative. 8.13.3
The Trust has considered a new PFI procurement as one of its options and to that end the question of “PFI-ability” is addressed in the Trust’s response to the Treasury Qualitative Assessment. This is a questionnaire that Trusts are required to consider for any scheme with a capital cost of more than £20m to determine whether it would be feasible to consider PFI as the procurement route.
8.13.4
The assessment responses show that the project could be suited to a PFI environment, but that undertaking a separate procurement would not deliver value for money due to the conflicting risks and responsibilities between a new PFI provider and the incumbent Service Provider for the existing PFI scheme.
8.13.5
The Department of Health has recently stated that it will continue to provide Deeds of Safeguard to support PFI schemes, but only for those with a capital value of more than £70m. Since the project proposed in this OBC includes a new building of some £40m capital value, for which a Deed of safeguard would not be issued, it is highly unlikely that funding for a PFI scheme could be obtained on competitive terms and such a procurement could not deliver value for money.
8.14
Sensitivity Analysis
8.14.1
This section details the financial sensitivity work undertaken on the affordability analysis. This review has focused on a range of key risks. The financial sensitivity analysis covers the impact of the expansion of Acute and Maternity services on overall Trust affordability. The position for the sensitivity in respect of the patient income for 2015-16 and the Trust’s overall surpluses for that year is as follows: Table 8.19: Sensitivities – Revenue Surplus
Change in Patient Income +£11m +£7m +£4m +£1m 0 -£1m -£4m -£7m -£11m
Base Case £000 7,755 6,383 5,354 4,325 3,982 3,639 2,610 1,581 209
Accelerated Case £000 8,527 7,213 6,228 5,242 4,914 4,586 3,600 2,615 1,301
Intermediate Case £000 7,784 6,470 5,485 4,499 4,171 3,843 2,857 1,872 558
8.14.2
The revenue surplus is resilient for up to a £11m reduction in the value of the activity transferred to the Trust from CFH for the base and intermediate cases. The accelerated case has the strongest resilience to reductions in patient income.
8.14.3
Finally the sensitivity has been assessed for changes in the capital cost of the project on the overall Trust revenue surplus for 2015-16:
Outline Business Case for Implementing the BEH Clinical Strategy 125
Table 8.20: Sensitivities – Capital
Change in Capital Cost +£50m +£25m +£10m +£5m 0 -£5m -£10m 8.14.4 8.15
Base Case £000 1,669 2,825 3,529 3,751 3,982 5,213 4,445
Accelerated Case £000 2,491 3,703 4,429 4,672 4,914 5,156 5,399
Intermediate Case £000 1,786 2,979 3,694 3,933 4,171 4,409 4,648
The annual surplus is very resilient to upward changes in capital cost for all timing options. The accelerated has the strongest resilience. Summary of Preferred Options and Funding Capital
8.15.1
PDC funding is required in respect of all timing options (£78.8m for the base case or accelerated option and £79.6m for the intermediate option) The LTFMs and Monitor metrics indicate that a small amount of capital could be borrowed (£3m) for the accelerated option in respect of the final capital to be incurred in 2015-16. Implementation and Transitional Costs
8.15.2
Implementation and transitional costs for decanting, double running, etc mainly during 2012-13, 2013-14 and 2014-15 are to be funded by NHS North Central London. These total £4.8m for the base case, £4.4m for the accelerated case and £5.7m for the intermediate case.
8.15.3
In addition, as detailed in paragraph 8.6.6, NHS North Central London is required to provide additional revenue income support, largely in 2012-13 and 2013-14. This support totals £14.5m for the base case, £7.8m for the accelerated case and £12m for the intermediate case. Impairments
8.15.4
Under current rules impairments have no impact on break-even duty and therefore no funding is required. Recurrent Revenue Costs
8.15.5
The recurrent revenue running costs will be funded by the Trust from PbR income.
Affordability - Conclusion Based on the SaFE and other assumptions described in this Outline Business Case, the preferred option (base, accelerated and intermediate cases), on a PDC funded basis, are affordable in respect of the transferred activity. The preferred option (base, accelerated and intermediate cases) is also affordable in the context of the Trust’s overall finances. The requirements for financial risk ratios and PBL rules necessary to successfully construct an application for Foundation Trust status are also achieved, except for a temporary liquidity issue as at 31st March 2013 and 31st March 2014. The accelerated timing option has a better affordability position and adherence to Monitor requirements compared to the base and intermediate cases. .
Outline Business Case for Implementing the BEH Clinical Strategy 126
9.
Management Case
9.1
Project Management and Organisation BEH Project Board Oversight and Governance
9.1.1
The BEH Steering Group has supported a proposal for new governance arrangements for implementing the BEH Programme, which will be presented to theSteering Group on 21st March and is to come in to place from April 2012. The proposal is set out in the diagram below: Figure 9.1: Organisation Chart for BEH Implementation
9.1.2
The composition and constitution of the various groups and their interactions will be developed and explained in the Full Business Case.
9.1.3
The BEH Steering Group is developing an Integrated Implementation Plan. Introduction to Trust Project Management
9.1.4
The hospital redevelopment project involves construction of a new building and significant levels of refurbishment within a busy teaching hospital site that will continue to be fully operational throughout the construction period. Careful thought has therefore been given to the construction phasing, project organisation and management structure to ensure, safety, smooth running, close control and minimal disruption.
9.1.5
This Chapter sets out how the Trust will manage the project implementation through to commissioning and opening, into the operational and post-project evaluation phases. It describes: •
Main roles and responsibilities;
Outline Business Case for Implementing the BEH Clinical Strategy 127
9.1.6
•
Project implementation structure, including membership and terms of reference of the implementation groups;
•
The project costs of the implementation phases;
•
The management of the interface with the contractor throughout this period;
•
The management of the interface with staff throughout this period;
•
Liaison with internal stakeholders e.g. Infection Control, Risk Management and Governance; Service Leaders and Trust staff;
•
Liaison with external stakeholders, e.g. NHS London, North Central London Cluster, local authorities and Local Residents.
The project structure set out within the NHS Estates Capital Investment Manual¹ will be followed, supported by the project management disciplines of PRINCE2² and Managing Successful Programmes (“MSP”)³. The project will also be subject to Gateway Reviews as described later in this chapter. Project Governance Roles
9.1.7
The following roles will be maintained throughout the construction and operation phases of the project: •
Investment Decision Maker – This role is occupied corporately by the NMUH Trust Board, sitting quorate, as a statutory public body. The Trust Board has a scheme of delegation permitting, within defined limits, the Chairman and Chief Executive together to authorise urgent actions in order to progress the project within planned timescales. There is further limited delegation for this purpose to the Director of Finance and the Director of Environment.
•
Project Owner – the Chief Executive of the Trust, as Senior Responsible Officer, retains personal accountability for project delivery.
•
Project Director – the Director of Environment is the point within the Trust for providing leadership and direction to the project for internal and external stakeholders. The current Director of Environment, which encompasses the Project Director role, is an Executive Director of the Trust Board.
Decision Making: Construction Programme 9.1.8
The Deputy Director of Environment will be the decision-maker on behalf of the Trust regarding the progress of the phases of the Construction Programme, with particular reference to avoiding delays and protecting the business continuity of the Trust from avoidable interruption. Any matters with significant implications regarding the project objectives, beyond resolution by the Deputy Director, will be referred first to the Director, through weekly supervision, or immediate intervention, if necessary; and secondly by reference to the monthly Hospital Development and Environmental Board. Urgent decision beyond the Hospital Development Director’s delegated authority, requiring swift resolution to maintain programme, will be referred by the Hospital Development Director to the Chief Executive and/or Trust Chairman for determination within their powers delegated by the Trust Board. Delegated Authority
9.1.9
The Deputy Director of Environment will have delegated authority to act as the Trust Representative and point of contact in all client dealings, with professional advisors, contractors, and the consortium for the Construction Programme. The Director of Environment will retain responsibility for project progress, and it will be the duty of the Deputy Director of Environment, to ensure that the Director of Environment is kept informed of, and updated with, all relevant Programme issues as they occur.
Outline Business Case for Implementing the BEH Clinical Strategy 128
9.1.10
Procedures for assessing and implementing changes to requirements beyond the “design freeze” encapsulated in the contract which impact on the delivery, design and/or cost of the scheme, will be referred to the Director of Environment who will obtain approvals as appropriate. All such matters will be subject to the formal change control procedure and will be reported to the Hospital Development and Environmental Committee. The Director of Environment will be supported by an internal organisation as shown in the organisation chart at Figure 9.2 below. Figure 9.2: NMUH Project Organisation
Chief Executive
Project Director
Deputy Director
Advisors
Environmental Team Support
Healthcare Planning Financial Senior Project Manager Commissioning
Senior Project Manager Refurbishment
Legal
Senior Proj ect Manager New Build Vacant
Technical Advisors
Land Equipment Contractor
Project Assistant
Roles and Responsibilities 9.1.11
The main responsibilities for each of the roles directly relevant to the delivery of the BEH Clinical Strategy indicated within the organisational chart at Figure 13.1 are as listed below. Support is provided by the requisite level of external advice e.g. legal, technical, financial, property, health care planning; etc. One of the themes of the arrangements is an emphasis upon continuity. It is envisaged that this will be provided by the Hospital Development Project Team whose members roles are those described below.
9.1.12
It should be noted that the team members have performed these roles through the construction and commissioning phase of the PFI scheme, which has recently reached its conclusion and are therefore extremely experienced in all aspects of the BEH project works. Chief Executive (Senior Responsible Officer) • • • • • • • • • •
Accountable for the overall business assurance of the project, supported by the Trust’s Director of Environment (Interim Project Director); Ensures the project gives value for money; Ensures a business case-focused approach; Monitors the business risks to ensure that these are kept under control; Balances the demand of the contractor and the users, constraining potential user and supplier excesses; Assesses the impact of potential changes on the Business Case and Project Plan; Ensures tolerances are set for the project; Authorises expenditure and sets stage tolerances; Approves the end stage report and lessons learnt report; Organises and chairs project board meetings;
Outline Business Case for Implementing the BEH Clinical Strategy 129
Briefs corporate management about project progress including programme; Recommends future action on the project to the Trust Board and Strategic Health Authority (provider arm) if the project tolerances are exceeded; • Approves the sending of the Project Closure Notification to the Strategic Health Authority (provider arm). • •
Director of Environment: • • • • • • • • • • • • • • • • • • • •
Provides leadership and direction to the scheme for internal and external stakeholders; Establishes or agrees the implementation programme, sub-programmes and related projects; advising on tolerances and dependencies. Ensures that the aims of the programme and related projects continue to be aligned with evolving business needs; Secures and protects project resources; Monitors progress against project milestones and critical path analysis; Ensures the realisation of benefits; Chairs internal Project Team meetings; Provides management, structures and processes for the project; Leads on commercial negotiations; Resolves or escalates project-specific issues Provides project budget management; Undertakes Trust Board reporting; Provides external interface with the Private Finance Unit, NHS Estates, Capital Investment Unit for London, SHA (provider arm), Commissioners and BEH Strategy Board; Provides internal and external communications with the public, staff and patients; Interfaces with other local projects; Maintains compliance with the Trust’s clinical strategy and models of care; Operates within the delegated decision making limits for the project; Provides leadership and direction to the internal Hospital Development Team; Oversees change control procedures; Oversees Trust compliance with project milestones and reviewable design data (RDD) deadlines.
Deputy Director of Environment: • • • • • • • • • • • • • • • • • •
Generates and maintains the Project Initiation Document for the implementation phases; Manages the reviewable design data process; Controls the development of Internal Design; Co-ordinates external involvement in the commissioning committee process; Acts for the Trust in pre-handover acceptance testing and snagging process; Liaises with the Trust advisors on construction, technical and FM design issues; Liaises with the contractor’s management team on construction, technical and design issues; Liaises with the Project Accountant on project budgetary control; Manages the Project Risks Register, risk management process and issues log; Leads on technical issues; Manages business and project risks, including the development of contingency plans; Liaises with the local Planning Authority and Building Control; Reports to the Hospital Development & Environmental Committee through Highlight Reports and Stage Assessments; Contributes as a member of the Trust's Capital Planning Group; Maintains the Trust’s Estates Development Control Plan; Supervises the Project Management of the Trust's Refurbishment Work; Manages the interface with the contractor’s management team during the construction phase of the project including, holding them to account for programme progress; Manages the construction phase programme.
Outline Business Case for Implementing the BEH Clinical Strategy 130
Commissioning Manager: • • • • •
• • • • • • • • •
• • • • •
Develops the strategy and implementation programmes for: Art in Hospital, artefact and materials reclamation, way finding, interior design and landscaping; Liaises with Electro Bio Medical Engineering (EBME) and Procurement Managers; Leads the ward naming and way finding workstreams; Acts as point of contact between the Trust and it’s and Professional Design Consultants; Liaises with the CDM-Coordinator and the Trust’s Risk Management organisation and leads for the Trust within the project for health and safety in connection with construction and commissioning activities; Liaises with users1 on the development and operation of protocols for undertaking construction activity within the health care setting; Develops the commissioning programme in consultation with internal stakeholders; Develops the move-in programme in consultation with internal stakeholders; Develops risks register associated with the move-in programme; Liaises with statutory bodies, internal inspectorates and subject experts; Manages the furniture and equipment budget; Ensures furniture and equipment is procured in line with the commissioning programme; Develops both clinical and non clinical operational policies in conjunction with departmental heads; Monitors completion of the Operations and Methods (O&M) Manuals, including the Health and Safety File, including archiving and handover at the commencement of the operation phase; Contributes to the joint programme of acceptance testing; Prepares the Lessons Learned Report and any follow on actions required; Prepares the End Project Report and Project Closure Notification; Controls health care planning compliance; Liaises with Communications regarding key milestones and general construction activities.
Project Managers • • • • • • • •
• • • • •
•
1
Ensure compliance with budget, programme, specification and standards; Liaise with users (hospital staff); Liaise with Trust Health and Safety and Fire Safety Managers and Representatives; Obtain detailed briefs from client departments; Liaise with Construction Contractor; Liaise, and co-ordinate the project, with the Deputy Environmental Director; Commission refurbishment areas in association with the Commissioning Manager; Undertake monitoring of the construction site including security arrangements (in liaison with the Trust’s Local Security Management Specialist and Deputy Director of Environment) and the maintenance of safe access to the hospital premises; Ensure noise control, dust control and related Trust infection control standards and protocols are complied with; Ensure permit to work systems are operated and that the protocol for interrupting work is complied with; Liaise with users, responding promptly to any concerns regarding the operation of their services; Ensure procedures are applied to mitigate risks and to maintain the operation of services; Report construction and decanting risks to the Deputy Director of Environment and put measures in place to reduce risk to retained services and ensure maintenance of the operation of these services; Retain information relevant to, and participates in, the project evaluation process;
The term "users" derives in PRINCE methodology from the user group quality assurance concept: in the NMUH context users are the Trust staff affected by, and customers of, the project and from time to time are the projects internal expert advisors
Outline Business Case for Implementing the BEH Clinical Strategy 131
• • • • •
•
• • • • • • • •
Liaise with the Commissioning Manager assets and building familiarisation and training programmes; Communicate Trust-wide changes to access and egress routes, both internal and external, arising during phases of the Construction Programme; Monitor compliance with project management principles including co-ordination and document production for formal and informal meetings; Monitor document control and governance compliance, escalating non-compliance issues directly to the Deputy Director of Environment; Provide administrative/minute taking support to all high level formal Project Committees e.g. Hospital Development & Environmental Committee, Partnership Project Executive, Project Assurance Group, Commissioning Team; Maintain and evolve the communications plan, fronting Internal and external communications including: Newsletter, Intranet, Website; external advisors and contributes as a member of the Trust's communication committee. Manage the filing for the Project Team in line with the Project Assurance process; Produce presentational material; Manage the Gateway Review process; Administer Change Control mechanisms; Collate data and reports; Arrange official openings and formal visits; Liaises with the Trusts hard FM provider regarding permits to work, access and maintenance issues; Works with consultant design teams with respect to delegated elements of the project.
Secretarial and Administrative Support: • • • • • • •
Provides secretarial support to the Project Director; Provides secretarial support to the Project Team; Assists with the compilation of reports; Maintains filing for the Project Team in line with the Project Assurance process; Maintains the existing and new Data Room files; Drafts minutes and notes; Undertakes general administrative duties: arranging meetings and refreshments, photocopying, binding, booking and preparing meeting rooms, telephone answering, message service, diary co-ordination etc.
Hospital Development & Environmental Committee 9.1.13
The Hospital Development & Environmental Committee is a formal sub-committee of the Trust Board. Its role is to: • • • • • • • •
9.1.14
Oversee all aspects of the PFI and BEH Clinical Strategy projects and the achievement of all key milestones and targets of the project plan. Ensure the development of a visible and sustained ownership and commitment to the project by key stakeholders of the local health economy. Devise and oversee the communication strategy. Ensure the development of an affordable and deliverable project within the context of the wider health economy. Arbitrate on any areas of conflict regarding business case development. Ensure the new development meets appropriate quality parameters. Facilitate wider health economy changes required to support the agreed service model and development. Oversee the development of the Business Case for the approval of the Boards of the Strategic Health Authority, NHS North Central London (Commissioners) and North Middlesex University Hospital Trust.
The membership of the Hospital Development & Environmental Committee is: Chief Executive
Clare Panniker - Senior Responsible Officer
Outline Business Case for Implementing the BEH Clinical Strategy 132
Director of Environment Director of Finance Chairman/Design Champion (Chair) Non-Exec Director Non-Executive Director
Kevin Howell Martin Armstrong David Hooper Sally Field Vincent Sagua
Project Implementation Programme 9.1.15
The key milestones for the programme for Option 18M, with the accelerated case shown for comparison purposes, are: Table 9.1: Key Programme Milestones Option 18M
Base Case
Intermediate
Accelerated
OBC submission
Feb 2012
Feb 2012
Feb 2012
OBC approval by SHA
Apr 2012
Apr 2012
Apr 2012
OBC approval by DH/HMT
July 2012
July 2012
July 2012
Done
Done
Done
GMP for enabling works
Apr 2012
Apr 2012
Apr 2012
Designs complete
Nov 2012
Nov 2012
June 2012
Guaranteed maximum price main works
Nov 2012
Nov 2012
June 2012
FBC submission
Dec 2012
Dec 2012
July 2012
March 2013
March 2013
Nov 2012
Construction work commences
April 2013
April 2013
Nov 2012
Construction work (refurbishment) completed
Aug 2014
March 2014
Oct 2013
Construction work (new build) completed
Jan 2015
April 2014
Nov 2013
Activity transfers from Chase Farm
Jan 2015
April 2014
Nov 2013
Site infrastructure works complete
Nov 2015
March 2015
Oct 2014
Milestone
Appointment of Preferred PSCP
FBC approved
9.1.16
The timetable will be reviewed at each stage of the implementation process.
9.1.17
This programme enables the Trust to accept additional acute and maternity activity from January 2015; if the accelerated programme were adopted, this activity could transfer 14 months earlier, in November 2013. The intermediate case would deliver activity transfer five months later, in April 2014.
9.1.18
A detailed programme covering the period up to FBC approval and project commencement through to final completion is set out in Appendix 9.1. Costs of Project Implementation
9.1.19
The costs associated with the project implementation structure and the Hospital Development Team are included in the capital cost profile, the cost to the Trust associated with implementation of the project is summarised below:
Outline Business Case for Implementing the BEH Clinical Strategy 133
Table 9.2: Project Implementation Costs
Year
(£ 000)
2011/12
£552k
2012/13
£517k
2013/14
£472k
2014/15
£71k
Total 9.1.20
£1,612k
The PCTs are unable to provide any support for these costs, which for previous years have been incurred from the Trust’s capital budget. Approvals and Letters of Support
9.1.21
These are included at Appendix 9.2 – To follow
9.2
Communications
9.2.1
Communications both with internal and external stakeholders is a vital component to managing the perception of health service changes that relate to the implementation of the BEH Clinical Strategy. This section of the OBC outlines the approach being taken.
9.2.2
There are vital considerations for this communications work, which include: • • •
•
Communicating the implementation of the strategy will be carried out in a positive, proactive way; Communications activity will ensure that all stakeholders understand the need for, and the consequences of, not doing the changes outlined in the strategy; All communications work will be aligned to the Integrated Implementation Plan and programme governance structure and conducted in partnership with all organisations involved in the strategy; Stakeholder engagement should be embedded in all aspects of the Integrated Implementation Plan, not solely focused on communications activity.
The Strategic Approach 9.2.3
The diagram below shows the three stages of engagement that differing stakeholder groups will need to reach depending on their role and involvement in the BEH Clinical Strategy. Figure 9.3: The Engagement Curve
Outline Business Case for Implementing the BEH Clinical Strategy 134
9.2.4
The strategy has three elements aimed at supporting stakeholders to the required levels of engagement in order to create the conditions for successful implementation. These are: • • •
AWARENESS to support all stakeholders in getting to a general level of understanding INVOLVEMENT to enable those affected by the programme beyond understanding to support and active participation with the integrated business plan COMMITMENT to take key stakeholders to a level where they give their full commitment and leadership to the programme
Awareness 9.2.5
Communication at this level should provide an understanding of the need for change, the need for information, understanding and reassurance via: •
• •
A raised awareness for all stakeholders, particularly with reference to the benefits for the people of Barnet, Enfield and Haringey, including dates when services will change from their current format; Regular progress reports and summaries for those who want more information, including those stakeholders that actively participated in the feasibility study engagement work; Ensuring appropriate channels are available for stakeholders to feedback any concerns or queries which are then clearly acted upon.
Involvement 9.2.6
Communication with stakeholders at this level should address the need for confidence about the programme, the acceptance of change, understanding the implementation process and timescales, the benefits of the changes and their role as a stakeholder in the process, by: • • •
Specific information to stakeholders affected before changes take place based on the Integrated Implementation Plan Establishing agreement across organisations for how and when communication is to take place, aligned to the programme governance structure Meeting the information needs of all stakeholders with joined-up, accurate information and quick response to any queries.
Commitment 9.2.7
Communication at this level will encourage full commitment to and leadership of implementing the clinical strategy via the Integrated Implementation Plan in the following ways: • • •
Clinical leadership and spokespeople driving both the reasons behind, and implementation of, the clinical strategy; Active involvement in service design and other key practical aspects of the Integrated Implementation Plan; Proactively, and without prompt, communicating their support for the aims of the strategy with other stakeholders.
9.2.8
The Trust will work closely with B&CF, NHS North Central London, London Ambulance Service, other affected trusts and NHS London to ensure consistent messages, plans and materials are developed to underpin effective communications. The communications and engagement strategy has been developed with all affected trusts participating and is aligned to the Integrated Implementation Plan so that all key aspects of implementation are communicated effectively and in a timely manner.
9.2.9
Effective stakeholder engagement forms part of this strategy but is to be linked to all aspects of the implementation programme in order to reach levels of commitment and engagement.
9.2.10
The Communications Sub Group will report and be accountable to the BEH Strategy Steering Group. The sub group will meet on a monthly basis and all decisions relating to communications will need to be approved by the BEH Strategy Steering Group.
Outline Business Case for Implementing the BEH Clinical Strategy 135
9.3
Use of Advisors
9.3.1
The Trust has retained project management, architectural and technical advisors under a national framework agreement.
9.3.2
The lead advisor appointed under the framework is Cyril Sweett, who provide project management and procurement advice, together with costing services.
9.3.3
The architects are AHP, who are likely to be appointed Kier as part of the Procure 21+ arrangement.
9.3.4
Technical advisors are Arcadis.
9.4
Procure 21+ Management Structure and Process
9.4.1
The Trust has undertaken a Procure 21+ selection process jointly with B&CF. High Level Information Packs were developed by Cyril Sweett for the main phase of the project and issued to the six public sector supply-chain partners (“PSCPs”) on the Framework Agreement.
9.4.2
The selection process resulted in four of the six PSCPs being short-listed and interviewed on 25th November 2011.
9.4.3
The Interview Panel included: • • • • • •
Kevin Howell, Director of Environment , NMUH Martyn Simpkin, Deputy Director of Environment, NMUH Andy Mitchell, Procure 21+ Implementation Advisor Steve Sewell, Programme Director, B&CF Danny West, Director of Estates & Facilities, B&CF Phil Smith, Strategic Estates Advisor, NHSL
9.4.4
Scores were collated from all Panel members and the weighted scoring analysis was used to select the PSCP. Selection criteria included candidates’ ability to deliver the project, key personnel, design and buildability, organisation process to work efficiently through design, build and commissioning stages. The Trust also considered the degree of innovation candidates could bring to the project, particularly with respect to programme, cost and quality.
9.4.5
Following the interviews, the Trust, jointly with B&CF, appointed the Kier Group as its partner to progress all stages of the scheme.
9.5
Design Review Panel
9.5.1
A Design Review Panel has been convened for 23rd March 2012. The event will be facilitated by Devereux Architects. Attendees will include: • • • • • •
Kevin Howell, Director of Environment, NMUH Rachel Hall, Clinical Planner, Cyril Sweett Mark Lydall, Architect, AHP David Hooper, Chair and Design Champion, NMUH Peter Limb, Hospital Development Advisor, NMUH Phil Smith, Strategic Estates Advisor, NHSL
9.6
Contract Management
9.6.1
The processes for undertaking PFI Variations and P21+ procurements are clearly set out in the relevant procurement guidance and the Trust will follow these, using its own professional advisors and the appropriate NHS leads.
9.6.2
During the process, the Project Director will be responsible for coordination of the clinical and other operational management requirements with those of the building contractors.
Outline Business Case for Implementing the BEH Clinical Strategy 136
9.6.3
Details will be developed in the Capital Design, Estates and Facilities Management workstream and agreed through the programme structure.
9.7
Change Management
9.7.1
The Trust’s Programme Management Office (“PMO”) is charged with the planning and implementation of the three-year QIPP programme alongside the delivery of transformational change across the Trust. This covers the key operational elements of length of stay, theatre efficiency and effective outpatient management and requires the co-ordination of a wideranging group of staff from across the Trust.
9.7.2
However, there are other elements to the Trust’s transformational strategy, an initiative that was established in 2010/11 to coincide with the year in which the Trust moved into new facilities. Rather than being taken forward in one block, the Trust has sought to integrate the change management process into other key aspects of its day-to-day work under the banner of “transformational change”. The main quadrants of the transformation programme; People, Processes, Patient Experience and Pride and Promotion are set out in brief below.
9.7.3
Specific updates are provided either through the Trust’s Patient Safety and Quality Committee or the Finance and Contracts Committee, with operational issues picked up at monthly Clinical Business Unit performance meetings.
9.7.4
It is recognised that progress in all four dimensions will be required in order to achieve the improvement we need to make in the patient experience of the hospital. The diagnostic work undertaken by McKinsey confirmed that we have correctly identified the areas to address in the transformation of the Trust.
9.7.5
It is recognised by the senior team that significant adjustments to leadership styles, behaviours and management practice are all essential pre-requisites of gaining the organisational changes necessary. This will be approached in a number of ways bringing additional skills to the team through new roles and a focused development plan for the team. Figure 9.4: Schematic of the transformation programme
Vision & Values Leadership Patient Experience & Effectiveness • Patient experience feedback • Using feedback to achieve change • Releasing time to care • Matching clinical resource to need • Patient safety & quality First • Partnerships with Patients People • Code of conduct • Customer service training • Managing performance • Management development • Staff engagement & recognition • Clinician development & engagement • Team development
The new North Middlesex Hospital provides high quality clinical care, outstanding customer care and efficient organisational systems and processes
Patient Flow & Processes • • • •
Discharge management Theatres Outpatients New Hospital clinical pathways
Pride & Promotion • • • •
Generic versus specific messages Marketing the New Hospital Staff as ‘Hospital Ambassadors’ Patients leading the promotion efforts
Support Streams – diversity, communication, the environment
Outline Business Case for Implementing the BEH Clinical Strategy 137
9.8
Risk and Value Management Introduction
9.8.1
It is a requirement of the Capital Investment Manual that a risk assessment should be produced for all projects seeking funding. This section of the Outline Business Case contains the findings of the Risk Assessment.
9.8.2
The objective of the risk assessment is to identify risks to the successful delivery of the project and determine the contingency sums to be included.
9.8.3
The methodology used in the risk assessment comprised the following stages, each of which is explained in detail in the subsequent sections of this report: •
OGC Gateway Risk Potential Assessment
•
Risk Management Plan
•
Quantitative Risk Analysis
•
Optimism Bias
OGC Gateway Risk Potential Assessment 9.8.4
The programme is subject to the Office of Government Commerce (OGC) Gateway Review Process to support the programme team in delivering the business objectives. The Risk Potential Assessment (Appendix 9.4) indicates that this project is very high risk.
9.8.5
A number of Gateway reviews have been held during the development of the BEH programme. A Gateway 2 Delivery Strategy review was held in March 2012. Gateway 2 reviews the Outline Business Case and Delivery Strategy. The Delivery Confidence Assessment of the review was Amber.
9.8.6
Subject to continuing to achieve the programme milestones set out in this OBC, the Trust plans to undertake the remaining Gateway Reviews during the programme as follows: • • •
9.8.7
Gateway 3 (investment decision) - November 2012 Gateway 4 (readiness for service) – November 2014 (prior to activity transfers) Gateway 5 (benefits realisation) - June 2016 (6 months post OPD works complete)
The review was co-ordinated with B&CF. Risk Management Plan
9.8.8
Risk Management is a systematic tool to support decision-making. The approach should identify the risks involved for options under consideration and then set procedures for the management of risks associated with the chosen option throughout the life cycle of the building. This helps to ensure the objective of minimum life cycle costs is achieved.
9.8.9
Risk Management incorporates risk assessment, which is an ordered approach to risk analysis. The risks are logged and scored by matrix analysis to determine whether the levels of risk are acceptable. The risks are colour coded for easy identification of key risks.
9.8.10
Experience indicates that Risk Management is most effective if it is aimed at specific risk minimisation targets and it is introduced at the earliest stages of the project with all members of the integrated project team involved. However, the process continues throughout the design and construction with reviews being undertaken at key stages.
9.8.11
Risk Management techniques offer a systematic approach to the identification, assessment and control of the significant risk factors affecting the progress of the project. Areas of high risk are reviewed to ensure that all reasonably practicable measures have been taken to mitigate them.
Outline Business Case for Implementing the BEH Clinical Strategy 138
9.8.12
The Risk Management process is designed to ensure that as far as is reasonable: •
All significant hazards are identified
•
Judgements are made as to hazard importance
•
Risk exposure is understood and reduced to acceptable levels
•
Cost effective risk control measures are implemented
•
Control measures are reviewed and managed to close out. Figure 9.5: Risk Management Process
Review Options No
Identify Risks What could go wrong?
Is Residual Risk Acceptable ?
Identify Control Measures
Assess Risks • Quantify • Rank
• Mitigation • Management • Control
Yes
RISK REGISTER Implement Control Measures
Update risk Monitor
register
9.8.13
In accordance with the Capital Investment Manual, the risks and implementation issues of a capital project of this nature have been identified, weighted, and action plans developed in a risk management plan.
9.8.14
The risk management plan that identifies how the Trust will manage the project risks is presented in Appendix 9.3.
9.8.15
Progress of the project in relation to the plan will be reviewed on a regular basis with feedback used to update the risk register and control measures. In parallel with risk identification and classification, mitigation measures will be developed in consultation with all involved parties and these are recorded on the Trust risk register. Finally, where considered vital, contingency plans will be developed for implementation in the event of the hazard manifesting itself and these are issued as separate risk assessments (at the time of the OBC submittal, none of these have been required). The risk register will also be used to assist in developing project contingency.
9.8.16
The following activities will be carried out:
9.8.17
•
Key risks will be monitored regularly by the team and highlighted in the Progress report.
•
The risk owner will control its own risks.
The risk register will be maintained and updated throughout the project by the Deputy Environmental Director. Risks identified by others will be incorporated when appropriate.
Outline Business Case for Implementing the BEH Clinical Strategy 139
Qualitative and Quantitative Risk Analysis 9.8.18
The risks to the project as a whole have been identified and incorporated into a Risk Management Plan; the detailed methodology for this exercise is explained in Appendix 9.3.
9.8.19
Other risks identified during the risk identification workshops and subsequent discussions with the project team were considered in terms of their likelihood of occurrence and how they might impact on the project; the team also considered how risks might vary according to the parameters of the different options.
9.8.20
Using the Datix Risk Evaluation Criteria, a figure was provided for the probability of occurrence and likely impact of each risk. This was then refined through further analysis with the team. Each risk therefore carries a “rating”, being the product of probability and impact, giving a figure of between 1 and 25; these ratings are incorporated in the Risk Management Plan to drive the management actions and timescales for managing each risk. The risks were qualitatively evaluated in accordance with the following criteria: Table 9.3: Risk Evaluation Parameters
Rating
Level
Probability (%)
Impact Capital Cost
Programme
Revenue / Patient Experience
5
Very High
> 50%
> £2M
> 8 wks
Very High
4
High
25 to 50%
£1M - £2M
6 – 8 wks
High
3
Medium
10 to 25%
£500k - £1M
4 – 6 wks
Medium
2
Low
5 to 10%
£250k - £500k
2 – 4 wks
Low
1
Very Low
< 5%
< £100k
< 2 wks
Very Low
9.8.21
Additionally, the project team have reviewed the likelihood of each risk occurring and used a three-point probability analysis to determine the most likely financial impact. Where appropriate, the risks have been differentiated for each option.
9.8.22
The risks were then quantified by considering the financial impact on either capital costs or revenues. The cost impact has been split between capital and revenue impact as summarised in Chapter 5 and the capital risks form the planning contingency element of the Cost Forms.
9.8.23
The value of each risk was assessed over the project life of 60 years and discounting techniques applied to the cash flows in the same manner as in the Generic Economic Model (“GEM”). The net present values (“NPVs”) of the aggregate risks were then added to the NPVs of the cash flows derived from the GEM to obtain risk-adjusted aggregate costs for the purpose of the economic appraisal. Optimism Bias Assessment 2
9.8.24
Guidance from the HM Treasury’s new Green Book requires that explicit adjustments be made to allow for optimism bias in all project appraisals to overcome the historical tendency to be over optimistic. Typically, optimism bias can arise in relation to: • • • •
9.8.25
Capital Costs Works Duration Operating Costs Under-delivery of Benefits
The guidance requires that adjustments should be empirically based, using data from past projects or similar projects elsewhere and adjusted for the unique characteristics of the project. 2
‘Supplementary Green Book Guidance on Optimism Bias’ from the ‘Appraisal and Evaluation in Central Government’ published January 2003.
Outline Business Case for Implementing the BEH Clinical Strategy 140
The size of the adjustments for optimism bias should reduce as the project progresses according to the extent of confidence in the estimates, the extent of management of generic risk and the extent of work undertaken to identify and mitigate project specific risks. 9.8.26
There is a large amount of subjectivity in all aspects of the calculation of optimism bias. In order to reduce the variation from project to project, a standard spreadsheet has been designed by the Department of Health, which has been used to calculate the optimism bias for each option being considered.
9.8.27
The guidance lists a number of contributing factors that have been shown to influence the level of optimism bias and sets out the percentage contribution of each factor to the upper bound value. An assessment was carried out in accordance with these guidelines to assess the extent to which each contributing factor has been mitigated through good project management, including provision of reliable costings, management of risk and identification and quantification of project specific risks.
9.8.28
An optimism bias assessment was carried out for this project and is attached in Appendix 5.2. The results are summarised in table 9.2. Table 9.4: Optimism Bias Results
Option 2
Option 2M
Option 4
Option 8
Option 18
Option 18M
Upper Bound Adjustment
34.0%
34.0%
34.0%
34.0%
34.0%
34.0%
Percentage Factors Contribute after Mitigation
32.0%
32.0%
34.0%
34.0%
37.0%
37.0%
Net adjustment for Optimism Bias
10.88% 10.88% 11.56% 11.56% 12.58% 12.58%
9.8.29
The residual optimism bias for the Business Case is representative of the risks that cannot be fully mitigated at this stage.
9.9
Workforce Planning Introduction
9.9.1
This section sets out the key issues that relate to how change will affect the Trust’s workforce and the Trust’s approach to workforce planning. It outlines the Trust’s current model, assumptions and plans to achieve the workforce aspects of the implementation of the BEH Strategy.
9.9.2
Key to successful workforce planning is the involvement of clinical professionals to help ensure the Trust’s workforce has the necessary skills to provide outstanding care.
9.9.3
Work is currently underway to review the Trust’s workforce plan to ensure it fully supports the following internal and external drivers of change: • • • • • •
The BEH Clinical Strategy Service developments and changes to clinical services The achievement of Foundation Trust status by 2014 The Trusts Workforce Strategy – Shaping the Future, 2012 - 2016 The achievement of the Trust’s efficiency programme The proposed changes to commissioning and service provision as detailed in Liberating the NHS.
Outline Business Case for Implementing the BEH Clinical Strategy 141
Governance and Support for the Workforce Changes 9.9.4
The “Report from a Clinical Review of the Barnet, Enfield, and Haringey Strategy” identified the clear need to establish joint working groups to minimise clinical risks both in advance of implementation and also post implementation. It also identified that this forum would be a constructive arena for looking at innovative and flexible working practices to support joint recruitment, secondment opportunities to support identified vulnerable units.
9.9.5
All the key stakeholders have already come together to establish this group as the BEH Workforce committee. This committee reports to the BEH Project Board, and brings acute and primary care employers affected by the changes together. The Committee will continue to develop plans to ensure that changes to the workforce are managed in a consistent, fair and efficient manner.
9.9.6
Given the historical path that the BEH strategy has taken, and as identified in the above clinical review report, there have been difficulties in discussing future job preferences and options with staff affected by the changes in the absence of a clear implementation timeline and this has had an impact on recruitment and retention. The Trust recognises its responsibility therefore to provide clear and regular communication at a local level to manage the expectations of those employees affected by the reorganisation of services at North Middlesex Hospital. The Trust has agreed a coordinated approach to communications across all the organisations and in particular will work with its core partner Barnet & Chase Farm Hospital to develop robust communication plans to support the wider workforce changes and reconfiguration of services so that consistent messages are delivered across both organisations. This will provide staff at all levels within the organisations confidence that the planning and implementation of the BEH strategy is ongoing. A communication strategy for and with staff is a significant part of the transition plan.
9.9.7
The terms of reference of the BEH Workforce Committee, which will be chaired by the Director of Transformation of the NCL Sector, will have a membership comprising Directors of HR from the acute and primary care setting as well as Project Leads from each organisation. The Trust will ensure that both the Medical and Nursing Director are represented on this committee and that they are made aware of the key issues and obstacles as and when they arise. Current Workforce Position
9.9.8
A workforce plan has been developed for the directly affected areas: Maternity services, Acute adult and paediatric inpatient services and Accident and Emergency. This has been developed using the six step methodology for workforce planning, as follows: 1. Defining the plan – identifying why a workforce plan is needed and for whom it is intended; 2. Mapping the service – identify the purpose and shape of the proposed service 3. Defining the required workforce (demand) – identify the skills required and the type and number of staff to deliver the new service model. 4. Understanding the workforce availability (supply) – identify current and future staff availability based on current profile and deployment/transfer of staff 5. Developing an action plan – plan to deliver the required workforce and manage the change 6. Implement, monitor and refresh as required.
9.9.9
The Trust’s overall strategic plans will include reference to this in the context of overall strategic direction. In evaluating the current workforce it can be determined that there are key issues that need to be addressed which are as follows: Staff:
As part of this workforce plan, current and future workforce requirements will be identified and the skills and competences of staff will be reviewed to ensure the optimum use and application of new technologies. Working practices, patterns and terms of employment will be reviewed in line with changes at a national level.
Outline Business Case for Implementing the BEH Clinical Strategy 142
The plan will also include the impact of changes in legislation, workforce demographics and the flexibilities available to work across traditional professional boundaries. Skills:
The capabilities of the individual teams and the overall organisation need to be assessed. It has been determined that this will achieved by determining the competences required and assessing the team against those required by the different staff groups. This is supported by the Trust’s Annual Training Plan.
Strategy: The Executive Management Board, with the Trust Board supports the strategic direction of the local health economy which will determine the health priorities for the local community in the future. Structure: The Trust has implemented what is deemed to be an appropriate structure to address service issues at a given point in time. This will be constantly reviewed in light of the agenda, competences and the development of the Trust and the implementation of the BEH Strategy. At departmental and Clinical Business Unit (CBU) level, there is also a need to undertake reviews of structure to reflect the impact of the BEH Strategy. Systems: The infrastructure and organisational processes through which things get done and are reported will be challenged to ensure that the process is assisting effective delivery of services rather than hindering the delivery. It is essential that processes are known and applied consistently. 9.9.10
The composition of the current workforce is set out in the table below: Table 9.5: Current Workforce - by Staff Group
Staff Group Admin Staff Medical Staff Nursing Staff Scientific Therapeutic & Technical Senior Managers TOTAL Contract Type Permanent Fixed Term Contract
Perm WTE 410.9 372.5 996.7 405.6 88.3 2,274.0 WTE 2,172.8 101.2
Workforce Turnover in Dec 2011
0.30%
All figures as at 31st December 2011 Anticipated Workforce 9.9.11
A high level summary of the anticipated changes is as set out below: Table 9.6: Anticipated Workforce
Staff group Medical Staff Nursing and Midwifery Staff Scientific, Therapeutic & Technical
Current Established WTE 372.5 996.7 405.6
Outline Business Case for Implementing the BEH Clinical Strategy 143
Anticipated increase in WTE 54.6 165.1 37.6
Post BEH implementation 427.1 1,161.8 443.2
Administrative staff & Senior Manager Total
499.2
51.6
550.8
2,274.0
308.9
2,582.9
9.9.12
The workforce baseline used is the budgeted establishment for 2011/2012 (as at 31st December 2011) and plans have been based on the clinical service assumption detailed in this OBC. The plan takes account of clinical adjacencies and the efficiencies this will promote.
9.9.13
A service-based costed workforce plan for the directly affected areas is included below. The reconfiguration of these services has a direct impact on staff working within these areas; however it is acknowledged that the impact of these changes may be wider than those individuals and teams working directly in the delivery of care. Staff working within associated and support services are often involved in the pathways of care through the Trust’s clinical services, and so the reconfiguration of the core services also impacts on them. Additionally the Trust continues to restructure and focus on the delivery of a high quality, cost-efficient service to patients, which in itself leads to service improvement.
9.9.14
The Trust‘s strategic framework for workforce planning has been based on the model in the figure below that integrates service planning and workforce planning: Figure 9.6: Integrated Service and Workforce Planning
9.9.15
As stated in Chapter 4, the proposed transfer of activity to the North Middlesex University Hospital NHS Trust is as follows: Table 9.7: Additional Activity
Speciality
Spells
A&E Attendances, including Major Minor Non-elective adult inpatient spells Non-elective paediatric inpatient spells Maternity – consultant and midwife-led births
22,179 14,603 7,576 7,743 2,002 1,850
Outline Business Case for Implementing the BEH Clinical Strategy 144
9.9.16
Based on these assumptions, a review of the current workforce and activity a model has been developed which indicates that the Trust will require an additional 308.9 WTE staff broken down as follows: Table 9.8: Additional Staff Numbers Table Needs Revised
Staff Group
Total
Senior Medical – Consultant
11.5
Junior medical
43.1
Qualified nursing
99.1
Midwives &Maternity Support workers
66
Scientific Therapeutic & Technical
37.6
Administrative and Senior Manager
51.6
Total
308.9
9.9.17
The output from this model requires ongoing testing with stakeholders, and professionals from the services affected and this is the next stage in developing the workforce plan. Integral to this will be the concept that workforce design and changes to the workforce have to be affordable, financially sound, driven by increases and changes to the volume and type of activity whilst maintaining quality of care.
9.9.18
The step change in activity will also provide an opportunity to review overall skill-mix and workforce design. It is not anticipated that the changes to overall staff numbers will be materially different from those stated above. Maternity Services
9.9.19
Midwifery services play an essential role in the delivery of ante, intra and post natal care. Alongside obstetricians, they provide care and support for women with complex needs, as well as a generally healthy population through a normal life event.
9.9.20
In adopting the BEH Strategy, the Trust is expecting an increase in births from approximately 3,700 births during 2011/2012, to 5,800 births in 2014/15 and then increasing to approximately 6,000 births by 2016/17 with associated ante-natal spells relating to non-deliveries.
9.9.21
As a consequence, the workforce required to meet this demand will need to increase and evolve to meet the changing need in numbers of births. This increase in activity will require additional staff and to ensure support of the London Commissioning intentions:
9.9.22
•
Achieve a birth to midwife ratio of 1:30.
•
Achieve a skill-mix of midwives and competent midwifery support staff that does not exceed 13%.
•
Achieve consultant staffing levels (obstetrician and anaesthetist) in line with Safer Childbirth (2007) recommendations or have contingency plans/ business cases in place to address shortfalls. Planning and local trajectories should be undertaken in partnership with commissioners.
•
Allow and promote direct access and self referral to their services.
•
Achieve the standard that 90% of women see a maternity healthcare professional for a health, risk and social assessment by 12 completed weeks of pregnancy.
NMUH has invested significantly in its maternity services, increasing the establishment of midwives by 12 whole time equivalent during 2011/12. It has plans to further invest in additional midwives during 2012/2013 to sustain the standard of 1:30 midwives to births and for the Trust to be in a strong position to provide excellent quality care and experience to mothers and babies post the closure of CFH.
Outline Business Case for Implementing the BEH Clinical Strategy 145
9.9.23
The workforce plan will elaborate on the two key elements that will position the Trust in a strong postion to manage the increase in births.
9.9.24
Over the forthcoming 12 months, the Trust will be introducing Maternity support workers into the workforce supported by a competency based implementation plan. It is anticipated that this will be live within 2012/2013 and will deliver the requisite 1:30 midwife to birth ratio.
9.9.25
The Trust has planned to increase the number of cots and beds in NICU/SCBU proportionately to meet the increased number of deliveries at NMUH. The appropriate staffing levels have been calculated and included in the figures above.
9.9.26
It is The second key element will be to ensure that smooth transfer of staff under TUPE arrangements from B&CF. The BEH Workforce Committee will agree numbers and staff type in early 2012 and these plans will be incorporated in the transitional workforce plan agreed by this committee. Once these numbers are understood in more detail regarding the staff likely to transfer, the organisation will identify the shortfall and put in place an associated recruitment strategy to ensure a full complement of staff are in place for the date of transfer. Accident and Emergency Services
9.9.27
It is anticipated that the number of Accident & Emergency attendances at NMUH will increase by over 22,000 per annum following the downgrade of the Accident & Emergency service at CFH. This will place a significant increased pressure on the department where there will be an increase in both medical and nursing staff to deal with this increased demand on services.
9.9.28
An appropriate staffing mix is a pivotal component of an effective Emergency Department. The College of Emergency Medicine recommends a minimum provision of ten WTE consultants in each Emergency Department, adjusted where appropriate for larger departments. The evidence being established is demonstrating that this number of Consultants can provide tangible benefits in terms of Consultant-led care from 08:00 am to late evening, in some cases up to midnight. This provides enhanced clinical decision making, increased supervision of junior members of the medical team - increasingly more necessary given the difficulties many trusts face in filling emergency medicine middle grade rotas - a reduced number of serious incidents, and an improvement in patient experience with a reduction in complaints.
9.9.29
The Trust will look to build on these workforce recommendations from the College of Emergency Medicine and consider them in the context of the BEH Strategy together with the standards required to meet the clinical quality indicators developed by the DH.
9.9.30
The Trust has an established centre UCC at NMUH which is integrated with the Emergency Department to ensure that each patient’s condition is referred to the most appropriate practitioner. This model of care optimises the skills of all within the emergency team including Emergency Nurse Practitioners, Assistant Practitioners and other non-medical roles in the delivery of care.
9.9.31
As a result of the increase in Minors activity arriving from CFH, there will be further investment in Emergency Nurse Practitioners to support the rapid turnaround and treatment of these patients. The Trust will also commission the sixth resuscitation bay within Accident & Emergency to manage the additional blue light ambulance calls and other walk in patients who are acutely unwell and require high levels of observation and intervention. This will require additional nursing staff to support this and the other increases in the Majors of the Department.
9.9.32
The Trust does continue to investigate how it can modernise the workforce to improve patient experience and outcomes while also addressing some of the chronic shortages that are experienced amongst emergency department doctors. Extended roles will continue to be expanded amongst the staff.
9.9.33
The Trust is working closely with B&CF to explore the opportunities for transfer of medical and nursing staff across to NMUH ahead and at the time of activity transfer. It recognises the difficulty in recruiting to these roles and the potential clinical risk of either staff leaving ahead of
Outline Business Case for Implementing the BEH Clinical Strategy 146
the transfer date or the shift of activity as patients become aware of the downgrade of the Emergency Department. Acute Adult and Paediatric Inpatient Services 9.9.34
The rise in number of non-elective inpatient admissions will require an increase in the overall bed base at NMUH. As described in Chapter 5, the capital plan includes opening an additional five wards – four x 22 bedded wards in the main tower block and one x 29 bedded ward in the Pymmes Building. The specific type of ward environments e.g. Medical, Care of the Elderly or Surgical has not been worked through.
9.9.35
This will see the Trust’s workforce – particularly nursing workforce - grow in order to maintain the high standards of care and excellent outcomes already established at NMUH. Ensuring NMUH has the skills in place to meet these increases is of high importance.
9.9.36
As with the transfer of maternity services, it would be anticipated that a cohort of staff will transfer, under TUPE arrangements from B&CF. The particular specialist skills of staff that will transfer are most likely to reflect the particular case mix that will also be transferring. It is not anticipated for instance that more surgical nurses will want to transfer than Medical or Care of the Elderly.
9.9.37
Once the types and numbers of staff transferring are understood in more detail, NMUH will identify the shortfall and put in place an associated recruitment strategy to ensure a full complement of staff are in place for the date of transfer.
9.9.38
During the next 18 months, the Trust has plans in place to shorten non-elective length stay and will shrink further the current overall bed base. Dependent on the timelines for delivery of this, it has potential to release staff that may require redeployment and could support the bridge of any gap in posts identified during the transfer process of staff from CFH. The organisation will hold vacancies from an appropriate point in 2013/2014 to support any redeployment however without wishing to compromise the safety of patient care. Transition Plan
9.9.39
In the absence of fixed timescales, at this stage a detailed implementation plan has not been finalised. However it is possible to give details of actions required and indicative timescales for the management of change and some suggestions of the key tasks that will require completion prior to that time: Table 9.9: Transition Plan
Action
Duration
Proposed Date (Base Case) January 2015
Proposed (Accelerated Case) November 2013
Internal communication to all staff and staff side on the implementation of the BEH Strategy. Communication will be via FAQs, staff bulletins, intranet and letters where appropriate and will reflect timelines, the impact on staff and services.
Ongoing
Until implementation and beyond
Until implementation and beyond
Communication leads from both Trusts attend BEH workforce committee. Ensure consistent message across both organisations.
Ongoing
Until implementation and beyond
Until implementation and beyond
Outline Business Case for Implementing the BEH Clinical Strategy 147
Action
Duration
Proposed Date (Base Case) January 2015
Proposed (Accelerated Case) November 2013
Line manager briefings and preparation for operational changes
Ongoing
Until implementation
Until implementation
Principles of transfer agreed with Barnet & Chase Farm Hospitals
Ongoing
May 2014
October 2012
Identification and agreement of future staffing numbers at specialty, staff group and grade
Ongoing
June 2014
December 2012
Discussion and agreement with Medical Training Deaneries on transfer of posts, appropriate rotations and design of rotas
Ongoing
June 2014
October 2012
Development of detail workforce plans for implementation to incorporate detailed TUPE analysis
Ongoing
July 2014
January 2013
Hold suitable vacancies where identified surplus of staff identified (with understanding about maintaining clinical safety)
From completion of detailed workforce plans until full implementation and thereafter if appropriate
July 2014
January 2013
Identified shortage and hard to recruit areas finalise recruitment and selection strategy and process (if required)
Six months (to take account of advertising, selection and notice periods)
August 2014
February 2013
Consultation document and process agreed by Joint Staff side committees and consultation paper circulated to affected staff
3 months consultation + feedback and transition period (2 months)
August 2014
February 2013
External communication to patients and other stakeholders of changes
Ongoing
July 2014
May 2013
Minimum 3 months
By transfer of staff and activity date
By transfer of staff and activity date
January 2015
November 2013
• In post • Vacancies • Specialty interests This will be led by the Joint BEH Workforce Group
Notification of TUPE transfers to NMUH Transfer of services and staff
Outline Business Case for Implementing the BEH Clinical Strategy 148
9.9.40
As outlined in the Report form a clinical review of Barnet, Enfield & Haringey strategy, there are identified risks dependent upon the speed at which services transfer across to North Middlesex Hospital. The slower the pace at which the transfer happens, sustainable clinical services will be placed at a greater risk. The Trust does recognise this risk and is committed to working with Barnet & Chase Farm Hospital to review continuously along the process of transfer the potential risks and to mitigate these through secondment opportunities and joint appointments leading up to the transfer of services as far as possible.
9.9.41
The Trust already has robust governance arrangements in place at a local and Trust level to monitor incidents, risks and outcomes for patients that are currently served. It is believed that by and large these will be appropriate to ensure that any problems will be identified early by operational teams. Each operational area has monthly Patient, Safety and Quality meetings that review key performance indicators for patient safety and quality. Work will be conducted with the operational teams to ensure that where it is necessary to put in additional indicators that these are made available and monitored regularly. Recruitment and Retention
9.9.42
Securing skilled medical, nursing, midwifery and support staff is crucial to the delivery of high quality patient care. As part of the development of a comprehensive workforce plan a variety of sourcing techniques will be explored including where appropriate international campaigns.
9.9.43
NMUH, along with other Trusts, has an ageing midwifery workforce. A rolling recruitment strategy has been developed to replace those employees due to retire as well as filling new and vacant posts due to additional leavers or natural turnover.
9.9.44
The difficulty in recruiting middle grade doctors to positions with A&E has resulted in the Trust investigating alternative working practices to reduce dependence on these skills whilst maintaining patient care and clinical safety. This includes emergency nurse practitioner and nurse consultant roles.
9.9.45
Resourcing the increase in acute services at NMUH will require a significant increase in qualified and non-qualified nursing staff. This will be delivered where possible through direct recruitment methods. Strong links exist between the Trust and education providers which will be enhanced to assist in securing newly qualified nurses and midwives.
9.9.46
The Trust recognises the responsibility across the health economy to ensure that safe clinical services are maintained at all sites and will work to ensure that flexibility is built in to ensure that this is delivered. This will include opportunities around secondments and rotations for specialist and difficult to recruit areas that will support the delivery of services across Barnet, Enfield and Haringey.
9.9.47
Through the BEH workforce committee, there will be coordinated and joined up recruitment drives to ensure that the key vulnerable areas are not left out or that one area of Trust receives preferential treatment over another. Where there are new or ongoing concerns these can be flagged with the Project Board and the risk register updated appropriately.
9.9.48
The Trust will work closely with B&CF to North Middlesex Hospital. This will be undertaken as early as possible to allow for a significant recruitment campaign to be completed for all levels of staff where this is required. Flexible Working
9.9.49
The Trust recognises the importance of having the ability to access flexible workers (clinical and non-clinical) to cover short term unforeseen events or planned increases in capacity.
9.9.50
The Trust has formed a successful partnership with NHS Professionals who provide flexible workers services at Trust. The existing arrangements will be extended to cover increased acute and maternity services.
Outline Business Case for Implementing the BEH Clinical Strategy 149
9.9.51
Our partnership with NHS Professionals has allowed the Trust to put in place systems and controls to reduce management time lost dealing with flexible workers whilst maintaining good clinical and financial governance. New Ways of Working, Skill-Mix and Productivity Increases
9.9.52
There are some broad types of re-design opportunities which have the potential to improve service delivery, increase staffing capacity in shortage areas and make better use of existing skills. These re-design approaches include the expansion and multi-skilling of support worker roles and responsibilities, for example, by combining the roles of health care support workers, ward clerks and housekeepers. Further examples include: •
Introduction and expansion of Specialist Practitioner and Advanced Practitioner Roles.
•
The role of consultant nurses and the benefits they bring to patient care
•
Modernisation of clinical administration careers in to patient pathway ambassadors
•
Utilisation of training/learning facilitator mainstreaming of new ways of working.
roles to support
the
introduction
and
Modernising Employment Practice 9.9.53
In delivering the future workforce, a need exists for the Trust to be a model employer. Published in 2008, ‘Workforce for London- A Strategic Framework’ outlines a 10-year vision and the need for an overall increase in the size of the NHS workforce in London, better-trained staff based out-of-hospital and increased investment in improved training and education supported by state of the art technology. This is pivotal in the development of the Trust’s workforce planning.
9.9.54
In addition, there are legislative changes that require the Trust to embrace modern working practices for example recent changes to the legislation relating to flexible working, equality duties, an extension of the European Working Time Directive to include doctors in training as well as Agency Workers Regulations. The Trust Workforce Strategy
9.9.55
Building upon the progress made by previous strategies, the Trust has recently approved a new Workforce Strategy entitled Shaping our Future, 2012 - 2016. This strategy focuses around five key objectives: •
Performance Management
•
Workforce Performance Planning
•
Education and Training
•
Employee Engagement and Wellbeing
•
Model Employment Practice
9.9.56
The Trust’s Workforce Strategy is designed to describe a strategic vision for the type of workforce it seeks to deliver its service and financial strategic plans. The aim of the strategy is to develop a flexible, skilled and motivated workforce which has the competencies, capacity and capability to meet the Trust’s future challenges. It supports the Trust’s Integrated Business Plan and is underpinned by a series of annual workforce, organisational development and training plans. However, at its core is the Trust’s mission, vision, values and goals which will drive a strong values based approach to the effective management of the workforce.
9.9.57
The strategy recognises the culture of the Trust, how it is led and how it recruits and retains staff to ensure it deliver the highest possible care to its patients and has been developed and consulted on with a key aim of supporting the implementation of the BEH Strategy.
Outline Business Case for Implementing the BEH Clinical Strategy 150
Workforce Transformation Programme 9.9.58
9.9.59
As at 31st December 2011, NMUH employed 2,274 whole time equivalent. As noted above, staff in the following areas: Maternity services, Accident & Emergency and Acute adult and paediatric inpatient services will be directly affected by the BEH Strategy – although this on the whole will be related to an increase in establishment to support the increase in activity in those areas. The implications of this are that: •
Under Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) there is a strong likelihood that existing staff from B&CF will transfer to this Trust. This means that there will be a requirement to formally consult with those staff at BCF on the transfer of their employment. As the receiving Trust, NMUH will ensure due diligence and process is followed to facilitate this transfer smoothly and that all new staff are inducted and welcomed to the Trust in a positive manner.
•
The Trust will have in place a robust staff engagement plan with its existing staff and those likely to transfer.
•
In parallel with the consultation with transferring staff, a comprehensive recruitment strategy will be put in place to ensure any gaps in establishment are filled in a timely manner.
•
The impact of a change of base for individuals is difficult to predict until detailed consultation with individual staff takes place.
In order to successfully implement the changes identified as part of the BEH Strategy, it is essential that the Trust takes all staff, especially those in the directly affected areas, with it. The transformational change programme will not only include the mechanics of consultation and formal processes, but also staff involvement and engagement in the design and delivery of the services in the new setting. Joint Staff Committee
9.9.60
The OBC, once approved, will be shared with the Trust Joint Staff Committee as soon as possible in order to inform them of the increase in establishment and activity, the TUPE implications of transferring staff and also to formally seek involvement of the trade unions and professional associations in the process. With Clinical Business Unit Engagement
9.9.61
Each changing service will be required to develop individual, service-specific change programmes. These may include: • • • • • •
Identification of what precisely is taking place within that service; Identification of which functions and departments within that service are affected; The impact on the number of staff within the establishment; Plans for training needs assessments and re-skilling exercises; Timescales; Process for implementation of the change.
9.9.62
Employee engagement in the process of change is critical to the success of the implementation of the BEH Strategy. In addition the engagement of the trade union representatives through the JSC, all staff directly affected by the change in service configuration will be involved in identifying areas for improvement in the current services, visioning the new services, and designing models of delivery. In this way the process of transition, including the grieving and loss of old ways of working, can be progressed.
9.9.63
Broader communication and engagement for all Trust employees is also part of the transformational change process. A programme of planned communications will be developed to ensure all employees are kept abreast of progress.
Outline Business Case for Implementing the BEH Clinical Strategy 151
Building Capability 9.9.64
Developing the capability of our staff is a fundamental element of the Trust’s overall vision. The BEH Strategy will play a part in delivering that vision through providing those staff that are directly affected with improvement skills to enable them to process map, analyse and redesign their services, as well as develop appropriate measures of success to enable them to identify their achievements.
9.9.65
Once the final iteration of the model of care and the detailed care pathways have been reviewed or developed for the clinical services, it will be possible to identify the competencies required in order to deliver care. This will then lead each core service into a period of role design or redesign.
9.9.66
There are tools available to assist in this process, amongst which Skills for Health provide a useful web-based team and role design tool aligned to the KSF. Specific workshops on role design will be planned and opportunities to consider research and benchmarking information from other organisations are being explored. Summary
9.9.67
NMUH is committed to ensuring all staff, current and new, are supported through the transition period and implementation of the BEH Strategy. The Trust will engage staff and staff side representatives throughout and ensure a coordinated approach in its partnership working with B&CF and the local health economy. Work to ensure a safe and sustainable staff establishment to meet activity demands is ongoing.
9.10
Benefits Realisation Plan
9.10.1
The Trust’s “Vision for the Future” for the North Middlesex University Hospital is to be: The hospital of choice for our local community, providing first class patient care in state-of-the-art healthcare facilities. The hospital aims to deliver high quality clinical care, outstanding customer care and efficient organisational systems and processes.
9.10.2
It is planning to expand its services to local people across the three boroughs of Barnet, Enfield and Haringey, as well as further afield. A key part of this is strategy is to help secure approval of the Barnet, Enfield and Haringey Clinical Strategy which if approved will include a new Women’s and Children’s Centre and new acute beds.
9.10.3
The Trust is working to achieve Foundation Trust status by April 2014. As a Foundation Trust NMUH proposes becoming one of the major acute hospitals in London that also offers primary and social care facilities on the hospital site.
9.10.4
So to summarise, the Trust’s organisational objectives can be characterised as follows: •
Providing high quality clinical care
•
Working from state of the art healthcare facilities
•
Operating efficient organisational systems and processes
•
Achieving Foundation Trust status by 2014
•
Expanding services, partly through implementing the Barnet, Enfield and Haringey Clinical Strategy and becoming a major acute hospital on a campus that also offers primary and social care services.
Benefits 9.10.5
The Trust aims to realise a number of benefits for both patients and the NHS through achieving its organisational objectives. To help achieve its organisational objectives the Trust understands that it needs to focus its efforts and resources on activities that support the realisation of these objectives.
Outline Business Case for Implementing the BEH Clinical Strategy 152
9.10.6
The table below shows how the Trust’s organisational objectives map into benefits; it also demonstrates the new national performance measures that will be indicators of the benefit. Table 9.10 – Mapping of Benefits
9.10.7
Organisational Objective
Benefit
National performance measures
Providing high quality clinical care
Patients will receive better quality treatment and clinical outcomes will improve
A&E total time; reducing emergency readmissions; reducing length of stay and overall reduction in acute bed capacity
Working from state of the art healthcare facilities
Patients will be treated in well utilised, functionally suitable and better quality accommodation supporting improved outcomes
Incidence of MRSA, C Difficile; single sex accommodation; patient & staff experience
Operating efficient organisational systems and processes
Services will be more efficient / cost effective releasing funds for service expansion or further improvement
Financial forecast outturn and performance; delivery of surplus, QIPP delivery; workforce productivity
Achieving Foundation Trust status by 2014
The Trust will be able to operate with greater freedom and flexibility in order to achieve its aims
Progress against TFA milestones
Becoming a major acute hospital on a campus that also offers primary and social care services
The Trust will be able to provide an expanded volume and range of integrated services which will improve clinical outcomes for the local community
Long-term condition management; integrated care; outside of hospital care; reducing hospital admissions; ambulatory care condition management; Urgent Care Centre
The table below shows how the benefits that the Trust aims to achieve map into the investment objectives for this project and then onto the benefits appraisal criteria which are used to differentiate between different means of achieving the investment objectives.
Range of integrated services
3
Greater freedom / flexibility
Accommodation
3
Efficient / cost effective
Better quality treatment
Table 9.11 – Mapping of Benefits Criteria and Investment Objectives
3
Investment Objectives
The primary aim of the project is to provide safe and high quality clinical and other facilities necessary to support the implementation of the Barnet, Enfield and Haringey
Outline Business Case for Implementing the BEH Clinical Strategy 153
Benefit Appraisal Criteria
3. Provide the space and facilities required to ensure the BEH Clinical Strategy is deliverable
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
clinical strategy. More detailed specific project objectives are to: Provide the facilities in the shortest possible time to minimise the risk identified in the BEH Strategy of the services becoming unsustainable, whilst minimising disruption to the clinical services; Ensure the development is consistent with the Trust’s business and clinical strategies and supports the business model being produced for the Foundation Trust application enabling the Trust to achieve FT status by st 31 March 2014; Ensure the development is consistent with the wider health economy plans to implement the BEH Strategy by increasing emergency bed capacity by 120 beds, expanding overall maternity capacity by 23 beds and neonatal capacity by 6 cots. Ensure the quality and space of the clinical facilities meets modern healthcare standards as per the guidelines set in the relevant Health Building Notes apart from where otherwise derogated; Ensure that the design is sympathetic to, and has the potential to improve, patient pathways and working practices by providing facilities that benefit from appropriate adjacencies; Ensure that the development is economically viable, being affordable to the local health economy in capital and revenue terms and gives best value for money for the Trust; Ensure the development is sustainable by providing an environmentally sound infrastructure that achieves BREEAM Excellent for New Build elements and Very Good for refurbished elements in accordance with the Trust’s SDMP (“Sustainable development management plan”); Reduce backlog maintenance in terms of cost per square metre from the highest 33% of Trusts to the middle 34% of Trusts and associated estatebased risks.
Outline Business Case for Implementing the BEH Clinical Strategy 154
4. Can be achieved in a timely manner whilst continuing to ensure operational and patient safety and achieving the earliest opportunity to reduce the existing clinical risk identified in the BEH strategy. 6. Supports the Trust’s strategic objectives 4. Supports Trust staff policies and objectives 9. Flexibility / Future Planning
5. Meets the needs of the local population, maintaining access, under all definitions
3. Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices. 3. Ensure the quality of the clinical facilities meets modern healthcare standards and is sympathetic to patient pathways and working practices. 4. Supports Trust staff policies and objectives 9. Flexibility / Future Planning 8. Quality of designs, environment & consumerism 9. Flexibility / Future Planning
8. Effective use of the Estate
The Benefits Realisation Plan 9.10.8
The Benefits Realisation Plan is a working document, which will evolve and develop during the whole life of the Project, playing a vital linking thread through the whole process. It is enclosed in Appendix 9.5. The Benefits Realisation Plan defines each benefit and documents how the benefits listed above will be achieved and measured by the end of the Project.
9.10.9
Targets are given for when the benefits will be realised, and a member of the Trust’s Executive Team identified as the lead for the monitoring progress with, and achievement of, individual benefits. Benefits are all measurable and the frequency at which the progress towards achieving each benefit in the intervening period has also been provided.
9.10.10 As far as possible, established measures have been selected to make benefits tracking as simple as possible. A number of the measures relate directly to the 2012/13 Outcomes Framework published on 9th December 2011 on the basis that: •
this data is recognised by the DH as having value in the measurement of improved clinical outcomes: a key benefit sought by the Trust;
•
this data will need to be collected by the Trust anyway.
9.10.11 The Benefits Realisation Plan will be reviewed throughout the project to ensure that it continues to reflect the organisational objectives of the Trust. It should be noted that not all of the benefits will be fully attributable to the Project investment because they relate to national and/or organisational requirements, which will have to be delivered in any event. 9.10.12 Some benefits may have been achieved already, others may change, and more may be envisaged as the result of other changes, within or beyond the National Health Service. Similarly organisational restructures and / or changes in data collection methodologies or responsibilities may require a change in the personnel charged with delivering the benefits and or the data sources. In some cases alternative measures may be required.
9.11
Post Project Evaluation Introduction
9.11.1
This framework will satisfy the requirements of the Department of Health’s Good Practice Guide: Learning Lessons from Post Project Evaluation (DoH 2007). Scope and Aim of Evaluation
9.11.2
In line with the Good Practice Guide, the project will need to be evaluated against the original investment objectives set out in the Outline Business Case (OBC) and against any new objectives that have been identified in the meantime. The processes involved in delivering the project will also be evaluated. The Evaluation Plan has been set up to enable a number of benefits to be realised. It is anticipated that the evaluation will help to: •
Improve the design, organisation, implementation and strategic management of other projects, both within and outside the Trust.
•
Ascertain whether the project is running smoothly so that corrective action can be taken if necessary.
•
Promote organisational learning to improve current and future performance.
•
Avoid repeating costly mistakes.
•
Improve decision-making and resource allocation (e.g., by adopting more effective project management arrangements).
Outline Business Case for Implementing the BEH Clinical Strategy 155
•
Improve accountability by demonstrating to internal and external parties that resources have been used efficiently and effectively.
•
Demonstrate acceptable outcomes and/or management action thus making it easier to obtain extra resources to develop healthcare services.
Benefits Realisation Plan 9.11.3
The Post Project Evaluation will incorporate a detailed review of all targeted specific outputs from the project, as detailed in the Benefits Realisation Plan (see Appendix 9.5). The report will take into account any management restructuring that has taken place over the same period and attempt to differentiate between benefits arising from the project and those from the management changes. The report will also take a counterfactual view and examine the likely outcome if the project had not been undertaken. Project Delivery Evaluation
9.11.4
The processes involved in delivering the project will also be evaluated and the four stages of evaluation are described below (the description involves some repetition, but has been included in full in the interests of clarity. Evaluation of the Project Procurement Stage
9.11.5
The objective of the evaluation at procurement stage is to assess how well and effectively the project was managed from the time of OBC approval to the approval stage of the Full Business Case (FBC). This will be undertaken using a “360o” view of the process using internal and external stakeholders. It is planned that this evaluation will be undertaken within three months following FBC approval and will examine: •
The effectiveness of the project management of the scheme – viewed internally and externally;
•
The quality of the documentation prepared by the Trust for the procurement;
•
Communications and involvement during procurement;
•
The effectiveness of advisers used on the scheme;
•
The efficacy of NHS guidance in delivering the scheme;
•
Perceptions of advice, guidance and support from the Department of Health, the Private Finance Unit, DH Estates and Facilities Management and the SHA in progressing the scheme.
Evaluation of the Project Implementation Stage 9.11.6
This stage will assess how well and effectively the project was managed from the time of FBC approval through to the commencement of operational commissioning. Again, a “360o” view of the process will be used involving internal and external stakeholders. It would be logical to undertake this within three to six months of the commencement of operational commissioning.
9.11.7
Given the organisational resources which will be committed to the programme of service transfer to different premises, it would make sense to undertake this evaluation at the same time as the ‘Evaluation of the Project in Use’ described below. The evaluation at the implementation stage will examine: •
The effectiveness of the Trust project management of the scheme – viewed internally and externally;
•
The effectiveness of the development partner’s project management of the scheme – viewed internally and externally;
•
Communications and involvement during construction;
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•
The effectiveness of the joint working arrangements established by the development partner’s project teams and the Trust project teams;
•
The support provided during this stage from other stakeholder organisations – PCTs, Local Authorities, Strategic Health Authority, other local Trusts, Department of Health and any others as appropriate.
Evaluation of the Project in Use (undertaken shortly after opening) 9.11.8
This stage of the evaluation will be undertaken between 6 and 12 months after operational commissioning has been completed so that many of the lessons to be learnt are still fresh in the minds of the project teams and other key stakeholders. The evaluation will assess how well and effectively the project was managed during the Trust’s operational commissioning phase and into the actual operation of the new hospital premises. A “360o” view of the process will be applied using internal and external stakeholders. The evaluation at this “project in use” stage will examine: •
The effectiveness of the Trust project management of the scheme – viewed internally and externally;
•
The effectiveness of the development partner’s project management of the scheme – viewed internally and externally;
•
Communications and involvement during commissioning and into operations;
•
The effectiveness of the joint working arrangements established by the development partner’s project team and the Trust project team;
•
The support provided during this stage from other stakeholder organisations – PCTs, Local Authorities, Strategic Health Authority, other local Trusts, Department of Health and any others as appropriate;
•
The overall success factors for the project in terms of cost, time and quality;
•
The extent to which the design meets users’ needs – from the point of view of patients/carers and staff.
Evaluation of the Project Once the Redeveloped Hospital Premises are Well Established 9.11.9
This evaluation is to be undertaken between two to three years following completion of commissioning. The objective of this stage will assess how well and effectively the project was managed during the actual operation of the new hospital premises. A “360o” view of the process will be applied using internal and external stakeholders. The evaluation at this “wellestablished” stage will examine: •
The effectiveness of the working arrangements established;
•
The extent to which the design meets users’ needs – from the point of view of patients/carers and staff.
Participants in Evaluation 9.11.10 The participants in the evaluation and their roles are shown in the table below. Table 9.12: Participants in the Evaluation and Their Roles
Member
Role
Evaluation Project Manager (external advisor)
To manage the evaluation in accordance with the Evaluation Plan and to provide objectivity, independence and apply other principles of good governance To provide input on: • achieving strategic objectives
Chief Executive (Senior Responsible Officer)
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Member Deputy Chief Executive
Role • achieving project objectives To provide input on: • management processes • achieving strategic objectives • achieving project objectives •
Hospital Development Director (Project Director)
Director of Finance and Performance
Medical Director/Director of Nursing
Director of Organisational Development and Human Resources
Director of Facilities
Patients/Patients’ Representatives
To provide input on: • management processes • achieving strategic objectives • achieving project objectives • capital costs • estates elements • commissioning programme To provide input on: • financial elements • achieving strategic objectives • achieving project objectives • flexibility in use/management of peaks and troughs in activity • flexibility for sustained capacity changes To provide input on: • Appropriateness of/adherence to model of care • Appropriateness/effectiveness of medical equipping arrangements/solutions • Compliance with NHS design guidance and infection control arrangements • Staffing efficiency, ergonomics, safety and security To provide input on: • Workforce planning • Recruitment and retention • Sickness absence To provide input on: • Design/environmental elements • Health and Safety • Energy Performance • Estates Maintenance Arrangements • Site development control planning Input on design/environmental elements
Management of the Evaluation Process and Resources to Deliver 9.11.11 The evaluation will be driven and undertaken by the Evaluation Steering Group. This will be multi-disciplinary and drawn from sources both within and outside the Trust, as required. The team will have the membership set out in Table 12.1 or representatives nominated by the Executive Leads listed. 9.11.12 The stakeholders in the evaluation are as follows: •
Senior managers within the Trust
•
Staff within the Trust
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•
NHS London
•
Contractor
•
SHA Estates
•
DH Estates and Facilities Management
•
Barnet PCT
•
Enfield PCT
•
Haringey Teaching PCT
•
Department of Health
•
HM Treasury
•
National Audit Office
•
Audit Commission
•
District Auditor
•
Patients and Carers
•
Advisors involved in the project
•
Patients Representatives’ Forum/PALS
•
Voluntary sector.
9.11.13 These parties will be involved in the evaluation to varying degrees either as participants or recipients of the final report. The Hospital Development (HD) Project Team costs during implementation and shortly thereafter are included in the capital costs. The majority of the evaluation will be undertaken via the HD Project Team which will keep abreast of projects which have been fully evaluated when in use and which have utilised the PPE guidance. The costs of the final post-project evaluation, once the redevelopment is fully-established, are not included in the costs set out in this Full Business Case but will be met from non-recurrent funding within the Trust. Dissemination of Findings 9.11.14 All evaluation reports will be completed within three to six months of data being collected. The results of each report will be made available to all participants in each stage of the evaluation. Results of the reports will also be made available on the Trust’s website.
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