Becoming a Foundation Trust – what are the Issues for Clinical Commissioning Groups?. Strategic Re-con figuration Building a Foundation for a Target Operating Model. A Toolkit to help guide Clinical Commissioning Groups. Contents. Foreword - Introduction - Purpose of this guide
Becoming a Foundation Trust – what are the Issues for Clinical Commissioning Groups?
A Toolkit to help guide Clinical Commissioning Groups
The Government’s ambition is to create the NHS as the best healthcare system in the world and this is rooted in the three principles of giving patients more power, focusing on healthcare outcomes and quality standards and giving frontline professionals much greater freedoms and a strong leadership role.
Clinical Commissioning Groups (CCGs) are charged with:
e.g. local authorities, NHS Commissioning Board
This indicates the important role that CCGs will have in developing and determining the future shape of the health and social care system. This guide is intended to help CCGs begin to engage in the wider issues of system management and in particular, issues with their local acute providers
CCGs have a clear role in ensuring that the wider healthcare system delivers services that meet the needs of the local population. In this respect, they will have an increasingly important responsibility to consider the impact of their commissioning decisions on local healthcare providers and whether these decisions may have unintended consequences.
Government policy is that NHS hospitals should run their own affairs and be accountable to local people and patients. This means an expectation that the vast majority of NHS Trusts will become Foundation Trusts by April 2014, primarily through a locally managed process, with national support as needed. Becoming a Foundation Trust requires strengthened board governance, financial disciplines that promote long-term financial viability and a framework to secure delivery of quality services.
It must be recognised that many of the remaining NHS Trusts have more challenges to resolve to achieve Foundation status than the early applicants did. These include financial, quality and governance issues within the organisation themselves, and also, for some Trusts, more deep seated and long standing issues about, for example, size and location, which limits their capacity to deliver health services efficiently and effectively. Therefore, this guide will examine the processes that may be followed, to allow Trusts and their lead commissioners to determine the appropriate route to financially and clinically secure providers of care.
CCGs have an important role in understanding the internal issues and influencing the external constraints that such organisations face. The commissioning intentions of CCGs are fundamental to the business plan of any aspirant Foundation Trust.
shaping future form of Trusts and required support for proposals
This is a practical guide intended to support Clinical Commissioning Groups (CCG) in considering what they will need to do when anticipating and considering sustainable service provision, service transformation and at the same time improving quality, innovation, productivity and prevention (QIPP). As part of these challenges, CCGs will be asked to input to, and influence, the journey of local NHS Trusts to becoming Foundation Trusts.
The guide can be used by CCG leaders, clinicians and mangers and PCT cluster leads
How this guide can be used
The guide provides you with a series of tools to help you:
consider the critical issues at a local level
NHS Foundation Trust
Commissioners are focused on commissioning cycle to prove a balanced foundation for strategic change
A key challenge is designing and purchasing sustainable service specifications that provide quality and value for money
The provision and security of local hospital services are vital for community confidence, user stability and assurance
The provider will value and prioritiseindependence and autonomy acquired through FT status
The format and content of an FT business plan is a crucial set of core requirements
Monitor is responsible for assessing and authorising applicants for NHS Foundation Trust status and for their regulation afterwards. Before submitting an application to Monitor, trusts have to gain the approval of their Strategic Health Authority (upon abolition of the SHAs the NHS Trust Development Authority will take on this role ) and the Secretary of State. Part of this key initial approval is the support of their local commissioners – formerly the PCT, but increasingly of their CCG(s). Once these support areas are secured, the application goes forward to the Department of Health’s Applications Committee which reviews it and advises the Secretary of State on its merits. If approval is secured, the Trust then submits its application to Monitor.
Commissioner support – vital in planning, monitoring, and FT application
See next page
Intervention Points for CCGs
The Department of Health has developed new processes to help progress aspirant FTs towards FT status. A key element of this process is the Tripartite Formal Agreement (TFA). The TFA summarises the main challenges facing each organisation, the resulting actions to be taken by the Trust, the SHA and the DH. There is an explicit timescale in this document for the Trust to become an FT. Because of the influence that commissioning intentions and overall commissioner support to applications have on whether Trust’s financial plans are viable, the lead PCT for each Trust has also endorsed the TFA. This responsibility will pass onto the lead Clinical Commissioning Group (CCG) once they are authorised.
The actions outlined in the TFA to become an FT primarily rest with the NHS Trust board and management, supported regionally by their SHA and nationally by the DH. When SHAs are abolished in April 2013, the NHS Trust Development Authority will become responsible for progressing the remaining Trusts.
The TFA forms the main public document giving the Trust’s commitment to becoming an FT and is the commitment against which the health economy, and particularly the Trust, will be measured. All aspirant Foundation Trusts have a signed TFA which is available on the Trust’s website.
The Benefits to commissioners of becoming a Foundation Trust
NHS Foundation Trusts:
Monitor as the regulator of FTs has said it is keen to develop closer and more effective relationships with commissioners.
Potential acute sector re-design
Public services are facing unprecedented financial and other challenges. The NHS is increasingly under pressure to improve quality, productivity, respond to public demand and make significant efficiency savings. The NHS works as a series of organisations that are inextricably linked and works as a whole system. Clinical Commissioning Groups may wish to change clinical pathways to improve services to local patients. Changing patterns of care can, in some circumstances, impact on the viability of other related services. Therefore the whole system needs to work together to determine priorities and solutions, ensuring that clinicians, managers and local communities are engaged effectively in the process of change.
System reform presents a number of challenges to local health systems and creates/exposes system management risks between the Strategic Health Authorities, Primary Care Trusts and newly formed CCGs.
Many health organisations on the Foundation Trust pipeline are struggling to attain legitimacy in their current organisational form having been challenged organisations for many years. In many cases, reconfiguration and efficiency saving will be required to deliver on the demographic and economic changes for the NHS over the medium term.
The relationship between Commissioners, Providers and Consumers
Many health organisations on the FT pipeline are struggling to attain legitimacy in their current organisational model and form. Critical mass and activity based income are influential factors in determining whether an organisation is sustainable and can achieve FT status.
Conurbations of health organisations need a programme approach to re-configuration that is aligned and transparent, and that uses clinical and economic evidence and objectivity.
Tactical Cost Improvement is not enough
Aspirant Foundation Trusts need to demonstrate clinical and business viability
Clinical & Business Viability
Providers have already made significant internal efficiency gains
Increased competition and plurality
Sustainability and critical mass ensure quality and continuity
CCGs have ambitions to minimise hospital based activity
Providers have fixed costs that need to be funded
An innovative and whole systems based approach to a Trust’s FT applicaiton is required to develop and agree a mutually sustainable position
2. Organisation Baseline
4. Target Operating Model
Virtual Network Established
Risk Mitigation Portfolio
Target Operating Model
TOM Baseline Review
Programme Mandate & Outline Business Case
Case for Change
Patient and Activity Flow Analysis
Options Criteria& Long Listing
Current Operating Model: Access, Quality & Financial Baseline
Short List Options
Workforce Data & Analysis
Key Risks Identified
Environment & Transport Mapping
Target Operating Model Baseline
Governance & Project Membership
Identify Quick Wins
5. Stakeholder Engagement & Account Management
Clinical Expertise & Objectivity
Programme Management Office Established
CCG Learning Development & Support
Stakeholders brought together on the programme path to achieve a route to FT status
Provider landscape review
Market Configuration/ Provider Structure Analysis
These work streams also inform an assessment of the sustainability of the current market configuration and development of the case for change
Care pathway patient flow analysis
Geographical patient flow analysis
Choice and contestability review
Example of patient and activity flows
There are a number of tried and tested tools which have proved to be very powerful and engaging with clinicians. They help to understand that whilst cost will vary from patient to patient the ‘portfolio’ of cases must balance in order to maintain a viable service. The following examples have been utilised to engage effective change.
Case Study: Profitability Trees
Case Study: Breakeven analysis
Profitability trees which breakdown the income and cost components of an HRG. This clearly shows cost and volume drivers and illustrates how the deficit or surplus at HRG level is derived
Breakeven and margins analysis, which illustrates the required patient throughput per theatre session or outpatient clinic in order to breakeven
A SWOT exercise can be undertaken across the health economy to help to shape the evaluation of options:
In developing a robust strategy it is important to scan both the internal and external environment to understand the organisation and the market within which it operates.
The process of determining these strategies is commonly referred to as a SWOT analysis. A detailed SWOT analysis by an organisation and its key stakeholders can provide useful information to help to shape future strategy and determine how resources might be best deployed in order to maximise organisational potential.
In a SWOT analysis, internal factors (e.g. clinical ratings of services, local reputation, strategic partnerships) are classified either as strengths (S) or weaknesses (W). External factors (e.g. local health needs, new technologies, regulation, or competitor activity) are classified either as opportunities (O) or threats (T). This can then be mapped on to a strategic framework (often referred to as a TOWS framework).
SWOT and TOWS frameworks:
AVOID AND OVERCOME
Understand Local Context
Four key stages of work, as outlined below and detailed in the project plan
Stage 1: Local Context and Long List of Options, will focus on understanding the local issues impacting on the Trust as well as the full range of options available for its future use. In this stage we will also develop generic selection criteria for the high level assessment of these options.
Stage 2: Ranking of Options, will focus on applying selection criteria to rank – qualitatively - each option in order to identify the “preferred” or highest ranking options for more detailed review – the “short list.
Stage 3: Detailed Appraisal, will focus on appraising each of these short listed options in terms of likely costs, outputs, risks and impacts - in quantitative terms - in order to identify the option most likely to generate the greatest net benefits for the local health economy.
Stage 4: Business Case Finalisation. In this phase we will finalise the business evaluation and present to the Trust Board.
Generic Selection Criteria
Selection of ‘Short Listed’ Options
Baseline Status Quo
Cost Benefit Appraisal
Selection of Best Case ‘Preferred Option’
Finalisation of Business Evaluation
Specialist Tertiary FT
Acute Sector FT
FT combined entity
This slide shows some of the organisational models being adopted to achieve FT status from the simple acute focussed FT to the sort of organisational franchising model now beginning to emerge in some areas.
Potential market configurations to consider may include care integration or networked care models. This slide sets out stylised examples of options for configuration of models of networked care. We would map the challenges and benefits inherent within each model, as well as the clinical, patient experience and economic attributes suited to each system, to the options being appraised – in which option is the most appropriate system (given service attributes) being implemented?
Total vertical integration
Provider arm acquisition
Integrated health & social
Primary care led
Fully merged organisation
As groups of emerging commissioners, Clinical Commissioning Groups will have an opportunity to improve the health of patients and wider communities but they will face a challenging commissioning environment and there will invariably be difficult choices and decisions. The public, patients and local representatives including MPs and local councillors are inevitably interested in and feel closely involved with their local hospital and for aspirant foundation trusts, often wish to see it succeed in its current organisational form.
Good responsive commissioning can be achieved when patients, the public and key stakeholders including Members of Parliament and Local Councillors are at the heart of what the NHS does.
Improving health and health services requires Clinical Commissioning Groups to understand and act on what really matters to people and ensure they are active partners in co-designing and co commissioning health services. This is especially important in the case of local politicians (MPs and local councillors). Everyone has a stake in the health of their community. Get the engagement right, and Clinical Commissioning Groups can improve services and bring people with them through change. This is especially so for local politicians. Clinical Commissioning Groups will need to balance engagement and any proactive relationship with the ability to understand the political environment in which MPs and local councillors operate.
Good engagement is based on in the quality of relationships that clinicians have with their stakeholders (patients and the public) and clinical commissioning groups create with local people, communities and their representatives. See time spent building relationships with local politicians as a worthwhile investment. They have insight and understanding about local intelligence and the local communities needs, wants and priorities of local people and will be keen to share it and work with the Clinical Commissioning Groups to fill in the gaps.
Increasingly approaches to involvement that rely heavily on ‘formal’ consultation alone will struggle to be good enough: now more than ever Clinical Commissioning Groups will need to work with local politicians as well as patients and public as partners if better health outcomes are to be secured.
Ensuring that local politicians are actively involved in decisions about commissioning can be a means of delivering powerful messages of reassurance to local communities but this has to be balanced with their ability to do the opposite which can include delaying changes which the NHS need to deliver to improve quality and outcomes for patients.
Clinical Commissioning Groups face many challenges as they journey toward authorisation and what is at the heart of much of their success will be the ability to engage actively with their local communities. This is equally so of local politicians where Clinical Commissioning Groups will have to balance the role of local politicians as the democratically elected members of local communities.