Managing finances in a world of system working

2. Managing finances in a world of system working Chair:Dame Gill Morgan, Chair, NHS Providers Speakers:Rob Whiteman, Chief Executive, Chartered Institute of Public Finance and Accountancy Rebecca Clegg, Chief Financial Officer, NHS Berkshire West CCG Steve Wilson, Executive Lead for Finance and Investment, Greater Manchester Health and Social Care

3. Speakers:Rob Whiteman, Chief Executive, Chartered Institute of Public Finance and Accountancy

4. Speakers:Rebecca Clegg, Chief Financial Officer, NHS Berkshire West CCG

5. Berkshire West ICS/ICP - Overview • Wave 1 ICS now an ICP and part of the Buckinghamshire, Oxfordshire and Berkshire West Integrated Care System (BOB ICS) • 500k population • 1 CCG (having merged 4 CCGs in April 2018) • 3 Local Authorities • 1 Acute Provider – Royal Berkshire Hospitals FT • 1 Mental Health/Community Provider – Berkshire Healthcare FT • 14 Primary Care Networks • Low per capita funding reflective of our demography • Started payment/costing journey in 17/18

6. Berkshire West ICS/ICP Financial Framework Journey

7. Payment - Case for Change/Principles • Payment principles • Principle 1: support ICSs in managing their collective financial resources and using those resources to maximise quality of care and health outcomes • Principle 2: provide shared incentives for reducing avoidable or low-value activity and redirecting resources to higher-value interventions, properly reimbursing these • Principle 3: support a rigorous, transparent approach to coding, counting and costing activity, allowing it to be analysed alongside data on needs and outcomes to support continuous improvements in efficiency and the effectiveness of resource utilisation • Principle 4: reduce unnecessary transactions and free up administrative resource Feedback from ICS sites on the case for change Fragmented payment approaches can make it challenging to integrate and reconfigure care models across organisations and settings of care Existing payment mechanisms can create incentives which are not aligned to current priorities Prices do not necessarily reflect cost The payment system does not always support collaborative behaviours

8. Blended Payment – Flexible framework to support change At least one of the following…

9. Speakers:Steve Wilson, Executive Lead for Finance and Investment, Greater Manchester Health and Social Care

10. “Taking Charge” THE GM Devolution Journey Steve Wilson Executive Lead Finance and Investment

11. COLLABORATIVE PROCUREMENT THE DEVOLUTION CONTEXT CREATING A POPULATION HEALTH SYSTEM PAYMENT REFORM QUESTIONS Contents

12. A SNAPSHOT PICTURE

13. THE HEALTH/WEALTH PARADIGM Strengthening the Health / Wealth Paradigm …poor health in some Greater Manchester communities, creating a barrier to work and to progression in work, provides an important explanation for why overall growth has been slow in the last decade. It explains why some communities have been unable to contribute or benefit more. HEALTH NEEDS TO FEATURE FAR MORE PROMINENTLY IN DISCUSSIONS OF HUMAN CAPITAL, LABOUR MARKET PARTICIPATION, AND PRODUCTIVITY

14. Whole system public Service reform What is making the difference in GM?

15. OUR SYSTEM ARCHITECTURE • Local care organisations coordinate delivery of integrated care in each borough • Boroughs are made up of smaller neighbourhoods - GP practices working with other health and care professionals as part of the GM model of unified public services • Standardisation across hospital sites and more care in the community, closer to home • A single local commissioning function in each borough plus a GM Commissioning Hub

16. SYSTEM FINANCIAL MANAGEMENT • Short to Medium Term • Aligned Incentive Contracts • Local Authority and CCG Risk Sharing and Innovation • ICS system Control Total – including offsets • Longer Term • Investing in Transformation • Population Health Focus • Place based commissioning • Integrated Neighbourhood Teams • Addressing the wider determinants of health • Payment Reform

17. Creating a population health system Focusing on the big Killers Half of all premature deaths are still linked to preventable factors, including unhealthy diet, inactivity, tobacco, alcohol and drug use, obesity and high blood pressure. Premature mortality is twice as high in more deprived communities. Health Creation in Every Policy Housing, crime, transport, employment and economic inclusion, community resilience, employment and skills all play a part. Every area of public service in Greater Manchester has health benefits as one of its recognised objectives, just as inclusive economic growth is recognised for its health potential by NHS partners. A unified model of public service delivery Our public service model principles are leading our development of integrated neighbourhood services for populations of 30-50,000 residents. Neighbourhoods will encompass primary care, schools, social care, mental health, community care, policing, housing and homelessness support, environmental health, employment and skills support, VSCE provision, community safety advice, substance misuse, early years and early help.

18. Creating a population health system How we can lead the way • We understand the ‘economics of prevention’. We’ve learned from experience the value of knowing how long different interventions (and investment in them) take to have an impact. Our cost benefit analysis tool helps us track all the benefits resulting from our major programmes. • We want to reverse the rising tide of childhood obesity, and in a good position to bring together regulatory, licensing, planning, population health and social movement approaches. For instance, we want to restrict unhealthy food advertising on our transport network • We want more children to be ‘school ready’ – the foundation of their working lives and productivity across our economy. We’ve got plans for an early years funding model that encourages cross-sector provider collaboration to raise standards and provides children’s services with the resources they • Justice devolution means we can drive closer integration between health, education and accommodation and the police, Crown Prosecution Service, courts, prisons and probation services. This will particularly help us deliver a trauma-based model of health and justice that prevents youth offending and supports victims of sexual violence and abuse. • Working Well already sets us apart when it comes to using local knowledge to give people tailored support into work. We want to create an employment, health and skills ‘ecosystem’ that responds better to what our residents and businesses need. • We plan to go far beyond the ambitions of the NHS long-term plan in improving air quality in Greater Manchester. We’ll upgrade public transport and public service fleets and help people understand why clean air is important so they play their part, like reducing short car journeys and using electric vehicles.

19. PAYMENT REFORM There are three main tools which comprise the strategic approach to developing payment reform across GM: Design Principles, the Commissioning Framework and the Five Area Framework. 1) Population health Promotion of overall health and wellbeing Design Principles Commissioning Framework Five Area Framework If the Commissioning Framework sets out who and what should be commissioned in the future by GM, this roadmap is meant to define how (meaning through what incentives) services will be commissioned to enable the goals as outlined in Taking Charge. The Design Principles were created to convey the overarching standards for creating a new payment model. Collaboration is key Get the incentives right In it together One size does not fit all Invest in the right tools Within the financial envelope Keep it simple The Five Area Framework was developed in part from the guidance set out in Taking Charge. It highlights the importance of building a care system which incentivises: 5) Complex case management Providing effective ongoing management of complex cases 2) Prevention Prevention of high-cost and poor quality outcomes for patients 4) Efficient care and pathways Delivery of effective, efficient treatments and pathways when the need for services arises Five Area Framework 3) Behaviour change Promotion of individual behaviour changes to improve self care

20. Place Based Funds Flow INTEGRATED COMMISSIONER INTEGRATED COMMISSIONER INTEGRATED COMMISSIONER Block Block Block Capitation Capitation Option A: Capitation Option B: Capitation & Block Option C: Block & Block HOSPITAL GROUP LOCAL CARE ORGANISATION LOCAL CARE ORGANISATION HOSPITAL GROUP LOCAL CARE ORGANISATION An SCF might choose to take their capitated budget which they receive and simply pass it onto the LCO, which in turn will distribute to providers. In this scenario, network providers may choose a different organisational form to distribute funds (e.g. lead provider or joint venture). An SCF might choose to take their capitated budget and transfer it to an LCO for out of hospital care and then transfer to the HG a block contract for other care. An SCF might select two block contracts for a number of reasons. For instance, if cost containment is a high priority, block contracts can be preferable. Alternatively, if both the LCO and HG want to engage in a block contract with a carve-out for fixed costs, this may lead to the selection of two block contracts. Primary Care Secondary Care Tertiary Care Social Care Social Care Primary Care Social Care Primary Care

21. Thank you