Business Plan 2012/13
Oxford University Hospitals
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ABBREVIATIONS
AHSC/N
CCG
CIP
CNST
CQC
CQUIN
DGH
EBITDA
EPR
FT
FYE
I&E
JR
LTFM
NHSLA
NOC
PCT
QIPP
RPI
RTA
SHA
SLA
Academic Health Science Centre/Network
Clinical Commissioning Group
Cost Improvement Programme
Clinical Negligence Scheme for Trusts
Care Quality Commission
Commissioning for Quality and Innovation
District General Hospital
Earnings before interest, tax, depreciation and amortisation
Electronic Patient Record
Foundation Trust
Full Year Effect
Income and Expenditure
John Radcliffe
Long Term Financial Model
National Health Service Litigation Authority
Nuffield Orthopaedic Centre
Primary Care Trust
Quality, Innovation, Productivity and Prevention
Retail Price Index
Road Traffic Act
Strategic Health Authority
Service Level Agreement
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Introduction
1.
This Business Plan sets out the Oxford University Hospitals Trust‟s objectives for
2012/13, the financial plan for their delivery and how the Trust will monitor success.
1.1. Part One describes the Strategic Context in which the Trust has developed its
plans and its six strategic objectives.
1.2. Part Two describes the Trust‟s strategy.
1.3. Part Three sets out the detailed corporate objectives for 2012/13 that the Trust
has developed to contribute to the delivery of its longer term strategic
objectives.
1.4. Part Four establishes the financial framework in which the objectives must be
delivered.
1.5. Part Five describes the structure and processes that have been put in place to
establish accountability for the delivery of the plan and monitor and manage
progress.
1.6. Part Six assesses the risks to delivery of the objectives [to be completed]
Part One - Strategic Context
National Strategic Context
2.
In July 2010 the new coalition Government set out its plan for the NHS in the White
paper, “Equity and Excellence: Liberating the NHS”1. The plan has three central
themes:
2.1. Putting patients and the public first
This involves putting patients at the heart of everything we do, giving them
more choice and control, helped by easy access to information about GPs and
hospitals. They will be in charge of making decisions about their care – “no
decision about me without me”.
2.2. Improving Healthcare Outcomes
There should be a relentless focus on clinical outcomes with success monitored
through outcome measures, such as cancer and stroke survival rates, rather
than through process targets, and the introduction of a new NHS Outcomes
Framework.
2.3. Autonomy, Accountability and Democratic Legitimacy
The objective of the proposed reforms is “to empower professionals and
providers, giving them more autonomy, and, in return, making them more
accountable for the results they achieve, accountable to patients through choice
and accountable to the public at local level.”
1
Department of Health, July 2010, Equity and excellence: Liberating the NHS
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3.
The Government consulted on these white paper reforms in the second half of 2010
and in January 2011 introduced the Health and Social Care Bill to Parliament.
4.
At the committee stage of the Bill in the House of Commons, the Government
commissioned a group of 45 leading healthcare professionals – the NHS Future
Forum – to undertake a listening exercise on the proposed reforms.
5.
In June 2011, the NHS Future Forum published its 181 recommendations on changes
to the Bill, most of which were incorporated into the Bill.
6.
In September 2011, the Bill passed its third and final reading in the House of
Commons and passed to the House of Lords for debate in October 2011.
7.
The Bill is now with the House of Lords with an expected approval in early 2012/13.
Financial Context – the need to implement best practice and increase productivity
8.
The Government‟s Comprehensive Spending Review of October 2010 confirmed that
NHS resources in England (excluding capital) would increase by a cumulative 1.3%
in real terms from 2010/11 to 2014/15 to reach £109.8 billion.
9.
After deducting earmarked funds for social care and reablement services, the real
terms growth will be virtually flat.
10.
The NHS capital budget faces a cut of 17% by 2014/15.
11.
Due to the above requirements, there is a need for the NHS as a whole to make
efficiency savings of £15-20 billion by 2014/15 for re-investment back into services.
This is delivered as the Quality, Innovation, Productivity & Prevention (QIPP) or
“Nicholson” challenge. 2012/13 will be the second year for the delivery of these
plans.
NHS Operating Framework 2012/13
12.
Within this context the NHS Operating Framework for 2012/13 was published in late
November 2011. As well as setting out the agenda for quality and reform for the
coming year, the Framework also lays out the financial and business rules within
which the NHS is to operate. It emphasises that strong financial management and
control are needed.
13.
The NHS Operating Framework for 2012/13 sets out a strategic vision to transform
the NHS service delivery model to focus on outcomes for patients and greater
involvement of GPs and clinicians in decision making. In doing so the Operating
Framework outlines the strategic aims, structural reforms, financial and quality
drivers and performance management.
Oxford University Hospitals
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These strategic aims present as four key themes within the Operating Framework
2012/13:
Putting patients at the centre of decision making in preparing for an outcomes
approach to service delivery, whilst improving dignity and service to patients and
meeting essential standards of care
Completion of the last year of transition to the new system, building the capacity of
emerging clinical commissioning groups (CCGs) and supporting the establishment
of Health and Wellbeing Boards so that they become key drivers of improvement
across the NHS
Increasing the pace on delivery of the quality, innovation, productivity and
prevention (QIPP) challenge
Maintaining a strong grip on service and financial performance, including
ensuring the NHS Constitution right to treatment within 18 weeks
15.
Other key elements of the Operating Framework include:
A range of outcome measures are set out under the domains of the NHS
Outcomes Framework.
PCT allocations will grow by at least 2.5% in 2012/13 and PCT clusters must
ensure all patients are seen on the basis of clinical need.
The running cost of clinical commissioning groups (CCGs) will be £25 per head
and the tariff price adjuster will see a reduction of at least 1.5%.
All NHS trusts are expected to achieve NHS Foundation trust (FT) status by
April 2014 other than by exceptional agreement.
There are key areas for improvement of dementia and care of older people,
carers‟ support and military and veteran health.
CQUIN (Commissioning for Quality and Innovation) will be increased to 2.5%
on top of actual „outturn‟ value.
A summary of the national performance measures is included below, including
the Outcomes Framework under Quality.
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Local and Regional Strategic Context
16.
The two largest commissioners of the Trust‟s services have historically been
Oxfordshire PCT and South Central Specialist Commissioners. The current
restructuring of commissioning is resulting in changes to both.
Specialised Commissioning
17.
From October 2011 the ten Specialised Commissioning Groups (SCGs) across the
country have clustered into the Strategic Health Authority footprints.
18.
For 2012/13 there will be four SCG clusters. This is an interim stage prior to the
formation for 2013/14 of the National Commissioning Group as a single function
within the NHS Commissioning Board.
19.
The four SCG cluster footprints are:
-
North of England SCG Cluster
North West, Yorkshire & Humber and North East SCGs
-
Midlands & East SCG Cluster
West and East Midlands and East of England SCGs
Oxford University Hospitals
-
South of England SCG Cluster
South West, South Central and South East Coast SCGs
-
London SCG Cluster
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20.
All Specialised Services will be contracted separately from other NHS services.
21.
Work is underway to disaggregate Specialised Services from other services within
contracts held by the NHS with Acute and Mental Health Providers.
22.
Providers of Health Services will be expected to work with Specialised
Commissioning Teams; Primary Care Trusts; and Commissioning Support Agencies
in the disaggregation of specialised activity from other healthcare services.
23.
SCGs that currently commission non-specialised services will make arrangements to
transfer commissioning arrangements to the relevant PCT.
NHS Oxfordshire
24.
The Trust‟s local non specialist commissioner is NHS Oxfordshire, the county‟s local
PCT which is part of the Oxfordshire and Buckinghamshire cluster.
25.
NHS Oxfordshire assessed its financial challenge in 2011/12 and identified the need
to deliver efficiencies of over £200m over the next 4 years. Delivery of these
efficiencies is addressed through the QIPP (Quality, Innovation, Productivity and
Prevention) Programme. Across the NHS this was described as the „Nicholson‟
Challenge to deliver efficiency savings of between £15-20 billion from 2011-14.
26.
NHS Oxfordshire has a Strategic Plan covering the years 2008-20132. The PCT‟s five
strategic goals are set out in the table below:
1.
Ensure that the core services purchased from primary and
secondary care providers continually improve to meet changing
health needs, giving patients optimum access to satisfactory, timely,
high quality care that also offers good value for money
2.
Improve health outcomes and promote independence for the
following key population groups:
Older people
Those with long term conditions
People with mental health problems
Children and families living in areas of deprivation
2
NHS Oxfordshire, January 2010, NHS Oxfordshire Strategic Plan 2008-2013 (Refreshed January 2010)
Oxford University Hospitals
27.
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3.
Improve access to health services by increasing the commissioning
of integrated whole care pathways that create a proportionate and
appropriate shift of activity from hospital into primary and
community care settings
4.
Help more local people of all ages to make sustainable healthy
lifestyle choices
5.
Reduce health inequalities in Oxfordshire by improving health
outcomes for people living in wards with the highest mortality rates
at a greater rate than for the PCT population as a whole
The PCT states that the strategy will lead to “a plateau in the level of activity within
the ORH and NOC”. It stresses the importance of “transformation in service design
and delivery, demanded across the spectrum of activity. Pathways will need to be
fully integrated, services flexible and the individual patient journey seamless –
meaning providers having to work together with the PCT in different and more
effective ways”.
Clinical Commissioning Groups
28.
3
During 2012/13 the PCT cluster will be supporting the development of Clinical
Commissioning Groups (CCGs). The OUH is working with the emerging CCGs to
understand how commissioning intentions will change when budgets are devolved
fully to these consortia in the future. The table below describes the areas covered by
the new Oxfordshire CCG and the particular health issues that have been identified
within them.3
Localities
Population
Practices
North
(Covers area
including
Banbury and
Chipping
Norton)
104,359
13 practices
(74 GPs)
North East
Almost
10 practices
Approximate
Share of
Oxon PCT
funding
15%
11%
Source: Oxfordshire Clinical Commissioning Group website
(http://www.oxfordshireccg.nhs.uk/default.aspx) accessed 24/11/11
Particular Issues for Locality
Teenage pregnancy
Road traffic accidents
Skin cancer (Malignant
melanoma)
Combination of rurality and
large market town
deprivation
Higher proportion of
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Practices
Approximate
Share of
Oxon PCT
funding
Localities
Population
Particular Issues for Locality
(Bicester,
Kidlington
and Yarnton,
Woodstock
and Islip)
78,000
Oxford City
(Oxford City,
Blackbird
Leys, Iffley,
Cowley,
Jericho and
Summertown)
South East
(Covers area
from
Wheatley in
the north to
Sonning
Common in
the south and
from
Wallingford in
the west to
Henley in the
east
South West
(Covers
Abingdon,
Clifton
Hampden,
Berinsfield,
Didcot,
Wantage and
Faringdon)
West
(Covers
Witney,
Burford &
Carterton)
198,629
28 practices
(146 GPs)
29%
Just over
78,000
9 practices
12%
c 136,000
14 Practices
(96 GPs)
13%
Older population sometimes geographically
isolated.
Growing population
Diverse population
Problems accessing
services
78,043
9 Practices
(52 GPs)
11%
Older population sometimes geographically
isolated
Growing population
Diverse population
Problems accessing
services
teenage pregnancy in
Bicester (second only to
Banbury )
High recorded rates of
obesity
Prolonged hospital stays
with delayed transfers of
care
Population changes
Health inequalities
Teenage pregnancies
Suicide
Health effects of exam
results
Students
Rural area - large
proportion of wards
classified as villages or
smaller
Ageing population
Highest percentage of
registered patients with
dementia in Oxfordshire
Highest number of
registered patients with
cancer in Oxfordshire
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Part Two – The Trust’s Strategy
Vision
29.
Oxford University Hospitals NHS Trust‟s vision is to be a world leading, innovative
academic health science system, working in partnership locally, nationally and
internationally to deliver excellence in compassionate healthcare, education and
research.
30.
This vision stems from the Trust‟s establishment and founding partnership with the
University of Oxford. It reflects:
OUH‟s position as a provider of services for a local population and for those from
further afield
Its values in delivering compassionate excellence
Its role as an active partner in healthcare innovation, education and research
with the aim of taking innovation “from bench to bedside”, forming an effective
bridge from basic science to the delivery of evidence-based best practice in care.
The Trust’s Core Values
31.
The Trust‟s Business Plan has been developed in the context of its core corporate
values. These values were generated through an exercise which took place from
September to November 2011. Feedback was received from over 750 staff, the Trust
Board, a number of management committees and from focus groups held with our
Patient Panel and partners. The values exercise was a key part of the integration
process between the two former organisations that now make up the Oxford
University Hospitals (the Nuffield Orthopaedic Centre and Oxford Radcliffe
Hospitals). Discussions were held on all sites and centred on what individuals,
teams and departments said was important to them.
32.
The Trust‟s core values are set out in the table below:
Excellence
Compassion
Respect
Delivery
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Learning
Improvement
Expressed as:
We aim to provide excellent care with compassion and respect. We will do this by:
Taking pride in the quality of care we provide;
Putting patients at the heart of what we do and recognising different needs;
Encouraging a spirit of support, respect and teamwork;
Ensuring that we act with integrity;
Going the extra mile and following through on our commitments;
Establishing systems and processes that are sustainable.
We aim to deliver, learn and continuously improve. We will do this by:
Delivering high standards of healthcare based on national and international
comparisons;
Delivering the best clinical teaching and research;
Adopting the best clinical research in patient care;
Striving to improve on what we do through change and innovation;
Monitoring and assessing our performance;
Learning from successes and setbacks;
Working in partnership across the Health and Social Care Community
Strategic Objectives
33.
The Trust has five strategic objectives which are:
SO1
To provide high quality general acute healthcare services to the population of
Oxfordshire
SO2
To provide high quality specialist services to the population of Oxfordshire and
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beyond
SO3
To be a patient-centred organisation providing high quality and compassionate
care – “delivering compassionate excellence”
SO4
To be a partner in a strengthened academic health sciences system with local
academic, health and social care partners
SO5
To meet the challenges of the current economic climate and the changes in the
NHS and become a resilient, flexible and successful Foundation Trust
34.
The Trust is currently developing a new strategy for the organisation.
milestones in this process have been/will be:
Key
34.1. Achieving integration between the Oxford Radcliffe Hospitals NHS Trust and
Nuffield Orthopaedic Centre NHS Trust (achieved 1st November 2011).
34.2. Sign Joint Working Agreement with the University of Oxford (came into effect
1st November 2011).
34.3. Achieving NHS Foundation Trust (FT) status – this is the key next step.
Preparing the organisation and completing the application will be a major part
of the Trust‟s work programme for the coming year and this has helped to
shape this business plan.
35.
The strategy is evolving as part of the development of the Integrated Business Plan
and Long Term Financial Model for the FT application. A Local Acute workstream is
seeking to address the strategic priorities of the PCT.
Achieving NHS Foundation Trust status
36.
SO6
37.
The Trust‟s five long-term strategic objectives are therefore supported by a further
objective:
To achieve NHS Foundation Trust status
NHS foundation trusts (FTs) were established by legislation in 2003 and now operate
under the Health Act 2006. Although they are NHS organisations which provide
NHS services to NHS patients in accordance with the core principles of the NHS –
care that is free and based on need, they differ from non FTs in that they are:
37.1. authorised and regulated by an independent regulator, known as Monitor,
which is accountable directly to Parliament;
37.2. accountable to their local communities through a system of local ownership
with members and elected governors - the governors being elected by the
members;
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37.3. not required to break even each year, although they must be financially viable.
They can borrow money within limits set by the regulator, retain surpluses and
decide on service development for their local populations;
37.4. free from central government control and strategic health authority
performance management;
37.5. required to lay their annual reports and accounts before Parliament each year.
38.
As an FT, OUH will:
38.1. be part of the NHS and provide NHS care to the best current standards;
38.2. be accountable to local people and the communities it serves via an active
membership and Council of Governors;
38.3. take its own decisions to deliver services within a framework set by regulators
and as part of a „family‟ of local health and social care organisations;
38.4. be able to respond quickly and imaginatively to the challenges of the economic
environment and the opportunities offered through the skills of its staff, its
facilities and networks, and its strong partnership with the University of
Oxford;
38.5. be able to use joint ventures with commercial, academic, health or social care
partners to provide benefit for the patients of tomorrow in new ways – and to
minimise the cost to commissioners of integrated care within a teaching centre;
38.6. invest and borrow, with spending no longer dominated by an artificial annual
cycle but by requirements to be financially viable; and
38.7. be required by the regulator to demonstrate that it is well-governed and
financially viable.
Key Dates
39.
According to the currently planned programme, the key dates for the OUH‟s
application to become an FT are:
June – September 2012
Public Consultation
November 2012
Submission of final application
January 2013
Elections for Governors
February 2013
Secretary of State Approval
June – August 2013
Authorisation
Membership
Oxford University Hospitals
40.
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As part of our work to become a successful and effective Foundation Trust we are
committed to building a substantial and representative membership. OUH believes
that a well-informed, motivated and engaged membership will help it to be a more
responsive organisation with an improved understanding of the needs of its patients
and local communities. All staff will automatically become members unless they opt
out. Others wishing to become members can do so at
http://www.ouh.nhs.uk/foundation-trust/membership.aspx
Workstreams
41.
The diagram below shows the main workstreams for the preparation of the Trust to
become a Foundation Trust and for its associated application, together with the
workstreams‟ reporting structures.
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Part Three - Corporate Objectives for 2012/13
42.
A set of corporate objectives has been developed. These are described in the table below under the strategic objectives that they
address.
Board Lead
SO1
1a
1b
1c
SO2
2a
Provide high quality general acute healthcare services to the population of Oxfordshire
Work with partners to redesign local services to put in place a model of care that
is patient centred and clinically and financially sustainable
Director of Clinical Services
Continue to improve Emergency/acute services/care pathways in conjunction with partners
Work with partners on initiatives to reduce planned activity
Continue to work with partners on initiatives to deliver care “closer to home”
Work with commissioners to move to quality/outcome based commissioning
Work with partners to reduce the number of system wide delayed transfers of care
Director of Clinical Services
Continue to develop supported discharge scheme
Implement workforce redesign and the development of new roles to support new
models of care
Director of Workforce
Provide high quality specialist services to the population of Oxfordshire and beyond
To secure the clinical and financial sustainability of the Trust‟s specialist services
by consolidating catchment area, increasing it where possible
Director of Planning and Information
supported by all Divisions
Review, develop and strengthen partnerships with referring centres to secure patient flows and support financial
sustainability – linked to development of Academic Health Sciences Network
Draft Annual Business Plan 2012-13
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Board Lead
In particular, review provision of cancer services to surrounding DGHs with a view to increasing delivery of services
locally where appropriate (e.g. peripheral clinics, joint appointments, satellite radiotherapy and/or chemotherapy)
whilst securing specialist referrals to the Cancer Centre
Explore potential to repatriate activity from London providers in accordance with commissioner requests – continue to
repatriate adult cardiac surgery from London providers
2b
Develop and strengthen the Trust‟s involvement in all Clinical Networks
Director of Clinical Services, Director
of Planning and Information and
Medical Director
Agree a blueprint for an effective clinical network and associated organisational framework/business model to be used
as the basis for discussions with partners
Continue to develop a Paediatric Network for Children‟s Heart Surgery and Neurosurgery in collaboration with
University Hospital Southampton NHS Foundation Trust
2c
Respond to national guidance on the centralisation of specialist care and support
services, including trauma, vascular, stroke, neonatal, cancer and pathology
services
Director of Clinical Services
Implement plan to become regional Trauma Centre
Continue centralisation of Vascular Surgery in Oxford
Continue development of Oxford as a Hyperacute Stroke Centre
Secure agreement of full business case for expansion of neonatal services and commence implementation
Agree future location of Head and Neck Cancer services and implement associated plan
Ensure the Trust has a robust plan in response to the Carter review of pathology services
2d
Develop services which are strategically important to the Trust
Draft Annual Business Plan 2012-13
Director of Clinical Services and
Director of Planning and Information
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Board Lead
Undertake a Strategic Service Analysis to identify key areas for strategic service development
Continue to implement the Radiotherapy Modernisation Plan
Establish an Integrated Spinal Pathway between the NOC, Neurosurgery and JR Orthopaedics
SO3
3a
To be a patient-centred organisation providing high quality and compassionate care – “delivering compassionate
excellence”
Embed the Trust‟s new values into everyday action and consolidate the newly
named organisation‟s brand and identity
Director of Workforce
Progress the Values into Action action plan
Ensure patient experience is used as a vehicle for engaging greater staff engagement and service improvement.
3b
Deliver continued and measureable improvements in patient safety, patient
experience and the effectiveness of services (including access), working through
the new clinically led organisation
Medical Director, Chief Nurse and
Director of Clinical Services
Implement new performance framework
Deliver quality standards, including those set out in the Quality Account for 2012/2013
Engage with patients to establish what really matters to them, identifying opportunities for improvements and ensure
they have input into proposed service developments
Increase and improve methods for capturing and analysing feedback from patients and carers on the care they receive
Achieve/maintain achievement of national standards for access to services:
- Referral to treatment times
- Cancer waiting times
- A&E standards
Improve turnaround times for clinical support services
Draft Annual Business Plan 2012-13
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Board Lead
3c
Compliance with CQC outcomes and achievement of improved NHSLA status
drawing on new assurance and governance standards
Director of Assurance
Review the Trust‟s proposed governance framework as part of the development of the application for Foundation
Trust status
Implement CQC action plan and deliver compliance in all outcomes
Agree plan to improve NHSLA status
Continue implementation of Trust‟s Quality Assurance system to support improved assurance from floor to Board
3d
Reduce delays for patients and improve the efficiency with which resources are Director of Clinical Services
used by further developing weekend and extended day working, including access
to diagnostics
3e
To plan and deliver a sustainable future for the Horton General Hospital
Director of Planning and Information
and Director of Clinical Services
Enhance the quality, efficiency and sustainability of services at the Horton General Hospital, including the remodelling of adult medical and surgical services and the provision of a flexible, robust core medical function that
supports other specialty work, developing the Horton Vision
SO4
To be a partner in a strengthened academic health sciences system with local academic, health and social care partners
4a
With partners bid achieve designation as one of the new Academic Health Science Chief Executive
Networks for a network with the OUH at its heart
4b
Academic Health Partnership
Chief Executive
Advance the proposed establishment of an Oxford Academic Health Partnership
4c
Progress the shared agenda with University of Oxford
Chief Executive
Progress the implementation of the Joint Working Agreement
Draft Annual Business Plan 2012-13
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Board Lead
4d
Implement education and training strategy, working with key partners including Director of Workforce supported by
the University of Oxford, Oxford Brookes University, The Thames Valley Medical Director and Chief Nurse
Postgraduate Deanery and other key partners that will meet the local and national
requirements for well trained and educated staff for all areas of the NHS
4e
Progress the strategies set out in the successful renewal bids for the Biomedical Medical Director
Research Centre and Unit
SO5
To meet the challenges of the current economic climate and the changes in the NHS and become a resilient, flexible and
successful Foundation Trust
5a
Work with partners in the local health community to ensure that services are Director of Clinical Services and
financially sustainable
Director of Planning and Information
Produce strategy
5b
Increase productivity and delivery of CIPs year on year in line with the agreed Director of Finance and Procurement
financial strategy and within the agreed performance framework/compacts
supported by Director of Clinical
Services
Deliver agreed Financial Plan
Deliver Cost Improvement Programme which assures patient safety and quality
Downsize commensurate with commissioner QIPP delivery
5c
Improve utilisation of the Trust‟s high value assets, „right-sizing‟ clinical Director of Development and the Estate
accommodation, vacating poor quality retained estate and exploring potential and Director of Clinical Services
commercial opportunities
Draft Annual Business Plan 2012-13
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Board Lead
Produce strategy
Agree a Private Patient strategy
5d
Realise the benefits of the introduction of the Electronic Patient Record (EPR) to all Director of Planning and Information
sites
Progress the roll-out of the EPR
5e
Continue to develop financial regimes and systems that meet FT requirements
Director of Finance and Procurement
Achieve surplus to underpin FT application
Remove the residual cumulative deficit generated in 2005/6 and 2006/7
Deliver improvements in the liquidity ratio
Improve the understanding of financial performance through the further development of service line reporting and
patient level costing
5f
SO6
Agree a workforce plan that aligns with the Clinical Services and Financial Director of Workforce
strategies
To achieve NHS Foundation Trust status
6a
Finalise Integrated Business Plan (IBP) and Long Term Financial Model (LTFM)
leading to final submission November 2012
6b
Undertake public consultation
6c
Elect governors
Draft Annual Business Plan 2012-13
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Part Four – Financial Plan
Background
43.
As described above, there is a continuing requirement for the NHS as a whole to
make efficiency savings of £15-20 billion by 2014/15 for reinvestment back into
services. This is usually referred to as the Quality, Innovation, Productivity and
Prevention (QIPP) challenge and 2012/13 will be the second year for the delivery of
these plans.
44.
The Department of Health published the tariff for NHS services on 16 February. The
tariff reflects a reduction in prices of 1.8% and the introduction of a wider range of
Best Practice tariffs foreshadowed in the Operating Framework.
The Regional Planning Context
45.
On 20 December NHS South of England issued their own guidance on the principles
that should form the basis of operating plans in NHS organisations for 2012/13.
These principles complemented the matters set out in the overarching NHS
Operating Framework but included the following additional matters that need to be
taken into consideration by Trusts when planning for 2012/13:
45.1. PCTs will be required to levy mandatory fines that are included in the NHS
standard national contract on providers that fail to meet key performance
targets.
45.2. Guidance was proposed as to what might be included within the measures that
would attract additional CQUIN (Commissioning for Quality and Innovation)
payments.
45.3. The notional tariff uplift for 2012/13 was to be 2.2%, with an efficiency target of
4%, meaning that tariffs were to be reduced by at least 1.8%.
46.
In his letter of 14 December 2011 Sir David Nicholson confirmed that all PCT revenue
allocations would be increased by 2.8% in 2012/13.
The OUH’s own Planning Context
47.
The Trust is forecasting the delivery of a £7.158m surplus against its break even duty
in the current financial year 2011/12.
48.
The Trust also needs to demonstrate on-going financial stability, and to strengthen its
liquidity position, as part of its preparation for Foundation Trust (FT) status.
49.
Next year‟s financial plans have to take into account the following previously agreed
service developments:
49.1. Vascular surgery, with the centralisation of activity from Thames Valley District
General Hospitals (DGHs) and the repatriation of work from London;
Draft Annual Business Plan 2012-13
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49.2. Cardiac surgery, with the repatriation of London activity for Thames Valley
PCTs;
49.3. Neonatology, and the expansion of Intensive Care cots as part of being
designated a Level 1 unit for South Central SHA, with work diverted from nonLevel 1 units in the SHA and the repatriation of out-of area transfers;
49.4. Trauma and Orthopaedics, with the designation of Oxford as a Major Trauma
Centre within South Central SHA.
50.
Financial pressures will also arise next year where:
50.1. Savings targets in 2011/12 have been met only through the identification of
non-recurrent schemes so new schemes to identify recurrent savings need to be
found in 2012/13.
50.2. There are inflation increases to agreed contract values – for example, there will
be annual increases to the three private finance initiative (PFI) contracts that are
linked to the retail price index (RPI). RPI is higher than the level of inflation
assumed within tariff.
50.3. It costs more to provide the same level of service as a result of (for example)
incremental pay drift; expenditure on agency staff; patient, clinical or quality
decisions leading to an increased use of high cost drugs; backlog maintenance
needed to be carried out; making higher payments into the clinical negligence
scheme (CNST) as a result of increased claims nationally; and the reduction in
NHS education funding to support the training of junior doctors and other
clinical professionals.
50.4. Capital charges rise, partly as a result of increases in the value of the Trust‟s
land and buildings as assessed by the District Valuer, and partly from the
investment the Trust makes in fixed assets through its capital programme.
50.5. Levels of over-performance against contracted levels are paid at marginal rates.
50.6. Penalties are applied by PCTs because key quality and other performance
measures are not met.
50.7. Not all criteria are met for receiving full CQUIN payments from commissioners.
51.
The financial context within which the Trust will operate next year presents
significant challenges. It has therefore been considered prudent to put reserves in
place in 2012/13 by including a contingency budget of 1% of planned turnover.
Commissioner Income
52.
The majority of the Trust‟s predicted income will come from contracts with
commissioners. Service Level Agreement (SLA) negotiations are ongoing at the time
of writing. The table below summarises the levels of income currently proposed
from each of the Trust‟s main commissioners.
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Oxford University Hospitals
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£m
Commissioner
NHS Buckinghamshire & Oxfordshire:
Oxfordshire
Buckinghamshire
Subtotal
350.27
35.70
385.97
South Central Specialist
Other Commissioners
Total SLA Commissioning Income
87.00
169.03
642.00
Other NHS Patient Care Income
Total Commissioning and RTA Income
15.91
657.91
Proposed Income and Expenditure (I&E) Account Budget 2012/13
53.
The proposed Trust revenue budget for the 2012/13 financial year is summarised in
the table below. [At this stage this reflects preliminary budgets which will be
revisited in the light of the outcome of the commissioning process].
Plan
2011/12
£000
Income
Commissioning & RTA
PP & Overseas
Other Income
Total Income
Outturn
2011/12
£000
Plan
2012/13
£000
606,584
11,350
111,505
729,439
647,454
11,514
125,177
784,145
657,912
10,322
109,833
778,067
-402,821
-255,702
-658,523
-422,591
-292,226
-714,817
-413,889
-298,654
-712,543
EBITDA*
70,916
69,328
65,524
Depreciation
Impairments
Investment Revenue
Other Gains & Losses
Finance Costs
PDC Dividend Payable
Retained Surplus
-34,694
-308
115
-179
-21,369
-8,404
6,077
-34,850
-34,000
135
-410
-20,406
-8,915
4,882
132
-200
-20,680
-9,222
1,554
526
308
-2,560
2,790
7,141
834
58
-690
2,132
7,158
-250
2,113
3,475
Expenditure
Pay
Non-Pay
Total Expenditure
IFRIC12 Technical Deficit
Impairments
Donated Asset Addns
Donated Asset Depn
Break Even Surplus
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Oxford University Hospitals
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*EBITDA = earnings before interest, tax, depreciation and amortisation
Savings Plans
54.
In order to meet the financial challenges for 2012/13 the Trust expects to be required
to develop a savings programme of at least £49.5m for 2012/13, which is 6.7% of
planned turnover. [The level of savings required may be affected by the conclusion
of the divisional budget setting process and possibly by the conclusion of the
commissioning process].
55.
The process for identifying CIP plans commenced in October 2011 and these plans
were developed through a workshop and subsequent discussions with the clinical
leadership.
56.
The workshop/discussion developed ideas around the following themes; Workforce;
Service Configuration; Resource Configuration; Managing Demand.
57.
The themes for 2012/13 have subsequently been redefined and are Pay Cost
Initiatives; Productivity & Efficiency (P&E); Capacity reduction; Procurement;
Income Generation; Divisional Efficiency
CIP Programme 2012/13
FYE of 2011/12 Savings Schemes
Pay Cost Initiatives
9.4
10.0
Productivity & Efficiency
2.3
Capacity Reduction
3.6
Procurement
4.4
Procurement - Energy Managed Services
1.2
Procurement - Medicines Management
3.1
Income Generation
1.0
Divisional Efficiency
14.5
Total
58.
£m
49.5
Cost improvement plans will be designed and reviewed to ensure that patient safety
and quality are assured.
Capital Plan 2012/13
59.
It is assumed that the sum invested in new capital projects in 2012/13 is equal to the
cash generated from depreciation less the repayments of principal that the Trust has
to make on its loans, PFI contracts and finance lease agreements.
60.
It is currently also assumed that funds generated from the surplus will not be
invested in capital expenditure but will be used to strengthen the Trust‟s liquidity
position.
Draft Annual Business Plan 2012-13
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Oxford University Hospitals
61.
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The table below shows the proposed capital programme.
Outline Scheme-Based Programme
Neonatal Intensive Care
Trauma Centre Business Case*
Total
Cost
2,685,000
2012/13
Allocation
2013/14
Allocation
2,685,000
790,000
790,000
Vascular Business Case (for 2nd IR room)*
1,300,000
1,300,000
Cardiac (Adult) Business Case*
1,400,000
1,400,000
Laboratory Business Case (Block 4, Churchill) (Molecular
diagnostics Centre) £0.8m BRC*
1,200,000
1,200,000
800,000
800,000
65,000
65,000
4,000,000
2,000,000
2,000,000
- Milton Keynes
7,000,000
470,000
6,530,000
- Swindon
6,925,000
475,000
6,450,000
Theatres - NOC potential purchase
250,000
250,000
Major Radiological Equipment*
600,000
PACS Replacement*
250,000
250,000
IT/EPR
3,000,000
3,000,000
Laboratory IT System Replacement
1,500,000
Endoscopy Six Day Working – additional scopes
Endoscopy Business Case – 5th Room*
Medical and Surgical Equipment*
Radiotherapy:
600,000
1,500,000
Ward Relocations:*
- Respiratory
3,000,000
3,000,000
subject to
option
subject to
option
- 2nd Robot
411,000
411,000
- Pharmacy Store Churchill*
650,000
650,000
50,000
50,000
375,000
375,000
Head & Neck Relocation (Churchill or West Wing)
Pharmacy:
Relocation of Radioactive Store – Churchill
OHIS Integration
Relocation of Occupational Health
General Estates:*
- Maintenance
2,000,000
1,000,000
40,000
40,000
- DDA
100,000
100,000
- Bed Replacement
100,000
100,000
750,000
750,000
- Signage
1,000,000
IMRT:
- Rapid arc installation
- Rapid arc upgrade
1,200,000
1,200,000
Renal Satellite Dialysis Extension:
- Milton Keynes Phase 2
180,000
180,000
PFI Disputes CH
732,000
732,000
Maternity Recovery, Ultrasound and Triage*
116,000
116,000
Wolfson Centre Contribution
900,000
900,000
TOTAL
42,369,000
21,834,000
20,535,000
Capital Available
42,369,000
20,934,000
21,435,000
Under/(Over) Commitment
(900,000)
900,000
*Investment in Existing Estate & Equipment
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Oxford University Hospitals
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Monitor Financial Risk Ratings 2012/13
62.
The OUH is not yet a Foundation Trust and is therefore not subject to Monitor‟s
financial regime. As good practice, however, the Trust has calculated the ratios used
by Monitor to assess an organisation‟s financial risk rating for inclusion in this
business plan and these are shown in the table below.
Scores
Financial Criteria
Underlying Performance
Risk Rating
Plan 2012/13
Weight
5
4
3
2
1
Metric
Score
EBITDA margin
25%
11%
9%
5%
1%
<1%
8.8%
3
Return on Assets
20%
6%
5%
3%
-2%
< -2%
4.7%
3
I & E Surplus Margin
20%
3%
2%
1%
-2%
< -2%
0.2%
2
Liquid ratio (days)
25%
60
25
15
10
<10
-24
1
Financial Efficiency
Liquidity
Weighted Average
Overall Rating (see rules below)
2.22
2
Note: If the Trust had a notional 30 days' working capital facility (which many Foundation Trusts arrange), then the metric for
Liquidity would be 6, giving a risk rating of 2 against that criterion. This would produce an overall weighted average score of 2.5
Part Five – Monitoring the Plan
Performance Review Committee
63.
A subcommittee of the Trust Management Executive has been established to monitor
the performance of all clinical and corporate divisions on a regular review cycle.
This committee will monitor this plan and the plans which support it, requesting
action and follow-up where performance varies from that expected.
64.
The committee is chaired by the Director of Finance, with the membership shown in
the table below:
Director of Finance and Procurement (Chair)
Chief Executive
Medical Director
Chief Nurse
Director of Planning and Information
Draft Annual Business Plan 2012-13
Director of Clinical Services
Director of Commercial Development
and the Estate
Director of Workforce
Director of Assurance
Divisional Directors x 7
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Oxford University Hospitals
65.
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The committee will provide regular reports on performance against this plan to the
Trust Management Executive and Trust Board.
Earned Autonomy and Incentives for Good Performance in the new Clinically Led
Organisation
66.
The Trust has introduced a system whereby, when a clinical Division demonstrates
that it is able to perform effectively and meet key agreed targets, it will earn the right
to operate more independently, with less corporate oversight of the decisions it is
making.
67.
Any increase in autonomy will be based upon a Division‟s performance in meeting
(or exceeding) agreed targets. The degree of earned autonomy will be subject to
review.
68.
The proposal for the incentive scheme is based on the premise that a Division must
exceed at the end of the financial year the financial and non-financial targets it is set.
69.
The overall performance of the Trust, and of the local health economy, will also play
a part in decisions affecting earned autonomy and the incentive scheme.
Performance Compacts
70.
At the beginning of the financial year each Division will agree a comprehensive
business plan. This business plan will form the basis of a Performance Compact
signed by members of the Executive Team and the Division. Divisions will be
expected to manage and control their operations to agreed standards within a
Performance Framework comprising:
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
71.
Primary Standards
Finance
Quality
Activity
Workforce
Performance
Contribution towards the objectives set out in this plan
Risk management
Divisional Performance Compacts will be monitored through regular Performance
Compact meetings. The outcome of these meetings, including agreed actions, will be
reported to the Performance Review Committee. This monitoring will inform
decisions about levels of autonomy and incentives.
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Oxford University Hospitals
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Part Six - Risks
[To be completed]
Mr Andrew Stevens, Director of Planning and Information
Ailsa White, Corporate Planning Manager
Matthew Lawrence, Head of Business Development
With input from other Directors, Divisions and their teams
March 2012
Draft Annual Business Plan 2012-13
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