Becoming a Foundation
Trust
A brief guide for Clinical Commissioning
Groups
Contents
•
Introduction -
•
Role of Clinical Commissioning Groups in Provider Development -
•
Overview of provider side reform -
•
Overview of Health and Social Care Bill -
•
The landscape for providers will change significantly -
•
As a result there will be reforms to the provider landscape and a new role for Monitor -
•
New provider landscape -
•
The Government’s reforms have substantial impact on the provider landscape -
•
Deadline for FT status -
•
Criteria NHS Trusts must meet -
•
Traditional route to becoming a Foundation Trust -
•
Key principles for Foundation Trust authorisation -
•
Tripartite Formal Agreements -
Contents (Continued)
• NHS Foundation Trusts - The benefits to commissioners of Trusts gaining Foundation
Trust status
•
The Role of Monitor -
•
Potential obstacles to becoming a Foundation Trust -
•
Economic regulation -
•
Introducing economic regulation to the NHS -
•
Further Information -
Introduction
All NHS Trusts should become Foundation Trusts on their own, as
part of an existing FT or in another organisational form by April
2014. It is government policy that NHS hospitals should run their
own affairs and be accountable to local people and patients, as
opposed to being subject to top-down direction from the
Department of Health (DH). To obtain FT status requires
strengthened board governance, financial disciplines that promote
long-term financial viability, and a framework to secure delivery of
quality services.
Monitor is the independent regulator of NHS FTs and is responsible for assessing applicants for FT
status and subsequently regulating them once they are approved. Monitor sets out the criteria
aspirant Trusts must meet.
This brief document outlined the key stages to becoming a Foundation Trust and the points at which
commissioners will become involved in that process.
Role of Clinical Commissioning Groups in Provider
Development
CCGs must:
NHS Foundation Trust
Maintain an ongoing dialogue with aspirant FTs,
supporting commitments set out in the tripartite formal
agreements (TFAs)
Ensure support and sign-up to the activity levels agreed by
both parties in the NHS Trust plans
Ensure NHS Trusts engage with and endorse provider
strategies that support sustainable local healthcare,
reflecting patient needs
Take actions to ensure appropriate providers and models of
care are available to meet commissioning requirements
Support the development of Trust FT applications
specifically with activity plans and overall health system
strategies
Support Trusts in developing sustainable business models
to achieve FT status
Provide support to NHS Trusts to ensure they are aware of
the Equality Delivery System
NHS Trust
1. Overview of provider side reform
Overview of the Health and Social Care Bill
The Health and Social Care Bill and the Government’s response to the
White Paper consultation include plans that will affect every part of the
NHS
• Commissioners: radical reforms to devolve commissioning responsibilities to GP
commissioning groups
• Regulators: Monitor to become economic regulator from 2012
and will run a joint provider licensing programme with CQC
• Providers: Implementing “any willing provider” alongside
mandating all NHS acute and mental health trusts to become FTs
Key themes
• Moving away from “excessive bureaucracy and top-down control”
towards more decision making by patients and health professionals
• Using market mechanisms (including competition and failure) to drive
improvements in value and quality
Rewarding
success
Allowing failure &
exit
Consequence
Any willing
provider
Provider freedoms
Fair competition
Wholly FT
landscape
Enablers
Improved value &
patient outcomes
Levers
Goal
The landscape for providers will change
significantly
Providers exiting
the market
Innovative
providers entering
the market and
expanding
Rewarding
success
Allowing
failure & exit
Consequence
Any willing
provider
Provider
freedoms
Competition
Wholly FT
landscape
Enablers
Improved
value & patient
outcomes
Levers
Goal
As a result there will be reforms to the provider
landscape and a new role for Monitor
Providers
exiting the
market
Innovative
providers
entering the
market and
expanding
New provider landscape
Role for Monitor
Any qualified provider
Licensing providers of NHS care
Market entry
Protecting and promoting patients’ interests
All NHS providers to become FT on their own, part of an
existing FT or in another organisational form
Reforms to the FT model
Setting prices for NHS care
Preventing anti-competitive behaviour
Supporting service continuity
2. New provider landscape
The Government’s reforms have substantial
impact on the provider landscape
The Health and Social Care Bill proposes several key reforms to the provider side of the
NHS, all of which will have potentially significant consequences
In broad terms, the Bill and the consultation response split providers into three different
groups,
•
NHS Trusts that have yet to become Foundation Trusts;
•
Current Foundation Trusts; and
•
Independent Sector providers
The reforms have differential impacts on each of the groups
As a result of the changes to the provider landscape there will be changes to the role of
Monitor in its role as regulator of Foundation Trusts
Deadline for FT status
There is a strong expectation that all public sector health providers will be
Foundation Trusts by April 2014 if possible. However a number of Trusts have said
themselves they are not clinically of financially viable for the longer term and might not
meet this deadline
As a result of this and the abolition of Strategic Health Authorities, all NHS Trusts that
have not gained FT status by April 2013 will be put under the guidance of a
newly-constituted Special Health Authority, the NHS Trust Development
Authority (NTDA)
The NTDA will support Trusts to FT status, OR work on an agreed solution to
their future form, for example merge with an existing FT. Clear signals are being
sent to providers indicating that they are co-responsible for achieving this.
A new single operating model for the four SHA clusters’ management of the FT Pipeline
will be operational by January 2012, foreshadowing the single national approach.
Monitor will continue to assess whether organisations meet the necessary financial and
governance requirements (the “FT Bar”). There will be no lowering of the
assessment bar in order to ensure that organisations will be fit for purpose.
Criteria NHS Trusts must meet
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.
SHA led Development Phase
SHA works with Trusts to develop robust and
SHANHS
ledFoundation
Development
Phase
credible
Trust applications.
Activities include:
1.
Pre-consultation
1. Pre-consultation:
•
Trust review
Public
• 2. Board
reviewconsultation
•
Draft business plan and financial model
Postsupport
consultation
• 3. Bespoke
SHA
that the applicant
is now ready to
4.decides
Historic
due diligence
proceed to:
report
2. Public consultation – minimum 12 weeks
5.
SHA and trust submit
3. Post consultation:
application to the
•
Finalisation of consultation
Department
•
Final
business plan and financial model
•
Historical due diligence sourced and
actioned
•
Board-to-board practice
•
All actions from 1) above, delivered
Secretary of State Support Phase
1.
When SHA is satisfied that Trust is
Secretary
of formally
State Support
ready, Trust
applies to
Secretary of
State, with SHA full
Phase
support
1.
2.
Monitor Phase
Applications
committee
Applications Committee
considers
applications
and provides
review
application
andadvice to
Secretary of State which Trusts be
make
the recommendation
supported to proceed to Monitor for
to
the Secretary
of State
assessment
and, if successful,
authorisation
2. Secretary of State support
3. Final decision by Secretary of State
granted
3. Trust is invited to formally
apply to Monitor
1.
Department
of Phase
Health advises Monitor
Monitor
of supported applicants
1. Application review by the
2. Trusts formally apply to Monitor
Assessment Team
3.
Monitor will carry out its full
5.
Board to Board meetings
process
Isassessment
the applicant
legally
Is the applicant legally constituted?
constituted?
Is the applicant financially viable?
• Is the
Is applicant
the applicant
financially
well governed?
viable?
4. Interviews with the Care Quality
• IsCommission,
the applicant
well
SHA,
and PCTs/CCGs
governed?
•
2. Interviews with the Care
Quality Commission, SHA,
and PCTs/CCGs
3. Board to Board meetings
4. SHA confirms the Trust is ready to move
into second phase
Commissioner support – vital in
planning, monitoring, and FT
application
See next page
Authorisation
granted
Deferral
Rejection
Traditional route to becoming a Foundation Trust
Intervention Points for CCGs
SHA Led Development Phase
Secretary of State Support Phase
•
• Commissioner signatory to TFA
• Negotiation and Agreement over
contract income
• Negotiation and Agreement over
changes to clinical pathways
•
• Commissioner input to the Trust’s
business plan and financial model
•
• SHA/NTDA check commissioner
support for FT application
•
Monitor Phase
When SHA is satisfied that Trust
• DH advises Monitor of the applicant’s
is ready, Trust formally applies
support from commissioners
to Secretary of State, with SHA
full support
• Monitor carries out full assessment
process including direct discussions
Commissioners provide a letter
with commissioners, with focus on
of support
commitment to financial model for
Trust, satisfaction with quality standards
Applications Committee
of Trust and commitment to Trust’s
considers applications and
clinical strategy
provides advice to Secretary of
State which Trusts be supported •Commitment to commissioning plans to
to proceed to Monitor for
ensure robustness of aspirant Trust
assessment and, if successful,
financial projections
authorisation.
Final decision by Secretary of
State
Key principles for Foundation Trust authorisation
Eight Domains
There are eight domains against which the Department of Health considers applications from NHS Trusts prior to recommending that the Secretary of State for
Health supports an application being progressed to Monitor for authorisation as an FT. The eight domains are:
1.
Legally constituted and representative – the aspirant FT will have to ensure an appropriate legal constitution which gaining appropriate
representative members of the local community
2.
A good business strategy – CCGs will be expected to discuss their commissioning intentions in their business strategy. Strategic convergence
with commissioning intentions and local health economy requirements will be tested
3.
Financially viable – CCGs commissioning plans will form a central part of the aspirant FTs business plan and in turn its financial viability as an
organisation. A well developed approach to contracting for services on the part of CCGs will be essential to the aspirant FT being able to
meet Monitor’s tests of viability
4.
Well governed – SHAs/NTDA and subsequently Monitor will test out the relationship between commissioners and providers. Good
relationships are the key to ensuring continuity and development of services and meeting the needs of patients
5.
Capable board to deliver – All aspirant FTs will be required to undertake a board assurance process to ensure that the organisation will be led
by capable individuals
6.
Good service performance – CCGs will be asked to input their views on the quality of the service performance that their patients are
experiencing as part of the FT process. SHAs performance manage trusts currently against all the key performance targets. CCGs should be
aware of both delivery against national metrics and also performance against key local priorities
7.
Local health economy issues/external relations – Key stakeholders, including CCGs and local authorities will be asked for their views of the
aspirant FT and these views will be triangulated against others, including the media, and also considered against any pending issues such as
disinvestment in services, when forming a view of the organisation’s suitability to progress to FT status. CCGs will be expected to put forward a
letter of support as the main commissioners
8.
Quality of services – The quality of services offered by an FT will be a key consideration. Clinical views will be sought from a variety of sources
and a standard framework will be produced to ensure a thorough assessment is made in this area. The views and experiences of CCG members
will be sought by the SHA, DH and by Monitor.
Tripartite Formal Agreements
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 to the lead Clinical Commissioning Group (CCG) once it is 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.
NHS Foundation Trusts
The benefits to commissioners of Trusts gaining Foundation Trust
status
NHS Foundation Trusts
are free from central government control. The board has the authority to run its Foundation Trust as it
judges best, but is accountable for the success or failure of the organisation. This is a cultural shift which
fosters improved leadership and innovation
have greater financial freedoms – they can borrow commercially and generate surpluses to expand,
improve quality or develop new services. And
are accountable to:
•
their local communities, through their members and governors
•
commissioners, for delivery of services specified in their contracts with PCTs, CCGs and other
specialist commissioners
•
Monitor as their regulator
•
Parliament, by laying their annual reports and accounts before the House of Commons and
House of Lords.
Monitor as the regulator of FTs has said it is keen to develop closer and more effective
relationships with commissioners
The Role of Monitor
Monitor is responsible for assessing and authorising applicants for NHS Foundation Trust status. It is
the independent regulator of NHS FTs and has a role to ensure that FTs are professionally managed,
legally set up and run and have their finances in good order.
Monitor assesses each applicant’s eligibility for FT status by considering:
The Trust’s legal constitution, including its level of public membership and draft constitution
The quality of governance, including the quality of the board, and its performance and risk management
arrangements
Evidence on the quality of services
The Trust’s financial viability, including its integrated business plan, short term financial health and
long-term financial projections
Potential obstacles to becoming a Foundation
Trust
The FT Pipeline is all about creating clinically and financially sustainable organisations that as a result
become FTs. So those that can’t show how they will be clinically and financially sustainable won’t be
able to become an FT in their current form. 20 Trusts, through the TFAs, have signalled this and there
may be a few more.
It is clear that not all NHS Trusts will become Foundation Trusts in their current form. A number of
these organisations have complex and substantial issues to resolve. Tackling these issues will required
innovative and in some cases, radical solutions. Some of the challenges identified for organisations
include:
Historic financial difficulties within the local health economy
The need to improve clinical outcomes
The need to improve patient experience by redesigning services to move procedures from a hospital to a
community setting, where appropriate
The need to replace facilities which are no longer fit for purpose
In these cases, more than others, it will be vital to have strong commissioner input to the solutions to
providing healthcare for local people. These solutions may include mergers, reconfiguration of services,
services closing in some areas and expanding in others.
3. Economic Regulation
Introducing economic regulation to the NHS
To realise the benefits from the market based reforms the Government has proposed the
introduction of Economic Regulation for the NHS which will be led by Monitor
Government has argued that Economic Regulation is warranted to correct specific
market failures seen in healthcare in order to protect patients and the taxpayer
As a result, economic regulation led by Monitor will cover three aspects:
Competition – all of healthcare and social care in the future
Pricing – NHS funded care – in agreement with the NHS Commissioning Board
Continuity of Service – designated service providers
These aspects will apply to all providers of NHS funded care (not just FTs)
Monitor’s role will often be a balancing act between action to promote efficiency and
action to ensure service continuity
Patient safety and quality will remain the jurisdiction of the CQC though there will be
joint working between the two organisations
Further Information
Further information can be found at :
www.monitor-nhsft.gov.uk
www.dh.gov.uk/
www.ccpanel.org.uk/