1.1. Activity Based Funding - Health and Care …...The NHS R&D activity data1 which was used to inform the activity based funding model for 2016/17 was high quality research; defined

Guidance for NHS Organisations 2016/17

Document developed by the Health and Care Research Wales Support Centre: 1 April 2016: Version 1

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1.1. Activity Based Funding



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Version Control

Version Date Changes

1.0 1st April 2016 Main changes for 2016/17 document:

Removal of all references to

DSCHR

Section 4 – reference to allocations

including a separate centralised

NHS Support Cost budget

allocation for primary care, public

health and WAST studies

Reference to allocations including a

separate amount for Clinical

Research Fellows and Specialty

Group Leads

Balancing factor and tariffs for

2016/17 updated in relevant

sections



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1. Purpose and Scope of this Guidance Document

The aim of this document is to advise NHS organisations on the background information and methodologies that informed the Welsh Government’s activity based funding model 2016/17 for NHS Research and Development (R&D), as well as describing the model. Appendix 1 provides a detailed spreadsheet comprising all NHS R&D allocations 2016/17.

2. Background: NHS R&D Funding Plan

In 2012, Welsh Government published the NHS R&D Funding Plan 2012/13-2014/15 which set the policy context and outlined the vision for establishing NHS funding streams to support high quality studies taking place in the NHS, as well as the development of a fair and transparent activity based funding model for NHS R&D. Activity based funding was introduced in 2012/13 and it was implemented through a three year transition period, with 2014/15 being the third and final year of transition. 2016/17 is the second year post the transitional funding period. This means that the activity based elements of the allocations (NHS Support Cost funding and Researcher Support and Portfolio Development funding are based entirely on activity. Note that the R&D office funding, referred to as Research Support & Governance (RS&G) has remained a fixed amount and is not activity based (see below)).

For 2016/17, there is a change to the RS&PD funding distribution across NHS

organisations, as £500,000 has been ring fenced for investment into the Clinical

Research Time awards (cohort 5, 2016/17) and Specialty Group Leads.

RS&PD is development funding intended to be invested in NHS staff in developing

their research careers and facilitating high quality research projects in the NHS in

Wales, therefore building NHS research capacity and capability. The Clinical

Research Time award provides protected time to NHS staff to develop projects or

research careers. Specialty Group leads are clinicians leading and supporting the

national endeavour to increase research activity in the NHS in Wales.



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The funding associated with these individuals will be allocated to their host NHS

employer as ring fenced funding provided as part of the NHS R&D allocations in

2016/17.

During 2016, a full review of the funding formula will be undertaken to address potential changes to the nature of studies undertaken, the integration of the research workforce and reflect the impact of the enhancing NHS approval programme. Any changes to the future activity based funding model in Wales will be undertaken in consultation with key stakeholders prior to implementation.

3. NHS R&D Funding Streams

In 2016/17 the NHS R&D Funding Streams for Wales are the same as those presented in the Welsh Government NHS R&D Funding Plan 2012/13- 2014/15. These funding streams are also outlined in Welsh Government’s Delivery Framework for Performance Management of NHS R&D. These are:

NHS Research Support and Governance (RS&G)

NHS Support Costs (NHS SC)

NHS Researcher Support and Portfolio Development (RS&PD)

These funding streams are also described in more operational detail in 1.2. The Appropriate Use of NHS R&D Allocations.

4. NHS R&D Allocations Budget 2016/17 The total budget for NHS R&D Allocations in 2016/17 is £13.4M. The total budget includes RS&G funding. However, in 2016/17, Welsh Government continues to manage a separate ring fenced budget to provide RS&G funding, for which £3M of the NHS R&D Allocations budget is used. The remaining £10.4M of the NHS R&D Allocations budget is available for:

NHS SC

NHS RS&PD (including a ring fenced amount in 2016/17 for Clinical Research Fellows and Specialty Group Leads)

The allocations also include a centralised funding pot for primary care, public health and Welsh Ambulance Service Trust (WAST) NHS support costs.

5. Description of the Activity Based Funding Model 2016/17-

Summary



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NHS RS&G - in 2016/17 the funding model remains the same as all previous

years since 2011/12. RS&G is allocated through a historical needs based assessment on NHS R&D office requirements carried out by Welsh Government in 2010. This is core funding which is ring fenced for R&D offices.

NHS SC - in 2016/17, the activity based funding model for NHS SC is the

same as the model used in 2015/16, which is based on: o A three year rolling average of recruitment to studies on the Clinical

Research Portfolio (CRP), with each study allocated to a complexity band (see section 7 for further detail)

o Multiplication of recruitment figures by the average tariffs associated with the relevant complexity band

o Proportional adjustment of the average tariffs for each complexity band to fit the budget for NHS SC 2016/17

NHS RS&PD - in 2016/17, the activity based funding calculation for RS&PD is

the same as the model used in 2015/16. The model is based on: o Activity Premium: A three year rolling average of the number of

studies (including PICs) on the Health and Care Research Wales CRP by complexity band using ratios (50%) combined with: A three year rolling average of recruitment to studies on the Health and Care Research Wales CRP by complexity band using ratios (50%)

o Leadership Premium: Number of studies a CI is leading on for Health and Care Research Wales CRP studies, affiliated to each NHS organisation combined with Number of Health and Care Research Wales Clinical Research Fellows (CRFs) in receipt of funding

between 01 October 2014 and 30 September 2015 employed by each NHS organisation using ratios

6. NHS R&D Activity Data The NHS R&D activity data1 which was used to inform the activity based funding model for 2016/17 was high quality research; defined as number of studies and recruitment data for studies eligible for the Health and Care Research Wales CRP. Data relating to Health and Care Research Wales CRP studies which were open and recruiting during the relevant time period were extracted from the Health and

Care Research Wales CRP2.

1 Note that for Health Boards, research activity data includes both primary and secondary care

2 Note that the data is extracted from the UKCRN database, with the CRP referring to the portfolio in Wales



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The data extracted from the Health and Care Research Wales CRP were:

recruitment to Health and Care Research Wales CRP studies by complexity band (Interventional, Observational, Large Sample), including primary care studies

number of Health and Care Research Wales CRP studies by complexity band (Interventional, Observational, Large Sample); and

Welsh Led Studies on the Health and Care Research Wales CRP

All NHS organisations were advised that the deadline for uploading data was 23rd October 2015. Assistance was offered to NHS organisations from the Support Centre to facilitate the activity data being as robust and as up-to-date as possible. Three- year Rolling Average

In 2014/15, the NHS R&D Allocations Advisory Group decided that for the 2015/16 NHS Support Costs and RS&PD Activity Premium allocations, a rolling average of data from the last two ABF periods would be implemented. The group also decided that for the 2016/17 NHS Support Costs and RS&PD Activity Premium allocations, a rolling average of data from the last three ABF periods would be implemented. The three-year rolling average includes the following reporting periods for activity:

01 October 2012 to 30 September 2013

01 October 2013 to 30 September 2014

01 October 2014 to 30 September 2015 The reporting period to determine the RS&PD Leadership Premium allocations was 01 October 2014 to 30 September 2015. This reporting period has been applied every year to date to coincide with the NHS activity based funding reporting periods in other UK nations

7. Complexity Bands Complexity bands have been used in the model when using recruitment data and number of Health and Care Research Wales CRP studies, in order to differentiate between study complexity and their associated costs. The three bands are:

Band 1- Interventional Studies: A study where the participants’ exposure to

a particular intervention (e.g. care pathway or lifestyle) is influenced by participating in the study (e.g. whether or not a participant receives a particular treatment will be determined by the research protocol).



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Band 2- Observational Studies: A study in which the participants’ lifestyle or

care pathway is not affected by being part of the study (e.g. the investigator does not determine whether or not participants receive or do not receive a particular treatment).

Band 3- Large Sample Studies: A study where the total UK planned sample

size (throughout the lifetime of the study), is equal to, or greater than 10,000 participants. This can be an observational or interventional study, but the key factor to determine the band is the total planned sample (participant) size of the study.

By including complexity bands within the model, a set tariff can be allocated to each complexity band to represent an average cost for supporting a study. Average tariffs have been used in the funding formula for NHS SC. Complexity bands have been used in the funding formulae for both NHS SC and NHS RS&PD. The complexity bands used in 2016/17 are the same as all previous years since 2013/14.

8. Activity Based Funding Model for NHS Support Costs 2016/17 The activity based funding model for NHS SC in 2016/17 is exactly the same as the model used in 2015/16. The funding formula, to calculate individual NHS organisation’s allocations for NHS SC in 2016/17, is calculated by:

recruitment to studies on the Health and Care Research Wales CRP with each study allocated to a complexity band;

Multiplication of recruitment by the average tariffs associated with the relevant study complexity band;

Proportional adjustment of the average tariffs for each complexity band to fit the budget for NHS SC 2016/17.

Based on experience from other UK nations, the proportion of R&D funding required for NHS SC (delivery funding) is approximately 40% of the NHS R&D allocations budget and 60% is often required to support active researchers (development funding). With the total NHS R&D allocations budget being £10.4M, £4.18M (40%) of the budget has been allocated to NHS SC.



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For NHS SC in 2016/17, support costs relating to primary care, public health and WAST studies continue to be centrally administered. The centralised budget for NHS SC in these sectors was calculated using the same funding formula. Average Tariffs for NHS Support Costs 2016/17 Using the funding formula described above for NHS SCs, the average 2016/17 tariffs for each complexity band are:

Average Tariffs for NHS Support Costs 2016/17

Band 1: Interventional Studies

£527

Band 2: Observational Studies

£125

Band 3: Large sample Studies £38

A similar model has been implemented in previous years in England; i.e. using tariffs for each complexity band, derived from a detailed costing exercise identifying average per patient costs, using a sample of observational and interventional portfolio studies. However, it is noted that the average tariffs are not comparable across UK nations due to the difference in the R&D infrastructure, NHS R&D funding streams and their purpose/ uses, e.g. the R&D infrastructure in Wales also has a Research Workforce, the costs for which could be considered to be covered by NHS R&D funding (e.g. delivery funding).

9. Activity Based Funding Model for Researcher Support and

Portfolio Development 2016/17

The activity based funding model for RS&PD is the same as the models used since 2012/13. This includes the number of participant identification centres (PICs) in the activity premium and the use of a three year rolling average of the number of studies and recruitment on the Clinical Research Portfolio (CRP). The RS&PD 2016/17 funding has been reduced by £500,000 for ring-fenced investment into the CRT scheme and Specialty Group Leads. The remainder of the funding stream has been subdivided into two separate premiums as this flexible funding is intended to support active researchers to act as collaborators in high quality research as well as to develop their own research as Chief Investigators, with the aim of securing grant funding for studies.



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The two premiums have separate funding formulae to enable the model to be sensitive enough to reflect their different purposes. These are:

Activity Premium: to incentivise NHS organisations to host and participate in

high quality research and to incentivise researchers in Wales to be Principal Investigators; and

Leadership Premium: to incentivise NHS organisations to lead their own

research and to reward NHS based Chief Investigators in winning grant funding.

Based on experience from other UK nations, the proportion of R&D funding required to support active researchers is approximately 60% of the NHS R&D allocations budget. With the total NHS R&D allocations budget being £10.4M, £6.27M (60%) of the budget has been allocated to RS&PD. Of this amount, £0.5m has been removed from the RS&PD budget to support Cohort 5 Clinical Research Fellows and Specialty Leads. This leaves £5.77M in RS&PD, with equal proportions on each premium: £2.89M* (50%) for the Activity Premium; and: £2.89M* (50%) for the Leadership Premium. For RS&PD in 2016/17, allocations relating to primary care, public health and WAST studies are included in the R&D funding allocations for NHS organisations (whereas the SCs are not part of the allocations for these settings/ organisations). Ratio Values for Activity Premium Ratio values have been included in the formula for RS&PD when using recruitment data and number of Health and Care Research Wales CRP studies. The ratio values used for complexity bands in 2016/17 are:

Ratio Values: Activity Premium 2016/17

Band 1: Interventional Studies

Ratio Value 14

Band 2: Observational Studies

Ratio Value 3

Band 3: Large sample Studies Ratio Value 1

Participant Identification Centres (PICs) Ratio Value 0.5



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Ratio values have been used in the funding formula for RS&PD. The ratio values are also based on the proportionate value of the average tariffs (used in NHS SC) described above. A balancing factor has also been applied within the Activity Premium for RS&PD to allocate an equal proportion of the budget to account for

number of Health and Care Research Wales CRP studies, (by complexity

band) including PICs and

recruitment to Health and Care Research Wales CRP studies (by complexity

band). This means that 50% of the Activity Premium budget has been allocated based on the number of Health and Care Research Wales CRP studies (including PICs) and 50% of the Activity Premium budget has been allocated based on recruitment to

Health and Care Research Wales CRP studies. The balancing factor used for number of studies and recruitment to studies in 2016/17 is 24.332. Activity Premium

Both number of Health and Care Research Wales CRP studies, (by complexity band) including PICs and recruitment to Health and Care Research Wales CRP studies (by complexity band) have been used within the Activity Premium, using a combination of two separate funding formulae. This is to incentivise NHS organisations to participate in a wide spectrum of research activity, participating in those studies with very high levels of recruitment (e.g. cohort studies investigating common diseases/ conditions and whole populations) as well as those studies which are likely to attract lower levels of recruitment (e.g. investigating rare diseases/ conditions or following a precision medicine approach). The funding formula, to calculate individual NHS organisation’s allocations for the Activity Premium for RS&PD in 2016/17, is calculated by:

number of studies on the Health and Care Research Wales CRP, including PICs, with each study allocated to a complexity band;

creating a ‘number of studies value’ using: the ratio values described above (Band 1: Interventional- Ratio 14; Band 2: Observational- Ratio 3; Band 3: Large Sample- Ratio 1: PICs- Ratio 0.5)

multiplied by the balancing factor 24.332



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Combined with:

recruitment to studies on the Health Care Research Wales CRP with each study allocated to a complexity band;

creating a ‘recruitment value’ using: the ratio methodology described above (Band 1: Interventional- Ratio 14; Band 2: Observational- Ratio 3; Band 3: Large Sample- Ratio 1)

Calculated by:

dividing the Activity Premium budget by the combined activity values (numbers of studies plus recruitment) for all NHS organisations to create an activity tariff;

multiplying combined activity values (numbers of studies plus recruitment) for each NHS organisation to calculate the allocation for the Activity Premium.

Ratio Values for Leadership Premium

Ratio values have also been introduced into the model for RS&PD when using leadership/ level of NHS involvement in Health and Care Research Wales CRP studies. The ratio values used for the leadership premium in 2016/17 are:

Ratio Values: Leadership Premium 2016/17

Chief Investigators

Ratio Value 3

Health and Care Research Wales Clinical Research Fellows

Ratio Value 1

Leadership Premium The funding formula, to calculate individual NHS organisation’s allocations for the Leadership Premium for RS&PD in 2016/17 is calculated by:

the number of Health and Care Research Wales CRP studies a Chief Investigator is leading on, affiliated to an NHS organisation in Wales;

the number of Health and Care Research Wales Clinical Research Fellows in receipt of funding between 01 October 2014 and 30 September 2015employed by each NHS organisation in Wales;



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creating a ‘leadership value’ using the ratio methodology described above (Chief Investigators- Ratio 3; Health and Care Research Wales Clinical Research Fellows- Ratio 1)

Calculated by:

dividing the Leadership Premium budget by the combined leadership value (numbers of Chief Investigators plus Health and Care Research Wales Clinical Research Fellows) for all NHS organisations to create an activity tariff;

multiplying combined leadership values (numbers of Chief Investigators plus Health and Care Research Wales Clinical Research Fellows) for each NHS organisation to calculate the allocation for the Leadership Premium.

Chief Investigator Affiliation In order to calculate NHS organisations’ allocations for the Leadership Premium, the Chief Investigator from each Welsh led study on the Health and Care Research Wales CRP has been affiliated with an NHS organisation. To do this, the Health and Care Research Wales Support Centre undertook a Chief Investigator/ NHS affiliation exercise whereby the Chief Investigators of Welsh led studies were contacted directly and asked to indicate which NHS organisation their study was best affiliated to. There are a number of cases where joint NHS organisation affiliation has been agreed, which led to the Chief Investigator premium being split equally between either two or three NHS Organisations. Where a Chief Investigator of a Welsh led Health and Care Research Wales CRP study was also a Clinical Research Fellow, the individual was only counted once as a Chief Investigator and was removed from the Clinical Research Fellow figure to avoid duplication.



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Appendix 1: Activity Based Funding Formula & Allocations Summary 2016/17

NHS OrganisationStudy

Complexity

Primary

Care

Secondary

CareTotal

Primary Care

Allocation

Secondary Care

Allocation

Total NHS SC's

AllocationNo. of Studies

No. Studies

Value

Recruitment

Value

Total Activity

Value

Activity

Premium

(Total)

No. CI's No. CRF's

Total

Leadership

Value

Leadership

Premium (Total)

Interventional 471.3 710.3 1181.7 £248,330 £374,252 £622,582 47.7 16,237 16,543 32,781

Observational 3.0 1767.0 1770.0 £375 £220,868 £221,243 47.3 3,455 5,310 8,765

Large Sample 33.3 166.7 200.0 £1,280 £6,401 £7,681 6.7 162 200 362

PICs 9.0 109 109

Total 507.7 2644.0 3151.7 £249,986 £601,520 £851,506 110.7 19,964 22,053 42,017 £559,978 26.5 2 81.5 £425,849 £1,587,346 £460,000 £2,047,346

Interventional 8.7 145.0 153.7 £4,566 £76,396 £80,962 26.0 8,857 2,151 11,008

Observational 13.0 671.0 684.0 £1,625 £83,872 £85,497 22.7 1,655 2,052 3,707

Large Sample 29.0 384.7 413.7 £1,114 £14,774 £15,888 6.0 146 414 560

PICs 7.3 89 89

Total 50.7 1200.7 1251.3 £7,305 £175,042 £182,347 62.0 10,746 4,617 15,363 £204,753 4.33 0 12.99999 £67,927 £447,722 £360,000 £807,722

Interventional 84.3 779.0 863.3 £44,432 £410,430 £454,862 48.0 16,351 12,087 28,438

Observational 557.3 1163.7 1721.0 £69,664 £145,453 £215,118 40.3 2,944 5,163 8,107

Large Sample 522.0 280.0 802.0 £20,048 £10,754 £30,802 8.7 211 802 1,013

PICs 8.3 101 101

Total 1163.7 2222.7 3386.3 £134,145 £566,637 £700,782 105.3 19,607 18,052 37,659 £501,890 17.5 3 55.5 £289,995 £1,358,522 £460,000 £1,818,522

Interventional 146.7 2299.3 2446.0 £77,274 £1,211,445 £1,288,718 72.0 24,526 34,244 58,770

Observational 29.3 3318.3 3347.7 £3,667 £414,778 £418,444 88.0 6,424 10,043 16,467

Large Sample 85.0 448.3 533.3 £3,265 £17,219 £20,483 11.7 284 533 817

PICs 10.0 122 122

Total 261.0 6066.0 6327.0 £84,205 £1,643,441 £1,727,646 181.7 31,355 44,820 76,176 £1,015,213 89.83 15 284.49999 £1,486,551 £4,145,206 £810,000 £4,955,206

Interventional 28.0 193.7 221.7 £14,752 £102,037 £116,789 11.3 3,861 3,103 6,964

Observational 64.0 372.0 436.0 £8,000 £46,498 £54,498 16.7 1,217 1,308 2,525

Large Sample 776.0 69.7 845.7 £29,803 £2,676 £32,479 4.7 114 846 959

PICs 5.0 61 61

Total 868.0 635.3 1503.3 £52,555 £151,211 £203,766 37.7 5,252 5,257 10,509 £140,050 15.33 2 47.99999 £250,806 £542,068 £260,000 £802,068

Interventional 0.3 247.0 247.3 £176 £130,136 £130,312 15.3 5,223 3,463 8,686

Observational 0.3 493.3 493.7 £42 £61,665 £61,706 20.7 1,509 1,481 2,990

Large Sample 0.0 50.3 50.3 £0 £1,933 £1,933 3.7 89 50 140

PICs 4.7 57 57

Total 0.7 790.7 791.3 £217 £193,734 £193,951 44.3 6,878 4,994 11,872 £158,218 8.5 0 25.5 £133,241 £485,193 £180,000 £665,193

Interventional 0.0 14.3 14.3 £0 £7,552 £7,552 1.3 454 201 655

Observational 0.0 28.3 28.3 £0 £3,542 £3,542 4.3 316 85 401

Large Sample 14.7 0.0 14.7 £563 £0 £563 0.3 8 15 23

PICs 3.0 36 36

Total 14.7 42.7 57.3 £563 £11,093 £11,657 9.0 815 300 1,115 £14,866 0 0 0 £0 £25,959 £70,000 £95,959

Interventional 0.0 73.3 73.3 £0 £38,637 £38,637 0.3 114 1,027 1,140

Observational 0.0 3.3 3.3 £0 £417 £417 0.7 49 10 59

Large Sample 0.0 1042.3 1042.3 £0 £40,032 £40,032 0.3 8 1,042 1,050

PICs 0.0 0 0

Total 0.0 1119.0 1119.0 £0 £79,086 £79,086 1.3 170 2,079 2,249 £29,977 4.5 2 15.5 £80,990 £110,967 £80,000 £209,713

Interventional 0.0 294.3 294.3 £0 £155,075 £155,075 37.7 12,831 4,121 16,952

Observational 0.0 44.0 44.0 £0 £5,500 £5,500 6.3 462 132 594

Large Sample 0.0 57.7 57.7 £0 £2,215 £2,215 2.0 49 58 106

PICs 0.0 0 0

Total 0.0 396.0 396.0 £0 £162,789 £162,789 46.0 13,342 4,310 17,652 £235,255 9 1 28 £146,304 £544,349 £210,000 £754,349

Interventional 0.0 135.3 135.3 £0 £71,303 £71,303 0.7 227 1,895 2,122

Observational 0.0 9.3 9.3 £0 £1,167 £1,167 0.7 49 28 77

Large Sample 0.0 0.0 0.0 £0 £0 £0 0.0 0 0 0

PICs 0.0 0 0

Total 0.0 144.7 144.7 £0 £72,469 £72,469 1.3 276 1,923 2,198 £29,299 0.5 0 1.5 £7,838 £37,137 £110,000 £122,275

2866.3 15261.7 18128.0 £528,977 £3,657,023 £4,186,000 599.3 108,406 108,406 216,811 £2,889,500 176 25 553 £2,889,500 £9,284,468 £3,000,000 £12,278,352

Primary Care £528,977

Public Health £79,086

Emergency Care £72,469

Total £680,532 £686,648

Clinical Research Fellows and Specialty Leads 2016/17 £500,000 £500,000

£9,965,000 £3,000,000 £13,465,000

Total NHS

R&D Funding

(ABF)

RS&G

Allocation

Total R&D

Allocation

2016/17

Recruitment * NHS SC's Tariff[(No. Studies * Balancing Factor(24.332) * Ratio Value) +

(Recruitment * Ratio Value)] * Activity Tariff(13.33)

[(No. CI's * Ratio Value(3) ) + (No. CRF's * Ratio Value(1) )]

* Leadership Tariff(5,225)

ABM UHB

Aneurin Bevan HB

Recruitment

NHS Support Costs RS&PD: Activity Premium RS&PD: Leadership Premium

BC UHB

C&V HB

Cwm Taf HB

Hywel Dda HB

Powys HB

PHW

Velindre NHS Trust

WAST

NHS Orgs Total

NHS SC Centralised

Pot

Grand Total

*£6,115.67 added here

following WAST

allocation surplrus

*Allocation agreed

between PHW and

Welsh Government

*Allocation agreed

between WAST and

Welsh Government



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Tariffs, Ratio Values and Budgets

Interventional £527

Observational £125

Large Sample £38

PICs 0.5

Large Sample 1

Observational 3

Interventional 14

24.332

2,889,500

216,811

13.33

CIs 3

CRF's 1

2,889,500

553

5,225Leadership Tariff

NHS Support Costs

Tariff

Activity Premium

Ratio Values

Balancing Factor

Activity Premium Budget (£)

Total Activity Value (All NHS Orgs)

Activity Tariff

Leadership

Premium Ratio

Values

Leadership Premium Budget (£)

Total Leadership Value (All NHS Orgs)

Documents

1.1. Activity Based Funding - Health and Care …...The NHS R&D activity data1 which was used to inform the activity based funding model for 2016/17 was high quality research; defined