Cordis Briefing

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Cordis Briefing

April 2017

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These are extracts from April 2017’s Cordis Briefing. Full versions of the slides are available for subscribers by

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Agenda

• Introduction / Opinion Polling

• Cordis Viewfinder 2017

• Funding for Social Care

• Profiling the Not-for-Profit Sector

• LHA Cap and Supported Housing

• Cordis Viewfinder 2017

• The NHS and Integration

Extract

Cordis Viewfinder 2017 &

funding for social care


Extract

Collective wisdom?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Strongly disagree Disagree Agree Strongly agree

2013 2014 2015 2016 2017

The squeeze on social care funding will

soon lead to a crisis which forces the

government to make more funds available

21% 79%


Extract

Budget

“Today, our social care system cares for over a million people and I pay

tribute to the hundreds of thousands of carers, who work in it.

“But the system is clearly under pressure. And this in turn puts pressure

on our NHS. Today, there are half a million more people aged over 75

than there were in 2010. And there will be 2 million more in ten years’

time.

“That is why the government has already delivered more than £7 billion

extra spending power to the system over the next three years….

“Today I am committing additional grant funding of £2 billion to social

care in England over the next 3 years, with £1 billion available in 17-18.

This will allow local authorities to act now to commission new care

packages.”


Extract

Budget

• £2billion over three years

– £1,010,000,000 in 2017/18

– £674,000,000 in 2018/19

– £337,000,000 in 2019/20

• On average it is around £13million per authority

• However actual distribution is more complex and intended to support

authorities in reducing delayed transfers of care.


Extract

Budget

• Largest additional funding:

– Kent £52.2million over three years

• Smallest additional funding (excluding Isles of Scilly at £97,000):

– Wokingham £338,172 over three years

• Around a third of the money is going to 20 of the 152 authorities


Extract

Budget

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

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Cornwall –

NOC/Liberal

Democrats

largest party Sutton


Extract

Budget

Local authority Total for 3 years % of total Political control

Kent 52,281,716 2.59% Conservative

Birmingham 51,056,185 2.53% Labour

Essex 49,862,220 2.47% Conservative

Lancashire 48,421,308 2.40% NOC/Labour

Hampshire 37,145,068 1.84% Conservative

Norfolk 36,366,269 1.80% NOC/Conservative

Derbyshire 31,739,609 1.57% Labour

Staffordshire 30,642,074 1.52% Conservative

Hertfordshire 30,546,869 1.51% Conservative

Devon 30,344,465 1.50% Conservative

Nottinghamshire 30,262,363 1.50% NOC/Labour

Lincolnshire 29,635,462 1.47% NOC/Conservative

Leeds 28,810,134 1.43% Labour

Suffolk 28,052,673 1.39% NOC/Conservative

Liverpool 27,063,384 1.34% Labour

West Sussex 25,338,528 1.25% Conservative

Durham 25,173,203 1.25% Labour

Manchester 24,336,236 1.20% Labour

Sheffield 24,078,295 1.19% Labour

Cornwall 23,951,338 1.19% NOC/Liberal Democrats

Population of these

authorities is around

17.7million people – 34%

of the England population


Budget

• £2billion in context

– ADASS identified an annual £2.6billion shortfall

– Payment of sleep in cover at NLW rates will cost around £100million (10% of

the first years payment)

– NLW will add around £2.3billion per year by 2020 to social care wage bill

– Cost of NLW for social care funded by local authorities estimated at

£360million

– At best around 46% of the money will be needed to pay for existing provision

which means that just over 50% is available to pay for ‘additional provision’.

– Government now argue that have increased funding on social care by over

£9billion over four years.(this includes the council tax precept)


Extract

Budget

• Better Care Fund starts to impact from 2017/18

1,010,000,000 674,000,000

337,000,000

105,000,000 825,000,000 1,500,000,000

820,900,000

1,289,800,000

1,804,000,000

-

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

3,500,000,000

4,000,000,000

2017/18 2018/19 2019/20

Additional budget funding Better Care Fund Council tax precept estimate

£1.9

billion

£2.7

billion

£3.6

billion


Extract

Budget

• Extra money has probably brought some time but…………

• Cost pressures in the system remain unfunded (NLW, growing

population of older people and people with complex disabilities)

• Uncertainty remains in terms of how much money is actually raised

through the precept, actual levels of demand (winter pressures) the

actual level of the Better Care Fund as it assumes savings else where

in the system.

• Extra money needs to do two things:

– Pay for rising costs of existing services

– Deliver additionality so more services are provided to more people

• Unclear how much of the latter will be delivered


Extract

Budget

• Ultimately this is a £2billion stop gap arrangement

• Chancellor also announced the intention to bring forward a Green

paper on long term funding

• This commitment or something more is likely to feature in the

Conservative manifesto


Extract

Funding negotiations


Extract

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017

Reduction of more than 20% Reduction of between 10% and 20%

Reduction of between 5% and 10% Reduction of between 0% and 5%

Freezing fee rates (i.e. 0% uplift) Increasing fee rates in line with inflation

Increasing fee rates above inflation

Freezing fee rates


Extract

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017

Reduction of more than 20% Reduction of between 10% and 20%

Reduction of between 5% and 10% Reduction of between 0% and 5%

Freezing fee rates (i.e. 0% uplift) Increasing fee rates in line with inflation


Reduction of more than 20%

Reduction between 10% and 20%

Reduction between 5% and 10%Reduction between 0% and 5%

Freezing fee rates

Increasing fee rates inline with inflation


The five year trend is fewer requests

for funding reductions.

However:

just under 20% still reported

requests for reductions of over 20%

30% reported requests for

reductions of between 10% and 20%


Extract

Funding negotiations

• Overall these appear more positive

• However this is still a sector which at best would be described as

‘distressed’


Extract

Profiling the not-for-profit sector


Extract

Research approach

• Longitudinal analysis, starting in 2012

• Exploring profitability and growth

• Based on year end results submitted to charity commission

• Looked at 122 charities delivering adult social care

• Categorised them (as far as possible) by main client group

• A combined turnover of more than £3bn in 2016, including:

– 24 charities with a turnover of more than £35m

– 44 charities with a turnover of £10-35m




Extract

All providers (122)

Profitability

• Looked at trends over four years

• Classified organisations as either:

– Struggling financially: deficits, or very low surpluses (in the region of 1%)

– Doing OK: surpluses of between 2% and 5%

– Outperforming: surpluses of more than 5%

Divergence:

Steady increase in the charities that

are struggling.

Steady decline in the charities that are

doing ok and outperforming.

Reasonable to assume this gap will

get wider in the coming years…

42%

53%49%

61%67%

33% 28%25%

20% 19%

25%19%

26%19%

14%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015 2016

Struggling

OK

Outperforming


Extract

All providers (122)

Growth

• Categories used:

– Stagnation/shrinking: below inflation-growth or shrinking

– Doing OK: slow continuous growth of around 3% - 5%

– Growing rapidly: steady growth of more than 5% per year

Relatively steady state:

Around half the cohort are stagnating or

shrinking.

Around a third are growing rapidly.

Reasonably steady since 2012 – perhaps a

modest improvement?

58%

51%

43%

53%48%

12%12%

19%15%

21%

30%

36%

38%

32% 31%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015 2016

Stagnating / shrinking

OK

Growing rapidly


Extract

All providers (122)

Snapshot in 2016

OutperformingOKStruggling

Sta

gn

ating /

sh

rin

kin

gO

KG

row

ing

rapid

ly

17% 7% 7%

16% 5% 2%

34% 7% 6%

15

%57

%


Extract

Overall

• Lots of similarities across client groups.

• All struggling with profitability now, including autism providers who

used to do ok on this back in 2012.

• But one or two interesting messages about growth:

• LD and Smaller providers, growth is difficult, in line with main cohort.

• MH / SM / Homelessness: may be turning things around a little. This

year’s performance is in line with the main cohort, whereas in previous

years they had trailed behind.

• OP services are continuing to grow faster than main cohort.


Extract

Overall

• We are seeing more distressed providers: marked increase in low

profit, low growth between 2012-2016.

• If historic trends are repeated, this pattern will continue.

• Very few providers are posting significant profits: it seems that growth

is an easier path to sustainability.


Extract

The NHS and integration

Back to the future?


Extract

Going further

• As part of Better Care Fund planning, areas must set out

plans for further integration by 2020.

• DH is encouraging areas to align their approach with

Sustainability and Transformation Plan geographies,

where appropriate.

• The focus may also be on commissioning integration or

through Accountable Care Systems or Organisations that

bring together provision.


Extract

Vanguards and integration

• Local areas are encouraged to use MCP and PAC

frameworks as guides to support local plans for

integration.

• “Scaling up of PACS and MCPs in a small number of STP

areas will create Accountable Care Organisations, with

further details in the Next Steps on the NHS Five Year

Forward View.”


Extract

Money

• In 2017-18, the BCF will be increased to a mandated

minimum of £5.128 billion and £5.617 billion in 2018-19.

• The local flexibility to pool more than the mandatory

amount will remain.

• The main change to the Framework from last year is

inclusion of the new social care grant funding.


Extract

Five Year Forward View update – key

points

Topic Key messages

Emergency care STPs and vanguards to be held to account for

stemming the growth in A&E admissions and bed

days. Vanguards to be docked funding if they fail.

Elective care NHSE acknowledges 18 week waiting target is

unachievable over the next 2 years

Primary care GP practices to be divided into regional hubs with an

average population size of 50,000

Mental health 150 new inpatient beds for children and young people

by 2019

Workforce Reforms to attract more nurses, including flexible

working

Technology Change in how trusts procure IT systems – exemplars

to be used as a blueprint

Accountable care Encouragement for ‘accountable care systems’


Extract

New care models

• MCP (14) and PACs (9) vanguard areas have lower growth in per

capita emergency hospital admissions than other areas of England:

– England 3.2%

– MCPs 1.9%

– PACs 1.1%

• Care home vanguards are making savings by reducing prescribing

costs, as well showing lower growth in emergency admissions

• NHSE is encouraging other areas to adopt vanguard models, and

MCPs and PACs to become accountable care systems


Extract

The future of STPs: population based

integrated health systems?

“Our aim is over the next several years to make the biggest

national move to integrated care of any major western

country”Five Year Forward View Next Steps

• Sustainability and Transformation Partnerships to cover every area of

England, coupled with integrated (‘accountable’) care systems

wherever possible


Extract

Principles

• STPs aren’t new statutory bodies

• The way STPs work will vary according to local need

• However, ‘to succeed, all STPs need a basic governance and

implementation ‘support chassis’’

• From April all NHS organisations will form part of an STP, which will:

– Have a board

– Appoint a chair/leader

– Have programme management support (if CCGs want to align their

management teams with STPs, NHSE will support that)

– Be able to propose an adjustment to their boundaries

– Be judged by results (metrics to be published)


Extract

Towards accountable care?

• Accountable care systems will be ‘evolved’ versions of STPs that are

working as locally integrated health systems.

• What does this mean?

A system in which a group of providers (or a single

provider) are held accountable for achieving a set of

outcomes for a defined population over a period of

time and for an agreed cost, under a contractual

arrangement with a commissioner.

Accountable Care: Focussing Accountability on the Outcomes That Matter,

WISH (2013)


Extract

Types of accountable care system

Accountable care

organisation

• Groups of health (and social care) providers working

together to provide care for a defined population

• Shift away from payment per intervention

• Outcomes based – can consider non-clinical

interventions

• Information sharing

• Savings made through achieving better outcomes

• Savings can be shared with payer

Alliance

contracting

model

• One contract between commissioner and alliance of

organisations

• Agreement between parties to work co-operatively

• Payment mechanisms can be structured to spread risk

between providers

• Risk of competition between partners


Extract

Types of accountable care system

Lead provider

model

• Outcome based contract let to a single accountable

lead provider for the whole programme of care

• Lead provider sub-contracts to others, manages and

decides on financial incentives and contract

mechanisms

• Lead provider incentivises different aspects of care to

work together as a whole

• Could be difficult to decide who should lead

Contracting

outcomes based

incentivised

contracts

(COBIC)

• Performance based contracting

• Emphasis on allowing time to define outcomes and test

through stakeholder involvement

• Can be difficult to specify outcomes


Extract

CCGsAverage pop’n size 226,00

(211)

Social

care

Public

health

Community

health

Mental

health

Primary

care

Hospital

services

Local Authorities

(152)

Public Health

England

Reg-

ulators

CQC

NHSI

Specialised

services

Primary

care

BCF

STPs (44)Average footprint pop’n 2m

New Care Models (‘Vanguards’)

Dept of Health

NHS England

(+ 4 regional teams)

209

2017


Extract

CCGsAverage pop’n size 226,00

(209)

Social

care

Public

health

Community

health

Mental

health

Primary

care

Hospital

services

Local Authorities

(152)

Public Health

England

Reg-

ulators

CQC

NHSI

Specialised

services

Primary

care

BCF


New Care Models (‘Vanguards’)

Dept of Health

NHS England



Accountable Care Organisations

2024?


Extract

Social

care

Public

health

Community

health

Mental

health

Primary

care

Hospital

services

Local Authorities

(152)

Public Health

England

Reg-

ulators

CQC

NHSI

Specialised

services

Primary

care

Dept of Health

NHS England


STPs Average footprint pop’n 2m

Accountable Care Organisations

2024?

Regional Health

Authorities

Area Health

Authorities

Hospital, specialist and community

health services

Family

Practitioner

Services

1974

Boards of

Governors of

Teaching

Hospitals

Dept of Health and

Social Services

Public

Health

Residential

care


Extract


Documents

Cordis Briefing