Polyclinics: Navigating the opportunities, dispelling the ... · for more information visit us at ... Making it work for you Ian Hempseed Partner – Commercial Team and Head of Charities

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for more information visit us at www.hempsons.co.uk

© Hempsons 2009

Polyclinics:Navigating the opportunities, dispelling the myths

Chairman: Dr Tony StantonLondon - 4th March 2009

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Myth Busting

Christian DingwallPartner – Commercial Team

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Healthcare for London

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Our Health, Our Care, Our Say

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The Press

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The Press

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The Press

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Healthcare for London

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Lord Darzi

In evidence to the Health Select Committee July 2008:… What happens with these health centres, the type of services they provide, has to be a local decision…

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Equitable Access

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Conclusion

• The locally led approach to the procurement of the Equitable Access Programme, and the emphasis on services being designed to meet local needs, means that there will inevitably be variation between what we mean by “polyclinics”. Whereas a multi-service facility may be appropriate for some PCTs, it may not be suitable for others. But a key issue is that Equitable Access is principally about improving services rather than procuring new facilities.

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Procurement - The Tender Process

Andrew Daly Senior Solicitor – Commercial Team

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Objectives of Session

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Objectives

• Overview of a Part B procurement • Why is there a process at all?

• Advert

• Expression of interest

• PQQ

• ITT

• Preferred bidder

• Contract award or debrief

• Top Tips – avoiding the pitfalls

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Part B Services

Procurement Process Overview

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Why is there a process at all

• Cross Border Interest • PCT Procurement Guide • Value for money • Means all of you can bid

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The Advert

• Look out for adverts• National magazines – HSJ, Pulse etc • NHS Supply2health – www.supply2health.nhs.uk• local press• OJEU

• Interested in the opportunity? – express an interest

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Expression of Interest

• Tell the PCT you are interested.• Follow instructions• Ensure you meet the deadline – if you are late you are likely to be excluded.

• Likely to receive a Pre-Qualification Questionnaire (PQQ)

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PQQ

• Purpose is to shortlist providers• How shortlisting will operate usually will be set out in the PQQ

• Shortlisted on basis of suitable organisation rather than on how provide service

• Know your corporate structure

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ITT

• Those shortlisted providers will be required to submit a tender

• The ITT sets out instructions on how to submit tender

• Will be evaluated on basis of evaluation criteria set out in ITT

• Successful bidder will be chosen

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Preferred bidder

Congratulations, you won!• Sign the contract• Provide the services

But if commiserations….• Seek feedback and learn lessons for the next one

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Top Tips – Avoiding the Pitfalls

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Top Tips

• Consider at an early stage if you are actually interested in the opportunity – what would you have to sign up to?

• Make sure you give yourself enough time to read all of the documents and to complete them – will take time

• Processes may be different so always read carefully• Follow all the instructions• Don’t assume the PCT know anything about you –

explain everything• Hit deadlines

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Top Tips

….. They get easier with practice

Good Luck!

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Partnering

Christian DingwallPartner – Commercial Team

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London – proposed services in a polyclinic

• General practice services• Most outpatient appointments • Urgent care• Interactive health information services• Pharmacy• Community services• Minor procedures• Diagnostics - point-of-care pathology and radiology• Proactive management of long-term conditions• Other health professionals

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Suggested other services from elsewhere

• Citizens’ advice, benefits, housing etc• Dialysis• Chemotherapy• Teaching and training• Social care• Leisure and fitness services• Cognitive behaviour therapy and other mental health services

• Patient and social groups

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Polyclinics and GP services – three options for organisation

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Do you need a partner?

• Is a single partnership big enough?• Do you need a consortium?• Who will your partners be?• Are there restrictions on who you can partner with?

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Structure – first considerations

• Taxation• Confidentiality• Who are you entering into partnership with?• Objectives and conflicts of interest• Contributions and returns• Governance and control• Reporting and decision making• Third party consents• Exit strategy• The structure of the partnership

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Structure – key factors

• Ownership• Limited liability • Ring fencing risk• Tax implications• Cost and return• Management structure• Financing• Confidentiality• Transferability of ownership• Ease of termination and winding up

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Structure – options

• Informal association• Contract joint venture• Partnership• Limited liability partnership• Corporate joint venture

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Conclusion

• The key issues are to work out what services you are going to provide as a “polyclinic” and to give yourself enough time to consider and resolve the first considerations and key factors so that you can then choose the correct structure for partnering.

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Corporate Structures -Making it work for you

Ian HempseedPartner – Commercial Team and Head of Charities

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Basic Principles of a Company Limited by Shares

• Separate legal entity• Limited liability• Directors

• agents of the Company• day to day management

• Shareholders• owners• protected statutory powers

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Understand your Rationale

• Scope of business objectives• Retain profit• Distribute profit• Capital returns or asset locked• Shareholders accept exclusivity

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Who are the Shareholders

• Partnerships cannot hold shares• Nominate trustee

• amend Partnership Deed• tie in other partners

• In personal capacity• NHS Pension Scheme

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Funding and Return of Capital

• Ordinary Shares• equity stake• votes • dividends

• Share Capital locked in• Unless Redeemable Shares

• only redeemable out of distributable profits or share issue proceeds

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Funding and Return of Capital

• Loans• more flexibility for repayment • heavy gearing on balance sheet

• Tax advice

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Level of Contributions

• All pay the same• List size• Practice income size• Counting of votes

• pro rata to capital invested• one vote per practice

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Relationship of Board to Shareholders

• Board wish list• independence

• flexibility

• speed to act

• entrusted to deliver

• Shareholders wish list• control over key decisions

• elect the Board

• remove directors (s168 Companies Act 2006)

• regular management information

• AGM

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Statutory Duties of Directors

• Comply with Memorandum and Articles• Independence• Care, skill and diligence• Good faith to promote the company• Avoid conflicts of interest• Avoid benefits derived from directorship

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An Effective Board

• Size• Range of skills and experience• Term of office• How elected?• Nominations panel• Expulsion

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Exit

• Voluntary• Mandatory• Valuation• Guaranteed exit -v- pre-emption

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Ensure stays in NHS Family

• Death• Bankruptcy• Removal from GMC Register • Family Trusts• Delays in share transfers• Shares unsold

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What you need

• Clear on objectives and requirements• Create structure suited to your needs• Bespoke Memorandum and Articles• Shareholders Agreement

• off the public record

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Property Implications

Lynne AbbessPartner and Head of Professional Services Team

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Congratulations!

• You have won the tender.

• But how do you intend to provide the premises from which to provide the new services?

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Timing Issues

The Beginning:• Evidence of availability of premises at the time of the submission of the bid.

The End: • Ability to escape without loss upon termination of the contract.

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Timing Issues

Contract duration:-

• Typically 5 years.• Maybe terminated earlier?• Possibility of renewal.

Ideally flexibility is required.

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The alternative approaches to the provision of premises

Use of your existing premises:-• Owned by you• Occupied under Lease• Occupied under Licence

New Premises which you propose to:-• Licence• Lease – of already constructed premises• Lease – of newly constructed premises by third party• Acquisition and development of new premises by you

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The Alternative Approaches

Use of your existing premises• current risk already identifiable and acceptable to the

partners

New premises which you propose to take for the purposes of the contract

• new and additional unknown/unquantifiable exposure

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Existing Premises

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Existing Premises – general points

Essential points to consider generally:-

• Is the new contract to be held in the same name as that of the present occupiers?

Consider e.g.

• “Partnering” arrangements with other Practitioners

• the setting up of a new limited company

• If not - new arrangements will be required for occupation by the new entity.

• Consider any planning restrictions.

• e.g. restricted hours of opening

• e.g. car parking issues

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Existing Premises – already owned by you

Ensure there is no conflict with:-• The terms of any mortgage• Any restrictive covenant on the Title• Consider the implications upon termination of the contract with regard to:-

• Any rent/rent reimbursement which has been paid.• Any contribution received towards rates, utility bills, staff costs.

• Your ability to continue to fund any mortgage outgoings.

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Existing Premises – Current Lease

• Will your extended proposed use breach the terms of your Lease?

• If so this could lead to forfeiture of the Lease which will also impact upon your core business.

• You may apply to Court for relief from forfeiture (provided the breach (and thus the contract) ends.

• A very expensive procedure!

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Existing Premises – Current Licence

• A Licence does not provide an “interest” in land. • It merely grants “permission to occupy”.• Very little security.• A breach of a Licence could lead to termination.• No right to apply for reinstatement of the Licence.

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New Premises

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New Premises – to be occupied under Licence

• Consider the same points as above.• Significantly quicker to negotiate the terms than any alternative form of occupation.

• Likely to impose less onerous obligations upon termination.

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New Premises – Lease of already constructed premises

Generally:-• The shorter the Lease Term, the less cost effective it is.

• The longer the Lease Term, the higher the SDLT (if payable).

• Investigation of title and negotiation of Lease terms• A Lease is a contract imposing liabilities:-

• During the Term.• At the end of the Term, i.e. dilapidations

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New Premises – Lease of already constructed premises cont’d…

Lease Term• Seek flexibility through the inclusion of a Tenant’s only break clause.

Consider the terms of the Lease:-• Use• Repairs• Recurring costs (particularly service charge).

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New Premises – Lease of already constructed premises cont’d…

Repairing obligations:-• Schedule of Condition• Internal repairing Lease• Dilapidations at the end of the Term

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New Premises - Lease of newly constructed premises by third party

• Consider all the issues as above.• Timing issues:-

• Identification of site.• Agreement of plans and specification.• Planning consent.• Negotiation of Agreement for Lease and Lease.• Construction period.

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New Premises - Lease of newly constructed premises by third party cont’d…

• Tenants to appoint Monitoring Surveyor.• Tenants require Construction advice, particularly re:

• type of building contract• collateral warranties.

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New Premises – Acquisition and development of new premises by you

• As above re development issues• Secure funding:-

• “Benefit” of recession.• Problem of “credit crunch”.• Investigation of title and purchase of site.• Agreement between the owning partners.

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New Premises – Acquisition and development of new premises by you cont’d…

• Agreement between the owners and the non-owners/occupiers by way of:-

• A lease• A Licence

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Summary

• Timing is crucial.• Flexibility may be crucial:-

• Your premises’ provision may need to include a combination of any of the above

• Consider what you are seeking to achieve:-• Limited liabilities/no capital gain/short term occupation or• accept risks and liabilities/long term investment/ potential capital gain.

• The Syston Model

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SystonSystonHealthHealth

ConsortiumConsortium

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Who We AreWho We Are

• Dr Gareth Chidlow– GP, ENT GP Specialist, PBC Clinical Lead (Dr Hurwood & Partners).

• Dr Phil Green– GP, PBC Clinical Lead (Dr Roper & Partners)

• Ingrid Holt (MSc)

– Service Development Manager, Syston Health Centre

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Syston Health CentreSyston Health Centre

• Background

• Building

• Services

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The Health Centre The Health Centre ‐‐ BackgroundBackground• 1970’s build & PCT owned

− 2 GP Practices− PCT Community Services

• Maintenance backlog: £1million • Not DDA compliant

• 3rd party developer schemes aborted

Decision: pursue self‐build

“If they can make a profit, so can we!”

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Building Building –– the beginningsthe beginnings

• GP Consortium

• Stakeholder presentations− Developers − Lawyers

− Accountants− Bank

• PCT and SHA support

• Feasibility study and cost analysis

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Appointments

• ArchitectsDraw up plans

• SurveyorsHeads of terms / Project Management

• LawyersPurchase of site / Leases / Consortium Agreement

• AccountantsFinancial projections / Capital Allowances / VAT etc

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The Build ‐ Tendering

Traditional procurement process vs.

Fixed price design and build

• Selection of contractor

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The Building Process• Archaeology watching brief

• Constant involvement/meeting• IT/telephony

• Interior finishes• Furniture/clinical items

• Staged payments• Date for practical completion

• Snagging• Retention

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Building Maintenance• Quotes received

−Equion Fm −NHS

• Decision ‐ do it ourselves• Appointment Building Manager

• Appointment Cleaners

A rapid learning curve!

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Building ‐ future proofing

• Infection control• Re‐design of procedure rooms

• Ventilation (HTM guidelines)

• MRI docking station – power requirements/turning circles etc

• Car park system• CCTV

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Pharmacy

• ‘One‐stop’ licence• Tender for provider

• Threats of judicial review • Appoint ‐ professional negotiator

David Lancaster 01509 813243

www.davidlancaster.org

Our efforts doubled!

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Additional sources of finance

• Boots premium and rent

• SHA ‐ £100,000 start up fund

• Section 106 funding

• Car parking

• MRI pad

• Expansion zones

• IT wiring paid by PCT

• Providing services

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Media Coverage

• Local newspapers/radio• GP Journals

Benefits

• Project kept in public eye• Patients kept on side despite no parking!• Continued support from local community

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Commitment involved

• Commitment of all 10 partners

• Devolved to 2 partners• Dedicated time out of clinical work

**The Royal opening**

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What would we do differently?

• Heat recovery• Increased amperage of 2nd plug

• Air Changes• Procedure rooms:

– Ceiling Heights– Barium Plaster

– Under floor heating

• Increase recovery space?

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Services ‐ considerations

• Suitability of service

• EngagementPatients / Consultants / PCT / others

• Impact of guidance and targetsNational / Local

• Available resourcesFinance / Activity / Clinical Expertise / Facilities

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Services – Models

• Private Healthcare‐ HCC registration

‐ Physiotherapy, Counselling etc

• NHS Healthcare‐ Secondary care outreach – ultrasounds

‐ PCT managed services – community nurses

‐ Practice ran services – GMS Extended Services

‐ PBC – Nurse / GP led

‐ PBC – Sub‐contracted

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PBC Sub‐contracting

• PCT contract with the Practices for service provision

• Contract agreed ‐ reduced National Tariff• Practice sub‐contract the service to private /

NHS provider of choice. e.g. Blue Sky Orthopaedic Ltd.

• Regular monitoring / data sent to the PCT• Current – Hand Clinic

• Pending – Hernia Clinic

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Challenges

• Changes in guidance

• Competition

• Contestability rules

• Commissioner / Provider split

• Reliance on PCT – finance / data

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Current servicesCurrent services

• 2 GP teaching practices (22000 patients)

• GP registrar locality teaching

• Community services –DN’s, HV’s, School Nurses

• Speech Therapy• Audiology

(Paediatric & Adult)• Private and NHS

physiotherapy

• Hand service• GPSI ENT• Mobile MRI• Breast Screening• Echocardiography• Ultrasound• AAA Screening• Diabetic Retinopathy

screening• 24 hour BP / ECG• Nurse Practitioner for

LTC management

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Beyond primary/secondary care

• Dental• Ophthalmic

• Private Healthcare• Cosmetic

• Healthy Living Classes

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Further Considerations

• Time & Resources‐ Set up, Communication & Management

• Marketing Services‐ Geographical area

‐ Events, Information

• IT Support‐ Choose & Book

‐ Data transfer links for images and reports

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Future Possibilities

• Private clinics– Outpatients– Procedures

– Diagnostics etc.

• HCC Registration

• Separate Facility?

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Who we worked withWho we worked with

• Hempsons

• LloydsTSB

• Richard Peszynski

• KPMG

• Ashley House

• David Lancaster

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© Hempsons 2009

Polyclinics:Navigating the opportunities, dispelling the myths

London4th March 2009

Documents

Polyclinics: Navigating the opportunities, dispelling the ... · for more information visit us at ... Making it work for you Ian Hempseed Partner – Commercial Team and Head of Charities