THE ROYAL BOURNEMOUTH AND CHRISTCHURCH HOSPITALS NHS … · Patient Story Paula Shobbrook: Verbal (b) CQC Quality & Risk Profile Update : Paula Shobbrook Verbal : 5. PERFORMANCE (a)

BoD/Agenda 08.06.2012 Page1 of 2

THE ROYAL BOURNEMOUTH AND CHRISTCHURCH HOSPITALS NHS FOUNDATION TRUST

A meeting of the Board of Directors will be held on Friday 8 June 2012 at 8.30am in the Committee Room, Trust Management Suite, Royal Bournemouth Hospital

If you are unable to attend on this occasion, please notify me as soon as possible on 01202 704777.

Karen Flaherty TRUST SECRETARY

A G E N D A APPENDIX

1. APOLOGIES FOR ABSENCE 2. MINUTES OF THE PREVIOUS MEETING (a) To approve the minutes of the meeting held on 11 May 2012 A

(b) To provide updates to the Actions Log B

3. MATTERS ARISING (a) Medical Staffing during evenings and at weekends

(53/12(a)) Mary Armitage Verbal

4. QUALITY (a) Patient Story Paula Shobbrook Verbal

(b) CQC Quality & Risk Profile Update Paula Shobbrook Verbal 5. PERFORMANCE (a) Increase in Non-Elective Demand – Jane Pike, Director of Acute and

Primary Care Services, NHS Bournemouth & Poole and NHS Dorset PCT Cluster in attendance

9.00am

(b) Performance Report Helen LIngham C (c) Financial Performance Stuart Hunter D 6. STRATEGY (a) Proposed merger between Poole Hospital and

RBCH Tony Spotswood E

7. DECISION (a) Audit Committee Terms of Reference Karen Flaherty F 8. DISCUSSION (a) Summary of Feedback on Monitor’s Stakeholder

engagement on the new NHS provider licence Karen Flaherty G

BoD/Agenda 08.06.2012 Page2 of 2

(b) Any Qualified Provider Tony Spotswood H 9. INFORMATION (a) What makes a Top Hospital 5 - External Influence Tony Spotswood I (b) Rationing Health Care – Nuffield Trust Tony Spotswood J (c) Core Brief (May) Tony Spotswood K (d) Communications Update (inc RAAI May) Richard Renaut L (e) Board of Directors Forward Programme and 2012

meeting dates Karen Flaherty M

10. NEXT MEETING

Friday 13 July 2012 at 8.30am in the Committee Room, Royal Bournemouth Hospital

11. ANY OTHER BUSINESS Key Points for Communication

12. COMMENTS QUESTIONS FROM THE GOVERNORS

Board Members will be available for 10-15 minutes after the end of the Part I meeting to take comments or questions from the Governors.

13. EXCLUSION OF PRESS AND PUBLIC AND OTHERS To resolve that under the provision of Section 1, Sub-Section 2, of the Public Bodies

Admission to Meetings Act 1960, representatives of the press, members of the public and others not invited to attend be excluded on the grounds that publicity would prove prejudicial to the public interest by reason of the confidential nature of the business to be transacted.

_______________________________________________________________________________________ BOD/PT 1 MINS 11.05.2012 PAGE 1 OF 12

THE ROYAL BOURNEMOUTH AND CHRISTCHURCH HOSPITALS NATIONAL HEALTH SERVICE FOUNDATION TRUST

Minutes of a Meeting of the Royal Bournemouth and Christchurch Hospitals National Health Service Foundation Trust Board of Directors held on Friday 11 May 2012 in the Committee Room, Royal Bournemouth Hospital Present: Jane Stichbury

Tony Spotswood Mary Armitage Karen Allman David Bennett Pankaj Davé Brian Ford Stuart Hunter Steven Peacock Alex Pike Richard Renaut Paula Shobbrook Ken Tullett

(JS) (TS) (MA) (KA) (DB) (PD) (BF) (SH) (SP) (AP) (RR) (PS) (KT)

Chairman (in the chair) Chief Executive Medical Director Director of Human Resources Non-Executive Director Non-Executive Director Non-Executive Director Director of Finance and IT Non-Executive Director Non-Executive Director Director of Service Development Director of Nursing and Midwifery Non-Executive Director

In attendance:

Karen Flaherty Donna Parker Dily Ruffer Tracey Hall Sue Mellor John Giles Judith Adda Mike Allen David Bellamy Sue Bungey Sharon Carr-Brown Derek Chaffey Carole Deas Lee Foord Eric Fisher Bob Gee Graham Swetman David Triplow Mr A Doxon Vivien Duckenfield Rosemary Gould Margaret Neville Jamie Pride

(KF) (DPa) (DR) (TH) (SM) (JG) (JA) (MAll) (DBe) (SB) (SCB)(DC) (CD) (LF) (EF) (BG) (GS) (DT) (AD) (VD) (RG) (MN) (JP)

Trust Secretary Deputy Chief Operating Officer Governor Co-ordinator Head of Communications Patient Engagement & Voluntary Services Manager (for items 1-4(a)) Volunteer (for items 1-4(a)) Public Governor Public Governor Public Governor Public Governor Public Governor Public Governor Public Governor Appointed Governor Public Governor Public Governor Public Governor Public Governor Member of the Public Member of the Public Member of the Public Member of the Public Member of the Public

Apologies: Helen Lingham (HL) Chief Operating Officer

49/12 MINUTES OF MEETING HELD ON 13 APRIL 2012 (Appendix A)

The minutes of the meeting held on 13 April 2012 were received and accepted as a true record of the meeting.


50/12 ACTIONS LOG (Appendix B)

(a) PCT Attendance (41/12(a)) TS noted that arrangements had been agreed for representatives from the PCT to attend the Board meeting in June to discuss working together to manage demand. He reported that there had been a positive discussion with Dr Forbes Watson from the shadow Dorset Clinical Commissioning Group at the Trust management Board meeting the previous week. MA noted that the issues may have not been presented so starkly before and Dr Forbes Watson had been very willing to listen. She further noted that the clinicians had welcomed the opportunity to speak with him directly.

51/12 MATTERS ARISING

There were no matters arising.

52/12 QUALITY

(a)

Patient Story

PS introduced John Giles, who was a former patient and a volunteer at the Trust. PS thanked the volunteers for their work at the Trust. JG provided information about his background and the circumstances around his admission to The Royal Bournemouth Hospital. He noted that he was admitted through ED and had subsequently undergone emergency abdominal surgery. He noted that he then spent four days in Hospital and had been informed that his condition would have been fatal without surgery. He reported that he had left having had a positive experience and feeling immense gratitude. From his experience with the Trust he noted that:

some patients needed an advocate to speak out in their best interests and to represent the disadvantaged;

the layout of the bays did not always allow staff to monitor the needs of patients;

the drop in activity on the Wards over the weekend was quite stark;

it was important that commitments about consultant or physiotherapist visits were kept; and

staff should not assume any medical knowledge on the part of the patient.

He noted that he became a member of the Trust and then later a volunteer and now volunteered one morning each month. He


noted that he met with Sue Mellor and was participating in a pharmacy project as well as the carrying out the patient experience surveys. He noted staff on the Wards were very welcoming when he was carrying out the surveys. He added that there was a difference in patient participation depending on whether a patient was coming in for elective surgery or was an emergency admission. He would be interested to know if there was any opportunity to give feedback in a less structured way than the surveys. He concluded by commending the Governors on the amount of work they did as volunteers. AP noted that the experience JG had shared was very powerful and although he had a positive experience overall she wanted to pick up on some themes that he had raised and wanted to meet up with him after the meeting to discuss there. JS thanked JG for attending the meeting and sharing his experiences and providing feedback at the meeting and when they had discussed these issues on a previous occasion. JG and SM left the meeting.

AP

(b) CQC Quality and Risk Profile Update (Appendix C)

PS noted that: the Trust was still viewed as low risk; the CQC had less data about the Trust than in the previous

month; she and TS had met with the CQC local inspector earlier in

the week and the Trust could expect an inspection before the end of May on the medicines management issue; and

with the work that had been done, she felt confident in advance of the visit.

MA noted information about the visit should be shared with staff and PS confirmed that this was planned for the following week.

(c) CQC In-Patient Survey (Appendix D)

PS noted that this work was in addition to the real-time patient feedback that JG and other volunteers collected. PS noted that she was disappointed that the CQC had changed its methodology and therefore it was not possible to compare the Trust’s performance this year to last year's performance. She noted however that the Picker Institute work gave an indication on how the Trust was performing. PS further noted that the Trust had performed better in 4 out of the 5 CQUIN measures and there had been other improvements. PS noted that the next CQC survey would be conducted in July and the Picker Institute would again be conducting this on behalf


of the Trust. MA noted that the point at which amber status applied did not appear clear. PS noted that the Trust's internal analysis had improved and the patient experience work would continue with improvements in the areas identified through this analysis. KA asked whether it would be possible to correlate the data with the results from the staff survey and use it for performance reviews. PS noted that there was analysis of specific areas as well as Directorates, which was being used to build individual action plans. SP asked about the areas of concern and the timescale for delivering the action plan. PS responded that the action plan was being pulled together and would be reviewed by the Patient Experience and Communications Committee. PS noted that there was a Patient Strategy Development Day the following week, attended by patients, carers and staff to help develop a Patient Experience Strategy including patient pledges. In response to a question from PD, PS noted that the improvements in ED would have an impact on the survey results. AP noted that she supported the CQC philosophy of aiming for excellence in the way trusts were rated as amber. She noted that there had been tremendous improvement since the survey was first carried out. She also drew attention to the scores on questions 41 and 44 of the CQUIN questions and the need to allow patients to talk about their treatment and concerns. JS noted the Board support for the action plans.

53/12 PERFORMANCE

(a) Performance Report (Appendix E)

DPa presented the report. She noted that: there been a reduction in the number of patients in April

compared to the previous month; the Trust would be reporting on the trajectory for new

targets for C. Difficile from next month; although the Trust was meeting cancer standards there

were challenges in Urology and around fast track referrals; the low volume of patients affected performance against the

62 day screening cancer standard in February; fast track referrals continued to be a challenge with ongoing

media campaigns; there was an increase of 19% in the number of patients for

bowel screening as a result of the media campaign although this was within the planned capacity for the


campaign and the expected level of positive results would not cause pressure for treatment;

the Trust was meeting national and local requirements for ED although the pressure was increasing;

stroke performance has improved which reflected the ongoing work on discharge although there was still some way to go on meeting the direct admissions target;

the Stroke Unit team were providing an outreach service to patients who were not in the Stroke Unit;

the Trust had finished the financial year in a positive position on the 18 week wait with the capacity issue in Gynaecology resolved although the Trust was still working with Orthopaedics; and

the performance on appraisals had improved and it was expected to continue to improve.

JS asked about the low percentage of patients being directly referred to the Stroke Unit. DPa noted that the issue was related to discharge processes which had been the focus of the work to improve performance. TS noted that the volume of attendances in ED was also a factor and this had been raised with Dr Forbes Watson, particularly given that the increase in ED attendances locally was bucking the national trend. PD asked for data about medical staffing during evenings and weekends compared to the week days. MA noted that the figures would be quite shocking, noting by way of an example that in the Medical Directorate the number of junior doctors went from over 120 to 10. MA welcomed the Board's focus on this issue which would require a change in working patterns. TS agreed that this was a cultural shift but also the tariff system was predicated on Monday-Friday, 9-5 service which would also need to change to support the move to 24/7 services which would require discussions with the PCT. SP noted that the number of patients seen on fast-track referrals could reach 600 patients a month soon based on the trend. DPa responded that the Trust needed to continue to review capacity and its ability to flex this, if this volume was to continue. SP also requested whether there was an analysis on the impact of the acuity of patients on capacity. DPa noted that this would need to be considered when capacity was reviewed. DB was concerned with the capacity planning in the Stroke Unit and felt it would be good to review this. JS suggested that this could be discussed with Damian Jenkinson later in the meeting. KT noted that the target for TIA High Risk Patients appeared low. TS noted that as national clinical lead for stroke, Damian Jenkinson would be well-placed to comment on that target too.

MA HL


RR noted the strong rationale for telemedicine to meet the drive for 24/7 care and added that stroke was one of the areas where the tariff had moved to rewarding seven day working. JS noted that whilst the Board appreciated the good work being done in the Stroke Unit it wanted to see improvements in the reported performance given the level of investment in the Unit and the impact on the outcomes for patients of meeting these targets.

(b) Financial Performance (Appendix F)

SH presented the position for the 2011/12 accounts, noting that this was still subject to audit. He noted that:

March was particularly busy even compared to usual patterns;

investment in innovation and quality on a recurrent and non-recurrent basis had been approved by the Trust Management Board;

the Trust's income there was £4.5m surplus which equates to 1.9% of turnover, and £18.5m before interest, taxation, depreciation and amortisation; and

he was delighted with the position and expressed his gratitude to teams in the individual Directorates.

SP noted the importance of recurrent savings in reaching this position. JS asked about the investment in innovation and quality and SH responded that he was likely to bring this back to the Board next month. BF noted that the Finance Committee had written to all the Clinical Directors and General Managers to thank them for all the work they had done after its latest meeting at which it had reviewed the year-end financial position. AP noted that the Trust needed to capitalise on the stable financial position to invest in excellence in quality. JS noted the importance of the accountability and commitment of individual Directorates in achieving this level of financial performance.

54/12 STRATEGY

(a)

Proposed Merger between RBCH and Poole Hospital (Appendix G)

TS gave an update, noting that: work was progressing on the submission to the OFT but

was involving more work than had been anticipated from TS, RR, Chris Bown and Gareth Corser;

the Trusts were discussing the fees with their advisers;


the arguments needed to rehearsed now for possible referral to the Competition Commission later;

the OFT process was likely to take two months and following possible referral to the Competition Commission the Trusts were unlikely to complete the whole process before February 2013;

It was understood that Monitor was likely to risk rate the transaction rather than conduct an assessment under the Health and Social Care Act 2012;

the memorandum of agreement had now been concluded; efficiency assumptions had increased and were now even

more challenging; and there had been positive feedback on the first stage of the

appointment process for the Chairman. SP noted his disappointment that the Trust was not getting the support from its advisors that it had expected. TS noted that the merger was breaking new ground and possibly the Trusts had higher standards but on the basis that they needed to put the best case forward for the merger. He noted that as the Trusts start to look at the organisational design work they will look more closely from the start at the help that can be provided, to ensure a blending and integration of the two organisations. SP asked about the support on the clinical savings. TS noted that the team had been changed in response to some concerns raised and that this had been done quickly. RR noted that while the Trusts were focussing quite intensely on the initial submission to OFT this work would take the Trusts forward for the next six months. He noted the Trust was the best advocate for its case although it needed advice on the process. He noted the OFT work may be offset by time saved on the Monitor application. PD commented that he was concerned that the Trusts were dealing with authorities which did not understand the business. TS noted that the OFT had been clear that it would not look at qualitative issues. He noted that the financial issues were generic but the quality issues were more specific to this merger. RR explained that one of the tests was the customer view of the merger so the PCT, Governors and local authorities were likely to be questioned by the OFT to understand their views. He noted that some of the issues about the sector had to be explained such as foundation trusts being not-for-profit and prices being fixed with the result that a reduction in competition was not likely to give rise to a reduction in quality or an increase in price. PS noted that governance structure already in place around quality, with quality impact assessment in the CIP. DB emphasised that given that the OFT did not look at quality the


focus should be on the counter-factual case with input from the advisers. TS agreed that the advisers had strengths in that area and it was important that the trusts focused more on the clinical case. RR confirmed that in the case being prepared the arguments on competition and choice being available was through the community providers, private providers and new entrants. DB noted the link with the discussions on AQP and the need to have a view of integrated care rather than unbundling this. AP noted that from her experience it was best to assume no knowledge of business or markets on behalf of the OFT or advisers. AP offered support to review the submission to ensure that some of these points were not missed as it was easy to do when one is working so closely on something. KT asked whether third parties would be invited to comment and review the submission. TS noted that although this was new, it was likely that the views of Monitor and commissioners would be sought. Possibly by the OFT certainly following any referral to the Competition Commission. He noted that Frontier’s support could be offered to the commissioners but it was unlikely to be necessary for Monitor which had more experience of dealing with competition issues and regulators. He confirmed that it was still to be determined how much of the document would be shared with commissioners and Governors. KT noted whether there was any opportunity to demonstrate support. JS advised that the submission was likely to be confidential at this stage given the general approach adopted on maintaining confidentiality over joint work.

AP

(b) Proposed Merger Consultation Summary (Appendix H)

RR presented the report, noting that: the consultation process had been thorough; some of the comments received conflicted; there was no clear choice on the name from the comments

received; and the responses would be worked through over the next few

months by both Trusts to conclude the consultation process.

JS noted all the support the Communications Department had provided to both Trusts through the consultation process.

(c) Annual Strategy Consultation Summary (Appendix I)

RR presented the report and noted that there had been less interest in this consultation, possibly due to the merger consultation running simultaneously. He noted that most of the comments had been positive and the plan would be presented to


Board and the Council of Governors on 22 May before being submitted to Monitor at the end of May.

55/12 DECISION

(a) Code of Governance Disclosure Statement (Appendix J)

KF presented the report. There were no comments or questions. The Board approved the statement for submission to Monitor and the disclosure in the Annual Report.

56/12 DISCUSSION

(a) Any Qualified Provider (Appendix K)

TS reported that: he had asked the PCT what was the desired outcome from

this process and explained the importance of an integrated service being offered at the national tariff;

the Dermatology specification did not protect patients and did not provide integration;

the Trust had spoken to legal advisers about alternative options to challenge the current process but it was hoped that discussions around the tariff and the specification would lead to a satisfactory outcome;

in the case of NHS Wiltshire, the Competition and Cooperation Panel had decided that there was a reduction in patient choice as a result of a reduction in price;

he believed that the Trust had a very good case; the Trust had received responses from both Dorset County

Council's and Borough of Poole Council's Oversight and Scrutiny Committees who were reviewing this;

the Trust was still awaiting a response from Bournemouth Borough Council; and

given previous comments by the PCT on the risk of cherry-picking when paying less than the tariff on cataract surgery the potential impact for the Trust's services may have been inadvertent.

RR noted that the main issue was not the Trust around preventing competition as the Trust accepted this but around complying with the national rules on price and the impact on other services with the possibility that these become unviable. MA noted that the Dermatologists at the Trust had worked very hard with providers in the community on integration, including specialist GPs, providing support on education and with advice and audit. TS reported that the Trust had received a copy of a letter on the


Dorset Locality Elective Community Care Strategy. He noted that it was difficult to understand how this was compatible with QIPP and improving efficiency. He noted that it also appeared incompatible with recent steps to move Phlebotomy services to hospitals. He explained that it was important for the Trust to give its views about what services were provided in the community. JS noted that as a Board, they were supportive of the meeting with the PCT taking place on the 17 May and of arguments that had been expressed in the paper and at the meeting around clinical quality, adherence to national processes and the need for proper consultation. She noted that it was very important for the Trust to raise its genuine concerns about the very best care being delivered to patients in the right setting. SP asked that outcome of meeting with the PCT on 17 May be shared with the Board.

TS

57/12 INFORMATION

(a) Objectives set for NHS Commissioning Board Authority (Appendix L)

This item was noted for information. BF noted the comments in the letter from Andrew Lansley about capacity at Monitor and the National Commissioning Board.

(b) Core Brief (Appendix M)

This item was noted for information.

(c) Communications Update (Appendix N)


(d) Active Travel Plans (Appendix O)

This item was noted for information. RR noted that the aim of the plans was to reduce congestion on site.

(e) Board of Directors Forward Programme (Appendix P)


58/12 DATE OF NEXT MEETING Friday 8 June 2012 at 08.30am, Committee Room, Royal Bournemouth Hospital

59/12 ANY OTHER BUSINESS KT noted that there were still a few remaining tickets for the Jigsaw Appeal event at Chewton Glen.


Key Communications points for staff 1. Merger update. 2. Performance. 3. Patient story. 4. AQP.

60/12 QUESTIONS FROM GOVERNORS 1. DT urged the Trust to fix the dates for the feedback on the

consultation and Ernst & Young's work to be presented to the Governors.

2. DC asked about Dermatology and Endoscopy services at

Christchurch Hospital and whether these were likely to stay. He noted that he was providing details to residents to attend meetings to hear the updates. TS noted that the future plans for the Christchurch Hospital site had been disclosed in the consultation. TS noted that the AQP process could lead to the withdrawal of some services from Christchurch Hospital and no impact assessment had been done by the PCT. TS noted that although there were some sceptical views expressed with regard to merger, the Trust need to redouble the efforts to explain the rationale for the merger as there was general support. SB added that Christchurch Borough Council had not replied to the Trust's letter about Dermatology services.

3. SCB noted that she was pleased that Bournemouth Borough Council

was offering some support for Governors' involvement with Health and Wellbeing Boards. She noted that the Council of Governors should support the effort to move Phlebotomy services into the community. In relation to competition on the merger she noted that it was important that the OFT understood the broader context and the use of AQP. She noted that the personal voice could be powerful in this context and may help demonstrate that integration was of greater importance than competition. TS commented that arrangements were being made for Suzanne Rastrick to attend a seminar for the Council of Governors and the issue of Phlebotomy services could be raised then. TS further noted that the OFT had set out the format of the document which did not accommodate Governor input as it was quite singular in the assessment it would make but this would play better with the Competition Commission.

4. JA noted that in media releases about the merger the order of the

Chairman and Chief Executive quotes should be rotated to ensure equal prominence for both Trusts. AP noted that although this would be considered the press would ultimately decide how to present this.

5. JA also asked that in its strategy on communicating with patients the

Trust should take into account the level of information that different patients may want. PS noted that in some areas, such as medication, the Trust was doing well on communication.

6. EF noted that he had noticed while carrying out real-time patient


surveys that the information on display in ED about the referral process was outdated. PS noted that SM was working with the Charitable Funds Committee to secure funding to help improve the appearance of the ED. RR noted that the Trust was genuinely trying to work with GPs locally to address issues around accessibility to GP services.

7. DC noted that treatment for Orthopaedic outpatients at Christchurch

Hospital should be considered by the Trust so that patients did not have to travel to Poole Hospital for treatment. TS responded that there was an agreement in place that Orthopaedic patients with fractures or following trauma admissions should be seen at Poole Hospital and the majority of elective patients should be seen at RBCH. MA noted that this issue was regularly raised with the Orthopaedic Directorates and streamlining the process had been of benefit to the majority of patients and had allowed the Trust to offer some of the shortest waiting times for elective Orthopaedic services.

8. SB reported that she had written to the local authorities and the

Secretary of State for Health seeking representation for the Council of Governors of foundation trusts on the local Health and Wellbeing Boards which were being established.

9. MAll reported that he had collapsed from a seated position in the

Atrium whilst visiting the Trust. He described in vivid detail how he was moved to ED, his treatment and the tests carried out there. He noted that he was thoroughly satisfied with the treatment he had received.

There being no further business the meeting was declared closed.

__________________________________________________________________________________________________________________ BOD / 11.05.12 PAGE 1 OF 2

THE ROYAL BOURNEMOUTH AND CHRISTCHURCH HOSPITALS NATIONAL HEALTH SERVICE FOUNDATION TRUST

Actions carried forward from a Meeting of the Royal Bournemouth and Christchurch Hospitals National Health Service Foundation Trust Board of Directors held on Friday 11 May 2012. 52/12 QUALITY

(a)

Patient Story

AP noted that the experience JG had shared was very powerful and although he had a positive experience overall she wanted to pick up on some themes that he had raised and wanted to meet up with him after the meeting to discuss there. JS thanked JG for attending the meeting and sharing his experiences and providing feedback at the meeting and when they had discussed these issues on a previous occasion.

AP

Meeting to be arranged

53/12 PERFORMANCE

(a) Performance Report (Appendix E)

PD asked for data about medical staffing during evenings and weekends compared to the week days. MA noted that the figures would be quite shocking, noting by way of an example that in the Medical Directorate the number of junior doctors went from over 120 to 10. MA welcomed the Board's focus on this issue which would require a change in working patterns. TS agreed that this was a cultural shift but also the tariff system was predicated on Monday-Friday, 9-5 service which would also need to change to support the move to 24/7 services which would require discussions with the PCT.

MA

__________________________________________________________________________________________________________________ BOD / 11.05.12 PAGE 2 OF 2

SP noted that the number of patients seen on fast-track referrals could reach 600 patients a month soon based on the trend. DPa responded that the Trust needed to continue to review capacity and its ability to flex this, if this volume was to continue. SP also requested whether there was an analysis on the impact of the acuity of patients on capacity. DPa noted that this would need to be considered when capacity was reviewed.

HL

Response to be provided at meeting

54/12 STRATEGY

(a)

Proposed Merger between RBCH and Poole Hospital (Appendix G)

AP noted that from her experience it was best to assume no knowledge of business or markets on behalf of the OFT or advisers. AP offered support to review the submission to ensure that some of these points were not missed as it was easy to do when one is working so closely on something.

AP

To be discussed at meeting on update of merger.

56/12 DISCUSSION

(a) Any Qualified Provider (Appendix K)

SP asked that outcome of meeting with the PCT on 17 May be shared with the Board.

TS

Completed.

Board of Directors

Meeting Date:

8th June 2012 Part I

Subject:

Performance Report

Section:

Performance

Executive Director with overall responsibility:

Helen Lingham, Chief Operating Officer

Author of Paper:

David Mills, Head of Information Donna Parker, Deputy Chief Operating Officer

Key Purpose Patient Safety

Health & Safety

Performance Strategy

X X

Action required by Board of Directors:

For information

Executive Summary:

The report outlines the Trust’s position against key access and performance targets for the month of April 2012 as set out in the Monitor Compliance Framework and Quality Care Commission requirements

Strategic Goals & Objectives

Performance

Links to CQC Registration

Section 5 Outcome 16

Links to Assurance Framework/Key Risks

Performance

Type of Assurance Internal External

X X

Board of Directors 08 June 2012

Performance Monitoring Page 1 of 3 For Information

Performance Exception Report 2012/13 - June

1 Purpose of the Report

This report accompanies the Performance Indicator Matrix and outlines the Trust’s performance exceptions against key access and performance targets for the month of April 2012, as set out in the Monitor Compliance Framework, Operating Framework and contractual requirements.

2 Infection Control

Performance against MRSA and C Difficile Targets

The Trust did not have any cases of hospital acquired MRSA in April. 3 C Difficile cases were reported against the new national monitoring target of 38 for the full year. Our trajectory has yet to be agreed.

3 Cancer

Performance against Cancer Access Targets

The Trust achieved all of the cancer targets for Quarter 4, despite a small drop in March’s performance against the 62 day target to 1st treatment to 84.1%. Urology continues to be managed closely to minimise the impact of the relatively high number of patient choice and complex pathway delays common to Urological cancer pathways. The Trust’s predictor report currently shows an anticipated compliant position for April except for the two week wait target. The latter was below threshold predominantly due to a significant number of patients exercising choice over the Easter holiday period. Due to the significant increase in fast-track referrals to Gastroenterology and Colorectal together with the backlog of patient choice requests, there were a small number of slight delays due to capacity. The two week wait performance is being closely managed across the quarter due to the further and additional bank holidays in May and June, though May has been well above threshold to date.

4 ED Quality Indicators DoH & Monitor requirement

Total time in A&E (95%) – 4 hours



Local contract monitoring only – a minimum of one timeliness and one patient impact Timeliness

Total time in A&E (95th percentile) – 4 hours Time to initial assessment (95th percentile) – 15 mins Time to treatment decision (median) – 60 mins Patient Impact Unplanned re-attendance rate - < 5% Left without being seen - < 5%

The national Monitor 4-hour target remained compliant and our ED Quality Indicator unvalidated position suggests compliance with our contracted ‘timeliness’ and ‘patient impact’ measures. We have seen an easing of ED attendances in April compared to March and a slight reduction on April 2011, however, admissions to CDU were still above the same period last year:

Main ED Attendances 2011/12 2012/13 % Change

April 4266 4094 ‐4.0%

Admissions to RBCDU 2011/12 2012/13 % Change

April 1952 1989 1.9%

5 Stroke Indicators

Performance against Stroke Best Practice Tariff and Network indicators

As highlighted in the update presentation last month, some improvement was seen in overall performance against the stroke standards compared to recent months. In April the Trust achieved 76% of patients spending 90% or more of their inpatient stay on the Stroke Unit, an improvement from 65% in March; though has remained under the target of 80%. This has largely been due to the difficulty in achieving direct admission to the Unit predominantly as a result of the continued higher acuity of patients and delays in discharge, exacerbated by staff turnover, which have extended the Unit’s length of stay.

50% of patients were directly admitted to the Stroke Unit (44% in March) and 32% were admitted within 4 hours, a slight increase on April (20%). Of the 7 patients who failed to arrive within 4 hours, 5 arrived out of hours. 83% of patients with acute stroke received brain imaging within 1 hour of arrival at hospital against our target of 95% of appropriate patients. 3 patients failed the



target; of these 2 arrived out of hours. 2 of the patients were scanned in less than 1 hour 35 minutes and 1 patient in under 3 hours.

Performance against the low risk TIA performance also improved to 94% in April.

6 Attendance

Sickness absence rate (4% current; 3% stretch)

Sickness in April has improved from last month to 3.18%. The Trust cumulative absence rate is 3.43%, continuing below the current target of 4% although above the stretch target of 3%.

7 Appraisals

90% of appraisals completed within one year

April’s compliance with the Trust’s annual appraisal target has continued to improve to 86.76% with no directorates ‘red rated’. Following final approvals the revised policy, process and training programme will be launched.

8 Referral to Treatment Time (RTT) – Speciality Performance

95% of non admitted patients will be treated within 18 weeks of referral. 90% of admitted patients will be treated within 18 weeks of referral.

The Trust achieved the aggregate RTT thresholds, however, Orthopaedics was below the 90% admitted threshold in April. Patients transferring between providers have exacerbated pressures on the directorate and this has been acknowledged by our Commissioners, in light of the introduction of the new speciality level target from April. Orthopaedics have undertaken a significant amount of pathway and process improvement work in order to meet the ongoing demand and transfer pressures. This dynamic action plan and work is ongoing in order to make continual improvement.

9 Recommendation

The Board of Directors are requested to note the performance exceptions to the Trust’s compliance with the 2012/13 Monitor and Operating Framework requirements.

HELEN LINGHAM CHIEF OPERATING OFFICER

vrbhinfo / performance management / board tmb / 2011-2012 / June 2012 Performance Indicator Matrix for June 12 Board Page 1 of 2

2012/13 PROPOSED PERFORMANCE INDICATOR MATRIX FOR BOARD OF DIRECTORS

Area Indicator Measure Target Monitor Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13

Monitor Governance Targets & Indicators

MRSA Bacteraemias Number of hospital acquired MRSA cases - Monitor de-minimis 6 1.0 0

Clostridium difficile Number of hospital acquired C. Difficile cases 38 1.0 3

RTT Admitted 18 weeks from GP referral to 1st treatment – specialty level 90% 1.0 94.4%

RTT Non Admitted 18 weeks from GP referral to 1st treatment – specialty level 95% 1.0 98.7%

RTT Incomeplete pathway 18 weeks from GP referral to 1st treatment – specialty level 92% 1.0 97.0%

2 week wait From referral to to date first seen - all urgent referrals 93%

2 week wait From referral to to date first seen - for symptomatic breast patients 93%

31 day wait From diagnosis to first treatment 96% 0.5

31 day wait For second or subsequent treatment - Surgery 94%

31 day wait For second or subsequent treatment - anti cancer drug treatments 98%

31 day wait For second or subsequent treatment - radiotherapy 94%

62 day wait For first treatment from urgent GP referral for suspected cancer 85%

62 day wait For first treatment from NHS cancer screening service referral 90%

A&E 4 hr maximum waiting time From arrival to admission / transfer / discharge 95% 1.0 96.4%

LD Patients with a learning disability Compliance with requirements regarding access to healthcare n/a 0.5

Indicators within the Operating Framework / Key Contractual Priorities

TIA High Risk Patients High risk TIA cases investigated and treated within 24hrs 60% BPT 62%

TIA Low Risk Patients % of patients seen, assessed & treated by stroke specialist < 7 days 100% BPT 94%

Brain Imaging – as per indicationsPatients with acute stroke meeting the indications receive brain imaging within 1 hr

95% BPT 83%

Brain Imaging – other stroke Other stroke patients receive brain imaging within 24 hrs 100% BPT 96%

Direct admission to stroke unitPercentage of patients with suspected stroke admitted to a specialist stroke unit within 4 hrs of arrival

90% BPT 32%

Alteplase (Thrombolysis) Percentage of appropriate patients receiving thrombolysis 100% BPT 100%

90% time spent on stroke wardPercentage of patients spending 90% or more of their time on the stroke ward during their inpatient stay

90% BPT 76%

MSA Mixed Sex Accommodation No of patients breaching the mixed sex accommodation requirement 0 0

IC MRSA Bacteraemias Number of hospital acquired MRSA cases - national stretch 0 0

Cancer 62 day – Consultant upgrade Following a consultant’s decision to upgrade the patient priority * 90%

VTE Venous Thromboembolism Risk assessment of hospital-related venous thromboembolism 90% 94.1%

Diagnostics Six week diagnostic tests Less than 1% of patients to wait longer than 6 wks for a diagnostic test <1% 0.2%

Patient Impact Indicator Achieve at least one of the Patient Impact Indicators

Timeliness Indicator Achieve at least one of the Timeliness Indicators

Ambulance Handovers No of breaches of the 30 minute handover standard tbc

Elective cancelled operations Cancelled Ops on day of admission as % of elective admissions < 0.7% 0.5%

28 day standard Patients not seen within 28 days of cancellation 0 0

Infection Control

Cancer

0.5

1.0

1.0

Stroke

E.D. Quality Indicators

Cancelled Operations

Referral to Treatment

vrbhinfo / performance management / board tmb / 2011-2012 / June 2012 Performance Indicator Matrix for June 12 Board Page 2 of 2

Area Indicator Measure Target Monitor Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13

Sickness absence Percentage of monthly sickness 4%-3% 3.18%

Sickness absence Percentage of cumulative sickness (rolling 12 months) 4%-3% 3.43%

Appraisals Percentage compliance with annual appraisals 90% 86.76%

RTT Admitted 100 - General Surgery 90% 96.3%

RTT Admitted 101 - Urology 90% 91.2%

RTT Admitted 110 - Orthopaedics 90% 86.62%

RTT Admitted 130 - Ophthalmology 90% 99.1%

RTT Admitted 140 - Oral surgery 90% 100.0%

RTT Admitted 300 - General medicine 90% 99.4%

RTT Admitted 320 - Cardiology 90% 95.7%

RTT Admitted 330 - Dermatology 90% 95.3%

RTT Admitted 410 - Rheumatology 90% 98.3%

RTT Admitted 502 - Gynaecology 90% 93.7%

RTT Admitted Other 90% 90.0%

RTT Non admitted 100 - General Surgery 95% 98.5%

RTT Non admitted 101 - Urology 95% 100.0%

RTT Non admitted 110 - Orthopaedics 95% 97.1%

RTT Non admitted 120 - ENT 95% 100.0%

RTT Non admitted 130 - Ophthalmology 95% 100.0%

RTT Non admitted 140 - Oral surgery 95% 97.3%

RTT Non admitted 300 - General medicine 95% 99.6%

RTT Non admitted 320 - Cardiology 95% 100.0%

RTT Non admitted 330 - Dermatology 95% 100.0%

RTT Non admitted 340 - Thoracic medicine 95% 100.0%

RTT Non admitted 400 - Neurology 95% 95.6%

RTT Non admitted 410 - Rheumatology 95% 98.0%

RTT Non admitted 502 - Gynaecology 95% 98.2%

RTT Non admitted Other 95% 95.9%

* Local standard of 90% with a dimimis of 2 breaches per month or 6 per quarter

RTT Specialty

Workforce

BOARD OF DIRECTORS

Meeting Date and Part: 08 June 2012 - Part I

Subject: Financial Performance

Section: Performance

Executive Director with overall responsibility

Stuart Hunter, Director of Finance & IT

Author of Paper: Pete Papworth, Deputy Director of Finance

Details of previous discussion and/or dissemination:

Finance Committee and Trust Management Board

Patient Safety

Health & Safety

Performance Strategy Key Purpose:

X

Action required by BOD: For Information

Executive Summary: Review of the financial performance for Month 01 2012

Strategic Goals & Objectives: Goal 7 – Financial Stability

Links to CQC Registration: (Outcome reference)

Outcome 26 – Financial Position

Links to Assurance Framework/Key Risks:

Internal External Type of Assurance:

X

Finance Committee June 2012

Financial Performance Page 1 of 4

Financial Performance

1. Introduction

This report summarises the Trust’s financial performance for the period to 30 April 2012. A detailed analysis is attached at Annex A, with performance against Monitor’s additional financial risk indicators included at Annex B.

2. Overview

The Trust is planning a cumulative surplus for the year of £1.9 million, representing a small proportion of the Trust’s £240 million income (less than 1%). This demonstrates sound and prudent financial planning, allowing the capacity to invest in future years.

3. Key Financials

Net Surplus

The Trust is currently reporting a net surplus of £101,000 against a year to date plan of £128,000 representing an adverse variance of £27,000. Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA)

The EBITDA ratio is one of the key performance indicators the Foundation Trust is monitored against. April reported a return of 6.9% against a plan of 6.6%. The forecast for the year is a return of 6.4%.

Transformation Programme

Savings recorded during April in relation to the Trusts challenging transformation programme amount to £487,000 against a target of £548,000. Whilst it is expected that the under achievement seen to date will be corrected throughout the year, there are some areas of concern. The Service Improvement and Transformation Team is currently working closely with Directorates to ensure that the strong performance reported in previous years continues.

Capital expenditure

Capital expenditure in April totalled £374,000 against a plan of £434,000. This small under spend is due to reduced spend in relation to Medical Equipment, following a number of generous charitable purchases. The Trust is planning total capital expenditure of £7.381 million during 2012/13.

4. Financial Risk Rating

The Trust’s overall financial risk rating as at 30 April was a rating of 3. This is a strong performance and is in line with the Trust’s annual plan. The best possible (lowest risk) rating is a rating of 5.

For information



5. Activity

Members will be aware that activity during 2011/12 was consistently above planned levels; a trend which looks to be continuing into 2012/13. Elective activity has been above plan in April by 196 spells (4%); however activity is below previous year’s levels, as shown below:

Outpatients activity is 732 attendances above plan (3%), and 1,668 attendances above the same period last year (7%). This significant increase is illustrated graphically below:

For information



Non Elective activity is 258 cases above plan, equating to a variance of 12%. Members will note however, that activity is below that seen during the same period in the last financial year. The trend in relation to Non Elective activity is shown below:

Emergency activity is currently under plan by 470 attendances (8%). This is 172 less than the same period in 2011/12.

6. Income Income to date totals £19.2 million, being £181,000 above planned levels and reflective of the activity seen to date. However, some areas (most notable Non Elective and Outpatients) have suffered from a shift in case mix and reduction in the associated tariff income.

7. Expenditure

Expenditure continues to be well controlled overall and totals £19.1 million to date. This represents an adverse variance of £208,000, although the majority of this is in relation to high-cost drugs, for which additional income is received.

8. Statement of Financial Position

The Statement of Financial position is broadly on plan in all areas except current assets and current liabilities. This is a result of the outsourcing of the Trust’s Transaction Finance Service with effect from 1 April; which has caused a short delay in the payment of invoices. Action is in hand to address this small backlog, and the expectation is that this will be resolved during May.

For information


Financial Performance Page 4 of 4 For information

9. Workforce

Current vacancies stand at 91 Whole Time Equivalents, equating to a vacancy rate of 2.5%. Sickness levels reduced in month from 3.9% to 3.2%, maintaining the cumulative level at 3.4%. The Trust has seen a significant improvement over the last twelve months; however continued focus is required to ensure that the Trust meets its 3% target.

10. Financial Risk Indicators In addition to the formally reported Financial Risk Rating, Monitor set out ten additional financial risk indicators that should be considered by the Trust as a mechanism to highlight potential financial risks that may arise from time to time. Performance against these indicators is shown at Annex B. All indicators are currently green, with the exception of indicator six in relation to the number of payables over their due date. As noted above, this is due to a short delay in the payment of invoices following the outsourcing of the Trust’s Transactional Finance Service. This is expected to be resolved during May.

11. Conclusion

The Trust is planning the delivery of all financial duties, with a planned surplus of £1.9 million demonstrating that financial budgetary control is well embedded within the day to day activities of the organisation. Members are asked to note the Trust’s financial performance for the period to 30 April 2012.

Pete Papworth Deputy Director of Finance May 2012

ANNEX A

2011/12YTD ACTUAL PLAN ACTUAL VARIANCE VARIANCE PLAN FORECAST VARIANCE VARIANCE

£'000 £'000 £'000 £'000 % £'000 £'000 £'000 %

NET SURPLUS/ (DEFICIT) 46 128 101 (27) (21%) 1,900 1,900 0 0% EBITDA 1,198 1,315 1,316 1 0% 16,139 16,139 0 0% TRANSFORMATION PROGRAMME 492 548 487 (61) (11%) 8,553 7,966 (587) (7%)CAPITAL EXPENDITURE 192 434 374 (60) (14%) 7,381 7,381 0 0%

2011/12YTD ACTUAL PLAN ACTUAL RISK WEIGHTED PLAN ACTUAL RISK WEIGHTED

METRIC METRIC METRIC RATING RATING METRIC METRIC RATING RATING

EBITDA Margin % 6.5% 6.6% 6.9% 3 0.8 6.4% 6.4% 3 0.8 EBITDA Achievement of Plan % 110.3% 100.0% 102.2% 5 0.5 100.0% 100.0% 5 0.5 Net Return after Financing % 3.0% 0.7% 0.3% 3 0.6 0.6% 0.6% 3 0.6 I&E Surplus Margin % 0.2% 0.8% 0.2% 2 0.4 0.8% 0.8% 2 0.4 Liquidity Days 45.8 43.4 55.1 4 1.0 57.2 57.2 4 1.0 FINANCIAL RISK RATING 3.1 3.3 3.3


£'000 £'000 £'000 £'000 % £'000 £'000 £'000 %

Elective 4,682 4,388 4,584 196 4% 57,734 57,734 0 0% Outpatients 22,301 23,237 23,969 732 3% 305,754 305,754 0 0% Non Elective 2,661 2,229 2,487 258 12% 27,115 27,115 0 0% Emergency 5,463 5,761 5,291 (470) (8%) 70,094 70,094 0 0% TOTAL ACTIVITY 35,107 35,615 36,331 716 2% 460,697 460,697 0 0%


£'000 £'000 £'000 £'000 % £'000 £'000 £'000 %

Elective 5,465 5,368 5,446 78 1% 70,632 70,632 0 0% Outpatients 2,665 2,856 2,839 (17) (1%) 37,578 37,578 0 0% Non Elective 4,737 4,500 4,437 (63) (1%) 54,984 54,984 0 0% Emergency 446 528 514 (14) (3%) 6,423 6,423 0 0% Non PbR 3,304 3,925 4,109 184 5% 49,784 49,784 0 0% Non Contracted 1,781 1,665 1,719 54 3% 20,228 20,228 0 0% Research 32 145 128 (18) (12%) 1,742 1,742 0 0% Interest 25 33 11 (22) (67%) 400 400 0 0% TOTAL INCOME 18,455 19,021 19,202 181 1% 241,771 241,771 0 0%


£'000 £'000 £'000 £'000 % £'000 £'000 £'000 %

Pay 11,316 11,548 11,515 33 0% 138,789 138,789 0 0% Clinical Supplies 2,581 2,489 2,547 (58) (2%) 32,659 32,659 0 0% Drugs 1,653 1,712 1,978 (266) (16%) 21,971 21,971 0 0% Other Non Pay Expenditure 1,651 1,779 1,707 71 4% 30,071 30,071 0 0% Research 32 145 128 18 12% 1,742 1,742 0 0% Depreciation 751 801 801 0 0% 9,611 9,611 0 0% PDC Dividends Payable 425 419 425 (6) (1%) 5,028 5,028 0 0% TOTAL EXPENDITURE 18,409 18,892 19,101 (208) (1%) 239,871 239,871 0 0%


£'000 £'000 £'000 £'000 % £'000 £'000 £'000 %

Non Current Assets 149,193 148,424 148,621 197 0% 146,760 146,760 0 0% Current Assets 48,177 57,584 62,319 4,735 8% 58,985 58,985 0 0% Current Liabilities (17,810) (20,877) (25,865) (4,988) 24% (19,359) (19,359) 0 0% Non Current Liabilities (2,186) (3,258) (3,253) 5 (0%) (2,763) (2,763) 0 0% TOTAL ASSETS EMPLOYED 177,374 181,873 181,823 (50) (0%) 183,623 183,623 0 0%

Public Dividend Capital 78,674 78,674 78,674 0 0% 78,674 78,674 0 0% Revaluation Reserve 69,326 68,499 68,499 0 0% 68,500 68,500 0 0% Income and Expenditure Reserve 29,374 34,699 34,650 (49) (0%) 36,449 36,449 0 0% TOTAL TAXPAYERS EQUITY 177,374 181,872 181,823 (49) (0%) 183,623 183,623 0 0%


£'000 % %

Staff (Whole Time Equivalents) 3,550 3,644 3,553 91 2.5% 3,630 3,630 0 0.0% Sickness 3.93% 3.00% 3.43% (0.43%) (14.3%) 3.00% 3.00% 0.00% 0.0%


FINANCIAL PERFORMANCE FOR THE PERIOD TO 30 APRIL 2012

2012/13 FULL YEAR

2012/13 YEAR TO DATE 2012/13 FULL YEARKEY FINANCIALS

EXPENDITURE2012/13 YEAR TO DATE

ACTIVITY2012/13 YEAR TO DATE 2012/13 FULL YEAR

INCOME2012/13 YEAR TO DATE 2012/13 FULL YEAR

WORKFORCE2012/13 YEAR TO DATE 2012/13 FULL YEAR

FINANCIAL RISK RATING2012/13 YEAR TO DATE 2012/13 FULL YEAR

STATEMENT OF FINANCIAL POSITION2012/13 YEAR TO DATE 2012/13 FULL YEAR

ANNEX B

QUARTER QUARTER QUARTERTWO THREE FOUR

1. Unplanned decrease in EBITDA margin in two consecutive quarters

Deteriorating trend in operating performance and cash flow generation GREEN GREEN GREEN GREEN GREEN

2. Forecast Financial Risk Rating of less than 3 in the next 12 months

Identified risk of potential financial breach within the next yearGREEN GREEN GREEN GREEN GREEN

3. Financial Risk Rating of 2 for any one quarter In year deterioration in financial performanceGREEN GREEN GREEN GREEN GREEN

4. Working capital facility agreement includes a default clause Risk that working capital facility may not be available if and when required GREEN GREEN GREEN GREEN GREEN

5. Receivables more than 90 days past their due date for more than 5% of the total receivables balance

Potential for payment/ receivable collection concernsGREEN GREEN GREEN GREEN GREEN

6. Payables more than 90 days past their due date for more than 5% of the total payables balance

Potential for build up in payables resulting in future liquidity concerns GREEN GREEN GREEN GREEN AMBER

7. Two or more changes in Finance Director in a twelve month period

Multiple changes in a short period of lead financial officerGREEN GREEN GREEN GREEN GREEN

8. Interim Finance Director in place over more than one quarter end

Absence of permanent/ substantive appointment to key positionGREEN GREEN GREEN GREEN GREEN

9. Cash balance is less than 10 days of operating expenses Potential liquidity concerns and ability to meet liabilities as they fall due GREEN GREEN GREEN GREEN GREEN

10. Capital expenditure is less than 75%, or more than 125% of the year to date plan

Capital expenditure plans are delayed to conserve cash; orare significanly above plan reducing cash below plan GREEN GREEN GREEN GREEN GREEN


FINANCIAL RISK INDICATORS AS AT 30 APRIL 2012

FINANCIAL RISK INDICATOR FINANCIAL RISKMONTH

ONE

2012/13 PLANQUARTER

ONE

2012/13

BOARD OF DIRECTORS

Meeting Date and Part: 8 June 2012 Part I

Subject: Proposed merger between RBCH and Poole Hospital

Section: Strategy

Executive with Overall Responsibility

Tony Spotswood

Author of Paper: Tony Spotswood


Update on actions underpining the proposed merger of the two Trusts

Patient Safety Health & Safety Performance Strategy Key Purpose:

X


For information/discussion

Executive Summary: Progress report on merger work

Strategic Goals & Objectives:

Sustaining local services


Quality and Safety


Viability of the Trust


X X

Board of Directors 8 June 2012 Part I

Proposed Merger Progress Report 1 of 2 Information/Discussion

Proposed Merger between Royal Bournemouth and Christchurch

Hospitals FT and Poole Hospital FT This paper is intended to briefly highlight the work ongoing to support the proposed merger of the Royal Bournemouth and Christchurch Hospitals FT and Poole Hospital FT. Appointment to the proposed Board I am pleased to report that Jane Stichbury has now been appointed Chairman of the proposed Board for the merged organisation. By the time of the Board meeting all Non-Executive interviews will have been completed. I will advise you of the appointments to the proposed Board at our meeting on 8 June. Of the candidates to be interviewed three candidates are current Non-Executives with Poole Hospital FT and four with Royal Bournemouth and Christchurch Hospitals FT. Once complete the Chairman and a group of Non-Executives will start the appointment process for Chief Executive which will run over the 11 and 12 June. Thereafter the Chief Executive and Chairman, with two Non-Executives will start the appointment process for Executive Directors. This process will be complete by the end of July. Submission to the Office of Fair Trading We have now submitted a draft proposal to the OFT for it to consider with regard to the proposed merger. I will apprise the Board of any intermediate feedback we have received. There is also further information I wish to share with the Board concerning the likelihood of the success of our application to merge and this matter will be covered verbally as part of our discussions. Clinical Strategy Work continues to agree options for the future configuration of Haematology and Acute Surgery. The relevant clinicians have now completed a scoring exercise to review options with regard to the future siting of the inpatient Haematology service. Further discussions have also taken place between a broad group of general surgeons drawn from the two Trusts to consider an appropriate model for Acute Surgery which centres on integration at one or other site. Further work is now being done to allow a comparison of the various options. As this work develops so we will engage with, and consult, the PCT and the shadow Clinical Commissioning Groups. The various options being developed will be the subject of consideration for inclusion in the Integrated Business Plan.


Proposed Merger Progress Report 2 of 2 Information/Discussion

Identifying Efficiency Savings Alongside the work being done by Clinical Directorates to identify savings over a three year time period, the Executive Directors of both Trusts have recently met to consider the savings required in respect of Corporate Services. Across these departments the combined Trust is expecting to make savings of £9m equivalent to 14%. Through the work that has been done thus far 97% of these savings have now been identified. Various schemes will clearly be subject to formal consultation once approved by the Joint Programme Board and the respective Trust Boards. A proportion of these savings particularly those associated with Estates, Medical Records and IT is dependent on capital investment including the establishment of an electronic patient record, the integration of information systems across the two Trusts and various energy conservation schemes. Governor Report A full report has been circulated to governors in both Trusts apprising them of progress, and exploring further the rationale for the proposed merger. This report is provided for information and discussion. Tony Spotswood Chief Executive

BOARD OF DIRECTORS

Meeting Date and Part: 8 June 2012 Part 1

Subject: Audit Committee Terms of Reference

Section: Decision


Steven Peacock, Chairman of Audit Committee

Author of Paper: Karen Flaherty, Trust Secretary

Key Purpose Patient Safety X

Health & Safety X

Performance X

Strategy

X


Review and approve

Executive Summary: The terms of reference have been amended to include other areas of responsibility for the Audit Committee which were included in Monitor's Code of Governance for NHS Foundation Trusts and Healthcare Financial Management Association NHS Audit Committee Handbook and were not currently expressly covered by the terms of reference. This included specific reference to the Clinical Audit Programme, Whistleblowing and the impact of the Trust's Cost Improvement Programme on clinical risk.


N/A

Links to CQC Registration (Outcome reference)

Various


Various

Type of Assurance Internal X External

Approval

Committee

Version Approval Date Review Date Document

Author

Board of

Directors

Draft 2012 June 2012 June 2013 Karen Flaherty,

Trust Secretary


AUDIT COMMITTEE

TERMS OF REFERENCE

The Audit Committee (the “Committee”) is a committee established by and responsible to the Board of Directors.

1. Membership

1.1 The Committee shall be appointed by the Board of Directors from amongst the Non-Executive Directors of the Trust and shall consist of not less than 3 members.

1.2 All members of the Committee shall be independent Non-Executive Directors at least one of whom shall have recent and relevant financial experience. One member shall be the Chair of the Healthcare Assurance Committee. The Chairman of the Trust shall not be a member of the Committee

1.3 Appointments to the Committee shall be for a period of up to three years, which may be extended for two further three year periods, provided the director remains independent.

1.4 The Board of Directors shall appoint the Committee Chairman (the “Chairman”) who shall be an independent Non-Executive Director. In the absence of the Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.

1.5 Only members of the Committee have the right to attend Committee meetings. Any other Directors may attend following notification to the Chairman. The Director of Finance & IT, Head of Internal Audit, a representative of the External Auditors, the representative from the Counter Fraud service and the Director of Nursing and Midwifery shall normally attend meetings to provide information to the Committee. Other individuals may be invited to attend for all or part of any meeting, as and when appropriate. The Committee can meet with the External and Internal Auditors or the representative from the Counter Fraud Service without any Executive Board Director present.

2. Secretary

The Trust Secretary (the “Secretary") or their nominee shall act as the secretary of the Committee.

3. Quorum

Approval

Committee


Author

Board of

Directors


Trust Secretary

The quorum necessary for the transaction of business shall be two members. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

4. Frequency of Meetings

The Committee shall meet at least quarterly and otherwise as required.

5. Notice of Meetings

5.1 Meetings of the Committee shall be called by the Secretary at the request of any of its members or at the request of External or Internal Auditors if they consider it necessary.

5.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee and any other person required to attend no later than five working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time.

6. Minutes of Meetings

6.1 The Secretary shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance.

6.2 The Secretary shall ascertain, at the beginning of each meeting, the existence of any conflicts of interest and minute them accordingly.

6.3 Minutes of Committee meetings shall be circulated promptly to all members of the Committee unless a conflict of interest exists.

7. Duties

The duties of the Committee can be categorised as follows:

7.1 Internal Control, Risk Management and Corporate Governance.

7.1.1 The Committee shall review the establishment and maintenance of an effective system of internal control, risk management and corporate governance, with particular reference to the organisation’s assurance framework.

7.1.1.1 In establishing the Annual Governance Statement, the Healthcare Assurance Committee will need to provide assurance on their activities during the year through their Chair.

Approval

Committee


Author

Board of

Directors


Trust Secretary

7.1.2 In particular, the Committee will review the adequacy of:

7.1.2.1 All risks and control related disclosure statements, together with any accompanying Head of Internal Audit statement, prior to endorsement by the Board.

7.1.2.2 The structure, processes and responsibilities for identifying and managing key risks facing the organisation.

7.1.2.3 The operational effectiveness of relevant policies and procedures including but not limited to:

7.1.2.3.1 The policies and procedures for all work related to fraud and corruption as set out in Secretary of State Directions and as recommended by the appointed Counter Fraud service;

7.1.2.3.2 The policies and procedures in place for ensuring economy, efficiency and effectiveness in the use of resources.

7.1.3 Recommend actions to the Board of Directors.

7.1.4 The scope, maintenance and use of the Assurance Framework.

7.1.5 The Clinical Audit Programme to ensure that it is robust, reflecting both national and local priorities, comprehensive and embedded across all clinical teams (management arrangements, planning, reporting, communication and learning) with the outcomes used to drive improvement and enhance the overall quality of clinical care.

7.2 Internal Audit

The Committee will:

7.2.1 Appoint the Internal Auditors, set the audit fee and resolve any questions of resignation and dismissal.

7.2.2 Ensure that the Internal Audit function is adequately resourced and has appropriate standing within the organisation.

7.2.3 Review the internal audit programme, consider major findings of internal audit investigations (and management’s response), and ensure co-ordination between the Internal and External Auditors.

7.2.4 Report non-compliance with, or inadequate response to Internal Audit Reports to the Board of Directors.

Approval

Committee


Author

Board of

Directors


Trust Secretary

7.2.5 The Internal Audit process will be utilised to provide assurance to the Board of Directors on the governance of the HAC.

7.2.6 Meet with the Internal Auditors at least once a year, without executive management being present.

7.3 External Audit

The Committee will:

7.3.1 Consider the appointment of the External Auditor, the audit fee and any questions of resignation and dismissal. Make a recommendation to the Council of Governors.

7.3.2 Discuss with the External Auditor, before the audit commences, the nature and scope of the audit, and ensure co-ordination, as appropriate, with Internal Audit and the representative from the Counter Fraud service.

7.3.3 Review External Audit reports, together with the management response.

7.3.4 Report non-compliance with, or inadequate response to External Audit Reports to the Board of Directors.

7.3.5 Meet with the External Auditors at least once a year, without executive management being present.

7.4 Counter Fraud Service

The Committee will

7.4.1 Appoint the Counter Fraud service, set the fee and resolve any questions of resignation and dismissal.

7.4.2 Ensure that the Counter Fraud function has appropriate standing within the organisation.

7.4.3 Review the Counter Fraud programme, consider major findings of investigations (and management’s response), and ensure co-ordination between the Internal Auditors and Counter Fraud.

7.4.4 Report non-compliance with, or inadequate response to, Counter Fraud reports to the Board of Directors.

7.5 Financial Reporting

The Committee will review the annual financial statements before recommendation to the Board, focusing particularly on:

Approval

Committee


Author

Board of

Directors


Trust Secretary

7.5.1 Changes in, and compliance with, accounting policies and practices.

7.5.2 Major judgemental areas.

7.5.3 Significant adjustments resulting from the audit.

7.5.4 The impact of the Trust's Cost Improvement Programme on clinical risk.

7.6 Whistleblowing

The Committee will review arrangements by which staff of the Trust may raise, in confidence, concerns about possible improprieties in matters of financial reporting and control, clinical quality, patient safety or other matters. The Committee should ensure that arrangements are in place for the proportionate and independent investigation of such matters and for appropriate follow-up action.

8. Reporting Responsibilities

8.1 The minutes of the Committee shall be submitted to the Board of Directors.

8.2 The Committee shall make whatever recommendation to the Board of Directors it deems appropriate on any area within its remit where action or improvement is needed.

8.3 The Committee shall compile a report to Members on its activities to be included in the Trust’s Annual Report.

8.4 The Committee shall compile a report on its activities to be submitted to the Board of Directors annually within three months of the end of the financial year.

9. Other

The Committee shall:

9.1 have access to sufficient resources in order to carry out its duties, including access to the Trust Secretary’s Office for assistance as required;

9.2 be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members;

9.3 give due consideration to laws and regulations and the provisions of the Code of Governance;

9.4 be responsible for co-ordination of the Internal and External Auditors through the Finance Director;

9.5 oversee any investigation of activities which are within its terms of reference;

Approval

Committee


Author

Board of

Directors


Trust Secretary

9.6 at least once a year review its own performance and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

10. Authority

The Committee is authorised:

10.1 to seek any information it requires from any employee of the Trust in order to perform its duties;

10.2 to obtain, at the Trust’s expense, outside legal or other professional advice on any matter within its Terms of Reference;

10.3 to call any employee to be questioned at a meeting of the Committee as and when required.

BOARD OF DIRECTORS

Meeting Date and Part: 8 June 2012 – Part I

Subject: Summary of Feedback on Monitor's Stakeholder Engagement on the New Provider Licence

Section: Discussion



N/A

Patient Safety Health & Safety

Performance Strategy

Key Purpose: X

Action required by BOD: Note and discuss

Executive Summary:

In advance of changes to Monitor's role under the Health and Social Care Act 2012, Monitor has sought to engage informally with stakeholders at the early stage on the structure of the new licence and the licence conditions which it would propose to implement. Monitor published a summary of the feedback received in response to its informal engagement exercise in May 2012.


N/A


N/A


All


X

Board of Directors Part 1 8 June 2012

Summary of Feedback on Monitor's Stakeholder Engagement on the New Provider Licence

1. Background The Health and Social Care Act 2012 expands Monitor's current role as the independent regulator for foundation trusts. The Act requires all providers of NHS services to be licensed unless they are exempt, with Monitor being responsible for issuing these licences. The provider licence would replace the terms of authorisation for foundation trusts. Monitor's current timetable is that it would issue the new licences from April 2013. The licences for foundation trusts will be issued automatically from the date that the new licensing regime comes into effect. Under the Act, Monitor provisions relating to the governance of foundation trusts will continue in the licence as long as they are needed rather than falling away in April 2016 as had originally been proposed in the Bill. Earlier this year, Monitor asked stakeholders to comment on its early thinking on the draft conditions it proposed to include in the new licence as part of an informal engagement exercise. Monitor has now published the feedback it received following this exercise to allow all stakeholders to see the main themes from the feedback. Monitor will be formally consulting on the new licence conditions later this year. Other organisations will also be consulting on matters which relate to Monitor's licence, for example the Department of Health which will consult later in the year on which types of provider it proposes to exempt from holding a licence. The proposed licence would have a modular structure with licence conditions grouped into "chapters" relating to a particular issue or theme. The same licence would apply to foundation trusts and other types of providers of NHS-funded services. However, there would be three types of licence conditions:

general, which apply to all providers; special, which apply to some providers; and conditions which apply to foundation trusts only.

Monitor currently expects that the conditions that foundation trusts will have to meet under the new licence conditions will be comparable to those required by the current Compliance Framework.

2. Feedback

2.1. General Most respondents supported Monitor's proposed approach to licensing and many of the draft licence conditions. In particular the feedback was that:

the conditions would allow Monitor to successfully carry out its main duty to protect and promote the interests of people who use health care services;

the conditions would help Monitor regulate providers in a proportionate and fair way; and

Summary of Feedback on Monitor's Stakeholder Engagement on the New Provider Licence Discussion

1


early sight of the proposals, before the more formal process begins, gave health service providers a helpful insight into Monitor's thinking at this stage in the development of the licence, although they encouraged Monitor to provide further guidance.

The feedback in relation to the specific licence chapters is set out in the subsequent sections.

2.2. Licence chapter 1: General Sector Scrutiny licence conditions, and the licence application

Theme 1 Concerns that the licence application process will create a lot of extra work for providers

Theme 2 Where the requirements of Monitor’s licence application process overlap with those of other regulations (e.g. the Companies Act), we need to explain why this is required

Theme 3 Respondents need more detail about how Monitor will assess providers’ compliance with the licence conditions, and how we will decide whether to take action to enforce the conditions

Theme 4 Concerns about the types of people that would have to comply with the “fit and proper persons” test

Issues being considered by Monitor are:

whether to introduce criteria which will mean that the directors of all licensees (or those performing the same functions) will have to meet certain minimum standards of fitness, similar to those currently applied to foundation trust directors;

removing licence requirements where the requirement has been met and evidenced as part of another regulatory process with which the applicant has already complied;

the draft guidance it will produce on enforcement later in 2012; the potential for the "fit and proper persons” test for people with

material influence over the licence applicant to apply to a wide range of people including shareholders and providers of other sources of company finance.

2.3. Licence chapter 2: Pricing licence conditions

Theme 1 Concerns about the extra cost and workload involved in submitting data to support the National Tariff

Theme 2 Concerns about the process of submitting data to support the development of the National Tariff

Theme 3 Questions about assurance requirements for data submissions to support the National Tariff

Theme 4 Is it necessary to have a licence condition that compels providers to engage with commissioners to agree local price modifications?

In response Monitor is:


2


looking at a range of options to improve the quality and consistency of cost-related data used for setting prices including whether to collect this from all providers or a sample;

considering how pricing could be used to assist it in fulfilling its function to promote service provision in which the quality of care is maintained or improved and what information it would need to do this;

recognising the need to try to improve the quality of costing data and to ensure that pricing is based on data which is as current as possible;

looking at setting prices for a period of more than a year. To give providers and commissioners a greater degree of certainty but in a way which can take unforeseen cost changes into account such as those brought about by new ways of delivering services or new health technologies;

letting the approach on pricing develop over the next few years with further consultations likely;

considering whether external assurance reports are necessary, as opposed to self-certification, and whether these would be required of all providers or just a sample and how any sample would be selected, and who would pay for these;

requesting comments on a possible approach to handling local modifications to pricing; and

expecting to publish the results of a research programme on one on costing and sampling during May/June 2012, and one on pricing strategy which will be published later in the year.

2.4. Licence chapter 3: Competition Oversight licence conditions

Theme 1 Monitor should provide guidance in order to clarify how the Competition Oversight licence conditions would be applied in practice

Theme 2 Mixed opinions about the requirements to inform the Office of Fair Trading(OFT) about mergers and some confusion about the role of different regulatory bodies in scrutinising mergers

Monitor has made it clear that in carrying out all its functions it will put the needs of patients first. It will consult further on what types of anti-competitive behaviour will be prohibited but expects that its approach will continue to evolve by way of both precedent setting through case decisions and through later guidance revisions. Monitor is also considering whether to introduce an exclusion for small scale changes to the condition obliging providers to notify the OFT about mergers if such a condition is included.

2.5. Licence chapter 4: Integrated Care licence conditions

Theme 1 Concerns that the licence condition that requires organisations to cooperate may be unnecessary

Theme 2 The licence condition that requires organisations to cooperate needs to be clearer if it is to be included in the final provider


3


licence Theme 3 Respondents felt that it was essential for primary care and

social care providers to be engaged in the development of integrated care. They were concerned that primary care and social care providers could fall outside of the remit of the proposed licensing system

Theme 4 Concerns about consistency with competition guidance Monitor is considering amendments to the conditions to reduce the overlap with CQC outcome 6 (Cooperating with other providers) and ensure consistency around the measurement of seamless delivery of care and evaluation of the benefits. Monitor has also noted that:

it is not currently planning to place any extra requirement on providers in relation to the compatibility of their IT systems;

there will be a separate process to develop guidance for commissioners on conflicts of interest and anti-competitive behaviour which would involve the Department of Health, the NHS Commissioning Board and Monitor but this will not be implemented through the provider licence.

2.6. Licence chapter 5: Continuity of Services licence conditions

Theme 1 Stakeholders need clearer information about the detail of the conditions so that they can develop their opinions

Theme 2 Monitor should consider “level playing field” issues when it develops the detail of the Continuity of Services conditions

Theme 3 Continuity of Services conditions could deter providers from developing new ways to deliver services or prevent them looking for ways to become more efficient

Theme 4 Providers should not be forced to provide Commissioner Requested Services when it does not make economic sense, or when patient safety might be compromised

Theme 5 The requirement for a commercial credit rating may create additional costs and workloads for providers. There may be other ways to assess a provider’s financial position

Theme 6 Concerns about whether the Continuity of Services conditions could be applied to organisations with complex group structures, and about potential conflicts with Care Quality Commission registration requirements

Theme 7 Would allowing commissioners to take over failing services offer more appropriate and proportionate protection than Monitor’s proposed Continuity of Services proposals?

Theme 8 There was broad support for the ‘availability of resources’ condition, but respondents challenged the need for auditor certification

Theme 9 Significant concerns about the proposed debt limit condition

Monitor is currently developing guidance for commissioners to help them identify Commissioner Requested Services (CRS) and expects that a number of factors will contribute to the definition of these services which


4



5

might include might include clinical impact, how far patients would have to travel to use the services and how long it would take them, and the proximity and capacity of providers offering similar services. Commissioners might be required to contribute to the risk pool and the scale of commissioner contributions could reflect the number of services that they designate as CRS. This could give commissioners some financial incentive to find other ways to commission services where possible. In response to feedback Monitor is reviewing the conditions to ensure these are sufficiently flexible to allow providers develop and reorganise services in innovative ways or to make them more efficient when this benefits patients but without risking service continuity. Monitor is considering the costs and benefits of the requirement for an external credit rating, including commissioning further research which looks at transitioning to a system of external credit ratings over time. Monitor is also considering "step-in" rights for commissioners to ensure continuity of services.

2.7. Licence chapter 6: Foundation Trust Governance licence conditions

Theme 1 Monitor should broaden, and be more specific about, the types of professionals that could act as turnaround plan assurers

Theme 2 Different opinions on the need for, and specific role of, the Governor Panel

Those who responded to Monitor were evenly split between those who supported the creation of a panel to advise Governors and those opposed to it. Monitor will be considering whether to put the panel in place (the Health and Social Care Act 2012 is permissive and does not require Monitor to set up a panel). If it decides to go ahead with the proposal, it will make it clear that the panel will only give independent advice on whether a foundation trust is breaching the terms of the constitution, or the other relevant requirements of the Act.

2.8. Licence chapter 7: Foundation Trust Registrar licence conditions

Theme 1 Respondents wanted to know why Monitor might charge fees for its foundation trust Registrar function and how fees will be assessed

In response to the feedback Monitor has noted that it expects the costs and fees associated with this aspect of its role to be small as it relates to collecting, storing and making available certain information about foundation trusts. It would also aim to make sure that any administrative costs associated with the collection of fees are minimised.

BOARD OF DIRECTORS


Subject: Any Qualified Provider

Section: Discussion


Tony Spotswood



Update on AQP report presented at May Board


X X


Information/Discussion

Executive Summary: Summary of the current status of AQP for Dermatology and Endoscopy


Maintaining local services


Quality and Safety


Quality and Safety


X


Any Qualified Provider 1 of 2 Discussion/Information

Any Qualified Provider Both the Board of Directors and the Council of Governors have taken a keen interest in the potential damage to be wrought to local services if the PCT continues to pursue its current approach with regard to using AQP as a means of fragmenting Endoscopy and Dermatology Services. Representatives from all three Acute Trusts met with Richard Holmes and members of the PCT on 17 May. In addition to the Chief Executives, all three Trusts were represented by local clinicians including Sean Weaver and Helen Robertshaw from this organisation. The PCT made clear its wish not to discuss further the process until it had concluded its assessment of the bids it had recently received. Nor did it wish to consider further at this time the issue of price. The meeting did however serve as an excellent opportunity to highlight a number of fundamental concerns with regard to the specifications issued as well as highlighting the universal view that proper consultation had not taken place and there was a failure to engage secondary care clinicians. Amonst the issues highlighted were: There has been no approach to local clinicians concerning the possibility of

alternative providers securing consultant supervision. This is particularly important with regard to Dermatology where there is a clear requirement for GPSIs or non-consultant grade staff to be supervised.

Both the PCT and potential bidders have failed to appreciate the importance of integration including how any third party providers would properly interface with existing MDT meetings when discussing future patient pathways. It is clearly critical that any patients with cancer are discussed at an MDT meeting and thus far no arrangements have been made that will enable this to occur.

Potential bidders have failed to factor into their proposals the cost of securing local histology services. In was noted that the cost of histology is likely to represent up to a third of the current price being quoted by the PCT for provision of surgical Dermatology services.

The PCT has indicated that it will complete its initial assessment process by the end of May and is keen to secure the engagement of local clinicians in helping develop pathways that would facilitate the engagement of other providers. The Consultant Dermatologists have already made plain that they do not support the current specification and are not willing to engage in an exercise to bolster new providers in the context of providing a service that is sub-optimal and not of a standard currently offered by the Trusts. More generally all Trusts made plain their wish to assist the PCT in providing more community based services. In common with other PCTs who are using AQP in these areas there is a compelling argument that these services should be provided at the national tariff. Independently the Trust has engaged Herbert Smith to set out the case initially for the PCT and then the SHA of the need to work within the rules governing the setting of prices including the use of the national tariff. It is anticipated that the Trust will also raise these concerns directly with the Competition and Co-operation Panel. The PCT has indicated that it will not issue contracts under the AQP process whilst the


Any Qualified Provider 2 of 2 Discussion/Information

issues we have raised are subject to their dispute process or indeed that of the SHA or CCP and in any event without giving three working days notice. There are a number of options as to how potentially the Trust could move forward; these include:- Active marketing and competition recognising that the Trust provides high quality

Dermatology and Endoscopy services which, in the case of Endoscopy is provided by a JAG accredited site, and through a principally Consultant-based service in relation to Dermatology.

Continuing to formally challenge the process particularly with regard to the lack of consultation and price setting.

Working with the PCT to find a different solution. This is only an option if the PCT choose to engage with this possibility.

This paper is provided to the Board for information and discussion. Tony Spotswood Chief Executive

BOARD OF DIRECTORS


Subject: What makes a Top Hospital? 5 External Influence

Section: Information


Tony Spotswood




X

Action required by BoD: To note the content

Executive Summary:

The last in a series of reviews by CHKS to outline the features of a top performing hospital. The key themes explored in the report are:

Seeing the hospital as part of the wider community

Corporate social responsibility

Risk sharing with commissioners

Learning from other healthcare providers and other industry sectors

Comparison not just with peers but worldwide


To strive towards excellence in the services and care we provide




X X

5

MAY 2012

Authors: Dr Paul Robinson

Julian Tyndale-BiscoePart of the CHKS Thought

Leadership Programme

Whatmakes

a

hospital?top

EXTERNAL INFLUENCE

Foreword – about this report ...........................................................................3

Executive summary ............................................................................................4

Introduction ...........................................................................................................5

Seeing the hospital as part of the wider community ...............................6

Corporate social responsibility ........................................................................8

Risk sharing with commissioners ..................................................................10

Learning from other healthcare providers

and industry sectors ..........................................................................................12

Comparison not just with peers but worldwide ......................................13

Conclusion ...........................................................................................................15

2012 Top Hospitals programme awards ....................................................16

References ...........................................................................................................23

Editorial advisory group

CHKS has worked with healthcare organisations across the UK to inform and support improvement for almost 25 years. This is the last of five reports that highlight examples of best practice from the UK’s top-performing hospitals, which we will share throughout the NHS. We would like to thank the expert panel that has advised us on these reports:

Helen Bevan, Chief of Service Transformation, NHS Institute for Innovation and Improvement Stephen Ramsden, Director, Transforming Health Ian Dalton, Chief operating officer, National Commissioning Board Simon Pleydell, Chief Executive, South Tees Hospitals NHS Foundation Trust Chris Ham, Chief Executive, The King’s Fund

Contents

r e p o r t 5 | w h a t m a k e s a t o p h o s p i t a l — e x t e r n a l i n f l u e n c e 3

CHKS has judged the HSJ Acute Organisation of the Year since its inception. In addition, CHKS celebrates success with its annual Top Hospitals programme. As a result we have

seen many examples of excellence in the delivery of healthcare by acute sector organisations. The idea behind this series of five reports is simply to share these examples of success in the hope that other organisations can take something from each of them.

While there are many examples in the literature of high-performing healthcare providers, they are often drawn from international comparisons. These reports reflect excellence in healthcare that has been recognised within the past few years. Our aim is to share the energy and enthusiasm for providing high-quality care that we have found in the NHS in the UK.

The reports are based on the collective view of the judges of the 2010 HSJ Acute Organisation of the Year award, who produced an overview of what they had seen across the successful trusts (see panel below). No single trust was excellent across the board but, together, they provided a set of themes from which we can share insight. These themes have supplied the focus for each of the five reports. While there may be little of surprise about the themes, it is important to recognise that they are based on current observation, so this series is not a definitive guide to good management.

Much of the focus and energy for NHS leadership has understandably concentrated on making improvements in those trusts where performance is below average. This often means the best organisations are left to get on and move forward as they see fit.

Being left to make your own way can lead to isolation. It is often difficult to find out what is going on in other high-performing organisations. This series is designed to help people get a better understanding of what is happening in other trusts, by sharing case studies that highlight what organisations have already achieved.

Quality and change Cost reduction through quality

improvement Disciplined execution of change

at scale Using data for improvement,

not judgement

Safety “Getting to zero” – zero

tolerance of harm Deliberate focus on reducing

mortality and on other safety measures

Leadership Strong, stable leadership with

continuity of chief executive Distributed leadership model

that empowers clinical leaders and shifts power to patients and their families

Investment in development The totality of the approach

Organisational culture Profound sense of mission

and direction A mobilised workforce with a

passion to get things right for patients

Defining and promoting values and living them every day

External influence Seeing the hospital as part

of the wider community Corporate social responsibility Risk sharing with commissioners Learning from other healthcare

providers and other industry sectors Comparison not just with peers

but worldwide

What makes a top hospital: the observed themes

Foreword

w h a t m a k e s a t o p h o s p i t a l — e x t e r n a l i n f l u e n c e | r e p o r t 54

Our experience has shown that external influence is undoubtedly one of the factors that distinguishes top hospitals in the UK from others in the sector. While its benefits may not

be immediate, there are significant paybacks in the longer term for those trusts that invest time and energy in this activity.

We have found five areas in which leading hospital trusts have focused their efforts. First, they have adopted the view that they are part of the wider community; in other words, their activities are not considered in isolation from what is going on locally. As hospital trusts face a future where vertical integration is likely to become more commonplace, the need to understand what goes on outside the front doors, and be part of it, will increase.

Second is corporate and social responsibility. CSR in the private sector can bring competitive advantage and, with a set of different drivers, it can also bring long-term benefits for acute trusts. Two chief executives we contacted believe that their employment initiatives have contributed to the growing loyalty of their workforce and to the high percentage of staff who would recommend their trust’s services to family and friends.

Risk sharing with commissioners is the third area of focus. There is general agreement that this requires significant courage, at a time when acute trusts are under increasing financial pressure. Opening your books to offer transparency to commissioners may at first seem counterintuitive – but it is the path that has been chosen by the UK’s top hospitals.

Fourth is a willingness to learn from other healthcare providers and other industry sectors. By using existing learning networks, it is possible to benefit from the experience of others; equally, though, trusts should be aware of initiatives in other industries that have succeeded in improving productivity and could be applied in the health sector.

The last point on the list is comparison, not just with peers but worldwide. This can be best encapsulated in the phrase “understanding what good looks like”. Trusts need to compare themselves to others, rather than operating in splendid isolation, and to broaden this comparison beyond regional to national or even international level. Many trusts have adapted what they have seen working elsewhere with good results.

Those acute sector organisations that commit to these areas of external influence are adding the final ingredient in the making of a top hospital. Taking external influence seriously requires dedication and courage – especially when system changes are afoot and financial pressures are at their greatest.

Executive summary


Introduction

External influence is often not seen as a core element of the business of running an acute trust. It covers activities such as corporate and social responsibility, which some view as little

more than tick-box exercises. However, take a trip to one of the top-performing trusts in the UK and you will discover that external influence is far from non-core – it is something that is embedded in the organisation at the highest level.

Whether it is through relationships with the local community, corporate social responsibility, risk sharing with commissioners or having an understanding of what good looks like through regional, national and international comparison – these top performers know and appreciate the value of external influence.

In this report we talk to those who have committed energy, enthusiasm and resource to ensuring their trust fulfils a wider system role and benefits from it. They understand that the payback is not instantaneous but can take years to materialise.

It’s fitting that the final report in this series looks at external influence because it is perhaps the most important distinguishing feature of a top hospital. Helen Bevan, chief of service transformation at the NHS Institute for Innovation and Improvement, says it is the one thing that sets the best trusts apart. “There is such a stark contrast between the places and the leaders that see their organisations as part of the wider system and those that don’t,” she says.

The case studies in this report and from the others in the series are now available online at http://tophospitals.chks.co.uk. If, having read any of the case studies, you would like to leave a comment or add your own examples, you can do so on the CHKS blog, at http://chksinsight.wordpress.com/

There is such a stark contrast between the places and the leaders that see their organisations as part of the wider system and those that don’t.Helen Bevan, NHS Institute for Innovation and Improvement


According to the judging panel of the HSJ acute organisation of the year award and the insight gained from the CHKS national Top Hospitals programme awards, there is a clear

distinction between hospital trusts that see themselves as part of the wider community and those that don’t.

Helen Bevan, chief of service transformation at the NHS Institute for Innovation and Improvement, says the contrast is clear. “As someone who has been on the HSJ’s judging panel for a number of years, one of the things that really sets the top hospitals apart is the extent to which the organisations see themselves as part of the community,” she says.

Bevan acknowledges that when times get tough, and in particular when the NHS is being asked to make unprecedented efficiency savings, the temptation to ‘pull up the drawbridge’ is high. The decision to concentrate on internal improvement at the expense of dealing with the outside world is not hard to understand but, she says: “Even though internal improvement work is often done in isolation, being engaged in the wider community is such a critical issue, especially because over the next few years we are going to see more organisations becoming joined up and this is not just about joined-up structures – it’s about the mindset.”

Nigel Edwards, senior fellow at the King’s Fund, agrees that isolationism is not an appropriate strategy for an organisation that is seeking to be a top performer. He says this is a choice faced by every acute provider: “You either have an inward focus, and that is about defining the problems you face in terms of faults in the system, or you take an outward-looking position.

“Sometimes being insular and having an internal focus can produce good performance in the short term but it is not a long-term strategy and not a wise one either. I have seen trusts that have developed a siege mentality but this inevitably means you fail to understand what good looks like.”

Edwards also agrees with Bevan that the current direction of travel in the NHS means trusts can no longer see themselves as standalone parts of the system. Vertical integration, he asserts, will see trusts being involved in a wide range of activities, from primary care service to mental health, which inevitably will require engagement with the wider community. “You can’t do this if you are not part of the community and are not visible,” he says.

Sue James, chief executive of Derby Hospitals NHS Foundation Trust, interprets this visibility in a holistic way. “Our role is to help people be as healthy as they can be and although the role of the acute provider is about specialist care, that doesn’t mean we shouldn’t be involved in other parts of the system,” she says.

“Hospitals should not be considered as ‘cathedrals’ in the health system. The whole issue of community cohesion is important – some communities feel disengaged and the hospital is one place where everyone mixes together, so it is part of our responsibility to find hard-to-reach communities and work with them.”

Bevan raises the issue of leadership style and says this has an important role to play in how well an organisation engages with the wider community. She describes a style that is focused on



I have seen trusts that have developed a siege mentality but this inevitably means you fail to understand what good looks like.Nigel Edwards, The King’s Fund

compliance and compares this with a distributed leadership approach, which is instead focused on commitment.

“I spend a lot of time visiting organisations in the NHS, seeing what good practice means, and I see such a difference between top hospitals and the rest of the pack. When it comes to external influence there is a need to redefine NHS leadership and move to this more distributed style, which means working both within the organisation and outside. We have in the past got very caught up around compliance and this has made an impact on our leadership model,” she says.

Edwards also talks about leaders, saying the ability of an organisation to connect with the community is linked with how well its leaders themselves engage with the outside world. “There are chief executives that I know of but have never met throughout all my time in the NHS,” he reveals. “In fact, no one seems to have met them. Yet there are others who I will always bump into because they are interested in finding out what is going on in the world around them. This plays into how well they connect with their local community.”

He points out that this can be a function of the culture of an organisation and how insular it is. An insular organisation, he suggests, may appoint a chief executive who appears to fit the mould whereas what may be needed is one that breaks it. The King’s Fund 2012 report, A Review of Leadership in the NHS,1 to be launched at its second annual NHS Leadership and Management Summit later this month, looks at how leaders can drive improvement by doing more to engage not only staff and patients but organisations across the health and social care system. The King’s Fund picks up on the distributed leadership theme, saying it is necessary to move away from the concept of the ‘superhero’ chief executive toward leadership that is demonstrated at all levels and across organisational boundaries.



Corporate and social responsibility Corporate and social responsibility (CSR) is a common area of focus in the private sector

and is becoming an increasingly important consideration for NHS boards. It is one of the components of external influence that top-performing hospitals have already mastered and they have committed time, energy and resources to doing so.

CSR can be defined as any activity that is aimed at furthering social good but goes beyond compliance or any other activity required by law. CSR activities are wide ranging and can include using only locally sourced materials in production, supporting local communities by engaging in employment initiatives, and adopting policies that ensure the organisation is environmentally friendly.

Not everyone can agree on the exact definition and, as a consequence, measurement of the benefits can be tricky. However, CSR has been shown to improve image and reputation2 and in the commercial world this can bring a competitive advantage.

Although competitive advantage might not be the primary incentive for some NHS trusts, there are other long-term benefits for top-performing trusts. For many of their chief executives being part of the wider community and investing in CSR does bring a tangible return. David Dalton, chief executive of Salford Royal NHS Foundation Trust, puts recent good results in the 2011 National NHS staff survey3 down to the trust’s involvement in local employment initiatives (see case study 1). When Dalton first came to work at the trust in 2001, less than 25 per cent of employees were from the Salford area – that figure has now risen to more than 50 per cent.

Diane Whittingham, who recently stepped down as chief executive of Calderdale and Huddersfield NHS Foundation Trust, is also convinced that CSR – in particular her trust’s efforts to support local employment initiatives – has borne fruit (see case study 2).

David Dalton, chief executive of Salford Royal NHS Foundation Trust, takes a personal interest in how the trust connects with the community. He explains there are a number of ways the trust is helping unemployed and disadvantaged people to find work, often in the trust itself.

The trust has been holding events that give disabled and long-term unemployed the opportunity to see what jobs are available in health and social care and then offer support to ensure they have a fighting chance of finding employment, within the trust or the wider community.

“Since 2005 we have seen 5,385 individuals go through this process and, as well as working with the local job centre and our partners (including Skills for Health) on pre-employment training programmes, they can volunteer to

work with us, which all helps with their CV and restores self-esteem,” Dalton says.

The trust is also using work placements to bring people back into employment. Dalton highlights the instance of a former patient who had undergone heart surgery and was no longer able to work as a long-distance lorry driver. After a work placement, he was taken on permanently and was the winner of a staff award in 2010.

In addition, the trust works closely with Balfour Beatty, its partner in the trust’s redevelopment programme, and is involved in a National Skills Academy for Construction project. Balfour Beatty employs a dedicated person to recruit trainees and local people into construction job roles at the trust.

So what does Dalton think are the long-term benefits? “In practical terms it gives us the opportunity to find local people whose values fit

with ours. The staff we have employed from the numerous schemes are loyal and clearly get a lot out of working here, according to the results of the NHS staff survey. It’s not a coincidence that they also would recommend our care to their family and friends,” he says. “We are also employing more local people – 57 per cent of the workforce live within 30 miles and 39 per cent within 15 miles of the site.”

Dalton believes that the more the hospital is connected to the community, the stronger it will be but knows it is a slow-burning process. “If you are effecting change on this scale you are not going to get much back in five years. We are seven years into our programme and we are beginning to build something that is sustainable. In 2010 we won Employer of the Year at the Greater Manchester Employer Coalition Awards.”

CASE STUDY 1Salford Royal NHS Foundation Trust


At Calderdale and Huddersfield NHS Foundation Trust, CSR is more than a tick-box exercise and a few well-meaning paragraphs on its website. It is dedicated to ensuring the organisation delivers care in a sustainable way. “That means everything from who we employ and what we buy, to how we complement other providers in the system and local businesses,” says Diane Whittingham, who was until recently chief executive. “It is about a long-term culture shift that is embodied in the way we work.”

As with Salford Royal, being a responsible employer plays a large part in this. Training and development initiatives, flexible working, staff crèches and work experience programmes are just some of the components. “We had 600 placements last year alone, covering school leavers to postgraduates, and at any one time

we will have over 400 volunteers working here,” says Whittingham.

The trust also carefully considers its green credentials when redeveloping the site. This covers the use of sustainable materials and waste management strategies. In 2006 it was selected as one of the first ten NHS organisations in England to sign up for the Carbon Trust’s NHS Management Programme. It was chosen from 25 hospital trusts that applied nationally to engage in the programme and play their part in managing climate change.

At the time Steven Bannister, the trust’s estates director, said: “A large organisation like the trust, with thousands of employees, has a major responsibility to lead on cutting carbon emissions, and the good news is that it could help us to save money by reducing our energy bills.”

The results are now being seen with a carbon dioxide reduction strategy in place. There is a long list of changes, from cycle lockers and showers to trust vehicles that are now all low emission. The trust is also buying almost 50 per cent of its goods within a 50-mile radius. “We are taking CSR very seriously and we have an associate director who heads up all this work,” says Whittingham.

“This is not about CSR being a nice thing to do – it makes absolute sense in terms of business. Inevitably, everything we are doing is helping to improve productivity. We have a strong and loyal staff base, with many of the people who have come in through our various schemes going on to become exemplar employees. Their commitment is substantial because we have supported them through difficult times.”

CASE STUDY 2Calderdale and Huddersfield NHS Foundation Trust

corporate and socia l responsib i l i ty

Supporting local and even national employment programmes might seem far removed from the day-to-day business of running an acute hospital trust but as Simon Pleydell, chief executive of South Tees Hospitals NHS Foundation Trust, points out, trusts are often the biggest employers in the region and have a responsibility to the community. “Middlesborough and the surrounding areas are deprived – with some of the worst areas of socio-economic deprivation in the country,” he says. “It is a region coming to terms with major changes in terms of the demise of its traditional industrial base.”

He is clearly proud of the trust’s record in supporting local employment schemes. “We have been the leading light in terms of local apprenticeship schemes,” he says, citing the fact that one of the trust’s apprentices, now a student nurse, was named as one of the UK’s top apprentices in 2011.

Pleydell takes a pragmatic approach to CSR and one that always considers the business case. He sees a clear advantage for the trust in being part of the momentum that is building behind initiatives such as the North East’s Health Innovation and Education (HIEC) cluster. HIECs are collaborative partnerships between NHS organisations, academia and industry. Their aim is to transform healthcare and drive up quality to improve patient care, safety, outcomes and experience by sharing innovative research, as well as supporting high-quality health education and training to enhance and develop workforce skills.


Risk sharing with commissionersOne of the features we have seen in top-performing organisations is a willingness not only

to ‘lower the drawbridge’ and engage with the local community but also to take an open-book approach to other health providers and commissioners.

The system of funding in the NHS, where commissioners determine the income of acute trusts, has encouraged many organisations to perpetuate the traditional ‘them and us’ approach. However, it is clear that organisations that are willing to be transparent reap the benefits. This does of course depend on the commissioner and there is anecdotal evidence that some commissioners do not encourage transparency.

Helen Bevan, of the NHS Institute for Innovation and Improvement, talks of a commitment between commissioner and provider, highlighting the example of a formal ‘compact’ between the two. This compact sets the ground rules for engagement and makes improvement through transparency an organisational goal. “We have had 13 years of top-down national targets and a lot of the apparatus of compliance is being dismantled. We are seeing commissioners and providers working hard to create a set of common values and shared goals,” she says.

Diane Whittingham, from Calderdale and Huddersfield NHS Foundation Trust, talks of the viability of the health system and says it is impossible to have an island of success in a sea of failure. “This means we all need to take a system perspective, have strong relationships and a sensible dialogue, and know when to compromise,” she says. She points to the success of a collaborative healthcare group between the trust and East Lancashire Hospitals NHS Trust, where there are opportunities for significant co-operation in areas of mutual benefit.

For Simon Pleydell, of South Tees Hospitals NHS Foundation Trust, risk sharing has been on the agenda for several years; the trust is part of a strategic management project – a genuine effort, he says, to share risk and improve the overall financial position of the commissioner NHS North Yorkshire and York, which has faced debt problems for more than a decade.

“There is no point driving the commissioner into greater debt,” he says. However, Pleydell warns that transparency will get more difficult, especially as the latest NHS Operating Framework4 will heap pressure on the acute sector, making risk sharing more problematic.

Patrick Crowley, chief executive of York Teaching Hospital NHS Foundation Trust – part of the same strategic management project – says a more transparent approach to contract negotiation and settlement has borne fruit for his trust. “Our PCT has been for many years one of the more financially challenged, which inevitably encouraged a short-term outlook and a more adversarial approach to contract management. This in turn led to a growing mistrust between partners within the system,” he says.

“About three years ago the local system was again being pressured to resolve a year-end problem with little or no time to do this. However, together with the SHA, we turned the debate into one about developing a more constructive way forward. The local foundation trusts agreed to absorb much of the financial pressure providing the SHA committed to facilitating, through a considered approach to brokerage, a collective negotiation of provider contracts and a common efficiency programme based on a common purpose.”

Crowley says the acute trusts took a considerable financial hit but at the same time developed a more open-book approach to contract settlement. A systems management executive was set up, consisting of the chief executives and financial teams, with the goal of a more honest process


r isk shar ing with commiss ioners

of sharing financial pressure and a collective approach to risk management. A common set of contract clauses was drawn up, which, he says, has led to tangible benefits.

“The PCT is now in underlying financial balance, a significant improvement in a relatively short period of time, and we have a better understanding and a much greater sense of trust. This has created a solid foundation for future work with the emerging clinical commissioning groups we will be engaged in, around pathways to improve outcomes and become more efficient.”

Sue James, of Derby Hospitals NHS Foundation Trust, is familiar with risk-sharing pressure. “When I arrived at the trust in January 2011, we were just coming to the end of a formal risk-sharing agreement with the primary care trust. There had been a stand-off, with the PCT saying it could afford to pay us £30 million less than the previous year.” She explains they agreed a 50 per cent discount for activity over a given threshold but it quickly became apparent that activity was still increasing. “We were able to show we weren’t creating activity for the sake of income and that we were delivering care even when it was against our financial interests.

“We then came up with an agreement where we would identify areas we could work on jointly to reduce activity. So for example, we are looking specifically at the frail and elderly to see what we can do to keep them out of hospital. This will involve working with GPs and encouraging them to take a preventative approach by flagging up high-risk patients,” she says.

Nigel Edwards, of The King’s Fund, says that, all too often, commissioners and providers find themselves in the situation game theorists describe as ‘prisoner’s dilemma’ (see box). This is where each organisation tries to optimise its own position in the health economy but in doing so produces the worst outcome for all. Edwards says risk sharing between commissioner and providers can have advantages particularly when it comes to chronic disease areas.

However, he too acknowledges the constraints. “If the health economy cake is expanding, then it is easy to be generous. Risk sharing gets hard when it is static or shrinking and it is possible to end up in a place where deficits are being passed between providers and commissioners. The key is to know how to collaborate to create additional value,” he says.

Prisoner’s dilemma – how game theory plays a part in risk sharing

Two accomplices are arrested in possession of firearms after a theft and held in isolation in separate cells. Both care much more about their personal freedom than about the welfare of the other. The arresting officer tells them they have a choice either to confess or remain silent. If a confession is made by one and the other remains silent, all charges against the one who confessed will be dropped while the testimony will be used to ensure the silent accomplice is charged and gets a maximum sentence.

They are also told that if they both confess there will be two convictions but the police will ensure they get early parole. In addition, the

officer tells them that if they both remain silent they will receive token sentences on firearms possession charges.

The dilemma they face is that, whatever the other does, each is better off confessing than remaining silent. However, the outcome when both confess is worse for each than the outcome had both remained silent.

The dilemma is often used to describe what happens at organisational level, for example in a health economy. Here the dilemma predicts that where organisations pursue rational self-interest they may all end up worse off than if they were to act contrary to rational self-interest.


Learning from other healthcare providers and industry sectorsIt is well accepted that organisations looking to make improvements can learn from others,

not just in their own sector but elsewhere. Helen Bevan, from the NHS Institute for Innovation and Improvement, says: “We can learn from healthcare organisations that have made the leaps in service quality we aspire to.” Without exception, all the acute sector organisations that are shortlisted in national awards have adopted something they have seen elsewhere in the NHS. They tend to be part of learning networks that share best practice, such as NHS Quest.

NHS Quest describes itself as the first member-convened NHS provider network for organisations that wish to focus relentlessly on improving quality and safety. It was founded in 2011 and has 14 founder members, with a programme office based in Salford. It aims to share learning as well as identify and develop initiatives that lead to improvements such as harm-free care, reducing readmissions and reducing mortality.

South Tees Hospitals NHS Foundation Trust is one of the founder members, says chief executive Simon Pleydell. “We were the first trust to have four pilot wards meeting the 95 per cent threshold for harm-free care. There is considerable effort put into organising visits between us and our partner organisations. The idea is that we are pooling our resources through learning from each other and that we are able to benchmark ourselves against the very best in the field of patient safety to drive significant improvement.”

Pleydell cautions that learning visits where senior teams decamp abroad may become less and less viable and that the network approach works well. He says NHS Quest has links with the Institute for Healthcare Improvement in Boston, which adds an international element. He also highlights the trust’s links with the NHS Institute for Innovation and Improvement. “We have been doing a lot of work based on the Institute’s staff engagement ideas to mobilise staff and patients and build a grassroots movement for healthcare improvement.”

Bevan is keen to point out that NHS acute providers can also learn from other industries. She believes that, although healthcare does have specific differences, there are industries in other sectors that can offer valuable examples.

There are well-known examples where the NHS has already learned from other industries, such as the Toyota Lean Approach and the Unipart University. Maxine Power, executive director of NHS Quest, says its members are always on the lookout for learning from other industries, and she cites her recent visit to Vernacare, the disposable system for human waste management in hospitals – which most NHS staff know as the company that makes urine bottles.

“Vernacare has a very close relationship with the NHS and is continually looking to make improvements in its manufacturing process,” says Power. “Its values are very closely aligned with ours and they are exploring ways to reduce costs and improve quality.

“Their use of advanced measurement and understanding of what the optimum manufacturing process looks like, and how employees fit into this, is also extremely interesting,” she adds. “The workspace is immaculate, which, given the nature of the manufacturing business they are in, is very impressive.” Power says she is setting up executive-level meetings to explore learning from Vernacare.


Comparison not just with peers but worldwideTop hospitals would not be where they are without an understanding of how their

performance measures up at regional, national and even global level. But, says Nigel Edwards of The King’s Fund: “An external focus on its own is not good enough; you need to know what good looks like.”

Regional and national comparison has become easier, especially when it comes to indicators such as mortality and other performance measures. Edwards and Simon Pleydell agree that worldwide comparison is less straightforward since the way that data is collected and measured can differ. For example, countries in Europe may use different Healthcare Resource Group classifications and primary care systems are organised differently. “Worldwide comparison tends to be very issue-specific, such as safety, or focused around a particular model,” says Edwards.

International comparison can be helpful when it comes to the role clinical leadership plays in driving improvements in performance. There are many examples of where trusts have made improvements based on work they have seen abroad and this is often pathway led.

In Engaging Doctors in Leadership5, the authors say there is still further potential for learning through comparison: “The NHS has an opportunity to learn from international experience to become an exemplar in medical leadership and its development.”

Several NHS organisations across the north of England have established alliances with international partners to support them in transforming services at a local level. Here, NHS North East, NHS North West and NHS Yorkshire and the Humber are part of an initiative called ‘Leading Large Scale Change Through International Alliances’. This programme focuses on collecting examples of improvement from clinical teams who have established links with internationally recognised organisations, such as the Virginia Mason Medical Center, Intermountain Healthcare and Johns Hopkins Medicine, all in the US, and Jönköping County Council in Sweden.

Helen Bevan is supportive of this work and says: “To say that it is not possible to make comparisons because of data inconsistency is missing the point. The great thing about doing worldwide comparison and learning from others is really about the mindset and adopting a whole new perspective on the way we operate.”

The NHS has an opportunity to learn from international experience to become an exemplar in medical leadership and its development.Ham C, Dickinson H. Enhancing Engagement in Medical Leadership


Worldwide comparison and learning from others Patient Status at a Glance BoardsSouth Tees Hospitals NHS Foundation Trust has applied learning from Virginia Mason Medical Center in Seattle to develop Patient Status at a Glance (PSAG) Boards. This was done across surgery in consultation with multidisciplinary teams. The board is updated every morning, ensuring the provision of accurate information to bed managers. PSAG boards are being rolled out across the whole of the acute trust.

Developing a safety cultureAintree University Hospitals NHS Foundation Trust developed a partnership with Johns Hopkins Medicine in Baltimore to help it build a culture of safety within the trust. As a result of the three-year partnership programme, the trust has seen significant engagement at all levels in preventing patient harm. Several initiatives have been modified and incorporated into the trust’s processes; for example, it now has patient safety officers on every ward with a full day dedicated to improving safety. Weekly meetings are held and chaired by the medical director where all incidents of harm are reviewed, with a specific focus on near misses. The trust has also introduced Comprehensive Unit-Based Safety Programmes, where multidisciplinary clinical teams – from porter to consultant – meet to ask two key questions: ‘How might our next patient be harmed?’ and ‘What can we do as a team to prevent it?’

Reducing readmissionsCalderdale and Huddersfield NHS Foundation Trust has been working worked in collaboration with a US membership organisation called the Clinical Advisory Board on its readmission agenda. The learning has helped it to bring together partners across local health and social care organisations to review local issues and get everyone to the same level of understanding about risks to patients, costs to the local health economy and preventive actions they could take. Through this association, the trust has established a multidisciplinary virtual ward that targets patients who are at risk of readmission.

compar ison not just with peers but worldwide


Conclusion

A commitment to external influence, and in particular the areas of focus we have highlighted in this report, not only sets leading acute sector organisations apart from others, it

produces significant benefits.These benefits are not immediate – as David Dalton, chief executive of Salford Royal

NHS Foundation Trust points out, they can take several years to materialise. The example of involvement in employment programmes is a potent one; helping individuals when they are at their lowest ebb and supporting them back into work can bring repayment through staff loyalty. Dalton is adamant that the trust’s good performance in the 2011 NHS staff survey is down to the relationship it has with its staff. This commitment to local people has helped the trust to win awards and it is now firmly embedded in the local community.

Such local engagement is only part of the external influence package. ‘Lowering the drawbridge’ to engage with commissioners on an open and transparent level is another important factor. Some trust chief executives will find this harder than others depending on their existing relationship with commissioners but the effort is clearly worthwhile.

Finding out what other providers are doing and being open to new ideas is also part of the external influence package. This does not have to be restricted to the healthcare sector because there are learning points from other industries. There are well-worn paths to car manufacturing giants such as Toyota but often learning is possible on the doorstep, as NHS Quest executive director Maxine Power has discovered with her visits to urine bottle manufacturer Vernacare.

Finally, we have found that continuous comparison is vital to help trusts understand what good looks like. As Nigel Edwards of The Kings Fund says: “It’s all very well seeing what good looks like but you then need a culture to encourage the implementation of what you have seen.”

None of the top-performing UK trusts have all these areas covered although most do one or two of them well. As we have discovered in previous reports in this series, culture and leadership play an important role in how well a trust performs. Those two elements are inextricably linked with external influence – Edwards’ observation that chief executives who foster relationships beyond the trust help to drive external influence is pertinent, and this is an important pointer for the future of NHS leadership development programmes.

If you are effecting change on this scale you are not going to get much back in five years. We are seven years into our programme and we are beginning to build something that is sustainable.David Dalton, Salford Royal NHS Foundation Trust


CHKS Top Hospitals programme 2012The CHKS Top Hospitals programme celebrates the best in UK healthcare. There are several

awards: some that are open to all UK hospital trusts and some that are for hospitals and other organisations that are working with CHKS.

All UK NHS hospital trusts are entered automatically for the open awards, which are judged using nationally available datasets that include every NHS acute trust.

There are three award categories: Quality of care: recognising excellence in providing high-quality care to patients that is

appropriate to their diagnosis Patient safety: recognising outstanding performance in providing a safe hospital environment

for patients Data quality: recognising excellence in clinical coding, which plays an essential role in

improving the quality of care provided to patients.

CHKS has also announced the winner of its quality improvement award. This international award recognises significant improvements in patient care and patient experience, as well as staff welfare, safety and morale. The CHKS quality improvement award 2012 was open to all healthcare organisations accredited by CHKS in 2011.

Jason Harries, managing director of CHKS, says: “The government has made it clear that every hospital is accountable to its patients, their families and carers as well as the local community to provide a safe environment where effective care can be delivered.

“Our national awards recognise the important part that data quality, safety and quality of care play in this respect.”

In the 2012 Top Hospitals programme awards CHKS has included newly

defined indicators based on the British Association of Day Surgery (BADS) directory of day surgery.

Further analysis of these indicators reveals substantial variation across hospital trusts in England. However, the analysis has also helped to dispel

the commonly held view that the inexorable drive for greater efficiency and higher day case rates has resulted in inappropriate referrals for day surgery (for example, for patients with complicating pre-existing conditions).

The argument is that these patients are often kept in hospital overnight, if only for observation. This would imply

that trusts with higher day surgery rates would have more day case conversions.

However, CHKS analysis has found no link and that the conversion rates are no higher in trusts with the highest day case rates. Indeed, the reverse is true: conversion rates are actually better (lower) at sites with better (higher) day case performance. CHKS consultants believe this is a result of a concerted focus on providing good quality care pathways by clinicians and management.

New research finds no link between conversion and day-case rates

Top Hospitals latest analysis


Top Hospitals programme 2012

Data quality awardThe awards recognise the importance of clinical coding and data quality, and the essential role they play in ensuring appropriate patient care and financial reimbursement from commissioners. We have presented three data quality awards recognising the best performers across the UK, based on a number of indicators. This year’s indicators are depth of coding (not case mix adjusted), the percentage of coded episodes with signs and symptoms as a primary diagnosis, and the percentage of uncoded episodes.

Shortlisted organisations 2012Data quality award (England) Frimley Park Hospital NHS Foundation Trust Lancashire Teaching Hospitals NHS Foundation Trust Northumbria Healthcare NHS Foundation Trust

Data quality award (Northern Ireland, Scotland, Wales) Betsi Cadwaladr University Health Board Cardiff & Vale University Health Board South Eastern Health and Social Care Trust

Data quality award (specialist trust) Clatterbridge Cancer Centre NHS Foundation Trust Liverpool Heart And Chest Hospital NHS Foundation Trust Papworth Hospital NHS Foundation Trust

WinnersData quality (England)Lancashire Teaching Hospitals NHS Foundation Trust

Data quality (Northern Ireland, Scotland, Wales)Betsi Cadwaladr University Health Board

Data quality (specialist trust)Liverpool Heart and Chest NHS Foundation Trust



Patient safety awardA national award for outstanding performance in providing a safe hospital environment for patients, it is based on more than 20 criteria, including rates of hospital-acquired infections and mortality. The indicators for 2012 include: Emergency readmission rate within 28 days of discharge following hip fracture (65 years and over) Summary Hospital-level Mortality Index (SHMI) Risk-adjusted mortality index Readmission rate within seven days of delivery Infection rate following Caesarean section Rate of deaths in hospital within 30 days of non-elective surgery Rate of deaths in hospital within 30 days of elective surgery Rate of deaths in hospital within 30 days of emergency admission for hip fracture (fractured neck of femur; 65 years and over) Rate of deaths in hospital within 30 days of emergency admission with a heart attack (myocardial infarction; aged 35 to 74) Rate of deaths in hospital within 30 days of emergency admission for a stroke Rate of deaths in low-mortality HRGs (HRG3.5) Rate of decubitus ulcer (for patients with length of stay over four days) Postoperative wound infection Complications of anaesthesia Foreign body left in during procedure Postoperative pulmonary embolism or deep vein thrombosis Postoperative sepsis Rate of accidental puncture or laceration during surgery Birth trauma (injury to neonate).

Shortlisted organisations 2012 Airedale NHS Foundation Trust Chelsea and Westminster Hospital NHS Foundation Trust Guy’s and St Thomas’ NHS Foundation Trust Barts Health NHS Trust South Eastern Health and Social Care Trust

WinnerPatient safetyAiredale NHS Foundation Trust



Quality of care awardAwarded nationally for excellence in high-quality care to patients appropriate to their diagnosis, the quality of care award is based on a number of criteria, including the length of time patients stay in hospital, the rate of emergency readmission and whether the care pathway proceeded as originally intended. The indicators for 2012 include:

Day case conversion to inpatient rate (vs national rates, case mix adjusted in line with BADS) Patient-reported outcomes score (across four procedures) Rate of emergency readmission to hospital Percentage of elective admissions where planned procedure not carried out (not patient decision) Summary Hospital-level Mortality Index (SHMI) Risk-adjusted length of stay Risk-adjusted mortality index Percentage of patients over 65 years with fractured neck of femur with pre-operative length of stay less than or equal to two days Cancer patients seen within two weeks (all suspected cancers) Discharge to usual place of residence within 56 days of emergency admission for patients with stroke Discharge to usual place of residence within 28 days of emergency admission for patients with a hip fracture (fractured neck of femur; aged 65 and over) Admitted patients’ waiting time from point of referral to treatment.

Shortlisted organisations 2012 Airedale NHS Foundation Trust Cambridge University Hospitals NHS Foundation Trust Dorset County Hospital NHS Foundation Trust The Whittington Hospital NHS Trust West Suffolk NHS Foundation Trust

WinnerQuality of careWest Suffolk NHS Foundation Trust



Quality improvement awardOur only international award recognises significant improvements in patient care and patient experience, as well as staff welfare, safety and morale. The CHKS quality improvement award 2012 was open to all healthcare organisations accredited by CHKS in 2011. All submissions are evaluated by the CHKS Accreditation Awards Panel

Shortlisted organisations 2012 Beacon Centre, Taunton and Somerset NHS Foundation Trust Centro Hospitalar do Porto, Geral de Santo António, Portugal Clane General Hospital, Ireland Hospital de Magalhães Lemos, Portugal Vhi Swiftcare Clinics, Ireland White Oaks Rehabilitation Centre, Ireland

Joint winnersQuality improvementBeacon Centre, Taunton and Somerset NHS Foundation Trust Centro Hospitalar do Porto, Geral de Santo António, Portugal

Our awards programme provides reassurance to hospital boards, staff and patients that their trust is amongst the highest performers when it comes to data quality, safety and quality of care.Jason Harries, CHKS



40 Top Hospitals awardThe 40 Top Hospital Award is not open to all UK hospital trusts but is awarded to the 40 top-performing CHKS client trusts. It is based on the evaluation of 23 indicators of clinical effectiveness, health outcomes, efficiency, patient experience and quality of care.

Revised annually to take into account newly available performance information, this year’s indicators include: Reported Clostridium difficile rate for patients aged 65 and over Day case rate (relative weighted performance across BADS directory) Day case conversion to inpatient rate (compared with national rates, case mix adjusted as per BADS) Depth of coding (not case mix adjusted) Percentage of coded episodes with signs and symptoms as a primary diagnosis Percentage of uncoded episodes Inpatient survey (overall care question) Percentage of outpatient first appointments not attended (specialty adjusted) Patient-reported outcomes score (across four procedures, per EQ-5D) Rate of emergency readmission to hospital (more than 16 days and less than 28 days) Emergency readmission within 28 days of discharge following hip fracture (for patients aged over 65) Percentage of elective admissions where planned procedure not carried out (not patient decision) Reference Cost Index (RCI) Summary Hospital-level Mortality Index (SHMI) Staff survey (overall job satisfaction question) Risk-adjusted length of stay Risk-adjusted mortality index Rate of emergency readmission to hospital following myocardial infarction within 28 days Rate of emergency readmission to hospital within 14 days for COPD Percentage of elective inpatients admitted on day of procedure Patient misadventure rate (ICD-based) Percentage of patients over 65 years with fractured neck of femur with pre-operative length of stay less than or equal to two days Unnecessary admissions via A&E.


40 Top Hospitals 2012Bedford Hospital NHS TrustBurton Hospitals NHS Foundation TrustCalderdale and Huddersfield NHS Foundation TrustCity Hospitals Sunderland NHS Foundation TrustCountess of Chester Hospital NHS Foundation TrustCounty Durham and Darlington NHS Foundation TrustDartford and Gravesham NHS TrustEast and North Hertfordshire NHS TrustEast Cheshire NHS TrustEast Kent Hospitals University NHS Foundation TrustFrimley Park Hospital NHS Foundation TrustHampshire Hospitals NHS Foundation TrustHeatherwood and Wexham Park Hospitals NHS Foundation Trust Imperial College Healthcare NHS TrustKingston Hospital NHS TrustLewisham Healthcare NHS TrustMedway NHS Foundation TrustMid Cheshire Hospitals NHS Foundation TrustMid Essex Hospital Services NHS TrustNorthampton General Hospital NHS TrustNorthumbria Healthcare NHS Foundation TrustRoyal Berkshire Hospital NHS Foundation TrustRoyal Bolton Hospital NHS Foundation TrustRoyal Surrey County Hospital NHS Foundation TrustScarborough and North East Yorkshire Healthcare NHS TrustSouth Eastern Health and Social Care TrustSouth Tees Hospitals NHS Foundation TrustSouth Tyneside NHS Foundation TrustSouth Warwickshire NHS Foundation TrustSouthern Health and Social Care TrustThe Newcastle Upon Tyne Hospitals NHS Foundation TrustThe Queen Elizabeth Hospital King’s Lynn NHS Foundation TrustThe Rotherham NHS Foundation TrustUniversity College London Hospitals NHS Foundation TrustUniversity Hospitals Bristol NHS Foundation TrustWest Hertfordshire Hospitals NHS TrustWestern Sussex Hospitals NHS TrustWeston Area Health NHS TrustWye Valley NHS TrustYork Teaching Hospital NHS Foundation Trust


1. The King’s Fund. A Review of Leadership in the NHS. www.kingsfund.org.uk/current_projects/leadership_review_2012/2. Fombrun C, Shanley M. What’s in a Name? Reputation Building and Corporate Strategy. Academy of Management Journal 1990; 33: 2, 233-2583. 2011 NHS staff survey. www.nhsstaffsurveys.com/cms/4. The Operating Framework for the NHS in England 2012-13. www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_1313605. Ham C, Dickinson H. Engaging Doctors in Leadership: What we can learn from international experience and research evidence. 2008. NHS Institute for Innovation and Improvement.

References

Assurance &accreditation

Performance & governance

Clinical coding & data quality

FT membership & engagement

Patient & staff experience

Consultancy & training

www.tophospitals.co.uk

This publication is supported by CHKS, the UK’s leading provider of healthcare intelligence and quality improvement services. In the last 21 years we have worked with 374 healthcare organisations worldwide.

This makes us the provider of choice with the broadest range of services and highest level of expertise and knowledge. With 70% of acute healthcare providers in the UK choosing CHKS to support them on their improvement journey, we have the skills and know-how to help you boost quality, cost and delivery performance in your organisation.

BOARD OF DIRECTORS

Meeting Date and Part: 8th June 2012 – Part I

Subject: Rationing Health Care - Nuffield Trust February 2012



Tony Spotswood, Chief Executive Officer

Author of Paper: Sandy Edington, Associate Director of Service Development



Action required by Board of Directors: Note for Information

Executive Summary: This document taken an empirical look at the potential for structuring the rationing process within the NHS

Strategic Goals & Objectives: Access to Care

Links to CQC Registration: (Outcome reference) Section 1, Outcome 1



Board of Directors – Part II 8th June 2012

Rationing Health Care – Nuffield Trust February 2012 Page 1 of 3 For Information

Report on Rationing Health Care – Nuffield Trust February 2012

1. Introduction This document takes an empirical look at the potential for structuring the rationing process within the NHS. This is developed particularly in the context of a rising population health need and a diminishing financial envelope funding these. Several parallel developments are recognised within this report, including devolution of responsibility to clinical level and the development of clinical commissioning groups. Many other discussions argue that any efforts should be focused on achieving greater efficiency in the NHS, before the decommissioning of existing services is considered. However, this document exposes the feasibility, advantages and disadvantages of introducing an explicit, nationally-set benefits package in the NHS in England. It outlines the case for, and against, introducing this and looked at experience from other countries who have attempted to do this. In essence, consideration is given to being very explicit about what healthcare is and what is not funded by the NHS. Such a benefit package would clarify which citizens would have to consider funding for themselves, or would not be able to access, if not publicly funded. 2. Current Approach Currently, it is observed that decisions are made in a de-facto and not always in a consistent fashion. This may take place at individual patient level and is termed an implicit approach. It has the following advantages: Doctors can respond to the individual needs of patients.

Local Commissioners can set local priorities for expenditure

It diffuses what might be difficult political/public pressure in response to problematic spending decisions.

However, the disadvantages are as follows: It may be inconsistent with promoting national strategic objectives

It can lead to a tendency to maintain historic patterns of care

It gives rise to variations in health funding decisions across country (post-code lottery)

There is often a lack of transparency about how spending decisions are made The experience of international health systems is that these packages set out either inclusive benefits (what will be funded) or excluded benefits i.e. what won’t be funded. In practice these often lack the detail necessary to be more than a guide to local practice.



Initially the report indicates the attractiveness of the NHS Benefits Package, given the financial difficulties currently. It asks 3 questions: 1) Is this feasible?

2) What would be its likely impact in 3 key areas – containing costs/improving efficiency, equity of access and transparency?

3) If a national benefits package is not feasible or desirable, can improvements to the current implicit system be made?

3. Conclusions The report concludes that developing a detailed national benefits package for the NHS is likely to be unworkable and implementing it may lead to adverse consequences. It would: 1) Prove technically challenging to develop and enforce.

2) Limit necessary local autonomy of Commissioners in adhering to budgets

3) Limit necessary local autonomy of Providers adapting to the variations in patients’ needs

4) Be vulnerable to arbitrary departures from consistent decision making, in the face of lobbying and other political pressure

5) Possibly compromise the solidarity of principle which the NHS applies. 4. Alternatives The report then cites a number of alternative options as recommendations for changes that could be made, to improve the current implicit approach: 1) A set of principles should be established which can shape how public money is

spent in the NHS. These principles could be enshrined in the NHS Constitution and restated in the annual Secretary of State for Health mandate to the NHS Commissioning Board.

2) The NHS Commissioning Board should perform a crucial role in setting the scope

of funding and service provision in the reformed NHS and working with the National Institute for Health & Clinical Excellence (NICE) to determine a Commissioning Outcomes Framework.

3) The NHS Commissioning Board should use NICE guidance for producing, as a

starting point, a national list of treatments that public money should not be spent on from the NHS, unless there are exceptional circumstances. Local Clinical Commission Groups should be required to report publicly on their progress in following this “do not do” advice explaining any exceptions where such procedures are funded.



4) The standards developed by NICE and set out in the Commissioning Outcomes Framework should be aligned with the structural level of the NHS tariff. Hospitals and other providers would therefore be paid by Commissioners in a way that upholds the NHS Benefits Package and is affordable clinically and cost-effective.

5) The NHS Commissioning Board should provide the public with information about

the relative performance of local clinicians against selected outcome indicators. 6) Decision-making in Clinical Commissioning Groups should be made transparent,

so that departures from certain national guidelines from NHS Commissioning Principles are subject to proper scrutiny before they are finalised.

7) Patients should be “nudged” toward preferred use of NHS services through the

provision of clear information and making it easier for patients to make the right choices.

5. Recommendation

The Board are asked to note this report for information.

Research reportBenedict Rumbold, Vidhya Alakeson and Peter C. Smith

February 2012

Is it time to set out more clearly what is funded by the NHS?

Rationinghealthcare

Acknowledgements

The authors are grateful for the contributions of Dame Carol Black, Jennifer Dixon andJudith Smith at the Nuffield Trust; Andy McKeon (Chair) and members of The Questfor NHS Efficiency steering group; and Aileen Clarke, University of Warwick. All thesereviewers have provided valuable comment and insights during the drafting of this report.We are also grateful to those individuals who agreed to be interviewed as part of ourresearch. The views expressed in the report are however our own.

We would also like to thank Rachel Posaner and colleagues at the Health ServicesManagement Centre Library, Birmingham, for their invaluable assistance with theliterature review.

The Quest for NHS Efficiency

The NHS is facing one of the most significant financial challenges in its history, withefficiency savings of at least 4 per cent per year now required. This comprehensiveprogramme of research aims to help the NHS respond to the financial challenges aheadby examining how health services can improve productivity and deliver more for less. It is informed by rigorous analysis of existing UK and international research evidence, and sets out practical recommendations for managers, clinicians and policy-makers about how the NHS can improve productivity and respond to what has been dubbed the ‘Nicholson challenge’.

To download further copies of this report and other publications in the series, visitwww.nuffieldtrust.org.uk/publications

Other publications in the Quest for NHS Efficiency series:

Setting Priorities in Health: A study of English primary care trusts (research report)

Setting Priorities in Health: The challenge for clinical commissioning (research summary)

Commissioning Integrated Care in a Liberated NHS (research report)

Commissioning Integrated Care in a Liberated NHS (research summary)

Can NHS Hospitals Do More With Less? (research report)

Can NHS Hospitals Do More With Less? Implications for policy and practice(research summary)

Find out more online at: www.nuffieldtrust.org.uk/efficiency

Contents

List of figures, tables and boxes 3

Executive summary 4

1. Introduction 8

2. The package of benefits currently funded by the NHS 10

The three elements of a benefits package 10

How is the NHS benefits package presently derived? 11

An assessment of the current system 18

Summary 22

3. Nationally set benefits packages 23

Inclusive and exclusive packages 23

Scope 25

Level of detail 25

Degree of enforcement 27

Summary 28

4. Setting a national benefits package for the NHS 29

Implications for containing costs and improving efficiency 29

Would a benefits package improve equity of service provision in the NHS? 31

Implications for accountability and transparency 31

Summary 33

5. Alternative policy options 36

National-level reforms 36

Local-level reforms 39

Citizens, patients and carers 40

Summary 42

6. Conclusion 43

Appendix: Level of regulation of the benefits package 45

References 51

List of figures

2.1: Principal factors influencing the shape of the NHS benefits package 12

2.2: Aspects of the priority-setting process that PCTs currently make explicit to the public 21

3.1: The four dimensions of a nationally set and explicitly defined benefits package 23

List of tables

4.1: Arguments for and against a nationally determined benefits package 35

List of boxes

2.1: Key clauses of the NHS Constitution 13

3.1: Chile’s ‘Regime of Explicit Guarantees in Health Law’ or Plan AUGE 26

3.2: The Social Health Insurance scheme in Germany 26

3.3: Spain – a national benefits package and autonomous regions 27

4.1: The experience of allowing statutory health insurers in Israel to determine their own package of care 33

3

List of figures, tables and boxes

4

The National Health Service (NHS) in England is facing a significant financial challenge.Between 2011/12 and 2014/15, NHS spending will increase by only 0.4 per cent in realterms (House of Commons Health Committee, 2010). To put this into perspective,between 1950 and 2000 the NHS’ net spending increased in real terms at an average of3.48 per cent per year, rising to 6.56 per cent between 1999/2000 and 2010/11 (Applebyand others, 2009a). The NHS therefore now faces what has been dubbed ‘the Nicholsonchallenge’: to derive by 2015 an estimated £15–20 billion more value from the overallbudget in order to meet rising demand without a corresponding increase in funding.

At the same time, the NHS is going through a series of large-scale reforms, as set out in the Coalition Government’s Health and Social Care Bill 2011. Responsibility forcommissioning patient care is set to be transferred from primary care trusts (PCTs) to consortia of general practitioners in ‘clinical commissioning groups’. Each clinicalcommissioning group will purchase care for the patients registered with its constituentgeneral practices (excluding highly specialist and primary care), and clinicalcommissioning groups will control around £60 billion of the NHS budget.

The drive to devolve greater responsibility for decision-making to local clinicians isexpected to result in variations in the funding and purchasing decisions made by localclinical commissioning groups for the populations they cover. Some fear that this will result in greater inequities in access to care across areas, while others regard this as a necessary way of allowing clinicians to respond to the different needs of their local populations.

The NHS has in the past responded to the need to constrain expenditure growth byattempting to increase productivity, reconfiguring services, restraining staff numbers andpay, and letting waiting lists for elective care grow. However, despite considerable debatein the past on ‘rationing’ and interest in the experiences of other countries in this regard,ending the availability of whole services has been rare.

The Nuffield Trust has argued elsewhere (Smith and others, 2010) that efforts should in the first instance be devoted to achieving greater efficiency in the NHS beforeconsidering the abandonment of previously available services. But, anticipating debate in this area, the Trust has conducted a review into the feasibility, advantages anddisadvantages of introducing an explicit, nationally set benefits package in the NHS inEngland. This report outlines the case for and against introducing such a package, anddraws out learning for the NHS from other countries that have attempted to do so.

The intention is to examine whether drawing up an explicit account of what health care is and what is not funded by the NHS could help to promote the main objectives of theNHS, such as maintaining a comprehensive service based on need, being free at the pointof use regardless of ability to pay, while spending within a global budget.

Executive summary

Rationing health care: Is it time to set out more clearly what is funded by the NHS?5

Funding health care: how are decisions made?In all publicly funded health systems, choices have to be made over who is covered and forwhat services. In the NHS, all citizens are covered, but there are in practice limits to thehealth care benefits paid for by the state. The inclusion or otherwise of services in themain ‘benefits package’ is open to contest and debate, and may shift over time.

Currently, the set of health care services paid for by the NHS (what we call the ‘NHSbenefits package’) is arrived at implicitly, as a result of decisions made by national,regional and local decision-makers, working within a context of laws, duties, policies,budgets and financial incentives that change over time.

This implicit approach to the development of the NHS benefits package has someadvantages:

• It allows doctors to respond, where necessary, to the needs of individual patients andnot be unduly constrained by rigid national rules.

• It allows local commissioners to set local priorities for spending within a fixed budget.

• It diffuses what might be unmanageable political and public pressure in response todifficult spending decisions.

But it also has disadvantages, for example:

• It may be inconsistent with promoting national strategic objectives such as cost-effectiveness and equity of access.

• It can lead to a tendency to maintain historical patterns of care.

• It gives rise to variations in health funding decisions across the country (the ‘postcodelottery’), with resulting perceptions of unfairness.

• There is a lack of transparency about how spending decisions are made.

The experience of international health systems

Some countries seek to describe explicitly the health care benefits that are paid for bytheir publicly funded health system. Such benefits packages may be inclusive, setting out apositive list of what will be funded, or exclusive, setting out a negative list of what will notbe provided, or will only be offered under some circumstances. In practice, benefitspackages often lack the detail necessary to be more than a guide to local clinical practice,and they rarely set out ‘appropriateness’ criteria to indicate which specific patients shouldqualify for receipt of a treatment. In some countries, regions have considerable autonomyover what is actually funded, albeit within a national framework of entitlements.

Should a national NHS benefits package be specified?Given the financial pressures faced by the NHS, the idea of setting out explicitly thelimits to what patients are entitled, in the form of a nationally specified NHS benefitspackage, may seem superficially attractive. This report examines three main questions:

1. Is it feasible in practice to define explicitly a list of benefits?

2. What would be its likely impact in three key areas: containing costs and improvingefficiency; equity of access to care; and transparency?


3. If setting a national benefits package is not feasible or desirable, can improvements tothe existing implicit system nevertheless be made?

The review concludes that developing a detailed national benefits package for the NHS islikely to be unworkable, and implementing it may lead to adverse consequences. It would:

• prove technically challenging to develop and enforce

• limit necessary local autonomy of commissioners in adhering to budgets

• limit necessary local autonomy of providers in adapting to variations in patients’ needs

• be vulnerable to arbitrary departures from consistent decision-making, in the face oflobbying and other political pressures

• possibly compromise the solidarity principle on which the NHS relies.

Alternative options

While this report recommends against the introduction of an explicit national benefitspackage, the motivation for examining this option remains pressing. The report thereforemakes a number of recommendations for changes that could be made to improve the waythe current implicitly set NHS benefits package is shaped, without going as far asspecifying a national set of NHS-funded services. The recommendations are as follows:

1. A set of principles should be established that can shape how public money is spentin the NHS and, conversely, inform decisions about what will no longer be paid for.These principles could be enshrined in the NHS Constitution and restated in theannual Secretary of State for Health’s mandate to the NHS Commissioning Board(and in turn to the new clinical commissioning groups), reminding NHScommissioners of what should underpin their decision-making about resources andservices. The principles are likely to be based on existing NHS criteria such as clinicaleffectiveness, cost-effectiveness and equity.

2. Acting on the mandate set by the Secretary of State, the NHS Commissioning Boardshould perform a crucial role in setting the scope of funding and service provisionin the reformed NHS, and working with the National Institute for Health andClinical Excellence (NICE) to determine a Commissioning Outcomes Frameworkthat will guide the activities of local commissioners, against which they will be held toaccount. The NHS Commissioning Board should commission core standards forNHS care from NICE – these must incorporate information about cost-effectiveness,best evidence-based clinical practice, and advice on efficient service provision.

3. The NHS Commissioning Board should use NICE guidance for producing, as astarting point, a national list of the treatments that public money should not bespent on in the NHS, unless there are exceptional circumstances. Local clinicalcommissioning groups should be required to report publicly on their progress infollowing this ‘do not do’ advice, explaining any exceptions where such procedures arefunded. More generally, clinical commissioning groups should be expected to reporton departures from national guidance.


4. The standards developed by NICE and set out in the Commissioning OutcomesFramework should be aligned with the structure and level of the NHS tariff.Hospitals and other providers would therefore be paid by commissioners in a way that upholds an NHS benefits package that is affordable, clinically effective and cost-effective.

5. Wherever possible, providers and clinicians should be ‘nudged’ towards clinicaland cost-effective care through: public exception reporting of services that are fundedoutside of Commissioning Outcomes Framework standards; the use of informationtechnology-based clinical prompts for general practitioners and specialists at the pointof diagnosis and treatment; and other information technology solutions such asmonitoring adherence to guidelines.

6. The NHS Commissioning Board should provide the public with information aboutthe relative performance of local commissioners against selected outcomeindicators from those set out in the NHS Constitution and the CommissioningOutcomes Framework. In this way, the NHS Commissioning Board will help toinform the public about what is in the de facto NHS benefits package and what theyshould expect from their local NHS, and encourage stronger local challenge andaccountability in respect of funding decisions and how these decisions are made.

7. Decision-making in clinical commissioning groups should be made transparent, sothat departures from certain national guidelines, and from NHS commissioningprinciples, are subject to proper scrutiny before they are finalised. Relevantinformation should be made available to local authorities, the media and citizens, andmechanisms put in place to permit representations to be heard.

8. Patients should be ‘nudged’ towards preferred use of NHS services, through theprovision of clear information and making it easy for patients to make the ‘right’choices. We consider it unlikely that policy-makers will seek to apply additional usercharges in the NHS in the foreseeable future.

8

The NHS is facing a significant financial challenge. Between 2011/12 and 2014/15,NHS spending will increase by only 0.4 per cent in real terms (House of CommonsHealth Committee, 2010). To put this into perspective, over the past 39 years the NHShas received funding increases of an average of 3.9 per cent a year above inflation, andbetween 1997/98 and 2010/11 the English NHS budget grew in real terms at an averageof 5.7 per cent per year. The NHS now faces what has been dubbed ‘the Nicholsonchallenge’: to derive, by 2015, £15–20 billion more value from the overall budget in order to meet rising demand and improve the quality of services without a corresponding increase in funding. This equates to the need for approximately 4 per cent efficiency gains per year.

The NHS is also going through a series of large-scale reforms, as set out in the CoalitionGovernment’s Health and Social Care Bill 2011. At the time of writing (February 2012),commissioning responsibility is set to be transferred from PCTs to consortia of generalpractitioners in ‘clinical commissioning groups’. Each clinical commissioning group willpurchase care for the patients registered with its constituent general practices (excludinghighly specialist and primary care), and clinical commissioning groups will control around£60 billion of the current NHS budget. The clinical commissioning groups will be held toaccount by a new NHS Commissioning Board, which will, in turn, be held to account bythe Secretary of State for Health. The NHS Commissioning Board will also commissionspecialist and primary care directly from providers.

These proposed new arrangements pose major challenges for the NHS. It is likely thatvariations in funding and purchasing decisions will arise as clinical commissioning groupsseek to remain within their allocated budgets while offering a good-quality service fortheir populations. Clinical commissioning groups will, however, operate within a newnational Commissioning Outcomes Framework that will comprise a set of standards ofcare with associated indicators (developed by NICE) (DH, 2011a). This framework willseek to promote a degree of national consistency in relation to local spending decisions byclinical commissioning groups.

But as pressures on budgets in the NHS increase, and limitations to what can be fundedbecome evident, it is likely that inconsistencies across geographic areas in the servicesprovided by the NHS will become more visible. Historically, there has been considerablepublic discontent with any suggestion of a ‘postcode lottery’, so policy-makers may wishto examine the virtues of setting a national benefits package that sets out entitlements toNHS care explicitly at a national level.

The logic is easy to understand. First, by specifying the services funded by the NHS (theNHS benefits package) at a national level, geographical variation in the provision of caremight be reduced. Second, by establishing an explicit benefits package at a national level,the scope and limitations of the services offered by the NHS would be more transparentto the public, who could then better hold to account those who defined, commissionedand delivered the package. Third, the package could be chosen so as to maximise thebenefits to the population (subject to the health care resources available) by limiting

1. Introduction


the package to services that are thought to deliver the maximum benefit in relation toexpenditure. A single, national body (such as the NHS Commissioning Board) might bebetter placed than local organisations to evaluate, establish and enforce ‘best practice’.

There is already a vehicle for setting out the broad entitlements offered by the NHS to thepopulation, and the corresponding responsibilities of the public. The NHS Constitutionsets out in very broad terms some guarantees, such as that people should not wait morethan 18 weeks from referral to hospital treatment. But it does not currently set out abenefits package.

However, there are also strong arguments against setting a more explicit benefits packageat national level. For example, the need to adhere to a standard package might underminelocal autonomy. In particular, it might remove the local managerial and clinical discretionneeded to maximise benefits for patients within a fixed local budget. And it may threatenthe discretion of clinicians to respond flexibly to variations in the needs and circumstancesof individual patients.

In this report, we examine the case for and against introducing an explicit, nationally setbenefits package funded by the NHS in England. The intention is to examine whethersetting an explicit benefits package could help promote the main objectives of the NHS,such as maintaining a comprehensive service based on need, and being free at the point ofuse regardless of ability to pay, while keeping expenditure under control. Also, to whatextent would it enhance the quality of care and equity of access to care for a given budget?

It is important to keep in mind the distinction between services that are promised (stated perhaps as entitlements) and services that are actually received by patients. Theperformance of any health system should be assessed with respect to the scope and qualityof services actually received by patients. The specification of a benefits package is merelyan instrument for specifying desired levels of attainment, which may or may not betranslated into services received. The effectiveness with which an explicit benefits packagewould lead to the right services being delivered to the right patients at the right time witha high level of quality is, of course, a crucial consideration that we touch on throughoutthe report.

The next chapter of the report, Chapter 2, discusses how the current package of benefitsprovided by the NHS is arrived at. It explains the influence of many different organisationsand actors that (to a greater or lesser degree) affect which services and treatments theNHS funds, and under what circumstances. Chapter 3 discusses how different countrieshave gone about setting benefits packages at a national or regional level and theirexperience in doing so. It identifies four different dimensions to such national benefitspackages: whether the package is inclusive or exclusive, its scope, its depth/level of detailand the extent to which it is enforced.

Chapter 4 assesses whether setting a comprehensive, explicit, national benefits package isfeasible, and whether it would be helpful in addressing the challenges confronted by theNHS. In Chapter 5 we examine some alternative options for improving the way thepackage of benefits funded by the NHS is shaped. Chapter 6 concludes the report.

10

In this chapter, we provide a framework for understanding what constitutes a healthsystem’s ‘benefits package’. We then look at how the benefits package funded by the NHSis currently derived, identify the various advantages and disadvantages of this system and outline whether a nationally set benefits package might remedy some of the problems identified.

The three elements of a benefits package

All publicly funded health systems offer – either implicitly or explicitly – a constrainedbundle of health services to which citizens are entitled (Busse and others, 2005). Eventhose systems that profess to offer ‘comprehensive’ benefits in practice place somelimitations on what is funded. Furthermore, all systems exhibit both systematic andrandom variations in the care provided to patients that cannot be explained by variationsin patient needs or preferences.

Once any issues of eligibility for care have been settled (for example, nationality, right ofabode, income levels, employment), a health system’s funded benefits package is made upof three broad elements:

• the categories of service funded

• the rules and protocols that govern their use (appropriateness)

• any financial limitations placed on the coverage.

These are discussed in turn. Throughout, reference is made to the statutory system ofhealth care (in England the NHS), and not services purchased privately, or financed fromvoluntary sources.

• Categories of service refer to the treatments and services funded by the statutoryhealth system as a whole. Each category included within the benefits package is madeup of a number of specific services. For example, orthopaedic surgery would normallyinclude knee arthroscopy and meniscectomy, shoulder arthroscopy and decompression,carpal tunnel release, hip replacement, lumbar spinal fusion and so on. Each of theseservices is comprised of multiple treatments, from pharmaceuticals to diagnostics torehabilitation. Together, these treatments and services provide the basic contents of ahealth system’s benefits package. Hence, if a service is included (say, hip replacement)then (subject to the caveats below) it will be funded by the statutory health system,whereas if it is not (say, spa treatments), it will not be funded.

• Appropriateness criteria govern when and for whom a treatment or service includedin the benefits package is funded. Appropriateness criteria may entail clinical criteriathat a patient has to meet before a given treatment is deemed appropriate and thereforefunded. For example, bariatric surgery may be offered only to patients who exceed acertain body mass index.

2. The package of benefitscurrently funded by the NHS


• Financial limitations dictate which services within the benefits package are providedentirely free of charge and which require a payment from the recipient. The NHS hashistorically placed little reliance on such user fees, although it does levy a prescriptioncharge, payable by adults who do not meet exemption criteria (related to income, ageor health status).

Before setting a national benefits package, it would be important to determine the criteriaby which the contents of the package would be selected. Without such criteria, thecontents could develop arbitrarily or implicitly and might become subject to unwarrantedinfluence from interest groups. The principal criterion used by NICE in its assessment ofnew treatments is cost-effectiveness – the costs of an intervention relative to the healthgain it secures, measured in terms of length and quality of life. This criterion is, of course,open to challenge, and has in practice been augmented by additional considerations suchas equity. Furthermore, NICE has found that it cannot rely on a single measure, especiallyin the presence of uncertainty (Appleby and others, 2009b).

In this report we shall assume that, if the NHS is to set a benefits package at a nationallevel, the body charged with developing it has been given clear principles on which tobase its deliberations. It might be thought that the main criterion would be cost-effectiveness,but there is no reason why that should necessarily be the sole objective. In particular, itmight be complemented by other clearly articulated national objectives such as costcontainment, equity of access or some notion of just reward.

How is the NHS benefits package presently derived?At present, the NHS benefits package is the implicit outcome of a series of decisionsmade by a range of national, regional and local decision-makers. This process is complex,with many influences acting individually, in concert and (sometimes) in conflict with oneanother. In this section we describe the main influences and assess the possible impact ofcurrent proposals for reform. In turn, we consider the various legal and quasi-legal dutiesin place, government performance management and policy, NICE decisions andguidelines, commissioning decisions at different levels, and local clinical decisions (seeFigure 2.1 on page 12).

Legal and quasi-legal frameworkLegislation relating to the NHS in England makes little attempt to prescribe whichservices and treatments are funded and which are not (Mason, 2005). English law has putthe government – and, in particular, the Secretary of State for Health – under a duty topromote a comprehensive health service. The language of these duties relates more to theprovision of services than strictly what must be funded. Some services must be provided(such as hospital accommodation, medical dental, ophthalmic, nursing, ambulance,diagnostic and treatment services). However, the National Health Service Act 2006 doesnot seek to establish the extent of that obligation. Rather, the Secretary of State forHealth needs to ensure the provision of health care services ‘to such extent as he [sic]considers necessary to meet all reasonable requirements’ (National Health Service Act2006, Section 3(1)). At the time of writing (February 2012), there is considerable publicdebate about the wording in the Health and Social Care Bill 2011 of clauses related to theduty of the Secretary of State for Health and the provision of NHS care (House of Lords


Select Committee on the Constitution, 2011). The extent of this debate bears witness tothe perceived importance of this duty.

Towards the end of its tenure, the Labour Government did make some moves to spell outmore fully in law a citizen’s ‘right’ to health care and what those rights amount to, notablythrough the creation of the NHS Constitution, which came into force in 2010 (see Box2.1 opposite for key clauses). The Constitution establishes a number of citizenentitlements with respect to the NHS, including:

• the right to a ‘comprehensive service’ (DH, 2010a, p. 3)

• the right to be treated ‘with a professional standard of care by appropriately qualifiedand experienced staff ’ (2010a, p. 6)

• the right to ‘drugs and treatments that have been recommended by NICE’ (2010a, p. 6).

Figure 2.1: Principal factors influencing the shape of the NHSbenefits package

NHSbenefitspackage

Local clinical

decisions

NICE

Governmentpolicy

(e.g. National Service

Frameworks)

Local commissioning

National commissioning

Legal andquasi-legal

duties


Nevertheless, given the lack of specificity in the NHS Constitution in terms of whatcounts as a ‘comprehensive service’, it has not in practice been a strong influence on whatthe NHS actually funds or provides.

• The ‘right to receive NHS services free of charge, apart from certain limited exceptionssanctioned by Parliament’.

• The ‘right to access NHS services’.

• The ‘right to expect your local NHS to assess the health requirements of the localcommunity and to commission and put in place the services to meet those needs asconsidered necessary’.

• The ‘right, in certain circumstances, to go to other European Economic Area countries or Switzerland for treatment, which would be available to you through your NHScommissioner’.

• The ‘right not to be unlawfully discriminated against in the provision of NHS services,including on grounds of gender, race, religion or belief, sexual orientation, disability(including learning disability or mental illness) or age’.

• The ‘right to access services within maximum waiting times, or for the NHS to take allreasonable steps to offer you a range of alternative providers if this is not possible.

• The ‘right to be treated with a professional standard of care, by appropriately qualifiedand experienced staff, in a properly approved or registered organisation that meetsrequired levels of safety and quality’.

• The ‘right to drugs and treatments that have been recommended by NICE for use in theNHS, if your doctor says they are clinically appropriate for you’.

• The ‘right to expect local decisions on funding of other drugs and treatments to be maderationally following a proper consideration of the evidence. If the local NHS decides notto fund a drug or treatment you and your doctor feel would be right for you, they willexplain that decision to you’.

• The ‘right to receive the vaccinations that the Joint Committee on Vaccination andImmunisation recommends that you should receive under an NHS-provided nationalimmunisation programme’.

The NHS also commits:

• ‘to make decisions in a clear and transparent way, so that patients and the public can understand how services are planned and delivered (pledge)’

• ‘to inform you about the healthcare services available to you, locally and nationally (pledge)’

• ‘to offer you easily accessible, reliable and relevant information to enable you toparticipate fully in your own healthcare decisions and to support you in makingchoices. This will include information on the quality of clinical services where there is robust and accurate information available (pledge)’

• ‘to provide you with the information you need to influence and scrutinise the planningand delivery of NHS services (pledge)’

Box 2.1: Key clauses of the NHS Constitution

Source: DH (2010a, pp. 5–8)


There are other laws and elements of secondary legislation that help to set out aspects ofthe benefits package. For example, there are legal limitations that govern the ‘eligibilitycriteria’ that a patient must meet in order to receive care from the NHS, such asresidential status. Secondary legislation also sets out some of the ‘financial limitations’ towhat the NHS offers, for example who qualifies for free prescriptions, and limitations todentistry services and ophthalmology. Furthermore, some legally enforceable NHScontracts set out certain ‘appropriateness criteria’ attached to sets of services.

Government performance management and policyWhile – compared with other countries – legislation has not shaped in any detail thebenefits package provided by the NHS, government policy has had a profound influence,enforced through ‘performance management’ by the Department of Health. For example,the previous Labour Government set a range of targets following The NHS Plan (DH,2000), against which the performance of management was carefully monitored. The mostrecent performance management framework, Vital Signs, had three levels of targets:national priorities; national priorities for local delivery; and local priorities. Nationalpriorities for 2008/09–2010/11 included:

• lowering the number of MRSA infections

• a maximum wait of 18 weeks for a patient from general practitioner referral tospecialist treatment

• a maximum of a two-week wait from general practitioner referral to first specialistappointment for suspected cancer (DH, 2008).

Of all the NHS reforms undertaken by the previous Labour Government, performancetargets appear to have had the greatest impact on raising standards of care in the targetedareas, in part because of the sanctions applied to managers who failed to achieve them,and in part because of the public ‘naming and shaming’ of underperforming organisations(Bevan and Hood, 2006; Propper and others, 2008). The use of targets has been criticisedfor distorting clinical priorities (Barber, 2007), however it has been effective in someareas, for example the reduction of waiting times (Bevan and Hood, 2006). From theperspective of the benefits package, targets serve to channel resources to certain parts ofthe NHS in preference to others. They may therefore have had an important indirecteffect on the benefits package provided by the NHS.

National service frameworks and other national initiatives have also been instrumental in shaping the NHS benefits package by setting clear protocols and quality requirementsfor the treatment of people with certain clinical conditions. For example, The NationalService Framework for Long-term Conditions (DH, 2005) defines 11 ‘qualityrequirements’ (QRs) that providers of such services must meet. According to theserequirements, those with neurological conditions should be offered an integratedassessment and plan of their health and social care needs (QR1); if they require hospitaladmission they should be assessed and treated in a timely manner by teams with theappropriate neurological and resuscitation skills and facilities (QR3); and they shouldhave access to appropriate vocational assessment, rehabilitation and ongoing support, toenable them to find, regain or remain in work and access other occupational andeducational opportunities (QR6).

While there is no statutory obligation on health care organisations to implement nationalservice framework standards, as Mason (2005) explains, the Health and Social Care(Community Health and Standards) Act 2003 gives the Secretary of State for Health


powers to publish standards for health care – including those informed by nationalservice frameworks. NHS bodies are bound to take national service frameworks andother guidance into account when making decisions about which services to fund, and to what extent (Mason, 2005).

The Coalition Government has sought to reduce this kind of central influence on theshape of care provided by the NHS. Many of the national service frameworks createdunder the previous government have not been refreshed. Furthermore, the governmenthas abandoned the use of many targets – such as guaranteed access to a primary careprofessional within 24 hours and to a primary care doctor within 48 hours – arguing thatthey were both ‘bureaucratic’ and without proper clinical justification (Ramesh, 2010;DH, 2011b). Instead, under current proposals, the NHS Commissioning Board will bemade responsible for developing a national NHS Commissioning Outcomes Framework.The Board has commissioned a set of ‘quality standards’ for care from NICE, which itwill use within the framework (NICE website, 2012a). The Board will use this frameworkto hold clinical commissioning groups to account for planning, funding and deliveringlocal services that meet national health priorities. Hence, national guidance will continueto shape the benefits package. What is not yet clear is the intended strength of nationalperformance management, or the autonomy envisaged for clinical commissioning groups.

On rare occasions there have been cases of direct intervention by government ministers in decisions about the NHS benefits package. For example, in 2005, Patricia Hewitt, then Secretary of State for Health, intervened in a dispute between North Stoke PrimaryCare Trust and a patient over the funding of the drug Herceptin for early-stage breastcancer, which had not yet received its European licence or been considered by NICE.Although Ms Hewitt regularly emphasised that the decision on whether or not to fundthe drug remained with the Primary Care Trust, she brought pressure to bear on thePCT, by stating her concern and requesting to see the evidence on which the PCT hadmade the decision. This appears to have influenced North Stoke’s decision to reverse itsoriginal ruling. According to commentators at the time, whether or not there was a direct instruction from Ms Hewitt was irrelevant. As one unnamed PCT chief executivetold the BBC, ‘After the health secretary took that position, the trust had no option’(BBC News, 2005).

The National Institute for Health and Clinical Excellence (NICE)The organisation that probably receives the most publicity for its role in shaping theNHS benefits package is NICE. NICE was originally created in 1999 both to reduce theregional variation in the NHS by creating a national list of approved drugs and healthcare technologies, and to improve the allocative efficiency of the NHS as a whole byassessing the cost-effectiveness of such treatments. As a body at ‘arm’s length’ from thegovernment, it was also hoped that NICE would be able to remove the media focus fromministers on decisions about funding treatments. At present, the work of NICE is splitacross many different aspects of care that currently contribute to the implicit NHSbenefits package. This includes development of guidance in the following areas:

• clinical guidelines

• diagnostic technologies

• interventional procedures

• medical technologies


• public health

• technology appraisals.

NICE’s technology appraisals apply to only a relatively small number of services in theoverall package of services purchased by the NHS, and to a relatively small proportion of the overall NHS drug budget of £12 billion. However, through its assessments andguidance, NICE exerts a strong influence on the contents of the NHS benefits package,whether in terms of the inclusion or exclusion of certain treatments or the establishmentof appropriateness criteria set out in clinical and other treatment guidelines.

Local NHS organisations are required to take NICE’s public health guidance intoaccount when developing public health strategies with local authorities and others, and toreview current management of clinical conditions in light of clinical guidelines. They alsohave a legal duty to fund and resource medicines and treatments recommended by NICEtechnology appraisals (usually within three months of NICE issuing guidance) (Secretaryof State for Health, 2001; Newdick, 2005).

NICE’s work focuses on questions of cost-effectiveness and allocative efficiency. Forexample, it has produced a ‘do not do’ list of 555 individual clinical interventions that it recommends should not be carried out. The list varies from recommendations not to undertake major surgery unless other options have been exhausted (for examplehysterectomy for heavy menstrual bleeding), to smaller-scale recommendations (forexample on the use of vitamins to reduce cardiovascular risk). In the same spirit, NICEhas also produced ‘cost saving guidance’ (NICE website, 2011a; 2012b). This includesguidance on the treatment of respiratory tract infection in primary care, which indicatesthat the use of a ‘no prescribing’ or ‘delayed prescribing’ policy is expected to lead to areduction in antibiotic prescribing of £3.7 million nationally in addition to reducedantibiotic resistance and adverse events associated with antibiotic use.

As reforms to the NHS take shape, it is likely that the principles used by NICE willremain unchanged, but it is as yet unclear as to what its precise role will be in future, orwhat impact this might have on the NHS benefits package.

CommissioningSince 2003, most commissioning of NHS services has been undertaken by local PCTs.PCTs have held around 80 per cent of the NHS budget and been responsible forcommissioning primary, secondary and community health care services for their localpopulations. Within their allocated budget, PCTs have had a duty to commission servicesto meet the needs of their local populations, at the same time as implementing NICEdecisions and guidance and meeting national targets. In reconciling these differentpriorities, PCTs have become important shapers of the benefits package available locally.

It is nevertheless important to note that PCTs have not been the sole organisations in the NHS with responsibilities for commissioning. A variety of other commissioningorganisations exists within the NHS:

• national or regional bodies commissioning highly specialised services and services for rare conditions

• joint commissioning arrangements where NHS bodies hold joint budgets with local authorities and commission services in a collective manner (for example formental health)


• various forms of practice-based commissioning, under which some PCTcommissioning is devolved to general practices

• primary care provider organisations that also play a commissioning role, such as generalpractice-based Personal Medical Services schemes

• person-level commissioning via personal budgets.

Each of these levels has some influence on the package available and services that arefunded for local people (Smith and others, 2004). However, the PCT has, over the pastdecade, been the dominant commissioning body.

Following the publication of the 2010 White Paper Equity and Excellence: Liberating the NHS (DH, 2010b) and the subsequent Health and Social Care Bill 2011, thecommissioning environment is undergoing extensive reform. PCTs and practice-basedcommissioning will be abolished in April 2013, with an as yet undetermined number of clinical commissioning groups assuming their purchasing role. Local health andwellbeing boards will lead joint commissioning with local government, and the NHSCommissioning Board will carry out national/regional commissioning of specialised and primary care services.

At the time of writing (February 2012), there is still some uncertainty about the exactform that the new arrangements will take, in terms of the size of commissioning groups,their powers, sanctions for budgetary breaches, accountability arrangements and theextent to which the NHS Commissioning Board (and Secretary of State for Health) willin future constrain local freedoms. However, regardless of the precise form of the changesbrought about by the reforms, it is likely that the core challenges associated withcommissioning will remain: that is, how to ensure that the NHS optimises the use itmakes of a fixed national budget and how to ensure that the funding decisions made at a local level are sensitive to local needs, respect national objectives and are transparent to the public.

Clinical decisionsClinicians, in discussion with their patients, play a crucial role in establishing whichservices are actually provided and which are not. Clinicians recommend to patientswhether a given service or treatment is ‘clinically appropriate’. In aggregate, the countlessindividual decisions made in respect of millions of patients have an immense impact onthe distribution of NHS spending between categories of service. Clinicians at all pointsin the system (but especially general practitioners) have a fundamental role in influencingaccess to NHS resources, and therefore shaping the benefits package.

Clinicians in turn will be subject to numerous influences in their treatmentrecommendations. As well as any requirements from commissioners, these might include:

• guidance from national professional bodies such as the royal colleges

• regulatory requirements of bodies such as the General Medical Council

• local treatment policies set by their employing organisation or partnership.

Although some of these influences are intended to reduce inappropriate variation, thereremain considerable differences in treatment patterns in the NHS that cannot in their


entirety be explained by clinical need, illustrated for example in the NHS Atlas ofVariation 2011 (DH, 2011c). Appleby and others (2011) document the large variationsbetween PCTs in admission rates for certain high-volume procedures, proceduresincurring high levels of expenditure and procedures with high levels of uncertaintyconcerning efficacy. Such variations in utilisation might be justified if they reflect localdifferences in patient preferences, patient clinical needs or the local opportunity costs of different treatments. Local clinical discretion (and variation) may in such cases bebeneficial if it enables local decision-makers to pursue cost-effective treatment ofindividual patients. However, if the clinical variation merely reflects a lack of informationon optimal patient pathways, inefficient practices or unwarranted patient access to NHScare, it may compromise the efficient and equitable use of NHS resources (Smith andDixon, 2012).

An assessment of the current system

Cost containment and allocative efficiencyThe main methods of containing costs in the NHS have traditionally been to set a fixed global budget at the local level, and for the Department of Health to manageperformance robustly against that budget. Local decision-makers are given a high degreeof autonomy as to how the budget is spent, notwithstanding the national guidance andtargets noted above. Commissioners (with a few exceptions) have usually been able toensure that the package available in their local area is comprehensive, and can be providedwithin the budgets allocated, albeit sometimes with long waiting times.

But there is inertia in the system. For example, rather than seeking to make substantialchanges to their local benefits package, PCTs have tended to follow historical patterns ofservice when setting priorities (Robinson and others, 2011). As Donaldson and others(2010, p. 802) put it, commissioners will often approach decisions with a view to givingproviders ‘what you had last year plus a bit more’. In this sense, few decision-makers ask‘about how this money is used never mind whether to maximum effect’ (2010, p. 802).

There are, of course, notable exceptions. For example, Croydon Primary Care Trustdeveloped a list of 34 low-priority procedures of ‘limited clinical value’, for which strictaccess criteria were introduced, with the intention that only patients likely to benefit fromthe procedures could secure access (London Health Observatory, 2007). The procedureswere divided into four groups:

• relatively ineffective interventions

• potentially cosmetic interventions

• effective interventions with a poor benefit/risk balance in mild cases

• effective interventions where more cost-effective alternatives should be tried first.

More generally, the Audit Commission (2011) notes that PCTs have used a range ofsources for decommissioning low-value treatments, and that annual savings of up to £441million may be feasible if best practice were followed everywhere. In addition, under theumbrella of Department of Health initiatives such as World Class Commissioning andQuality, Innovation, Productivity and Prevention (QIPP), some PCTs have developedpriority-setting approaches and have started to move funding away from low-valueprocedures and services.


Nevertheless, recent work by Robinson and others (2011) has shown that the prioritysetting of most PCTs – even those employing advanced methods of setting priorities –has remained focused on incremental decisions about new funding and new developments,rather than reassessing their core set of health services. Moreover, although thedevolution of decision-making allows local commissioners to adjust the local package in line with local budgets, it also means that many of the same priority-setting processesrelating to the same set of services may be replicated up and down the country. Given thatthe characteristics of many services and patients do not vary materially across the country,it seems difficult to defend much of this replication of effort.

NICE is internationally recognised as a leading authority on health technology assessment.Through its rigorous assessments and clear focus on cost-effectiveness, and the ability tomandate some treatments, it has had a strong impact on shaping some elements of theNHS benefits package. For example, it has helped to reduce some unexplained variationacross local areas, in particular in cancer care (Chalkidou, 2009). However, NICE’simpact has some limitations.

First, it has tended to focus more on assessing whether new expensive drugs andtechnologies should be included within the NHS benefits package, rather than assessingthe cost-effectiveness of treatments already funded.

Second, despite the legal force of some of NICE’s recommendations, there is someevidence to show that they are not always followed by commissioners, providers andclinicians on the ground. For example, a study by Cullum and others (2004) showed thatwhile in some instances clinical practice was consistently highly compliant with NICEguidance (for example guidance on the removal of wisdom teeth and the use of taxanesfor breast cancer), in others it was consistently non-compliant (for example, guidance onthe use of Orlistat, a drug designed to treat obesity). Moreover, some organisationsappeared to exhibit more consistent compliance than others across a range of guidance.

Cullum and others identified a number of possible barriers to implementation of NICErecommendations. An enduring issue is an unwillingness among commissioners to sacrificeexisting services for newly recommended interventions. For example, recent NICEguidelines state that any patient with a body mass index of 40 or above should be referred for bariatric weight loss surgery, as well as those with a body mass index ofbetween 35 and 40 who have other conditions such as Type 2 diabetes. However, somePCTs have failed to implement this guidance, claiming that it is too costly, insteadrestricting surgery to those with a body mass index of 50 to 60 (Royal College of Surgeons,2010). Such arguments may indicate that the cost-effectiveness ‘threshold’ adopted byNICE may be too liberal given the budgetary circumstances prevailing in some PCTs.However, given the lack of evidence on the cost-effectiveness of many establishedprogrammes of care, it is difficult to validate this claim (Appleby and others, 2009b).

It is unclear what effect the recently proposed changes to commissioning will have on the cost-effectiveness of NHS care. The new commissioning bodies are likely to berelatively inexperienced at setting commissioning priorities, financial management andbudgetary control – they will require support and vigilant monitoring. The generalpractitioners forming clinical commissioning groups will also face the challenge of beingsimultaneously providers and commissioners. They will have to justify to their patientslocal commissioning decisions for which they have been responsible and that may attimes lead to restrictions in the care available.

Local autonomy and equity of accessA significant benefit of the present system is that it enables a range of actors to shape theNHS benefits package in line with local needs and preferences. Clinicians are given thefreedom and power to respond to the idiosyncrasies of individual cases, rather thanforcing the patient through a ‘one-size-fits-all’ approach. For example, one can easilyimagine a situation where a general practitioner will decide that, although a patient doesnot meet the usual clinical threshold for a particular procedure, the psychological distressbeing experienced by the patient is an adequate reason for referral.

However, this local autonomy has given rise to substantial variability in interventionrates, and therefore a potential inequity in the availability of benefits funded in differentgeographical locations. The concern is not necessarily with variation in the package per se– for the package will naturally vary as it responds to the different needs of differentpopulations – but rather unjustified variation in the package, that is, variation that cannotbe explained by a variation in need.

Analysis of programme budgeting data for 2006/07 by The King’s Fund showed thatthere were apparently large variations between PCTs, not only in the amount they spentper head of population but also in the proportion of each PCT budget devoted to eachdisease area (Appleby and Gregory, 2008). Care must be taken with the quality of theprogramme budgeting data. However, in an extreme example, Islington Primary CareTrust was found to spend 2.9 times more per head (£332) on mental health care than EastRiding of Yorkshire Primary Care Trust (£114), even after taking into account legitimatereasons for variation (for example, the age and need profile of the population, the cost oflocal services and so on) (Appleby and Gregory, 2008).

Variations in appropriateness criteria are also evident. For example, there has beensubstantial variation in criteria for eligibility for in vitro fertilisation (IVF) treatment,such as a woman’s body mass index and her partner’s smoking status. The Department ofHealth was so concerned by this variation that it had to remind PCTs of current NICEguidelines (DH, 2011d).

A central feature of the proposed reforms to the NHS is to devolve more decision-makingpower to local bodies, and to focus on clinical outcomes as the prime yardstick forperformance assessment (DH, 2010b). Application of this principle is likely to lead togreater variation in utilisation of health services than at present. A key question istherefore whether this increased variation in services provided will nevertheless lead toimproved health outcomes (and reduced health inequalities). Furthermore, even if thereforms succeed in bringing about a greater degree of local autonomy in decision-making,the public may not tolerate the ‘postcode lottery’ that would probably become apparent,even if it were eventually shown to give rise to better health overall.

Accountability and transparencyThe present system has a mixed record with regard to accountability and transparency.For example, NICE makes strenuous efforts not only to involve the public in its decisionsthrough citizen councils (NICE website, 2011b) but also to make its processes astransparent as possible (NICE website, 2011c).

However, PCTs’ achievements in this area have been mixed. Some PCTs have madepublic which services they considered low priority and which they did not routinelyfund. For example, Wirral Primary Care Trust’s policy on low-priority proceduresspecifically stated that the PCT did not in general support referral for homeopathy.



Access to homeopathy funded by the PCT required prior approval through an appealsprocess, with key criteria for approval including evidence of effectiveness, failure ofconventional treatment and assurance concerning the training and qualifications of theproposed provider (Wirral PCT, 2011). A national survey of PCTs by Robinson andothers (2011) in 2009/10 showed that of the PCTs that responded, only 45 per centstated that the criteria used by priority-setting panels when making decisions were madeexplicit to the public, and only 44 per cent stated that the decisions of priority-settingpanels were made available to the public (see Figure 2.2).

Commentators have noted that the process by which the NHS sets its benefits packageremains both obscure and lacking in accountability to local populations. As Klein andothers (1995, p. 772) put it: ‘The issue of rationing [in the UK] offers a case study inblame diffusion. Ministers have accepted that rationing is inevitable ... [they will] onoccasion define what should be provided (for which they can claim credit) but willalmost never explicitly decide what should not be provided (which might attract blame).’

It can be argued that national politicians are ultimately accountable to the population (atelection time) for the performance of the NHS, including decisions in funding prioritieslocally and nationally. However, there is a parallel argument that such nationalaccountability should be augmented by strong local accountability, particularly whenincreased local autonomy is being introduced, and the local population has no choice ofcommissioner (as is the case at present). Increased local accountability might be securedby greater transparency over funding decisions and greater involvement by the public onsetting priorities. The current reform proposals appear to acknowledge some of these

Source: Robinson and others (2011)

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arguments. For example, the creation of local health and wellbeing boards and (followingthe recommendations of the NHS Future Forum, 2011; DH, 2011e) the proposal forclinical commissioning groups to hold meetings in public is intended to improve theaccountability of clinical commissioning groups to the local population.

Not all commentators agree that obscurity and lack of accountability when setting abenefits package should necessarily be considered a problem. For example, Mechanic(1997) argues that it allows decision-makers at all levels the time and freedom to makesensitive judgements. This explains why policy-makers may be attracted to a system inwhich difficult and contentious decisions can usually be made piecemeal and locally. It can also be argued that more transparent processes are costly to implement and an over-rigid package would be insensitive to individual circumstances, as well as vulnerableto ‘capture’ by powerful interest groups.

Ham and Coulter (2001, p. 164) nevertheless argue that priority-setting choices ‘need tobe informed by an understanding of community preferences if they are to gain acceptanceamong those affected’. Moreover, a lack of proper community engagement can bedetrimental to the decision-making process as a whole. In a blame-free environment,decision-makers have less pressure on them to act reasonably. In contrast, if decisionmakers were encouraged to make their decision-making processes and decisions public, itwould help to guard against inconsistency, unjust preferences and groundless exceptions.

Summary

The current package of benefits funded by the NHS is arrived at implicitly through thedecisions of actors at all levels of the health care system, including politicians, regulators,commissioners, clinicians and patients. The principal advantages of this are a moreresponsive approach to meeting local needs, strong budgetary control and a diffusion of responsibility for highly complex choices. However, the current system also has several failings:

• it does not retain a strong focus on allocative efficiency

• it leads to variation in the benefits package available in different localities

• it often offers little accountability to local populations.

The extent to which the proposed reforms of the NHS will address these issues remainsan open question. In the following chapter, we examine how other countries haveconstructed a national benefits package and how far it has helped them to address thechallenges of priority setting.

23

This chapter examines the various forms that a formal national benefits package mighttake, drawing on international experience. There are four principal dimensions alongwhich benefit packages tend to differ (see Figure 3.1):

• whether they are defined in an inclusive or exclusive fashion

• their scope (the extent to which all health services are considered or not)

• their level of detail (how and when the treatment should be applied)

• the extent to which they are enforced.

Inclusive and exclusive packages

There are two basic forms that a list of national benefits could take: either a positive list of services included in the package, or a negative list of all those services that are excluded.For example, the health care systems in Armenia, the Czech Republic, Estonia, theRussian Federation, Slovakia and Switzerland each have a benefits package that isdescribed using a positive list or catalogue, detailing all the services guaranteed for

3. Nationally set benefits packages

Figure 3.1: The four dimensions of a nationally set and explicitly definedbenefits package

Positive list Negative list

Inclusive or exclusive?

High Low

Level of detail?

Mandatory Guidance

Enforcement?

Broad Narrow

Scope?


citizens or insured persons (Hunter and others, 2005, p. 173). In contrast, in countriessuch as Finland, Latvia and Lithuania, the benefits package is primarily described in termsof exclusion rather than inclusion (Hunter, and others, 2005, p. 173). Of course, manycountries have both positive and negative lists. For example, Italy’s catalogue of benefits(livelli essenziali di assistenza/levels of essential health care) describes both the servicesthat the national health service (Servizio Sanitario Nazionaleis) is required to provideuniformly in all regions and those services excluded on the basis of various criteria,including proven clinical ineffectiveness (Lo Scalzo and others, 2009).

Exclusions may be in terms of whole services, or certain services for certain people (usingappropriateness criteria). For example, although certain aspects of the arrangements havesubsequently changed, Bilde and others (2005) report that in Denmark legislationensured that unmarried women and women over 45 years of age could not have IVFtreatment; that sterilisation could not be provided to people under 25 years of age; andinduced abortions after week 12 of pregnancy were only allowed after permission fromthe Minister of Justice, and with specific medical or social indications.

A well-known example of seeking to create a ‘positive’ list is the Oregon Health Plandeveloped in the early 1990s for the state’s Medicaid recipients (Medicaid being publichealth insurance cover for low-income populations in the United States). The originalaim was to introduce limits to care available under Medicaid by setting a prioritised list oftreatments, and in doing so expand the coverage of Medicaid benefits to a greater numberof low-income people without any health insurance. The starting point for the list was abroad set of treatment categories arranged in priority order (Dixon and Welch, 1991).Within each category, pairs of medical conditions and treatments were ranked based oneffectiveness and cost.

The theory of how the list would function to control costs and extend coverage wassimple: a line would be drawn at a point on the list based on the amount of money theOregon legislature set aside for its Health Plan every two years. Everything above the line would be covered but nothing below it. Over time, the line could be moveddepending on technological advance and the budget available. When the first list wascreated, it contained 696 condition–treatment pairs and the cut-off point was drawn at 565. The ranking was informed by cost-effectiveness, but also by public priorities (from extensive public consultation) and ‘commonsense’ judgements by members of theOregon Health Commission. A revised list went into effect in April 2010, which includes678 lines and covers treatments up to line 502 (Oregon Health Services Commissionwebsite, 2010).

The difference between a positive and negative list lies in how ‘explicit’ the package isabout which benefits are included. In the case of a positive list, the contents of thepackage are necessarily explicit. With a negative list, a service provider or user must inferwhat the package contains. In principle, developing a positive list involves subjecting allof the existing benefits to review. It is technically complex, and likely to involveconsiderably more effort than specifying a negative list. The task becomes even morecomplex if limitations are placed on who may receive a treatment included in the list (seethe section ‘Level of detail’ below).


Scope

National benefit packages can differ in their scope, that is, the extent to which the listrefers to the whole spectrum of health care, or just to subsets such as services forparticular conditions, or to particular types of service.

For example, one could say that the benefits package of the German Statutory HealthInsurance scheme has a ‘wide’ scope. As explained in the account of the Statutory HealthInsurance benefits package in Book V of the German Social Code (Sozialgesetzbuch), itcovers a wide range of services, relating to:

• prevention of disease

• screening for disease

• diagnostic procedures

• treatment of disease (including ambulatory medical care, dental care, drugs, non-physician care, medical devices, inpatient/hospital care, nursing care at home and certain areas of rehabilitation)

• transportation (German Federal Ministry of Justice website, 2012; Busse, 1999).

Other health systems have more limited scope. For example, the Canadian public packageexcludes reimbursement for pharmaceuticals outside of a hospital setting. Packages insome lower-income countries refer only to hospital care, leaving citizens to make theirown arrangements for primary care and pharmaceuticals. The Chilean benefits package(see the next section) refers only to a limited number of conditions. The implicit EnglishNHS package excludes consideration of long-term social care, and it is noteworthy thatthe somewhat unclear boundary with health care has given rise to a need for moredetailed guidance than in other parts of the NHS benefits package.

Level of detail

Another variable is the amount of detail in a nationally set benefits package about whichservices are funded, in what circumstances and with what financial costs. For example,some benefits packages go into great detail about the appropriateness criteria applied to included services, as well as any financial limitations. However, others only set outapproved services in general terms. The level of detail included in the package shapes thedegree to which local decision-makers are given the autonomy to interpret the remit ofthe package in relation to specific cases. Chile and Germany illustrate the two ends of thecontinuum – see Boxes 3.1 and 3.2 on page 26.

Successive governments in New Zealand have developed highly detailed ‘Clinical PriorityAssessment Criteria’ and ‘booking systems’ to select and prioritise patients for access topublicly funded elective surgery (Hadorn and Holmes, 1997; Derrett and others, 2003).These national-level measures were intended to prevent variation in health servicesutilisation and the inequitable access to health care resources, effectively by formalisingclinical judgement.


In practice, the provision of certain procedures is neither limited to a certain disease, norare they excluded from being used for another disease (Busse and others, 2005, p. 84). Forexample, in France, as in Germany, little attempt is made to describe the appropriatenesscriteria attached to the services included in the Social Health Insurance scheme. Rather,in most cases, services will be funded by Social Security (Sécurité Sociale) provided adoctor considers them medically necessary and, in some cases, applies for priorauthorisation (entente préalable) (Bellanger and others, 2005, s25).

Plan AUGE came into effect following the passing of Law 19,966 in 2005. The Planguaranteed government funding for health care services, initially relating to a list of 40diseases and health conditions, which was later expanded to 65 high-priority healthconditions (The Rockefeller Foundation, 2010). Within this system, funding is guaranteedby the government regardless of a citizen’s affiliation to the public FONASA insurancesystem or the private ISAPRES system.

Although Chile’s Plan AUGE is directed towards a relatively small range of services incomparison to Germany’s Statutory Health Insurance scheme, it includes significant detailabout services within its scope. The plan sets out a maximum waiting period for receivingservices at each stage of a patient’s interaction (the sub-guarantee of ‘opportunity’) as wellas the set of activities, procedures and technologies necessary for treating each medicalcondition (sub-guarantee of ‘quality’) and the maximum that a family can spend per yearon health (sub-guarantee of ‘financial protection’) (World Bank, 2008, p. 4). It also definesthe medical response for each disease and condition; and emphasises prevention, earlyexamination of symptoms, and primary care (World Bank, 2008, p. 4). Hence, while thebenefits package set out in Plan AUGE is relatively small, it has a significant level of detail.

Box 3.1: Chile’s ‘Regime of Explicit Guarantees in Health Law’ or Plan AUGE

Although the benefits package of Germany’s Social Health Insurance scheme is wide inscope, some of the benefits covered in the package are not set out precisely. For example,along with the overall framework provided by Book V of the Social Code, there areseveral benefit catalogues that explain the details of the Social Health Insurance benefitspackage: Diagnosis Related Groups, Uniform Value Scale, Uniform Value Scale forDentists and Uniform Value Scale for Dental Technicians. However, the level of detail inthese catalogues is highly variable. Thus, while benefits offered in the outpatient sectorare defined explicitly on a positive list (the so-called Uniform Value Scale), the benefitscovered under ‘inpatient care’ are left largely implicit (Bäumler and others, 2008, p. 9). Inprinciple, all inpatient health care services that are not explicitly excluded by a directive ofthe Federal Joint Committee could be provided at the expense of Social Health Insurance(Bäumler and others, 2008, p. 9).

Box 3.2: The Social Health Insurance scheme in Germany


Degree of enforcement

Finally, benefits packages differ in the extent to which they are enforced. At one end ofthe spectrum, one might imagine a package that has a degree of legislative force behind it,effectively prohibiting purchasers from buying any services outside the boundaries of theprescribed package (or legally requiring them to purchase services included within it). Forexample, Pharmac, the Pharmaceutical Management Agency of New Zealand, has suchan approach for the prescribing and purchasing of pharmaceuticals (Cumming andothers, 2010). At the other end of the spectrum, a benefits package might merely offerpurchasers a guide to preferred services. In this latter case, adherence to the package may not even be monitored, suggesting that its influence on the delivered health care may be limited.

Between these two poles, there is a range of further options, some of which are hard to characterise neatly, as seen in the Spanish example in Box 3.3.

Italy has similar enforcement arrangements for its national benefits package. In theory,the benefits package of Italy’s health service is first set at a national level, with furtherdecisions about supplementary services left to its regions, or private insurance companies.However, within this system, the ‘force’ of the national benefits package and its hold overpurchasers is difficult to assess. In principle, the national government has exclusive powerto set the levels of essential health care (livelli essenziali di assistenza) and is responsiblefor ensuring the general objectives and fundamental principles of the national health caresystem (Lo Scalzo and others, 2009). Regions are then given exclusive responsibility forthe organisation and administration of publicly financed health care (Lo Scalzo andothers, 2009). However, as Hunter and others (2005, p. 174) point out, because nationalstandards are rarely explicitly defined, ‘enforcement’ is often a matter of negotiation and interpretation between central government and the regions rather than a matter of hard-and-fast rules. Hence, one could say that Italy’s benefits package sits awkwardlybetween the idea of a legally enforced contract with local purchasers and a starting pointfor negotiation and further discussion on what services can eventually be purchased.

Spain has a tax-funded, national health care system in which most services are publiclyprovided, with some contracting arrangements with private and local public bodies. What is particularly interesting about the Spanish system is the interplay betweennational bodies and largely independent regions, the so-called ‘autonomouscommunities’. At present, national legislation sets out what regions are obliged to provideand, since 2006, a national body (the Interterritorial Council of the Spanish NationalHealth Service/Consejo Interterritorial del Servicio Nacional de Salud) has beenresponsible for reviewing the contents of the common basic package (García-Armestoand others, 2010). However, within Spain’s highly devolved system, autonomouscommunities are able to re-evaluate their benefits package depending on their respectivefinancial and political situation, and to offer additional or new benefits (Planas-Miret andothers, 2005). Thus, despite a strong, national, legislated benefits package, variation inthe package of care in different autonomous communities remains, with some regionsbroadening and developing the range of services they provide and others offering a morerestricted range (García-Sánchez and Carrillo Tirado, 2008, p. 18).

Box 3.3: Spain – a national benefits package and autonomous regions


Summary

It is not possible in this brief chapter to summarise all the nuances of differentinternational experience in setting national benefit packages. For further details, see for example the results of the European Commission ‘HealthBASKET’ projectcomparing nine European countries (Schreyögg and others, 2005; see Appendix for asummary) and the country profiles prepared by the European Observatory on HealthSystems and Policies.1

In summary, a national benefits package might take a wide range of different forms,determined by their design along four key dimensions. However, those drawing upvarious different kinds of benefits packages have faced common problems. In the nextchapter we examine some of these problems and assess how helpful or otherwise it wouldbe to set a national benefits package for the English NHS.

1. www.euro.who.int/en/who-we-are/partners/observatory

29

This chapter examines the merits of instituting a national benefits package for the NHSin England. The assessment is made in relation to three areas: containing costs andimproving efficiency; equity; and accountability and transparency.

Implications for containing costs and improving efficiency

The most immediate argument for setting the NHS benefits package at a national level is that it might help contain costs and improve the efficiency of the NHS as a whole. A national organisation such as the NHS Commissioning Board could use themechanism of a national benefits package to increase the commissioning of cost-effectivetreatments and the decommissioning of treatments that are not cost-effective.

For example, one could in principle envisage assessing all potential treatments in themanner currently pursued by NICE, rank them according to cost-effectiveness (orwhatever other evaluation criterion was selected), and thereby specify the package thatmaximised benefits (however defined) subject to the fixed NHS budget. This wasessentially the approach taken in Oregon, which was outlined in Chapter 3. Withsufficient performance management – often lacking in respect of the implementation ofNICE guidance at a local level – this kind of national-level mechanism could have thepotential to influence strongly what is commissioned at a local level.

Furthermore, the sort of information provided by NICE is a public good. Therefore, aslong as such a body is given very clear criteria for ranking treatments, there is a strongargument for using a single decision-making organisation to assess the relevant evidenceand undertake the necessary analysis. Unless there is significant legitimate freedom forlocal areas to vary the criteria for assessment (which in England seems unlikely), it isinefficient and unnecessary for a large number of local organisations to duplicate the task.

However, international experience shows that there is good reason to be cautious aboutthe effectiveness of a national benefits package in improving efficiency. First, to beeffective, it is likely that the established benefits package would have to be specified inconsiderable detail, with indications of appropriateness as well as choice of interventions.The experience of Chile has shown that one can draw up a detailed account of thebenefits package when the package itself is relatively small, but it is almost impossible toenter into that level of detail with respect to a large benefits package. Explicitly definedbenefits packages are therefore usually wide in scope, low in detail and lightly enforced. Ifthis were the outcome in England, specification of a national package might merely serveto create a culture of entitlement, expanding rather than appropriately constraining theoverall demand for health care, and hence failing to control expenditure.

Second, it would be extremely challenging and costly to assess each treatment and serviceon the basis of stated objectives (such as cost-effectiveness), and to update theseassessments as new technologies or new evidence emerged. As Stolk and Poley (2005, p.5) point out in relation to a similar idea voiced in the Netherlands, it would be difficult‘to screen the whole benefit package in terms of necessity and cost-effectiveness ... thereare about 11,000 different medicines on the market in the Netherlands’.

4. Setting a national benefitspackage for the NHS


Third, in some areas, assessing cost-effectiveness (or performance against other nationalobjectives) may prove impossible, due to a lack of information and the challenges ofmodelling costs and health benefits of treatment. At present, pharmaceutical companieshave a strong incentive to produce information and evidence in advance of a NICEdecision because of their incentive to receive approval. But this incentive does not applyto the majority of drugs, diagnostics and technologies in common usage in the NHS. For the majority of such treatments, there are numerous technical and analyticaldifficulties in performing a cost-effectiveness analysis, particularly when ethicalconstraints preclude randomisation.

Fourth, if one were to rank all services and treatments according to specified criteria, thesetting of the benefits package requires the detailing of a threshold beyond which treatmentsare rejected. NICE is generally assumed to apply a maximum threshold of about £30,000per quality-adjusted life year for accepting new treatments (Appleby and others, 2009).However, it also takes other criteria such as equity and proximity to death into account, andthere is therefore some variation around that level. For example, NICE has noted that, whenevaluating the effectiveness of different palliative care treatments, it may be necessary toadopt a different approach that takes into account extending life, relieving suffering,improving functioning or extending care and compassion (Russell and others, 1996).

This experience highlights the complexity that would be involved in setting a ‘cut-off ’ pointfor inclusion in the package if multiple criteria (beyond cost-effectiveness) are applied to theselection of treatments. It is therefore unsurprising that nearly all international examples ofcomprehensive ‘positive list’ benefit packages have broadly defined the scope of the packagebut leave most decisions about when and to whom to provide the treatment to local clinicaldecision-making. Reimbursement is based on clinically assessed medical necessity, possiblywith some types of care requiring pre-authorisation.

The weaknesses of the prioritised list as a cost containment strategy can be illustrated bythe Oregon experience. First, the list in the Oregon Health Plan did not controlexpenditure on treatments that were above the line, and few of the most expensivetreatments fell below it. All diagnostic services were covered, even for conditions forwhich the treatment itself was not covered. The initial thinking was that costs would beheld back by introducing the list alongside managed care. But even with 85 per cent ofpeople in managed care, costs grew rapidly. Second, to make any substantial savings,Oregon had to drop hundreds of condition–treatment pairs from the plan, includingtreatable cancers and other serious conditions. Such decisions were medically and morallydifficult to take in full public view (Dixon and Welch, 1991). Furthermore, whatremained covered by the plan after dropping so many conditions would not have madesense from a health care perspective. According to Jonathan Oberlander, a politicalscientist from the University of North Carolina at Chapel Hill who has followed theOregon experiment closely, the intentions behind the plan were good and noble but thenotion that health care costs could be controlled line by line was foolish (Oberlander,2007; Alakeson, 2008).

Furthermore, unless the criteria for ranking treatments were chosen with great care,perverse choices might result. As the experience with NICE and in Oregon has indicated,reliance on cost-effectiveness as a sole criterion for choosing the benefits package isunlikely to be adequate. But this begs the question of what additional criteria, such asuncertainty, equity, other notions of fairness or wider social benefits, should be included,and how they should be integrated into evaluative methodology. In practice, therefore,creating a national benefits package to improve allocative efficiency and control costs,while remaining consistent and fair, presents a formidable series of challenges.


Would a benefits package improve equity of service provision in the NHS?Promotion of equitable access to care for the population is a fundamental rationale fornational intervention in locally delivered public services. The NHS is funded by nationaltaxation, so citizens reasonably expect some uniformity in the health services madeavailable. Another strong argument for setting the NHS benefits package at a nationallevel would therefore be to combat unexplained or unjustified variation in what the NHSprovides. In other words, one could use a national benefits package to reduce thepostcode lottery.

The ability to reduce variation in the benefits package commissioned locally woulddepend on two things: first, being able to draw up a sufficiently detailed package torestrict local room for manoeuvre (say, including extensive appropriateness criteria); andsecond, being able to enforce such appropriateness criteria from the national level. Thiswould mean setting the package in much the same way as Chile established its PlanAUGE, rather than leaving local decision-makers to interpret a general plan, as inGermany, or giving regions some flexibility to alter the package, as in Italy and Spain. In this sense, a national benefits package could be a powerful mechanism for improvingequity of access to care within a devolved commissioning environment.

There are, however, other challenges to be overcome. First, drawing up sufficientappropriateness criteria to restrict local variation would be very challenging, even if the example set by NICE shows that it can be done in some areas. When it comes totightly enforced appropriateness criteria, Chile represents the exception rather than the rule, and has the advantage of having to consider a very limited range of services. In many of the countries that have set a national benefits package, it is standard practiceto leave judgements about a service’s appropriateness to the local doctor (see the section ‘Level of detail’ in Chapter 3). In practical terms, it is likely that the most that can be hoped for is specification of appropriateness criteria for a limited number oftreatments for which evidence about effectiveness for different patient groups isreasonably secure. Likewise, the costs of monitoring compliance and enforcing thepackage may be substantial.

Second, with detailed specification of patient entitlements, there may be little scope for the discretion needed to adhere to local budgets. Local commissioning may become little more than passive reimbursement of national entitlements, and the incentive forcommissioners to seek out innovative ways of working within fixed budgets may be lost(McMahon and others, 2006, p. 346). In short, expenditure control may be compromised,even if equity of access is safeguarded.

Implications for accountability and transparency

A third argument for setting a national benefits package is that it would promotetransparency and accountability. The idea is that it would set out explicitly both theservices to which citizens were entitled, and the process by which the associated decisionswere reached, taking the principles underlying the NHS Constitution to their logicalconclusion. A nationally defined benefits package would make rationing – that is, thefailure to offer care, or the denial of care, from which patients could benefit (Maynard,1999) – explicit, rather than leaving it to occur implicitly.


Making explicit the extent of the NHS benefits package could have a number ofadvantages. First, members of the public would be able to hold decision-makers toaccount at all levels of the system for the services they provide. It can be argued that suchexplicitness would create a steady improvement in decision-making processes (Maynard,1998). Second, by creating a single benefits package at the national level, it would be clearwhere accountability for the limits of the package lay. Front-line providers would be givenclear guidance on what services could or could not be provided, and absolved from blamefor any denial of treatment. In particular, general practitioners would not be put in thepotentially difficult position of being both a rationer of care and a patient’s advocate.Third, transparency would give greater certainty to citizens on the limits of the NHSbasket of services. It could thereby facilitate a market in complementary private healthinsurance to cover the gaps by allowing patients to see where they needed to ‘top up’ theircare and where the NHS would provide for them, as is common in countries such asFrance and Ireland to cover gaps in financial coverage.

However, national and international experience shows that explicitness comes withcertain disadvantages, over and above the costs of making the package explicit in the firstplace. First, there is some evidence that the creation of a national benefits package doesnot necessarily increase the public knowledge of entitlements, even if it is widelyadvertised. For example, even though Chile’s Plan AUGE is entirely explicit about therights that citizens have to certain health care services, this entitlement does not appear to be as widely known to the public as was intended (World Bank, 2008). One of themost heavily discussed aspects of Plan AUGE was the ability of health care users to claimtheir rights and take action if health care providers fail to comply with the guarantees.However, evidence collected by the regulatory body, the Health Superintendency(Superintendencia de Salud), shows that a significant percentage of the population is stillnot aware of the guarantees included in the AUGE. Only 48 per cent of respondents wereaware of at least one of the explicit guarantees, and 29 per cent knew of the existence ofall four guarantees (World Bank, 2008, p. 8).

Equally, there is some doubt about how transparent one can be about a health servicepackage. For example, even in the case of New Zealand’s explicit priority scoring system,commentators have been quick to point out that much of the system remains based onimplicit decisions. As Dew and others (2005) explain, given the continued role of clinicaljudgement in priority assessment, implicit rather than explicit rationing is still a strongfactor in accessing elective surgery in New Zealand, and likely to remain so for manyspecialties.

Second, greater transparency could lead to an unjust distortion of the benefits package.By making the boundaries of the NHS’ benefits package plain for all to see, politiciansmay come under pressure from powerful interest groups to depart from systematic rulesfor setting the package and make unwarranted changes to the present package or torestore services that have been dropped. In England, the existence of NICE has helped toreduce that pressure, or at least act as a buffer between politicians and interest groups. Byway of illustration, politicians in Israel have been subject to immense pressure to adjustthe scope of the benefits package, as set out in Box 4.1 opposite.


Third, the solidarity principle underlying the NHS relies on the willingness of higher-earning, young and healthy people to cross-subsidise low-earning, older and sicker people, through their tax contributions. Creation of an explicit benefits packagemight start to make the magnitude of such transfers explicit and contentious. Whetherthat would compromise solidarity in relation to the NHS is an open question. However,such uncertainty suggests a need for significant caution in pressing for greater levels oftransparency concerning the NHS package.

Finally, one consequence of transparency is that it might encourage the development of a market in private health insurance that covered some treatments or user charges notcovered by the package. The longer-term impact that the widespread use of private healthinsurance in England would have on the traditional NHS solidarity principle needs to becarefully considered. To what extent would it be considered acceptable for those whowere able to pay for private insurance to secure access to a broader benefits package thanthe rest of the population, and would it compromise the widespread support for the NHSnecessary to secure its continued funding from national taxation?

Summary

The arguments for creating an explicit NHS benefits package are that it could:

• improve allocative efficiency

• help constrain expenditure

• increase equity

• strengthen transparency and accountability of services funded by the NHS.

However, there are many reasons for believing that advantages of explicitly setting apackage may not be realised, and that it may also give rise to a number of adverseconsequences. In particular, a national benefits package might:

• prove technically challenging to develop and enforce

• limit necessary local autonomy of commissioners in adhering to budgets

• limit necessary local autonomy of providers in adapting to variations in patients’ needs

Chinitz and others (1998) describe the experience in Israel in 1998 when the governmentput forward a proposal to allow statutory health insurers to determine flexibly their ownservice basket, subject to regulation by the Minister of Health. Almost as soon as this Billwas published, it became the focus of intense public debate and activity on the part ofconsumer groups, specific disease groups, and human rights organisations. Delegationsof patients seeking coverage of drugs not included in the basic basket were received byPresident Ezer Weizman and, in a nationally televised event, Tal Levi, a young girl withcancer, pleaded to receive drugs not currently covered. Furthermore, when a drug for thetreatment of Alzheimer’s disease, which had been sought by families of patients with thedisease, was not included, the protests of the families were well covered in the news.

Box 4.1: The experience of allowing statutory health insurers in Israel todetermine their own package of care


• be vulnerable to arbitrary departures from consistent decision-making, in the face of lobbying and other political pressures

• compromise the solidarity principle on which the NHS relies.

Table 4.1, opposite, presents a summary of the arguments for and against a nationallydetermined benefits package against each of the three main criteria of efficiency, equityand transparency. It can be seen that in relation to these core issues, the idea of instituting a national benefits package may in practice lead to inefficiencies and implementationdifficulties. Therefore, in the next chapter we discuss whether there are alternativemechanisms that might help to achieve the objectives of a national benefits package while mitigating some of the adverse consequences.


Implications forcontaining costsand improvingefficiency

Implications forequity in serviceprovision

Implications foraccountabilityand transparency

Arguments for

• Would improve commissioning of cost-effective treatments anddecommissioning of treatments that are not cost-effective

• Would reduce duplication by vestingdecision-making powers in a single,national body (for example NHSCommissioning Board)

• Would set the NHS benefits package at a national level in order to combatunexplained or unjustified variation

• Would enable the public to hold decision-makers to account for theservices they provide

• Would give greater certainty to the public as to the limits of the NHS benefits package

• Would help to facilitate the private,complementary health insurance marketto cover gaps in care

Arguments against

• Difficulties in drawing up an explicit accountof the benefits package when the package itselfis fairly large

• Challenges and costs in assessing eachtreatment and service on the basis of cost-effectiveness, and to updating as newtechnologies of evidence emerge

• Assessing cost-effectiveness in some areas mayprove impossible

• Complexity involved in setting a ‘cut-off ’point for inclusion in the package if multiplecriteria (beyond cost-effectiveness) are applied

• Question of which criteria, beyond cost-effectiveness, need to be included and howthey should be balanced against one another

• Drawing up sufficient appropriateness criteriato restrict local variation would be verychallenging

• Would restrict the scope of local bodies toadhere to local budgets – expenditure controlmay be compromised

• Evidence that explicitly stating what a healthservice’s benefits package contains does notsubstantially improve public knowledge ofentitlements

• Doubts around how transparent one could be about entitlements – especially aroundappropriateness criteria

• Possibility of transparency leading to an unjustdistortion of treatments and services available

• Threat to solidarity by making transfer ofresources from higher-earning, youngerhealthy people to low-earning, older, sickerpeople explicit; and by facilitating a private,complementary insurance market

Table 4.1: Arguments for and against a nationally determined benefits package

36

Given the difficulties set out in the preceding chapters, we conclude that the creation of an explicit national benefits package is not a policy that can be recommended.However, the motivation for examining this policy option remains pressing: the need toextract maximum benefit from a limited NHS budget while preserving equity andaccountability, particularly in the current austere financial climate.

In this chapter we examine alternative options for improving the way the benefits packageprovided by the NHS is arrived at in England in the context of the reform programmeproposed by the Coalition Government. We have split these options into the level at whichthey might be applied: nationally, locally and at the level of citizens, patients and carers.

In carrying out this analysis, it is assumed that policy-makers wish systematically topursue their objectives for health services subject to a national budget constraint. Asnoted in Chapter 1, it is impossible to develop policies or clinical guidance without aclear statement of what those objectives might be. The work of NICE is based on theprinciple of maximising cost-effectiveness, subject to additional considerations such asequity and uncertainty, and we assume that similar objectives would inform the potentialinitiatives described below. In each section, policies are identified that might help topromote such objectives, while maintaining local flexibility to manage uncertainty,respond to local circumstances and adhere to local budgets.

National-level reformsAs currently envisaged, the NHS Commissioning Board will play a central role in shapingthe behaviour of local commissioners and, in turn, providers. It will be essential that theBoard has a clear framework setting out the strategic principles and objectives forcommissioning. There are a number of functions related to priority setting, resourceallocation and commissioning that are best undertaken at a national level, either by theBoard or an ‘arm’s-length’ agency, to promote consistency of policy and avoid unnecessaryduplication of effort at the local level.

Establishing national principles and rationalising existing legislationAlthough developing and implementing a comprehensive ‘positive list’ of benefits may not be feasible or desirable, there is a strong case for defining more explicitly how public moneywill be spent in the NHS. To this end, one option is to establish a set of national principlesthat would provide local decision-makers with the broad parameters within whichcommissioning decisions should be made. To improve transparency and accountability, these principles could be published openly, perhaps in the NHS Constitution.

While a set of principles would not constrain local commissioning to the same extent as anationally defined benefits package, it would give local decision-makers clear direction asto how they should use their local flexibilities, and inform local priority setting. It would,for example, signal to local commissioners and the public a clear commitment to greatereffectiveness, equity and efficiency, as well as transparency and accountability. It wouldalso empower regulators, local authorities and citizens in challenging purchasingdecisions made at a local level, for example by clinical commissioning groups that appearto invest in treatments of low value or lacking a strong evidence base.

5. Alternative policy options


For this to be feasible, the Secretary of State for Health would in turn have to give theNHS Commissioning Board very clear strategic terms of reference, perhaps in the ‘NHSmandate’ proposed in the Health and Social Care Bill 2011. As explained in Chapter 2,the NHS benefits package is currently shaped by laws, regulations, guidelines andgovernment directives. These are, however, diffuse in nature and generally opaque to the public. It may be possible to take advantage of the proposed NHS reforms and usemechanisms such as the NHS Commissioning Board’s terms of reference to guide thegradual rationalisation of existing legislation and regulations into a more coherentpackage of principles to inform priority-setting and funding decisions. In the future, the NHS Constitution could be used to explain the force and relevance of the legalframework to the wider population, improving public awareness of their entitlements and setting out limits of what the NHS can offer.

The information role of the NHS Commissioning Board, NICE and the Care Quality CommissionThe NHS Commissioning Board has commissioned NICE to develop quality standards(with associated indicators), some of which will inform a new national CommissioningOutcomes Framework for the NHS. This is intended to form the national framework forcommissioning, against which the performance of clinical commissioning groups will beassessed, and accountability to patients and the public demonstrated (NICE website,2012). The Board will have a crucial role in coordinating the work of NICE, NHSEvidence, the Care Quality Commission, Monitor and other regulators in bringingtogether the necessary evidence and standards into a framework for commissioning thatcan assure delivery of the proposed new NHS Commissioning Outcomes Framework.

NICE should continue to develop integrated guidance on cost-effective practice in themanagement of conditions, including the specification of ‘do not do’ procedures orprocedures of low value, encouraging decommissioning of low-value services anddeveloping appropriateness criteria for treatments. A key issue would be how binding tomake the guidance from NICE. Determining the degree of local clinical flexibility withinan overall commissioning framework will be complex and challenging, and there arelikely to be ‘test cases’ along the way, where the balance of national consistency and localflexibility will be defined and refined.

The NHS Commissioning Board could also have a central role in determining where newevidence is required to improve efficiency in the NHS (Smith and Dixon, 2012). Forexample, the Board might ask NICE to identify evidence gaps relating to establishedservices and processes of care. Addressing these gaps would require NICE to work closelywith the National Institute for Health Research and universities to develop a researchagenda that addresses national information priorities for commissioning. Over time, newevidence could be used by the NHS Commissioning Board and NICE to issue guidanceto local clinical commissioners about how to channel public investment towards moreefficient care.

There is some evidence to show that reporting of performance can be powerful in drivingimprovement in health care systems. For example, Lindenauer and others (2007) showthat reporting to the public can be as effective an incentive as financial rewards inconvincing providers to improve their clinical performance. In order to align localcommissioning decisions more closely with evidence-based and best-practice care and toreduce unexplained variation across the country, it will be important for commissioners


to have access to accurate information about their (and their providers’) performancerelative to others. The NHS Commissioning Board should provide commissioners andthe public with comparable information about the use of procedures or drugs, wherenecessary adjusted for relevant population characteristics. The Care Quality Commissionshould align its performance monitoring and reporting with NICE guidance.

Information of particular relevance to the shaping of the benefits package would be:

• performance metrics such as the rate of referrals for certain treatments in differentareas of the country

• the exceptional purchase by commissioners of low-value treatments

• adherence by commissioners and providers to best-practice guidelines

• the use of appropriate low-price drugs

• health gain secured

• relevant indicators of health inequalities.

This information would allow commissioners and local service users to see how the localbenefits package compared to the range of services delivered in other localities andnationally, and would also assist patient choice of provider.

Provider payment mechanismsThe structure and level of payment tariffs have a profound influence on commissionerand provider behaviour, and by implication play a role in shaping the benefits package. The tariff for health care should, as far as possible, encourage the provision of a cost-effective benefits package that is affordable within the available budget. Whereevidence of best practice is available, the level of the tariff (set by Monitor) and rulesabout how the tariff works, including when non-payment applies (set by the NHSCommissioning Board), could influence which treatments are provided and in whatcircumstances. For example, if a provider continued to undertake procedures from the ‘do not do’ list specified by NICE and included in the Commissioning OutcomesFramework, payment could be withheld by commissioners. Similarly, failure to takeaccount of appropriateness criteria that led to a treatment being provided to an individualfor whom it was not indicated could also result in payment being reduced or withheld, or payment could be made conditional on an exception reporting process.

Best-practice tariffs could also be used to encourage the provision of cost-effectivetreatments. At present, the health service is expanding best-practice tariffs into areas such as adult renal dialysis, interventional radiology, and primary total hip and kneereplacements (DH, 2011f ). However, such tariffs could be expanded yet further, makingreceipt of a full tariff conditional on adherence to clear quality standards across a carepathway. Another possibility would be to use Patient Reported Outcome Measures torequire a certain average health gain secured by providers – this could be built into theCommissioning Outcomes Framework. This would introduce an element of ‘pay forperformance’ that could improve quality of care and (if properly designed) reducetreatment of patients with low capacity to benefit. The NHS Commissioning Boardmight also examine developments in Germany where a lower tariff is paid for care inproviders providing low volumes of care and where lower volume is associated with worseclinical outcomes (Busse and others, 2011, Chapter 14).


The impact of the tariffs on commissioners, who are liable for their payment, should also be considered. For example, if lower tariffs were paid for low-quality care,commissioners (especially where they are general practitioners) may have a perverseincentive to refer patients to low-quality providers. This illustrates the need for a very clearperformance-reporting infrastructure for commissioners, so that they can be held to accountfor such behaviour. To neutralise the financial benefits of commissioning low-quality care,there may be a case for imposing financial penalties on commissioners, for example by notallowing them to retain the savings generated by paying less than the full tariff.

Local-level reforms

The current proposed NHS reforms imply considerable delegation of responsibility to local organisations, in particular general practitioner commissioners (in clinicalcommissioning groups) and the expanded number of NHS foundation trusts. It will be essential that local decision-making is transparent, and that local accountabilityarrangements, particularly for new clinical commissioners, are structured so that thepriority-setting and spending decisions of local organisations can be properly scrutinised.This might entail formal local consultation processes for significant departures fromnational guidelines or restrictions to access.

The role of commissionersThe decisions of local commissioners – clinical commissioning groups – will in futureplay a critical role in shaping the NHS benefits package, much as PCT decisions currentlydo. They need to develop the capacity to understand evidence, to interpret nationalguidance appropriately and to exercise local discretion when appropriate. Priority settingwill become a central preoccupation of clinical commissioning groups, and they will need rapidly to assemble skills to fulfil that role. It is likely that there will be manypriority-setting issues that are common to many clinical commissioning groups, andwhich can therefore be most effectively addressed through collective arrangements toassemble, analyse and disseminate relevant evidence.

The role of providersEven in the absence of an explicit benefits package, it will be important to encourage localclinicians to provide evidence-based and best-practice care through a variety of alternativemechanisms. In general, the ‘rigidity’ of clinical guidance should depend on the degree of certainty in the evidence. At one extreme, quality guidelines might be mandatory ifunequivocal evidence links good outcomes for most patients to certain clinical actions.At the other extreme, where evidence is lacking, or there is great heterogeneity amongpatients, guidelines might be merely advisory. Several intermediate approaches can beenvisaged for some treatments, such as the requirement to report an ‘exception’ fordeparture from the default treatment, or the requirement to secure prior consent fromthe commissioner to provide some treatments.

As an example of ‘nudging’ clinicians towards preferred treatments, clinical prompts andother kinds of decision supports can be highly effective at translating evidence about bestpractice into day-to-day clinical decisions (Bates and others, 2001; Thursky and others,2006; Menachemi and others, 2007; Zaidi and others, 2008). Huge strides have beenmade in the NHS in the quality of prescribing using these tools. According to a study byKawamoto and others (2005), the effectiveness of these prompts can be further enhancedif they are well designed and automated. They claim that, ‘as a general principle, ourfindings suggest that an effective clinical decision support system must minimise the


effort required by clinicians to receive and act on system recommendations’ (p. 7). This is another area where NICE quality standards will be invaluable to the shaping of theCommissioning Outcomes Framework and the wider application of the Framework inthe reformed NHS. The ability to turn quality standards into effective prompts may becritical to shaping provider behaviour.

Public reporting of provider performance is increasingly prevalent, and when welldesigned can promote desired improvements in provider and practitioner behaviour(Hibbard and others, 2005). Increasing demands for transparency and accountability aredriving more widespread use of such schemes, and they are likely to become important in areas such as adherence to guidelines. However, they will have to be designedthoughtfully in order to avoid some of the unintended consequences that can arise fromany performance-reporting scheme.

Financial incentives are also likely to play a role in encouraging preferred behaviouramong organisations and individual practitioners. Although the evidence is disputed,many commentators have argued that the implementation of the Quality and OutcomesFramework in use in general practice offers an indication of what can be achieved even ina complex primary care setting (Roland, 2007; Gillam and Siriwardena, 2010; Peckhamand Wallace, 2010; Doran and others, 2011). This suggests that there is scope for carefulexperimentation with pay-for-performance schemes in many other NHS settings toencourage adherence to the preferred treatment pathways. However, the design of suchschemes is complex, and the effectiveness of pay-for-performance continues to be studied,so evaluations of such experiments will provide important insights.

Citizens, patients and carers

‘Supply-side’ decisions (those made by NHS bodies) have historically been moreinfluential in shaping the NHS benefits package than ‘demand-side’ decisions (thosemade by patients and carers) (Thomson and others, 2010). However, there are ways inwhich the NHS could involve patients and carers in helping to align the benefits packagemore closely with effective practice. It is important to note though that, as NHS patients,citizens are likely to be interested in effectiveness more than cost-effectiveness, as they donot bear directly the costs of the treatment they receive. It is mainly their role as taxpayersthat prompts an interest in cost-effectiveness.

There is scope for greater clarity about what patients and the public can expect from theNHS benefits package. NICE already develops versions of its guidance for patients andthe public, outlining the treatment and care they should expect to receive for a particularcondition. This guidance is available via the NICE2 and NHS Choices3 websites. Forexample, the guide relating to the treatment of depression in adults specifies that adults with moderate or severe depression should be offered both an antidepressant and apsychological treatment, either cognitive behavioural therapy or interpersonal therapy. Theavailability of clear information for patients on best-practice treatment can be a tool withwhich to hold providers to account – more active marketing of this kind of information toindividuals could create demand-side pressure for more evidence-based care.

2 . www.nice.org.uk/3 . www.nhs.uk/Pages/HomePage.aspx


Financial incentives in the form of modest co-payments are used by the health systems of many countries, both to provide additional income to the health system and to try toinfluence patients’ patterns of behaviour. Because of the strong underpinning principle ofaccess to NHS care on the basis of need, not of the ability to pay, the NHS has made littleuse of co-payments, and even where it does – for example for prescription charges inEngland – about 90 per cent of those in receipt of prescriptions enjoy exemption.Experience in countries such as France, Germany and Sweden shows that imposition ofuser fees is feasible and can have some impact, but mainly as a way of managing demandfor care rather than as a significant source of health system finance.

A reduction in co-payments (or positive financial incentives) can be used to rewarddesirable behaviour or encourage the use of particular kinds of care. For example, thereare exemptions in France for certain charges relating to chronic disease care in order toencourage patients to seek early intervention and effective management (Thomson andothers, 2010). In New Zealand, there has been a policy focus on reducing co-paymentsfor general practice, as part of a wider drive to reduce health inequalities and avoid thosewith high levels of need missing out on vital preventative and treatment services withinprimary care (Cumming and Mays, 2011).

Notwithstanding the practice adopted in many countries, in the form of co-payments for services such as general practice visits, hospital hotel services or urgent care centres, thepracticality of extending user charges in the NHS beyond the current levels is highlyquestionable, given their political sensitivity. It is unlikely that any government would beeager to promote such a policy, although it may be the case that some future governmentwill find it necessary to consider modest user charges as a mechanism for guiding patientstowards preferred use of the health service. This might take the form of retaining free accessfor mandated, cost-effective care, but imposing a user charge if a patient prefers a morecostly treatment or drug. Such incremental ‘top-up’ charges are widely used in countrieswith systems of reference prices for pharmaceuticals (Kanavos and Reinhardt, 2003).

Alternative approaches to the demand side may involve ‘nudges’ towards preferred use of NHS services. These might arise from the provision of clear information about therelative merits of alternative treatments, and designing services to make it easy for patientsto follow particular care pathways, particularly for complex or long-term care. Preferredcombinations of services could then be packaged together. While patients might remainfree to request alternative care pathways, the default choice would be the one thatperforms best according to criteria such as cost-effectiveness.

Finally, the move towards ‘personalised’ medicine suggests that, in the future, patientswith some conditions may demand bespoke treatment, designed in the light of theircircumstances and preferences. This does not necessarily compromise the principle ofseeking to constrain NHS provision to cost-effective treatments. However, it doesmultiply the complexity of the task, and reinforces the need to offer patients clearguidance on the range of treatments that the NHS is able to make available.

The ultimate devolution of commissioning care takes the form of ‘personal budgets’ givento patients with certain long-term care needs. The budget can be used to purchase care inline with the patient’s own preferences, with the intended consequence of substantialvariations in care packages. In this case, the ‘benefits package’ does not pre-judge the carereceived, but instead offers the patient an entitlement in the form of the personalisedbudget rather than any specific treatment.

Summary

The explicit specification of a national benefits package cannot be recommended.However, as resources are limited, there remains a pressing need to encourage provisionof health care in line with agreed national criteria, if those resources are to be used to besteffect. We have suggested mechanisms for securing better use of NHS resources, at anational, local, and an individual level. The recommendations flowing from this analysisare given in the concluding section.


43

The idea of setting out explicitly the entitlements of patients, in the form of a nationallyspecified NHS benefits package, may seem initially to be attractive. This report hasexamined the merits of such a move according to its likely impact in three key areas:containing costs and improving efficiency; equity; and accountability and transparency.We have argued that for a number of reasons the development of a detailed nationalbenefits package for the NHS is likely to be infeasible, and implementing it may lead toadverse outcomes.

This report recommends against the introduction of an explicit national benefits package.However, such a conclusion does not change the motivation for this study: the need toextract maximum benefit from a limited NHS budget while preserving equity andaccountability, particularly in an austere financial climate. The report therefore makes anumber of recommendations for changes that could be made to improve the way theNHS benefits package is shaped, without going as far as specifying a national set of NHS-funded services. The recommendations are as follows:

1. A set of principles should be established that can shape how public money is spentin the NHS and, conversely, inform decisions about what will no longer be paid for.These principles could be enshrined in the NHS Constitution and restated in theannual Secretary of State for Health’s mandate to the NHS Commissioning Board(and in turn to the new clinical commissioning groups), reminding NHScommissioners of what should underpin their decision-making about resources andservices. The principles are likely to be based on existing NHS criteria such as clinicaleffectiveness, cost-effectiveness and equity.

2. Acting on the mandate set by the Secretary of State, the NHS Commissioning Boardshould perform a crucial role in setting the scope of funding and service provisionin the reformed NHS, and working with the National Institute for Health andClinical Excellence (NICE) to determine a Commissioning Outcomes Frameworkthat will guide the activities of local commissioners, against which they will be held toaccount. The NHS Commissioning Board should commission core standards forNHS care from NICE – these must incorporate information about cost-effectiveness,best evidence-based clinical practice, and advice on efficient service provision.

3. The NHS Commissioning Board should use NICE guidance for producing, as astarting point, a national list of the treatments that public money should not bespent on in the NHS, unless there are exceptional circumstances. Local clinicalcommissioning groups should be required to report publicly on their progress infollowing this ‘do not do’ advice, explaining any exceptions where such procedures arefunded. More generally, clinical commissioning groups should be expected to reporton departures from national guidance.

6. Conclusion


4. The standards developed by NICE and set out in the Commissioning OutcomesFramework should be aligned with the structure and level of the NHS tariff.Hospitals and other providers would therefore be paid by commissioners in a way that upholds an NHS benefits package that is affordable, clinically effective and cost-effective.

5. Wherever possible, providers and clinicians should be ‘nudged’ towards clinicaland cost-effective care through: public exception reporting of services that are fundedoutside of Commissioning Outcomes Framework standards; the use of informationtechnology-based clinical prompts for general practitioners and specialists at the pointof diagnosis and treatment; and other information technology solutions such asmonitoring adherence to guidelines.

6. The NHS Commissioning Board should provide the public with information aboutthe relative performance of local commissioners against selected outcomeindicators from those set out in the NHS Constitution and the CommissioningOutcomes Framework. In this way, the NHS Commissioning Board will help toinform the public about what is in the de facto NHS benefits package and what theyshould expect from their local NHS, and encourage stronger local challenge andaccountability in respect of funding decisions and how these decisions are made.

7. Decision-making in clinical commissioning groups should be made transparent, sothat departures from certain national guidelines, and from NHS commissioningprinciples, are subject to proper scrutiny before they are finalised. Relevantinformation should be made available to local authorities, the media and citizens, andmechanisms put in place to permit representations to be heard.

8. Patients should be ‘nudged’ towards preferred use of NHS services, through theprovision of clear information and making it easy for patients to make the ‘right’choices. We consider it unlikely that policy-makers will seek to apply additional usercharges in the NHS in the foreseeable future.

45

Appendix: Level of regulation ofthe benefits packageAdapted from HealthBASKET: Synthesis report(Busse and others, 2006)

Document(s) and purpose

Specified inclusions

SSC. Art. L.321–1Definition of entitlements

Hospital care

Outpatient care

Diagnostic services and careprescribed by physicians

Drugs, medical appliances anddurables

Health care and relatedtransport

DenmarkHospital Act

Regulation of hospitals

Public Health Insurance ActEntitlement to services of Primary care

Medicines ActRegulation of access to pharmaceuticals

Social Services ActRegulation of rehabilitation and other services

Hospital care

Primary care and prevention

Pharmaceuticals

Rehabilitation and otherservices

France

General

Health care at private andpublic institutionsRehabilitation at private andpublic institutionsPhysiotherapy at private andpublic institutions

General practitionersSpecialistsDentistsMidwives

LaboratoriesSpeech therapyNursingPhysiotherapy

Included in positive list




Act LXXXIII 1997 Services of CompulsoryHealth Insurance

Definition of entitlements

Services for prevention andearly detection

Curative services

Other services

SGB VDefinition of entitlements for insurees in the statutory health insurance

Prevention of disease and its worsening

Screening

Treatment of disease

General

Primary preventionDental preventionMother–child/Father–childSpaDisability preventionContraceptionAbortion

• Anaesthetics• Surgical or medical

intervention• Vaginal intervention, incl.

drug injection• Delivery of labour

inducing drugs

Health check-up• Hypertension screening• Hypercholesterolemia

screening• Diabetes screening• Cancer screening

Children screening• Health and development

assessment

Treatment• In- and outpatient, incl.

drugs, devices and medical products

• RehabilitationIn vitro fertilisationMedical and dental treatmentMaxillofacial treatmentDrugs and medical productsMedical aids‘Soziotherapie’Rehabilitation

Family doctor servicesDental careOutpatient specialist serviceInpatient care

DeliveriesInfertility treatmentMedical rehabilitationPatient transportationEmergency ambulanceservices

Germany

Hungary




ZFWEntitlements to health insurance

General practitioner care

Paramedical care

Obstetric care

Maternity care

Pharmaceutical care

Medical devices

Dental care

Specialist medical care

Audiological assistance

Outpatient haemodialysis

ItalyDCPM 29 2001

Definition of national standards of care (Levels of Essential Care, LEAs)

Public and occupationalhealth care services

Community care services

Hospital care services

Netherlands

General

Hygiene and public health• 25 services divided in

3 groupsFood control and hygienesurveillance

• 8 servicesOccupational security andprevention

• 14 servicesPublic health and veterinaryservices

• 31 services in 3 groupsIndividual prevention care

• 3 services

Primary care servicesTerritory emergency servicesPharmaceutical servicesIntegrative careSpecialist outpatient servicesProsthesis careAmbulatory home careResidential and semi-residential careThermal (spa) care

• 7 groups

Hospital inpatientHospital outpatientOther




Constitution of the Republicof Poland

Definition of citizens’ rights

Health Insurance LawDefinition of services funded from public money

Health protection

Health care services

Prevention of epidemicdiseases and environmentdegradation

Diagnostic tests

Protection of health,prevention of disease andinjury screening

Primary health care

Specialist outpatient

Medical rehabilitation

Dentistry services

Hospital treatment

Highly specialised services

Psychology

Logopedy

Nursing care

Antenatal care and newborn care

Care during breastfeedingperiod

AWBZEntitlements to health insurance in exceptional circumstances

Rehabilitative care

Transportation

Prevention services

Long-term medical treatment,nursing or personal home care

NetherlandsContinued

General

Genetic testingThrombosis preventionChronic intermittentventilation

Antenatal careTests in connection withcongenital metabolicdysfunction

Special services for pregnantwomen, children, disabled andelderly people

Laboratory tests

Vaccinations

Examination and treatment

Examination and treatment

Hospices and palliative care

Newborn health anddevelopment assessment

Poland




RD 63/1995/ Law 16/2003Organisation of the health services provided by NHS

Definition of minimum benefits to be provided by all autonomous communities

Public health services

Primary care services

Specialised care

Healthy child care

Spa

Medical products and aids

Medical transport

Emergency care

Spain

General

Health and developmentassessment

Epidemiological informationand surveillanceHealth protectionHealth promotionDiseases and disabilitypreventionSurveillance and control ofrisks from imported goodsEnvironment healthpromotion and protectionOccupational healthpromotion and protectionFood security promotionOn demand outpatientservices (elective and urgent),office-based and home-based

Indication, prescription anddelivery of diagnostic andtherapeutic interventionsPrevention, health promotion,family health and communityhealth interventionsInformation and surveillanceOutpatient rehabilitationSpecific services for women,children, adolescent, elderly,special risk groups andchronically illPalliative care for theterminally illMental health careDental health careOutpatient specialised health care

Specialised ambulatory care inday-hospitalsSpecialised inpatient care

• Medical, surgical, obstetricand paediatric

PolandContinued




NHS Acts 1946 and 1977Definition of the general duties of the NHS (‘comprehensive health services’)

Hospital accommodation

Family planning services

Dental inspections of schoolpupils

Primary care

Aftercare of persons who havesuffered from illness

Socio-sanitary care

Pharmaceuticals

Health care information and documentation

UK

General

Coordination with outpatient care and homehospitalIndication, prescription anddelivery of diagnostic andtherapeutic interventionsOrgan, tissue and celltransplantationPalliative care for theterminally illMental health careRehabilitationLong-term health care

Convalescence careRehabilitation

Convalescence careRehabilitation

Medical servicesNursing servicesSpecialist servicesOther servicesHigh-security psychiatricservices

General medical servicesGeneral dental servicesPharmaceutical servicesOphthalmic servicesOther specialist outpatient servicesMother and children careHome nursingVaccinations andimmunisationsAmbulance services

SpainContinued

© Busse R, Schreyögg J and Velasco-Garrido M (2006)


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Benedict Rumbold

Benedict joined the Nuffield Trust in November 2008 having undertaken a PhD in moralphilosophy at Birkbeck College, where he also worked as a Sessional Lecturer.

His current interests include rationing and priority setting in health care, informationalgovernance and integrated care. He is particularly interested in the conceptualunderpinnings of health policy, and how health care systems seek to incorporate moderntheories about justice and fairness.

Vidhya Alakeson

Vidhya joined the Resolution Foundation as Research and Strategy Director in January2011. Prior to this she was a former Nuffield Trust Senior Fellow in Health Policy. In thisrole she was responsible for developing the Trust’s comparative international healthpolicy work.

Prior to joining the Trust, Vidhya worked as a policy analyst for the Assistant Secretaryfor Planning and Evaluation at the U.S. Department of Health and Human Services,having first moved to the US in 2006 as a Harkness Fellow in Healthcare Policy. Beforemoving to the US, Vidhya worked as a Senior Policy Advisor in the Public Services Teamat HM Treasury, and also undertook a secondment at the Prime Minister’s Strategy Unit.

Peter C. Smith

Peter is Professor of Health Policy, and is co-Director of the Centre for Health Policy inthe Institute of Global Health Innovation, at Imperial College London. He has workedand published in a number of disciplinary settings, including statistics, operationalresearch and accountancy. His main work has been in the economics of health and thebroader public services, most recently as the Director of the Centre for HealthEconomics at the University of York.

Peter has acted in numerous governmental advisory capacities, has been a board memberof the Audit Commission, and is currently a member of the NHS Co-operation andCompetition Panel. He has also advised many overseas governments and internationalagencies, including the World Health Organization, the International Monetary Fund,the World Bank, the European Commission, and the Organisation for EconomicCooperation and Development. He has published over 100 peer-reviewed journal papers and ten books.

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ISBN: 978-1-905030-53-8

BOARD OF DIRECTORS


Subject: Core Brief



Tony Spotswood, Chief Executive

Author of Paper: Tracey Hall, Head of Communications

Key Purpose Patient Safety Health & Safety Performance X

Strategy X


Note for information.

Executive Summary: The Core Brief distributed within the Trust in May 2012


Links to CQC Registration

(Outcome reference)



Core BriefMay 2012 From: Tony Spotswood, Chief Executive

Latest Care Quality Commission national survey of outpatientsThe Board of Directors was delighted with the results for the Trust in the latest Care Quality Commission national survey of outpatients. Although the survey was carried out in April and May 2011, the results were only published recently. When benchmarked against the other 162 acute and specialist Trusts surveyed, the results showed that RBCH had 21 questions rated green (top 20% of Trusts), 16 rated amber and only 2 rated red (bottom 20% of Trusts). As well as benchmarking well against other trusts, when the results are compared to the Trust’s 2009 results there has been an improvement on 23 questions, no

significant change for 8 questions and improvements in the 2 questions which were red rated. Both years show consistent greens in the category of ‘overall impressions’ and the Trust’s performance has improved in the category of questions relating to privacy and dignity, customer service, attitudes and communication. I know that these results are due to the hard work and dedicated service of the staff at the Trust and I would like to thank you on behalf of the Board of Directors for this. It has a tremendous impact on the experience of patients attending our hospitals.

I also hope we can strive to improve our performance on the following two areas which were rated red where I know work has already begun on this around the Trust:l The wait from the time the patient was first told they needed an appointmentl Knowing how patients would receive results of tests.The Board of Directors takes great pride in delivering a high quality service to patients demonstrated in these results and you should all feel proud of your contribution to this.Jane StichburyChair

Chairman announced for proposed merger of foundation trusts Jane Stichbury has been announced as the proposed Chairman should the merger of The Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust and Poole Hospital NHS Foundation Trust be approved. The two hospital Trusts are currently working on a busi-ness plan for merger. Proposed appointments to the Board are made to support the planning process and ensure a smooth transition of responsibility if the merger proceeds. Jane Stichbury will formally take up the role if the merger application is successful and the new organisation is licensed by Monitor, the regulator of foundation trusts. Jane is the current Chairman of The Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust and

will continue in this role until this time. The announcement of the proposed Chairman follows an independent appointment process led by current Gov-ernors of the two Trusts. A Joint Nominations Panel was established, with equal representation of Governors from both Trusts, and supported by an external foundation trust Chairman acting as an advisor. The Council of Governors of the new merged organisation will need to approve the Chairman appointment, should the merger be authorised.

The proposed Chairman and Governors from the Joint Nominations Panel will now appoint the proposed Non-Executive Directors for the merged organisation. Appoint-ment of the proposed Chief Executive and Executive Directors will follow. The Trusts remain separate legal entities until the date of the licenced merger. Each Board of Directors retains complete legal responsibility for their organisation until this time. On this date, the proposed Board of Directors will take responsibility for the new merged organisation.

Latest update on hospitals’ mergerConsultation on how the new organisation will be run finishesConsultation on how the merged organisation is run has now finished. Both Trusts are considering the feedback received before a number of recommendations are made to the merger Joint Programme Board (made up of directors from both Trusts) and discussed with Governors.The key themes that emerged were:• To ensure there is governor representation

from the Christchurch area• To consider the minimum eligible age for

becoming a governor• The ‘Dorset’ member constituency should be

more specificA summary of all the comments received will be sent to everyone who responded to the public consultation at the end of May. You will also be able to read the report on the Healthy Future website, via the intranet homepage, or contact the Communications Team on ext 6172 for a copy.What happens next in the merger process?As well as considering the outcome of the public consultation, the two trusts are in the process of recruiting a proposed Board of Directors for the new merged organisation.This began with the proposed Chairman in May (see front page for more details) and is followed by the Non-Executive Directors, Chief Executive and finally the Executive Directors.Recruiting new membersThe Trusts will soon begin recruiting members for the new merged organisation. The members of the new organisation can stand for election to become a Governor and vote for the proposed Council of Governors, which is expected to be in place by January 2013. Staff members will automatically become members of the new organisation unless you choose to opt out.Key milestonesThe Office of Fair Trading (OFT) has a duty to review FT mergers and the next step will be for them to consider our proposal. Its role is to assess the proposed merger to establish whether there is a significant lessening of competition as

a result of the Trusts merging.If the OFT decides there is, it will then refer us to the Competition Panel, which will undertake a more detailed review of the merger. As the regulator for FTs, Monitor will then be involved in assessing the proposal. We are currently awaiting clarification on Monitor’s role in the process as a result of the new Health and Social Care Act.• Recruitment of proposed Board: May-July

2012• Office of Fair Trading/Competition Panel

process: May 2012-Feb 2013*• Estimated date for completion and approval:

April 2013** Dates may be subject to change

Find out more and let us know your views or concernsYou can read more about the merger, including some frequently asked questions about what it could mean for you, on the Healthy Future website (access from the intranet home page). There are also lots of opportunities to meet the Executive Team or let us know your concerns:• Monthly briefing sessions with the Chief

Executive are held across both hospitals. The next session is on 28th May from 12:30pm - 1:30pm in the conference room, Education Centre, RBH.

• Email the communications team at [email protected] or call us on ext 6172.

• If you have a question let us know. Others will more than likely be asking themselves the same so you can help us update the frequently asked questions for everyone.

• Let us know when your directorate meetings are and we can come to you!

• Write to us if you want to keep it anonymous: Communications Department, Postpoint B43, RBH.

z

Hospital staff will be joining hundreds of members of the public in a bid to raise money for the Royal Bournemouth Hospital’s Jigsaw Appeal. The Twilight Walk, which takes place on the 1st June at 8pm on Bournemouth seafront, raised over £20k last year for the hospital charity.

If you want to sign up to walk with work colleagues, friends, or family, pop into the fundraising office in the atrium, or register online at www.jigsawappeal.org.uk For more information call 01202 704060 or email [email protected]

Hundreds sign up for Twilight Walk

Virtual Media CentreDid you know that you have access to a system that keeps you informed and involved with what’s happening in the Trust whenever you want?

The Virtual Media Centre (VMC) is your online resource for accessing the latest information, articles and news releases about our hospitals. You can read health-related news from the local and national media and access the latest staff briefings and Trust publications.

There is even a ‘Shout About It’ page where you can let us know if there is something that you would like us to promote. For example, have there been any developments or improvements within your department recently? Has a patient had a really positive experience? Have your staff excelled in any way?

The VMC is a fantastic way to keep updated on Trust developments, so make sure you visit it daily.

The VMC can be found on the intranet homepage or by visiting: http://rbhintranet/virtual_media_centre/?page_id=72.

Announcement from the NHS Commissioning Board Special Health Authority:Four Regional Directors have been appointed in the Operations Directorate in the new national NHS Commissioning Board Authority (check from the press release)

Regional Director, North of England

Richard Barkercurrently Chief Operating Officer, NHS North of England

Regional Director, Midlands and the East

Dr Paul Watsoncurrently Chief Executive, NHS Suffolk

Regional Director, London

Dr Anne Rainsberrycurrently Chief Executive, NHS North West London and Deputy Chief Executive, NHS London

Regional Director, South of England

Andrea Youngcurrently Chief Operating Officer / Deputy Chief Executive, NHS South of England

The Regional Directors will provide strategic leadership for the NHS Commissioning Board across the region, including co-ordination and oversight of local area teams.The Regional Directors’ first key task is to work with Primary Care Trust and Strategic Health Authority Clusters to co-design a proposal for the final model of the Commissioning Board’s network of Local Area Teams.

Helen Burstow and Lucy Ward from the Christchurch Hospital team

Dying Matters Awareness Week 14-20 May 2012 encourages people to talk openly about dying, death and bereavement.

The theme of the week is “Small Actions, Big Difference”, aimed at encouraging individuals and organisations to take the simple steps that can make a big difference to people when they are dying or bereaved. Whether it is through sharing their wishes with someone close to them, registering to become an organ donor, writing a will, considering taking out a funeral plan or making an effort to speak to someone who has been recently bereaved, members of the public can take small actions that make a real difference.

The Macmillan Unit at Christchurch Hospital is one of 16,000 members of the national Dying Matters Coalition, set up by the National Council for Palliative Care (NCPC) the coalition aims to encourage people to talk about their own end of life issues with friends, family and loved ones in order to make ‘a good death’ possible for the 500,000 people who die in England each year.

Research has previously found that many people have specific wishes about their end of life care or what they would like to happen to them after their death, but that a reluctance to discuss these issues makes it much less likely that these will be met. There is a major mismatch between people’s preferences for where they would like to die and their actual place of death - 70% of people would prefer to die at home but more than half currently die in hospital.

Heather Rogers, Macmillan Unit Palliative Care Clinical Leader said: “Every minute someone in England dies, but many people still feel uncomfortable talking about end of life issues. Talking about dying, death and bereavement is in everyone’s interests as it can help ensure that all of us can get the care and support we want, where we want it at the end of our lives. Through being more confident in talking about dying and taking small actions to plan for the future and support each other, together we can make a big difference.”

Dying matters - lets talk about it

Last few days to nominate for the staff awardsYou only have until 12 noon on Friday 25 May to make your nominations for the 2012 Staff Excellence Awards.You can make nominations for patient safety, customer care, team work or leadership, to name a few.Management teams are asked to make a nomination for the Award for Quality Award, which will be judged by the executive team. The public is also able to nominate a member of staff for the Unsung Hero Award.Tony Spotswood, Chief Executive, said: “For the past four years the Staff Excellence Awards have seen some amazing stories about colleagues who have gone the extra mile. We have recognised and celebrated team work, innovation and, most importantly, a commitment to ensuring our patients receive the best experience possible when coming to our hospitals.”This is your chance to shine and to be proud of what you achieve, both as individuals and as a team, and for others to be proud of you. Please make a nomination for the Staff Excellence Awards. We look forward to seeing some of you at the awards evening.You can make your nomination on line via the home page of the intranet or contact the Communications Team for a nominations pack on ext 6172 or [email protected]

Medicine for Managers Lectures Mr Stuart Rhys-Williams, Consultant ENT Surgeon, will give a talk on “The wonderful world of ENT surgery: Up the nose, in the ear, down the throat”, an audiovisual extravaganza.The lecture will take place at 1pm, on Wednesday, 23rd May 2012 in the lecture theatre, Postgraduate Centre. A light buffet lunch will be available from 12.30 pm in the Oasis dining room. These lectures are aimed at non-clinical members of the Trust but all are welcome.

New ‘Acute Medical Unit’ opens its doorsEmergency admissions to RBH will become more streamlined this week as the new Acute Admissions Unit opens its doors.

The current system sees around 270 patients arriving at the Emergency Department (ED) each day. Of these, 144 will be minor cases, 66 will be major cases, and around 16 patients will have been referred by their GP.

The new model will see GP admissions (one in four) bypassing the ED completely, entering the new Acute Medical Unit (AMU) - a specialised ward with ten extra assessment beds and appropriate equipment ready to diagnose their condition and receive the best treatment.

The AMU means that patients referred by their GP receive care in a more efficient way and also reduces pressure on the ED.

Chris Atkinson, general manager said: “The new system will mean that patients will have a better experience when they require emergency admission to hospital. This has been made possible due to the commitment and hard work of all ED and AMU staff. Thank you to them and to the many other departments involved without whom this major improvement would not have been possible.”

Picker 2011 Inpatient reportThe Trust’s in-patient survey is carried out by the Picker Institute and provides a bench mark to compare with 72 other Trusts. These results are then aggregated and inform the Care Quality Commission results which will be available in May 2012.

A postal survey was sent to 834 eligible patients who had spent the night in the Trust during the month of July 2011. Patients were asked 89 questions about their experience.

499 patients completed the questionnaire, giving a response rate of 60%, an improvement on 2010 when it was 57% (the national average was 50% in 2011.)

Many positive areas have been highlighted including

91% rating care as good/excellent

92% noted Doctors and nurses worked well together

82% always had confidence and trust in Doctors

96% reported high standards of cleanliness in wards 89% hand wash and gels available

89% reported always having enough privacy when being treated or examined

BOARD OF DIRECTORS

Meeting Date and Part: 8th June 2012 – Part 1

Subject: Communications Update and Read All About It



Richard Renaut, Director of Service Development

Author of Paper: Tracey Hall, Head of Communications and Fundraising



X X

Action required by Committee: To note the report

Executive Summary: The Communications Report provides a summary of key communication activities over the past month, including a summary of the Trust’s media coverage (Read All About It).



Outcome 1, 13 and 14



Board of Directors – Part I 8th June 2012

Communications activity – June 2012 Page 1 of 3 For information

Communications and fundraising activities June 2012

1. Introduction

Below is a summary of communication and fundraising activities over the past month and key activities for the coming month.

2. Recent activities Consultation The Trust’s public consultations are now closed. Summaries on the feedback received during the Trust’s Annual Strategy and the joint proposed merger public consultations are now complete. Copies of both summary reports have been sent to everyone who responded to the consultation and to nearly 200 local stakeholders. Staff benefits Publicity for the second wave of salary sacrifice schemes, under the Staff Benefits Programme, began early June. During June/July, staff have one last opportunity this year to sign up to the car parking scheme year. The bike to work scheme is also available as well as the newly launched car leasing scheme. Publications Buzzword, the Annual Report and Core Brief have been produced during this period. Staff awards A record 163 entries have been received for this year’s Staff Excellence Awards, up from 107 entries received last year. Judging packs have been distributed to the panel for the shortlisting round on 12 June. Communications support The communications team is providing two days a week support to Poole Hospital. This is a combination of communications and graphic design support. At least one day of the week a member of the team is based at Poole. Fundraising The Jigsaw Appeal for Women is delighted to have been chosen as one of the Mayor’s charities for 2012/13. The new Mayor of Bournemouth, Cllr Phil Stanley-Watts, is also a member of the portering team at the Royal Bournemouth Hospital. A representative from the Appeal sits on the Mayor’s Charity Committee and will take the lead on organising an event for the Mayor.



E-communications - RBCH patient journey planner

The e-communications officer is developing an online patient journey planner which allows patients to receive the information relevant to their patient journey electronically via the Trust’s website. This includes information to help them prepare for their hospital visits, support them through their patient journey and support after discharge. This patient journey planner is a micro-site on the RBCH website which can potentially include the following:

A guide of what to expect with words and pictures, covering the diversity

of patient interactions that may occur Combination of online services and self-management features e.g. digital

support groups Related videos Related articles Appointment cancellations Live talk for support Self-help tools and widgets

The planner will substitute hospital bedside folders, aiming to promote added value to the patient experience as well as postal savings for the Trust. This new service is being trialled with the Orthopaedic Directorate.



3. Focus for June/July

Finalist judging for the Staff Excellence Award takes place on 25 June. Filming of those shortlisted will also take throughout June. Leading merger communications FT Focus – summer edition of the members’ newsletter Staff Benefits Programme

Tracey Hall Head of Communications and Fundraising June 2012

May 2012 l 1

Read All About It...May 2012

Summary of media coverage:

*This does not include Mary Armitage’s Echo column

Articles are published with the kind permission of the Daily Echo, Advertiser, the New Milton Advertiser and the Stour and Avon Magazine.

The May edition of ‘Read all about it’ is very positive, including coverage promoting the Open Day and next Understanding Health events. There was also lots of news on activity from the Jigsaw Appeal.

2012 Coverage*Positive 10

Negative 0OK 1 May 2011 Positive 12 Negative 2 OK 1

May 2012 Online 1 Print 13 Radio 0 Television 0

May 2012 l 2

DatePublicationInformation

TitlePage numberArticle size

2 May 2012Daily EchoJP Morgan gives the Jigsaw Appeal a cheque for £2,000.Jigsaw Appeal is given £2,00012Sixteenth of a page



1 May 2012Daily EchoAn article about a Jigsaw Appeal’s event where James Martin will cook to raise money.Top TV chef at gournet event12Sixteenth of a page



1 May 2012Daily EchoAn article about concert money going towards RBCH Stroke unit.Church date for special concert17Sixteenth of a page

3 May 2012Guardian, Online Secret to getting trust staff to use new software? Listen to their objections Nurses must be involved in designing systems they use, says Royal Bournemouth and Christchurch Hospitals manager as trust boosts use of electronic discharge to 99%http://www.guardian.co.uk/government-computing-network/2012/may/03/discharge-form-bournemouth-trust-software?newsfeed=true.

DateWebsiteTitle

Information

May 2012 l 3



3 May 2012Daily EchoThe Boscombe and Southbourne Rotary club held stroke awareness day and were helped by RBH nurses.Stroke day was a huge success12Sixteenth of a page



4 May 2012Daily EchoArticle promoting the Jigsaw Twilight walk on 1st June.Seafront walk to help charity6Sixteenth of a page

DatePublicationInformationTitlePage numberArticle size

8 May 2012Daily EchoAn article about the RBCH Open Day.View machines at hospital day14Sixteenth of a page



9 May 2012Daily EchoAn article about a Board date at RBCH.Hospitals hold a meeting on site20Sixteenth of a page

May 2012 l 4

DatePublicationInformationTitle

10 May 2012AdvertiserMedical column.Help us stop the clots this National Thrombosis Week

www.rbch.nhs.uk

Dr Mary Armitage, Medical Director. [email protected]

www.rbch.nhs.uk

Facebook/Poole, Bournemouth and Christchurch Hospitals

Help us stop the clots this National Thrombosis WeekReducing avoidable deaths from Venous thromboembolism (VTE) remains a clinical priority across the NHS. Just being unwell and being in hospital leads to an increase in the possibility of a deep vein thrombosis (DVT), or blood clots, which occur in the deep veins of the leg. It may cause pain, swelling and the leg to become hot and red, or there may be no obvious symptoms. Occasionally, part of the blood clot can dislodge and go to the lungs. This is called a pulmonary embolism. A pulmonary embolism can cause difficulty in breathing and pain in the chest. Around 25,000 people die from VTE contracted in England’s hospitals every year. This is more than a combined total of deaths from breast cancer, AIDS and traffic accidents, and more than 25 times the number of people who die from MRSA. When coming into hospital, you will be assessed to see how at risk you are. The most important factors in helping to reduce blood clots are keeping well hydrated and mobile. It is very important that whenever possible in hospital you walk or exercise your legs even if you are in bed or in a chair. You may need a pair of graduated stockings. These work by gently compressing your legs which increases the speed of the blood flow and prevents your leg veins from expanding. Your doctors in hospital might also prescribe a drug which is called ‘low molecular weight heparin’. This helps prevents your body from forming blood clots. It is normally given as a small once daily injection.The Trust has patient information leaflets in each clinical area on DVTs as well as a video in departments such as Emergency Department, Outpatients and Phlebotomy. Clinical staff within the Trust are also educated as part of their yearly updates. Every Trust in the country is required to submit the number of patients that are assessed for VTE. Bournemouth remains one of the top performing large Trusts.To find out more, come along and see the educational stand in the main atrium of the Royal Bournemouth Hospital, as part of the sixth annual National Thrombosis Week.

May 2012 l 5


16 May 2012Daily EchoMedical column.Nominate your hospital hero now

May 2012 l 6


TitleArticle size

17 May 2012Daily EchoA Throop woman has embarked on a challenge of marathon proportions for charity.Carole takes on top 20 charity challengeHalf page

May 2012 l 7



21 May 2012Daily EchoSamantha Nair from RBCH took part in 140 mile charity bike ride.It’s pedal power11Three quarters of a page

May 2012 l 8



21 May 2012Daily EchoAn article promoting the next Understanding Health event at The Village.Doctor to speak at hotel meeting 15Sixteenth of a page

May 2012 l 9


30 May 2012Daily EchoMedical column.New community physio-led Pulmonary Rehabilitation Service

BOARD OF DIRECTORS


Subject: Directors Forward Programme



Tony Spotswood, Chief Executive


Key Purpose Patient Safety Health & Safety Performance X

Strategy X


Note for information.

Executive Summary: Copy of the Board of Directors Forward Programme and meeting dates 2012


Governance of the organisation

Links to CQC Registration (Outcome reference)



Board of Directors - Meeting Map 2012 1Board of Directors Business Programme 2012

What Who Where Before Jan Feb Mar Apr May Jun Jul Sep Oct Nov Dec Where After

Annual PlanBoard Objectives TS Chief Executive N/AAnnual Plan - BoD approve Draft for Public Consultation RR TMB BoDAnnual Plan - Feedback from Consultation to BoD RR CoG BoDAnnual Plan - Final Draft for BoD Approval RR TMB BoD PublicationStrategy Tracker - Quarterly RR Service Development N/A

BudgetBudget for next financial year SH Finance N/ACapital Plan for next financial year SH CMG & Finance N/ACode of Conduct for Payment by Results RR Service Development N/APCT Contract Sign Off RR Service Development PCT

Annual reportAnnual Report & Accounts First Draft SH Finance N/AAnnual Report - Audit Committee SP Audit N/AAnnual Report - Finance Committee BF Finance N/AAnnual Report - Healthcare Assurance Committee PS HAC N/AAnnual Report & Accounts - Final draft for approval SH Finance & Audit Cttees MonitorAnnual Report & Accounts - Going Concern Statement SH Finance & Audit Report & A/Cs

CQC RegistrationQuality and Risk Profile Update PS HAC CQC

Charitable FundsAnnual Report & Accounts SH Charity Cmtte Charity Commission

HealthcareAssurance Framework PS HAC N/AChild Protection & Safeguarding Annual Report PS HAC N/AClinical Governance - Quarterly Report PS HAC N/AClinical Governance - Annual Report PS HAC N/ACQC Quality and Risk Profile PS HAC N/AMortality Quarterly Report MA Medical Director ?Quality Accounts - First Draft PS Clinical Governance N/AQuality Accounts - Final Draft for Approval PS Clinical Governance Publication

Infection ControlBoard Statement of Commitment to prevention of Healthcare Associated Infection PS Infection Control ?Infection Control - Annual Report PS Infection Control N/A

MonitorMonitor Quarter 1 Report HL Director of Ops MonitorMonitor Quarter 2 Report HL Director of Ops MonitorMonitor Quarter 3 Report HL Director of Ops MonitorMonitor Quarter 4 Results HL Director of Ops MonitorMonitor Annual Risk Assessment TS External Monitor?Monitor's FT Sector Overview - Annual Risk Assessment TS Chief Executive N/AMonitor Self Certification - Board Statements RL Trust Secretary Monitor

Staff

Board of Directors - Meeting Map 2012 2What Who Where Before Jan Feb Mar Apr May Jun Jul Sep Oct Nov Dec Where After

Staff Excellence Awards - Chairman's Prize RR Awards Panel Staff AwardsStaff Survey - Results KA Workforce ?Local Clinical Excellence Awards MA Remuneration ?Local Clinical Excellence Awards - Annual Report MA Remuneration N/A

GovernanceRegister of Interests RL Trust Secretary FileConstitutional Documents - Annual Review RL Trust Secretary CoGCode of Governance Disclosure Statement RL Trust Secretary MonitorMeeting Dates for Next Year RL Trust Secretary N/AForward Programme RL Trust Secretary N/ANHS Constitution - Bi-annual Self-Assessment RL Trust Secretary PCTIG Toolkit RL HAC Connecting for HealthAnnual Members Meeting 9th

Minutes of Subordinate groupsAudit Committee Cttee Audit N/ACharity Committee Cttee Charitable Funds N/ACouncil of Governors RL CoG N/AFinance Committee Cttee Finance N/AHealthcare Assurance Cttee HAC N/AInfection Control Cttee Infection Control N/APatient Experience & Communications Committee Cttee PEC N/ARemuneration Committee Cttee Remuneration N/ATrust Management Board Cttee TMB N/AWorkforce Committee Cttee Workforce N/A

Review Performance & Terms of Reference subordinate Groups Audit Committee SP Audit File - RL Charities Committee KT Charitable Funds File - RL Finance Committee SH Finance File - RL Healthcare Assurance Committee PS HAC File - RL Infection Control Committee PS Infection Control File - RLPatient Engagement and Communications Committee (formerly Marketing) RR Marketing File - RL Remuneration Committee SC Remuneration File - RL Trust Management Board TS TMB File - RL Workforce Committee KA Workforce File - RL

CommunicationsInpatient Annual Survey Results PS Marketing Publication?Marketing & Communications Report RR Service Development N/ARead All About It RR Service Development N/AService Guide RR Service Development ?