Written evidence from the Department of Health (PEX 01)
1. NHSEfficiency Challenge
1.1 The plans being made by NHS bodies to enable them to meet the “Nicholson Challenge”
1. Despite more than £12.5 billion of increased funding over the current spending review period (2011–12 to 2014–15) the NHS will still face significant additional demand for services arising from demographic change, public expectations and pressures to fund new technologies and drugs. To meet this challenge the NHS needs to make up to £20 billion of efficiency savings by 2014–15.
2. The local NHS is best placed to identify the scale and scope of its financial challenge over the next four years. They used 2010–11 to produce QIPP [quality, innovation, productivity and prevention] plans for making savings while driving up or maintaining quality. The local plans were incorporated into strategic health authority (SHA) integrated strategic operating plans that set out how each region will meet their own particular challenge. These plans identified £17.4 billion of efficiency savings over the period. They were approved by the Department of Health (“the Department”) in 2011–12 and published locally. The Department will also contribute £1.5 billion of savings from budgets held centrally and by its arm’s-length bodies.
QIPP in 2011–12
3. The 2011–12 financial year was the first year that the NHS was required to start delivering on their QIPP plans.
4. Primary care trusts (PCTs) reported total efficiency savings of £5.8 billion in 2011–12. The data were published in1 The Year: NHS Chief Executive’s annual report 2011–12. Table 1 sets out the categories under which QIPP savings were made broken down by SHA Cluster:
TABLE 1
Total 2011–12 QIPP SHA Cluster
Midlands & North of South of
London East England England
QIPP Category £m £m £m £m Total
Acute services 556 818 801 668 2,843
Ambulance services 8 27 23 16 74
Community services 112 122 88 141 463
Continuing healthcare 23 50 43 43 159
Mental health and learning 133 130 101 76 440
disabilities services
Non-NHS healthcare 37 29 50 41 157
(including reablement)
Prescribing 214 142 229 115 700
Primary care, dental, 59 126 117 115 417
pharmacy, ophthalmic
Specialised commissioning 56 57 72 70 255
Other 32 122 107 46 307
Total (£m) 1,230 1,623 1,631 1,331 5,815
5. While making these savings, key quality and access standards have been maintained or improved by the NHS:
— Infection rates at their lowest since mandatory surveillance was introduced.
— Lowest ever level of patients waiting more than 18 weeks for their treatment and both standards met each month.
— All ambulance trusts meeting their category A8 performance measure for the first time since Call Connect was introduced.
— Nationally in 2011–12, performance measures on A&E, cancer care, dentistry and waiting times were all met.
Plans for 2012–13 and beyond
6. During the 2012–13 planning round, assurances were sought from SHAs about the engagement and sign up from emerging clinical commissioning groups (CCGs) to the proposed delivery plans, including the QIPP elements.
1 NHS Chief Executive (2012) The Year: NHS Chief Executive’s annual report 201112 www.dh.gov.uk/health/files/2012/06/the-year-and-q4-June2012accessible-version.pdf
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7. In addition, Developing clinical commissioning groups: Towards authorisation2 highlights that CCGs will also need to demonstrate they have a clear and credible plan for QIPP delivery and a track record for delivering transformational change as part of the CCG authorisation process (domain 3). This was further emphasised in the applicants guide to authorisation papers first published in April 2012.3
1.2 Sustainability of NHS efficiency savings
8. Figures outlining efficiency savings achieved by the NHS during the first quarter of the 2012–13 financial year will be published by the Department in The Quarter 1: 2012–13. This reflects significant progress by the NHS in rising to the challenge.
9. The strong NHS performance in 2011–12 provides firm foundations for sustained delivery over the next three years, as the NHS continues to face ongoing challenges from rising demands for NHS services.
10. In 2011–12, QIPP savings were weighted towards central actions, including pay and administrative cost reductions and local efficiency programmes. However, to meet the full QIPP challenge the NHS will need to deliver transformational change through clinical service redesign in order to deliver further saving, quality and productivity improvements over the remainder of the 2010 Spending Review period.
11. The Government has been clear that savings from transformational change will be weighted towards the later years of the Spending Review to ensure that appropriate clinical leadership and local engagement takes place. In 2012–13, the NHS needs to build on the progress made in delivering efficient organisations and start to deliver transformational change while maintaining the gains already made.
12. However, the challenges to deliver better value for money and deliver care more effectively and in different settings will not come to an end in 2014–15. This suggests that a focus on quality, innovation, productivity and prevention will become the way the service is managed for the foreseeable future.
13. In 2012–13, the Department is collecting information from SHA cluster-assured PCT cluster milestone trackers. They contain information on 5 to 7 key transformational initiatives that represent a meaningful amount of planned savings.
14. The trackers provide a framework where, for each initiative, PCT clusters can set out the specific goals and provide information on the impact of the initiative in terms of quality, planned savings and impact on key performance indicators.
15. SHA clusters use the milestone tracker returns in conjunction with actual finance performance and activity data to assure the overall delivery of QIPP.
QIPP 2013–14 and beyond
16. A draft mandate for the NHS Commissioning Board, setting out the core objectives for improving health and healthcare, was published on 4 July 2012 for consultation. This included a specific objective on ensuring delivery of efficiency QIPP savings to maintain or improve quality. Consultation responses are now being considered and a final mandate will be issued in due course.
17. It will be a matter for the NHS Commissioning Board to determine how to monitor and assure delivery and performance for QIPP from 2013–14, while maintaining performance and access standards.
1.3 Redesign of NHS services
18. The Department has established a website with NHS Evidence to collect and disseminate evidence-based and peer-reviewed examples of approaches to service changes that could significantly improve the quality and productivity of NHS services. This collection has grown and now includes over 100 case studies, a number of which demonstrate how the NHS is transforming the way they deliver care on both a small and large scale at a local and regional level, for example:
— A number of district hospitals across the country have created multi-disciplinary Alcohol Care teams, led by a consultant with designated sessions, who collaborate across hospitals and primary care to develop a coordinated alcohol treatment and prevention programme. By integrating services between primary and secondary care, and moving treatment into community settings where appropriate, significant reductions in admissions have been reported across participating sites with anticipated savings of £1.6 million for a district hospital.
2 Department of Health (2011) Developing clinical commissioning groups: Towards authorisation www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/documents/digitalasset/dh_130318.pdf 3 www.commissioningboard.nhs.uk/resources/resources-for-ccgs/auth/
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— The Royal Cornwall Hospitals NHS Trust moved administration of intravenous iron for patients with Chronic Kidney Disease (CKD) out of an acute setting into the community. Moving care closer to the patients’ home reduced patient journey times, transport costs, the risk of hospital- acquired infections and travel-related injuries. At the same time, the initiative also improved patient comfort and satisfaction. Savings were delivered through a reduction in hospital visits. The initiative can be replicated within 12 months, generating savings of up to £29,000 per 100,000 population.
— The Stroke REACH Early Discharge Scheme (Stroke REDS) is a model that was jointly commissioned by NHS Camden and the London Borough of Camden. The initiative expanded an existing community rehabilitation team and identified practical ways to improve quality, safety and productivity which teams can adopt and adapt to help meet local demands while supporting NHS reforms to integrate services. Central to the scheme is a specialist multi- disciplinary team and an “in-reach” model that enables a seamless transfer of care from hospital to a patient’s home. Savings of £83,000 per 100,000 population can be achieved through reduction in an average of 10 non-elective bed days and reducing ongoing dependence on social care packages by an average of 19 hours each week.
— A whole system redesign of London’s stroke services has seen the development of a network of eight hyper acute stroke units (specialist stroke units). Since this reconfiguration, London now reports a significant improvement in stroke survival, and higher survival rates from stroke compared with the rest of England. A preliminary analysis of the impact suggests that, at 90 days after stroke has occurred, the new configuration of services reduces deaths by about 100 each year, an increase in Quality Adjusted Life Years of 86, and a reduces costs by around £3.5 million each year.
19. At a national level the Department has also aided the NHS to achieve transformational change: — The Urgent Care Clinical Dashboard provides GPs with real-time data on their patients’ use of
A&E services and are locally-driven and clinically-led. Each displays local unscheduled care activity in a secure, user-friendly dashboard, configured to reflect local priorities. Originally piloted at NHS Bolton, dashboards are now live in 32 NHS organisations spread throughout England. The dashboards are live in over a thousand GP practices, covering a patient population of around 6.3 million. To date, benefits realised at dashboard sites have included reductions in A&E attendances and non-elective admissions, earlier supported discharge, and increased visibility of a range of information relating to urgent care and enabling the provision of more proactive care. A recent pilot in Bolton of an initiative to follow up hospital discharges within 48 hours (enabled by the dashboard) has shown substantial reductions in readmissions within both 24 and 48 hours, and attracted positive patient feedback.
— The QIPP long-term conditions national work stream is in the process of testing, refining and implementing a Year Of Care (YOC) funding approach to long-term conditions. It will be a risk-adjusted, capitated model for people with long-term conditions. This is to recognise that people with a long-term condition on the whole have more than one condition and need to be managed in a more integrated way, with greater emphasis on preventative support and care in the community, which in turn may avoid admission to hospital. The YOC is being tested with seven early implementer sites.
Service redesign and NHS reforms
20. The reforms offer significant additional opportunities to support the NHS in its efforts to realise the improvements in quality and efficiency. For example, in the short term the reforms allow more money to reach the front line where it can be used to care directly for patients with less being used for administration. In the medium term, by giving clinicians an even greater role and freedoms to design local services, they will help to ensure that patients get the care they need as quickly and conveniently as possible.
21. CCGs will have the flexibility to collaborate with each other, providers, local government and with the NHS Commissioning Board in making decisions about the redesign of services. CCGs will work with provider organisations from the outset to enable them to plan for the necessary changes. In planning services, CCGs will need to consider how best to secure the highest quality for their local population within available resources. This includes working closely with providers and separately, health and wellbeing boards and local HealthWatch to ensure that plans are aligned with the local needs assessments, and have effectively engaged patients and local communities.
22. The Health and Social Care Act 2012 helps to ensure that the redesign and reconfiguration of services is locally-led by underpinning commissioning decisions with clinical insight through the establishment of CCGs. Clinically-led commissioning will give GPs, working with their clinical partners across primary, secondary and community care, the ability to plan and design services that will deliver the best possible health outcomes within available resources.
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Improvement in the NHS
23. It is recognised that there needs to be a key focus from the NHS Commissioning Board in terms of support for transformational change at scale and pace as a means of improving outcomes in line with priorities of the Commissioning Board’s key domains. There will be a number of levers for this, including, for example:
— Approach and focus on transformation within the NHS Commissioning Board structure. — Embedding the NHS Change Model.
— Establishment of a new improvement body as a key delivery partner whose remit will include improvement activities.
24. In addition, in December 2011, the NHS Chief Executive published Innovation Health and Wealth (IHW),4 which sets out a delivery agenda for spreading innovation at pace and scale throughout the NHS. It recommends a number of actions that should deliver significant improvements in the quality and value of care delivered in the NHS. They are designed as an integrated set of measures that together will support the NHS in achieving a systematic and profound change in the way it operates. The actions are grouped under eight key themes:
— We should reduce variation in the NHS, and drive greater compliance with NICE guidance. — Working with industry, we should develop and publish better innovation uptake metrics, and
more accessible evidence and information about new ideas.
— We should establish a more systematic delivery mechanism for diffusion and collaboration within the NHS by building strong cross-boundary networks.
— We should align organisational, financial and personal incentives and investment to reward and encourage innovation.
— We should improve arrangements for procurement in the NHS to drive up quality and value and to make the NHS a better place to do business.
— We should bring about a major shift in culture within the NHS, and develop our people by “hard wiring” innovation into training and education for managers and clinicians.
— We should strengthen leadership in innovation at all levels of the NHS, set clearer priorities for innovation, and sharpen local accountability.
— We should identify and mandate the adoption of high impact innovations in the NHS.
25. NHS organisations were asked to make an immediate start by developing plans in local areas to deliver against this ambitious agenda. Implementation on all eight themes is underway, with a particular focus on the “High Impact Innovations” identified in IHW. From April 2013, compliance with the high-impact innovations will become a pre-qualification requirement for CQUIN.
26. The Department has also launched www.innovation.nhs.uk, where implementation guidance and support for each of the innovations can be found. The website allows users to learn about the innovations, read case studies, access support to help with implementation, including procurement, help with business cases development and service redesign, benchmark performance, share their experiences, score others’ case studies and develop ideas and online communities. The website discussion forums enable innovators from the NHS, public, private, academic, scientific and business communities to get in touch, share ideas, and post details of their own innovations.
1.4 The prospects for the long-term viability of NHS Trusts and NHS Foundation Trusts given (a) the 2010
spending review settlement and (b) financial commitments incurred under the Private Finance Initiative
27. The NHS is in a strong overall financial position and ended 2011–12 with an overall surplus of £1,587 million and NHS trusts (excluding foundation trusts (FTs)) reported an overall year-end surplus of £45 million in their final accounts for 2011–12.
28. The overall year-end surplus of £1.6 billion in 2011–12 will help to ensure funds are available for improving quality and meeting demands during transition to the new health system, so that the NHS is in the best position as it moves forward to the new landscape.
29. While the overall NHS financial position remains healthy, the Department will continue to focus on the small number of organisations struggling to manage their finances.
30. Some NHS trusts face financial challenges to become viable and meet the requirements to achieve FT status. For these, the Department is working with SHAs to determine where the actions required are not deliverable within the local health economy and where national solutions may be required to support the establishment of an all FT landscape.
31. The Operating Framework for the NHS in England 2011–125stated that: “NHS trust operating deficits will only be accepted where this is part of a planned recovery path agreed with the SHA and the Department.” 4 Department of Health (2011) Innovation Health and Wealth: Accelerating adoption and diffusion in the NHS
www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_131299 5 Department of Health (2010) The Operating Framework for the NHS in England 201112
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32. The 2012–13 framework6 states that: “NHS trusts are expected to plan for a surplus consistent with their NHS Foundation Trust pipeline plan and their Tripartite Formal Agreements. Breakeven or operating deficit plans will only be countenanced where an NHS trust is in formal recovery, it has been agreed with its SHA cluster, and it is consistent with the TFA.”
Sustainability of NHS trusts through achievement of FT status
33. There is now a clear objective for all the remaining NHS trusts to become established as sustainable providers of high-quality healthcare services and move forward to FT status. The expectation is that the vast majority will achieve FT status by April 2014 on their own, as part of an existing FT or in another organisational form. To support this delivery, work is underway to fully understand and resolve all the issues that the remaining NHS trusts need to address to be able to demonstrate clinical and financial viability, and meet the requirements needed to achieve FT status. Currently around 60% of eligible organisations have achieved FT status.
34. The NHS Trust Development Authority (NTDA) will play a vital role in laying the foundations for the new health and social care system. From April 2013, it will provide oversight, support and performance management for all 103 remaining NHS trusts that have not yet reached FT status, to support them in the delivery of high quality and sustainable services for patients.
Impact of PFI schemes on establishment of a sustainable NHS provider landscape
35. Of the remaining NHS trusts, six have been identified as eligible for funding support that totalled £1.5 billion. This has been made available to address the affordability of these PFI schemes over their contract period. These organisations were determined following a wider review of those NHS trusts where affordability of PFI schemes was considered as preventing them from achieving financial sustainability. The six eligible NHS trusts are:
— St Helens & Knowsley NHS Trust. — Maidstone & Tunbridge Wells NHS Trust. — Dartford & Gravesham NHS Trust.
— North Cumbria University Hospital NHS Trust. — Barking Havering & Redbridge NHS Trust. — South London Healthcare NHS Trust.
36 Alongside this outcome, the wider review also concluded that for all these six NHS trusts, PFI was not