Financial Recovery Plan - Merton CCG

MERTON CLINICAL COMMISSIONING GROUP GOVERNING BODY Date of Meeting: 21st July 2016 Agenda No: 8.2 Title of Document: Financial Recovery Plan

Attachment: 15 Purpose of Report: For approval

Report Author: Lead Director: RSM Andrew Hyslop, CFO Contact details: [email protected] Executive Summary: In 2015/16, the CCG posted a breakeven position which was delivered via a number of non-recurrent items. For 2016/17, the CCG has submitted a financial plan which forecasts a small deficit of £0.6M following various one off items with a calculated underlying deficit of £6.0M. Equally, changes to the national funding formula mean that the CCG is now judged to be above the target allocation, and so the financial outlook has significantly worsened at the same time as an emerging underlying financial deficit. It is therefore imperative that the CCG delivers its 2016/17 planned QIPP levels in a recurrent and sustainable manner and gets ahead of the curve in relation to planning for the 2017/18 QIPP requirements in order to return to underlying financial sustainability by March 2018. In this context the CCG requires a Financial Recovery Plan (FRP) to identify and confirm the potential to deliver these efficiency savings and to put in place a programme to return the CCG to financial balance. The leadership recognises that this will also require improvements in the current governance arrangements and a programme of culture change to help the organisation step-up to the challenges posed by this scenario. This FRP sets out the approach to driving further efficiency, detailed QIPP plans and the improvements in the current governance arrangements which support delivery of the plans. Key sections for particular note (paragraph/page), areas of concern etc: All Recommendation(s): THE Governing Body is asked to approve the Financial Recovery Plan. Committees which have previously discussed/agreed the report: Finance Committee ; Executive Management Team

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Financial Implications: Significant – as set out in the paper Implications for CCG Governing Body:

To approve the Financial Recovery Plan How has the Patient voice been considered in development of this paper: This will need to be considered once the detailed workstreams in the FRP are developed and individually approved Other Implications: (including patient and public involvement/Legal/Governance/Risk/Diversity/ Staffing) None at this stage Equality Assessment: An Equality Assessment is not required at this time. Information Privacy Issues: None Communication Plan: (including any implications under the Freedom of Information Act or NHS Constitution) The wider issue of how to communicate the CCG’s financial position and financial recovery plan is the subject of a separate paper setting out the communications strategy.

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Merton CCG Financial Recovery Plan 14th July 2016

Board commitment We, the Executive Board of Merton Clinical Commissioning Group (CCG), have prepared this Financial Recovery Plan (FRP) and are committed to its delivery as set out in the key milestones and deliverables. We are accountable for the delivery of this plan and have in place appropriate governance and control mechanisms to enable the Board to perform its roles and responsibilities as set out in the plan. However, it must be recognised that this plan is a working document and will evolve, and the detailed plans are subject to change as it continues to be developed.

Andrew Murray Chair

Adam Doyle CO

Dated: 14th July 2016

NHS Merton CCG – Financial Recovery Plan 14th July 2016

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Contents •

Executive Summary

•

Task 1-Develop Capacity

•

Why are we preparing an FRP?

•

Task 2- Strengthen the PMO

•

•

•

Introduction

•

Task 3-Action Plan

•

Historical Financials

•

Task 4- Governance and Management Arrangements

•

Financial Targets

•

Task 5-Risk and Mitigation

•

Benchmarking

•

Task 6-Communication Strategy

•

Summary

•

Conclusion

Where we are going to be? •

Overview

•

Returning to financial sustainability

•

2016/17 QIPP programme

•

2017/18 QIPP programme

•

QIPP Summary Savings

•

Evaluation of commissioned services

•

Savings Profile

•

Contingency Planning

•

Appendices

• • • • • • • • • • • • • • •

Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8 Appendix 9 Appendix 10 Appendix 11 Appendix 12 Appendix 13 Appendix 14 Appendix 15

Key Partners and Contracts Historic financial performance Budgetary Process Health activity benchmarking QIPP process and PMO team SWOT Analysis FRP overall strategy Financial Forecasts Sensitivity Analysis QIPP Benchmarking QIPP programme and assessment Governance and Management Background and Vision Evaluation of commissioned services Glossary of Terms

Steps to ensure delivery •

Introduction


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FRP - Executive Summary

Executive Summary Introduction This FRP is presented against a backdrop of a suddenly emerging underlying deficit in the second half of 2015/16 and consequent CCG procured governance reviews to establish the underlying causes and why our governance processes were slow to respond to the emerging situation. The Governing Body and management team have already taken significant action to stabilise the situation. Team members have been changed and a new focus on delivery of financial targets has already been instilled, through the executive team and the governance arrangements of the CCG. This FRP sets out our response to the financial challenge and details the additional savings plans being implemented along with significantly enhanced oversight and monitoring arrangements which together will return the CCG to financial balance. Background Merton CCG’s population is contrasted between the more deprived wards in the east of the borough (Mitcham) and the more affluent wards in the west (Wimbledon). This is demonstrated by marked differences in income, educational attainment, employment, life expectancy, health and utilisation of health services. Merton is not a lead commissioner for an acute provider and this presents additional challenges to us as we seek to implement transformational changes, requiring more complex engagement activities. Equally, our geographical position, with ease of access to multiple acute providers allied with Patient Choice, has resulted in a wider spread of provider contracts and of individually of lower values than many other CCGs of similar size. Until 2016/17, the CCG was considered as below target allocation, and so received above average annual inflationary increases. Changes to the national funding formula announced in 2015 has resulted in the position that the CCG is now judged to be above the target allocation with the consequent impact on future funding levels. The change in funding formula, coupled with the underlying financial deficit, means that the CCG needed to respond positively and robustly to the current position. This we have done and the actions we are taking are described within this FRP. Our financial plans demonstrate a return to financial balance within 2017/18 and we are confident of achieving this. Strategic Context Merton CCG is an integral member of the South West London STP which sets the strategic plan for the local footprint to 2020/21. The strategic plan is being developed through genuine collaboration between all NHS commissioners and providers in South West London, working with the six Local Authorities and GP federations. Our FRP is cognisant of the direction of travel set out within the STP and is complementary to it. This plan has been developed at the same time as Richmond CCG - both CCGs are an integral part of the SW London Commissioning Collaborative and our combined voice will enable a greater influence over shared decisions. Key areas for influencing include Threshold Management and a common approach to evaluation of commissioned services and Prescribing.


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Executive Summary 2016/17 Financial position Merton CCG originally submitted a planned deficit position of £6.0m. Following discussion with NHSE, the Governing Body and management team explored additional opportunities to more aggressively target savings and flexibly make use of our reserves. Actions we have taken to date have led to a reduction of the planned deficit downwards from £6.0m to £3.3m for 2016/17. At the time of the original financial plan submission the CCG had identified £5.3m of QIPP savings with £2.0m of unidentified savings. As a result of this FRP we have locked down delivery of the £5.3m plan and secured an additional £2m of savings. This capitalises on all schemes where savings can be delivered in-year – other projects where savings will take longer to extract because costs are locked into contracts or evaluation of commissioned services will require consultation, form part of the 2017/18 savings plan. We will continue to look for options to further improve on this projected outturn. 2017/18 Financial Forecast To ensure that the CCG returns to financial balance in 2017/18, the FRP sets out the plans to deliver financial savings of £10.9m. The savings will be delivered over four key headings: • • • •

Full year effect of 2016/17 Savings Transactional savings Pathway Savings Evaluation of commissioned services

£2.3m £2.0m £4.0m £2.6m

Work on the implementation of the 2017/18 saving schemes is already underway and running in parallel with the 2016/17 schemes, in effect creating a 21 month savings plan to return the CCG to financial balance. This FRP provides full details of the 2016/17 and 2017/18 savings plans to meet these targets. This is underpinned by evidence which shows that the level of targeted transactional savings are feasible. A total of £7.4m of potential evaluation of commissioned services has been identified. A prioritisation method has been agreed and the Governing Body and other stakeholders has been tasked with agreeing at least £2.6m savings from this list. Consultation will take place in the autumn and then implementation will take place via contracts agreements to come into force of 1st April 2017.


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Executive Summary Benchmarking The FRP is strongly evidence-based. Along with Right Care, evidence has shown that relatively the level of QIPP delivered at Merton has been low. Whilst the scope for significant additional savings in 2016/17 is limited, a programme that starts now will deliver full year savings from 1st April 2017. This Right Care and other available data have proved to be valuable sources, leading to the following conclusions: • • • •

Prescribing savings opportunities in Diabetes and respiratory long term conditions Material opportunities are identified within Circulation, Respiratory and MSK Historical values/number of QIPP schemes benchmark below average when compared to the CCG’s peer group Elective and NEL admissions in overall terms benchmark well although when looking at over 65’s the CCG benchmarks above average

From this the QIPP Savings programme targets the services to older persons and long term conditions as a priority and also recognises the need for stepped changes in the approach as the CCG seeks to deliver QIPP values in excess of historical achievements. The CCG benchmarks in upper decile in a number of areas, potentially reflecting the increased investment over past years. But key indicators such as a very low NEL average length of stay have driven us to question whether all admissions are actually necessary. Alternative solutions for dealing with Crises as well as Prevention of patients reaching Crisis will increase the average length of stay but reduce the number of patients actually needing in hospital care. Dealing with patients differently is the longer term strategic aim. Our benchmarking going forward will test against these strategic aims based on a clear and common understanding of what good looks like and that the more we are able to support at stage 1, the more we will be able to ensure our services can be sustainable. Seven principles underpin this FRP:

1

Self care and prevention to support healthy active aging and independence

2

3 Support to live well with simple or stable long term conditions

Support to live well with complex comorbidities, dementia & frailty

4

Good hospital care when needed with good discharge planning

5

6 Good transfer of care support, rehabilitation and re-ablement

7 High quality nursing & residential care when needed

Choice, control and support towards end of life


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Executive Summary Investment Required to Deliver the FRP To implement this QIPP programme a total of £1,012k (11% of the value of savings) needs to be invested in 2016/17 and £1,908k (17.5% of the value of savings) in 2017/18. This investment will cover a number of areas such as additional clinical skills in Out of Hospital Care, to help plan and prevent acute admission. Some examples of the investment proposed include: • • • •

Increased capacity and capability in the Pharmacy and Prescribing function Establishment of a Referral Management Centre Gain share funding with our new community service provider to reduce MSK acute admissions via alternative community based pathways Better Care Fund investment in intermediate care to keep people out of hospital and be discharged appropriately.

Conclusions The requirement for financial turnaround represents a major change to an organisation that was, until recently, geared up to invest and develop services. The change has been rapid and for some of the clinicians and staff as well as the governing body, remains immensely challenging. The CCG has plans in place to deliver its short term savings plan requirements and return to financial balance. The CCG believes that this is eminently doable. The delivery challenge is about culture and people, not ideas, and whilst changing the psychology has already started, this will not happen overnight. Clear and consistent messages and leadership from the Executive Team are important reasons for the changes now taking place. Equally the CCG recognises the importance and need to recruit resources to deliver the savings plan. In the longer term there is a clear recognition of the need for the CCG to operate more closely and formally with the other CCGs in South West London and informal discussions have commenced as to what this might look like and what it will entail. In summary, the plan has been developed, a new culture of action-orientated behaviour has been instilled and there is support from the Governing Body and the management team to drive forward with a programme of financial improvement.


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Why are we preparing an FRP?

Why are we preparing an FRP? Introduction to this section Merton CCG has signalled a forecast deficit in 2016/17, and also an underlying deficit which would lead to in-year deficits in the future. In this context, the CCG agreed with NHS England that a Financial Recovery Plan (FRP) is required to define the strategy to return the CCG to financial sustainability. The scale of the challenges make financial balance in 2016/17 unattainable. Therefore the strategy is for us to develop and implement plans as quickly as possible, to ensure an improvement in 2016/17 and deliver a return to financial breakeven in 2017/18, in effect delivering a 21 month programme to return to in-year and underlying financial surplus. This section of the FRP sets the scene and describes the current position. The FRP has been developed alongside the work of the CCG with other local partners on the development of the Strategic Transformation Plan (STP). This first section responds to the question “Why are we preparing an FRP?”. It provides a summary of the current position of the CCG and the potential opportunity to deliver financial improvements alongside the strategic plans of the organisation. The pages that follow:

• Summarise the financial position • Summarise the results of the benchmarking work undertaken This chapter shows that: • Additional QIPP and evaluation of commissioned services is needed to return the CCG to financial balance • Additional resources have been secured to provide the capacity to implement the improvements • Culturally the organisation has strengthened its governance structure and processes leading to clarity of accountability and increased rigour and pace


10

Why are we preparing an FRP? Historical Financials The diagram to the left illustrates a comparison of the actual to budget variances over the last three years across each our programme spend areas. Generally speaking our commissioning activities have overspent and have been supported by central reserves and corporate cost underspends.

Variance Analysis: FY 2014-2016

Reserves and Other

Corporate and Estate Costs Primary Care

Entering FY17 the CCG has attempted to reflect the historic commissioning overspends within increased contracted activity levels so as to deliver a more reflective contractual position against which we can target adverse variances. More specifically: •

Non Acute Commissioning Acute Commissioning

•

• -5,000 -4,000 -3,000 -2,000 -1,000

0

1,000 2,000 3,000 4,000 5,000

Acute commissioning – regular under provisions on the budget as part of acute commissioning – rectified via improved forecasting and contracted levels of activity. Equally, we are targeting activity diversion schemes and more robust monitoring and challenge of acute activity levels. Non Acute commissioning - movements largely attributable to mental health placements. Increased analysis will be performed to address the imbalance within this area. Prescribing – whilst increases in demand for drugs within an elderly population are to be expected we are working more closely with peer CCGs to develop joint approaches to medicines management.


11

Why are we preparing an FRP? Historical Financials 30,000

Surplus Reconciliation: FY 15 to FY 16 507

25,000 20,802

The CCG achieved a surplus of £2.7m in FY15 but this subsequently reduced to a surplus of £28k in FY16. The key drivers for this include:

(6,506)

• Historical under budgeting for acute activity growth. This has led to costs incurred in excess of expectations and has been a regular occurrence with St Georges NHS trust (£3.1m over budget for FY16). We have altered our approach to calculating and planning for activity growth.

20,000 (15,790) 15,000

• Slippage in investments during FY15 which had a negative impact in the following year.

10,000

• The change in the tariff system with the transition to enhanced tariff option. The estimated net impact was approximately 3%.

5,000 2,668

(1,309) (343)

-

28

• Reserves which were provided for but uncommitted causing a decrease in the overall surplus (£1.7m favourable variance for FY16). The cumulative impact of this has led to a need to address the underlying spend patterns through identification of savings and has resulted in the development of this FRP.


12

Why are we preparing an FRP? Financial Targets Merton CCG originally submitted a planned deficit position of £6m. Following discussion with NHSE and Governing Body deliberations we have identified further actions which reduce our expected deficit position to £3.3m.

Caption

Overview

In order to deliver this change of position the CCG took the following action with its budgets: Original Deficit Position Removal of RTT reserve Further budgetary reviews Total

(£6.0m) £2.0m £0.7m (£3.3m)

RTT Reserve

Removal of the £2.0m RTT reserve as the latest information available to us indicates that the level of growth committed to the contract is sufficient to cover the recurring impact of demand growth.

Elimination of Contract Negotiation Risk

This relates to a release of £0.7m of savings from the reduction in the contract negotiation reservice which was provisionally put in place to cover the risk of not securing acute contracts. This was part of an overall greater provision which is no longer required and is therefore released.

The CCG will continue to seek to find ways of further improving on this outturn - the table to the right provides further details of the actions taken. The impact of this outturn would be a requirement for a gross savings plan in 2017/18 of £10.9m. The remaining chapters of the FRP provide further details behind the financials and actions to be implemented to ensure the targets are achieved.


13

Why are we preparing an FRP? Benchmarking - overview The CCG has utilised benchmarking data where available in order to help identify areas of opportunity. These include NHS England Right Care analysis, admission vs population benchmark data and QIPP programme benchmarking. When considering the overall benchmark messages the CCG generally benchmarks well with few significant outliers. However, that said the above resources have helped identify several themes which the CCG is actively exploring and planning to elicit savings from in both 2016/17 and 2017/18. These include: • Right Care Prescribing which identifies prescribing saving opportunities in Diabetes and Respiratory long term conditions • Right Care identified opportunities surrounding key Material opportunities are identified within Circulation, Respiratory and MSK We have reviewed the admissions vs population benchmarking and noted that: • Elective admissions in overall terms benchmark well although when looking at over 65’s we benchmark above average • Non Elective admissions in overall terms benchmark well although when looking at over 65’s we benchmark above average

The above has led us to focus on our older persons service offering out of hospital, an example of which is a Project which surrounds case finding in the 50+ patient population of ‘frequent flyers’ in order to signpost and better manage their care in the community and primary care setting. Furthermore our final benchmarking data set looks at the value and volume of QIPP schemes across other CCGs in 2015/16. This identified that the CCG benchmarked poorly in relation to the historic value and volume of QIPP schemes i.e. other CCGs have delivered, pro rata, a higher overall value and number of schemes than us which in part may help explain our current financial position but also identifies to us that we need to invest in securing additional resources and enhancing our governance arrangements on the ground if we are to deliver the required value and volume of Projects required to return the CCG to financial stability in 2017/18. The learning and practical changes identified by this benchmarking are identified further in this FRP under the relevant sections. See appendix 10 for the detailed benchmarking data.


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Why are we preparing an FRP? Benchmarking – conclusions To enhance our understanding of what other CCGs are doing to deliver their QIPP requirements we have undertaken a benchmarking exercise in terms of QIPP scheme delivery for 2015/16 so that Merton CCG could compare, contrast and learn from the exercise. We have used a benchmarking dataset of 15 CCGs comparing QIPP related KPIs to Merton CCG: • • • • •

Average value of Annual QIPP plan Number of QIPP schemes on Annual QIPP plan QIPP % of resource Most common schemes Highest (Individual) Value Schemes

We also use an expanded dataset across 22 CCGs to compare the different QIPP schemes in place relative to that of Merton.

Average Merton CCG across CCGs (15 CCGs) QIPP Plan Value (£'000) Number of QIPP schemes QIPP % of resource

Merton Ranking (benchmark group)

Variance

9,743

5,023

4,720

14/16

21

13

8

11/16

3.02%

2.12%

0.90%

13/16

The high level QIPP benchmarking results show that across average QIPP plan value, number of QIPP schemes and QIPP % of resource Merton CCG are performing below the average benchmark relative to the other CCGs. This reflects our previous positive financial performance but also demonstrates an organisation that is not used to delivering a challenging QIPP target as many CCGs have been doing. Therefore we need to invest as much time and energy in delivering the required cultural shift and ways of working as much as the development of individual QIPP schemes.


15

Why are we preparing an FRP? Benchmarking – Harrow data We have been made aware via NHSE London that Harrow CCG have undertaken some detailed benchmarking to assist with the identification of their QIPP savings. We have received the data from Harrow CCG to see if this assists us in identifying further QIPP savings or at the very least supporting our existing thinking. As can be seen from the graphs below there is minimal indication that there are material outliers for the CCG to focus in on. This is supported by the accompanying detail that supports these high level summaries.

Merton CCG is below peer average in terms of elective spend

Merton CCG is above peer average in terms of Outpatient spend

Merton CCG is below peer average in terms of non elective spend

Merton CCG is below peer average in terms of Prescribing spend


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Why are we preparing an FRP? Summary The FRP has been produced because the CCG needed to identify, plan for and deliver a significantly enhanced level of savings in comparison to prior years. Through the FRP we will demonstrate our ability to respond quickly and effectively to the emerging financial challenge, secure additional capacity where required and instil greater rigour and pace in our governance and oversight processes. Additional financial savings are needed to achieve this turnaround. A significantly enhanced QIPP will be at the heart of this transformation. That programme will ensure that patient quality remains a key focus alongside a programme to drive down costs and return the CCG to financial sustainability.

Benchmarking provides some evidence of the scale of opportunity. The FRP focusses on those areas where Right Care and other benchmarking provides a signal of the scope for improvement. The FRP describes this improvement and positions the solutions alongside the other strategic aspirations for the CCG, particularly the agenda set out in the STP. Other testing has shown that the level of QIPP delivered in Merton lags that achieved elsewhere and the recent rise in acute costs also demonstrates that there must be opportunity for an enhanced QIPP in the coming year. Experience has shown that QIPP and evaluation of commissioned services have lead-in timescales from design of the solution through to reaping the financial rewards. The FRP describes a realistic timescale for identifying and implementing the new QIPP, consequently there is some impact on 2016/17, however the majority of the savings flow in 2017/18.


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Where we are going to be

Where we are going to be Overview This section of the FRP sets out the details surrounding the QIPP savings plans for both 2016/17 and 2017/18 and demonstrates our ability to return to financial balance within 2017/18. The approach is underpinned by a clear goal to maintain and build on the quality of care. Four underlying principles have guided our thinking when developing this FRP; namely that all schemes would contribute towards: • • • •

Clinical performance and delivery of care Deployment of acute care into a community settings Delivery of clinically appropriate and timely treatment Managing the risk of long term conditions

This section describes the results of the benchmarking work and the resulting QIPP programme that has been developed. The investments already undertaken to deliver this improvement are also outlined. Full details of the projects that have been considered and prioritised is provided in the attached appendices.. The section concludes by summarising the resultant financial impact of this programme.


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Where we are going to be? Returning to financial sustainability Five Year Plan (£’000)

2016/17

2017/18

2018/19

2019/20

2020/21

Revenue Resource Limit

270,068

272,323

283,050

290,454

301,244

Total Programme Costs

270,215

266,349

274,691

282,149

291,934

Total Reserves

3,118

5,974

6,108

6,230

6,402

In Year Surplus/ (Deficit)

(3,265)

0

2,252

2,075

2,908

Surplus as % of notified resource

-1.2%

0.0%

0.9%

0.7%

1.0%

In year QIPP as % of resource

-2.3%

-4.0%

-0.3%

-0.9%

-0.9%

Cumulative QIPP %

-2.3%

-6.3%

-6.6%

-7.5%

-8.4%

The CCG recognises that it is in unfamiliar territory and is essentially in a turnaround position and has responded accordingly with the development of this Financial Recovery Plan.

The FRP seeks to return the CCG to underlying financial surplus in FY18. Delivery of the FY18 position is underpinned by the achievement of an aggressive saving plan over this and next year with £7.3m and £10.9m required for each of the respective financial years. The identified savings plan to deliver these targets has been worked up in detail and set out later on in the FRP.


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Where we are going to be? 2016/17 QIPP programme- QIPP requirement The waterfall diagram below shows how the QIPP requirement of £7.3m and other actions contributes to the delivery of the £3.3m planned deficit for 2016/17.

Movement between 15/16 Outturn and 16/17 Plan 10,000

5,000

15/16 Surplus Allocation Growth

Net Tariff Deflator

Activity Growth

FYE Budget Cost Non Adjustments Pressures/ Recurrent Investments Adjustments

QIPP

Budgetary Reviews

Planned 16/17 Deficit

(5,000)

(10,000)

(15,000)


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Where we are going to be 2016/17 QIPP programme – closing the gap The original financial plan submission to NHSE included a requirement to deliver £7.3m of QIPP in 2016/17. The CCG had already identified £5.3m of QIPP savings and is already proactively pursuing the crystallisation of these. As part of the FRP process the CCG has also identified a further £2.0m (risk adjusted) of QIPP savings to support delivery of the financial plan. See below for the additional schemes. Contribution to Target Comments £000s

Programme Area

Scheme

Urgent Care

Short stay 0-3 no procedure

339

MSK Day Admissions

445

Utilising Capacity in Nelson HC

314

Service Review

QMH Referrals

112

Partial Year effect Current QIPP understated

Prescribing

Expansion of Meds Management Targets

800

Risk Rated to allow for update of changes to Scriptswitch and resolution of technical issues. Plus part year impact

Planned Care

Total

Risk Rated in recognition of potential double counting with the existing QIPP and only a partial year for delivery. Patient Targeting will increase the opportunity and reduce the risk Although the Connect solution is in place this currently assumes OP cost savings. This is being widened to incorporate Day Case Procedure savings. The introduction of the Referral Management Centre in October will ensure that all referrals are processed through the service thus ensuring better policing of compliance. The minimum that we have reflected is predicated on an increase in activity throughput to the Centre. This saving results from the differential in tariff. Further savings opportunities exist in varying the Acute contracts which is subject to negotiation.

2,010


22

Where we are going to be 2016/17 QIPP programme – summary Below is a summary of the QIPP programme in place for 2016/17. This includes the additional £2m identified as part of the FRP added to the original £5.3m to show the overall 2016/17 savings plan of £7.3m. Work on the implementation of these schemes has already started and there is a robust process of monitoring in place, with project leads fully accountable for delivery. Further details are presented within Appendix 11. 2016/17 Savings

Required

Net

Target

Investment

Savings

£000s

£000s

£000s

Urgent Care

1,402

-279

1,123

This incorporates schemes for complex patients case finding, 0-16 NEL admissions and admission prevention for short stays (0-3 days) with no procedures

Planned Care

1,822

-271

1,551

This incorporates schemes for practice variation, a referral management centre, MSK connect pathway, MSK day cases and increased use of the Nelson HC

Contracts

2,119

-262

1,857

This incorporates schemes for coding and counting, continuing healthcare, foetal medicine

731

-50

681

Prescribing

1,235

0

1,235

Total

7,259

-812

6,447

Programme Area

Service Review

Schemes

This incorporates schemes for corporate efficiency and use of commissioned community beds instead of QMH This incorporates schemes for primary care prescribing, script switch and Right Care benchmarking of drugs


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Where we are going to be 2016/17 QIPP programme – savings delivery All those QIPP and evaluation of commissioned services projects that can be implemented in 2016/17, leading to savings in-year, have been adopted. Schemes that will take longer to generate savings, either because contracts are locked down in-year or due to the need for consultation, feature as part of the 2017/18 plan. The current status of the 2016/17 schemes is summarised below: Programme Area

Urgent Care

Planned Care

Contracts

Service Review Prescribing

QIPP Scheme Name

Target

Savings Identified

PID Complete

Anticipated Delivery of Savings

1

Complex patients Case Finding 50+

1,014





1,014

2 3 4 5 6 7 8 9 10 11 12 13 14 15

0-16 Respiratory Short stay 0-3 no procedure Practice Variation Referral Management Centre MSK Connect Pathway MSK Day Admissions Utilising Capacity in Nelson HC Coding and Counting Continuing Health Care Foetal Medicine Corporate Efficiencies QMH Referrals Review of GP Prescribing Right Care Identified Drugs

49 339 563 169 281 445 314 638 381 1,100 359 372 435 800 7,259

             

             

49 339 563 169 281 445 314 638 381 1,100 359 372 435 800 7,259

Ref

Total


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Where we are going to be QIPP requirement – 2017/18 The waterfall diagram below shows how the current savings plan of £10.9m contributes to the delivery of the £0.1m planned surplus.

Movement Between 16/17 Outturn and 17/18 Plan 4,000 2,000 -

16/17 Deficit (2,000)

Allocation Growth

Net Tariff Deflator

Activity Growth

FYE Budget Cost Non Adjustments Pressures/ Recurrent Investments Adjustments

QIPP

Planned 17/18 Surplus

(4,000) (6,000) (8,000) (10,000) (12,000)


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Where we are going to be 2017/18 QIPP programme – summary The requirement for 2017/18 is a significant programme of savings - substantially more than the CCG has ever delivered in terms of QIPP value in any one year. Consequently work on the implementation of the 2017/18 savings plan has already started and therefore in effect this FRP represents a 21 month savings plan, ensuring the return to financial viability over the two financial years to 2017/18. The plan has four main components: 2017/18 Original Savings

Risk Adjusted

Required

Net

Identified

Target

Investment

Savings

£000s

£000s

£000s

£000s

2016/17 FYE

2,334

2,334

-221

2,113

Transactional

2,000

2,000

-350

1,650

Clinical Pathways

4,000

4,000

-700

3,300


4,080

2,566

-637

1,929

Total

12,414

10,900

-1,908

8,992

Programme Area


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Where we are going to be 2017/18 QIPP programme – detail Below is the detailed schemes which make up the 2017/18 savings programme. Programme Area

Ref

QIPP Scheme Name

Target

1

Medicines Management

400

2

Referral Management Centre/Practice Variation

508

3

MSK Connect Service

926

4 5

Continuing Healthcare Corporate Efficiency Acute Contracts

195 307 1,500

6

Acute Contracts Local Prices

500

7

Right Care Identified Drugs

328

8

Right Care Pathways

551

9

NEL Admission Reduction and Ambulatory Care

3,121

10

Review of appropriate services

2,564

2016/17 FYE

Transactional

Clinical Pathways

Evaluation of commissioned services Total

Commentary FYE of Meds Management Schemes This Project has the potential to deliver further savings and is the key enabler to other Planned care savings plans. Delivery of incremental savings with full impact of PoLCE ,Thresholds and as a result of a fully operational Referral Management Centre Full year effect of part year savings Full year effect of part year savings The CFO is about to undertake a review of the current Acute Contracts. This activity is expected to lead to reductions that can be negotiated as part of the contract round for 2017/18 Changes in Respiratory, Diabetes and Circulatory drugs identified by Right Care and in line with the SWL programme of work Planned Care Pathways to be redeveloped around Cardiology and Neurology. In addition commissioning of a community service for Optometry relieving the acute providers will deliver a significant cost saving A move to an ambulatory care model and the maturing of the Community based model for supporting complex patients will deliver a significant saving in 2017/18. Further work to ensure the right patients are targeted in this year to ensure their conditions stabilise for the future Each service is being subjected to a risk based decision tree to determine its applicability to be reviewed for evaluation of commissioned services. All longlisted services will be subject to the CCGs stringent review, assessment and ratification process. It is recognised within the timescales that some services may need to be taken to public consultation

10,900


27

Where we are going to be QIPP Summary Savings – approach and prioritisation The CCG conducted a prioritisation exercise to assess all QIPP schemes, considering each in terms of the impact and ease of implementation. This has been performed on a QIPP by QIPP basis where a number of factors have been assessed to provide an overall weighting. This was undertaken using two key methods. The first of these was applying local knowledge to assess which schemes can be more easily implemented, acting as a qualitative means of assessment. This included meeting with local clinicians, through both one-to-ones and workshops, to use their knowledge of demographics and their expertise of their specialties to assess whether implementation can be achieved effectively. Secondly we used a similar approach to that used at Portsmouth CCG whereby a number of factors are considered within the prioritisation, these include; • Clinical evidence – schemes are based around a solid foundation of clinical evidence from a number of sources which includes Right Care, NICE guidance and also clinical studies from CCG from all around the UK. This evidence provides a base to ensure that there is confidence that schemes can be successful. • Sustainability – can the schemes be sustained, will the schemes remain financially feasible and will these be still implementable going forward in line with priorities? • Patient Impact – how are the patients impacted? If schemes are implemented will the CCG still be able to serve its patient population and ensure they still receive the right level of care? • NHS Standards – will the scheme ensure that NHS standards are adhered to? • Timescales – is the implementation time is realistic and could there be delays in schemes being implemented which would detrimentally affect the QIPP targets? • Political Image – whether the schemes could prove detrimental in a political sense. An assessment was undertaken of whether there could be resistance to the schemes from stakeholders and whether this would have a negative effect on the CCG. For each factor a grading from 1-5 (5 being most favourable) has been given using professional judgement and clinical experience to give an indication of what could be expected, given current conditions within the health-sector. We present a summary of our results on the following page.


28

Where we are going to be QIPP Summary Savings 2016/17 – assessment We have undertaken an assessment of the QIPP schemes with consideration given to the financial impact and ease of implementation. This is based on the approach discussed on the previous page. Programme Area

Urgent Care

Planned Care

Contracts

Ref

QIPP Scheme Name

Ease of Financial ImplementationImpact (£’000) Average

1


2

0-16 Respiratory

49

3

Short stay 0-3 no procedure

289

4

Practice Variation

563

5

Referral Management Centre

169

6

MSK Connect Pathway

281

7

MSK Day Admissions

495

8

Utilising Capacity in Nelson HC

314

9

Coding and Counting

638

10

Continuing Health Care

381

11

Foetal Medicine

12

Corporate Efficiencies

359

13

QMH Referrals

372

14

Review of GP Prescribing

435

15

Right Care Identified Drugs

800

1,014

1,100

Service Review

Prescribing Total

4.17 3.83 3.83 3.67 3.83 4.17 4.17 4.17 4.25 3.67 1.00 1.00 3.83 4.00 4.00

7,259

The results imply that the majority of saving schemes have an ease of implementation of three or above. This provides us with confidence that we will be able to implement such programmes successfully and the primary focus will be on the implementation of these in the short term.


29

Where we are going to be QIPP Summary Savings 2017/18 – assessment We have used the same rationale as per 2016/17 over our summary savings identified for the next financial year. Programme Area

Ref

Medicines Management

400

4.00

2

Referral Management Centre/Practice Var

508

3.83

3

MSK Connect Service

926

4.17

4

Continuing Healthcare

195

4.00

5

Corporate Efficiency

307

4.50

6

Acute Contracts

1,500

4.50

500

4.50

328

4.17

551

4.00

Transactional 7 8

Evaluation of commissioned services Total

Ease of Financial Implementation Impact (£’000) (Average)

1 2016/17 FYE

Clinical Pathways

QIPP Scheme Name

Acute Contracts Local Prices Right Care Identified Drugs

9

Right Care Pathways

10

NEL Admission Reduction and Ambulatory Care

3,121

4.00

11

Other Acute Services TBI

2,564

TBC

10,900

There is an increasing number of savings schemes which have a higher ease of implementation. This is partially due to the extended timescales (21 months) with the ability to dedicate increasing time to deliver such schemes and undertake effective engagement.


30

Where we are going to be evaluation of commissioned services As part of the drive to deliver a balanced budget and a sustainable future going forward the CCG is faced with considering whether any non- life threatening services can be decommissioned. We are taking a long hard look at all areas without exception to ensure there is no duplication of service and commissioning is appropriate. To this end the Executive Management Team (EMT) instructed a process be put in place up to look at possible options around evaluation of commissioned services services and assessing the associated risks. An evaluation of commissioned services group has been set up to plan and manage the process. The group consists of representation from Quality, Patient Engagement, Commissioning, a Clinical Lead, Public Health, Contracting, Finance & external consultants RSM. To inform the process a decision tree was developed to support the group in deciding whether or not the service can be risk assessed for evaluation of commissioned services. Each service is assessed according to a risk matrix. The EMT is expected to review the scores presented by the evaluation of commissioned services group and make a decision that can be taken to the Governing Body. The overall process of decision making in respect of the evaluation of commissioned services is as follows: July 2016 Governing Body • A presentation of the FRP, followed by a paper that says as a result of this we need to do an evaluation of our commissioned services • The GB is asked to agree this approach Sept ember 2016 Governing Body • A presentation of the long list of services that could be potentially reviewed, provided in a different or no longer commissioned • The team have been set a circa £6m target for this to ensure we have the ability to not approve it we feel that it is not appropriate (for whatever reason) to do so • The GB will be asked to do approve that the team do a wide engagement pieces on these key services and that the GB has sight at the Sept GB meeting of what that engagement will look like (along with the legal advice) • The GB will also be asked to give permission for the providers of these services to be notified that we are looking at these services and that we will be confirming our commissioning position with them later in the year January 2017 Governing Body • The GB will be given the feedback form the public and members on the services and the executive team will also recommend what services we should be changing at that point • This will be in a good time for contracting and we will also know what the high 2017/18 financial plan is looking like at that point. • The GB will be asked to confirm this in January


31

Where we are going to be Savings Profile

The graphs on the left demonstrate the profile of the QIPP savings programmes over the next 21 months. These represent the combination of 2016/17 schemes and their full year effect in 2017/18 as well as new schemes for 2017/18. The impact of the overall QIPP programme is due to occur over the later part of the 21 month savings horizon. The spike in March 2017 reflects the timing assumption of the foetal medicine settlement.


32

Where we are going to be Contingency Planning The FRP shows that the CCG will deliver an underlying financial surplus from 2017/18. The targets remain stretching, but they are achievable given the actions we have already taken. As part of the implementation of the FRP, work will be undertaken to explore opportunities for further cost reductions. The ideas currently under consideration include the following: • • • • • • •

Not paying for any waiting time below the maximum level and removing NHS access to other elective procedures Stop paying for selected treatments and drugs Further reductions in the Mental Health contracts Reductions in primary care access Removal of Better Care Fund Further reduction in Community contracts Identifying continuing areas to disinvest and decommission services in line with the market. Understanding this in relation to other CCGs is essential and many have been in the process or have decommissioned areas such as cutbacks in hearing aids for those whose hearing is warranted as moderate and reduced funding in prescription items such as painkillers and gluten free products

All these ideas will be fully considered by the CCG. Any that can be implemented to have a part-year effect in 2016/17 will be, to improve the position from the £3.3m deficit set out. Where savings take longer to be implementable, then these will ensure the delivery of the £10.9m savings needed to return the CCG to financial surplus in 2017/18.


33

Steps to ensure delivery

Steps to ensure delivery Introduction The delivery of this FRP will require a transformation in terms of the way that the CCG operates and implements QIPP. This section sets out the Implementation Plan, the risks and the mitigation of those risks, the approach to embedding a new culture of delivery and the way that the plan will be communicated to staff, partners and other stakeholders. The approach is a six-pronged strategy: 1. 2. 3. 4.

Put in place the capacity to drive the programmed Strengthen the PMO to support the delivery of the plan Publish the action plan for the implementation of each QIPP and the programmed as a whole Map responsibilities into the existing governance structure so that accountabilities are clearly identified and that scrutiny and challenge occurs at the appropriate level 5. Manage Risk 6. Communicate regularly and clearly with all stakeholders both internally and externally This section provides further detail on these 6 tasks.


Steps to ensure delivery Task 1 – Develop Capacity The CCG is currently reviewing the capacity in place to deliver a programme of this magnitude whilst also recognising the interim nature of a number of incumbents. Leadership for the schemes has been delegated to existing clinical and managerial staff and the additional schemes will be integrated with those existing plans. However, as more PIDs are completed and passed over to the Programme Leads to deliver the CCG is mindful of the need to invest appropriately to ensure that the individual schemes deliver as per the plan. Discussions are held regularly at the Financial recovery Group weekly meetings regarding capacity and capability and further investment will be made as and when it is clear that further investment will reduce delivery risks. Any future recruitment will include people / companies on short-term contracts to ensure that we can be sure that they will stay to deliver the improvements, whilst recognising that this is a short term intervention, and that once the schemes are in place, management levels will reduce back to current levels. Current capacity includes: Role

Resource

Duties

Report to

Executive Lead

Sue Hillyard

Accountable officer for the overall programme and ensuring that the individual QIPP schemes are managed at a strategic level and delivered as per the plan.

Financial Recovery Group and Governing Body

Work stream Lead

x4 personnel

To run work streams and drive the delivery of the QIPP (Planned, Urgent, Service Reviews and Prescribing)

Executive Lead

QIPP Lead

x7 personnel

To lead multiple QIPP projects and ensure delivery

Work stream Lead

To undertake the analysis and support the development of the PID and then the implementation of the schemes

QIPP Lead

Specialist Support

Various as required

Where possible and practicable it is proposed that the implementation process is run collaboratively with colleagues at Richmond CCG. The two CCGs are preparing and agreeing FRPs at the same time and there are a number of areas of overlap where joint working would reduce implementation costs and increase leverage. Prescribing, short stay, referral management, PLCB and unplanned care are all areas of potential for collaboration which will be actively explored.


Steps to ensure delivery Task 2 - Strengthen the PMO The current PMO team is responsible for ensuring the successful delivery of three primary areas. This is: • Data Adequacy- this is to ensure the collection and appropriate analysis of information surrounding QIPP projects and programmes. The information used must be accurate and complete obtained on a timely basis and circulated amongst the appropriate stakeholders within the business. • Reporting- reporting clinical / quality benefits to patients or financial efficiencies which are unlikely to be fully realised must be made to the Savings Delivery Group and FRG. Potential actions must be identified with appropriate mitigation steps implemented. • Robust Processing- ensuring risk management and key stakeholder engagement processes are undertaken on all QIPP projects. The PMO will focus on managing challenging projects and creating high performing programmes, underpinned by high performing teams. In order to deliver the 21 month savings programme the CCG has decided to strengthen its PMO capacity and capability with the imminent appointment of a Turnaround Director an also a senior level PMO manager (band 8/9). Both of these new appointments are joint appointments with Richmond CCG who we intend to work much more closely going forward including pooling resources, sharing skills and knowledge base, whilst ensuring the delivery of a joined-up programme. The CCG will monitor the PMO’s capacity to retain robust oversight and management/reporting of progress and should, additional grass roots support be required then additional recruitment will be authorised as it is recognised that a strong, functioning PMO is imperative to programme success.


Steps to ensure delivery Task 3 – Action Plan In addition to the actions already taken by the CCG deliver this FRP we recognise the need for an overarching plan with key milestones to support oversight of delivery across the31/07/2016 next 21 months. Set out below are the key milestones within that journey: PIDs signed off Integrate remaining newly identified 2016/ 17 QIPP plans into the main programme

04/07/2016

31/07/2016

Review of capacity and ongoing oversight of 2016/17 QIPP delivery

04/07/2016

01/08/2016

01/09/2016

01/10/2016

01/11/2016

01/12/2016

01/01/2017

01/02/2017

01/03/2017

01/01/2017

01/02/2017

01/03/2017

31/03/2017

30/09/2016 PIDs signed off

Work up 2017/18 PIDs for all projects

01/08/2016

01/09/2016

30/09/2016

31/10/2016 Investment Approved

Governing Body to consider and approve investments linked to 2017/18 QIPP schemes

03/10/2016

31/10/2016

2017/18 QIPP Scheme commences

03/10/2016

01/11/2016

01/12/2016

01/11/2016

01/12/2016

31/03/2017

Consultation period for disinvestments

03/10/2016

28/10/2016 Deep Dive 1

25/11/2016 Deep Dive 2

30/12/2016 23/12/2016 Deep Dive

Internal deep dives across QIPP workstreams

03/10/2016

01/11/2016

01/12/2016

30/12/2016

31/01/2017 Assurance Paper

20/03/2017 Submission to GB

Independent review and assurance of all projects in progress as per PIDs

02/01/2017

01/02/2017

01/03/2017

31/03/2017

The above will be developed into a more detailed action plan, with key adjacencies flagged and the critical path mapped out, by the PMO. This will map into our governance arrangements so that issues can be properly considered and agreed at the appropriate forum.


38

Steps to ensure delivery Task 4 - Overview of governance and management arrangements As soon as the underlying financial deficit was recognised the CCG procured both a financial governance review and also a wider corporate governance review in order to understand any current deficiencies and put in place any identified good practice from these reviews. The key findings from the Financial Governance Review included greater ownership and increased scrutiny by the Governing Body over financial performance and the establishment of a Financial Recovery Group (FRG) to scrutinise at a more regular and granular level the delivery of this FRP and consequent savings plans. The CCG has accepted all of the recommendations made and implemented the necessary changes which strengthens our governance arrangements and makes them fit for purpose as we set out to deliver this FRP. The Governing Body will be signing off on the implementation of the recommendations at its July 2016 meeting. Beyond the learning and investment from the governance reviews the CCG recognised the magnitude of the overall challenge and the CCG’s starting point and has invested in additional external capacity to identify and develop schemes for the unidentified QIPP target (£2.0m) and has also invested in increasing the PMO capacity by hiring an experienced PMO manager to lead the PMO alongside the recruitment of a Turnaround Director. The FRG has been established since May 2016 and is, coupled with improved QIPP reporting and monitoring via the weekly executive chaired QIPP Delivery Group, already providing enhanced transparency of the current status of each Programme/Project and allowing much earlier intervention and escalation where required. This leads us to have far greater confidence in our ability to deliver the financial plan as submitted.


39

Steps to ensure delivery Task 5 - Risk and Mitigation A Risk Assessment has been conducted and a mitigation plan developed to address those risks. This is summarised in the table below: Risk Delays in progressing the planning stage due to capacity problems Lack of Investment to implement the scheme

Likelihood

1

2

Consequence

3

4

Total

3

8

The need for formal consultation 5

Savings do not materialise at the level required due to duplication, push-back from providers or staff or other factors Lack of Accountability to implement the plan

3

1

4

4

4

20

12

4

Implications

Controls

Mitigations

The CCG team will discuss the capacity requirements openly with the existing team and ensure that there is proper investment to enable the planning to progress The CFO will set aside an investment pot to ensure that the investment needs can be covered

•

QIPP Delivery Group weekly mtg FRG weekly mtg

•

•

Timescales have been realistically set to allow for formal consultation in all cases where this could be a requirement

•

Once targets are agreed, the responsible leader for the QIPP scheme will be instructed that any shortfall in achieved savings will need to lead to a new QIPP to cover the gap

•

PID documentation includes resource section Robust PID sign off process QIPP Delivery Group weekly mtg PID documentation includes section on consultation Use of Clinical Reference Group re PID sign off FRG signs off all disinvestment decisions PID documentation includes a section re double count risk PMO check and challenge at point of PID sign off

As part of the culture change programme, all staff will be advised of their full personal accountability for the delivery of the savings

•

PID documentation requires identified leads (inc clinical) QIPP Delivery Group weekly mtgs FRG Weekly mtgs

•

•

•

• •

• •

•

•

•

•

• •

• •

•

Procurement of external capacity to augment existing resources Programme management approach adopted

Existing financial plans include identified resource requirements (FY17) Prudent generic allowance provided for in forward financial plan (FY18) All disinvestment plans impact FY18 and allow time for formal consultation

Programme management approach adopted to ensure cross scheme communication Communications Strategy to transparently inform stakeholders of context and decisions Programme and Project Management approach adopted Exec Lead identified for each Work stream and reporting into forums


40

Steps to ensure delivery Task 6 - Communication strategy The CCG faces a significant financial challenge in delivering this Financial Recovery Plan. The CCG will need to explain the rationale behind the Financial Recovery Plan, and explain to stakeholders that the CCG is reviewing the contracts of a number of services to ensure that safe and high quality services that represent best value for public money are provided to residents across the whole of Merton. This includes evaluation of commissioned services some discretionary services and services where an alternative service can offer improved effectiveness or value for money. The aim of our communications and engagement activity is to:

• • • • •

enable the CCG to engage stakeholders in a timely and appropriate way on its financial position ensure the CCG is the trusted source of accurate and up-to-date information on the financial position. assure relevant stakeholders that the CCG has a clear action plan for addressing the financial position ensure there is clear plan for how stakeholders will be engaged at each stage To reinforce the overarching message that: This is not just a Merton issue, this is across SW London and the NHS as a whole and only by working together will real service improvement and patient experience change for the better

Headline points

• The Communications team will support senior management in providing regular briefings to stakeholders; • The CCG will produce a bi-monthly newsletter to convey key messages about the Financial Recovery Plan to our audiences which can be cascaded via a variety of sources and ensures consistent messages are given in a timely manner. • Merton CCG is committed to being open and transparent with our local population and in order that residents can ask questions about the Financial Recovery Plan, people will be signposted to email [email protected] for their inquiry can be delegated to the appropriate CCG staff member.


41

Steps to ensure delivery Conclusion . achievement of these savings plans is a significant challenge. However, the CCG has already strengthened its governance The arrangements, invested in increased capacity to identify schemes, monitor scheme delivery and in additional project delivery capacity. The identified schemes are evidence-based and supported by local clinicians. The investments have been quantified. Work on the full implementation has commenced. Our actions and plans will return the CCG to underlying financial surplus. In summary the CCG is determined to deliver this FRP, to drive financial recovery and return the organisation to financial sustainability.

.


42

Merton CCG Financial Recovery Plan Appendices

List of Appendices • Appendix 1

Key Partners and Contracts

• Appendix 2

Recent historic and financial performance and comparison vs budget

• Appendix 3

Budgetary Process

• Appendix 4

Health activity benchmarking

• Appendix 5

QIPP process and PMO team

• Appendix 6

SWOT Analysis

• Appendix 7

FRP overall strategy

• Appendix 8

Financial Forecasts

• Appendix 9

Sensitivity Analysis

• Appendix 10

QIPP Benchmarking

• Appendix 11

QIPP programme and assessment

• Appendix 12

Governance and Management

• Appendix 13

Background and Vision

• Appendix 14


• Appendix 15

Glossary of Terms

Merton CCG Financial Recovery Plan Appendix 1 – Our Key partners and contracts at April 2016

Why are we preparing an FRP? Our key partners and contracts The CCG contracts with a number organisations in the LHE for provision of services including Acute, Mental Health, Community and Primary Care services. The services provided primarily relate to acute contracts where we expect CCG spend to account for 52% of overall spend with an approximate spend of £85m on community services and primary care. We set out below a high level summary of the top 5 contracts and a diagram illustrating the breakdown in CCG spend across our services. Name

Contract

Plan 2016/17 £m

St George’s Healthcare NHS FT

Acute

Epsom and St Helier University Hospitals NHS Trust

Acute

South West London and St Georges Mental Health Trust

Mental Health

£17m

LAS NHS Trust Emergency Service Contract

Acute

£11m

Epsom and St Helier University Hospitals NHS Trust - SWLEOC

Acute

4% 1%2%

£65m

Acute Contracts Mental Health Contracts

£32m 21%

Community Services Contracts Primary Care Services 52%

Continuing Healthcare Other Programme Services

11%

Running Costs

£6m

9%

Merton CCG Financial Recovery Plan Appendix 2 – Recent historic financial performance and comparison vs budget

Why are we preparing an FRP? Recent financial performance vs budget We present a summary table of actual vs budget with the differences over the last three years illustrated below: 2013/14 (£’000)

Caption

2014/15 (£’000)

2015/16 (£’000)

Budget

Actual

Difference

Budget

Actual

Difference

Budget

Actual

Difference

Acute Commissioning

120,989

124,811

(3,822)

126,000

127,874

(1,873)

129,678

134,380

(4,702)

Non Acute Commissioning

45,199

45,614

(415)

48,855

49,495

(640)

66,110

65,284

826

Primary Care

25,543

26,139

(596)

26,666

27,352

(686)

28,138

28,661

(523)

Corporate and Estate Costs

6,969

6,930

39

7,737

8,488

(752)

9,169

8,832

337

Reserves

6,206

1,413

4,794

6,745

2,290

4,455

3,507

1,783

1,724

Surplus

2,080

2,080

-

2,163

2,668

(505)

2,366

28

2,338

Why are we preparing an FRP? Recent financial performance Vs budget – 2013/14 Caption

FY14: Actual vs Budget 140,000

Variance (actual vs budget)

Explanation

• 120,000

Acute Commissioning

100,000

(3,822)

80,000

60,000 40,000

• Budget


(415)

Actual Difference

20,000

•

• •

Primary Care and Prescribing

(596) •

0 Corporate and Estate Costs

Reserves and Other

An over spend of £0.4m was incurred on the South West London Mental Health contract. This was due to non delivery of savings from a QIPP project. The adverse variance can be attributed a number of QIPP schemes that did not deliver the anticipated savings in year These schemes included nutrition, dressings and switching from branded.

•

The primary driver behind the favourable variance was that staff costs were lower than expected

•

Significant reserves in place surrounding the SLA reserve (variance £4m) and non-recurrent fund (£2.7m) explaining the substantial variance

39

4,794

The majority of the variance (£2.3m) was incurred due to over performance against the St Georges NHS Trust contract The main areas of over performance included outpatient procedures, non elective, A&E and maternity.


FY15: Actual vs Budget 140,000

Variance (actual vs budget)

Explanation

• 120,000

Acute Commissioning

(1,873)

•

100,000 80,000 60,000 40,000


The adverse variance relates to overspends on mental health (£0.2m), learning disabilities (£0.4m) and continuing care (£0.5m) due to an increase in the number of placements and long stay patients

•

£0.4m of the over spend is due to increase in medicines prescribed for cardiovascular, respiratory and central nervous systems. The remaining £0.3m overspend occurred on local enhanced services for care of the elderly.

Budget

Difference 20,000

• (640)

Actual Primary Care and Prescribing

(686)

0 Corporate and Estate Costs

Reserves and Other

• •

The overspend of £0.8m can mostly be attributed to higher than anticipated programme spend related to the Nelson Health Centre

•

The reserves were £4.5m lower than budgeted due to the fact that the overspends have been offset by release of the SLA and contingency funds and partial use of the non recurrent fund

(752)

4,455

£1.5m of the variance can be attributed to over performance against the St George’s, Chelsea & Westminster and Queen Mary’s contracts. This was driven by overspends in maternity (£0.4m) and emergency and non-elective activity (£0.5m).


FY16: Actual vs Budget

Variance (actual vs budget) •

140,000 Acute Commissioning

120,000

(4,702)

100,000

•

•

80,000


60,000

Budget

40,000

Actual Difference

20,000

Explanation

826

•

• Primary Care and Prescribing

(523)

•

0


Reserves and Other

£0.5m of the variance was in light of mental health services with a decrease in spend on placements. Slippage had occurred on Better Care Fund schemes such as interface geriatricians and dementia nurses with delays in recruitment and subsequent costs as a result. An increase in prescribing rates for drugs had occurred for the management of diabetes and new anticoagulants. This was higher than expected. The increase was partially offset with recharges to other CCGs at the local GP led health walk in centre.

•

The under spend is owing to the Quality Premium award for 2014/15 which is received as an admin allocation although generally spent as Programme Cost.

•

The difference was largely attributable to the contingency reserve- a reserve was budgeted but the reserves were not .

337

1,724

The overspend was largely attributable to increases in spending at St George’s NHS trust (£3.1m variance). The areas where overspending was most prevalent was in critical care and outpatient activity.

Why are we preparing an FRP? QIPP historic performance 2015/16 QIPP Performance (Net) Plan £000s

Actual £000's

Variance £000s

%

Transactional

2,294

2,675

381

16.6

Transformational

2,577

2,225

(352)

(13.7)

Total

4,871

4,900

29

0.6

•

The CCG has historically reported delivery of its QIPP targets which for FY15 and FY16 were £6.6M and £4.9M respectively.

•

In FY16 this was delivered through a combination of transactional and transformational schemes with a range of schemes significantly contributing to achieving the target including: ‒ ‒ ‒ ‒ ‒

•

Acute Challenges (£1,542k) Better Care Fund (£669k) Prescribing (£527k) Nelson HC and OP Navigation (£501k) Running Costs (£448k)

FY17 and in particular FY18 shows a step up in requirements in the required level of savings to be delivered through the QIPP programme.

Merton CCG Financial Recovery Plan Appendix 3 – Budgetary process

Why are we preparing an FRP? Budget process The budgetary process is started within the Finance team and is led by Andrew Hyslop (CFO). It predominantly uses historical financial and operational performance data plus nationally and locally agreed growth assumptions to forecast forward the potential activity levels and hence financial outcome. This data is provided from a number of in-house and external (CSU) sources, as well as liaison with the key providers. Where there is a gap in estimated referrals between the provider and the CCG, this is generally negotiated and agreed over time at a senior level. The budget is then been agreed by the Executive management of the CCG, and then formally approved by the Board. Given that the CCG has historically run a large surplus, met its financial targets and delivered financial performance relatively close to budget demonstrated previously, that this process has to date been deemed as adequate. However in light of the deterioration in performance, the underlying forecast position and the deficit forecast in FY17 certain changes have been made to the budget process for this financial year and beyond. The key changes are: 1. Greater involvement by the Executive Management in the budget setting – including key assumptions; 2. A weekly Financial Recovery Group has been established- amongst other aspects this will involve discussing, monitoring and addressing issues within the budget process; 3. Additional scrutiny of the QIPP’s in the budget including weekly updates/challenge session; 4. Regular executive sign off of monthly budgets/financial performance throughout the year to improve ownership and accountability; 5. A bottom up approach at an individual budget level to reflect factors such as non-recurring funding; 6. The governing body has supported a temporary investment of £1.1m in a package of additional support, which includes the cost of external FRP support and will provide additional funds to assist with budget allocation; 7. Formal sign off of the budget by all of the budget holders in the CCG. It is envisaged that these changes to the budget process will ensure greater buy in from the CCG budget holders and the key providers such that they have more ownership of the budgets and greater accountability to perform within those budgets. This will also form a key part of the performance appraisal for those individuals with budgetary responsibility.

Merton CCG Financial Recovery Plan Appendix 4 – Health activity benchmarking

Why are we preparing an FRP? Benchmarking-summary

Elective Admissions - All

•

A key issue for the CCG has been continued overperformance on elective referrals.

•

However, on an unweighted basis, the CCG benchmarks favourably in terms of elective access rates at an overall level.


Elective Admissions – Age 65 to 84

•

A key issues appears to be that access rates for older patients are comparatively higher.

•

This will be a key area of focus for the FRP in addressing referral variation at practice level.


Emergency Admissions - All

•

Like elective referrals, the CCG benchmarks relatively favourably in terms of emergency admissions.


Emergency Admissions - Age 65 to 84

•

Again, a key issue is that admissions rates fro older patients is significantly higher than the rest of the population.

•

This is partly being addressed by our 50+ complex patients QIPP scheme, but this issue will need to be further addressed by the FRP.

Merton CCG Financial Recovery Plan Appendix 5 – QIPP process and PMO team

Why are we preparing an FRP? QIPP process Merton CCG’s primary responsibility is to ensure the delivery of high quality, clinically safe, efficient and effective services. This section describes the governance framework for the CCG’s planning and assurance of QIPP Delivery. Merton CCG must ensure that the delivery and shape of change in the healthcare system is achieved so that innovative, high quality care can be delivered within the resources available. The Merton QIPP Programme Management Office monitors progress and provides support to the management (SRO) and clinical (CRO) leads and project managers that are responsible for the delivery of individual projects. The QIPP SRO for the CCG is the CFO. The CFO personally assures the Chief Officer on the detailed delivery of the QIPP. The CCG has identified the need to strengthen both the PMO process and project management resources if it is to deliver an ambitious QIPP programme in 2016/17 and beyond. Joint appointments with Richmond CCG have been approved and the appointment of a joint Turnaround Director is imminent. The QIPP is a continuous process. All QIPP schemes will be “bottom up” in approach and owned by a project manager and subject to rigorous scrutiny by the QIPP Delivery Group. Each project is regularly reviewed to assure that progress of the project is adhering to plan. Savings and investments are risk assessed and suitable adjustments to net savings achievable are made in accordance with the risk assessment. In year QIPP projects are monitored on a weekly basis. Plans for projects for the following year are reviewed and developed at monthly development meetings. This ensures that there is a continuous pipeline of QIPP projects for both the current and following year.

Why are we preparing an FRP? QIPP governance Every project must have a detailed project plan (PID) outlining milestones, risks, finance and KPIs. Plans should be drawn up with input from Project Managers, CCG and Clinical Leads and the PMO. All plans will be signed off by the CFO, DoC, and the project managers who will take full ownership of these plans. Escalation All QIPP Delivery Group meetings will afford the opportunity for leads to flag up any issues for escalation. These issues will be recorded through risk registers, milestone delivery reports and detailed meeting minutes and actions. Issues requiring escalation will then be handled by the PMO and escalated through the governance structure. Issues that require additional resources or an alternative approach to the deployment of resources will be referred to the DoC by the CFO. Risk Management Risks, issues, milestones & benefits will be monitored, tracked and reported by the process of weekly QIPP Delivery Group review meetings attended by the DoC, CFO, Head of PMO, and project managers. These meetings afford the opportunity for close scrutiny of milestones, benefits and risks following which minutes, action logs and updated milestone and risk tracker reports will be produced. The DoC and the CFO assure the risk process. All risks will be mitigated either through action logs, milestones and accountability measures to understand if all risks are maintained. In order to monitor and manage risks, the PMO will update a QIPP programme risk log on a weekly basis. The PMO will assess the changes to the programme risk logs and update a master risk register on a weekly basis and report on a monthly basis. The Finance Committee The Finance Committee will receive assurances from the Financial Recovery Group, consider routine reports prepared by the PMO on the delivery of the QIPP Programme at a project granular level. The Finance Committee will then report to the Governing Body on progress.

Why are we preparing an FRP? QIPP roles and responsibilities Financial Recovery Group The purpose of the Financial Recovery Programme Board is to: • Oversee the financial aspects of organisational turnaround; • Oversee QIPP monitoring processes so that delays or other exceptions can be resolved; • Advise the Chair of the Governing Body in the use of emergency delegated powers when required; • Develop a Programme Management Office (PMO) approach to QIPP delivery; • Ensure workstreams are appropriately governed and resourced to deliver their individual projects; QIPP Delivery Group The role of the group will be to: • Hold the wider programmes to account for the delivery of the annually agreed QIPP projects. • Monitor progress made by each of the programmes on the planning and delivery of projects. • Resolve difficulties experienced by the programmes in delivering projects. • Make recommendations to the FRG and Governing Body of actions required to ensure project delivery. • Signing-off PIDs for each project. • Identifying mitigating actions for risks to the delivery of projects. • Produce remedial plans to rectify slippage in implementation or underperformance against project benefits. • Develop plans for additional projects consulting as required.

Why are we preparing an FRP? QIPP roles and responsibilities PMO The PMO is responsible for: • The collection, analysis and reporting of information on the delivery and outcomes of QIPP projects and programmes. • Reporting to the Savings Delivery Group and FRG where clinical/quality benefits to patients or financial efficiencies are unlikely to be fully realised and to suggest timely corrective action and mitigations. • Ensuring that appropriate risk management and key stakeholder engagement processes are undertaken on 2016/17 QIPP projects. Accountability Accountability for the QIPP process is shown in the figure on the previous page. The Director of Commissioning (DoC) will assume responsibility for programme delivery whereas the CFO will assume responsibility for governance and reporting. The CFO and the DCFO will attend both the Savings Delivery Group and the FRG on a routine basis. Project Managers attend the Savings Delivery Group and are held to account for the delivery of their project using a weekly flash report. The CFO and DoC are held to account via the FRG. These accountability arrangements will be updated to reflect the appointment of a Turnaround Director once formally approved. The Savings Delivery Group reports to the Financial Recovery Plan Group which in turn reports to the EMT.

Why are we preparing an FRP? PMO team CFO Andrew Hislop The PMO will report to the CFO on an operational basis

Head of Programmes / PMO The diagram to the right reflects the current position.

Zoli Zambo

The schematic will require updating to reflect the joint appointment (with Richmond CCG) of a Turnaround Director once formally approved and appointed.

PMO Manager

Programme Management Office

PMO Manager

PMO Support

Challenge, drive pace, monitor

Regular reporting / meetings on project progress

Project Leads Urgent Care

Planned Care

Contracts

Service Review

Merton CCG Financial Recovery Plan Appendix 6 – SWOT analysis

Why are we preparing an FRP? SWOT analysis Strengths •

• • •

A supportive group of GP’s (24 GP practices) who understand the need for change to deliver a balanced budget over the short to medium term. Establishment of new functions- this includes a PMO and transformation team which will aid with financial recovery. Merton CCG is a new community provider and investor in community services. Over 90% of Merton residents have indicated they are positive about their health and wellbeing. This suggests the vast proportion of the population are receiving healthcare in line with their expectations.

Weaknesses •

• • • •

Opportunities •

• •

•

There has been mis-management of the CHC provision by the CSU, and by taking this in-house (new CSU contract) there is a significant opportunity for overall improvement. The team has identified potential additional QIPP’s which are capable of delivery in the next 12-24 months but now require further analysis. There are a number of targets set as part of the Merton strategy which will enhance healthcare causing potential reduction of costs if achieved eg: uptake of childhood immunisation from 72% to 88%. Additional funding will be provided which leads to a stronger opportunity to recover the financial position of the CCG.

Projected underlying deficit of £8.7m by 2017/18 with an unidentified gross QIPP forecast of £2m for the next financial year (2016/17). A track record of under delivery on a significant proportion of QIPP’s in FY15 and FY16. Merton CCG is not an acute lead commissioner. A team that is relatively stretched and which now has to deliver a challenging Financial Recovery Plan and has had historical issues with accurate data and reporting. Under investment in primary care which makes it less likely to have capacity to address such issues.

Threats • • • •

Failure to deliver the intended QIPP’s, without mitigating actions, would result in a larger deficit. Further unexpected growth rates repeated in this next financial period would create a much larger deficit. An ageing population which is likely to lead to an increasing strain on healthcare services if varies in line with expectations. The number of households within Merton is projected to increase- this is likely to increase the demand for services and heighten healthcare risks from overcrowding.

Merton CCG Financial Recovery Plan Appendix 7 – FRP Overall Strategy

Where do we want to be? FRP overall strategy The diagram alongside shows the overall FRP strategy and the key elements required to deliver the FRP. Each of these elements interacts and there is an overall requirement for excellent governance for the duration of the plan in order to achieve all of the clinical and financial outcomes. The Board is fully behind the FRP and the action plans which translate this FRP into deliverables and milestones, such that the Senior Management are personally tasked and responsible for delivery of key areas which include: • Ensuring a deficit no greater than £3.94m for FY17 with the aim to achieve a healthy surplus going forwards. • Delivering a much larger QIPP programme than ever before. • Individual QIPP scheme plans with a bottom up approach in place with a responsible project manager. Clear targets and time frames ascertained and monitored throughout such projects.

Merton CCG Financial Recovery Plan Appendix 8 – Financial Forecasts

Where do we want to be? Financial forecasts - analysis Merton Five Year Plan (£’000)

Acute

Non-Acute



Reserves

2016/17

141,459

66,650

56,865

11,500

3,798

2017/18 2018/19 2019/20 2020/21 Drivers Acute commissioning is the largest cost incurred by the CCG. Historical analysis has been performed to predict the demand for acute commissioning levels. More 145,411 149,797 154,320 160,336 specifically data has been used over the last three years which has been used to forecast growth on an activity level basis for the different providers. Non-acute commissioning costs will increase steadily over the period in light of demographic growth and trends within the economy such as general rises in inflation. The exception to this is continuing healthcare services which is estimated to grow initially at 15% based on rapid growth over the last 12 67,512 69,836 72,215 74,980 months.

58,872

12,494

5,974

61,177

12,728

6,108

63,809

13,429

6,230

We expect mental health costs to remain relatively static in light of the current QIPP plans in place surrounding mental health and our continued investment within this particular area. Primary care has seen significant growth for the recent financial year ended but this is partially in light of changes in prescribing rates impacting overall demand 66,979 for medication. We expect the growth in costs to continue at a regular rate over the next five years. Corporate and estate costs increase gradually across the five years in light of controlled but gradual growth likely to be reflected within the CCG with increased 14,160 overheads such as staff costs.

6,402

The contingency reserve sees a relative increase over the five year period. This is due to underlying recurring pressures and the cost of complying with NHS business rules in respect of the 1% uncommitted reserve. Therefore in anticipation of the growth of the CCG, the 1% reserve will increase year on year leading to an overall increase in total reserves.

Where do we want to be? Financial forecasts – analysis We present summary comparatives for the primary financial elements comparing FY16 actual performance to forecasts for FY17. Acute

Our biggest challenge will be to monitor and budget accurately based on rises in acute activity levels.

Non-Actute

2016/17


We have noted unexpected increases in prescribing due to the increase in prescribing rates and the developments in pharmaceuticals with drugs readily available for the likes of diabetes which have been of particular demand within the Merton population.

2015/16


Reserves

0

50000 100000 150000

We have maintained a prudent level of reserves and although we expect a deficit of £3.3m for FY17 we are confident of financial recovery by breaking even for FY18 and achieving a surplus from that position through factors such as realised gains from investments within QIPP and growth of the CCG. The forecast also includes the reinstatement of previously approved investment reserves where slippage was used to fund recurring expenditure in FY16.

Where do we want to be? Financial forecasts - assumptions Caption

Assumption

Rationale

Price (Tariff/Efficiency)

Tariff impact estimated at 2.79%

This is established on contract proposals which have been validated by the CSU. It is forecast that there will be reduced tariff inflation of 0.3% in FY18 followed by a flat trajectory thereafter until FY21 when 0.9% uplift has been assumed in line with latest national projections.

Growth (Activity)

Acute growth average estimate is at 3.10%. Mental health and community service cost growth estimated at 1%.

A model has been developed to ensure acute growth is aligned with recent historic trends. This modelling has assumed for each provider and point of delivery (POD) that average historic growth over the last three years will be replicated during FY17, before mitigation by QIPP schemes. Whilst we are hopeful that this level of growth will slow, we have felt it prudent to reflect the current levels of growth before QIPP.

Continuing care growth estimated between 10-15% across the next five years.

With regards to continuing care this is a composite growth assumption that reflects both activity and price growth. This service, which grew at 21% in FY16 is assumed to continue growing significantly, albeit at the lower rate of 15% initially before dropping to 10% over five years. This reflects the fact that growth is unlikely to keep compounding at a static rate and the fact that a significant element of the increase in FY16 appeared to be a stepped change.

Prescribing is estimated at 5% with all other programme costs estimated to grow at 1%.

Prescribing growth is established on the same factors as continuing care and other costs are expected to remain relatively static with regards to current plans and the healthcare demands relative to Merton.

Acute activity reserves: £0.75m risk contingency

Risk Contingency: this relates to fixed cost investments or pricing rather than the level of activity being commissioned. This has been sized at 25% of the current net gap between CCG and provider positions and it is expected to be fully spent in the coming weeks.

Where do we want to be? Financial forecasts - assumptions Caption

Assumption

Rationale

Investments/ Decommissions

Investment Reserves reapplied (typically £2.5m on an annual basis)

There has been a reinstatement of previously approved reserves used to fund recurring expenditure during the last financial year. Decommissions and its subsequent implementation are currently being considered although they are not currently included in the model for prudency reasons.

Cost Pressures

Varied on a programme by programme basis

Cost pressures are dependent on various programmes, initiatives and funding support the CCG is expected to make which are not considered within the other cost streams.

Reserves

1% uncommitted reserve

As required by NHS business rules, the CCG has ensured that it has created a 1% uncommitted reserve which is genuinely free from any spending commitments. NHSE has cautioned against making any assumptions about being to utilise this reserve given uncertainty regarding emerging policy.

QIPP

The QIPP delivery plan is 3% of non-developed primary care programme resource followed by 4% for FY2018 and FY2019 followed by 2% thereafter. QIPP delivery costs are 15% of gross savings.

The assumptions are based on the expectations of NHSE, current plans, resource and assurance on QIPP implementation savings programmes. The investment will be in the short rather than medium to long term to ensure that the £3.94m deficit predicted for the next FY is adhered to. This will reduce the concerns of NHS England.

Inflation

Acute inflation fluctuates between 2-2.90%. Non Acute inflation fluctuates between 0.30-1.10%. Other inflation is assumed at 1%.

Cost inflation is based upon price changes. Acute and non-acute tariff changes are based on published assumptions by Monitor during 2015/16. Other pricing changes are based on historic trends and have been sense checked against other CCG assumption as part of the 5 years plans across South West London.

Merton CCG Financial Recovery Plan Appendix 9 – Sensitivity Analysis

Where do we want to be? Sensitivity analysis The table below shows the cumulative net difference for the deficit/surplus position across five years when variables are adjusted in relation to the forecasting model. The sensitivities applied relate to growth and non-achievement of QIPP. We note that across the growth adjustments, cumulative positions for growth below and above baselines are relatively similar. The nonachievement of QIPP adjustments are of importance but within our in year QIPP forecasting we expect a general decrease over the five years with a greater emphasis on QIPP in the short rather than long term where benefits can be realised.

Assumption Summary

Assumption Adjustment (%)

Impact of Adjustment (2016/17)





Growth above baseline

(+) 5%

(816)

(678)

(1,679)

(1,506)

(2,065)

Growth below baseline

(-) 5%

544

677

1,658

1,481

2,029

Non achievement of QIPP

10%

(726)

(1,816)

(1,907)

(2,184)

(2,474)

Non achievement of QIPP

20%

(1,452)

(3,632)

(3,813)

(4,369)

(4,948)

Where do we want to be? Sensitivity analysis The diagram to the left illustrates the respective deficit/ surplus positions year on year on the key variables adjusted across the next five years.

5,000 4,000 3,000 2,000

In Year Position

1,000

Growth Increase 5%

16/17

17/18

18/19

19/20

20/21

Growth Decrease 5%

-1,000

Non Achievement of QIPP, 10%

-2,000

Non Achievement of QIPP, 20%

-3,000 -4,000 -5,000

The growth decrease of 5% has a significant impact on the position of the CCG which would lead to an in year surplus position for FY18 with a position by FY21 nearing £5m. The non achievement of QIPP by both 10% and 20% would lead to in year deficit positions for the next four years forecast but would not impact the CCG attaining a surplus by FY21 were the non achievement of QIPP to be reflected at 10%. This is indicative that QIPP is a primary factor impacting the financial performance of the CCG. Therefore, we expect significant investment, time and resource requirements from the QIPP programmes discussed and subsequently implemented as part of this FRP but we expect this to lead to a substantial improvement in the financial position of the CCG

Merton CCG Financial Recovery Plan Appendix 10 – QIPP Benchmarking

Where do we want to be? QIPP benchmarking - findings QIPP Plan Value

Average

Merton

18,000

Number of QIPP Schemes

16,000

Average

14,000

Merton

12,000 10,000

40

8,000

35

2,000 -

5.00%

30 25

QIPP % of Resource Allocation

4,000

QIPP % of Resource Allocation Average

4.00%

20

3.00%

15 10

2.00%

5 0 CCG1 CCG2 CCG3 CCG4 CCG5 CCG6 CCG7 CCG8 CCG9 CCG10 CCG11 CCG12 CCG13 CCG14 CCG15

6,000

Number of QIPP Schemes

QIPP Plan Value (£000's)

20,000

1.00%

0.00%

Where do we want to be? QIPP benchmarking - findings Scheme

Number of CCGs with this scheme

Continuing Health Care

13

Prescribing

11

Procedures of Limited Clinical Value (POLCE)

11

MSK Pain

6

Non-Elective Admissions (case management, Care homes, Dementia, EoL)

6

Acute schemes

5

End of Life

5

First to Follow Up

5

Ophthalmology and Eye Health

5

Referral Management GP Referrals

5

We have obtained QIPP scheme listings to identify the various schemes in place within the different CCGs. This has been collated over a data set of 22 CCGs. For full listings, please refer to the appendix 4.

We have analysed the QIPP schemes in place by type and frequency. We have ranked these and the most frequent types are illustrated in the table on the left, with continuing health care, the most common closely followed by prescribing and POLCE (PCLV) QIPP schemes. The schemes categorised do vary on a CCG by CCG basis and therefore the table acts as a form of guidance where there may be a degree of overlap of treatments covered by specific CCG schemes. Our existing FY16 QIPP schemes already incorporated several of the more frequent areas including CHC, Prescribing, MSK and Referral Management. Further to the benchmarking exercise we are also now looking at developing additional QIPP schemes around Non elective Admissions (short stay with no procedure), MSK Day Case activity shift out of acute settings, further prescribing schemes, POLCE and OP First to Follow Ups.

Merton CCG Financial Recovery Plan Appendix 11 – QIPP programme and assessment

Where do we want to be? QIPP programme and assessment – Detailed QIPP’s We present a summary of the QIPP programmes in place and to be implemented – we provide an assessment of the quantifiable benefits of the QIPP programme including our expectation of the likelihood of delivery. Urgent Care 2016/17 Project

Project Lead

Savings Target £000s

Required Investment £000s

Net Savings £000s

Programme Readiness

Savings Delivery


AB

1,014

-252

762

Amber

Amber

0-16s Respiratory

ML

49

-27

29

Red

Red

Short Stay 0-3 days No Procedure

Total

TBC

749

-

750

1,812

-279

1,533

Amber

Amber

Overview

Progress

Identify and case manage high risk patients using existing community services and assess needs of case mix. Year 2 benefits from existing HARI and CPAT. CLCH incentive £327 as leverage to deliver QIPP. Reduce non-elective admissions for 0-16s.

CCG capacity to drive collaboration between federation and community is deemed sufficient by SDG. GP Federation service specification to be worked up in detail.

Expansion of the existing QIPP to incorporate the following specific areas: - Avoidance of emergency admissions for Hypertensive Conditions - Community Management of patients with Diabetes - Early Diagnosis of COPD and respiratory Disorders , management of conditions reducing the need for emergency admission - Education of Patients in managing complex conditions and ensuring appropriate medication usage

Recently expanded scope of scheme from respiratory conditions only to all conditions.

Where do we want to be? QIPP programme and assessment – Detailed QIPP’s We present a summary of the QIPP programmes in place and to be implemented – we provide an assessment of the quantifiable benefits of the QIPP programme including our expectation of the likelihood of delivery. Planned Care 2016/17 Project

Project Lead



Net Savings £000s

Programme Readiness

Savings Delivery

Practice Variation

TB

563

-

563

Amber

Red

Referral Management Centre

AM

169

-221

-52

Amber

Amber

MSK Connect Pathway

CC

281

-

281

Green

Amber

MSK Day Admissions

TBC

146

-

146

Amber

Amber

Nelson Health Centre

TBC

314

-

314

Amber

Amber

£1,473

-221

1,252

Total

Overview Eliminate unwarranted practice variation by sharing practice level data across CCG and conducting prospective audits of referrals for 8 specialties. Practices are supported by partnership managers. Long term aim to achieve approx.15% reduction in OPA activity for the overall demand management programme. Introduce an administrative/ clinical triage system for the 8 highest activity specialties Mobilize and monitor new community provider for a single point of access MSK physio service. The service will clinically triage and direct all MSK referrals using a community block contract instead of PbR. Extension of the existing QIPP anticipates a target in line with Right care expectations and a potential delay as existing referrals work their way through the system. There is a requirement for a focus on Triage and potentially a review of the existing waiting lists to ensure all referrals have been made appropriately. NHS Merton CCG has a contractual commitment to utilise the Nelson Health Centre. The contract commits to a Minimum Income Guarantee “MIG” for 2016-17 which is set at £2m. Utilising the Nelson HC to the full capacity of the Contract would result in £314k saving.

Progress Practice profile data shared with practices and visits to each practice scheduled by 28/6. 12 practice visits completed. Demand management schemes to be aligned and savings assumptions revisited.

Business case discussed at EMT and further alignment required with other schemes. Service monitored via monthly meetings, activity data for April now received, still awaiting SLAM data for acute activity.

Where do we want to be? QIPP programme and assessment – Detailed QIPP’s We present a summary of the QIPP programmes in place and to be implemented – we provide an assessment of the quantifiable benefits of the QIPP programme including our expectation of the likelihood of delivery. Contracts 2016/17 Project

Project Lead



Net Savings £000s

Programme Readiness

Savings Delivery

Coding and Counting

AH

638

-

638

Amber

Amber

Continuing Healthcare

JH

381

-262

119

Green

Amber

Foetal Medicine

AH

1,100

-

1,100

Red

Red

2,119

-262

1,857

Total

Overview

Progress

Methodically identify inappropriate coding patterns in secondary care, based on prior experience of CFO with 0.75% yield from three main acute contracts.

Software enablers being put in place such as ASH and SQL. Aligning schemes with other lead commissioners, who also have similar targets to achieve.

Ensure all residents receive appropriate CHC packages in line with national guidance and minimize any in-year growth, Current plan is 15% growth on 2015/16 vs. 11% national plans. Double payment for services being claimed back jointly with other SWL CCGS from NHSE/PHE.

New provider to start operations on 1/7/16 . MCCG and RCCG jointly recruited project lead to clear backlog. Increased risk of not realising savings following responses from NHSE/PHE.

Where do we want to be? QIPP programme and assessment – Detailed QIPP’s We present a summary of the QIPP programmes in place and to be implemented – we provide an assessment of the quantifiable benefits of the QIPP programme including our expectation of the likelihood of delivery. Service Review 2016/17 Project

Project Lead



Net Savings £000s

Programme Readiness

Savings Delivery

Corporate Efficiency

AD

359

-

359

Amber

Amber

QMH Referrals

JH

261

-50

211

Green

Amber

620

-50

570

Total

Overview

Progress

Ensure that MCCG has sufficient capacity to deliver financial turnaround and has workforce plans in place to maintain services. Savings are based on premium for interim staff eliminated by 1/10/16. Ensure use of MCCG commissioned community beds instead of QMH using new provider from 1/10/16.

Recruitment freeze instigated as of 6/6/16 and associated process implemented. SMT to be used as programme board for recruitment plans. Additional savings such as holidays are being captured for interims. Contract notice submitted to St George's by DB Regular meetings with CLCH for developing inreach services Activity data for April showed slightly better than planned outturn due to fewer community beds open.

Where do we want to be? QIPP programme and assessment – Detailed QIPP’s We present a summary of the QIPP programmes in place and to be implemented – we provide an assessment of the quantifiable benefits of the QIPP programme including our expectation of the likelihood of delivery. Prescribing 2016/17 Project

Prescribing

Right Care Prescribing

Total

Project Lead



Net Savings £000s

Programme Readiness

Savings Delivery

SA

435

-

435

Amber

Green

Established programme area focusing on primary Higher than anticipated savings in April due to care prescribing, care homes, script switch and respiratory patent expiry. nutrition (baby milk). Significant turnover of staff in a small team may slow progress.

Amber

Right Care has identified 6 key drugs which NHS Merton CCG is spending more than the top 5 of its 10 peers. In addition to a focus on these particular drugs and the conditions they are designed to treat, this programme anticipates an extensive opportunity for saving by carrying out a more extensive and detailed Benchmarking and a regime of clinical review of prescriptions aligned and integral to the other QIPP projects

TBC

800

-

800

1,235

-

1,235

Amber

Overview

Progress

Merton CCG Financial Recovery Plan Appendix 13 – QIPP Monitoring

Urgent Care Unplanned Care Month

Target Target Target Actual / Forecast Actual/Forecast Actual/Forecast

Apr-16

Savings Investments Net Savings Savings Investments Net Savings

350,000

May-16

Jun-16

33,800 33,800 67,600 169,319

33,800 33,800 67,600

33,800 33,800 67,600 101,400

169,319

-

101,400

Jul-16

-

67,600 67,600 135,200 67,600 28,000 39,600

Actual / Forecast

150,000

Target

100,000

50,000

By Who

Mar-17

Jan-17

Feb-17

Dec-16

Oct-16

Nov-16

Sep-16

Jul-16

Aug-16

Jun-16

Apr-16

May-16

-

Key actions Due Date

A Bunka

Pilot e frailty case finding tool

16-Jun-16

A Bunka

Multi agency training on Frailty commenced

20-Jun-16

CLCH

Interviews for case managers to take place

M Tolson

01-Jul-16

A Bunka

20-Jul-16

Fed/CLCH

-

Nov-16

-

157,900 101,400 259,300 157,900 28,000 129,900

Dec-16

-

157,900 101,400 259,300 157,900 28,000 129,900

Jan-17

-

191,700 135,200 326,900 191,700 28,000 163,700

Feb-17

-

191,700 135,200 326,900 191,700 28,000 163,700

Mar-17

-

192,100 135,200 327,300 192,100 28,000 164,100

16/17 1,353,400 1,014,000 2,367,400 1,522,719 - 252,000 1,270,719

17/18 1,353,400 - 252,000 1,101,400 1,353,400 - 252,000 1,101,400

Create primary care capacity to enable medical management of complex patients as part of the integrated health and social car e teams. Improve information sharing for direct patient care purposes in order to reduce administrative time related to management of patients with complex care needs. Improve the 7 day response for people with complex health and social care needs. The draft PID forecasts 525 prevented NEL admissions which (using 2015/16 tariff). This is valued at £1,014k gross QIPP . The PID forecasts £326k costs for GP service and project management. Phasing of savings are currently estimated as 10% Q1 20% Q2 30% Q3 40% Q4

Description

15-Jun-16

30-Jun-16

-

Oct-16 157,900 101,400 259,300 157,900 28,000 129,900

The scheme builds on works strated in previous year and aim to benefit from partial implementation and enhancement of those in 2015/16. This is especially the case as a new community service provider was mobilised on 1 April 2016. Enhancing exitsting schemes as well as developing new initatives is part of the scheme with the aim of f unctionally merge health and social care provider teams to enable delivery of a single pathway for complex patients.

0

200,000

-

Sep-16 67,600 67,600 135,200 67,600 28,000 39,600

Overview

Complex Patients 2016/17

300,000

250,000

Aug-16 67,600 67,600 135,200 67,600 28,000 39,600

Agree funding and resource for interim packages of care

Pre pilot of medical input required in case finding & management

Joint business case from Federation and CLCH for medical management

Risk analysis Description of risk Risk of double counting programme achievements with other QIPP schemes. Financial pressures result in cuts to services that could impact on achievement of the scheme. Hospital based systems do not embrace new model - particularly in terms of the Interface Geriatrician model New model fails to make savings / is more expensive. (Activity takes place in the community but there is not a corresponding shift of activity in secondary care) Unable to recruit appropriate professionals with skill mix required

RAG Status Amber Amber Amber

Amber

Amber

Planned Care Practice Variation Month Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast 100,000 90,000 80,000 80,000

Apr-16


May-16

Jun-16

Jul-16

0

0

0

0

0

0

0

0

Practice Variation/Demand Management 2016/17

70,000 70,000 60,000 60,000

Key actions Due Date 23-May-16

30-May-16

09-May-16

27-May-16

By Who NEL CSU

Clinical lead Chair PC team

Di r. of Commi s s i oni ng

Di r. of Commi s s i oni ng

Mar-17 Mar-17

Jan-17 Jan-17

Feb-17 Feb-17

Dec-16 Dec-16

Oct-16 Oct-16

Nov-16 Nov-16

Sep-16 Sep-16

Jul-16 Jul-16

Aug-16 Aug-16

Jun-16 Jun-16

Apr-16 Apr-16

Actual/Forecast Actual/Forecast Target Target

May-16 May-16

50,000 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 -

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

93,770

93,770

93,770

93,770

93,770

93,770

0

0

93,770 93,770

93,770 93,770

93,770 93,770

93,770 93,770

93,770 93,770

93,770 93,772

0

0

93,770

93,770

93,770

93,770

93,770

93,772

16/17

17/18

562,622 0 562,622 562,622 0 562,622

562,622 0 562,622 562,622 562,622

Overview This several projects aimed at reducing GP practice-originated secondary care referrals. Each project is at a This scheme schemeincludes includes several projects at different stages different stage. Forecast support savings have back loaded to issues the second of the financial yearcare in recognition of the late start to DXS - pilot of decision toolbeen for GPs - multiple withhalf hardware in primary all the projects. Further modelling is required to understand whether the forecast savings are realistic or whether more / Outpatient Navigators (OPN) project different need to be identified and worked up. advice from specialists to prevent referrals. KINESIS -schemes software enabling primary care to obtain Practice visits PRACTICE VARIATION - Full cycle of clinical audits across 8 specialties - to include prospective audit and peer review of all referrals, addressing needs arising for example clinical education, then re-audit after agreed timeframe. DXS - pilot of decision support tool for GPs to enable them to adhere to locally -agreed care pathways and clinical guidelines. KINESIS - software enabling primary care to obtain advice from secondary care consultants to avoid making referrals.

Update PRACTICE VARIATION - launched on 18/05/16 and all practices visted at least one DXS - significant IT dificulties were encountered and until it is resolved it cannot be used. The project is on hold, therefore awaiting a commitment from both SECSU and NELCSU that they can resolve IT issues and provide timeframe. A director level meeting was requsted on 3/6/16 to agree a resolution. KINESIS - business case went to EMT on 1/06/16 and has been deferred pending a strategic overview paper setting out the cost and benefits in the overall context of the whole planned care programme. Paper to EMT on 22/06/16.

Description DXS: Decision from NEL and SECSU has been escalated to director level as to whether and when they will be able to resolve IT issues. A paper will be written for EMT as soon as NEL's decision and plan is in hand. This project is on hold until such time as the IT issues can be resolved. PRACTICE VARIATION: Engagement of practices has been secured by the Chair and the Clinical Leads supported by the CCG primary care team. The Chair announced a workstream of clinical audits of referrals by practices at the Forum on 18 May. The Chair and 3 clinical leads are visiting all practices between 23 May-end June 2016 to begin diagnostic conversations. The prospective clinical audits across 8 specialties will be undertaken from 1 June-31 August 2016. Feedback will be collected and reported on monthly. Practice time will be remunerated through pre-existing payment arrangements to practice clinical leads.

Risk analysis Description of risk GPs do not engage, (e.g. due to PMS review breakdown, LMC involvement or lack of incentives)

RAG Status Amber

Amber New CSU ICT service contract is not yet finalised and there is a risk it fall through.

PRACTICE VARIATION: Interim head of primary care with career history in managing practice variation in other London CCGs has been recruited as of 9 May 2016.

Amber CCG HR capacity to deliver programme is too stretched.

PRACTICE VARIATION: QIPP savings may not be realistic in year. This was picked up at 1 June 16 EMT, analysis of the projects under Planned Care QIPP and their costs and benefits in the round is underway and due to 22 June 16 EMT.

Risk of double counting programme achievements with other QIPP schemes.

Red

Planned Care Referral Management Centre Month Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast

Apr-16


20,000

May-16

Jun-16

Jul-16

0

0

0

0

0

0

0

0

0

0

0

RMC 2016/17 Feb-17

Mar-17

Jan-17

Dec-16

Oct-16

Nov-16

Sep-16

Jul-16

Aug-16

Jun-16

Apr-16

-

May-16

Sep-16

0

10,000

-10,000

Aug-16

Actual/Forecast Target

-20,000

-30,000 -40,000

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

0 (44,789) (44,789) 0 (44,789) (44,789)

0 (44,789) (44,789) 0 (44,789) (44,789)

0 (44,789) (44,789) 0 (44,789) (44,789)

56,396 (44,789) 11,607 56,396 (44,789) 11,607

56,397 (44,789) 11,608 56,397 (44,789) 11,608

56,397 (44,789) 11,608 56,397 (44,789) 11,608

16/17

17/18

169,190 (268,734) (99,544) 169,190 (268,734) (99,544)

676,764 (537,468) 139,296 676,764 (537,468) 139,296

Overview The referral management centre will help GPs to effectively navigate patients through the local healthcare system. The service will support the management of the healthcare economy and its work will drive improvements in quality and efficiency. It will be underpinned by evidence based referral pathways and guidelines, which will help to ensure that care is consistently delivered in appropriate settings. The service will consist of: - Administration triage to ensure that referrals meet minimum data requirements. - Clinical assessment for 8 specialities to ensure appropriateness of referral. - Peer review and primary care support. Service will start as a pilot to test the concept and will be formally reviewed at M7 (April 2017). Update Business case went to EMT on 1/06/16 and has been deferred pending a strategic overview paper setting out the cost and benefits in the overall context of the whole planned care programme. Paper to EMT on 22/06/16.

-50,000


By Who

Description

Status

Risk analysis Description of risk

RAG Status

Risk of d ou b le cou n tin g p rog ram m e ach ievem en ts with oth er QIPP sch em es.

29-Apr-16 26th-May-16 30-Apr-16

Alison Miller

Draft an internal RMC options paper for the CCG for EMT

Alison Miller

Prepare a business case for a Referral Management Centre with various options by 1st June 2016.

Alison Miller

Develop a Communications Plan for PEG

Complete

Red If the CCG deci des to award a pi l ot contract wi thout competi ti on the CCG coul d potenti al l y face l egal chal l enges from other provi ders who woul d have consi der tenderi ng for the servi ce.

Complete

Inability for the new service provider to recruit local GPs or set up an IT solution in time for service go-live and ramp up.

Red Amber

Alison Miller

Develop the evaluation criteria for consideration by CRG

The servi ce may not rel ease the expected fi nanci al benefi ts i n the ti meframe, i f referral s conti nue to i ncrease and there i s no al ternati ve communi ty provi der(s) to refer to.

Alison Miller

Draft terms of reference for a Referral Management Project Board

Complete

Failure to integrate and interface with NHS IT systems, processes and protocols meaning that it is more time consuming to refer using the RMC.

Amber

21st-Apr-16

Alison Miller

Prepare a draft Resource Plan for the Demand Management QIPP Programme

Complete

The project will be evaluated at M6 and it may not have demonstrated financial/quality benefits in this timeframe.

Amber

23rd -June-16

Alison Miller

Present the RMC Business Case to the GB

15-Jun-16 30th-Apr-16

Amber

Planned Care MSK Connect Pathway Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast

Month Savings Investments Net Savings Savings Investments Net Savings

40,000

Apr-16 0

May-16 0

Jun-16 4,230

Jul-16 27,125

Aug-16 27,125

Sep-16 28,828

Oct-16 28,828

Nov-16 32,234

Dec-16 30,402

Jan-17 35,641

Feb-17 29,885

Mar-17 36,502

0 0

0 0

4,230 4,230

27,125 27,125

27,125 27,125

28,828 28,828

28,828 28,828

32,234 32,234

30,402 30,402

35,641 35,641

29,885 29,885

36,502 36,502

0

0

4,230

27,125

27,125

28,828

28,828

32,234

30,402

35,641

29,885

36,502

MSK 2016/17

35,000 30,000

25,000 Actual/Forecast

20,000

Target

15,000 10,000 5,000

Mar-17

Jan-17

Feb-17

Dec-16

Oct-16

Nov-16

Sep-16

Jul-16

Aug-16

Jun-16

Apr-16

May-16

-

Overview Commencement of a new model of care for community outpatient MSK/Physiotherapy patients to be delivered under a contract with a new provider, Connect Physical Health Ltd. Phase 1 (2016/17) - Connect will implement a community Musculoskeletal Clinical Assessment and Treatment Service (CATS) which comprises a single point of access, delivered by Connect, for all community MSK and physiotherapy (non-domiciliary) referrals. This new service comprises a fast triage service for all patients presenting with an MSKrelated condition (excluding 'red flag' conditions which should be directed straight to secondary care services). The service will triage referrals and then direct them to either the community physiotherapy services, the community MSK service, or secondary care as appropriate. The community physiotherapy and MSK services will provide an early assessment and management plan for patients, in some cases as part of the fast triage process. As a result of this new service GPs will no longer refer patients to hospital based physiotherapy. Following successful implementation and stabilisation of the service planning will commence for Phase 2., which will explore with Connect further opportunities to reduce secondary care T&O through delivery of services in the community.


16/17 17/18 280,800 672,900 0 0 280,800 672,900 280,800 672,900 0 0 280,800 672,900

Risk analysis By Who

21-Mar-16

CCG

01-Apr-16

Connect

30-Apr-16

CCG

30-Apr-16

CCG/ Connect

01-Jun-16

CCG

01-Jun-16

CCG/ Connect

Description Connect Information Pack and Referral Form sent to Practices

Description of risk Risk of double counting programme achievements with other QIPP schemes.

Service Go Live

Primary care referral patterns to not change to utilise the new Single Point of Access and inappropriate referrals to secondary care continue

MCCG Clinical Lead for service confirmed (interim)

Activity levels may not be achievable within the new Community Physiotherapy and MSK contracted activity.

Amber

Agree ongoing stakeholder engagement plan with Connect

Lack of engagement by new community provider in necessary communications with patients and Primary Care to achieve objectives.

Amber

Connect Stakeholder Engagement activity commences Commence discussions with Connect regarding further opportunities for service development

RAG Status Amber Red

Planned Care MSK Daycase Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast 70,000


Apr-16

May-16

Jun-16

0

0

0

0

0

0

Jul-16 0 0 0 0 0 0

Gross target vs. Gross actual/forecast

60,000

50,000 40,000

30,000 20,000

Aug-16 40,625 (10,000) 30,625 40,625 (10,000) 30,625

Sep-16 40,625 (10,000) 30,625 40,625 (10,000) 30,625

Oct-16 60,625 (10,000) 50,625 60,625 (10,000) 50,625

Nov-16 60,625 (10,000) 50,625 60,625 (10,000) 50,625

Dec-16 60,625 (10,000) 50,625 60,625 (10,000) 50,625

Jan-17 60,625 0 60,625 60,625 0 60,625

Feb-17 60,625 0 60,625 60,625 0 60,625

Mar-17 60,625 0 60,625 60,625 0 60,625

16/17 445,000 (50,000) 395,000 445,000 (50,000) 395,000

17/18 727,500 0 727,500 727,500 0 727,500

Overview The MSK day-case QIPP is a recognition that the existing MSK scheme, by providing a single-point of access and triage for Trauma and Orthopaedic services should deliver a reduction of procedures being carried out. This is supported by an assumption of rigor in respect of application of thresholds criteria for surgical procedures. The model anticipates a reduction of £485k out of a targeted day-case cohort in 2015/16 £3.3m. This may require an increase in capacity at Connect, the provider and this has been costed into the PID at c £50k reflecting the potential additionally. Update Working with Connect to review current referral routes to T&O and scale up service to act as single referral point for all referrals.

10,000 0

Key actions Due Date 30-Jul-16 30-Jul-16 30-Jul-16

Description Working with Connect to review referral routes to T&O Formulate plans to provide single referral point for all T&O referrals. Liaise with DXS and RMC to ensure T&O is covered fully

Status On-going Started On-going

Risk analysis Description of risk Not yet completed, risks unknown

RAG Status Red

Planned Care Nelson Health Centre Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast 40,000 35,000

Month

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17


13,000 0 13,000 13,000 0 13,000

13,000

13,000 0 13,000 13,000 0 13,000

13,000 0 13,000 13,000 0 13,000

13,000 (10,000) 3,000 13,000 (10,000) 3,000

36,000 (5,000) 31,000 36,000 (5,000) 31,000

36,000 (5,000) 31,000 36,000 (5,000) 31,000

36,000 0 36,000 36,000 0 36,000

36,000 0 36,000 36,000 0 36,000

36,000 0 36,000 36,000 0 36,000

36,000 0 36,000 36,000 0 36,000

36,000 0 36,000 36,000 0 36,000

13,000 13,000 13,000


30,000 25,000 20,000

15,000 10,000

5,000 0

Key actions Due Date 15-Jul-16 30-Sep-16 30-Jul-16 30-Jul-16 30-Aug-16 15-Sep-16

16/17

17/18

317,000 (20,000) 297,000 317,000 (20,000) 297,000

425,000 0 425,000 425,000 0 425,000

Overview A number of diagnostic and other outpatient specialist services are delivered from the Nelson Health Centre, since April 2015 and are charged at locally agreed prices. Patients reported high levels of satisfaction with the service However, the service was significantly underutilised and there were several barriers that prevented primary care to refer to the service. This included issues with the Choose and Book booking system and TQuest the ordercom system. An intensive campaign to increase the use of Nelson Health Centre was launched in January 2016 and it had some impact, but it is still underutilised. It is a key priority for us in 2016/17 to work with STGH to review and increase services at Nelson and remove the barriers to referrals for primary care. Update Proposal to include this in the QIPP programme for 2016/17 and 2017/18 has been signed of by FRG on 7/7. Next steps Formalise project plans and provide more granularity and timelines for achieving this. Reach agreement internally and with STGH regarding MIG.

Description Formalise project details and timelines and allocate resources to project Agree with STGH additional services to be delivered from NHC

Status

Risk analysis Description of risk STGH may not want to move services to NHC as it generates less revenue and they are protected by MIG (Minimum Income Guarantee).

STGH may want to shift activity to NHC where the financial savings are smallest to MCCG.

Review current activity levels and patterns at NHC

IT issues are not resolved, hence remain a barrier to referral to GPs. Identify barriers to referral to NHC Draw up and agree remedial action plan for barriers to referral Commence implementation of agreed action plan with STGH (inc. E-referral)


Contracts Coding and Counting Month Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast 250,000

Apr-16


May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

212,500

212,500

212,500

0

0

0

0

0

0

0

0

0

212,500 212,500

212,500 212,500

212,500 212,500

0

0

0

0

0

0

0

0

0

212,500

212,500

212,500

Coding & Counting 2016/17

200,000

16/17

17/18

637,500 0 637,500 637,500 0 637,500

637,500 637,500 637,500 0 637,500

Overview This scheme is to ensure that Merton CCG only pays for activity that occured in secondary care and at the cost that is most appropriate for the activity and cross referencing patient episodes in multiple provider settings to ensure no double or triple charging occurs. Challenges will be based on 3 month worth of activity.

150,000

Actual/Forecast Target

100,000 50,000

Update Raw data and queries are being obtained from CSU to analyse local data and prepare bespoke queries. Aim to work in collaboration with Wandsworth CCG as they are lead commissioners for St George's. Next steps Organise training session and allocate resources to carry out analytical work.

Mar-17

Jan-17

Feb-17

Dec-16

Oct-16

Nov-16

Sep-16

Jul-16

By Who

Aug-16

Jun-16

Apr-16 Key milestones Due Date

May-16

-

Description


RAG Status

31-May-16

CC

Draw up plans to achieve savings

Unable to identify areas for challenges (currently no resource allocated to this scheme, nor is data or queries avilable)

Amber

15-Jun-16

CC

Model latest activity data to test for likely yield

Unable to successfully challenge providers to achive planned savings (will aim to have significantly higher challenges, accepting that not all will yield results)

Amber

30-Jun-16

AH

Discuss collaborative approach with Wandsworth CCG regarding approach and resouces needed.

30-Jul-16

AH

Ensure CCGs have knowhow and resources to undertake detailed analysis

30-Nov-16

AH

Submit challenges to providers

31-Dec-16

AH

Reach agreement with providers based on challenges

Contracts Continuing Healthcare Month Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast


100,000

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

0 (20,520) (20,520) 0

0 (20,520) (20,520) 0

0 (58,735) (58,735) 0

0

0

0

0 (2,068) (2,068) 0 (101,843) (101,843)

0 (2,068) (2,068) 0 (2,068) (2,068)

0 (2,068) (2,068) 0 (2,068) (2,068)

40,125 (2,068) 38,057 40,125 (2,068) 38,057

53,500 (2,068) 51,432 53,500 (2,068) 51,432

66,875 (2,068) 64,807 66,875 (2,068) 64,807

73,562 (2,068) 71,494 73,562 (2,068) 71,494

73,562 (2,068) 71,494 73,562 (2,068) 71,494

73,563 (2,068) 71,495 73,563 (2,068) 71,495

CHC 2016/17

80,000 60,000

40,000 20,000

Actual/Forecast

-60,000 -80,000 -100,000

-120,000

Key milestones Due Date

By Who

01-Jul-16

JH

01-Jul-16

JH

01-Jan-17

JH

01-Nov-16

JH

01-Oct-16

JH

01-May-16

JH

Mar-17

Jan-17

Feb-17

Dec-16

Oct-16

Nov-16

Sep-16

Jul-16

-40,000

Aug-16

Jun-16

Apr-16

-20,000

May-16

-

Target

16/17

17/18

381,187 (118,387) 262,800 381,187 (118,387) 262,800

(24,811) (24,811) 575,833 (24,811) 551,022

Overview • The patient care packages budget for Continuing Healthcare has been based on a 15% increase in 16/17 and a 13% increase in 17/18 based on demographic forecasts. In 15/16 and 14/15 there was a 21% increase in patient care packages. • There is an assumption financial forecast is accurate for 15/16. The provider is currently reporting a higher financial forecast. Due to data quality issues current forecast is based on using estimates from the ledger. • The potential cost savings will come from a number of CHC areas, improving the consistency of decision making, a review of high cost cases and implementation of personal health budgets. • The service will be enabler to other QIPP schemes as more appropriate packages of care will mean less reliance on other services. Update • The transition of new provider is on schedule. • The fast track audit was meant to be completed by the end of June. Due to data extraction issues by the incumbent provider this looks like it is likely to be delayed till the ned of July. This will effect how quickly learning from the audit • A number of additional intiatives that the commissioner has developed with the new provider may deliver further savings. These currently have not been costed in this plan and most likely the full benefit will not be realised till next financial year. • These intiatives include getting 3 quotes for every care package that is not commisssioned via the AQP, making sure robust care plans are in place for patients before packages of care are brokered. this will ensure care agencies do not dictate packages of care.

Description Instigation of an in house oversight function and selective panel process to ensure consistency of CHC decision making Re commission the CHC service to ensure high quality service with timely reviews for all patients Review high cost cases to ensure value for money - offer a personal health budget to patients where appropriate Complete fast track audit and implement any recommendations from the audit Integrate the assessment and review process with social care so changes in eligibility can be instigated when appropriate. Review 2015/16 caseload for any non Merton patients.

Risk analysis Description of risk Cost of the new service may increase due to the backlog of assessments, reviews and invoices. Timescales to mobilise new service are short. Further negotiations will be needed with the SECSU if the proposed timescale is breached.

RAG Status Red Amber

Contracts Foetal Medicine Target Target Target Actual / Forecast Actual/Forecast Actual/Forecast 1,200,000


Apr-16

May-16

Jun-16

-

-

-

-

-

-

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Foetal Medecine 2016/17

1,000,000 800,000

Actual / Forecast

600,000

Target 400,000

200,000

By Who

15-May-16

Mar-17

Jan-17

Feb-17

Dec-16

Oct-16

Nov-16

Sep-16

Jul-16

Milestones Due Date

Aug-16

Jun-16

Apr-16

May-16

-

Mar-17 1,100,000 1,100,000 1,100,000 1,100,000

16/17 1,100,000 1,100,000 1,100,000 1,100,000

17/18 1,100,000 1,100,000 1,100,000 1,100,000

Overview There was an error made when the CCG was formed and budgets were getting transferred to specialised/Public Health England etc from the old PCTs. Because this budget was paid over to St Georges by Wandsworth, Merton and Croydon (others much smaller amounts) as a screening cost it was incorrectly included as a transfer under screening services. It transpired that these costs were included in the pathway tariff so should have been retained by the CCG. NHS England whilst acknowledging they have the budget are reluctant to transfer this funding back to CCGs for 2 reasons: 1. Issue only just raised so why do CCGs need the money now if they have been paying providers. 2. NHSE Specialised don’t have the funding to give back so just increases their deficit. Not really an argument but clearly a stumbling block to getting agreement. Update Mike Sexton (Croydon CFO) is leading this on our behalf as the SWL CFO rep on the London technical group. They have offered in the region of £500k to settle but we have said we want the full value which is circa £2.5m. Mike is having one final conversation with Will Huxter (NHSE Spec Comm lead) so will advise after that. Face to face meeting on 4/7/16 no resolution, written communication to be sent.

Description


CM

Risk assess amount receivable in the light of SWL intelligence

NHS England do not agree to pay the full amount owed

15-May-16

AH

Agree with Croydon and Wandsworth CCGs to work collaboratively

15-May-16

AH

Croydon CCG leads on negotiations with NHS E on behalf of the collaborative

30-Jun-16

AH

Have face-to-face meetings with NHS E to reach agreement

RAG Status Red

Service Design Corporate Efficiency Month Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast 70,000

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

0

0

0

0

0

0

£59,835

£59,835

£59,835

£59,835

£59,835

£59,835

0 0

0 0

0 0

0 0

0 0

0 0

59,835 25,165

59,835 25,167

59,835 25,167

59,835 25,167

59,835 25,167

59,835 25,167

0

0

0

0

0

0

25,165

25,167

25,167

25,167

25,167

25,167


Corporate Efficiency 2016/17

60,000 50,000 40,000

Actual/Forecast

30,000

Target

20,000

16/17

17/18

359,012 0 359,012 151,000 0 151,000

718,024 718,024 302,004 0 302,004

Overview The budget baseline position includes full year costs for a number of interim post holders. Costs for these posts have been included at agency rates including VAT (as is normal practice). It is now envisaged that the posts filled by the interim managers will be substantively recruited to "in year". As a result, the CCG is able to make savings on the premium paid for the interim services. The project does not assume any savings associated with a corporate amalgamation with Wandsworth CCG. These will be considered at a later date. Update Detailed calculations are available, timelines and responsibilites need to be formalised to ensure progress.

10,000

30-Apr-16

By Who

Mar-17

Jan-17

Feb-17

Dec-16

Oct-16

Nov-16

Sep-16

Jul-16

Aug-16

Jun-16

Apr-16 Key actions Due Date

May-16

-

Next steps Draw up proposal for FRP to agree timeline for each post and recruitment process.

Description

CM

Confirm recruitment process for interim and permanent managers

31-May-16

CM

Monitor spend on interim lines in budget to identify any savings in-year due to holidays or other leaves

01-Jun-16

AH

Take stock of interim requirements and their anticiated tenure

15-Jun-16

AH

15-Jun-16

AH

01-Oct-16

AH

FRG to agree approach to recruitment for roles based on CCG needs and the wider environment Agree schedule for the recruitment of the posts and commence the recruitment process Appoint to substantive roles by 1/10/2016

Risk analysis Description of risk System wide integration may delay Merton CCG approach to be finalised. Assumed that unbudgeted posts will also be terminated end of Sept 2016. This may be subject to change. Delay in recruitment to permanent post Unable to find suitable candidates to roles (consider headhunting or using agencies to find/screen applicants)

RAG Status Amber Red Red Amber

Service Design QMH Referrals Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast 50,000


Apr-16 (3,628) 0 (3,628) (712) 0 (712)

May-16 (5,566) (8,333) (13,900) (5,566) (8,333) (13,900)

Jun-16 14,389 (8,333) 6,056 14,389 (8,333) 6,056

Jul-16 30,695 (8,333) 22,362 30,695 (8,333) 22,362

40,000

30,000 Actual/Forecast Target 10,000

Key actions Due Date 01-May-16

By Who JH

Mar-17

Jan-17

Feb-17

Dec-16

Nov-16

Oct-16

Sep-16

Jul-16

-20,000

Aug-16

Jun-16

Apr-16

-10,000

May-16

-

Sep-16 4,412 (8,333) (3,922) 4,412 (8,333) (3,922)

Oct-16 7,575

Nov-16 40,911

Dec-16 45,449

Jan-17 25,335

Feb-17 35,464

Mar-17 41,304

7,575 7,575

40,911 40,911

45,449 45,449

25,335 25,335

35,464 35,464

41,304 41,304

7,575

40,911

45,449

25,335

35,464

41,304

16/17 260,952 (41,667) 219,285 263,867 (41,667) 222,201

17/18 260,952 0 260,952 263,867 (41,667) 222,201

Overview

QMH Referrals 2016/17

20,000

Aug-16 24,611 (8,333) 16,278 24,611 (8,333) 16,278

Queen Marys Hospital is a community hospital that offers elderly rehabilitation and neuro rehabilitiation for patients that a re referred from St George's Hospital. Merton CCG commissions equivalent facilities in the community closer to home and at lower tariff than QMH. In-reach service from MCCG (provided by new community provider) is building links and increase presence at STGH to ensure that joint decision making takes place and referrals to QMH are only take place for when necessary and MCCG facilities Woodlands and Carter house are fully utalised. The commissioning manager will be avaialble to offer support to this decision making process. MCCG bed capacity was also reduced in 2015/16 due to clinical incidences and service is now managed by the new community provider and have taken steps to avoid bed closures and expedite reopening of beds.

Update M1 - we have exceeded our target spend value, we had a large increase in demand for rehabilitation beds in April 3 beds remain closed in Woodlands these savings has been incorporated into these figures. A contract notice has been submitted to SGH regarding Queen Mary's elderly rehabilitation. Db is negtiated with SGH contract team to leessne the notice period. We have closely monitored mobilisation of new provider in developing the in-reach services. The sucess of scheme will be very much dependent on the effictive mobilisation of bed based intermediate care from October 1 by CLCH. Commissioning mnager has monthly meetings with CLCH to track this pproject and has esculated it to the contract team to make sure that CLCh are aware of the importance of functioning bed based IC Auditing referrals to QMH for appropriateness and following MCCG clinical pathway .

Description Discussion required with Sue Hillyard as to whether the QIPP can be achieved via a contract negotiation settlement.

Risk analysis Description of risk Risk of double counting programme achievements with other QIPP schemes. If bed based IC and commnity services are unable to meet the needs of patients in year 2, there will be an increase in excess bed days. Major quality issues have been realised at one care home. If concerns are not addressed, savings benefit may not be realised.


Prescribing Prescribing Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast


160,000

Apr-16 73,899

May-16 73,899

Jun-16 52,164

Jul-16 52,164

Aug-16 34,776

Sep-16 52,164

Oct-16 26,082

Nov-16 26,082

Dec-16 17,388

Jan-17 8,694

Feb-17 8,694

Mar-17 8,694

73,899 146,269

73,899 64,422

52,164 119,271

52,164 52,164

34,776 34,776

52,164 52,164

26,082 26,082

26,082 26,082

17,388 17,388

8,694 8,694

8,694 8,694

8,694 8,694

146,269

64,422

119,271

52,164

34,776

52,164

26,082

26,082

17,388

8,694

8,694

8,694

Prescribing 2016/17

140,000 120,000 100,000

Actual/Forecast

80,000

Target

60,000 40,000 20,000

01-Aug-16

SA

01-Jul-16

SA

01-Jul-16

SA

01-Jul-16

SA

01-Sep-16

MB

Mar-17

Jan-17

Feb-17

Dec-16

Oct-16

Nov-16

Sep-16

Jul-16

By Who

Aug-16

Jun-16

Apr-16 Key actions Due Date

May-16

-

16/17 434,700 0 434,700 564,700 0 564,700

17/18 434,700 434,700 564,700 0 564,700

Overview Prescribing is an established area of work for Merton CCG, with good track record in delivering schemes. The scheme has four main strands to be delivered by the medicine management team. Primary Care £300k - consists of a review of medication changes and an individual records review. Also includes savings from Scriptswitch. It is very difficult to change medication in asthmatics and COPD without doing a full clinical review. The reviews are crucial to the CCG improving its spend on respiratory and improving outcomes for patients but this will require investment in clinical staff i.e. nurses or pharmacists Care homes £60k - Continuation of a two year plan started in September 2015. Nutrition £70k - Second of a two year plan focussing on baby milks. Requires appointment of a qualified paediatric dietician. Dietician is on maternity leave until November 2016. Locum dietician started in May 2016. Secondary Care £35k - A benefit share scheme between CCGs and provider trusts to encourage the use of less expensive high costs drugs. Update Project over performed significantly partially because of an inhaler coming off patent MM team is facing reduced capacity due to 2.4wte staff leaving, future team structure is being considered Additional

Description Recruit new member of staff in Primary Care team Transfer budget for Carer Homes Pharmacist to CLCH to drive out QIPP savings Recruit dietician and agree funding sources for postholder to cover redundancy. Await agreement form DOCs regarding the SWL scheme. Develop a SWL QIPP plan with the CSU. Recruit 1.0wte care home pharmacist and 1.4wte primary care pharmacists

Risk analysis Description of risk Risk of double counting programme achievements with other QIPP schemes. Ability of CLCH to drive out Care Homes savings in Pharmacy may be difficult. Nutrition target may not be met if dietician cannot be recruited to

RAG Status Red Amber Amber

Prescribing Rightcare Drugs Target Target Target Actual/Forecast Actual/Forecast Actual/Forecast 112,000 110,000


Apr-16

May-16

Jun-16

0

0

0

0

0

0

Jul-16 100,000 (11,111) 88,889 100,000 (11,111) 88,889


108,000

Aug-16 100,000 (11,111) 88,889 100,000 (11,111) 88,889

Sep-16 100,000 (11,111) 88,889 100,000 (11,111) 88,889

Oct-16 100,000 (11,111) 88,889 100,000 (11,111) 88,889

Nov-16 100,000 (11,111) 88,889 100,000 (11,111) 88,889

Dec-16 100,000 (11,111) 88,889 100,000 (11,111) 88,889

Jan-17 100,000 (11,111) 88,889 100,000 (11,111) 88,889

Feb-17 100,000 (11,111) 88,889 100,000 (11,111) 88,889

Mar-17 110,000 (11,112) 98,888 110,000 (11,112) 98,888

16/17 910,000 (100,000) 810,000 910,000 (100,000) 810,000

17/18 628,000 0 628,000 628,000 0 628,000

Overview Right care has identified 6 key drugs which Merton CCG is spending more than the top 5 of its 10 peers. Further extensive benchmarking is to take place to identify more savings and specifically focusing on reducing high cost drugs when genrics are available.

106,000

Update Recruitment in on its way to increase capacity of medicine optimisation team. Detailed benchmarking is taking place, which includes - Care and nursing homes, - Drop list' - Care homes, - CLCH use of dressings etc., - Sriptswitch updating.

104,000 102,000

100,000 98,000 96,000 94,000

Key actions Due Date 21-Jul-16 21-Jul-16 21-Jul-16

Description Recruit to posts for the team Carry out detailed benchmarking in target areas Review Scriptswitch and alternatives for future schemes

Status On-going Started

Risk analysis Description of risk Not yet completed, risks unknown

RAG Status Red

Merton CCG Financial Recovery Plan Appendix 12 – Governance and Management

How will we get there? Governance and management The CCG has recently procured an externally delivered financial governance review as it wished to capture an external and objective view as to why the current governance arrangements failed to identify the deterioration in financial performance. In summary terms the review found that the current structure is adequate although improvements can be made to the quality and tone of the financial reporting. Furthermore the CCG recognises the need for increased focus and capacity in delivering its QIPP plan and has put in place an additional layer of scrutiny and challenge solely focused on the financial turnaround: the Financial Recovery Programme Board (FRPB). This will allow for quality time to be given over to scrutinising existing and newly developed QIPP plans and hold project leads to account on a timelier basis due to the fortnightly frequency of the Programme Board. It is intended that detailed QIPP plan, individual scheme reporting and supporting documentation will help form the standing papers and agenda of the meeting thus ensuring that a far greater level of detail is provided and scrutinised than previously. The purpose, as defined within the Terms of Reference, for the FRPB is: • Oversee the financial aspects of organisational turnaround; • Oversee QIPP monitoring processes so that delays or other exceptions can be resolved; • Advise the Chair of the Governing Body in the use of emergency delegated powers as provided within Standing Orders where decisions are required when the Governing Body is not due to meet which would result in a detrimental effect on the achievability of the financial plan; • Develop a Programme Management Office (PMO) approach to QIPP delivery; • Ensure work-streams are appropriately governed and resourced to deliver their individual projects; and • Provide regular and detailed FRP/QIPP reports to the Finance Committee and the Governing Body such that it allows appropriate scrutiny, challenge and informed and timely decision making.

How will we get there? Governance and management In light of the findings from the financial governance review we have also revised our approach at Governing Body to ensure sufficient time and focus is given over to financial matters alongside a greater level of detail in order to ensure and allow Governing Body members own the issue and the solution and are sufficiently informed to be able to challenge accordingly. This alongside the introduction of the Financial Recovery Programme Board will provide sufficient capacity and opportunity to ensure that the required monitoring and oversight of delivery of the Financial Recovery Programme is in place and effective. Revised governance arrangements and roles are as below. It should be noted that Workstreams also report in the Clinical Reference Group on quality related matters but for the purpose of this paper we have concentrated on the financial delivery of QIPP.

Governing Body

• Provides overall discharge of the CCGs accountability to deliver its financial duties • Financial Recovery Programme to form part of the standing finance papers at this time

Finance Committee

• Chaired by Lay member (Governance) - meets monthly • provides a detailed assurance function on behalf of the Governing Body

Financial Recovery Programme Board

• Chaired by the Chief Officer • Weekly forum to hold executive Workstream sponsors to account for delivery of their Workstreams

QIPP Delivery Group

• Weekly forum to hold senior management and clinical officers to account for progress against milestones • Identifies and determines any required mitigating actions to keep delivery on track

Workstream Leads

• Workstreams have executive sponsorship • Workstream Lead to create the right environment and facilitate delivery of the individual projects and ensure congruent goals and no duplication of effort

Project Leads

• Provide leadership for an indviudal scheme • Ensure that all required documentation is completed and oversee delivery of the scheme to time and at the identified level of benefit

PMO Assurance & Reporting (accountable to Chief financial Officer) Review adequacy of plans; ensure consistent documentation; ensure compliance with process incl. QIA assessments; reporting function

How will we get there? Governance and management The Executive Management Team meets on a fortnightly basis with the Senior Management Team meeting on a weekly basis. This forms part of the day to day governance structure provides a further opportunity for scrutiny, challenge and accountability to be carried out should this required. The effectiveness of the PMO will be critical to the performance management and assurance process. The PMO will report on the status of projects, i.e. whether each have measurable, deliverable plans and will provide guidance and advice as to the development of schemes in line with the agreed documentation and processes. We have recently invested in the PMO resource capacity to ensure that this function is fit for purpose. Within our plans each QIPP scheme has a designated manager and executive clinical lead. This enables clear lines of responsibly for delivery of schemes and separation of monitoring functions. Clear accountability and joint ownership between clinicians and managers is vital to the delivery of financial recovery. Improved Financial Reporting The CCG is developing and enhancing its finance, QIPP and activity reporting to FRPB, Finance Committee and Governing Body. This will focus more on key indicators, exception reporting, delivery of the Financial Recovery Plan, activity & trends, QIPP delivery and actions being taken or proposed. Future development will also include greater Primary Care Co-commissioning information, GP practice level information, horizon scanning and links to the 5 year financial plan. The CCG has identified the need to strengthen both the PMO process and project management resources if it is to deliver an ambitious QIPP programme in 2016/17 and beyond. The delivery of QIPP schemes should be viewed as a continuous process. All QIPP schemes will be “bottom up” in approach and owned by a project manager, belong to a work stream and be subject to rigorous scrutiny by the Project Delivery Group (weekly) and the Financial Recovery Programme Board (fortnightly).

How will we get there? Governance and management Financial Control Environment

The diagrams to the left summarise the results from our financial controls assessment performed during August 2015. The findings were indicative of a robust control environment in place which provides stakeholders with comfort over both the accuracy and completeness of figures provided. Moreover, within a challenging environment where fraud risk is prevalent we ensure that controls are sufficient to mitigate such risks arising with consideration to a number of areas ranging from systems to finance team capability.

Excellent Good Moderate

Area of consideration Longer term planning Detailed financial planning In year financial performance

Financial reporting

Systems of financial control

Risk management Finance team capability and capacity including support services Audit and other finance committees

Sub-area

Selfassessment Good Good

Credibility and degree of stretch Alignment with activity and provider Moderate contracts Moderate Consistency of reporting with Excellent ledgers and NHSE submissions Comprehensiveness and use as Good control mechanism Sufficiency of board reporting to Good manage overall financial position Standing orders, SFIs and Good delegated authorities Budget setting, monitoring and forecasting and key area cost Excellent control Balance sheet including intercompany balances (AoB) & Good cash Systems & processes (including Good internal audit response) Risk sharing & income recognition Good Identification and monitoring Good process Level of net risk Good Core team Excellent Commissioning support services Excellent (mark as N/a if no CSU support) Governing body ensures effective Good financial management Audit Committee performance Good

From the 18 sub areas assessed we recognised 4 of these areas as excellent, 12 as good and 2 as moderate. The sub areas were based on a number of factors which include both month end and day to day finance processes in place. We have continued to improve our finance control environment since this assessment which will ensure that the figures utilised to make financial, operational and strategic decisions in light of recovery will be based on accurate figures. Changes which have been implemented include: -A more stringent budget process to enhance financial planning aspects and increase the reliability and accuracy of forecasts made including the area of in year financial performance which we recognised as moderate. -Additional enhancements within the finance team to increase capability and resource further. -Implementation of a financial recovery programme which will increase oversight in respect of financial management. -Creation of a Financial Recovery Group chaired by the Chief Officer which currently meets weekly to oversee delivery of the FRP and financial recovery.

How will we get there? Governance and management Lead Commissioner

Sedina Agama

RAG Programme

Amber

QIPP Name

Prescribing

RAG Savings

Green

Month

Apr-16

Month Target Savings Target Investments Target Net Savings Actual/Forecast Savings Actual/Forecast Investments Actual/Forecast Net Savings 140,000

Sep-16 52,164

Oct-16 26,082

Nov-16 26,082

Dec-16 17,388

Jan-17 8,694

Feb-17 8,694

Mar-17 8,694

73,899 124,570

73,899 86,930

52,164 52,164

52,164 52,164

34,776 34,776

52,164 52,164

26,082 26,082

26,082 26,082

17,388 17,388

8,694 8,694

8,694 8,694

8,694 8,694

124,570

86,930

52,164

52,164

34,776

52,164

26,082

26,082

17,388

8,694

8,694

8,694

80,000

Actual/F orecast

60,000

Target

40,000 20,000

01-Jul-16

SA

01-Jul-16

SA

01-Jul-16

SA

01-Sep-16

MB

Mar-17

Jan-17

Feb-17

Dec-16

Oct-16

Nov-16

Sep-16

Jul-16 SA

Aug-16

Jun-16

Apr-16

May-16

-

17/18 FY 434,700 498,402 63,702

100%

May-16 73,899

100,000

01-Aug-16

16/17 FY 434,700 498,402 63,702

Apr-16 73,899

Prescribing 2016/17

By Who

16/17/YTD 73,899 124,570 50,671

QIA Assessment complete? Jun-16 Jul-16 Aug-16 52,164 52,164 34,776

120,000


Financial Summary Target Actual/Forecast Over/(Under)

16/17 434,700 0 434,700 498,402 0 498,402

17/18 434,700 434,700 498,402 0 498,402

Overview Prescribing is an established area of work for Merton CCG, with good track record in delivering schemes. The scheme has four main strands to be delivered by the medicine management team. Primary Care £300k - consists of a review of medication changes and an individual records review. Also includes savings from Scriptswitch. It is very difficult to change medication in asthmatics and COPD without doing a full clinical review. The reviews are crucial to the CCG improving its spend on respiratory and improving outcomes for patients but this will require investment in clinical staff i.e. nurses or pharmacists Care homes £60k - Continuation of a two year plan started in September 2015. Nutrition £70k - Second of a two year plan focussing on baby milks. Requires appointment of a qualified paediatric dietician. Dietician is on maternity leave until November 2016. Locum dietician started in May 2016. Secondary Care £35k - A benefit share scheme between CCGs and provider trusts to encourage the use of less expensive high costs drugs. Update Project over performed significantly partially because of an inhaler coming off patent MM team is facing reduced capacity due to 2.4wte staff leaving, future team structure is being considered Additional work streams are to be evaluated , working with RSM .

Description Recruit new member of staff in Primary Care team Transfer budget for Carer Homes Pharmacist to CLCH to drive out QIPP savings Recruit dietician and agree funding sources for postholder to cover redundancy. Await agreement form DOCs regarding the SWL scheme. Develop a SWL QIPP plan with the CSU. Recruit 1.0wte care home pharmacist and 1.4wte primary care pharmacists

Risk analysis Description of risk Risk of double counting programme achievements with other QIPP schemes. Ability of CLCH to drive out Care Homes savings in Pharmacy may be difficult. Nutrition target may not be met if dietician cannot be recruited to

RAG Status Red Amber Amber

How will we get there? Governance and management QIPP Programme and Assessment Planning for the FY17 QIPP programme commenced late and is therefore less developed than is ideal. Consequently, the programme is still rapidly evolving and this meant that at the time of signing off the FY17 financial plan the level of detail and hence assurance wasn’t where it should be. At that stage there was considerable thinking in place within the CCG and a number of ideas for the development of the detail was hampered by timing and also availability of good quality data from which the CCG could robustly and accurately quantify the size of the opportunities. Initial planning centred on the need to deliver a 3% QIPP saving in FY17 due to the CCGs financial position. As there is no realistic prospect of achieving a QIPP saving on devolved primary care budgets, the 3% target on existing commissioned services effectively became 2.7% or £7.3M. This is the value which has been incorporated into the FY17 plan and is at a level significantly above that which has been achieved by the CCG in previous years. The original developed QIPP plan totalling £7.3M is made up of the following projects:

How will we get there? Governance and management The above FY17 QIPP Plan was subject to high level scrutiny as part of the externally delivered financial governance review. The outcome of the review was that £2.8m of the current QIPP plan will not be delivered, unless the CCG is able to strengthen the delivery of the current identified and developed schemes and/or identify, design and implement additional projects with a FY17 impact. As further analysis has been undertaken in relation to the above programme it has become evident that a number of assumptions in relation to the value of opportunity savings are less robust than at first thought and therefore the delivery challenge may be even greater than what was first determined. The essential ingredients to upscale delivery for FY17 include better quality data to base decisions and monitoring on, increased capacity and capability (project management), investment in the CCGs PMO structure and a cultural shift which recognises that the CCG is in turnaround and ensures that everyone is fully focussed on the scale of the challenge and delivery of the solutions. All of the above ingredients are recognised by the CCG and we are on with responding to each need although equally recognising that this is early days and more is needed to be done to ensure that the environment is such that it supports delivery of the full opportunity that the FY17 QIPP plan provides for. The intention is to restructure the current QIPP plan into workstreams which will allow for a more co-ordinated focus on discrete material areas of spend. This is illustrated on slide 34 (FRP framework) which summarises the restructured governance arrangements which essentially splits hospital based care into planned / unplanned, separates out the work surrounding the existing contracts and securing VfM from these and finally where we aim to disinvest from our current investments. Currently individual projects report into the QIPP Delivery Group without any middle tier of ownership and oversight ensuring that all projects in a particular area are aligned, co-ordinated in terms of timescales and deliver a holistic picture of commissioning across each area. Equally by employing a Head of Programme to each workstream provides greater capacity, leadership and challenge at a granular level.

Merton CCG Financial Recovery Plan Appendix 13 – Background and Vision

Why are we preparing an FRP? Background-Local Health Economy (LHE) Merton CCG is responsible for commissioning healthcare services in excess of £250m within the borough. It has a group of 24 GP member practices and works together with partners to ensure the right outcomes can be achieved for our patients in the short, medium and long term. Life expectancy is increasing and mortality is low. Older people make up 12.3% of the population of Merton. This is predicted to grow by 14.7% in the next ten years. Levels of crime and accidents remain low compared with the rest of London. The borough has many green spaces, high educational attainment and high levels of volunteering. It has one of the highest life expectancies in the country, with a higher proportion of older people than the rest of London. In the most deprived areas within Merton, life expectancy is about nine years lower for men and thirteen years lower for women than in the least deprived areas.

As the deprivation map to the left shows, Merton CCG largely operates in a low deprivation area particularly when compared to other areas based more central to London. There are small pockets of higher deprivation towards the east and south east region. Despite what is a relatively positive LHE there are a number of ongoing challenges which are discussed on the following page.

Why are we preparing an FRP? Background- Opportunities for Improvement Four areas are identified as priorities for improvement. This FRP is cognisant of these priorities, and a financial recovery plan has been developed that is fully consistent with the on-going plans and strategies in place across the CCG: Maximising prevention opportunities • The top three causes of death for those under 75 account for 70% of all deaths In Merton. • Estimated 19% of residents in Merton smoke (UK average:19%). • Approximately 36% of children aged 10-11 are obese (UK Average:10%). • Almost 19% of adults are estimated to be obese. • Nearly two thirds of adults aged 16+ in Merton are currently overweight • Only 15% of outdoor space is used for exercise in Merton compared to 17.1% in England. • The borough has a standard admission rate of 85.6% for hospital admissions for alcohol attributable conditions.

Reducing health inequalities • The difference in life expectancy between the most and least deprived areas of Merton is 9 and 13 years for males and females respectively. • There is a difference of approximately 4 years in life expectancy between males and females. • Males are more active than females in Merton (50.4% relative to 31.6%) • Premature deaths make up 38.3% of all deaths in East Merton compared to 27.6% in the West of the borough. • East Merton is renowned as being younger, poorer and ethnically more diverse with relatively lower levels of education outcomes and training qualifications than West Merton.

Minimising harm and threats to health

Increasing and Changing populations

• There are 1,926 people in Merton with dementia, • Main causes of premature deaths include one in three due to cancer, one in three due to circulatory disease and one in seven due to respiratory diseases. • By 2020 it is predicted the number of people dependent on drugs will increase by 11%. • The estimated levels of the adult population drinking were at ‘increasing risk’ (21%) and higher risk (7.2%) which were above London or England levels. • Domestic violence represents an estimated 5% of total crime with 87% of Merton crime victims historically Merton residents.

• Merton’s population will increase by 13,245 between 2015 to 2020 with this trend expected to continue. • The proportion of the population from an ethnic background is 37%. This is expected to rise to 40% in 2020. • The number of households in Merton is projected to increase to 99,000 (15%) by 2021- this is ranked 4th highest in England. • A negative net migration forecast is expected by 2020 (outflow exceeding inflow)

Why are we preparing an FRP? Our Vision and 5 year plan In order to provide some context and background to the FRP we set out below a summary of our vision for the CCG and its five year plan. The FRP is a credible document which is in line with our overall vision, plan and the wider STP currently being prepared for the SWL footprint.

Working collaboratively with a range of partners across the wider health and social care system including local authorities and voluntary organisations to develop strategy. In particular the CCG will work with the London Borough of Merton as a key strategic partner to further develop and implement the most appropriate joint commissioning and system leadership arrangements to progress the ‘Whole Merton’ approach. We present our vision diagrammatically discussing our delivery areas for patients on the following page. Our five year plan includes the following key elements: 1. Develop a joint 5 year plan with NHS England to improve healthcare for patients by working with local doctors, councils and NHS organisations. This plan will have a wide focus to look at the whole healthcare system, including clinicians. 2. QIPP investment to release synergies in the medium term coupled with shorter term gains to help stabilise the financial position. 3. Working as part of the wider South West London group to enhance sustainable services for a growing and ageing population. 4. A return to financial stability, with a £4m deficit planned for 2016/17 and the CCG returning to a breakeven position for 2017/18.

Why are we preparing an FRP? Our Vision and 5 year plan The five year plan is stretching but the CCG has set out to achieve its goals in both the short and longer term by utilising the appropriate skills, resource and experience to implement a clear action plan, predominantly based around delivery of QIPP. The FRP has been created for Merton CCG which will provide a mechanism to highlight and address issues. Regular monitoring and tools will be in place to overcome any blockers which might prevent the achievement of the 5 year plan. These aspects link together as follows: FRP - Financial analysis of our historic, current and forecast performance to provide a robust basis for the future ensuring more accurate reporting and budgeting - Includes the actions required to ensure QIPP targets are met - this will include a number of qualitative and quantitative measures ensuring an appropriate culture and assurance & governance processes are embedded within the CCG in line with achieving financial sustainability.

1 5 Year Plan

FRP

2

STP - All short term decisions taken to improve our financial position and sustainability will be congruent with the overall aims and objectives of the STP. - We will hold regular meetings ensuring effective project management as part of the transformation programme.

STP

3

5 Year Plan - Our 5 year plan will align with the STP and our contribution to its overall success. - Equally our 5 year plan will articulate the impact of our short/medium term FRP actions and demonstrate how these lead to a sustainable organisation.

Why are we preparing an FRP? Our Vision and 5 year plan

Merton CCG commissions services from a range of providers to meet local healthcare needs. There is currently a focus on the following key delivery areas: 1. Older and Vulnerable Adults

2. Mental Health 3. Children and Maternity Services 4. Keeping Healthy and Well 5. Early Detection and Management 6. Urgent Care 7. Medicines Optimisation

8. Transforming Primary Care Our whole Merton approach is used to encapsulate a congruent approach serving the population in entirety.

Why are we preparing an FRP? Our Vision and 5 year plan The FRP will be underpinned by a number of core principles. Whilst it is recognised that the financial results and control is critical to success for the CCG, NHSE and the wider LHE, it is balanced against a continuous desire to enhance patient outcomes. This will be delivered by ensuring that within the organisation and with partners, there is accountability for performance, and a culture of delivery. This culture starts at the top and will be demonstrated by all of the senior management team. It requires considerable communication with all stakeholders, including employees. These core principles are as follows:

Patient Outcomes

The desire to continually improve patient outcomes is at the heart of the CCG.

Accountability

Teams and individuals are held to account through robust governance to ensure delivery.

Delivery and culture

Create a “can do” culture; with a bottom up approach wherever possible.

Financial control

To pay the right price for what is provided – the provision of high quality cost effective services and a return to a balanced budget.

Merton CCG Financial Recovery Plan Appendix 14 – evaluation of commissioned services

Procedure of Limited Clinical Value

2015/16 Cost

% Reduction Assumption

Saving 17/18

Nervous System

Back Surgery - Epidural Injections

194,260

30%

58,278

Carpal Tunnel surgery

154,047

80%

123,238

11,080

50%

5,540

Breast prothesis removal or replacement

4,249

50%

2,125

Cosmetic breast surgery

7,590

100%

7,590

15,847

30%

4,754

2,415

30%

725

400

50%

200

Obstructive Sleep Apnoea

Endocrine System and Breast

Gynaecomastia

Mastopexy

Minor Skin Lesions


2015/16 Cost


Saving 17/18

Eye Blepharoplasty

6,089

30%

1,827

960,281

30%

288,084

Correction of ptosis

14,392

30%

4,318

Minor Skin Lesions

13,326

50%

6,663

Grommets

62,549

70%

43,784

Minor Skin Lesions

12,318

50%

6,159

Pinnaplasty/otoplasty/split ear lobes

20,761

70%

14,533

5,954

50%

2,977

810

50%

405

9,724

50%

4,862

Cataract Surgery

Ear

Respiratory Tract Minor Skin Lesions Resurfacing/other minor skin procedures Rhinoplasty


2015/16 Cost


Saving 17/18

Mouth

Tonsillectomy

153,587

70%

107,511

10,097

30%

3,029

23,751

30%

7,125

98,956

50%

49,478

107,923

50%

53,962

Upper Digestive Tract

Wireless capsule and balloon endoscopy

Lower Digestive Tract

Minor Skin Lesions

Other Abdominal Organs - principally digestive

Surgery for asymptomatic gallstones

Arteries and Veins

Varicose veins


2015/16 Cost


Saving 17/18

Male Genital Organs Aesthetic/cosmetic genital surgery

30,248

80%

24,198

Circumcision

78,651

80%

62,921

Fertility preservation

1,189

100%

1,189

Minor Skin Lesions

2,192

100%

2,192

4,596

100%

4,596

50%

44,877

Lower Female Genital Tract Aesthetic/cosmetic genital surgery Upper Female Genital Tract Fertility preservation Hysterectomy for HMB IVF

89,754 -


2015/16 Cost


Saving 17/18

Skin Minor Skin Lesions

4,664

50%

2,332

Resurfacing/other minor skin procedures

169,510

50%

84,755

Skin contouring eg buttock, thigh, arm lift

1,211

80%

969

Skin resurfacing/surgical interventions for scarring

9,193

80%

7,354

Dupuytren's Contracture

59,751

80%

47,801

Ganglia (excision of)

26,187

80%

20,950

4,239

50%

2,120

3,801

30%

1,140

145,503

30%

43,651

19,918

30%

5,975

Soft Tissue

Trigger finger Bones and Joints of Skull and Spine Back Surgery - Discectomy for lumbar disc prolapse Back Surgery - Epidural Injections Back Surgery - Thermal radiofrequency denervation

Merton CCG Financial Recovery Plan Appendix 15 – Glossary of Terms

Glossary of terms Term

Meaning

Term

Meaning

b/f

brought forward

GP

General Practitioner

Board

Executive Board of Directors

HR

Human Resources

JSNA

Joint Strategic Needs Assessment

BME

Black and Minority Ethnic

LHE

Local Health Economy

Capex

Capital expenditure

LTCFF

Long Term Cash Flow Forecast

CCG

Clinical Commissioning Group

NBV

Net Book Value

CEO

Chief Executive Officer

NED

Non-Executive Director

c/f

carried forward

NHS

National Health Service

Comms

Communications

PID

Project Initiation Document

CSU

Clinical Support Unit

PMO

Project Management Office

DoF

Director of Finance

POD

Project Overview Document

EBITDA

Earnings Before Interest Tax Depreciation Amortisation

STP

Sustainable Transformation Programme

SWL

South West London

FRP

Financial Recovery Plan

SWOT

FYE

Full Year Effect

Strengths, Weaknesses, Opportunities, Threats

FYXX

Financial Year ended XX

VAT

Value Added Tax