Royal National Orthopaedic Hospital
Delivering Healthcare
for London
…through world class healthcare delivered by well-governed,
clinically and financially sustainable organisations.
Development Plan
Trust: Royal National Orthopaedic Hospital
CE: Rob Hurd
CENTRAL LONDON COMMUNITY HEALTHCARE- ORGANISATION SUMMARYRoyal National Orthopaedic Hospital Contact: / Mark Vaughan / Successful Organisation ‘Indicative’ Timeline
Royal National Orthopaedic Hospital Senior Responsible Officer (Sign-Off): / Rob Hurd
NHS London Contact (Provider Support): / Chris Cheyne
NHS London Contact (FT Team): / tbc
SUMMARY POSITION
Successful Organisation Assurance Domains / NHS Trust RAG Rating / SHA RAG Rating / Key Issues
1. Good Business Strategy / Impact of changes to specialist services as a result of tariff and NC sector review/ HfL to be modelled.
Estates redevelopment: Stanmore site redevelopment OBC approved by NHS London / DH. Informal SoS approval pending full govt. approval.
2. Financially Viable / Use of Resources rating “Fair”. Current in year finances and CIP delivery on track.9 Year CIP and Service Transformation Plan signed off by Trust Board, NHS London and Dept. of Health as part of Redevelopment OBC approval process.
3. Well Governed / FRP assessment undertaken, mock HDD to follow within the next 4 months. Plans in place to improve ALE and CQC scores (OBC to support Estate redevelopment and Children’s’ Services Director appointment). No major control issues identified by Internal Audit.
4. Capable Board to deliver / Board development programme in place. Executive Team currently undergoing significant change (Interim Director of Operations, Chief Nurse replacement being recruited, Interim Finance Director in post)
5. Good Service Performance / Quality of Services rating “Fair” (08/09). Ongoing management of 18 weeks performance – 18 week action plan on target for March 2010 milestones agreed with PCTs/NHS London – sustainable delivery not yet in place for spinal deformity patients.
6. Quality and Productivity / 18 week access and service transformation action plans (and associated 9 year CIP) in place. Current estate conditions requires continued capital investment to manage infrastructure failure risks during redevelopment planning period. Understanding patient experiences and outcomes continues to be enhanced through Board quality indicator monitoring and increased profile of patient and public involvement.
7. LHE Issues/ External Relations / Contract sign off delays often caused by diversity of commissioning base.
8. Legally Constitutes and Representative / N/A until FT Application Process
Other Issues
1. GOOD BUSINESS STRATEGY
Successful Organisation Assurance Sub-Domains
A. Strategic Fit with SHA Direction of Travel;
B. Alignment with Key Elements of HfL;
C. Commissioner Support for Strategy;
D. Takes Account of Local/ National Issues;
E. Good Market, PEST and SWOT Analyses.
Current Position/ Issues and Risks / NHS Trust RAG Rating / SHA RAG Rating
CURRENT POSITION AGAINST KEY DOMAIN INDICATORS
· Strategic Fit of the Integrated Business Plan (IBP) with Healthcare for London – Vision agreed by Trust Board. Specialist and nationally recognised trust providing orthopaedic services to the UK. 48% of activity is from London. Key issue is impact of specialist changes under tariff and HfL. The Trust is planning to transfer 50% of routine new outpatients (representing 10% of total outpatient attendances) to alternative settings closer to patients in line with HfL assumptions. Development potential to centralise all elective orthopaedic onto single North London site (Stanmore). Need for estates redevelopment to address the capital infrastructure issues facing the Trust - redevelopment plan has NHS London & DH OBC approval.
· Commissioner Support for the Trust’s Strategic Plan - NHS London approval of redevelopment OBC in February 2010 included confirmation of strategic fit and activity projections were supported by over 70% of the commissioner base.
· Market Assessment and Key Competitors – A specialist orthopaedic Trust that derives 80% of its activity from complex orthopaedic surgery and has a national profile. Scored weak, weak in HCC ratings 2 years in a row which could impact on reputation of the Trust although achieved fair/fair in most recent ratings – key remaining performance issue is 18 week access sustainability. Specialist trust with wide referral base and limited competition. Referral growth has averaged over 5% per year for 5 years and population demographics and medical training trends continue to increase the need for specialist orthopaedic referral. Specialist Commissioners (NCG and Regional SCG) represents 20% of the commissioning base although 80% of activity meets specialist services definition set criteria. The Trust’s key partners are the four other specialist orthopaedic Trusts in the UK – Royal Orthopaedic Hospital Foundation Trust (Birmingham), Nuffield Orthopaedic Hospital (Oxford), Robert Jones Agnes Hunt (Oswestry), Wrightington Hospital (part of Wrightington, Wigan & Leigh Foundation Trust)
· SWOT Analysis
Strengths - Reputation for clinical excellence and high quality outcomes demonstrated by zero MRSA, low surgical site infections; Independent reviews citing “world class services”, new state of the art outpatient facility in central London, world renowned training of orthopaedic surgeons, wide referral base, strong market position, approved OBC for main site redevelopment, significant potential surplus land assets. Weaknesses – Current poor estate and backlog maintenance (inefficient site); high proportion of specialist tariff work and activity out of tariff still subject to local negotiation; wide commissioner base dilutes engagement with commissioners – as a National centre the Trust is not a key part of local health economy, no clear “plan B” if approved Redevelopment OBC does not proceed to implementation. Opportunities – Cascading clinical excellence to other facilities (franchising initiatives), consolidating routine elective orthopaedics for North London into fewer sites with specialist back up. Threats – Redevelopment affordability dependent on significant 9 year Service Transformation and CIP Plan.
Key Development Need
Risks - Non-delivery of service transformation and CIP plan. 18 week access not sustainably delivered due to short term capacity constraints, particularly in super specialist services with no alternative provider capacity e.g. spinal deformity surgery. No “plan B” estates solution if service transformation/CIP plan does not remain on track.
Mitigation - Board to ward service transformation project overseen by Trust Board and monitored by NHS London & NCL PCTs. Working with Commissioners on developing wider networks of service provision in super-specialist areas to make best use of all capacity across primary, secondary and tertiary care / ●
Ref / Key Development Actions / Timescale for Delivery / Senior Responsible Officer / Progress to Date/ Outcome
1. / The Trust needs to ensure that a viable alternative plan (Plan B) is developed to address the impact the Stanmore redevelopment not progressing to FBC & implementation. / March 2011 / Chief Executive / Engagement in NCL SOR ongoing
2. FINANCIALLY VIABLE
Successful Organisation Assurance Sub-Domains
A. FRR of at least 3 under a Downside Scenario;
B. Surplus by Y3 under a Downside Scenario and reasonable Level of Cash;
C. Above underpinned by a set of reasonable Assumptions e.g. CIPs, Capex Plans, IFRS Treatment for Trusts with PFIs, Impact of Tariff Changes e.g. HRG4, etc;
D. Commissioner Support for Activity and Service Development Assumptions.
Current Position/ Issues and Risks / NHS Trust RAG Rating / SHA RAG Rating
CURRENT POSITION AGAINST KEY DOMAIN INDICATORS
· Turnover (£m) – £99m
· Historic Financial Position (Surplus/ Deficit) – Cumulative deficit of £3.4m but no cash loans. Expect to repay cumulative deficit by 2010/11 (£1.7m forecast surplus)
· Historic CIP Achievement – 05/06 plan £2.4m, achieved £2.7m. 06/07 plan £3.9m, achieved £5.5m. 07/08 plan £4.0m, achieved £2.2m. 08/09 Plan £4.1m, achieved £3.7m. 09/10 Plan £2.9m forecast to achieve. 10/11 Current Plan £2.3m.
· In Year Financial Position and CIP Performance – M10 - £0.92m surplus against £1m target. CIPs on target, £2.5m delivered to date.
· 2 Year Detailed CIPs plus 3 Year High Level CIPs including Governance and Quality Impact – 9 year CIP strategy (10/11 to 18/19) developed and approved by Trust Board. Schemes totalling £33m, averaging 4% per annum identified.
· Long Term Financial Model (LTFM) in place, underpinned by robust Assumptions/ supportive Evidence – 10 year LTFM in place and approved and NHSL. Planning assumptions reflect latest NHSL planning guidance of zero growth and negative tariff price changes post 11/12.
· Financial Risk Rating (FRR) – 09/10 forecast FRR 2 (capped due to liquidity). 10/11 forecast FRR 2.
· Downside Scenario calculated – 9 year downside risk assessment produced with mitigating actions (£8m cumulatively).
· Robustness of Assumptions (alignment with Operating Framework and HfL) – 10/11 contract proposals capture both Operating Framework and HfL assumptions, including national and local CQUIN targets. LTFM from 11/12 reflects latest NHSL planning assumptions.
· Agreement of Service Developments (Commissioner Support) – Engaged with the London Commissioning Group on developing an appropriate tariff for specialist bone tumour work, and alongside a number of other Spinal Injuries provider Trusts led by South East Coast Specialist Commissioning Group for Spinal Injuries Tariff. Agreement close to being reached with Commissioning Agency on 10/11 income and activity growth to meet 18-week performance target for all specialties except spinal deformity.
· Impact of other Future Financial Changes (R&D, SIFT) – Marginal impact of HRG version 4 and MFF; Risk of local price negotiations for activity removed from PBR; Private Patient income forecasts capped to meet Monitor thresholds; Continued receipt of CQUIN payments (1.5% of NHS income).
· Private Patient Cap – current private patient ratio is 7% and plan to stay within this limit. / ●
Ref / Key Development Actions / Timescale for Delivery / Senior Responsible Officer / Progress to Date/ Outcome
2. / Delivery of CIP strategy through identified service transformation programme. / Transformation Committee structure and terms of reference agreed. Delivery of 9-year programme to start immediately. / CEO
/Director of Transformation/ Executive Team. / Service Transformation Committee meeting from April 2010. Quarterly progress updates to be provided to NHSL.
3. / Improvement in Liquidity and Financial Risk Ratings through achievement of cumulative break-even duty in 2010/11, i.e. retaining cash generated by retained surplus for deposit or reducing creditor liabilities. / To deliver the planned surplus over next 12 months. / Director of Finance / 9-year cash flow forecast in place.
4. / Mitigation of future HRG impact through Strategic Orthopaedic Alliance (SOA) and Spinal Currency Project / Ongoing. However main 2010/11 issues mitigated with elements of the tariff increased and local prices agreed for others / Director of Finance.
SOA supported by CEO, Chairman and Medical Director. / 2010/11 issues reflected in contract agreements (mid-March 2010). Ongoing input into SOA and Spinal project.
3. WELL GOVERNED
Successful Organisation Assurance Sub-Domains
A. Evidence of achieving Statutory Targets;
B. Declaration of Full Compliance or robust Action Plans in place;
C. Robust, comprehensive and effective Risk Management and Performance Management Systems in place, which are proven to effect Decision-Making.
Current Position/ Issues and Risks / NHS Trust RAG Rating / SHA RAG Rating
CURRENT POSITION AGAINST KEY DOMAIN INDICATORS
· Mock Historic Due Diligence (HDD) - Financial Reporting Procedures (FRP) – Mock FRP assessment completed December 2009 and action plan in place (attached)
· Care Quality Commission (CQC) Ratings – Use of Resources “Fair” (FR & FM 2, FS, IC & VfM 3); Quality – Fair (estate non-compliant with core standards – full compliance dependent on implementation of Stanmore site redevelopment)
· Performance against Statutory Break Even Duty – 5 years in cumulative deficit at end of 07/08 so auditors issued a S19 letter. On target to repay in 2010/11.
· Assurance Framework and Statement of Internal Control – 2008/09 significant control issues highlighted in SIC – non-compliance on consent (now addressed); non-compliance on estates (addressed by implementation of Stanmore redevelopment plan); 18 access target (action plan to address agreed with NHS London/PCTs).
· Risk Management Systems/ Processes – NHS London Rating 09/10 Q3 – Finance 3; Governance – Green. 2 core standards unmet, 18 weeks access not yet sustainably delivered - action plan undergoing escalated monitoring
· Serious Untoward Incidents – 5 SUIs in 09/10 – route cause analysis completed and action plans signed off by Clinical Governance Committee/Trust Board - no subsequent recurrence.
· Issues raised by Internal/ External Audit – No major issues.
Key Development Needs-Complete Mock HDD
Risks - delivery of sustainable 18 week access and Service Transformation plans. Mitigation-governance in place to monitor delivery of action plans / ●
Ref / Key Development Actions / Timescale for Delivery / Senior Responsible Officer / Progress to Date/ Outcome
5. / Mock HDD exercise undertaken and implementation of FRP action plan. / August 2010 / Director of Finance / FRP action plan developed and being implemented. LTFM completed and IBP being updated to allow mock HDD to be undertaken.
6. / Audit Commission ALE ‘Use of Resources’ and Care Quality Commission ratings improvement / April 2010 / Director of Finance (ALE)
Chief Nurse (Core Standards) / ALE action developed at the beginning of 2009/10 and number of initiatives implemented.
Core Standards will not be met in respect of the Estate. OBC approval expected which will address this.
Core Standard in respect of Safeguarding Children being addressed through the Trust’s Children’s’ Services Committee and the appointment of a Director of Children’s’ Services.
4. CAPABLE BOARD TO DELIVER
Successful Organisation Assurance Sub-Domains
A. Evidence of reconciliation of Skills and Experience to requirements of the Strategy;
B. Evidence of Independent Analysis of Board Capability/ Capacity;
C. Evidence of Learning Appetite;
D. Evidence of effective, evidence-based Decision Making Processes.
Current Position/ Issues and Risks / NHS Trust RAG Rating / SHA RAG Rating
CURRENT POSITION AGAINST KEY DOMAIN INDICATORS
· Board Membership – Rob Hurd (previously Finance Director) appointed permanent Chief Executive (October 2008), Interim FD appointed for 18 months (review permanent replacement June 2010). Recruited 4 NEDS in 07/08 from a variety of backgrounds to enhance the current skills base on the Trust Board and undertaken a review of the Board skills and knowledge. Chairman second term finishes October 2010. Interim Director of Operations currently in post (being advertised for permanent role April 2010). Chief Nurse promotion leaving June 2010, recruitment process started March 2010 to replace.