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Finance Report Month 3 2011-12

Finance Report Month 3 2011-12. Jonathan Wise, Director of Finance & Performance. NHS HARROW FINANCE REPORT 11/12 - CONTENTS. Summary [Slides 3-7] M3 Position [Slides 8-25] Forecast outturn position [slides 26-29] Appendices Detailed finance schedules [Slides 30-40]. 2.

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Finance Report Month 3 2011-12

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  1. Finance ReportMonth 3 2011-12 Jonathan Wise, Director of Finance & Performance

  2. NHS HARROW FINANCE REPORT 11/12 - CONTENTS • Summary [Slides 3-7] • M3 Position [Slides 8-25] • Forecast outturn position [slides 26-29] • Appendices • Detailed finance schedules [Slides 30-40] 2

  3. SECTION 1 – SUMMARY 3

  4. EXECUTIVE SUMMARY • The month 3 report is based on the latest information available. Slide 16 indicates some data quality issues with acute contract information. • The month 3 report includes performance against QIPP. The Month 3 and forecast outturn (FOT) variances have been analysed between QIPP/non-QIPP as per the table below: • The QIPP position is shown in detail on slides 32-33. • Overall at month 3 the position is break-even against plan. The forecast outturn at month 3 is also breakeven. 4

  5. FINANCIAL PERFORMANCE SUMMARY (1) YTD FOT • Statutory duties • Underspend against revenue resource limit • Achievement of capital resource limit • Achievement of cash limit • Underlying recurrent position • Achievement of overall financial plan • Achievement of public sector payment policy • Achievement of 11/12 QIPP plan G G G G G G R R G G G G G A 5

  6. SUMMARY OF MONTH 3 AND FORECAST OUTTURN • Year to Date position • The year-to-date position at month 3 is breakeven, made up of overspends of £1.5 on Acute Contracts, £0.1m on Prescribing, £0.1m on Dental Contract and £0.1m on joint working budgets offset by underspend on Medical Contracts of £0.1m and reserves of £1.7m. • Forecast outturn position • The forecast outturn position is breakeven. This is made up of forecast overspends of £0.8m on Acute Contracts, £0.5m on Joint Working budgets and £1.0m on Prescribing offset by underspends of £0.2m on Community, £0.1m on Medical Contract and £2.0m on reserves/investment. 6

  7. UNDERLYING (RECURRENT) FINANCIAL POSITION • In order to understand the financial position of the PCT, it is important to distinguish between recurrent (underlying/run rate) and non-recurrent (one-off) income and expenditure items as it is the recurrent position that is core determinant of on-going financial sustainability; • The year-end outturn, adjusted for the major one-off items is set out below: • £m • Year-end outturn 0 • Adjusted for Sector support (25.5) • Other non-recurrent items 3.6 • Underlying financial surplus/deficit (21.9) 7

  8. SECTION 2 – MONTH 3 POSITION 8

  9. OVERVIEW OF BUDGET POSITION AT MONTH 3 There has been a net reduction in the resource limit due to PCT contribution towards London Health Programmes and other levies net of allocations received for which budgets have already been created. There has been a transfer of from issued budgets into Reserves as a result of contract finalisation. 9

  10. SUMMARY OF YEAR TO DATE VARIANCES - MONTH 3 Explanations for the main variances are included on the following slide.

  11. SUMMARY OF YEAR TO DATE VARIANCES (1) Acute Commissioning(£1.5m)unfavourable - Currently 8 out of the 23 acute contracts are showing overspends at month 3. The most material variances are overperformance reported at North West London Hospitals (£1.4m), Imperial (£0.2m), UCLH (£0.4m), Chelsea & Westminster £0.2m and underperformance at Barnet & Chase Farm £0.1m, Royal Free £0.1m, RHOH £0.1m, West Herts £0.1m, Great Ormond Street £0.1m, Hillingdon £0.1m and Royal Brompton £0.1m. Other Acute Commissioning breakeven - This includes London Specialist Commissioning Group (Acute & Mental Health), Other Specialist Commissioning for Acute and Mental Health, Cost per Case, High Cost Drugs and Non Contracted Activities. At month 3 there is a breakeven position reflected. Joint Working Commissioning(£0.1m) unfavourable - This relates to a Continuing care overspend of £0.1m. Community Commissioning breakeven- This includes the various Community services plus UCC, NCA and Hillingdon wheelchair services and the Primary Commissioning Services which includes Physiotherapy, CAS, SPA and the referral management centre. Prescribing (£0.1m) unfavourable Unfavourable position at month 3 based upon April 2011 data. 11

  12. SUMMARY OF YEAR TO DATE VARIANCES (2) Primary Care (£0.04m) unfavourable – Medical contracts are under spending by £0.1m. Dental contracts are overspending by £0.1m as the patient charge revenue collected is less than the month 3 target. Estates Costs breakeven - This includes the various sites including Alexander Centre, The Heights and depreciation and cost of capital. Corporate Costs breakeven - This includes the share of sub-cluster costs and turnaround support. Public Health (£0.02m) favourable - This includes drugs & alcohol, LSG Public Health, Childhood Immunisation, Termination of Pregnancy, HIV and Health Promotion. The Childhood Immunisation is £0.02m under spent. 12 12

  13. ACUTE CONTRACT POSITION – MONTH 3 • Figures used have been based on Month 2 Trust reports as reported by the ACV • ACV are investigating the reported SLAM figures further as some in sector Trusts have potentially reported incorrectly on NEL Thresholds, Emergency Readmissions and Contract Terms e.g. Outpatient Ratios • Reported Trust figures exclude ACV Challenges and impact of any agreements connected with non recurrent support for NWLHT and Imperial • Out of Sector contracts - reflects latest position from ACV for contracts and Trust reported figures for actual values. • Total YTD performance: £1.5m overspend • Forecast Outturn (FOT) position: £0.8m overspend. Extrapolating the YTD position to year-end, plus the forecast non-achievement of the acute stretch QIPP, gives an overspend of £7.2m (4.3%). An in –year over-performance risk reserve of £6.4m, equivalent to 3.9% of the acute contract baseline, has been set aside to manage contract over-performance. The value of the reserve was assessed as reasonable given the level of acute over-performance in recent financial years. The net pressure after acute reserve has been released is £0.8m. 13

  14. ACUTE CONTRACT POSITION – MONTH 3 • The Year to Date Analysis is based on Month 2 Performance Reports for each Trust forecasted to Month 3. • There are a number of Out-of Sector 11/12 contracts which have not yet been agreed, including Royal Free, UCLH, East & North Herts and Royal Marsden. Where the contract value is not yet available the month 2 position is based upon estimated values.

  15. ACUTE CONTRACT POSITION – MONTH 3 Analysis of (Over)/Under Performance by Point of Delivery (POD) (£’000) The above table analyses under/(over) performance by POD by Trust. Over performance in excess of £20k has been highlighted in yellow. The Year to Date Analysis is based on Month 2 Performance Reports for each Trust forecasted to Month 3. A commentary on the month 2 position reported by Trusts is on the following slide. 15 15

  16. ACUTE CONTRACT POSITION – M2 TRUST REPORTS (1) 16

  17. ACUTE CONTRACT POSITION – M2 TRUST REPORTS (2) Actions in the above table are due for review by the end of August or are ongoing. 17

  18. ACUTE ACTIVITY ANALYSIS - MONTH 3 • Drivers of the over spends reflected in Slide 16 are not all depicted in the year on year Acute Activity Analysis in slides 18-21 as the budgets were reduced to reflect anticipated savings which have not been achieved; • Non PbR cost pressures such as Critical Care, Excluded Drugs & Devices, Direct Access, Renal and Other Exclusions are not reflected in the Acute Activity Analysis graphs. • PbR cost pressures such as Accident and Emergency are also not reflected in the Acute Activity Analysis graphs; • The following slides show actual activity changes year on year: • - outpatients 7.4% decrease (excluding CAS services); • - elective admissions have increased by 5.6%; • - non-elective admissions have decreased by 0.4%; • - births have decreased by 4.6%. 18 18

  19. ACUTE ACTIVITY ANALYSIS (1) - OUTPATIENTS Against the comparative period of April- May 11 , there is a decrease in activity of 7.4%. This excludes activity seen by the CAS services which is currently unreported on national returns. 19

  20. ACUTE ACTIVITY ANALYSIS (2) - ELECTIVE Against the comparative period of April – May 11, there is an increase in activity of 5.6%. 20

  21. ACUTE ACTIVITY ANALYSIS (3) – NON-ELECTIVE Against the comparative period of April - May 11 , there is an decrease in activity of 0.4%. This excludes activity seen by the CAU services which is currently unreported on national returns. 21

  22. ACUTE ACTIVITY ANALYSIS (4) – BIRTHS Against the comparative period of April - May 11, there is an decrease in activity of 4.6% 22

  23. CLAIMS MANAGEMENT The ACV undertakes a number of contract challenges each month including attribution checks, rule based checks such as Non-Paediatric Outpatients coded as Paediatrics, OP Attendances during period of admission etc. and clinical checks such as A&E re-attendance within 2 hours, multiple day cases on same day. There will also be challenges relating to the 11/12 contract levers such as testing that the outpatient ratios and day-case to outpatient ratios have been calculated correctly, Planned Procedures with Thresholds charged correctly, emergency marginal rate adjustments calculated correctly, emergency re-admissions treated correctly. In addition the ACV will measure the quality metrics included in acute contracts and apply the financial consequences of breaches where these have been agreed in the 11/12 contract. At the time of this report there is no data yet available from the ACV on all the challenges they have raised relating to 11/12. However, for example, the expected yield from challenges raised to NWLHT for April 11 is £179k. The PCT also undertakes attribution checks on non-contracted activity, high cost drugs and cost per case invoices. 23

  24. SPECIALIST COMMISSIONING – LSG REPORT M2 • LSG Report depicts YTD position at month 2 £459k favourable • Main areas of underperformance at month 2 are Adult BMT, Haemophilia, Neuro- Rehabilitation and NICU. • Adult BMT is showing £94k, Haemophilia £90k, Neuro-Rehabilitation £84k and NICU £153k under spend. • FOT position at month 2 after risk share agreement are applied £11k unfavourable • Board Report reflects a breakeven position for both YTD and FOT at Month 3 as the LSCG report M2 report was received after the month 3 position was finalised. 24

  25. SPECIALIST COMMISSIONING – LSG REPORT M2 25 N.B. Figures reflect month 2 data from providers

  26. JOINT WORKING VARIANCES – MONTH 3 • Integrated Commissioning is made up of the following areas – • Continuing care Adults is £0.1m overspent. This is due to not achieving QIPP of £0.2m mainly relating to LD, EMI & PD, offset by savings in Elderly due to less clients meeting the continuing care criteria. • Continuing care Children is £0.02m overspent, this is mainly due to increased pressure on care packages. • Intermediate care is breakeven. • End of Life is breakeven. • Mental Health Providers are underspend by £0.02m, this is due to savings on cost per case. 26 26

  27. COMMUNITY SERVICES VARIANCES – MONTH 3 • Community Services Contracts Breakeven – The community services are currently showing a breakeven. • Primary Commissioning Services Breakeven – The Primary Commissioning Services are currently showing a breakeven. 27 27

  28. PRIMARY CARE VARIANCES - MONTH 3 • Prescribing -– (£0.1m) Un Favourable – Year to date unfavourable variance of £0.1m from GP Prescribing expenditure for April 11. • Primary Medical Service(£0.1m)Favourable- due to over achievement of Walk in centre income. This is income relating to Non Harrow patients that attend Harrow Walk in Centres. • Dental Contract (£0.1m) Unfavourable – This is due to the patient charge revenue collection being less than the budget. • Pharmacy Contract (£0.004m) Unfavourable – The LPS contract is currently over spending and there is a review being carried out to evaluate the service and the payments. • Ophthalmic Contract – Break even to budget at month 3 28 28

  29. CORPORATE VARIANCES – MONTH 3 • Estates (£0.0m) Breakeven – The Estates are showing a breakeven position as at month 3. • Corporate Service (£0m) Breakeven – Both the share of sub-Cluster costs and additional Turnaround Support are showing a breakeven position.. • Public Health (£0.02m) Favourable – This is due to the Childhood Immunisation showing an underperformance of £0.02m. 29 29

  30. BALANCE SHEET 30

  31. DEBTORS ANALYSIS 31

  32. BETTER PAYMENT PRACTICE CODE (BPPC) PSPP is being achieved in three out of four categories and very nearly achieved in the fourth. Note: Figures include performance on commissioning (plus Harrow provider services invoices relating to 10/11) 32

  33. QIPP PROGRAMME SUMMARY • . Data is not yet available on performance on all QIPP schemes. Where data is not available, performance is assumed to be on plan. • Total budget variance is split by QIPP/non-QIPP as follows: • . The following slides provide a scheme-by-scheme analysis of the QIPP programme • The main areas of forecast underachievement are: • GP Prescribing • Mental Health repatriation • Intermediate Care • For each of the above areas a recovery plan is in the process of development/implementation 33 33

  34. QIPP PROGRAMME (1) 34 34

  35. QIPP PROGRAMME (2) 35 35

  36. SECTION 3 - FORECAST OUTTURN 36

  37. SUMMARY OF FORECAST OUTTURN VARIANCES Explanations for the main variances are included on the following slide.

  38. SUMMARY OF FOT VARIANCES (1) Acute Commissioning (£0.8m) unfavourable – The FOT is shown as £0.8m overspent after adjusting for NWLHT challenges and contract adjustments and being offset by acute contract in-year risk acute reserves. Other Acute Commissioning Breakeven– The FOT position is shown as breakeven. Joint Working Commissioning (£0.5m) un/favourable – Due to part non-achievement of Mental Health repatriation QIPP scheme. Community Commissioning Breakeven – Community Services contract - The FOT is also showing a breakeven position. Primary Commissioning Services Breakeven The FOT is set at £0.2m favourable due to the effect of the achievement of QIPP savings (Referral Management Centre). Prescribing (£1.04m) Unfavourable – Due to QIPP savings forecasted not to achieve. 38

  39. SUMMARY OF FOT VARIANCES (2) Primary Care Primary Medical Service – (0.1m) Favourable – This is due tot the review of Out of Hours contract with Harmoni and issue of termination notice for the last 6 months. Dental Contract Break Even – Based on 10/11 outturn and expenditure profile for Month 1 to Month 3. Pharmacy Contract Break Even– Based on 10/11 outturn. Ophthalmic Contract(£0.02m) Unfavourable – Based on 10/11 outturn, forecasted to have an unfavourable variance of £15k. Estates Break-even - The most likely FOT is a breakeven position. Corporate Costs Breakeven - The FOT is expected to be breakeven Public Health Breakeven - The FOT variance is expected to be breakeven. Reserves/Investments (£2.04) favourable – there is a forecast underspend on in-year investment to balance the overspends above. 39 39

  40. RISKS/OPPORTUNITIES SUMMARY Based upon the above analysis the worst case is for an overspend of between £1m-£2.5m. The potential best case reflects the non-utilisation of the risk reserve for Harrow held at Brent plus any further underspends on budgets and reserves. 40 40

  41. APPENDIX A – FINANCIAL SCHEDULES 41

  42. NHS HARROW SUMMARY - MONTH 3 42

  43. ACUTE - MONTH 3 43

  44. JOINT WORKING - MONTH 3 44

  45. PRIMARY CARE - MONTH 3 45

  46. PRESCRIBING – MONTH 3 46

  47. COMMUNITY SERVICES - MONTH 3 47

  48. PUBLIC HEALTH – MONTH 3 48

  49. ESTATES – MONTH 3 49

  50. CORPORATE – MONTH 3 50

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