initial budgets and performance plans 2012 13 n.
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  1. INITIAL BUDGETS AND PERFORMANCE PLANS 2012/13 • BOARD 29 MARCH 2012 Jonathan Wise, Director of Finance & Performance

  2. Contents Introduction Executive Summary Financial Risk Assessment NHS Brent context 12/13 planning process Part 1 - 2012/13 Budgets/Finance Plan Budget Setting Process Budget Overview / Budget Summary Main Budget Changes Part 2 – 2012/13 QIPP Part 3 – CCG delegation Part 4 - 2012/13 Performance Plans Overview – health indicators Performance Measures 12/13 plans Appendix – QIPP Plans

  3. ExecutiveSummary • The 12/13 budgets have been prepared in the context of the MTFS that went to the Board in December updated as appropriate for the 11/12 outturn, 12/13 National Operating Framework and contract negotiations with providers • Although the latter are not yet concluded, an assessment has been made of likely outcomes for incorporation in the budget • A £21.5m surplus plan is presented, assuming QIPP delivery of £13m • A financial risk assessment (see slide 4) has been undertaken which suggests a potential additional headroom of up to £4.5m • The CCG have applied for full delegation of relevant budgets on 1 April totalling approx. £436m • Performance plans for 12/13 are included to continue the improvements made in 11/12

  4. Financial Risk Assessment A surplus plan of £21.5m has been submitted. The risk analysis above suggests a potential for an increased underspend / increased investment of £4.5m.

  5. 2012/13 Budgets Sign-off and in-year management The 12/13 budgets sign-off and in-year management process will be consistent across Brent and Harrow as follows: Date • Initial budgets agreed by sub-Cluster Board • Budgets agreed by Cluster Board • Budgetary responsibilities documented and signed off by all budget holders • Practice-level budgets agreed and issued 29/3 10/4 30/4 31/5

  6. National and NWL London context The Operating Framework for 2012/13 sets out the national framework for maintaining and improving quality and outcomes, together with the finance and business rules. In December 2011, NHS North West London issued the updated Strategic Commissioning Plan to 2014/15 (Part A: Delivering Service Change in North West London, Part B: The commissioning and provider landscape and enabling plans, and Commissioning Intentions for 2012-13). Spending Review settlement in October 2011 covers 12/13 to 14/15 – overall NHS spending to increase by 0.4% in real terms. Uplift of 3% in 12/13 issued to all PCTs. Non-recurrent allocations include primary dental and general ophthalmic services and support for joint working between health and social care (£2.489m). 2% of PCT resources held by NHS London No PCT will plan for a deficit in 2012/13 and legacy debt carried into 2012/13 to be cleared. Aspirant CCGs to work closely with PCT clusters to ensure that no PCT ends 2012/13 in a deficit position. No change to weighted capitation formula – Harrow remains 2% over target.

  7. Brent context

  8. Brent Medium Term Financial Strategy • MTFS presented to Board in December • Based on projections for growth uplift and cost drivers as per NWL financial strategy • Assumed 3 year QIPP target of 2% p.a. (lowest in NWL Cluster) • 3–year forecast surplus, with investment headroom recurrent and non-recurrent

  9. 12/13 Planning Process Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 2012/13 Mar 11 QIPP planning and CCB involve-ment Brent CCG Commissioning Strategy GPCE involvement in QIPP business case signoff and budget setting for Operating Plan On-going GPCE involvement in financial plan, including QIPP planning and delivery • Budget-setting process • QIPPdelivery • Contractnegotiations Detailed QIPP planning and delivery (please refer to next page) Budget setting and 12/13 Op. Plan • 12/13 Finance operating plan (budget and QIPP) signed off: • GPCE : 28 Mar • Sub-cluster Board: 29 Mar Budget setting process 12/13 Finance budget reviews

  10. 12/13 Planning Process – QIPP planning detail Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 Jun 12 Aug 12 Oct 12 Dec 12 Jan 13 High level milestone QIPP initiatives Assess resources Cluster QA process Recruitment of support Detailed plans in place for 13/14 Business cases: Service redesign Developed Signed off Detailed plans in place for 12/13 Implementation Contract negotiation: Preparation Sign off QIPP plan linkages with b udget setting 12/13 Finance budget reviews Performance monitoring 12/13 Finance operating plan (budget & QIPP) agreed

  11. Part 1 – 2012/13 BUDGETS/ FINANCE PLANS

  12. 2012/13 Budget Setting Process Approach has built on strengths of 11/12 processes in Sub-Cluster, is consistent with London/Cluster timelines and takes account of best practice. Key aspects: - Clearly agreed (by CCB) approach - Impact of full year effects from 11/12 reflected in baseline - Finance and activity plans aligned - Budgets based on realistic assumptions for inflation etc - QIPP embedded in individual budget lines (no balancing items) - Budgets reflect 12/13 national Operating Framework and Cluster Commissioning Strategy - Budgets appropriately profiled across the financial year - Budgets supported by a clear sign-off and in-year management regime - In-year contingency to cover known and unknown risks - Budgets reconciled to agreed contracts (not yet completed) - Recurrent and non-recurrent income and budgets clearly identified - All significant contracts agreed prior to start of year (not yet completed) - Process for budgets at practice-level agreed by CCB

  13. 2012-13 Budget Sources Notes: (1) Non-Recurrent £24m comprises Dental £14.3m, Ophthalmic £2.4m, Pharmacy £3.9m and Social Care transfer £3.4m (2) Non-recurrent (£0.2m) Social care transfer reduced by £0.2m to £3.2m in 12/13 (3) Includes £21.6m carry forward from 11/12 and £4.5m return of sector support

  14. 2012/13 Initial Budget Applications Initial budgets have been set to take account of anticipated activity and cost pressures, QIPP targets and tariff changes. Investment plans are included but are subject to development and agreement of business cases.

  15. Summary slide (budgets/savings/volume changes) Explanations for the figures are contained in the following slide. A detailed break-down of the QIPP programme is contained within the Appendix.

  16. Summary slide (budgets/savings/volume changes) • 11/12 outturn adjustments (reduction of £15.3m) – This predominantly relates to decreases for non-recurrent spend in 11/12 including NWLHT hosted payments £11.5m, Social Care transfer of £3.4m and Corporate £2.0m plus additions for budgets re-instated above outturn (net £1.6m) such as for pay underspends, Dental and GMS. • 12/13 non-recurrent planned investments £7.8m and 12/13 recurrent planned investments £6.0m and 12/13 other spend £4.5m – see Slide 17. • 12/13 growth £20.3m • £11.5m acute growth • £2.1m prescribing cost pressures / growth • £1.1m on specialist commissioning, predominantly mental health • £0.6m continuing care pressures • £0.2m corporate cost pressures • less £0.9m net reduction in estates costs mainly depreciation and cost of capital. • £5.7m acute in-year risk reserve equivalent to 2.0% of the acute budget

  17. 2012/13 Brent Investment Proposals A range of investments are proposed for 2012-13. Note: If status is blank this indicates project has not yet been approved i.e. business cases being developed.

  18. Main Budget Changes – Acute Contracts (1) • Standard national contract for Acute, Mental Health and Learning Disability, Community or Ambulance Services. • National tariff reduction of 1.8% (2.2% inflation less 4% efficiency). • CQUIN payment increased from 1.5% to 2.5%. • There are important changes to note relating to the expansion in the number of service areas covered by best practice tariffs and the introduction of mandatory currencies for contracting adult mental health services. • In addition, there have been changes in the underpinning healthcare resource group (HRG) structure, further information on which can be found on the NHS Information Centre’s website. • The operation of the emergency readmissions policy in 2012-13 should be based on a clinical review of readmissions. The revised approach centres around a review of emergency readmissions carried out by a team which is led by an independent clinician and which can give providers and commissioners a better understanding of why readmissions are happening, and provide a basis for agreeing the proportion of all the eligible readmissions which could be avoidable through action by the whole health economy. • Marginal rate for emergency admissions above 08/09 baseline maintained at 30%. • Budgets have been set based upon latest proposals from the ACV with a negotiation reserve held based upon the ACV’s view of the worst case position. • A in-year risk reserve has been set equivalent to 2.0% of the initial acute budget.

  19. Main Budget Changes – Acute Contracts (2)

  20. Main Budget Changes - Community

  21. Main Budget Changes – Joint Working

  22. Main Budget Changes – Primary Care Main Budget Changes – Prescribing The Prescribing budget is reviewed in Part 3 CCG delegation GP Prescribing £37.4m Other Prescribing £0.9m Total Prescribing £38.3m

  23. Main Budget Changes – Public Health

  24. Main Budget Changes – Estates • In 2012/13 PCTs no longer have delegated responsibility for capital projects. All new capital projects must be approved by the SHA; • Estates and facilities managed by outer cluster. • Estates held by PCT is recharged to users. • Envisaged that Estates assets and responsibilities will transfer to NHS Property Services during 2012/13.

  25. Main Budget Changes - Corporate Main Budget Changes – Contingency & Planned Surplus • Contingency £2.7m equivalent of 0.5% of the allocation • Planned surplus of £21.5m

  26. Part 2 – 2012/13 QIPP Delivery

  27. Brent QIPP summary • The scale of the 12/13 Brent QIPP plan is summarised below: expected to deliver £13.0m in savings (net, post-risk). 12/13 figures to be confirmed after completion of contract negotiations

  28. Context • The main drivers of the case for change within Brent were identified in the Commissioning Strategic Plan for Brent CCG: • Financial challenge: Significant financial challenge as outlined above. • Structure of services: The structure of services is often inefficient, expensive and results in poor patient experience and outcomes • Health outcomes aspirations: Progress towards improving health outcomes is hindered by financial challenges and structural and operational inefficiencies. • Resulting commissioning priorities are reflected in the structure of the Brent QIPP plan, comprising of: • 1. Transformation initiatives • Reshaping how acute care is delivered throughacute admission avoidance strategies and shifting services from acute to more appropriate care settings, to achieve a lower cost of care within the health system in three areas: • Unplanned care • Planned care • Outpatient care 2. Cost and value initiatives Improving productivity and efficiency across the whole system. Enablers to drive change Risk mitigation to ensure delivery of redesigned services and benefits realisation.

  29. Brent12/13 QIPP plan – overview The Brent QIPP plan has been structured around eight QIPP work streams covering the whole health system, as outlined below: Transformation Transf. & Cost & Value Cost and Value

  30. Brent 12/13 QIPP plan – Integrated Care Pilot (ICP) Additional savings opportunity for Brent from ICP implementation: Scope of ICP in 12/13: • Will cover patients over the age of 75 and all adults with diabetes from Q1 in 12/13. • The integrated model of care is based on multi-disciplinary meetings and work plans; aims to reduce levels of acute activity (PODs)– i.e. A&E, non-elective, elective and outpatients. • Many of Brent’s QIPP schemes also impact on these acute PODs. A full financial review has taken place to look for any possible double counts with other QIPP schemes. This review has led to refreshed target being set. The updated NET target for 2012-13 is £1.5m and is included within the 12/13 QIPP programme. • This pilot has the potential to support existing QIPP plans in unplanned and LTC care and to achieve further improvements Re-provision costs: • Investment costs for Brent are £1m in year 1 rising to £2.7m in year 2 and then £3.2m thereafter. The modelled net savings are approx. £1.5m in year 1 rising to £5.7m - £7.1m in year 5. Brent have assumed funding at this level within 2012-13 budget setting.

  31. Brent 12/13 QIPP plan – provider impact • The most significant impact of the Brent QIPP plan will be on Acute providers. • Reduction in activity in the acute sector; shift towards community services and social care. • Reduction in acute resources and increased investment in other care settings due to expansion of services in primary, community and social care. • Impact on multiple care settings and providers: Delivering the QIPP plan will require integrated working across a number of care settings. • All providers expected to maximise efficiency and productivity to reduce their cost base.

  32. Brent 12/13 QIPP plan – delivery mechanism • QIPP work streams will be delivered through four different mechanisms as outlined below. These mechanisms identify the central role played by other stakeholders in delivery of savings. • 49% of the 12/13 plan is based on service redesign and contracting changes, led by the Brent team. • 51% of the 12/13 plan will be delivered through other parties, with ACV playing a key role in contract negotiations for the majority of these savings.

  33. Brent 12/13 QIPP plan – current RAG rating (based on current view of planning) • The RAG rating is based on four planning criteria: • Implementation plans in place? • Business case signed off? • Embedded in contracts? • Contract negotiations are being led locally, or • By third parties (e.g. ACV, specialist commissioners. • Embedded in budgets? • Many schemes currently need to be embedded into contracts and budgets which is reflected in the high proportion of amber schemes; contract negotiations must be completed to have an accurate view of budgets before the planning of the scheme can be rated as green. • RAG rating: • GreenPPPP • AmberPPP • AmberPP • RedP • Red OOOO

  34. Brent 12/13 QIPP plan – savings mechanisms • The breakdown of QIPP initiatives by key ‘savings mechanism’ is outlined below. Savings will be delivered through a combination of ‘carry-forward’ (existing QIPP plans carried forward into 12/13) and new schemes delivered through a combination of contractual changes or activity shifts through service redesign. • Delivery of c. 35% (£4.5m) of the QIPP plan is dependant on agreement of contract reductions; these contract negotiations are still ongoing so a final view of the impact on savings is yet to be determined.

  35. Brent 12/13 QIPP plan – implementation risks • Assuming contract reductions are agreed as per plan, the following chart provides a view of risk adjusted QIPP savings: • 100%: low risk; assumption of full savings (typically carry forward or contractual schemes) • 75% risk adjustment: medium risk (efficiency savings e.g. Prescribing, Continuing Care etc.) • 50% risk adjustment: high risk (typically activity shifts requiring service redesign) • This view is expected to evolve as implementation of QIPP initiatives is progressed.

  36. QIPP risk-rated monthly delivery expectations • The expected delivery of QIPP savings has been phased based on the expected implementation date and anticipated ramp up time; the cumulative phasing is depicted in the graph below. • Savings from ‘carry forward’ or ‘contractual’ schemes will be realised earlier in 12/13 as these schemes: • Have already been implemented and savings are being realised (i.e. carry forward schemes), or • Require only a contractual change at the beginning of the year for savings to be realised (i.e. contractual schemes). • Savings from other schemes will be back-loaded in 12/13 as they typically require service redesign and activity shifts over the course of the year. £000’s

  37. Brent QIPP programme structure • The QIPP programme structure includes eight work streams, each of which is led by a management lead (Senior Responsible Officer or SRO) and a clinical lead from within the GPCE (Clinical Responsible Officer or CRO). • The CRO is accountable for delivering work stream outcomes and benefits. • The SRO, working with the CRO, is responsible for delivering work stream outcomes and benefits. Localities QIPP Programme PMO Mary Ian David Sarah Sheik SRO AC / EK EK / AS CA CA CA CA AP / JM CRO AC Community Services - Productive Community Health Planned care @ lower cost OP @ lower cost Procedures in community clinics Pre-op assessment at GP Extending scope of PPwT Non GP OP referral ratios Day case to OP procedure Case Mgt - Case Management of frequent flyers Rapid response and home care - STARRS NHS 111 (IW) UCC – Imperial EOL (EM) Zero LOS stretch and NEL short-stay ratio Non birth ratio Primary Care Referral Standardisation (DP) Prescribing within Budget (JO) OP ratios Cluster wide primary care contracting Integrated care Mental Health Productive MH Services (IAPT, Dementia, LD) MH – specialist commissioning CNWL Rosedale Unit Mental Health Repatriation CNWL Contract Efficiency Continuing Care Continuing Care Workstreams Enhanced recovery - Hospital @ Home Other Estates review Public health budgets Acute – Spec. Commissioning Acute - Direct Access Acute - High Cost Drugs Acute – Maternity Pathology Tender Prescribing within budget Other Workstreams: Notes: Blue schemes are ACV contracting mechanisms Purple schemes are cluster-led primary care contracting mechanisms Brown schemes are other non-local commissioning routes

  38. QIPP Monitoring Process Shadow CCG Governing Body Cluster board Shadow CCG Executive Cluster PMO Project Highlight report Progress update CCG QIPP Committee Milestone plans Risk log • Project boards Clinical RO Finance team link Financial tracking Senior RO Activity tracking Information team link • Each project has a highlight report which contains the key project management elements to deliver a successful project. • The highlight reports are used within the project boards to update on progress. • The highlight reports are collated on a fortnightly basis and summarised into a QIPP performance dashboard. • The dashboard is reported to our QIPP Committee, GP Commissioning Executive and to the cluster programme management office.

  39. Part 3 – CCG Delegation

  40. Background Shadow CCG is in the process of applying for authorisation of delegation of all commissioning budgets from 1st April. The values of the 12/13 delegated budgets are shown on slide 14. Until April 2013 authorisation of CCGs, the Cluster CEO will remain the Accountable Officer and shadow CCGs are consortia are bound by PCT governance, including SFIs/SOs etc. The remainder of this section sets out how budgets are being set and managed/delegated within the CCG.

  41. CCG Budget Management 2011/2012 Commissioning Budgets will be held at the following levels: 1. Practice level budgets – where robust activity and finance information are available and subject to Fair Shares using the updated 2011/2012 DoH Fair Shares Toolkit Acute PbR services Prescribing 2. Practice Level budgets with any variances held at CCG level Non PbR Acute services Mental Health Community Services 3. CCG Level (pooled budgets) – including the following: MFF Reserves Risk Pool (See slide 43) CQUINS Local Authority pooled budgets Contingency of 0.5% of CCG Budgets Other budget

  42. Fair shares methodology The DoH’s 2011/2012 Fair Share (FS) toolkit published for PCTs for the purpose of allocating budgets to GP practices, has not been updated for 2012/13. However, Managements Leads have recommended that in line with 2011/12 decision, the delegated budgets should be fair shared by April 2013. To achieve this, the 2011/2012 FS toolkit has been updated with GP practice registered population, number of births data and 2011/2012 forecast outturn spend (covering all 2011/12 budgets held at practice level). Same FS methodology used in 2011/2012, is used in 2012/2013. The recommendation is that all practices move to 100% FS. The data is currently under review at management leads.

  43. Acute risk pool arrangements • The national guidance suggests that practices contribute 3-5%of their indicative budget to a risk pool; • The currently agreed criteria for the risk pool, that is used for spells costing more than £10k; • Any under/overspend on the acute risk pool at the end of the year is allocated to practices pro-rata to initial contributions.

  44. Prescribing budget setting (1)£’000 The table below represents latest workings:

  45. Prescribing budget setting (2) • In 2011/12, GPCE agreed that: • a policy is set for the next two years • To include prescribing in the DH fair-shares toolkit • An adjustment is made to reflect the impact of nursing home registration • that in 2011/12, the budget setting policy would be to apply the uplift and savings consistently across all practices • that from 2012/13, a lower uplift / higher savings targets would be applied to those practices that had not kept within the 2011/12 prescribing budget • In 2012/13 the above recommendations will be actioned.

  46. Incentive scheme • There is an intention to continue the Commissioning Incentive Scheme for practices and localities; however, the details have yet to be worked up.

  47. Reporting Reporting framework(yet to be discussed at Management Leads, but expectation is to continue with current format using the GP Portal) • Finance slide pack (Monthly) Overview of financial position, covering information and analysis of practice over spends/under spends. 2) Summary Variance report Practice level (Monthly) Covers the cost and activity variances at practice level & by different budget headings. 3) Practice level reports (Monthly) Reports at practice level containing detailed information by provider, point of delivery and specialty. 4) Backing Data (Monthly) Web based reporting tool that drills down to patient level data. Also, backing data at patient/practice level for areas where reliable activity and finance data is available: 5) Benchmarking pack (Quarterly) Activity and financial benchmarks and trends for each practice compared with others. 6) Potential New Areas Trend analysis by practice. Top overperforming Specialities by practice.

  48. Part 4 – Performance plans 2012/13

  49. Health Context • Overall life expectancy for both men and women is higher than the England average however the life expectancy of men living in the least deprived parts of the borough is over 9.5 years higher than for men living in the most deprived parts. • Over the past 10 years the rates of deaths from all causes has fallen however the rate of early deaths from stroke and heart disease remains worse than the England average • Deprivation is higher than the England average with the proportion of children living in poverty is worse than the England average • An estimate 16% of adults in Brent smoke and 21.2% are obese • Almost 20% of Brent’s Adult population are estimated to be obese. The rate of hospital stays for alcohol related harm is higher than average • Over half of our population is not taking part in any form of physical exercise with 21.7% of year 6 pupils being classified as obese • High and increasing prevalence of diabetes, HIV and TB

  50. Performance delivery 11/12 • The achievement is based on the current months performance (although this may relate to a previous month due to the availability of data) • Where a table indicates progress, the progress relates to the most recent published data where available or monthly or weekly leading measures for each indicator. Supporting Measures Headline Measures Additional Public Health Measures • Public health measures- change in indicator- breast screening uptake for 50-70 yrs is now being measured instead of coverage. 2010-11 and 2011-12 performance has been amended to reflect this. CVD Mortality and Cancer Mortality- no longer using a 3 year rolling average as actual but instead using the annual rate. • Note: Cluster have re-issued RAG thresholds which may impact on how some of the targets are reflected in Cluster documentation. The new thresholds will be used in the Board reports for 12/13 reporting.