CREATING A VISION FOR EPSOM GENERAL HOSPITAL

Transcription

Epsom and St Helier University Hospitals
NHS Trust
CREATING A VISION FOR
EPSOM GENERAL HOSPITAL
Strategic Outline Case
Issue Date: 23 October 2009
A Vision for Epsom General Hospital
VERSION CONTROL
Version
Date Issued
Brief Summary of Change
Owner’s Name
Draft.V1
09/07/2009
First working document: built on
standard SOC model
Chris Scroggie, Project Team
Draft.V2
28/08/2009
Second working document:
development of Strategic Case
Draft.V3
03/09/2009
Third working document: review
and update of Strategic Case
James Nicholls, Project Team
Draft. V4
04/09/2009
First draft of Strategic Case to Jon
Sargeant for review
Draft. V5
07/09/2009
Review and initial text for
Economic and Financial Cases
Draft. V6
08/09/2009
Review and initial text for
Management and Commercial Cases
Draft. V7
11/09/2009
Revision of whole document
following Project Team Review
Draft. V8
14/09/2009
First cut draft for issue to Gateway
Review team
Draft. V9
16/09/2009
Draft issued to Gateway Review
team
Draft. V10
18/09/2009
First cut of annexes and update of
option descriptions
Draft. V11
19/09/2009
Project Team review and
refinement
Draft. V12
21/09/2009
Draft issued to Jon Sargeant for
review
Draft. V13
22/09/2009
Detailed revision of Finance and
Economic Cases based on Financial
Model V5
Draft. V14
25/09/2009
Refinement of SOC to reduce from
120 pages to 50 pages
Draft. V15
27/09/2009
Draft for Jon Sargeant approval for
issue to Trust Executive Committee
Draft. V16
28/09/2009
Draft for issue to Trust Executive
Committee
Jon Sargeant, Lead Director
Draft. V17
07/10/2009
Draft updated following Trust
Executive Committee comments
Draft. V18
08/10/2009
Draft for issue to Project Board
Draft. V19
16/10/2009
Draft updated following Project
Board comments
Draft. V20
19/10/2009
Final reviews by Project Team
leadership
Jon Sargeant, Lead Director
James Nicholls, Project Lead
Draft. V21
23/10/2009
Final version issued to Trust Board
for approval
23/10/2009
2
TABLE OF CONTENTS
Version Control
2
Table of contents
3
Preface
4
SOC Structure
5
Abbreviations
6
Glossary
8
Approvals
10
1.
EXECUTIVE SUMMARY
11
2.
THE STRATEGIC CASE
20
3.
THE ECONOMIC CASE
54
4.
THE COMMERCIAL CASE
86
5.
FINANCIAL CASE
91
6.
THE MANAGEMENT CASE
97
Appendices
General Annex
Finance Annex
Estates Annex
23/10/2009
3
PREFACE
Our vision is to
maintain and
grow our
reputation as
the: “secondary
provider of
choice for the
populations of
Merton, Sutton,
Epsom and the
surrounding
areas”
Epsom and St Helier University Hospitals NHS Trust (‘the Trust’ or ESH)
presently operates from three hospital sites: St Helier Hospital (STH) in
Carshalton; Sutton Hospital in Sutton; and Epsom General Hospital (EGH) in
Epsom.
In June 2009 the Trust submitted an Outline Business Case (OBC) for the
planned upgrade and strategic redevelopment of a significant portion of the
STH site including vacation of the Sutton Hospital site. This is currently with
the Department of Health (DH) for approval.
This Strategic Outline Case (SOC) sets out the need for change and related
investment options for the future operation of EGH. It is the next logical
strategic step for delivery of hospital facilities designed to meet modern
standards of care and local commissioning intentions across the Trust.
This SOC therefore sets out a range of potential options, derived through
close working with local stakeholders, which respond to the need for change
and seeks permission to prepare a detailed OBC for investment in the future
of EGH.
Jon Sargeant
Executive Director Lead
October 2009
23/10/2009
4
SOC STRUCTURE
We are using
the latest ‘5
case model’
structure from
NHS London
Our case focuses
on Epsom
General
Hospital’s role
in meeting local
healthcare
requirements
irrespective of
future
management
arrangements
Our SOC has been prepared using the Five Case Model. It uses the latest
guidance from NHS London and follows the updated SOC Checklist. The five
case model comprises the following key components:
•
the strategic case section. This sets out the strategic context and the
case for change, together with the supporting investment objectives for
the scheme
•
the economic case section. This demonstrates that the organisation has
selected a preferred way forward, which best meets the existing and
future needs of the service and is likely to optimise Value for Money
(VfM)
•
the commercial case section. This outlines what any potential deal
might look like
•
the financial case section. This highlights likely funding and affordability
issues and the potential balance sheet treatment of the scheme
•
the management case section. This demonstrates that the scheme is
achievable and can be delivered successfully in accordance with
accepted best practice.
Scope
Our SOC responds to:
•
the commissioning intentions of NHS Surrey (formerly Surrey PCT);
•
the issues that our local health economy partners, local councils,
patients and the public have raised as important to them;
•
the service development requirements described by our lead clinicians
and senior managers;
•
the need to modernise the EGH estate and facilities;
•
the need for greater efficiency and productivity driven by the economic
climate; and
•
the broader market for provision of healthcare services to patients in
the Epsom area.
This SOC assumes (but is not dependant upon):
23/10/2009
•
the St Helier Hospital scheme (Phase 1) development going ahead as
planned; and
•
EGH remaining merged with STH as part of the same trust following the
Local Needs Local Health (LNLH) review.
5
ABBREVIATIONS
Abbreviated
Unabbreviated
A&E
Accident and Emergency
ALOS
Average Length of Stay
BDO
BDO Stoy Hayward LLP
BHCH
Better Healthcare Closer to Home
BR
Benefits realisation
CEO
Chief Executive Officer
CHP
Combined Heat and Power
CIPs
Cost Improvement Programmes
COPE
Centre of Pain Education
CQC
Care Quality Commission
CSP
Commissioning Strategy Plan
CT
Computerised Tomography
DH
Department of Health
EGH
Epsom General Hospital
ESH
Epsom and St Helier University Hospitals NHS Trust
ECG
Electrocardiogram
ENT
Ear, Nose and Throat medicine
EOC
Elective Orthopaedic Centre (formerly SWLEOC)
EWTD
European Working Time Directive
FBC
Full Business Case
FM
Facilities Management
GP
General Practitioner
GPSI
General Practitioner with a Special Interest
HfL
Healthcare for London
HRG
Healthcare Resource Group
I&E
Income and Expenditure
ICC
Intermediate Care Centre
ICO
Integrated Care Organisation
ICR
Institute of Cancer Research
IMD
Index of Multiple Deprivation
IM&T
Information Management and Technology
IPAC
Intermediate and Post-Acute Care
ITT
Invitation to Tender
JHSC
Joint Health Scrutiny Committee
LCC
Local Care Centre
LINks
Local Involvement Networks
LoS
Length of Stay
NHS
National Health Service
NHSL
NHS London
23/10/2009
6
Abbreviated
Unabbreviated
NHS SEC
NHS South East Coast
NHS Surrey
Formerly Surrey PCT
NHS Sutton and Merton
Formerly Sutton and Merton Primary Care Trust
NICE
National Institute for Health and Clinical Excellence
OBC
Outline Business Case
OGC
Office of Government Commerce
OJEU
Official Journal of the European Union
OPARS
Older People’s Assessment and Rehabilitation Services
OSC
Overview and Scrutiny Committee
PCT
Primary Care Trust
PDC
Public Dividend Capital
PFI
Private Finance Initiative
Phase 1
St Helier Hospital Scheme (Phase 1)
QOF
Quality Outcomes Framework
RCOG
Royal College of Obstetricians and Gynaecologists
RMH
Royal Marsden Hospital Foundation NHS Trust
SFFF
Surrey Fit For Future
SHA
Strategic Health Authority
SLA
Service Level Agreement
SLR
Service Line Reporting
SME
Subject Matter Expert
SOA
Super Output Area
SOC
Strategic Outline Case
SSDP
Strategic Services Development Plan
STH
St Helier Hospital
SWLSTG
South West London and St Georges Mental Health NHS Trust
TEC
Trust Executive Committee
UCC
Urgent Care Centre
UTI
Urinary Tract Infection
VfM
Value for Money
WCC
World Class Commissioning
23/10/2009
7
GLOSSARY
Category B Estates
standard
The measure of the quality of the physical estate as defined in Estatecode as
“sound, operationally safe and exhibiting only minor deterioration”.
European Working
Time Directive (EWTD)
The EWTD is a directive from the Council of Europe 93/104/EC which lays
down minimum requirements in relation to working hours, rest periods,
annual leave and working arrangements for night workers. By August 2009
health professionals will be expected to comply with the maximum 48-hour
working week.
Facilities Management
(FM)
FM is usually described as ‘soft’ or ‘hard’. Hard FM covers a range of services
including: the maintenance of buildings, engineering, utilities, landscaping
and similar elements. Soft FM covers services which support the operation of
the facility and typically includes catering, cleaning, security, portering.
Healthcare Resource
Group (HRG)
HRGs provide a means of categorising clinical activity in order to monitor and
evaluate the use of resources.
Index of Multiple
Deprivation (IMD)
The Index of Multiple Deprivation 2007 combines a number of indicators,
chosen to cover a range of economic, social and housing issues, into a single
deprivation score for each small area in England. This allows each area to be
ranked relative to one another according to their level of deprivation.
Integrated Care
Organisation (ICO)
The NHS Next Stage Review announced plans to pilot a new form of
integrated care organisation (ICO) and other forms of integrated care in order
find new ways for primary, community, secondary and social care to work
together.
Intermediate and PostAcute Care (IPAC)
‘IPAC services’ is the term used to describe, broadly, both those patients
receiving IPAC and a wider group of patients who could benefit from a similar
type of care, allowing treatment outside the acute hospital setting.
Local Hospital
As defined in Healthcare for London’s ‘A Framework for Action’, local
hospitals will provide non-complex inpatient and day case care to Londoners.
They will be able to offer care for all but the most severe emergency cases,
with a 24/7 urgent care centre acting as a “front door” to the A&E
department. They should also become expert centres for inpatient
rehabilitation.
Major Acute Hospital
As defined in Healthcare for London’s ‘A Framework for Action’, major acute
hospitals will provide more specialised health services to the highest clinical
standards. They will treat sufficient volumes patients to maintain the most
specialised clinical skills and to achieve the best outcome for patients.
National Institute for
Health and Clinical
Excellence (NICE)
NICE is an independent organisation responsible for providing national
guidance on promoting good health and preventing and treating ill health.
23/10/2009
8
Official Journal of the
European Union
(OJEU)
The European Union (EU) procurement directives set out the law on public
procurement and apply to purchases by public bodies. Certain financial
thresholds apply, above which contracts must be advertised in the OJEU.
Notices (often referred to as Advertisements) placed in the OJEU are the
official means of information delivery concerning the progress of a particular
competitive procurement to the European public at large.
Scrutiny Committees
The Health and Social Care Act of 2001 gives statutory provision to local
authorities with social services responsibilities to review and scrutinise health
services provided or commissioned by NHS trusts. In the London Borough of
Sutton this is undertaken by the Health and Well-being Scrutiny Committee,
and in the London Borough of Merton this is undertaken by Health and
Community Care Overview and Scrutiny Panel. These scrutiny committees
have a responsibility to participate in a Joint Health Scrutiny Committee
(JHSC) where the service changes proposed by an NHS trust affect more than
one local authority area, as is the case in BHCH. Health scrutiny committees
have powers to refer matters to the Secretary of State for Health.
Service Line Reporting
(SLR)
SLR details total income and expenditure at specialty level to allow clinical
directorates to fully understand their financial positions and cost drivers. It
supports greater devolved decision-making and engages clinical staff and
others in financial issues.
Super Output Area
(SOA)
SOAs are a unit for presenting statistical information covering areas of a
consistent population size.
World Class
Commissioning (WCC)
The world class commissioning programme aims to deliver a more strategic
and long-term approach to commissioning health services, by developing the
knowledge, skills, behaviours and characteristics commissioners will need to
deliver improved health outcomes.
23/10/2009
9
APPROVALS
This Strategic Outline Case for Epsom General Hospital is recommended for approval by:
John Davey
Samantha Jones
Chairman, Epsom and St. Helier University
Hospitals NHS Trust
Chief Executive, Epsom and St. Helier University Hospitals
NHS Trust
Jonathan Kwan
Jon Sargeant
Medical Director, Epsom and St. Helier
University Hospitals NHS Trust
Finance Director, Epsom and St. Helier University
Hospitals NHS Trust
Chris Butler
Bill Gillespie
Chief Executive, NHS Surrey
Chief Executive, NHS Sutton and Merton
23/10/2009
10
1. EXECUTIVE SUMMARY
The first
1.1
hospital in
1.1.1
Epsom was
opened in 1873,
and was
initially known 1.1.2
as the Cottage
Hospital
The future of
Epsom Hospital
has evoked a
strong public
response over
the years
23/10/2009
Introduction
This SOC sets out the need for development at EGH and provides a
clear direction of travel for more detailed service and facility design
work and financial planning at OBC stage.
The Strategic Case provides a detailed background to the Trust, and
to EGH and sets out the case for change. EGH needs to modernise if
it is to provide safe, efficient and patient focussed care. It needs to
respond to the emerging NHS Surrey commissioning intentions and
exploit the opportunities presented by closer partnership working
with other providers on the Epsom site. It needs to change if it is to
meet the healthcare demands and expectations of its local
population.
1.1.3
Key to any decisions about the future of the hospital is a clear set of
over arching objectives. The aims and Critical Success Factors(CSFs)
for the project were developed and refined through close work with
staff, patients, local health economy partners, councillors and MPs.
1.1.4
Key to any solution is the need to fit with the overall strategy for the
Trust and its local commissioners and to secure a financially viable
and clinically excellent service for future generations of patients. The
Financial Case assesses the affordability of the each of the shortlisted options and the Commercial and Management cases start to
consider the implementation issues.
1.1.5
Two important assumptions are made in developing this SOC:
•
That the STH Phase 1 project will proceed to procurement within
the costs and timeframe noted in that OBC.
•
That, following the draft recommendations of the LNLH review,
the Trust will remain as a single entity.
1.1.6
These planning assumptions provide a platform on which to develop
the ideas for the Epsom site but, to be clear, the Epsom SOC is not
dependant on these outcomes. It is generally agreed that local
commissioning intentions determine that there needs to be a hospital
in Epsom, irrespective of who manages it or what happens to the STH
Phase 1 development.
1.2
The strategic context
1.2.1
The Trust presently operates 3 acute hospitals from St Helier, Sutton
and Epsom. The Phase 1 project makes specific proposals regarding
the future services and facilities that will be delivered from a
redeveloped STH site and proposes the closure and subsequent sale of
the Sutton Hospital site.
11
23/10/2009
1.2.2
Although from an administrative perspective the Trust is responsible
to NHS London it operates facilities whereby the STH throughput is
largely commissioned by NHS Sutton and Merton (formerly Sutton and
Merton Primary Care Trust) which is inside London and the EGH
throughput is largely commissioned by NHS Surrey.
1.2.3
The Trust has been in financial balance for the last two years
although there remains a small cumulative deficit on the Trust’s
balance sheet. The Trust’s agreed Annual Plan 2009/10 shows that it
will continue to break even throughout the three year planning
period.
1.2.4
NHS Surrey is a large Primary Care Trust (PCT) which had a recurrent
budget of £1.4 billion for 2008/09. The PCT broke even last year but
have significant financial challenges ahead of them. Its commissioning
intentions are similar to Healthcare for London and broader national
strategies and look to move care from secondary to primary care
settings where appropriate and safe. It has worked closely with the
Trust on commissioning issues specific to the Epsom locality under the
‘Assuring Access’ program which has seen the future of services such
as women’s and children’s and A&E secured.
1.2.5
EGH operates within a highly complex healthcare economy with both
GP led Integrated Care Organisations (ICOs) and a number of
independent sector healthcare providers highly active in a very
competitive market place.
1.2.6
The future relationship between STH and EGH is being tested under
LNLH. The Trust took the strategic decision to continue with the
Epsom SOC on the basis that irrespective of future management
structures the need for an acute hospital at Epsom was assured and
therefore so is the need to modernise facilities.
1.3
The case for change
1.3.1
Following provisional approval of the STH OBC by NHS London the
Trust now need to formally consider the medium to long term
direction for the EGH.
1.3.2
There have, in the past, been a number of proposals for the
redevelopment of the EGH site largely linked to the charitable
Denbies Trust. These proposals were significant in scale, were based
around an expectation of increased specialist and non specialist
throughput and were linked to proposals for the Denbies Trust to
either acquire further elements of the EGH site or to provide financial
support to the proposed schemes.
1.3.3
The Trust will continue to consider these proposals but this will be in
the light of a clear understanding of what it needs as an organisation
and the risks and benefits of such arrangements.
1.3.4
In identifying a “Direction of Travel” the Trust believe that there is a
compelling case for change which is centred around resolving the
following key issues:
12
1.4
•
The need to respond to the commissioning intentions of NHS
Surrey who anticipate a change to services delivered in the acute
setting. EGH facilities need to be the right size and shape to
respond.
•
Partners in the local health economy have expressed a keen desire
to see the EGH site developed to incorporate a mix of primary and
secondary care services. This broader health economy driver for
change is likely to see some community facilities which are no
longer fit for purpose re-provided on the Epsom site. This presents
exciting possibilities for a different model of care with a variety of
health services accommodated in a ‘health village’ giving the
opportunity for better access for patients, improved outcomes and
quality, economies of scale and greater financial benefits. It also
manages the potentially destabilising effects of movements of
activity out of the acute setting by maintaining critical mass of
staff and activity on the EGH site.
•
The need for the hospital estate and services to be both more
integrated within ESH and more efficient in the ways in which they
deliver healthcare, in particular by the better co location of
certain services.
•
The need for the hospital to meet the facilities standards
expected from a provider of 21st century healthcare.
Economic case
The long list
1.4.1
Given that the intention behind producing the SOC was to establish a
“Direction of Travel” for the hospital, a very broad long list of options
was established through a workshop held by the Trust Executive
Committee (TEC). This did not seek to identify a specific number of
discrete options but sought to establish both a range of possible
models for providing services and facilities, together with establishing
a range of CSFs.
The short list
23/10/2009
1.4.2
The Long List was subjected to a formal scoring process involving
representatives from a significant number of local stakeholder groups
and health economy partners together with local councillors and MPs.
1.4.3
By ranking the benefit scores the Trust short listed the 12 best options
for further economic analysis. Additionally, the Trust is required to
include a “Do Minimum” option for comparison thus giving a total of
13 options to consider.
1.4.4
The capital costs are built up with reference to work recently
conducted by Davis Langdon (quantity surveyors) on the Phase 1
scheme. For the purposes of comparative analysis they assume that
the costs will be fully funded by Public Dividend Capital (PDC) with no
funding from external sources. Where the proposal also includes the
potential for land sales these are included based on the most recent
13
valuation of the site which placed a value of £19 million on the entire
site if used for residential development.
Table 1. Capital costs and benefits points of options
Capital Cost
Benefit
points
Cost/benefit
point (£s)
Rank
£115,794,942
1,257.20
92,105
6
£79,159,853
1,249.80
63,338
3
£111,580,710
1,202.80
92,767
7
£76,925,977
1,195.50
64,346
4
Modern local Maximum
New build
£384,538,768
1,183.10
325,026
12
6
Modern local
Intermediate New build
£236,729,691
1,175.80
201,335
10
7
Major acute Maximum
Hybrid
£131,014,653
1,163.00
139,920
9
8
Major acute Intermediate
Hybrid
£99,831,794
1,155.70
105,893
8
9
New concept Maximum
New build
£375,333,568
1,128.80
332,507
13
10
New concept
£227,524,491
1,121.50
202,875
11
11
Refurbish
£91,622,794
1,111.30
82,446
5
12
Modern local
Intermediate Refurbish
£66,202,175
1,103.90
59,971
2
13
Do Minimum: 21st Century
Turnkey Solution
£48,856,714
1,049.60
46,548
1
Option
Description
1
Hybrid
2
Modern local
Intermediate Hybrid
3
New concept Maximum
Hybrid
4
New concept
Intermediate Hybrid
5
For a full explanation of the option descriptions as set out in table 1, please refer to section 3.5 of this SOC
1.4.5
1.4.6
23/10/2009
The top option is “Do Minimum: 21st Century Turnkey Solution” based
on its low cost which offsets its low benefits score.
•
Three out of the top six options looked for a Modern Local Hospital
•
Three out of the top six options looked to an intermediate
solution, i.e. keeping the best of the current infrastructure
•
Three out of the top six options looked to refurbishment as the
preferred building solution
Based on this VfM test above, the revised ranking indicates that, as a
“Direction of Travel” the Trust should look towards the creation of a
Modern Local Hospital with an intermediate scope delivered via
refurbishment. However, the list will be tested again at OBC stage
14
and the opportunity exists to develop alternative solutions around the
“New Concept Model” and hybrids of new build and refurbishment.
1.4.7
Once a better understanding of the benefits of the “New Concept
Model” is known it is likely that this option will demonstrate improved
VfM.
1.5
Commercial case
Procurement strategy
1.5.1
In formulating the “Direction of Travel” the Trust has only briefly
considered the procurement strategy that might apply. This will be
the subject of further analysis at OBC stage including the provision of
a more complete understanding of the service requirements and the
potential for risk transfer attendant with each option.
1.5.2
Procurement routes considered are:
•
Private Finance Initiative (PFI)
•
Procure21
•
Official Journal of the European Union (OJEU)
Funding strategy
1.5.3
A range of funding routes is examined briefly in the commercial case.
Again, at this stage, there are too many uncertainties to draw clear
conclusions as to the preferred funding route. The vagaries of the
financial markets and the present lack of public capital suggest that
the Trust need to keep all options open and make a decision on a
clear VfM and affordability basis once a preferred option is thoroughly
evaluated and described at OBC. In reality the total funding is likely
to be derived from a number of sources in a hybrid model.
1.5.4
The funding routes considered are:
•
PFI
•
PDC
•
Loans
•
Land sales
•
Third party
•
Sales and lease back
•
Hybrid
Workforce strategy
1.5.5
23/10/2009
The Commercial Case asks for consideration of the potential
workforce issues arising from the project. These are not apparent at
the moment and in any case are likely to emanate from the
commissioning intentions of NHS Surrey and be dealt with as part of
15
the whole health economy development rather than this project
specifically.
1.6
Financial Case
1.6.1
The Financial Case sets out the capital and revenue affordability of
the options.
1.6.2
The Trust has a strong track record of financial stewardship over the
last three years moving from a deficit in 2006/07 to a recurrent
surplus of £4.9m in 2008/09. The Annual Plan demonstrates continued
achievement of statutory financial targets.
1.6.3
The Epsom SOC assumes a breakeven start point for this project. This
is on the basis that the Cost Improvement Programmes (CIPs) and
transitional funding identified in the STH Phase 1 project are
delivered. The underlying model already incorporates NHS London
Planning assumptions which reflect the anticipated impact of the
economic downturn on the NHS.
1.6.4
The methodology and model used are consistent with the approved
Phase 1 model and include an assessment of inflation, tariff efficiency
and volume growth. Capital costs are developed based on average
cost per square metre using DCAGs and MIPs 506.
1.6.5
Capital affordability is assessed based on the ability for the Trust to
maintain its estates costs for the EGH site within 12.5% of the
turnover associated with EGH activity.
1.6.6
The capital funding ceiling is calculated using the PFI test. The total
estates revenue costs must not exceed 12.5% of turnover at OBC and
15% at Full Business Case (FBC). Turnover for EGH at the same price
base as capital costs is £118m. The limit of estates related costs are
therefore £14.9m at OBC and £17.8m at FBC.
Table 2. Capital Affordability based on 12.5% test
23/10/2009
Option
Description
Estates Cost (£m)
Option 1
Modern local Maximum Hybrid
15.2
Option 2
Modern local Intermediate Hybrid
13.0
Option 3
New concept Maximum Hybrid
14.7
Option 4
New concept Intermediate Hybrid
12.4
Option 5
Modern local Maximum New build
35.4
Option 6
Modern local Intermediate New build
24.4
Option 7
Major acute Maximum Hybrid
18.7
Option 8
Major acute Intermediate Hybrid
15.5
Option 9
New concept Maximum New build
34.6
Option 10
New concept Intermediate New build
24.1
Option 11
Modern local Maximum Refurbish
13.2
Option 12
Modern local Intermediate Refurbish
11.9
Option 13
Do Minimum: 21st Century Turnkey Solution
10.8
16
on this test and these are highlighted in blue above.
1.6.8
Revenue affordability is based on the ability of an option to generate
a net contribution over the planning period.
Table 3. Revenue Affordability
Option
Description
Net
CIPs
Average in
year (£m)
Max in
year (£m)
Option 1
-0.8
-0.05
3.0
Option 2
-1.2
-0.08
1.9
Option 3
-0.4
-0.03
2.7
Option 4
-1.1
-0.07
2.5
Option 5
5.7
0.36
7.5
Option 6
2.1
0.13
5.7
Option 7
0.3
0.02
2.5
Option 8
-0.4
-0.02
3.4
Option 9
5.5
0.34
7.3
Option 10
1.8
0.11
4.4
Option 11
-0.8
-0.05
2.6
Option 12
-1.3
-0.08
2.4
-1.8
-0.11
1.9
Option 13
1.6.9
st
Do Minimum: 21 Century Turnkey
Solution
Based on this ability to cover its costs and achieve a net contribution
over the planning period, options 5, 6, 7, 9 and 10 appear
unaffordable from a revenue perspective. The remaining, affordable,
options demand CIPs in the range of 1.6% and 2.8% of EGH turnover in
their worst year and this is assumed deliverable based on estate and
operational efficiencies delivered by new facilities.
1.6.10 The options that pass both the revenue and capital affordability tests
are:
Table 4. Affordable options
Option
Description
Option 2
Option 3
Option 4
Option 11
Option 12
Option 13
1.6.11 These are the options that will be taken forward at OBC, although all
options will be retested.
23/10/2009
17
1.7
Management Case
1.7.1
The Management Case sets out the project management
arrangements that are in place to deliver the project. The Trust has a
strong governance structure which provides the Trust Board with
assurance that the project is being managed against target and the
opportunity to discharge its responsibility for oversight and scrutiny.
1.7.2
The Project Board has met monthly since July and will continue to
manage the project through its stages from SOC through OBC and to
FBC and implementation. The Project Board membership includes a
broad range of stakeholders representing all interested groups. In line
with the Gateway Review the Trust will look to streamline Project
Board membership and set up a stakeholder steering group to
maintain appropriate engagement. The Trust are delighted with the
huge level of support and interest that has been received from the
public, staff, local health economy partners, local councils and MPs.
1.7.3
The Project Team is inherited from the successful Phase 1 project and
has the critical mass and funding to manage the project using
PRINCE2 methodology.
1.7.4
The timetable for the overall project is set out below. For illustration
purposes this assumes the PFI procurement route, which is not yet
established, but provides a good indication of the likely timescales.
The Trust anticipates commissioning and opening of new facilities by
December 2016.
Table 5. Project Timetable
Activity
Timescale
Complete
SOC Submitted to NHSL
1 month
Nov 09
Public meeting
NHSL Approval
Nov 09
2 months
OBC kick off
23/10/2009
Jan 10
Jan10
Activity and capacity modelling
2 months
Mar 10
Service design and modelling
3 months
Jun 10
Design work
6 months
Dec 10
Financials
3 months
Dec 10
SHA OBC Approval
3 months
Mar 11
DH OBC Approval
3 months
Jun 11
Invitation to Participate in Dialogue
3 months
Sep 11
SHA Review
2 months
Nov 11
Pre Qualification
3 months
Mar 12
Competitive Dialogue
6 months
Oct 12
Bidding
2 months
Dec 12
Selection and ABC
3 months
Mar 13
FBC
9 months
Dec 13
Construction and commissioning
3 years
Dec 16
18
1.7.5
1.7.6
The Trust has assessed the risks to the project at this stage. The key
areas are:
•
The number of strategic initiatives that are ongoing at the time of
preparing this document and which will conclude during its
development. The Trust’s view is that it needs to press ahead and
will incorporate the outcome of these initiatives as it goes.
•
The NHS Surrey commissioning intentions are still being finalised
and the specific impact is not yet fully known. The Trust have
worked with commissioners to understand their plans and have
incorporated the initial assessment of the quantitative and
qualitative impact in their thinking.
•
The Trust is embarking on two major projects at the same time.
The Phase 1 project is in advance of the EGH scheme. The Trust
anticipates that these two projects can be managed in a
complementary fashion with each drawing strength from the
other, both in terms of shared resource as well as thinking, to
achieve a holistic implementation for the Trust.
The Trust has carried out a Gateway 0 review. The conclusion of this
review is:
Delivery Confidence Assessment for is:
23/10/2009
•
For completion and submission of the SOC is Amber / Green.
•
For completion of the potential OBC and eventual delivery of a
solution is Amber.
1.8
Conclusion
1.8.1
In conclusion the Trust are confident that there is a strong case for
delivering an affordable solution to manage the planned changes in
the health economy, responding to commissioning intentions and
improving the site to make services more accessible and to deliver
better patient experience with better facilities for staff.
19
2. THE STRATEGIC CASE
2.1.1
This section sets out the background and history to the Trust and
reviews the current and future strategic drivers for change.
2.2
Introduction
2.2.1
The Strategic Case is split into two parts. Part A focuses on the
strategic context and Part B describes the case for change.
2.3
Epsom and St Helier University Hospitals NHS Trust
2.3.1
ESH provides
acute and some
specialist
hospital
services to
420,000 people
across its three
main sites with 2.3.2
turnover of
£315m and over
4,300 staff.
The Trust was established on 1 April 1999, following the merger of
Epsom Healthcare NHS Trust and St Helier NHS Trust. At this point the
Epsom Trust was operating a deficit whilst the St Helier Trust had an
on going operating surplus. It became known as Epsom and St Helier
University Hospitals NHS Trust (ESH) in July 2003; the name change
recognised the important role the Trust plays in training future
doctors in partnership with St George’s Hospital Medical School.
2.3.3
The Trust also provides care for a wider population, with respect to
certain specialist services including:
ESH is a large acute trust which provides a full range of services to
more than 420,000 people in local communities including the whole of
the London Borough of Sutton, part of the London Borough of Merton;
the Surrey Boroughs of Epsom and Ewell, parts of Reigate, Banstead
and Elmbridge, plus part of Mole Valley District.
•
The South West Thames Renal and Transplantation Unit based on
the STH site;
•
Elective Orthopaedic Centre (EOC, formerly SWLEOC) based at the
EGH site; and
•
Queen Mary’s Hospital for Children, a dedicated children’s hospital
with an accredited Neonatal Intensive Care Unit (NICU) also based
on the STH site.
2.3.4
The vast majority of services provided by ESH are commissioned by
either NHS Sutton & Merton or NHS Surrey.
2.3.5
The Trust employs 4,321 staff across its various sites.
Table 6. Total Staff Employed by Trust
Staff Group
Medical and dental
Administration and estates
Healthcare assistants and other support staff
Nursing, midwifery and health visiting staff
Scientific, therapeutic and technical staff
23/10/2009
Number
615
1,073
724
1,463
440
Other
6
Total
4,321
20
STH is the
largest of the
2.3.6
Trusts’
hospitals and is
the location of
Trust HQ in NHS
London
St Helier Hospital
The STH site in Carshalton is a district general hospital with a busy
24-hour Accident and Emergency department dealing with 80,000
attendances per year. It has 521 beds and undertakes all of the
emergency surgery in the Trust. The Renal Unit provides acute renal
care and dialysis and is integrated with the St George's Hospital
transplantation programme. STH is also the host site for Queen
Mary’s Hospital for Children.
Sutton Hospital
2.3.7
EGH accounts
for more than a
2.3.8
third of the
Trust’s
activities.
2.3.9
Sutton Hospital is located adjacent to The Royal Marsden Hospital
Trust (RMH) Surrey Branch in Sutton. It houses a 32 bed day surgery
unit, a urology unit with lithotripsy, dermatology laser care, pain
control service and a large ophthalmology outpatient service. A
number of other outpatient services are provided together with
radiology and physiotherapy.
The EGH site currently has 305 beds open and serves the northern
part of the NHS Surrey catchment area providing an extensive range
of inpatient, day and outpatient services to a population of 180,000
people. Clinical services at EGH generate about £100m of income,
37% of the Trust’s total clinical income of £270m.
It has a 24-hour Accident and Emergency (A&E) service with 50,000
attendances per year and undertakes all pre-booked (elective)
inpatient surgery within the Trust. There is also an extensive range of
diagnostic and supporting services, including pathology, radiology
(including CT, MRI and ultrasound) vascular diagnostic services and a
busy modern day care and day surgery unit. Moreover, the site
includes an acute psychiatric facility operated by Surrey and Borders
Partnership NHS Foundation Trust.
2.3.10 The Elective Orthopaedic Centre (EOC) is also hosted by the Trust at
the EGH site. This NHS treatment centre provides joint replacement
services to patients of St George’s Healthcare NHS Trust, Mayday
Healthcare NHS Trust and Kingston Hospital NHS Trust in addition to
patients from the Trust.
Table 7. Staff employed at Epsom General Hospital
Staff Group
Medical and dental
178
Administration and estates
224
Healthcare assistants and other support staff
23/10/2009
Number
77
Nursing, midwifery and health visiting staff
406
Scientific, therapeutic and technical staff
122
Other
113
Total
1,120
21
Set out below is a map showing the location of the principal hospitals
managed by the trust:
Figure 1.
23/10/2009
Map of ESH main hospital locations
2.4
Commissioning responsibility
2.4.1
The Trust is responsible to NHS London and services on the St Helier
site are primarily commissioned by NHS Sutton and Merton. Epsom
General Hospital is geographically situated within NHS South East
Coast (NHS SEC) and its main commissioner is NHS Surrey.
2.4.2
This SOC will be formally approved by NHS London but with letters of
support from NHS Surrey, Sutton and Merton PCT and NHS SEC.
2.5
Current commissioning
2.5.1
The table below lists the 5 commissioners that make up 97% of all
clinical income at the Trust. A further 165 PCTs account for the
remaining 3% of commissioned activity. EOC activity is included within
EGH activity. Sutton Hospital activity is included within STH.
22
Table 8. Clinical income by site and commissioner (2008/09)
The vast
majority of
EGH’s services
are
commissioned
by NHS Surrey
Commissioner
St Helier Total
Epsom Total
Trust Total
£115,992,811
£13,265,030
£129,257,841
NHS Surrey
£23,712,286
£75,198,199
£98,910,485
Croydon PCT
£13,787,722
£2,941,615
£16,729,337
Kingston PCT
£3,053,215
£4,969,943
£8,023,157
Wandsworth PCT
£3,854,140
£811,440
£4,665,581
Other PCTs
£8,608,497
£2,857,887
£11,466,384
£169,008,670
£100,044,115
£269,052,785
Sutton and Merton PCT
Total
EGH is the
centre for
elective
inpatient
surgery for the
trust
2.6
Key features of ESH service model
2.6.1
In October 2006, the Trust reconfigured surgical services in order to
consolidate non-elective surgery on the STH site and concentrate
elective inpatient surgery at EGH. This complex and challenging
operational shift was achieved with minimal disruption to patient care
and no adverse incidents. As part of these changes, £1 million was
spent upgrading the theatres and the high dependency unit at EGH.
ESH is shortlisted to
continue to
provide renal
services to NHS
Surrey
2.6.2
Renal medicine services continue to expand and are projected to
grow at between 7% and 10% per annum for the foreseeable future.
Dialysis services are now provided from five satellite locations across
South West London, Surrey and West Sussex, as well as at STH, and
further satellites are planned for the coming year. NHS Surrey
commission about 50% of the renal work undertaken by the Trust.
They tendered their renal work in 2009 and the Trust is short-listed as
part of a consortium with St Georges and Ashford and St Peter’s
hospitals. Once the outcome of this exercise is known it will be
factored into EGH SOC and the Phase 1 FBC.
2.6.3
Stroke
management
differs between
NHS London and
NHS SEC
The Trust has invested capital and has appointed additional medical
staff to provide improved facilities and services for stroke patients.
Further investments will take place in 2009/10 in nursing and therapy
staff and expansion of the units at both STH and EGH to achieve
standards set out in the London Stroke Strategy and NHS Surrey’s
Commissioning Intentions.
Commissioners 2.6.4
have provided
certainty that
Women’s and
Children’s
services remain
at Epsom
2.6.5
Significant investments in additional medical and midwifery staffing
have been made over the past two years and further investment is
expected in 2009/10 to achieve standards set out in the RCOG
guidance for consultant labour ward presence and midwife to mother
ratios called for in “Maternity Matters”. A number of key services
have shown improvements in performance and growth over the past
three years, including pathology, renal services and the EOC.
23/10/2009
Other investments have centred on improving the patient experience:
reducing the numbers of patients accommodated in mixed sex wards;
reducing healthcare acquired infections; improving waiting times; and
refurbishing clinical areas including GUM, maternity and stroke
facilities.
23
2.7
Better Healthcare Closer to Home (BHCH)
2.7.1
Innovative
changes to
delivering care
closer to home
have put STH at
the leading edge
of the acute
response to
Healthcare for
London
As part of the redevelopment of health services within Sutton and
Merton a programme called “Better Healthcare Closer to Home
(BHCH)” has been developed to establish 21st century healthcare
within the area with more services provided at a local level. The
programme proposes to create integrated healthcare services based
around a number of Local Care Centres (LCCs) distributed throughout
the locality, supported by a local acute hospital providing core
secondary care services.
These LCC facilities are designed to
undertake a number of the functions that are at present delivered
from existing acute hospital sites, principally ESH and St George’s
Healthcare NHS Trust, resulting in a net shift in clinical activity away
from these sites.
2.7.2
In response to this programme, ESH have produced an OBC which
proposes the substantial re-development of the STH site and the
eventual closure and disposal of the Sutton hospital site.
2.8
Elective Orthopaedic Centre (EOC)
2.8.1
EOC is setting
standards as a
national
exemplar and
2.8.2
future plans for
EGH need to
exploit its
commercial and
clinical models
EOC is looking
to expand and
diversify its
23/10/2009
The EOC opened five years ago primarily to undertake elective hip
and knee replacements for the South West London sector with a
mission to meet the challenging targets set out in the NHS Plan.
The EOC Partnership has successfully brought together some elements
of the elective orthopaedic work of five acute trusts in South West
London into one location, originally in the form of hip and knee
replacement surgery but latterly including shoulder, foot & ankle and
revision activity. It is an independent operation, hosted by ESH, and
operated from the Denbies Wing of EGH. For governance, the centre
reports through ESH, but it is strategically managed through a riskshare agreement with the following Partner trusts:
•
ESH;
•
St. George’s;
•
Mayday; and
•
Kingston.
2.8.3
Over the five years since the EOC’s inception, the centre has reduced
patient waiting times for hip and knee patients, provided a
demonstrable high quality service, delivered good clinical outcomes
and reported excellent patient satisfaction. It has optimised its
operational performance, expanded the range of procedures it
undertakes and increased turnover from £17M in 2004/5 to £25M in
2008/9. The centre is totally dependent on income through PbR and
for the last three years has delivered a break-even financial position,
realising 3% profit for the EOC Partnership Board.
2.8.4
The EOC is meeting its patient’s and commissioner’s expectations but
has plans for further growth and development. These plans are
supported by commissioners and are the subject of a separate
24
business case, a copy of which is included in the General Annex to this
SOC. In order to accommodate increased demand the EOC proposes
development of a 5th theatre together with the necessary
infrastructure on site to support it, namely power requirements.
The project will require £950k of capital funds. The investment will
sustain growth in a spinal service for the sector and realise additional
income/profit for the Partner trusts.
service
offerings
2.9
Trust Finances
Based on
performance to
July 2009,
2009/10 outturn 2.9.1
is expected to
be in line with
the Annual Plan
The Trust has recovered from financial deficit in 2006/07 to a healthy
surplus in 2008/09. It achieved this through a range of sustainable
CIPs and strengthened income performance.
2.9.2
Historical income and expenditure accounts and balance sheets are
summarised in Tables 9 & 10 below.
In 2009/10 the Trust aim to deliver a small deficit after absorbing the
impact of impairments in line with the Annual Plan. In July 2009 the
Trust posted a surplus of £1,210k in month, £128k more than plan
which led to a surplus of £62k year to date. Whilst this is £1,010k less
than plan the Trust are confident that it will achieve the required
year end position.
Table 9. Trust Income and Expenditure Accounts
Year
2008/09
2007/08
2006/07
£’000
£’000
£’000
274,112
260,405
239,796
40,908
36,093
33,058
(301,279)
(289,314)
(274,206)
13,741
7,184
(1,352)
(434)
(285)
0
13,307
6,899
(1,352)
737
1,118
481
(1,813)
(694)
(19)
(78)
(79)
(85)
Surplus / (Deficit) for the Financial Year
12,153
7,244
(975)
Public Dividend Capital dividend payable
(7,251)
(6,417)
(6,286)
4,902
827
(7,261)
Income and Expenditure
Income from activities
Other operating income
Operating expenses
Operating Surplus / (Deficit)
Profit / (loss) on disposal of fixed assets
Surplus / (Deficit) before interest
Interest receivable
Interest payable
Other finance costs
Retained Surplus / (Deficit)
23/10/2009
25
Table 10. Trust Balance Sheets
Year
2008/09
2007/08
2006/07
£’000
£’000
£’000
182,231
202,883
191,910
26,561
31,880
19,440
(29,590)
(33,284)
(22,288)
Creditors due after more than one year
(2,046)
(4,668)
(9,353)
Net current assets
(5,075)
(6,072)
(12,201)
Provision for liabilities and charges
(5,937)
(7,430)
(6,487)
Total Assets Employed
171,219
189,381
173,222
Public dividend capital
133,585
134,980
132,749
33,075
50,122
39,743
Donated asset reserve
5,155
4,990
4,886
Income and expenditure
(596)
(711)
(4,156)
171,219
189,381
173,222
Balance Sheets
Fixed assets
Current assets
Creditors due within one year
Revaluation reserve
Total taxpayers equity
2.10 Financial Recovery
Robust savings
plans have
delivered £
24.3m of
savings in the
last 2 financial
years
2.10.1 In the 2006/07 financial year the Trust made a financial deficit of
£7.3 million. Although never in formal turnaround, the Trust set up a
structure to identify potential savings and to support delivery to
ensure that the deficit was not repeated. Savings were identified in
seven key areas:
•
Reduction in the Average Length of Stay (ALOS);
•
Reduction in outpatient appointments leading to fewer clinics;
•
Improvements to scheduling and operational disciplines leading to
reduced theatre lists;
•
Reductions in the number of temporary medical and nursing staff;
•
Elimination of overlaps in job roles and tighter controls on
temporary staffing, leading to reductions in administration,
clerical and secretarial staff;
•
Restructuring of corporate functions; and
•
Standardisation of goods used by the Trust leading to improved
procurement and reduced prices.
2.10.2 These measures led to savings of £18.3 million in the year 2007/08,
enabling the Trust to make a surplus of £827k in that period. A
further £6m of savings were made in 2008/09.
23/10/2009
26
2.11 Trust quality and performance
According to the 2.11.1 The Care Quality Commission (CQC, formerly the Healthcare
Commission) recently issued its annual health check of the Trust for
CQC the Trust is
2008/09.
providing a
good quality of 2.11.2 The Commission determined that overall the Trust was providing a
services to its
‘good’ quality of service to patients and that the Trust’s performance
patients
was ‘fair’ in its use of resources. This report can be found attached
in the General Annex.
2.11.3 Whilst these measures do not represent a change from the last year’s
scores, over the past year the Trust has made significant
improvements in many areas, including:
•
Infection control;
•
Stroke;
•
Waiting list reductions; and
•
Emergency access.
2.11.4 The following are more detailed highlights of the report:
23/10/2009
•
Emergency access target: 98.1 % of patients were seen, treated,
and admitted or discharged within the four hour target in A&E;
•
Cancer related targets:
−
99.9 % achievement against the two week target for seeing
patients who have been urgently referred by a GP. The
national target for this was 98 %;
−
99.8 % achievement against the 31 day target based on
initially diagnosing a patient to treating them. The national
target for this was 98 %; and
−
97% achievement against the 62 day target to treat a patient
after an urgent referral from GP. The national target for this
was 95%.
•
Rapid access chest pain clinic: 99.6% of patients were seen within
the maximum two week wait for the rapid access chest pain clinic
after urgent GP referral;
•
18 week wait – the time from GP referral to treatment time for
patients who have surgery: achieved (85%);
•
18 week wait – the time from GP referral to treatment time for
patients who are not admitted to hospital: achieved (95%); and
•
Access to genito-urinary medicine (sexual health) services –
patients offered an appointment within 48 hours: achieved (99%).
27
2.12 Clinical Strategy
Clinical strategy 2.12.1 In November 2007 the Trust Board considered an updated Clinical
Strategy entitled “Shaping our Future, an emergent strategy for Trust
supports the
clinical services”. In this the Trust set out its overall vision of being
vision to be the
“the provider of choice for secondary healthcare for the populations
provider of
of Merton, Sutton, Epsom and the surrounding areas.” Subsequently,
choice for
it has adapted the basic principles set out in this strategy to
secondary
accommodate Healthcare for London and NHS Surrey commissioning
healthcare.
intentions.
Assuring Access
The Assuring
Access
programme has
helped clarify
intentions re
certain services
at EGH
2.12.2 The “Epsom Assuring Access” programme was established by NHS
Surrey following completion of their “Fit for the Future in Surrey”
programme to focus specifically on the needs of the population served
by EGH and to ensure that they had access to secondary services on
an equitable basis with the rest of Surrey. This followed concerns that
the Trust might have difficulty in achieving the required clinical
standards in some services at EGH.
2.12.3 The aim of the programme was to enable NHS Surrey to establish a set
of commissioning intentions that offered local residents the best
quality care as locally as possible to where they live, based on:
•
health needs and trends of the population;
•
national guidelines;
•
professional guidelines;
•
clinical evidence; and
•
new approaches to service delivery.
2.12.4 In July 2008 the scope was widened to include the Women’s and
Children’s review (which had originally been initiated as a separate
project by the Trust, NHS Surrey and NHS Sutton and Merton) in
relation to EGH delivered services.
2.12.5 The programme was led by a Programme Board comprising
representation from NHS Surrey, the Trust, local GPs, Surrey LINks,
Surrey County Council, and Central Surrey Health.
This work resulted in:
23/10/2009
•
An engagement process that included co-design events with a wide
range of stakeholders to identify needs and preferred solutions.
•
Evidence based commissioning intentions for:
−
Stroke
−
Cardiology
28
−
Women’s and Children’s services (Maternity)
−
A&E Services
•
Recommendations to the board of NHS Surrey with regards to the
future of services based on the EGH site
•
Joint working to deliver responses to commissioning intentions and
to put in place appropriate levels of service, including:
−
bringing obstetric and midwifery staffing and cover
arrangements in line with RCOG guidance, Midwifery Matters
and BirthratePlus
−
a revised cardiology
arrangements
−
new standards and model of care for stroke patients.
network
and
care
pathway
Local Needs Local Health
2.12.6 LNLH is a review to examine the future structure of ESH. The possible
LNLH looks at
structural options that have been under consideration include:
potential future
management
• the current organisational model, with EGH and STH remaining as
structures for
one merged Trust;
the Trust’s sites
• a de-merger with EGH and STH becoming standalone entities;
•
a divestment of part of or all of the Trust; or
•
any other option that came up as part of the review.
2.12.7 The aim of LNLH is to establish the optimal organisational structure
for the Trust that will allow it to improve the quality of services
offered to local people in the future, ensure the clinical and financial
sustainability of these services and better adapt to risks and pressures
currently faced by healthcare organisations in UK. Whichever future
structure is chosen, the management and staff can then plan with
greater certainty to meet the challenges presented by the financial
position, an ageing estate and changing conditions in the local health
economy.
This SOC
assumes that
the Trust stays
as a single
merged Trust
23/10/2009
2.12.8 In order to progress the SOC for EGH assumptions have been made on
the basis of the ‘stay merged’ option. This does not make any
representation towards a potential outcome of the LNLH exercise but
simply provides a platform which is easily understood. The Trust’s
view is that irrespective of the outcome of LNLH there will be a need
for a hospital on the EGH site providing A&E and local acute services
in line with the commissioning plans of NHS Surrey.
29
2.13 Financial Strategy
2.13.1 The Trust’s medium term financial strategy is provided in the Annual
Annual Plan to
Plan 2009/10, a copy of which is contained in the Financial Annex to
strengthen
this document. The Annual Plan confirms that the Trust has a central
recovery but
aim of maintaining its financial recovery but not at the expense of
not at the
clinical and operational targets.
expense of
clinical targets. 2.13.2 The Trust’s action plan towards NHS Foundation Trust status has five
core themes which reflect many of the issues already identified in the
plan:
•
Achieving financial stability
•
Improving operational performance
•
Strengthening financial, strategic and business planning
•
Developing management capacity
•
Building external relations
Table 11. Annual Plan Income and Expenditure Forecasts
Year
I&E Account
Income
Expenditure
EBITDA
ITDA
Surplus
2008/09
2009/10
2010/11
2011/12
Actual £m
Plan £m
Plan £m
Plan £m
311.7
323.9
324.9
328.5
(289.6)
(305.1)
(307.0)
(312.5)
22.1
18.8
18.0
16.0
(17.2)
(16.0)
(15.4)
(16.0)
2.7
2.6
0.0
2.6
0.0
4.9
Impairments1
Net surplus
(3.0)
4.9
(0.3)
2.14 Epsom Estates Strategy
2.14.1 In early 2008 the Trust launched the EGH estates review, which is led
Epsom estates
by a group made up of senior Trust staff and representatives from
strategy will
NHS Surrey, Epsom Council and DH. The contents of this SOC will
continue to
further inform the emerging estates strategy.
develop in
response to this 2.14.2 The following sections provide background information and describe
SOC
the key estates issues currently facing the Trust with respect to the
age and condition of the buildings, compliance with Consumerism
Agenda targets and compliance with the Disability Discrimination Act
(DDA).
2.14.3 The site is set to the south of Epsom and comprises a number of
blocks of varying age. The entire site is shown below:
1
Impairments are excluded for the purposes of determining achievement of break-even duties.
23/10/2009
30
Figure 2.
Aerial photograph of Epsom General Hospital
2.15 Site Ownership
The entire
hospital site
includes two
parcels of land
which are
leased to the
Trust
23/10/2009
2.15.1 The entire site at EGH comprises three separate sections:
•
An area of freehold land was transferred, in 1999, to a Charitable
organisation known as the St Kilda’s Trust and this is shown shaded
yellow in the plan at figure 3 below. St Kilda’s built a residential
accommodation block and leased it back to the Trust until 2013.
The Trust, at present, has not addressed the issue of potentially
losing the use of this facility. The land transferred for the
residential accommodation also included an area that could be
used for car parking. Under the conditions of the Landlord and
Tenant Act the Trust has the right of renewing the lease. Should
the Trust not do so then the St Kilda’s Trust can do with the site
as it wishes, subject to any planning conditions.
•
Similarly, an area of land was transferred to the Denbies Trust,
shown shaded red at figure 3 below, in 1997 which enabled the
funding and building of the Denbies Wing but did not include the
fitting out of this wing. The building has been leased back to the
Trust on a 999 year lease. The lease for the Denbies Wing
contained a clause that it could only be used for Medical and
Elderly patients. This has been amended so that A&E and
Orthopaedic patients can be located within it.
31
Figure 3.
Site ownership at Epsom General Hospital
The remainder of the land on the site is owned by the Trust.
2.16 Epsom Buildings
2.16.1 The operational site comprises the following buildings:
23/10/2009
•
Woodcote Wing – Now decommissioned;
•
Rowan House – 1942. Originally built as a Nurses Home; residential
accommodation now occupies two floors. The other floor contains
offices and therapy & training areas;
•
Headley Wing – 1955. OPD and X-Ray are located on the ground
floor; pathology occupies the first floor. Some refurbishment has
been carried out;
•
Wells Wing – 1971. This block contains the medical and surgical
wards, theatres, the hospital kitchen, the restaurant, the PGMC
and seminar rooms;
•
Langley Wing – 1975. Surrey & Borders Mental Health Foundation
Trust currently occupies the ground floor. ESH occupies the first
floor and has recently had the second floor handed back by the
mental health trust;
•
Bradbury Wing – 1995. Maternity, paediatrics and MRI are located
within this building. MRI was fitted out as a condition of the lease
with Alliance Medical. The condition overall is good;
•
Denbies Wing – 2000. This block, as a shell, is owned by the
Denbies Trust, which is a charitable trust and the block is leased
back to the Trust on a 999 year lease. ESH has carried out the
32
fitting out and extension. The ground floor contains the A&E
department whilst the upper floors contain the EOC. Due to its
recent construction and fit out, its condition is extremely good
and fit for purpose; and
•
24% of the
buildings are
over 50 years
old which is in
line with
national
average
Beacon Ward (temporary) – 2001. EOC occupies the majority of
this building.
2.16.2 Approximately 24% of the buildings at EGH are over 50 years old which
is in line with the national average. Backlog maintenance for Epsom
stands at approximately £3m. Parts of the site are overcrowded while
others are underutilised. Co-location of services is poor with patients
occasionally being transferred outside, between buildings, during
their care.
2.17 Epsom Site Development
Estate strategy 2.17.1 The following plans are already under consideration for the Epsom
site and included in the Estate strategy:
already
contains a range
• Improvements to the provision of Single Sex accommodation and
of
facilities to meet same sex requirements
improvements
to the hospital
• Improvement to the CAU
These changes
will be
incorporated in
the OBC
23/10/2009
•
Pharmacy Improvement Scheme.
Completion due 2009/2010
•
Refurbishment of Alexander Ward. Completion due 2009/2010
•
Additional Single Rooms in Alexander Ward.
2009/2010
•
Refurbishment of Buckley Ward. Completion due 2009/2010
•
EOC – Additional 5th theatre in Denbies Wing 2009/2010
•
Potential Urology consolidation from Epsom and Sutton into
dedicated unit in Wells Wing. Business Case to be completed
pending outcome of current reviews
•
Extension of Observation Bed Ward and Relocation of Medical
Admissions. Business Case due to be completed 2009
•
Women’s Health Services – potential expansion and renovation to
increase maternity beds, provide new Day Assessment Unit,
Private Maternity Unit, EPAU, transitional care space and family
accommodation – integral part of Women’s and Children’s review
•
Paediatric Services – potential expansion and renovation to
provide family accommodation
•
Paediatric HDU and development of Children’s Development
Centre – integral part of Women’s and Children’s review
•
Potential relocation of Microbiology from West Park Hospital.
Completion due
33
2.17.2 Under any proposed site development option arising from this SOC
these schemes would be challenged to ensure that they still make
sense as part of an overall improvement programme.
2.17.3 The town planning situation at EGH is that there is an extant
conditional planning permission, submitted in 1993 and granted in
1997, for a phased redevelopment of the site. The redevelopment
incorporated the construction of 2, four storey buildings and 2, three
storey buildings together with extra car parking provision located
about the site to meet increased demand and alleviate the concerns
of Epsom and Ewell Borough Council regarding the issues of parking on
the surrounding public roads. The major increase in car parking
provision was to be secured by the construction of a multi deck Car
Park. Under the details of the permission a condition required the Car
Park to be completed prior to the implementation of the second
phase of the new development.
2.17.4 In 2003 the Trust applied for a relaxation of this condition in order
that the Trust could occupy the second phase of the redevelopment
programme (completed in 2000) on the grounds that it was not
increasing the activity on the site and was supporting the control of
its car parking provision with a robust Travel Plan. This was refused
by the Council. The Trust appealed against the Council's refusal
which was determined by a Public Inquiry in the Trust's favour. This
allowed the Denbies Wing to be occupied by the EOC.
2.17.5 Separately there is an extant planning permission for the construction
5 staff residential accommodation blocks on the site. One of these has
been completed on land owned by the St Kilda Trust and leased back
to ESH.
2.17.6 All the above proposals constitute a Master Plan by the former Epsom
Health Care NHS Trust submitted to and approved by the Epsom and
Ewell Borough Council. Since the merger of Epsom Health Care with
STH there has been no further progress with the implementation of
the redevelopment plan. However, all the planning permissions
granted are extant.
2.18 Environmental Impact
All future plans 2.18.1 Overall environmental impact and sustainable development is a key
consideration in all of the Trust’s plans. The Trust is aware of the
will meet the
importance of sustainability in the work it carries out and has taken
requirements of
forward and incorporated the above policies into the areas of
BREEAM
procurement, estate and building development.
2.18.2 In both the management and development of the estate the
sustainability agenda is being progressed in waste, water and energy
projects.
2.18.3 The development of the plans for EGH will include the need to meet
the sustainability and green agendas and this will be picked up
through design and BREEAM work at OBC stage.
23/10/2009
34
2.19 Information Technology Strategy
2.19.1 In line with the national IM&T Strategy, the ESH IM&T strategy focuses
Focus is on
on clinical information systems, the culture surrounding real-time
clinical
data entry by clinicians and a supporting infrastructure to enable this.
information
Information to manage the business of ESH is vital and it will be
systems which
derived (in the main) from clinical information systems. Specifically:
support timely
and effective
• ESH will make patient care safer and more efficient and improve
decision making
the working lives of clinicians and other staff by using modern
Information Technology.
•
ESH will achieve paperless patient journeys by thorough and
enhanced use of iSOFT Clinical Manager and other linked clinical
information systems; and
•
ESH will establish an information culture which regards data
quality, information sharing and knowledge management as
essential parts of clinical, business and operational processes to
improve the care delivered to patients, both within the Trust and
the wider Health Economy.
A copy of the IT Strategy is contained within the General Annex.
2.20 National Context for Change
2.20.1 The national context is driven by strategy emerging from DH, the NHS
Greater
and the Academy of Medical Royal Colleges. These include:
emphasis to be
placed on fitting
• The Government’s White Paper “Our Health, Our Care, Our Say”
services around
(DH, January 2006) places a greater emphasis on “fitting services
patients
around patients not patients around services”;
•
The Academy of Medical Royal Colleges’ report on Acute services
which sets out the Academy’s position on the organisation of acute
services from the perspective of the health needs of the
population;
•
The 2000 NHS Plan which introduced what has been called the new
NHS “Consumerism” agenda. “Consumerism” covers the whole
patient experience from cleaner hospitals, better hospital food
and through to better designed hospitals; and
•
High Quality Care for All - in June 2008 DH issued the final report
of the NHS Next Stage Review. This envisages the NHS moving
from a system that is focused on increasing the quantity of care to
one that focuses on improving the quality of care.
2.21 Regional Strategic drivers
2.21.1 The regional context for the Trust is set out by both NHS London and
NHS SEC.
23/10/2009
35
NHS London Strategic Health Authority
2.21.2 The formation of NHS London in July 2006 enabled healthcare across
Trust focus on
the capital to be coordinated and overseen by a single strategic body,
meeting
with the aim of preventing ill health, providing high quality
requirements of
healthcare and support, and ensuring that investment in the NHS
Healthcare for
delivers improvements for Londoners. NHS London commissioned Lord
London
Darzi to develop a strategic vision for healthcare in London. The
report developed was titled “Healthcare for London: A Framework for
Action (“HfL”)” and was published in July 2007.
2.21.3 The framework highlighted a number of reasons why there is a need
to review London’s healthcare which included the recognition that
the NHS is not meeting the expectations of Londoners with large
inequalities in healthcare across the capital; a need to tackle health
challenges specific to London; improved healthcare research needed
to ensure London is at the cutting edge of medicine and a move
towards more community-based care which patients want, with
centralised specialist services to improve outcomes.
NHS South East Coast Strategic Health Authority
2.21.4 Whereas the Trust recognises that NHS SEC commissioners commission
a relatively small percentage of the Trust’s total healthcare provision
they commission a significant element of the work conducted on the
EGH site. NHS SEC’s strategy centres around five themes which are as
follows:
•
Health Inequalities - Reduce health inequalities and raise the life
expectancy of the most socially disadvantaged;
•
A Sustainable Region - Promote a vibrant, healthy and sustainable
region to maximise the impact on people’s health and address
climate change;
•
Employment and Health - Improve workplace health and social
inclusion in employment to create a more productive workplace;
•
Children and Young People - Promote the physical and mental
health and wellbeing of children and young people; and
•
Later Life - Improve the healthy life expectancy of older people
and reduce inequalities in health.
2.21.5 The strategy links actions at a national, regional and local level to
ensure that all those with an interest in and impact on health issues
work in partnership to improve the health of everyone in the South
East.
2.21.6 NHS SEC also seeks to ensure that the people within the Strategic
Health Authority (SHA) have their say over the kind of care they wish
to be provided with and produced ‘Healthier People Excellent Care’,
a consultation paper which consolidates the recommendations of
leading clinicians in consultation with patients, the public and staff
across the region.
23/10/2009
36
2.22 Local Strategic drivers
This SOC
focuses on NHS
Surrey
commissioning
intentions
2.22.1 For the purposes of this SOC the local context for the delivery of
healthcare is determined by the commissioning intentions of NHS
Surrey who are the second largest commissioner of healthcare from
the Trust but the biggest commissioner of services from EGH.
2.23 NHS Surrey Healthcare Economy
2.23.1 NHS Surrey was formed on 1st October 2006, bringing together the
five former PCTs within Surrey namely, North Surrey, East Elmbridge
and Mid Surrey, East Surrey, Surrey Health and Woking and Guildford
& Waverley PCTs. NHS Surrey serves a population of 1.2 million
people and has a total budget of around £ 1.4 billion in the current
year.
2.23.2 NHS Surrey has developed an overarching commissioning strategy
that, through its ‘Fit for the Future’ programme, resolved to
commission services that meet national guidelines and evidence of
best practice.
2.23.3 Issues specific to ESH have been taken forward under the ‘Assuring
Access for Epsom’ programme (AAE) which has particularly focused on
the future of women’s and children’s services, A&E and acute
medicine. In December 2008, NHS Surrey issued clear commissioning
intentions seeking to maintain women’s and children’s services and
A&E services, as currently configured, at EGH, with investment to
address national guidance and EWTD issues, where required.
2.23.4 Plans to achieve guideline levels for obstetrician labour ward
presence, improved midwife to mother ratios and EWTD compliance
across all staffing groups have been incorporated in the Trust’s Annual
Plan for 2009/10.
2.23.5 The Trust is continuing to work with the PCT to develop robust stroke
and cardiac services that are networked with other Surrey acute
hospitals to ensure rapid access to Primary Transcutaneous Coronary
Angioplasty (PTCA) and stroke thrombolysis in line with patient needs.
EGH cardiologists will support a PTCA rota based at St Peter’s
Hospital, Chertsey (Ashford and St Peter’s NHS Trust). Stroke
thrombolysis will be supported through telemedicine links with other
Surrey acute sites. These changes are expected to have minimal
impact on service activities at EGH.
Changes at NHS Surrey
2.23.6 In June 2009, a major change to the organisational structure of NHS
Surrey took place to better support Practice Based Commissioning and
local clinical engagement. The new structure will facilitate improved
planning, delivery and monitoring of health care.
NHS Surrey Commissioning Intentions
NHS Surrey will
23/10/2009
2.23.7 NHS Surrey will commission for quality, using the latest clinical
37
commission
services that
support the
shift from Acute
to Community
and Primary
care settings
evidence and patient experience to shape the way healthcare is
delivered. They will focus on the best possible experience for the
patient rather than on the organisations delivering care. Specifically
the PCT will commission services that support the continuing shift
from acute to community and primary care settings where it is
clinically appropriate for services to be provided closer to home. This
provides value for money and benefits to patients but will require
greater flexibility across the workforce, ongoing retraining and
changes to roles and settings within which the workforce operates.
2.23.8 In its five year Strategic Commissioning Plan (2008 – 2013) it describes
how it will develop capacity and capability for the local health
economy in Surrey and create an environment which supports and
promotes high quality health outcomes and an excellent, safe patient
experience. These commissioning intentions mark the beginning of
turning the strategy into reality, setting out some of the changes that
NHS Surrey expects to achieve for the year 2009/10. It reflects the
themes of the Next Stage Review, High Quality Care for All, Healthier
People, Excellent Care; NHS SEC’s five year plan, the PCT’s Strategic
Commissioning Plan, the PCT’s six Strategic Delivery Programmes and
the 2009/10 National Operating Framework. The priorities have been
grouped against the PCT’s five strategic goals, which are:
NHS Surrey has
identified 5 key
areas for
system and
demand
management
SG1
To improve the health and quality of life of all our population
reducing the gap in health differences;
SG2
To improve the development and long term health of children
and young people;
SG3
To help and support people manage their ongoing conditions,
and develop services that improve their quality of life;
SG4
To improve the results of treatment and patients’ experience
of local health services by the commissioning the best
services; and
SG5
To provide the best care at the best time to meet people’s
health needs.
2.23.9 Cost pressures for 2009/10 from its strategic modelling indicate some
significant challenges for NHS Surrey. In order to deliver targets it is
proposing a number of changes to its planning assumptions. The PCT
will:
•
Hold a larger contingency;
•
Allocate population growth to contracts;
•
Only commit to investments once the resource had been released
as a result of delivery of pathway changes and adjustments made
to contracts; and
•
Delivery of substantial Demand Management/Service Redesign
programmes.
2.23.10 The PCT will be focusing its attention on the following system
management/demand management schemes for 2009/10:
•
23/10/2009
Unplanned care with a particular focus on managing the “front
38
door” to A&E;
•
Admission Avoidance including effective management of Long
Term Conditions, clinical and medical assessment in the
community and case management;
•
Implementing a new system for reporting and monitoring those
patients who are medically fit for discharge and reviewing and
improving processes supporting discharge;
•
Improving efficiency and productivity; and
•
Working with General Practitioners to review and strengthen
referral management systems.
2.23.11 The Trust and NHS Surrey have discussed the translation of these
narrative descriptions into numbers to drive the activity, capacity and
financial modelling described above.
2.23.12 The implementation of NHS Surrey’s commissioning intentions will
involve the development of Integrated Care Organisation (ICO) pilots.
The detail and pace of change associated with the impact of the
intentions will change as the pilots’ feedback. The assumptions set
out below are therefore a ‘prudent best estimate’ based on current
thinking at NHS Surrey.
2.23.13 The key features of the assumptions to be used in the EGH strategic
outline case are as follows:
•
Baseline income is calculated using 2008/09 activity at 2009/10
prices using HRG V4.0 grouper;
•
10% of income for a range of points of care and a sub set of
specialities will no longer be commissioned from ESH;
•
75% of this impact will be implemented in 2010/11 with the
remaining 25% implemented in 2011/12. No further changes are
assumed for the remainder of the planning period to 2022/23; and
•
Growth assumptions had been suspended for a period of 5 years up
to 2012/13 in the modelling for the Phase 1 project. This was a
proxy for the impact of commissioning intentions which were not
known at that time. As the commissioning intentions are now
explicit it has been agreed that these growth assumptions be
reinstated to prevent double counting.
2.23.14 The following table sets out the impact of the commissioning
intentions once fully implemented using the assumptions above and
based on 2008/09 activity at 2009/10 prices. The reinstated growth
has not been included.
23/10/2009
39
Table 12. Impact of NHS Surrey draft Commissioning Intentions on Income
for EGH
Point of Care
2008/09 Income
NHS Surrey CI
Impact
% Change
Day Case
£6,243,218
-£555,488
-9%
Elective Inpatients
£4,513,298
-£451,330
-10%
£24,099,943
-£2,409,994
-10%
£339,998
-£33,644
-10%
Outpatients New
£5,086,482
-£394,443
-8%
Outpatients FU
£6,239,941
-£485,748
-8%
Outpatients Procedures
£1,353,116
-£132,211
-10%
Critical Care
£2,022,273
-£202,227
-10%
Diagnostics
£4,099,455
-£409,945
-10%
Non Elective Inpatients
Regular Attenders
Women's and Children's
£2,410,045
0%
£5,268,998
0%
Total
£61,676,767
-£5,075,030
-8%
2.23.15 In 20010/11 the impact will be to reduce income by about £3.8m and
in 2011/12 by a further £1.2m. The impact on capacity and revenue
streams is set out later in the document.
Surrey Healthcare Economy
The Surrey
healthcare
economy is
highly
competitive
2.23.16 It must be recognised that the dynamics of the healthcare economy
operated by NHS Surrey are significantly different from those
operated by NHS Sutton and Merton who commission the majority of
the current and future workload at STH. The NHS Surrey health
economy is much more developed in terms of its Any Willing Provider
(AWP) policy towards healthcare provision, and its experience in
managing such providers. It is thus seen as a very competitive market
in which the Trust must be able to provide its core (and other)
services in a way that ensures long term clinical and financial
viability. In many instances these competing services are provided by
consultants who also hold positions in ESH.
2.23.17 There are many other established organisations within the healthcare
economy that actively compete with the Trust. In particular the
following:
23/10/2009
•
Ashtead Hospital;
•
Clockhouse Medical Clinic;
•
Epsom Day Surgery Limited(Old Cottage Hospital);
•
Cobham Day Surgery Limited;
•
St. Anthony’s Hospital;
•
The Children’s Trust; and
•
Central Surrey Health (CSH).
•
There are also consortia of GPs providing services to their
40
patients:
•
EDICS;
•
MEDLInCs; and
•
IHP.
Further details of all of the above organisations can be found in the
General Annex.
2.24 Activity, capacity and financial impact of strategic
context
2.24.1 The purpose of this section is to set out the impact of the strategic
context, as described above, on the activity, capacity and financial
impact for EGH. These changes predominantly come from the NHS
Surrey commissioning intentions.
2.24.2 The financial information is based on 2008/09 activity but regrouped
using HRG 4.0. The activity and capacity information uses the Phase 1
activity models updated for the NHS Surrey commissioning intentions.
2.25 Activity
2.25.1 The assumptions provided by NHS Surrey indicate a 10% reduction in
10% reduction
selected activity implemented over the two years 2010/11 and
in selected
2011/12. 75% of this change will be delivered in 2010/11 with the
activity
remaining 25% change delivered in 2011/12.
implemented
during FY11 and 2.25.2 NHS Surrey previously provided volume growth assumptions which
FY12
were used in the St Helier Phase 1 OBC. These assumptions included
no growth in the 5 years to 2012/13 as a proxy for demand
Volume growth
management in the absence of commissioning intentions at that time.
is estimated at
Growth is now reinstated and is approximately 1.3% per annum overall
an average of
on average. Growth assumptions were provided on a speciality by
1.3% per annum
speciality basis with some specialities expected to grow more rapidly
than others.
2.25.3 It is assumed that the 10% transfer of activity to other settings is
applicable to future growth. Therefore 10% of the 1.3% average
growth is assumed to move to other settings.
2.25.4 The table below shows the impact of these assumptions on bed based
activity (this activity includes EOC), however it should be noted that
expanded commissioning intentions will be released in January 2010.
23/10/2009
41
Table 13. Impact of NHS Surrey CI's on bed based activity
Speciality
Activity Spells
Sum of Activity FY23
Day
Case
Elective
Cardiology
Chemical Pathology
Clinical Haematology
Dermatology
Ear Nose & Throat
Sum of Activity FY09
Non
Elective
Day
Case
Elective
2,114
126
28
6
1
35
Non
Elective
1,887
103
22
5
15
4
1
17
3
5
27
1
2
1
737
4
717
4
General Medicine
1,875
124
6,541
1,589
105
5,487
General Surgery
1,352
1,531
73
1,139
1,349
66
7
7
1,244
5
5
1,001
594
226
30
597
227
30
Geriatric Medicine
Gynaecology
Midwife Episode
510
Nephrology
556
1
Obstetrics
1
1
2,002
1
2,115
Ophthalmology
328
6
272
5
Oral Surgery
261
3
252
3
Paediatric Surgery
102
1
104
1
Paediatrics
154
18
150
18
1,503
Pain Management
Plastic Surgery
1,407
13
12
7
6
Trauma & Orthopaedics
2,281
5,711
73
1,978
4,820
66
Urology
1,230
1,070
32
1,086
899
27
9,105
8,748
15,846
8,040
7,474
14,711
Well Babies
Grand Total
1,805
1,963
2.25.5 The table below shows the activity at 2008/09 and 2022/23. The net
impact of growth and commissioning intentions is an increase in
activity of 11%.
2.25.6 The table below shows the impact of these assumptions on outpatient
activity. This activity includes EOC.
23/10/2009
42
Table 14. Impact of NHS Surrey CI's on outpatient activity
Activity
Specialty
Antico Service
Sum of Activity
FY23
First
attend
Follow
up
Sum of Activity
FY09
First
attend
Follow
up
Total Activity
FY23
FY09
109
11,880
90
9,719
11,989
9,809
Audio Medicine
3,017
2,884
3,144
3,112
5,901
6,256
Cardiology
3,975
15,697
3,249
12,233
19,672
15,482
21
478
17
385
499
402
Chemical Pathology
Clinical Genetics
55
99
46
83
154
129
605
4,805
471
3,750
5,410
4,221
1,306
2,131
1,139
1,856
3,437
2,995
Diabetic Medicine
986
6,245
885
5,615
7,231
6,500
Ear Nose & Throat
2,332
4,530
2,270
4,428
6,862
6,698
General Medicine
3,136
7,733
2,640
6,536
10,869
9,176
General Surgery
3,392
5,155
3,003
4,567
8,546
7,570
565
1,133
452
907
1,698
1,359
Dermatology
Geriatric Medicine
Gynaecology
2,450
2,964
2,422
2,968
5,414
5,390
Midwife Episode
498
2,964
498
2,964
3,462
3,462
Nephrology
152
672
152
672
824
824
Neurology
464
385
433
359
849
792
Obstetrics
2,039
4,326
2,223
4,695
6,365
6,918
Ophthalmology
2,204
5,960
1,819
4,882
8,164
6,701
Oral Surgery
1,518
1,210
1,501
1,199
2,728
2,700
19
40
18
39
59
57
Paed Cardiology
Paediatric Neurology
Paediatric Surgery
Paediatrics
13
13
13
13
27
26
180
92
176
90
272
266
2,074
8,079
2,024
7,863
10,153
9,887
Pain Management
114
40
103
36
154
139
Palliative Medicine
10
169
8
129
179
137
Rheumatology
Trauma & Ortho
Urology
Grand Total
290
1,077
260
963
1,367
1,223
11,048
23,453
9,986
21,244
34,501
31,230
1,894
5,271
1,559
4,388
7,165
5,947
44,465
119,484
40,601
105,695
163,949
146,296
2.26 Capacity
2.26.1 Capacity is calculated on the basis of the above activity delivered at
the better of national top quartile or Trust average productivity
performance.
2.27 Beds
2.27.1 The current bed base at EGH is shown in the table below.
23/10/2009
43
Table 15. Current Bed Capacity at Epsom
Ward
Narrative
Beds
Alexandra
Medical (reopens Nov 09)
Beacon
Closed
0
Britten
Stroke
18
Buckley
Medicine
25
Buckley Annex
Medicine
7
31
Casey
Paediatrics
16
CAU (Swift)
CAU
16
Cavell
Medicine
CCU
CCU
14
0
Chuter Ede
Elective Care
44
Croft
Medicine
19
Croft Escalation
Escalation
9
Gloucester
Medicine
19
HDU
High Dependancy
4
ITU
Intensive Care
3
Maternity – Delivery
Delivery Beds
Maternity - Ante & Post
Antenatal and postnatal
Observation Bed
A&E
4
Rosebery
Post Acute
0
SCBU
Special Care
8
EOC
HDU/ITU/Wards & PACU
Epsom Total Beds
5
29
65
336
2.27.2 The table below shows the total beds required at Epsom General
Hospital at 2022/23 to house the level of activity calculated in the
previous section.
EGH require 21 2.27.3 Beds are calculated on the basis of speciality activity and, as
mentioned previously, applying national top quartile length of stay
less beds by
assumptions (where they are better than trust performance).
FY23 assuming
Assumptions are also made that bed occupancy will average 83% for
top quartile LoS
all beds apart from paediatrics and obstetrics which are set to 64%.
23/10/2009
44
Table 16. Bed Capacity at 2022/23
Specialty
Epsom General
Hospital
Elective
Orthopaedic
Centre
16
Grand Total
16
Cardiology
0
0
Chemical Pathology
0
0
0
0
Dermatology
0
0
Ear Nose & Throat
2
2
General Medicine
118
118
General Surgery
19
19
Geriatric Medicine
29
29
Gynaecology
3
3
Midwife Episode
2
2
Nephrology
0
0
Obstetrics
18
18
Ophthalmology
1
1
Oral Surgery
1
1
Paediatric Surgery
0
0
Paediatrics
8
8
Pain Management
0
0
Plastic Surgery
0
0
12
Urology
10
Well Babies
Grand Total
66
10
10
249
78
10
66
315
2.28 Outpatients
2.28.1 Current outpatient facilities are spread across the EGH site. There are
35 designated rooms as follows:
Table 17. Current Clinic Rooms
Clinic Space
Headley
Bradbury
Oaks
Orthoptists
Rooms
14
6
11
1
Dental
1
Ophthalmology
1
Photo Room
Total
1
35
2.28.2 The key assumptions used to model the clinic rooms required to house
the expected future activity are as follows:
23/10/2009
45
•
20 minutes per appointment;
•
3 hours per clinic;
•
2 clinics per day;
•
5 days per week; and
•
46 weeks of the year.
2.28.3 The output from this modelling is shown in the table below:
Table 18. Outpatient clinic rooms 2022/23
OPD clinic rooms
to increase by 5
by FY 23
Specialty
Anticoagulant Service
2.9
Audiological Medicine
1.4
Cardiology
4.8
Chemical Pathology
0.1
Clinical Genetics
0.0
1.3
Dermatology
0.8
Diabetic Medicine
1.7
Ear Nose & Throat
1.7
General Medicine
2.6
General Surgery
2.1
Geriatric Medicine
0.4
Gynaecology
1.3
Midwife Episode
0.8
Nephrology
0.2
Neurology
0.2
Obstetrics
1.5
Ophthalmology
2.0
Oral Surgery
0.7
Paediatric Cardiology
0.0
Paediatric Neurology
0.0
Paediatric Surgery
0.1
Paediatrics
2.5
Pain Management
0.0
Palliative Medicine
0.0
Rheumatology
0.3
8.3
Urology
Grand Total
23/10/2009
Total
1.7
39.6
46
2.29 Theatres
2.29.1 There are currently 9 theatres at Epsom including EOC (4 theatres).
Utilisation is however poor with less than 70% in some areas.
2.29.2 Theatre capacity is based on future activity expectations and
assumes: current time per case remains as per 2008/09 activity;
utilisation moves to 80%; and theatres are available 8 hours a day, 5
days a week and 50 weeks per year.
2.29.3 This results in the need for 3 day case theatres and 5 inpatient
theatres. This excludes expected additional activity for EOC and
transfer of activity from Sutton Hospital.
PART B: THE CASE FOR CHANGE
2.30 The Case for Change: Introduction
2.30.1 The sections above outline the strategic context for the Trust as a
whole and EGH specifically. Taking that into consideration, the Trust
have modelled the activity and capacity that is likely to be required
at EGH to provide this level of service over the coming years.
2.30.2 The purpose of this section is to clearly outline why the Trust need to
change EGH and to outline the steps taken by the Trust to clarify the
case for change and what its objectives are going forward. This will
feed into the Economic case (next section) and help to formulate the
options to respond to the case for change.
2.31 SWOT analysis
2.31.1 Below is a SWOT analysis of the EGH site generated by Trust key staff
in interviews with the Project Team in June and July 2009.
23/10/2009
Strengths
EGH has a highly trained, expert staff as well as large levels
of local support. The EOC being hosted on site is a key
strength to be built upon.
Weaknesses
The layout is not fit for purpose as there is not enough colocation of services and very poor utilisation of the overall
site footprint. There is not a proper day surgery unit or a
stand alone endoscopy unit as they current have to share.
Opportunities
On the back of the recommendations of Darzi, the Assuring
Access for Epsom review and LNLH, there is scope to refit /
refurbish / rebuild the hospital to better reflect how it will
sit in the local community going forward.
Threats
Other hospitals and trusts may attract patients away from
the EGH site resulting in loss of income. PCT intentions,
local providers and local commissioners all may negatively
impact on the long term financial and clinical stability of
EGH.
47
2.32 Investment Objectives
The Trust have
agreed a set of
Investment
Objectives for
the project
2.32.1 Following guidance from NHS London and the Treasury, the Trust has
generated a set of Investment Objectives that outline the key
strategic changes required for EGH, as based on the strategic context
discussed above. In parallel, the Trust also generated a list of CSFs
that help to form the evaluation criteria for the Trust’s options. The
Investment Objectives were developed first by the Project Team
following on from a series of meetings and structured interviews with
Trust Executive Directors, Directorate Management Teams, Lead
Nurses and key external stakeholders including NHS Surrey and the
local ICOs. These were then refined at an ‘options workshop’ held by
the Project Team with the TEC on 23 July. TEC is made up of the
Executive Directors, non voting Directors, clinical Directors, some
site-specific deputy Directors and the Chief Pharmacist.
2.32.2 Following the TEC workshop, the Investment Objectives (and CSFs)
were reviewed by the Project Board on 29 July and ratified by the
TEC on 12 August. Below is the list of Investment Objectives for this
Strategic Outline Case:
2.32.3 The investment objectives for this project are as follows:
•
•
•
23/10/2009
Investment objective 1: Improve patient and staff experience,
providing attractive and highly functional facilities centred around
the patient. For example:
−
Meeting consumerism standards (increased number of singles
rooms, elimination of mixed sex accommodation);
−
Modern patient journey - reduced waiting;
−
Quality of building and environment;
−
Improved facilities and equipment for delivery of care;
−
Improved way finding; and
−
Improved patient and staff satisfaction.
Investment objective 2: Provide facilities that optimise the
productive and effective utilisation of resources, accelerating the
patient journey and eradicating delays and bottlenecks. For
example:
−
Reduced turn around time for diagnostic results / reports;
−
Better theatre productivity / increased day-care rates;
−
Faster access to critical case;
−
Better resource utilisation; and
−
Centralisation / rationalisation of support services.
Investment objective 3: Champion the establishment of a number
48
of market leading 'Centres of Clinical Excellence' within a strong
clinical and non-clinical support infrastructure. For example:
•
•
−
Expand elective services that could exploit the EOC model in
their specialty;
−
Extend the EOC scope to do a wider range of procedures;
−
Focus on and exploit the strengths of key services; and
−
Create market leading brands.
Investment objective 4: Support a radical reorganisation of
services across the site improving overall co-location and ensuring
the ideal proximity between clinical facilities specifically designed
around the patients’ journey. For example:
−
Reorganised site with better co-location of services to
prevent the external movement of patients;
−
Works to achieve integration, rationalisation and
centralisation of clinical and clinical support services across
sites; and
−
Configures the juxtaposition of wards, clinics, theatres,
diagnostics, A&E etc such that they support modern care
pathways.
Investment objective 5: Dramatically reduce the footprint of the
hospital owned buildings (whilst maintaining a high quality
environment) maximising the opportunity to sell residual land or
for alternate healthcare purposes. For example:
−
More efficient use of estate;
−
Centralisation / rationalisation of support services; and
−
Greater density of buildings on a reduced site.
2.33 Financial Implications of Doing Nothing
2.33.1 The next 15 years for the Trust will prove to be challenging even
without the changes outlined in the strategic context section:
•
Cost inflation is expected to run at between 3.5% and 5.2% over
the planning period;
•
NHS London Planning assumptions indicate 6 years of tariff
reductions of 0.5%; and
•
The new EGH must deliver growth in activity whilst managing
costs.
Figure 4.
23/10/2009
Potential CIPs required if Do Nothing Adopted
49
Balanced
Budget
£70m
Deficit
4% p.a. price funding gap will lead to a deficit without significant
improvements to efficiency
180
160
140
120
100
80
60
40
20
0
FY10
FY11
FY12
FY13
FY14
FY15
FY16
Price growth
FY17
FY18
FY19
FY20
FY21
FY22
FY23
Cost inflation
2.33.2 A high level assessment of the ability for the ‘Do Nothing’ option to
achieve these savings requirements has been carried out and this has
been compared to the average of the other potential solutions.
2.33.3 We have made the assumption that the ‘Do Nothing’ option would not
be capable of accommodating the expected volume growth after
commissioning intentions and that this would result in a loss of
income. This is based on the inability of this option to move to top
quartile length of stay.
2.33.4 The cumulative impact on the Trust’s income and expenditure
position results in the need for more CIPs and this is shown in the
graph below. This excludes FM and other efficiency gains that would
not be achieved and therefore the position could be worse.
Figure 5.
23/10/2009
Comparison of cumulative CIPs required under 'Do Nothing' and
50
the average of other potential solutions
16.00
14.00
12.00
10.00
£m
8.00
6.00
4.00
2.00
0.00
-2.00
2012/1 2013/1 2014/1 2015/1 2016/1 2017/1 2018/1 2019/2 2020/2 2021/2 2022/2 2023/2 2024/2 2025/2 2026/2 2027/2
3
4
5
6
7
8
9
0
1
2
3
4
5
6
7
8
Do Nothing
0.00
2.17
4.65
6.96
11.56
13.04
13.31
13.25
13.32
13.35
13.35
13.63
13.75
14.10
14.16
14.91
Average
0.00
1.25
2.80
4.16
7.81
8.32
7.60
6.55
5.62
4.62
3.59
2.82
1.88
1.15
0.13
-0.22
2.34 Case for Change
2.34.1 Given all of the above, it is imperative that the Trust takes action
now to position itself for the future:
•
EGH cannot remain the same;
•
Financial downturn drives efficiency which cannot be delivered
under the ‘Do Nothing’ option;
•
Care in different settings reduces critical mass and an innovative
new approach to partnership working is required;
•
Current site not fit for purpose;
•
Highly competitive healthcare economy;
•
New commissioners and providers;
•
Alternate views around STH and EGH integration; and
•
Vocal and influential stakeholder community
2.34.2 Epsom General Hospital could be redesigned to deliver a wide range
of primary and secondary care services, fostering a joint approach to
managing the care of local patients.
2.34.3 Currently it seems that there are more people competing to deliver
services than there are patients to receive them and consequently the
Trust focuses on financial viability rather than on the optimum
patient pathway. Re-thinking how the local health economy could
work as a partnership will help to deliver services that are of higher
quality, more affordable to all and that allow the EGH site to offer a
wide range of primary and secondary care services for people in the
local area.
2.34.4 The current sense of competition around the provision of services
could be replaced by a more positive approach to collaboration,
23/10/2009
51
ensuring that patients are treated by the most appropriate health
care professional but that boundaries between primary and secondary
care are fluid enough for patients to travel easily between the two.
This is more easily achieved on a site where cross boundary working is
evidenced through collaborative team work using a network of
primary and secondary services across the local health economy with
the EGH site at the centre.
2.35 Stakeholder Involvement
Epsom Site
Development
Project Board
established in
July
Project Board
2.35.1 The Epsom Site Development Project Board first met on 29 July 2009.
Its main purpose is to:
1. Ensure that the project is delivered to an agreed timescale and
budget;
2. Receive recommendations from the Project Team;
3. Authorise changes to budget and timescale within its delegated
authority from the Trust Board;
4. Ensure that the project objectives remain consistent with the
Trust’s corporate objectives;
5. Review the Strategic Outline Case including;
a. Approve the CSFs for the development;
b. Approve the selection of long list and short list options;
6. Ensure stakeholder engagement and involvement in all stages of
the process; and
7. Ensure engagement and involvement of Patients, the Public, GPs
and Clinicians in this process through the set up and management
of this group.
Its membership and further details can be found in the Project
Initiation Document attached to this SOC.
Initial Engagement
2.35.2 The Project Team completed a series of structured interviews with
Significant
Trust Executive Directors, Directorate Management Teams, Lead
stakeholder
Nurses and key external stakeholders including NHS Surrey and the
engagement has
local ICOs. The interviews discussed the following headings:
been
undertaken
• The Strategic Context - key assumptions and drivers;
23/10/2009
•
The Operational Vision - how services are developed at EGH;
•
The Market Context - how those services interact with other
52
providers;
•
The Estates Vision - key issues to enable the operational vision;
•
Funding Opportunities - charitable donations and other sources of
finance;
•
Potential Constraints - what could stop us achieving the vision;
•
Engagement - who should have an input and how do we engage
with them; and
•
Next Steps - timetable and arrangements for engagement and
approval.
2.35.3 This process has allowed the Trust to explore both the internal vision
and the external drivers for change and helped the Project Team to
structure the format of the TEC workshop held on 22 July.
TEC workshop
2.35.4 Following the initial consultations listed above, a TEC workshop was
held on 22 July to confirm the investment objectives and to establish
a draft long-list of options and CSFs to measure the options against.
Short-listing evening
2.35.5 To ensure that as wide a range as possible of stakeholders have been
engaged in this process, a short-listing evening was set up for the
TEC, the Epsom Site Development Project Board and approximately 30
external stakeholders on 19 August.
2.35.6 At the scoring evening participants engaged in a lively and
discussion to establish the parameters that framed the
exercise. All attendees were invited to complete a
questionnaire, the outcome of which forms a short-list of
which together represent a ‘preferred way forward’ for EGH.
helpful
scoring
scoring
options
2.36 Key project risks and constraints
2.36.1 The project risks arise from 3 key areas, namely:
23/10/2009
•
The potential lack of clarity surrounding the commissioning
intentions of NHS Surrey and the future use of other provider
organisations as activity transfers to community and primary care
settings;
•
The final resolution of the LNLH report concerning the future
establishment of the Trust; and
•
Capacity of the Trust to conduct the project in the same timescale
as the re development of the STH site.
53
3. THE ECONOMIC CASE
3.1
Introduction
This section will 3.1.1
identify the
Long list and
short list of
options to be
considered
In accordance with the Capital Investment Manual and the
requirements of HM Treasury’s Green Book (A Guide to Investment
Appraisal in the Public Sector), this section of the SOC documents the
wide range of options that have been considered in response to the
potential scope identified within the strategic case. It then explains
the process to identify the short-list of options through both non
financial analysis (benefit scoring) and financial analysis.
3.1.2
There were four steps in this process as set out below. Each step
involved either project team analysis or external stakeholder
engagement. Due to the level of stakeholder engagement achieved at
this stage the Trust carried out a high level feasibility analysis of the
long list at stage 3 as well as a more detailed scoring exercise at stage
4.
Figure 6.
TEC generated
the Critical
Success Factors
for the project
23/10/2009
Economic Analysis Process
Internal
Critical success
factors
1
Stakeholders
CSF Weighting
2
Internal
Long List
Generation
3
Stakeholders
Short List
4
3.2
Stage 1: Critical Success Factors
3.2.1
The CSFs for the project were developed first by the Project Team
working with the SOC guidance provided by NHS London. On 23 July
2009, these were then refined at an ‘options workshop’ held by the
Project Team with the TEC.
3.2.2
Following the TEC workshop, the CSFs and Investment Objectives
were reviewed by the Project Board on 29 July and ratified by the
TEC on 12 August. The CSFs were further ratified at a meeting on 19th
August with invited members of the public, patient representatives,
local health economy partners, local councillors and MPs.
3.2.3
Below is a list of the CSFs for this project. For each CSF the
description of the ideal option, together with some bulleted
examples, is given:
54
1. Strategic fit
The option needs to deliver the ideal strategic solution that facilitates
a seamless integration of Trust and commissioner imperatives for the
future.
•
This may be measured by its ability to meet all national, regional
and local strategies together with complying with the applicable
commissioning intentions of the responsible PCTs
•
A good strategic fit will retain critical mass of clinical facilities on
the Epsom site whilst supporting and promoting the delivery of
more care in community settings, and greater partnership working
•
A good strategic fit will offer flexibility in the face of developing
strategies such as LNLH, Assuring Access and the South West
London Whole System Development Project
•
A good strategic fit will allow the Trust to work more closely with
its responsible PCTs so that they can plan and react
collaboratively to the challenging changes in the health economy.
2. Quality standards
The option must provide the infrastructure to deliver and maintain
national top decile performance with regard to quality standards.
•
This may be measured by lower re-admission rates, lower levels of
hospital acquired infections, improved PEAT scores and reduced
complaints.(PEAT - Patient Environmental Action Team).
•
Care Quality Commission reports will also assess the areas of focus
and the success in implementing effective solutions.
3. Modernisation and innovation
The option must maximise opportunities to implement leading edge
technology and exemplar care pathways and foster modernisation and
innovation for service transformation.
•
This may be measured by the extent to which an option facilitates
the introduction of modern evidence based care
•
Supports the use of new technologies where these demonstrably
improve outcomes or performance
•
Supports clinical service transformation to change the way care is
delivered
•
Supports initiatives to deliver care in different settings potentially
by different professionals.
4. Expectations of Key stakeholders
The option shall clearly recognise the various needs of the many
stakeholder interests and present the ideal balanced solution.
23/10/2009
55
•
Where stakeholder views differ, does the option offer a good
compromise?
•
Does the option present flexibility for changing stakeholder views?
5. Performance and outcomes
The option is the optimal solution for improving and maintaining
performance and outcomes at national top decile levels.
•
This may be measured by lower lengths of stay, more efficient use
of theatres, reduced waiting times, fewer cancellations, reduced
DNAs and greater overall operating efficiencies. (DNA-Did Not
Attend)
•
Additionally by increased use of “hospitals at home” and a greater
emphasis on care provided outside the acute setting.
6. Patient safety
The option ensures that any risk to patient safety, either during or
after its implementation, is reduced to the absolute minimum.
•
Issue of patient safety may be compromised by rebuilding and
refurbishment works, relocation of services and interruptions to
services that may result from an option
•
The impact on patient safety can be measured by the extent an
option presents the opportunity to examine all aspects of the
interaction between the site and services and the patients and
ensure that risks are identified and mitigated
•
All existing risks to patient safety are addressed.
7. Culture
The option clearly recognises the need for an environment that
supports clinicians, managers and staff from different organisational
cultures to work effectively, efficiently and harmoniously.
•
This could be measured by the successful integration of services,
staff, partners and patients within a new culture at EGH
•
The extent to which the service model and facility recognises the
value of professionals and staff from different elements of the
local health economy delivering comprehensive, joined up and
patient centred care.
8. Long term stability
The option is the best opportunity for the delivery of long term
clinical and financial stability for EGH.
Issues that would promote long term stability are to:
•
23/10/2009
Work effectively with partners in the local health economy;
56
•
Support recruitment and retention of staff;
•
Support training and education;
•
Retain critical mass and case-mix of patient workload; and
•
Flexibility for anticipated future changes in demography.
9. Achievability
The option is easily deliverable presenting few obvious barriers in
terms of service model, planning, design and development,
procurement, transition and implementation.
•
Does the option promote a service model that the Trust believes
can be delivered?
•
Does the option indicate any significant planning permission issues
or site ownership issues given the complex nature of EGH’s
ownership footprint?
•
Is there likely to be capacity in the market to deliver the solution
(construction etc)?
•
If the option indicates procurement of a new site is it likely that
this site will exist?
•
Is the programme of change deliverable - to what extent can
clinical services continue uninterrupted during any building works
given the compact nature of the EGH site?
These CSFs were used, alongside the Investment Objectives set out in
the ‘Case for Change’ section, to guide the generation of the Long
List of possible options.
3.3
Stage 2: Weighting of the scoring criteria
3.3.1
Stakeholders
were involved in
weighting the
scoring criteria
Through a process of combining the selected investment criteria and
CSFs the Trust generated a single list of scoring criteria against which
each of the Long Listed options would be measured. Given the diverse
nature of the stakeholders involved in the process, some of the
criteria were likely to be regarded as more valuable than others.
Therefore stakeholders were asked to weight each criterion in order
that their preferences could be identified and taken in to account.
3.3.2
The weighting exercise was undertaken whereby all participants were
invited to compare all of the individual Investment Objectives and
CSFs against each other and to record their preference. Each criterion
was ascribed a score of either 1 or 0 depending on preference, such
that the scores for each criterion could be aggregated to provide an
overall score for that criterion. The application of this scoring has
allowed for a ‘weighting’ for each criterion that ensures that those
options containing more of the attributes that the stakeholders, as a
group, valued score better overall than those that perhaps focus on
less important benefits.
23/10/2009
57
Weighting Results
3.3.3
The result of the weighting exercise is set out below:
Criteria
Patient safety
Meeting and improving quality standards
The delivery of improved performance and outcomes
The long term clinical and financial stability of the
Productivity and efficiency of services and patient
and staff experience
Patient focused care
Modernisation and innovation for service
transformation
The achievability of an option
The delivery of Trust and Local Health Economy
strategy
The collocation of services within the Epsom site
Development of 'Centres of Clinical Excellence'
Ensuring ‘fit’ with the organisational cultures of the
various organisations involved
Balancing the expectations of key stakeholders
The utilisation of the Epsom estate
Totals
Total
Score
Weight
Rank
362
300
292
269
12.8
10.6
10.4
9.5
1
2
3
4
222
7.9
8
224
225
7.9
8.0
7
6
228
158
8.1
5.6
5
9
114
116
113
4.0
4.1
4.0
11
10
12
106
92
2821
3.8
3.3
100.0
13
14
3.4
Stage 3: Options Long-list Generation
3.4.1
The long list of options was generated by a workshop in accordance
with best practice contained in the Capital Investment Manual. This
workshop took place on 23 July 2009 with members of TEC. The long
list of options was then reviewed by the Project Board on 29 July and
ratified by the TEC on 12 August.
3.4.2
This process generated options within the following key categories of
choice:
Scoping options – choices in terms of coverage (the what)
The choices for potential scope are driven by business needs and the
strategic objectives at both national and local levels. In practice,
these may range from business functionality to geographical,
customer and organisational coverage. Key considerations at this
stage are ‘what’s in?’ ‘what’s out?’ and service needs.
Service solution options – choices in terms of solution (the how)
The choices for potential solution are driven by new technologies,
new services and new approaches and new ways of working, including
business process re-engineering. In practice, these will range from
services to how the estate of an organisation might be configured.
Key considerations range from ‘what ways are there to do it?’ to
‘what processes could we use?’
23/10/2009
58
Service delivery options – choices in terms of delivery (the who)
The choices for service delivery are driven by the availability of
service providers. In practice, these will range from within the
organisation (in-house), to outsourcing, to use of the public sector as
opposed to the private sector, or some combination of each category.
The use of some form of public private sector partnership (PPP) is also
relevant here.
Implementation options – choices in terms of the delivery
timescale
The choices for implementation are driven by the ability of the supply
side to produce the required products and services, VfM, affordability
and service need. In practice, these will range from the phasing of
the solution over time, to the modular, incremental introduction of
services.
Funding options – choices in terms of financing and funding
The choices for financing the scheme (public versus private) and
funding (central versus local) will be driven by the availability of
capital and revenue, potential VfM, and the effectiveness or
relevance / appropriateness of funding sources. See 3.8 below.
3.4.3
Within each of the scoping options, service solution options, service
delivery options the Trust provided 4 alternatives as set out in detail
below. The full long-list of options is therefore made up of the 64
permutations and combinations of the detailed options. For the
purpose of scoring, the Implementation and Funding have been
excluded as they will be more appropriately considered at OBC stage.
Option scoring
3.4.4
From the
categories of
options the
Trust generated
a long list of 64
potential
options
Having identified a Long List of 64 individual options these were
scored against each of the Investment Objectives and the CSFs at the
short-listing evening on 19 August 2009 by the same group of Trust
staff and stakeholders as had participated in the weighting exercise.
The scores for each set of options are shown below with a more
detailed description of the option.
Scoping Options
23/10/2009
3.4.5
This range of options considers coverage of the project, looking at the
degree to which the project will address the EGH site. In accordance
with the Treasury Green Book and Capital Investment Manual, the
Trust are obliged to consider the ‘Do nothing’ and ‘Do minimum’
option as a benchmark for potential VfM and, as can be seen below,
the ‘Do nothing’ option has been discounted.
3.4.6
Within the broad scope outlined in the strategic case, the following
four main options are considered:
59
3.4.7
•
Option 1.1: Do Nothing - only implement those things that result
from NHS mandatory guidelines. Complete all backlog
maintenance;
•
Option 1.2: the ‘Minimum’ Scope - reconfigure to provide the
minimum levels required to meet local commissioning intentions
and consumerism standards. Complete all remaining backlog
maintenance;
•
Option 1.3: the ‘Intermediate’ Scope - retain elements of the site
that are fit for purpose and redevelop those that aren't while
meeting local commissioning intentions, consumerism standards
and completing all remaining backlog maintenance; and
•
Option 1.4: the ‘Maximum’ Scope - redevelop the entire site to
meet Trust objectives, consumerism standards and local
commissioning intentions.
The table below summarises the assessment of each option against
the investment objectives and CSFs.
Table 19. Scoping Options Scores
Option
1.1
1.2
1.3
1.4
1.1
2.0
4.2
4.6
Productivity and efficiency of services
1.2
1.9
4.1
4.5
1.2
2.0
4.0
3.8
1.1
2.0
4.0
4.5
2.0
2.2
3.3
3.2
Investment objectives
Patient focused care and patient and staff experience
Critical success factors
The delivery of Trust and Local Health Economy strategy
1.1
1.8
3.8
4.1
1.3
1.9
3.8
4.4
Modernisation and innovation for service transformation
1.2
1.9
4.1
4.1
1.6
2.0
4.2
3.6
1.3
1.9
4.1
4.1
Patient safety
1.5
2.3
4.2
4.5
1.3
2.1
4.1
4.5
1.3
2.0
4.3
4.0
Total
3.4.8
23/10/2009
1.9
2.6
4.1
3.1
19.1
28.6
56.2
56.9
Taken in isolation the stakeholders scored the option of Maximum
scope highest with the Intermediate scope a very close second. With a
very low score the ‘Do Nothing’ option was discounted.
60
Service Solution Options
3.4.9
This range of options considers potential solutions in relation to the
preferred scope.
The four options that have been considered are:
•
Option 2.1: Major Acute Hospital - growth of acute services to
exploit centres of excellence and improve clinical and support
facilities, productivity, performance and quality outcomes. This
description is in line with the ‘Major Acute Hospital’ as explained
in Healthcare for London’s report: ‘A Framework for Action’;
•
Option 2.2: Modern Local Hospital - reconfiguration of current
acute services to improve clinical and support facilities,
productivity, performance and quality outcomes. This description
is in line with the ‘Local Hospital’ as explained in Healthcare for
London’s report: ‘A Framework for Action’;
•
Option 2.3: New Concept Model - healthcare partnership to
provide a ‘village’ of healthcare centres of excellence delivering
acute and hub community care in a single setting; and
•
Option 2.4: Service Removal - redistribution of EGH acute services
to alternative hospitals potentially allowing other organisations to
deliver community services on the EGH site, or the sale of the EGH
site.
3.4.10 The table below summarises the assessment of each option against
Table 20. Service Solution Options Scores
Option
2.1
2.2
2.3
2.4
3.3
4.3
3.8
1.4
3.3
4.3
3.5
1.4
3.7
3.8
3.4
1.3
3.5
4.2
3.8
1.3
2.2
3.1
3.4
2.1
2.9
4.2
3.8
1.4
3.4
4.3
3.6
1.4
3.6
4.3
3.7
1.4
3
4.1
3.7
1.4
3.4
4.1
3.6
1.4
Patient safety
3.6
4.4
3.5
1.9
3.4
4.2
4.0
1.4
3.0
4.3
4.0
1.3
Total
23/10/2009
2.6
4.1
3.4
1.4
44.8
57.7
51.1
20.5
61
3.4.11 Taken in isolation the stakeholders preferred either a modern local
hospital or a hospital based around a new service model in preference
to a major acute hospital. At this point the service removal option
was discounted.
Service Delivery Options
3.4.12 This range of options considers the options for service delivery in
relation to the preferred scope and potential solution.
The four options that have been examined are:
•
Option 3.1: Refurbish - deliver the scope of redevelopment by
refurbishing the existing site;
•
Option 3.2: New Build - demolish all of the existing site and
rebuild;
•
Option 3.3: Hybrid - demolish and rebuild portions of the site and
refurbish other portions; and
•
Option 3.4: Relocation - sell the site and acquire a new site to
accommodate the revised hospital services.
Table 21. Service Delivery Option Scores
Option
3.1
3.2
3.3
3.4
2.9
3.6
4.6
2.2
2.9
3.7
4.5
1.9
2.6
3.6
4.2
2
2.4
4.1
4.2
2
2.2
3.6
3.8
3.1
2.6
3.5
4.4
2
2.6
3.9
4.1
2.2
2.4
3.9
4.2
2.2
2.8
3.3
4.4
1.8
2.6
3.6
4.2
2.1
3
3.4
4.1
2.3
2.7
3.7
4.1
2.2
3
3.1
4.6
1.7
Patient safety
Total
3.6
2.5
4.1
1.6
38.3
49.5
59.5
29.3
3.4.14 Taken in isolation the stakeholders preferred a hybrid of new build
and refurbishment and the option of service re location was
discounted.
23/10/2009
62
Implementation Options
3.4.15 This range of options considers the choices for implementation in
This section
relation to the preferred scope, solution and method of service
considers the
delivery. Although considered below these options did not form part
alternative
of the considerations when creating the options Long List as they do
timing of the
not directly support the identification of a “Direction of Travel”.
implementation
Equally, the implementation and funding routes are largely technical
of the project
exercises and would not have benefited from broader stakeholder
involvement and assessment.
3.4.16 There are two potential implementation options:
•
Option 4.1: ‘Big Bang’
•
Option 4.2: phased.
Option 4.1: ‘Big Bang’
3.4.17 This option assumes that all the required services could be delivered
within the initial phase(s) of the project.
Advantages:
•
Likely lower overall cost;
•
All changes are done in one go; and
•
Overall speed of change.
Disadvantages:
•
May be more intrusive in terms of key Trust staff time;
•
Problems may be exacerbated by the number of changes taking
place concurrently; and
•
Potentially high capital costs in early years.
Option 4.2: phased
3.4.18 This option assumes that the implementation of the required services
would be phased on an incremental basis.
Advantages:
•
Changes can be done at a pace to suit the Trust; and
•
Capital requirements spread across the entire period.
Disadvantages:
23/10/2009
•
Likely longer overall build period;
•
Engages Trust key personnel for a longer period of time; and
•
Likely higher overall cost.
63
Overall conclusion: implementation options
Table 22. Assessment of Implementation Options
Reference to:
Option 4.1
Option 4.2
‘Big Bang’
phased
Description of options:
Patient safety
Ensuring ‘fit’ with the organisational cultures of the various
organisations involved
The long term clinical and financial stability of the Epsom
General Hospital
?
?
Summary
Discounted
Preferred
3.4.20 Based on the high level review of the advantages and disadvantages of
the options and the fit with CSFs the initial assessment is that a
phased approach would be preferred. However, both options will be
considered in more detail at the OBC stage.
Funding Options
3.4.21 This range of options considers the choices for funding and financing
This section
for the preferred scope, solution, method of service delivery and
considers the
implementation.
possible options
for funding the 3.4.22 Any option can only be recommended if it is affordable to the Trust.
project
The capital cost of the scheme must fall within maximum funding
limits set by HM Treasury and the revenue cost of financing the
scheme cannot put the Trust into a position whereby it fails to meet
its statutory obligation to break even.
3.4.23 For the Trust to confirm that the scheme is affordable it must look at
the method of funding in order to assess the total capital and revenue
implications. The options the Trust will explore are as follows:
•
23/10/2009
Option 5.1: PFI
64
•
Option 5.2: PDC
•
Option 5.3: Loans
•
Option 5.4: Third Party
•
Option 5.5: Land Sale
•
Option 5.6: Hybrid of the above
3.4.24 Given the current economic climate and recent guidance from NHS
London, it is increasingly unlikely that PDC funding would be an
option available to the Trust in the short to medium term, however it
has been included here for completeness and in the event that the
market conditions may change in the future.
3.4.25 Although considered below these options did not form part of the
considerations when creating the options Long List as they were not
considered relevant to the present consideration of a “Direction of
Travel”
Option 5.1: PFI
3.4.26 Under this option, the required services might be provided on a PPP
(PFI) basis from a single service provider or consortium made up of
potential service providers on the private sector side.
3.4.27 The assets underpinning the provision of services would be an integral
part of the service and indistinguishable within the resultant service
charge. All elements of the service would be within the potential
scope of the deal.
3.4.28 The Confederation of British Industry (CBI) has developed the
following criteria for assessing the eligibility of public sector
investment schemes against private funding arrangements (CBI
Report: Private Skills in Public Service). The Project team has
assessed the potential for private finance using these criteria.
Table 23. Assessment of favourable characteristics for a PFI project
Characteristic
1. Output/service-delivery driven
High
Medium
Low
2. Substantial operating content within the project
3. Significant scope for additional/alternative uses of the asset
4. Scope for innovation in design
5. Surplus assets intrinsic to transaction
6. Long contract term available
7. Committed public sector management
8. Political sensitivities are manageable
9. Risks primarily commercial in nature
10. Substantial deal
11. Complete or stand alone operations to allow maximum
synergies
Note: none of these conditions will themselves guarantee success but they point to a particular
direction and allow for a more informed decision.
23/10/2009
65
Advantages:
•
Risk transfer; and
•
Availability of funds.
Disadvantages:
•
Cost;
•
Fit with refurbishment project;
•
Procurement costs; and
•
Value for Money.
Option 5.2: PDC
3.4.29 PDC funding assumes that the capital cost of the option is provided to
the Trust through an increase in its public dividend capital. The Trust
is required to make a return of 3.5% on its average relevant net assets
and therefore the financing cost of the investment is the return on
assets, depreciation and hard FM.
3.4.30 The revised capital regime for NHS trusts is now loans based, PDC only
being available in exceptional circumstances (expected to become
even more exceptional in current economic climate).
Advantages:
•
Cost;
•
Speed of procurement;
•
Complexity; and
•
Fit with refurbishment project.
Disadvantages:
•
Availability of funds; and
•
Risk transfer.
Option 5.3: Loans
3.4.31 The Trust may not borrow an amount beyond its Prudential Borrowing
Limit (PBL). This is set with reference to a range of financial risk
ratings that determine the maximum gearing ratio for a trust’s
balance sheet which are set to ensure that no trust is able to borrow
to an extent that would destabilise its balance sheet.
3.4.32 Guidance from the strategic health authority indicates that while
PBLs for NHS trusts are not a statutory requirement, the DH policy
lead is minded to follow an approach similar to Monitor in terms of
their new Prudential Borrowing Code for Foundation Trusts.
23/10/2009
66
3.4.33 ESH's Prudential Borrowing Limit is circa £25m. This would be
applicable to the loans funded option and therefore the loans funded
option alone would, generally, have been unlikely to be feasible.
3.4.34 However, pending further policy guidance from DH, trusts working on
capital business cases where public funding will be needed should
assume that loans may be available above the current notified PBL as
long as it can be demonstrated that the loan is affordable in I&E
terms and that Tier 2 ratio tests wouldn’t be breached. OBCs should
therefore include at least 5-year I&E and balance sheet projections
and position vs. the Tier 1 and Tier 2 ratio tests.
Advantages:
•
Cost;
•
•
Complexity; and
•
Disadvantages:
•
Availability of funds;
•
Risk transfer; and
•
Lack of PBL.
Option 5.4: Third Party
3.4.35 There has been a lot of discussion regarding the possibility of thirdparty funding regarding EGH ever since the Denbies Trust have been
associated with EGH. It is unclear as to how serious this is presently,
or what conditions would attach to any deal.
3.4.36 The Trust will also seek to explore any other possible third party
funding arrangements to the extent to which they provide the Trust
with the funds that it requires whilst still meeting the long term
strategic goals for EGH.
Advantages:
•
Cost;
•
•
Complexity; and
•
Disadvantages:
•
23/10/2009
67
•
Risk transfer;
•
Lack of VfM; and
•
Legals.
Option 5.5: Land Sale
3.4.37 Under this option, the required services might be funded through the
sale of un-needed or unused land on the current EGH site.
Advantages:
•
Cost;
•
•
Complexity; and
•
Disadvantages:
•
•
Risk transfer;
•
Lack of VfM; and
•
Legals.
Option 5.6: Hybrid
3.4.38 Under this option, the required services might be provided through
combination of the different funding routes outlined above.
Advantages:
•
Access to funds;
•
Speed of procurement; and
•
Disadvantages:
•
•
Complexity;
•
Risk transfer;
•
Lack of VfM; and
•
Legals.
Overall conclusion: funding
3.4.39 At the SOC stage there is insufficient detail to properly assess the
funding route that may be used. However, as discussed above, with
23/10/2009
68
the current economic climate access to PDC funding will likely be very
limited so a hybrid using a range of funding sources will be the most
likely solution. The funding route will be explored in detail at OBC
stage.
Stakeholders
involved in
scoring the
options to
provide a short
list
3.5
Stage 4: Short-listing
3.5.1
On August 19th 2009 a ‘scoring evening’ was held with relevant
stakeholders to ensure that the options that the Trust chooses as its
‘preferred way forward’ are representative of the desires of the
stakeholders of the Epsom community as a whole. These were, for
the most part, the same individuals who had provided the ‘weighting’
scores for the evaluation criteria. At the scoring evening participants
engaged in a lively and helpful discussion to establish the parameters
that framed the scoring exercise. All attendees were invited to
complete a scoring questionnaire, the outcome of which generated a
short-list of options which together represent a ‘preferred way
forward’ for Epsom General Hospital. Copies of the questionnaire are
attached in the General Annex.
3.5.2
The weighted results of this scoring exercise provide a number of
‘benefit points’ for each of the 64 Long listed options.
Figure 7.
3.5.3
23/10/2009
Ranked outcome of benefit appraisal of options
Using the benefit points derived from the scoring exercise the table
above ranks each of the long listed options in terms of desirability
with 1 being the top score and 64 being the bottom score. Based on
this table the Trust selected the top 12 ranked options for further
evaluation. The Trust are also obliged to further evaluate either the
‘Do Nothing’ option or ‘Do Minimum’ option. Having previously
discounted the ‘Do Nothing’ option the Trust have chosen to further
evaluate the ‘Do Minimum’ option that gained the highest score in the
at the scoring evening. This option was ranked 17 out of the original
64 and is further explained below. As a consequence the Trust has
further evaluated 13 separate options.
69
Analysis of Short listed options
Capital cost for 3.5.4
the top 12
options, plus
‘Do minimum
option’
3.5.5
calculated
Following establishment of the capital cost the options have also been
looked at in terms of Value for Money by identifying the net capital
cost per benefit point. The following section sets out the result of
this exercise.
3.5.6
In considering the options each option has been given an option
number which is in line with their comparative ranking from the
scoring exercise such that Option 1 is the option that had the highest
overall score.
23/10/2009
The calculation of capital costs is set out in the Financial Case and
more particularly in the Finance and Estates annexes which provide a
detailed ‘Block by Block’ breakdown of the site and the impact of
each option.
70
Description of the Short-Listed Options
Option 1: A Modern Local Hospital with the Maximum service
scope, provided via a hybrid of Refurbishment and New Build.
General description
The refurbishment of a significant amount of the hospital including
the replacement of the Headley wing and the introduction of a
Combined Heat and Power (CHP) system. Delivery of improved
consumerism standards and better collocation of services. After
vacating some of the properties the surplus land and buildings are
sold off for residential us, however the lost car parking space is not re
provided.
Description of key changes
Wells Wing
Refurbishment of level 2 to provide 46 single rooms and
refurbishment of MAAU on level 5. Transfer beds from
Langley wing (26) close Langley wing & convert
kitchens to wards and build new kitchens in yard or on
a new floor.
Headley wing
Replace Headley wing with new front entrance and re
configure clinic space.
Rowan House
Re furbished to include PGMC meeting rooms small
admin but move rest off site.
Langley wing
Mental health trust to relocate mental health services
beds. Trust beds to transfer to Wells wing and building
vacated.
Day case unit
Completely refurbished and extended by 100 m² for
recovery.
Ebbisham ward
Completely refurbished for paeds, to meet public
demand.
OPD clinic (Oaks)
Completely refurbished and partial extension.
Surplus land
An area equating to 50 % of the site to be disposed of.
Decanting costs
A total cost allowance of £ 9 million has been included
in the option.
Option 1
Capital
23/10/2009
Cost/Benefit
123,917,442
Less Land sales
(8,122,500)
Net Capital cost
115,794,942
Benefit points
1,257.2
Cost per benefit point
£92,105
71
Option 2: A Modern Local Hospital with intermediate service
General description
The refurbishment of a significant amount of the hospital including
the partial replacement of the Headley wing and the introduction of a
CHP system. Delivery of improved consumerism standards and better
collocation of services. After vacating some of the properties, the
surplus land and buildings are retained in their current state and
condition as are the car parking facilities.
Wells Wing
Refurbishment of 3,796 m² representing some 30% of
the entire Wells wing ward space.
Headley wing
Replace a proportion of Headley wing with new front
entrance and re configure clinic space.
Rowan House
Langley wing
vacated.
Day case unit
Partially refurbished and extended by 100 m² for
recovery.
Ebbisham ward
Completely refurbished for Paeds, to meet public
demand.
Dr Flats
Completely upgraded.
OPD clinic (Oaks)
Completely refurbished and partial extension.
Decanting costs
A total cost allowance of £ 4.5 million has been
included in the option.
Option 2
Capital
Less Land sales
Net Capital cost
23/10/2009
Cost/Benefit
79,159,853
0
79,159,853
Benefit points
1,249.8
£63,338
72
Option 3: A New Concept model providing a maximum service
General description
A key element of this option will be the exciting opportunity to
accommodate services from community settings on the EGH site
creating a primary and secondary care health village. This is actively
supported by NHS Surrey and the local GP community together with
the pilot ICOs. The option would potentially see the following
initiatives:
•
Transfer of New Epsom and Ewell Cottage Hospital beds to the
EGH site;
•
Intermediate care facilities;
•
‘Repatriation’ of activity moved to community settings under NHS
Surrey commissioning intentions to the EGH site and run by our
community partners in collaboration with our clinicians;
•
A solution for the transfer of beds and services from the
Leatherhead Hospital to the EGH site improving facilities for
patients;
•
ICOs activity commissioned from both acute and primary care
facilities on the site; and
•
Transfer of rehabilitation services to the site.
The acute facility would see the refurbishment of a significant
amount of the existing hospital together with a limited amount of
new build expansion particularly the replacement of the Headley
wing.
Delivery of improved consumerism standards and better
collocation of services. The site will then also house a new CHP
system. Surplus land is sold for development and the lost car parking
is not re provided.
It is anticipated that this option could provide significant patient,
staff and economic benefits through collaboration. We have modelled
the financial impact on the Trust for this option on the basis that
surplus land is sold for development by other providers. However a
range of alternative options including leases could be put in place and
would result in shared overhead costs and capital charge savings in
other parts of the local health economy. These are not modelled but
would be developed at OBC stage.
23/10/2009
73
Wells Wing
a new floor.
Headley wing
Replace of a large a proportion of Headley wing with
new front entrance and refurbish and re configure
clinic space.
Rowan House
Completely refurbished to include PGMC meeting rooms
small admin but move rest off site.
Langley wing
vacated.
Day case unit
recovery.
Ebbisham ward
Completely refurbished for Paeds to meet public
demand.
Dr Flats
OPD clinic (Oaks)
Completely refurbished and partial extension
Surplus land
An amount equating to 60% of the land to be divested
for development of associated community facilities.
Decanting costs
Option 3
Capital
23/10/2009
Cost/Benefit
121,327,710
Less Land sales
(9,747,000)
Net Capital cost
111,580,710
Benefit points
1,202.8
£92,767
74
Option 4: A New Concept model providing an intermediate service
General description
The Trust could develop a healthcare village as outlined above in
option 3 however under option 4 there would be a reduced scope
providing for the refurbishment of a significant amount of the existing
hospital together with only a limited amount of new build expansion
particularly the replacement of a proportion of the Headley wing.
Delivery of improved consumerism standards and better collocation of
services. The site will then also house a new CHP system. After
vacating some of the properties, the surplus land is retained in its
current state and condition for potential healthcare use by other
bodies and any lost car parking is not re provided.
Wells Wing
Headley wing
Replace of a proportion of Headley wing with new front
entrance and refurbish and re configure clinic space.
Rowan House
Completely refurbished to include PGMC meeting rooms
small admin but move rest off site
Langley wing
vacated.
Day case unit
recovery.
Ebbisham ward
Completely refurbished for Paeds to meet public
demand.
Dr Flats
Completely upgraded
OPD clinic (Oaks)
Completely refurbished and partial extension
Surplus land
Surplus land and buildings retained by the Trust for
alternative use by other healthcare bodies. Any
conversion or refurbishment to be at the cost of the
incoming body.
Decanting costs
Option 4
Capital
Less Land sales
Net Capital cost
23/10/2009
Cost/Benefit
76,925,977
0
76,925,977
Benefit points
1,195.5
£64,346
75
scope, provided via a new build.
General description
The demolition and re provision of all of the existing facilities on the
same site, built to modern space requirements etc. including the
introduction of a CHP system and the delivery of improved
consumerism standards and better collocation of services. After
vacating some of the properties, the surplus land and buildings are
sold off for residential use, however the lost car parking space is not
re provided.
Complete demolition and re construction of existing space.
Surplus land
Surplus land equating to 60% of the site is sold for
development.
Decanting costs
Option 5
Capital
394,285,768
Less Land sales
(9,747,000)
Net Capital cost
384,538,768
Benefit points
23/10/2009
Cost/Benefit
1,183.1
£325,026
76
Option 6: A Modern Local Hospital with an intermediate service
scope, provided via a new build.
General description
The demolition and re provision of some of the services on the site
together with the refurbishment of other elements. The introduction
of a CHP system. Delivery of improved consumerism standards and
better collocation of services. After vacating some of the properties,
the surplus land and buildings are sold off for residential use, however
the lost car parking space is not re provided.
Wells Wing
Complete demolition and re construction of existing
space.
Headley wing
space.
Rowan House
space.
Langley wing
vacated .
Day case unit
space.
Ebbisham ward
Complete refurbishment of existing space.
Doctors flats
Dr flats
OPD clinic (Oaks)
Surplus land
development.
Decanting costs
Option 6
Capital
244,852,191
Less Land sales
(8,122,500)
Net Capital cost
236,729,691
Benefit points
23/10/2009
Cost/Benefit
1,175.8
£201,335
77
Option 7: Provision of a Major Acute Hospital with a maximum
service scope, provided via a hybrid of refurbishment and new
build.
General description
The re provision of those parts of the estate that are not already
deemed ‘fit for purpose’ together with the refurbishment of the
majority of the other parts of the site including the introduction of a
CHP system. Delivery of improved consumerism standards and better
collocation of services. This option also looks to increase the size of
the building to account for modern ward space requirements. After
vacating some of the properties the surplus land and buildings are
sold off for residential use, however the lost car parking space is not
re provided.
Wells Wing
a new floor.
Headley wing
space.
Rowan House
Complete refurbishment of the existing space.
Langley wing
vacated.
Day case unit
Ebbisham ward
Doctors flats
Dr flats
OPD clinic (Oaks)
Additional space
In line with the definition of a Major Acute facility the
option includes an allowance for an additional 10% of
new build space to be included in the costing.
Surplus land
development.
Decanting costs
Option 7
Capital
170,849,598
Less Land sales
(8,122,500)
Net Capital cost
162,727,098
Benefit points
23/10/2009
Cost/Benefit
1,163.0
£139,920
78
Option 8: Provision of a Major Acute Hospital with an
intermediate service scope, provided via a hybrid of
refurbishment and new build.
General description
The re provision of those parts of the estate that are not already
deemed ‘fit for purpose’ together with the refurbishment of some of
the other parts of the site including the introduction of a CHP system.
Delivery of improved consumerism standards and better collocation of
services. This option also looks to increase the size of the new build
sections to account for modern ward space requirements. After
vacating some of the properties the surplus land is retained in its
present state and condition as are the car parking facilities.
Wells Wing
Refurbishment of a significant proportion of Wells
wing.
Headley wing
Partial refurbishment and partial demolition and re
construction.
Rowan House
Complete refurbishment of the existing space.
Langley wing
vacated.
Day case unit
Partial refurbishment of existing space.
Ebbisham ward
OPD clinic (Oaks)
Additional space
In line with the definition of a Major Acute facility the
option includes an allowance for an additional 10% of
new build space to be included in the costing.
Decanting costs
Option 8
Capital
Less Land sales
Net Capital cost
Benefit points
23/10/2009
Cost/Benefit
122,592,429
0
122,592,429
1,155.7
£106,076
79
Option 9: Provision of a New Concept Hospital with a maximum
service scope, provided via a new build.
General description
This option is based on the new concept model which is more fully
described in the General description section of Option 3. Under option
9 however the facilities would be provided via a new build rather than
a hybrid of refurbishment and new build. The acute facility would
therefore see the re provision of the entire estate together with the
introduction of a CHP system.
Complete demolition and re construction of existing space.
Surplus land
development.
Car parking facilities
Lost car parking spaces not to be re provided.
Decanting costs
Option 9
Capital
385,080,568
Less Land sales
(9,747,000)
Net Capital cost
375,333,568
Benefit points
23/10/2009
Cost/Benefit
1,128.8
£332,507
80
Option 10: Provision of a New Concept Hospital with an
intermediate service scope, provided via a new build.
General description
This option is based on the new concept model which is more fully
described in the General description section of Option 3. Under option
10 however the facilities would be provided via a new build rather
than a hybrid of refurbishment and new build and the scope would be
reduced to an Intermediate scope. Again surplus land will be sold and
lost car parking will not be re provided.
Wells Wing
space.
Headley wing
Demolition and re construction of 80 % of existing
space.
Rowan House
space.
Langley wing
space.
Day case unit
space.
Ebbisham ward
Complete refurbishment.
Dr flats
OPD clinic (Oaks)
Complete refurbishment and extension of the existing
space.
Terminal care
space.
Surplus land
development.
Decanting costs
Option 10
Capital
235,646,991
Less Land sales
(8,122,500)
Net Capital cost
227,524,491
Benefit points
23/10/2009
Cost/Benefit
1,121.5
£202,875
81
scope, provided via a refurbishment.
General description
The refurbishment of a significant amount of the hospital and the
introduction of a CHP system. Delivery of improved consumerism
standards and better collocation of services. After vacating some of
the properties the surplus land and buildings are sold off for
residential us, however the lost car parking space is not re provided.
Wells Wing
Refurbishment of level 2 to provide 46 single rooms
and refurbishment of MAAU on level 5. Transfer beds
from Langley wing (26) close Langley wing & convert
a new floor.
Headley wing
Rowan House
Langley wing
vacated.
Day case unit
recovery.
Ebbisham ward
demand.
Doctors flats
Dr Flats
OPD clinic (Oaks)
Complete refurbishment and partial extension.
Surplus land
An area equating to 50 % of the site to be disposed of.
Decanting costs
Option 11
23/10/2009
Cost/Benefit
Capital
99,745,294
Less Land sales
(8,122,500)
Net Capital cost
91,622,794
Benefit points
1,111.3
£82,446
82
Option 12: A Modern Local Hospital with an intermediate service
scope, provided via a refurbishment.
General description
The refurbishment of an amount of the hospital including the
introduction of a CHP system. Delivery of improved consumerism
standards and better collocation of services. After vacating some of
the properties, the surplus land and buildings are retained in their
current state and condition as are the car parking facilities.
Wells Wing
Headley wing
Refurbishment of the entire wing.
Rowan House
Langley wing
vacated.
Day case unit
recovery.
Ebbisham ward
demand.
OPD clinic (Oaks)
Complete refurbishment and partial extension.
Decanting costs
Option 12
Capital
Less Land sales
Net Capital cost
23/10/2009
Cost/Benefit
66,202,175
0
66,202,175
Benefit points
1,103.9
£59,971
83
Option 13: Do Minimum: 21st Century Turnkey Solution- a Modern
Local Hospital providing the minimum service scope, provided via
a hybrid of refurbishment and new build.
General description
The refurbishment of a proportion of the ward space to meet
minimum requirements for consumerism, improving collocations and
including a limited CHP system. After vacating some of the properties
the surplus land and buildings are retained in their present state and
condition as are the car parking facilities.
Wells Wing
the entire Wells wing ward space to deliver additional
single rooms.
Headley wing
Refurbishment of the entire wing.
Rowan House
Langley wing
vacated.
Day case unit
recovery.
Ebbisham ward
demand.
OPD clinic (Oaks)
Decanting costs
Option 13
Capital
Less Land sales
Net Capital cost
Benefit points
23/10/2009
Cost/Benefit
48,856,714
0
48,856,714
1,049.6
46,548
84
Summary
Having looked at the benefit points scored per £ of net capital cost,
the ranking of the options would be re-assessed with Option 13 having
the best cost per benefit points scored.
Benefit points
Cost/benefit
point (£s)
Rank
Option 13
1,049.6
46,548
1
Option 12
1,103.9
59,971
2
Option 2
1,249.8
63,338
3
Option 4
1,195.5
64,346
4
Option 11
1,111.3
82,446
5
Option 1
1,257.2
92,105
6
Option 3
1,202.8
92,767
7
Option 8
1,157.7
106.076
8
Option 7
1,163.0
112,652
9
Option
23/10/2009
Option 6
1,175.80
201,335
10
Option 10
1,121.50
202,875
11
Option 5
1,183.10
325,026
12
Option 9
1,128.80
332,507
13
3.5.7
At this point in time, the ‘Do Minimum – 21st Century Turnkey
Solution’ option appears to provide the best option based around its
relatively low cost per benefit point.
3.5.8
The spread of benefits scores was much less broad than the spread of
capital costs. As a result the much more cost effective ‘Do Minimum’
solution scored at a level which is probably higher than the benefits
that it will deliver on a comparative basis with the other options.
This may mean that once the Trust has further understanding of the
benefits at OBC stage, the ‘Do Minimum – 21st Century Turnkey
Solution’ option may not be so highly ranked.
85
4. THE COMMERCIAL CASE
This section
looks to the
procurement
route for the
options
Funding will be
considered in
much greater
detail at OBC
stage
23/10/2009
4.1.1
This section of the SOC outlines the potential procurement routes
that could be used in relation to the preferred option outlined in the
Economic Case. A more detailed consideration of the Commercial
Case will take place at the OBC stage.
4.1.2
The financial analysis for this SOC has used PDC funding and IFRS
accounting. The Trust has reviewed its balance sheet in line with IFRS
accounting and is aware of the potential ‘on-balance sheet’ issues
associated with PFI.
4.2
Funding Route
4.2.1
There are a variety of potential funding routes that the Trust will
examine in more detail at OBC. For the Trust to confirm that the
scheme is affordable it must look at the method of funding in order to
assess the total capital and revenue implications. The Trust will
examine six forms of funding:
•
PDC funding: The capital cost is met through issue of new PDC to
the Trust at a cost of 3.5% per annum, but it is currently only
available in exceptional circumstances (and this is expected to
become even more exceptional in current economic climate).
•
Loan funding: In this case the Trust would apply to the NHS bank
for a loan to pay for the scheme and make annual repayments of
capital and interest. The total cost of the scheme is in excess of
the Trust’s Prudential Borrowing Limit (c.£25m) and therefore this
route could not fund the whole scheme. Recent guidance however
indicates that trusts working on capital business cases where
public funding will be needed should assume that loans may be
available above the current notified PBL as long as it can be
demonstrated that the loan is affordable in I&E terms and that
Tier 2 ratio tests, as set out in the Prudential Borrowing Code for
Foundation Trusts (but applicable to NHS Trusts) wouldn’t be
breached.
•
PFI funding: Where the capital development and hard FM costs are
funded through a special purpose vehicle with the Trust making
annual payments known as Unitary Charges.
•
Land sales: The range of short-listed options include the
opportunity to sell land. Whilst this would recover in the region of
£8m to £10m it is not sufficient to fund the whole scheme but
would provide a funding contribution.
•
Third party income: The Trust will examine the range of options
for third party funding to support its initiative. It will apply VfM
tests to these potential routes in order to ensure that the funding
route supports the investment objectives.
86
•
4.3
4.3.1
Procurement
route to be fully
considered at
OBC stage
Finally, the Trust will look at a range of hybrid funding options
drawn from the above list.
Procurement Route
The range of short listed options present the opportunity to consider a
number of different procurement routes. Once the preferred solution
is finalised at OBC the best procurement route will become more
apparent and more detailed scrutiny of commercial proposals can
take place. At this stage, although no preferred procurement route is
identified, the following routes are viewed as possible:
Public funding
4.3.2
A publicly funded scheme presents two options – Procure21, which is
efficient and effective, or EU procurement which has recently
introduced competitive dialogue regulations.
4.3.3
Procure21 has emerged as the main alternative to PFI in procuring
large NHS projects. There is a growing knowledge base of delivering
large projects successfully within the NHS using Procure21, and the
current Principal Supply Chain Partners (PSCPs) have, between them,
considerable experience. ESH does not have direct experience of
Procure21 but will seek advice from DH, NHS London and its technical
advisers to ensure the benefits of the vehicle are fully realised.
4.3.4
Alternatively, the Trust could advertise for the services it requires via
OJEU. This puts greater onus on the Trust to select the best
combination of skills, experience and value through its own
evaluation process. However, it would also allow the Trust to test a
wider range of suppliers than Procure21, potentially leading to a
better, more innovative solution.
PFI
Soft market
testing for
funding to take
place at OBC
stage
4.3.5
If public funding were not available then the Trust would consider
PFI. This will require both a qualitative and quantitative assessment
of the proposed PFI project, covering viability, desirability and the
achievability of the scheme overall.
4.3.6
The Treasury’s VfM assessment tool will be applied to the scheme in
line with DH and Treasury requirements. The aim of this assessment is
to:
•
provide an assessment of whether PFI is likely to provide VfM;
•
test the competitive interest in the project and the market
capacity to bid and deliver the project effectively; and
•
assess the affordability of the project.
Viability of PFI
4.3.7
23/10/2009
Investment objectives and desired outcomes need to be translatable
87
into outputs that can be contracted for, measured and agreed.
The Trust will need to satisfy itself that operable contracts could be
constructed for this project which will describe service requirements
in clear, objective, output-based terms.
Desirability of PFI
4.3.8
23/10/2009
Although recently only a small number of projects have come to
market in the Health Sector, generally, the UK PPP/PFI market is
currently active, with a large number of bidding opportunities coming
to the market in other sectors such as education, emergency services
etc. The Trust is aware that, as a result of the increased number of
projects available on the market, potential bidders will be able to be
more selective about which ones they wish to pursue. The Trust is
therefore committed to ensuring that the project represents a
compelling proposition and investment for potential bidders.
Experience indicates that bidders target the schemes they bid for
very carefully due to the significant bid costs involved. The Trust
appreciates the fact that potential bidders are undertaking a risk
based approach to assessing which bids to respond to. This risk
process addresses a large number of both internal and external issues,
examples of which are:
•
Fit with strategic business goals;
•
Political support;
•
Resources availability;
•
Commitment to and momentum of the project;
•
Equity exposure;
•
Quality of Trust’s Project Team and advisors;
•
Other procurement commitments;
•
Land and Planning issues;
•
Synergy with other projects and commitments;
•
The use of tried and tested contract specifications and payment
mechanism;
•
Procurement timescale and investment cashflow;
•
Manageable bid costs (clarity of process and deliverables);
•
Availability and commitment of partners;
•
New versus refurbishment (new being preferred);
•
Simple technology (IT/Equipment);
•
Sensible risk transfer;
•
Degree of competition; and
88
•
Geography and support infrastructure/supply chain.
Achievability of PFI
4.3.9
The attractiveness of the preferred option to private sector capital
will be a key factor in the deliverability of the project. The Trust
believes that the main elements of this project will prove attractive
to Private Finance and be capable of delivering a value for money
solution. Following approval of this SOC, informal market sounding
amongst likely potential bidders will be carried out by the Trust and
its appointed advisers. At this stage, the Trust believes that there will
be strong interest in the project.
Procurement Strategy
4.3.10 The procurement strategy is to review the potential options in more
detail at OBC stage and to conduct soft market testing together with
an analysis of the advantages and disadvantages of different routes.
At a later stage, the Trust will have a greater understanding of the
level of refurbishment vs new build and the value of the scheme
which will help decide whether PFI or Procure21 is the better option.
Clearly, this will also depend upon funding route.
Commercial Deals
4.3.11 Given the early stage of the project and the potential for a number of
procurement and funding routes to be examined once the detailed
content of the scheme has been worked up at OBC, no potential
commercial deals have been examined.
Potential for Risk Transfer
Risk transfer to 4.3.12 Detailed analysis of the potential for risk transfer will take place at
OBC stage. The general principle is to ensure that risks should be
be fully
passed to ‘the party best able to manage them’, subject to VfM.
considered at
OBC stage
4.3.13 The table below outlines the potential allocation of risk. To be clear
this allocation would depend on the nature of the procurement route,
the type of payment mechanism and details of the preferred option,
however these are beyond the requirements at SOC stage:
23/10/2009
89
Table 24. Potential PFI Risk Share
Risk Category
Potential
allocation
Public
1. Design risk
Private
2. Construction and development risk
3. Transition and implementation risk
4. Availability and performance risk
5. Operating risk
6. Variability of revenue risks
7. Termination risks
8. Technology and obsolescence risks
23/10/2009
Shared
9. Control risks
10. Residual value risks
11. Financing risks
12. Legislative risks
13. Other project risks
4.4
Personnel Implications (Including TUPE)
4.4.1
It is anticipated that the TUPE – Transfer of Undertakings (Protection
of Employment) Regulations 1981 – will not apply to this investment
as outlined above, however this will be fully considered at OBC stage.
90
5. FINANCIAL CASE
5.1.1
Financial case
to determine
revenue
affordability of
the options
5.2
The purpose of the financial case is to determine the affordability of
the options that make up the preferred direction of travel. In this
context all 13 of the short listed options will be reviewed for both
Capital and Revenue affordability.
5.2.1
The current, historic and forecast financial position of the Trust is
provided in the Strategic Context and the impact of the Phase 1
project is set out in the OBC for that project. Whilst there are some
short-term financial pressures emanating from the Phase 1 initiative
the current assumption is that because these are generated from the
overall economic downturn they will be resolved by the Trust, NHS
Sutton and Merton, the SW London Sector and NHS London working
together.
5.2.2
The Trust have therefore assumed for this SOC that the baseline
position for the Trust is breakeven. The various options will therefore
be assessed in terms of the impact that they have on the ability of the
Trust to continue to breakeven. In simple terms this will be measured
by the level of additional recurrent CIPs that need to be generated by
the Trust, under each option, such that the break even position
continues.
5.3
Methodology and Assumptions
5.3.1
Preparation of the STH OBC included development of a long-term
financial model. This model worked from a baseline of 2007/08
outturn and estimated the future financial position of the Trust
through to 2027/28. This model is used to prepare the financial
information used in this SOC after being updated for the 2008/09
audited accounts. The model provides I&E statements, balance sheets
and cash flow statements for each of the years under review for each
option. We have therefore modelled the impact of the EGH SOC
options over a period of 19 years which is consistent with the original
Phase 1 model.
The current financial position of the Trust
Key Assumptions
5.3.2
23/10/2009
The key assumptions used in the model are set out below:
•
The June 2009 NHS London Planning Assumptions adjusted and
extrapolated for the period beyond 2017/18;
•
Volume growth based on the speciality growth assumptions
provided by NHS Surrey and NHS Sutton and Merton;
•
Capital costs based on average DCAGs at MIPs 506 taken from the
OB forms for the Phase 1 scheme; and
•
Average depreciation and VAT recovery rates.
91
5.3.3
The Finance Annex provides a fully detailed list of assumptions and
the financial analysis is supported by a comprehensive financial
model. At the OBC Stage, the financial model will be refined and will
include a provision for the downward valuation of the new build
elements of the scheme of approximately 20%.
Capital costs
Cost compiled
block by block
Forms OB1
contained in
Estates Annex
5.3.4
The development of the capital costs for each option was carried out
by the project team together with the Trust’s estates team. The
Epsom site is broken down into approximately 30 blocks. Each block
has a known area, net book value, depreciation rate, return, and
facilities management cost associated with it.
5.3.5
The 13 options were reviewed and described in terms of their impact,
block by block. The impact was calculated with reference to the
number of square meters of demolition, decant, refurbishment or new
build was required. This in turn was worked out with reference to the
activity and capacity modelling described in the Strategic Context.
The raw capital costs were then included in OB forms and on costs,
location adjustments, optimism bias, VAT, etc. together with the OB
forms and supporting computations can be found in the Estates
Annex.
5.3.6
Some of the options present the opportunity to release vacant land
for sale. The most recent DV report identified the value of the Epsom
site at £19m. The potential income from land sales was calculated
based on the proportion of the site released multiplied by the overall
value less an allowance for costs.
Potential land
sales based on
latest site
valuation.
Revenue Costs
23/10/2009
5.3.7
The revenue cost of capital was calculated by determining the net
revenue costs of FM, depreciation and return saved through disposal
of assets added to the new costs resulting from the option specific
capital costs.
5.3.8
The impact of NHS Surrey commissioning intentions was determined
using the activity model. The demand management assumptions were
applied to activity using HRG4.0 grouping of 2008/09 outturn data. As
set out by NHS Surrey 75% of the impact was applied in 2010/11 and
the remaining 25% added in 2011/12. It was assumed that the demand
management assumptions are applied to all subsequent volume
growth.
5.3.9
The impact of NHS Surrey commissioning intentions and volume
growth are assumed to be at marginal levels and therefore result in
‘variable’ cost changes only. For volume growth it is assumed that for
every £1 increase in income there is a 25p increase in cost. Volume
growth is only 1.3% per annum on average and the Trust’s view is that
the additional activity can be absorbed within current costs. This is
line with the recently approved STH OBC cost modelling.
92
Capital Affordability of Short-listed Options
5.3.10 The capital cost for each of the 13 short-listed options is shown in the
table below, net of land sales. For comparative purposes each option
is assumed to take 4 years to reach completion and would start in
2013.
Figure 8.
Capital costs net of land sales
£m
116
Option 1: Modern local Maximum Hybrid
79
Option 2: Modern local Intermediate Hybrid
112
Option 3: New concept Maximum Hybrid
Option 4: New concept Intermediate Hybrid
77
385
Option 5: Modern local Maximum New build
Option 6: Modern local Intermediate New build
237
Option 7: Major acute Maximum Hybrid
163
123
Option 8: Major acute Intermediate Hybrid
Option 9: New concept Maximum New build
375
Option 10: New concept Intermediate New build
228
Option 11: Modern local Maximum Refurbish
92
Option 12: Modern local Intermediate Refurbish
66
49
Option 13: Do Minimum: 21st Century Turnkey Solution
0
50
100
150
200
250
300
350
400
450
5.3.11 The capital funding ceiling is calculated using the PFI test. The total
Capital
estates revenue costs must not exceed 12.5% of turnover at OBC and
affordability is
15% at FBC stage. Turnover for EGH at the same price base as capital
predicated on
costs is £118m. The limit of estates related costs are therefore
Estates costs
£14.9m at OBC and £17.8m at FBC.
being less than
12.5% of
Table 25. Total Estates Costs of Options
turnover at OBC
Option
Description
Option 1
£15.2
Option 2
£13.0
Option 3
£14.7
Option 4
£12.4
Option 5
£35.4
Option 6
£24.4
Option 7
£18.7
Option 8
£15.5
Option 9
£34.6
Option 10
£24.1
Option 11
£13.2
Option 12
£11.9
Option 13
Estates Cost
st
Do Minimum: 21 Century Turnkey Solution
£10.8
Based on this test alone there are only six of the thirteen options
which are affordable and these are highlighted in blue above.
23/10/2009
93
Revenue Affordability of Short-listed Options
5.3.12 The revenue affordability of the options is determined by the level of
Revenue
incremental recurrent CIPs required to continue to meet the Trust’s
Affordability is
break-even duty.
based on ability
to achieve
5.3.13 As per the assumptions above, the Trust has already included in its
breakeven over
underlying financial model the impact of future tariff efficiencies and
the planning
inflation. The requirement for incremental recurrent CIPs in this SOC
period
therefore relates entirely to covering the NHS Surrey commissioning
intentions and the revenue cost of the capital investment.
5.3.14 The table below sets out the cumulative CIPs required over the 16
year forecast planning period, the average ‘in year’ savings required
and the maximum savings required in any one single year. The first
three of the total 19 year planning period are excluded as these are
part of the Annual Plan.
Table 26. CIP Impact of options
Sum of
Sum of CIPs over
first 5 years 6 to
years CIPs
16
Net CIPs
Cum. CIPs Average in
Max in
(£m) year (£m) year (£m)
Option
Description
Option 1
Hybrid
7.0
-7.8
-0.8
44
-0.05
3.0
Option 2
Modern local
Intermediate Hybrid
3.7
-4.9
-1.2
20.7
-0.08
1.9
Option 3
New concept Maximum
Hybrid
5.3
-5.7
-0.4
38.5
-0.03
2.7
Option 4
New concept
Intermediate Hybrid
3.4
-4.5
-1.1
17.5
-0.07
2.5
Option 5
New build
23.2
-17.5
5.7
216.2
0.36
7.5
Option 6
Modern local
13.4
-11.3
2.1
120.2
0.13
5.7
Option 7
Major acute Maximum
Hybrid
8.4
-8.1
0.3
72.2
0.02
2.5
Option 8
Major acute
Intermediate Hybrid
6.3
-6.7
-0.4
46.2
-0.02
3.4
Option 9
New concept Maximum
New build
21.3
-15.8
5.5
207.9
0.34
7.3
Option 10 New concept
13.0
-11.2
1.8
116.0
0.11
4.4
Option 11 Modern local Maximum
Refurbish
3.8
-4.6
-0.8
25.4
-0.05
2.6
Option 12 Modern local
Intermediate Refurbish
2.7
-4.0
-1.3
10.7
-0.08
2.4
Option 13 Do Minimum: 21st
Century Turnkey
Solution
2.1
-3.9
-1.8
1.4
-0.11
1.9
5.3.15 Based on the ability of an option to cover its costs and achieve a net
contribution over the planning period (negative CIP) options 5, 6, 7, 9
and 10 are unaffordable from a revenue perspective. The remaining
options demand CIPs in the range of 1.6% and 2.8% of EGH turnover in
their worst year and this is assumed deliverable.
23/10/2009
94
5.3.16 The following graphs below show the profile of these savings.
Figure 9.
Graph of in Year Incremental Savings Required by Option
£10m
£8m
£6m
£4m
£2m
£m
-£2m
-£4m
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28
Option 1
0.4
1.2
1.8
0.6
3.0
-0.8
-0.7
-0.8
-0.7
-0.8
-0.9
-0.6
-0.8
-0.6
-0.7
-0.4
Option 2
0.1
0.4
1.1
0.2
1.9
0.2
-0.4
-0.6
-0.6
-0.6
-0.7
-0.5
-0.6
-0.4
-0.5
-0.2
Option 3
-0.5
0.3
1.4
1.4
2.7
0.7
-0.5
-0.7
-0.7
-0.8
-0.8
-0.5
-0.7
-0.4
-0.8
-0.5
Option 4
-0.5
-
0.7
0.7
2.5
0.4
-0.3
-0.6
-0.6
-0.6
-0.6
-0.4
-0.6
-0.3
-0.6
-0.3
Option 5
3.1
4.1
4.3
4.2
7.5
0.7
-1.4
-2.7
-2.0
-2.0
-2.1
-1.8
-1.9
-1.8
-2.0
-0.5
Option 6
1.7
2.3
1.4
2.3
5.7
1.1
-1.2
-1.4
-1.3
-1.4
-1.5
-1.1
-1.3
-1.1
-1.6
-0.5
Option 7
0.9
1.4
1.9
1.7
2.5
0.7
-0.8
-0.9
-1.0
-1.0
-1.0
-0.7
-1.0
-0.7
-1.2
-0.5
Option 8
0.5
0.8
0.3
1.3
3.4
0.4
-0.6
-0.8
-0.7
-0.9
-0.8
-0.6
-0.8
-0.6
-0.9
-0.4
Option 9
3.0
4.0
4.2
2.8
7.3
1.9
-1.4
-2.5
-1.9
-2.0
-2.0
-1.8
-1.8
-1.8
-2.0
-0.5
Option 10
1.6
2.2
2.5
2.3
4.4
0.8
-1.2
-1.3
-1.3
-1.3
-1.4
-1.1
-1.3
-1.1
-1.5
-0.5
Option 11
-
0.2
0.5
0.5
2.6
0.7
-0.4
-0.6
-0.6
-0.6
-0.7
-0.4
-0.6
-0.4
-0.8
-0.2
Option 12
-0.2
-
0.3
0.2
2.4
0.3
-0.3
-0.5
-0.5
-0.6
-0.6
-0.3
-0.5
-0.3
-0.6
-0.1
Option 13
-0.2
-0.1
0.4
0.1
1.9
-0.1
-0.3
-0.4
-0.5
-0.5
-0.5
-0.3
-0.6
-0.2
-0.4
-0.1
5.3.17 As can be seen from the above all options have a similar profile of
incremental recurrent CIPs required for the Trust to continue to meet
its break even duty:
23/10/2009
•
In the initial years the incremental recurrent CIPs are required to
meet the impact of NHS Surrey commissioning intentions which are
a net cost to the Trust that will have to be covered by savings;
•
For the next two years the impact of growth in NHS Surrey
commissioning will outstrip the movement of workload in to the
community thereby giving an incremental increase in net income
and little need for incremental recurrent CIPs;
•
In the next phase the costs of the new buildings (depreciation and
funding) impact on the Trust and these will need to be mitigated
via increased incremental recurrent CIPs; and
95
•
In the latter (tail) years the additional impact of operating the
new facilities has been fully absorbed by incremental recurrent
savings made in the earlier years.
5.3.18 In qualifying whether any option is “affordable” the Trust must judge
its own ability to be able to generate those incremental recurrent
savings in the quantum and timescale set out. In this particular
instance this must be done on top of the level of incremental
recurrent CIPs which are already a feature of the agreed STH Phase 1
OBC.
Conclusion
5.3.19 The six options that pass both the revenue and capital affordability
tests are found in the table below. Therefore, the final six options
that the Trust recommends to take forward as a direction of travel to
OBC stage are:
23/10/2009
Option
Description
Option 2
Option 3
Option 4
Option 11
Option 12
Option 13
96
6. THE MANAGEMENT CASE
6.1.1
This section of the SOC addresses the ‘achievability’ of the scheme.
Its purpose is to set out the actions that will be required to ensure
the successful delivery of the scheme in accordance with best
practice.
6.1.2
This scheme is an integral part of the Trust’s vision for the future,
which comprises work done on both the STH site (on the Phase 1
project) as well as the EGH site (through this SOC).
6.1.3
The project will
methodology.
6.2
Project reporting structure
6.2.1
This section sets out the names and roles of those involved with the
project and includes the project Executive, the Project Manager and
representatives of the Users.
be
managed
in
accordance
with
PRINCE2
Figure 10. Project Governance Structure
Trust Board
SRO: Sam Jones
CEO
Trust Executive
Committee
Jon Sargeant
Executive Lead
•
•
•
•
Project Board
•
•
•
•
Project Team
6.2.2
23/10/2009
NED
Project Director
Exec Directors ESH
NHS Surrey & NHS Sutton
and Merton
NHSL & NHS SEC
E&EBC
GPs
Patient/staff Reps
• Jon Sargeant, Executive
Lead
• Tim Wilkins, Project
Director
• James Nicholls, BDO
• David Norris, ESH
• Peter Cook, ESH
• Chris Scroggie, BDO
The project team is in place and fully funded through to submission of
the SOC.
97
23/10/2009
6.3
Project roles and responsibilities
6.3.1
The Epsom Site Redevelopment Project Board first met on 29 July
2009. Its main purpose is to:
•
Ensure that the project is delivered to an agreed timescale and
budget;
•
Receive recommendations from the Project Team;
•
Authorise changes to budget and timescale within its delegated
authority from the Trust Board;
•
Ensure that the project objectives remain consistent with the
Trust’s corporate objectives;
•
Review the SOC including:
−
Approve the CSFs for the development; and
−
Approve the selection of long list and short list options.
•
Ensure stakeholder engagement and involvement in all stages of
the process; and
•
Ensure engagement and involvement of Patients, the Public, GPs
and Clinicians in this process through the set up and management
of this group.
6.3.2
The Project Board currently meets every month to review progress
and any issues brought to it by the Project Team and any other
stakeholders.
6.3.3
The Project Team meets on a weekly basis with the Executive Lead
Director.
6.4
Outline project plan
6.4.1
The following plan sets out the high level milestones and anticipated
timescales associated with delivering the overall project. A more
detailed summary can be found in the Project Initiation Document in
the General Annex.
98
Table 27. High Level Project Plan
Activity
Timescale
Complete
SOC Submitted to NHSL
Public meeting
NHSL Approval
OBC kick off
Activity and capacity modelling
Service design and modelling
Design work
Financials
SHA OBC Approval
DH OBC Approval
Invitation to Participate in Dialogue
SHA Review
Pre Qualification
Competitive Dialogue
Bidding
Selection and ABC
FBC
Construction and commissioning
1 month
Nov 09
Nov 09
Jan 10
Jan10
Mar 10
Jun 10
Dec 10
Dec 10
Mar 11
Jun 11
Sep 11
Nov 11
Mar 12
Oct 12
Dec 12
Mar 13
Dec 13
Dec 16
2 months
2 months
3 months
6 months
3 months
3 months
3 months
3 months
2 months
3 months
6 months
2 months
3 months
9 months
3 years
6.5
Use Of Special Advisers
6.5.1
Special advisers have been used in a timely and cost-effective manner
in accordance with the Treasury Guidance: Use of Special Advisers.
Details are set out in the table below:
Table 28. Use of special advisors
23/10/2009
Specialist Area
Adviser
Financial
BDO LLP
Technical
BDO LLP
Procurement and legal
BDO LLP
Business assurance
BDO LLP
Other
BDO LLP
6.5.2
The need for a broader skill set of professional advisers for the OBC is
understood.
6.6
Gateway Review Arrangements
6.6.1
A Health Gateway Review was carried out from 15th to 17th
September 2009. Recognising that this project was at an early stage,
and that the SOC had not been completed, it was agreed at the
Planning Day that it would be appropriate to undertake a Gate 0
Review.
6.6.2
The primary purpose of a Health Gateway Review 0: Strategic
assessment is to review the outcomes and objectives for the
programme (and the way they fit together) and confirm that they
make the necessary contribution to government, departmental, NHS
or organisational overall strategy.
99
6.6.3
The following summary text is extracted from the Gateway Review
Document:
The Strategic Outline Case (SOC) for “Creating a Vision
for Epsom General Hospital” is currently in draft form.
There is still an amount of work to complete,
particularly in relation to the financial models for the
options. The Project Team are confident that they can
meet the target dates. There are indications though
that there may be some slippage.
There are expectations within the wide stakeholder community
regarding the next steps. These will need careful and consistent
management.
In Summary:
•
The Project Team has made sound progress, especially in relation
to the involvement and management of stakeholders. The Review
Team (RT) have heard positive comments from a number of
interviewees about the level and quality of stakeholder
engagement in the development of “Creating a Vision for Epsom
General Hospital”. This engagement has been extremely positive
and resulted in the local population and stakeholder groups having
a much more realistic and informed view about the process and
likely extent of the project.
•
There is still much to do to complete the current phase of work.
The capacity to do this needs careful consideration, especially if
more activity on the St Helier Hospital OBC is deemed necessary
following review at the Department of Health.
•
Expectations, relationships and overall communication will
continue to need active management and should not be
underestimated.
•
It is felt that the focus should continue to be given to achieving a
high quality SOC and other key documents, even if this takes a
little longer. These need to be supported strongly by the
commissioning PCTs and SHAs.
Following completion and submission of the SOC, it will still be
necessary to give further attention to a number of key activities as
initial steps on the route to the next stage of the Project, the OBC.
These tasks would include:
23/10/2009
•
Reviewing, streamlining and agreeing appropriate governance.
•
Clarifying and agreeing with Commissioners the next level of detail
to enable the Trust to be more specific on clinical services redesign.
•
Agreeing an on-going communications strategy.
•
Ensuring a strategic fit to the outcomes of the current strategic
100
reviews.
Overall we feel the Delivery Confidence Assessment for this Project
is:
a. For Completion and submission of the SOC is Amber Green.
b. For completion of the potential OBC and eventual delivery of a
solution is Amber.
The Review Team acknowledge that in the current economic climate
with pressures on availability of public sector capital and competing
priorities, it is difficult at this stage to anticipate all of the
discussions that will be necessary as this Project moves forward.
6.7
Risk Management
6.7.1
The Project Team maintain a full project risk register and issues log.
The table below sets out the key high level issues.
Table 29. High Level Risks
Risk
Action/Mitigation
Status
Priority
Risk of failure to complete within
given timescales due to lack staff
issues ,holidays, illness etc and the
challenges of running two projects
at the same time.
Stable team presently in
place and constantly
reviewed.
Open
Low
Open
High
Existing lack of clarity around NHS
Surrey commissioning intentions
may delay final approval of SOC.
Any changes in those intentions
during the course of producing the
SOC will further delay production of
the SOC.
23/10/2009
Change in government policy leads
to changes in scope and/or
direction of Epsom project
providing delays in production and
approval of the SOC.
Monitor policy from DH
through close liaison with
NHS London.
Open
Low
Changes emanating from the
conclusion of the Local Needs, Local
Health review that might alter the
scope or direction of the project
leading to delays in production of
the SOC.
Regular updates from ESH
CEO to Project Board:
Open
Medium
Changes to the scope of the Epsom
project as a result of changes in the
local commissioners current
financial position.
Sensitivity testing within
the financial models and
constant monitoring of NHS
Surrey commissioning plans.
Open
Medium
Local campaigns add delays to
approval process.
Communications and regular
updates and engagement
with stakeholders.
Open
Low
Need to carry out further
Consultation causes delays to the
project.
Communications and regular
updates and engagement
with stakeholders.
Open
Low
101

CREATING A VISION FOR EPSOM GENERAL HOSPITAL

Transcription

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