Welcome to the inaugural

HSJ Intelligence Conference

Thank you

• 52 clients

• PPA Business Intelligence Product of the Year

The NHS in the next 12 months

• An overview: the election and its consequences

• Finance

• Commissioning

• The provider sector

• Integration

• Efficiency and procurement

• Workforce

The five things that matter in 2015/16

• The election

• Funding and finance

• NHS performance

• Efficiency

• New care models

The election

• The NHS matters

• No winners

• Supply and confidence

….and its consequences

• Permanent campaigning

• Local issues matter nationally

• Simon Stevens unbound?

• ‘Brave decisions’

Insights into the key issues

facing the NHS

Crispin Dowler

Provider and Finance Bureau Chief

HSJ/HSJ Intelligence

NHS finances in 2015-16

What lies ahead in 2015-16?

• Dominant theme is likely to be the further spread

and deepening of hospital sector deficits.

• Problems that have been concentrated among

smaller DGHs will become common among

hitherto stronger performers.

• This could have serious knock-on consequences

for both provider policy generally and the NHS

Five Year Forward View.

How did we get to this point?

-300

-200

-100

0

100

200

300

400

500

600

700

2011-12 2012-13 2013-14

NHS Trusts

FTs

Provider sector surplus/deficit (£m)

The situation this year

• Data published by HSJ Intelligence last August

showed a forecast acute sector deficit of £773m

for 2014-15.

• M9 Monitor figures show a £375m forecast

deficit for FTs overall (driven by acute deficits).

• M8 NTDA figures show a £308m forecast deficit,

driven by a forecast £361m acute sector deficit

(despite undisclosed bailouts).

• A number of forecasts have deteriorated since

this point.

So far, problems have been

concentrated in smaller providers

Latest Monitor Data for the FT Sector

But specialised commissioning is under

increased strain

HSJ Intelligence, Liverpool Heart and Chest Hospital FT Investigation, July

2014:

“The second, more fundamental, risk [to Liverpool Heart and Chest

Hospital’s finances] is the parlous state of NHS England's specialised

commissioning budget, which accounts for more than 62 per cent of it’s

clinical income. NHS England reported a deficit of £377m on its specialised

commissioning budget in 2013-14, and has warned it will need a

‘significant stretch’ to balance the budget this year.

“There is limited scope for NHS England to reduce demand for tertiary

services, and this leaves the commissioner with limited alternatives for

containing its financial exposure to activity growth in these areas. Longer-

term, it can push for reconfiguration to potentially more-efficient models of

care, but the short term alternatives amount to either managing its risk by

seeking block or capped contracts, or restricting demand by defining

tighter access criteria. Both of these possibilities will remain risks for

providers like LHCH in coming years.”

Tariff row

• The tariff row has exposed both the pressure on

specialised commissioning and the overall lack of money

vs demand on the system.

• 210 providers have agreed to voluntary tariff, inc 3.5%

efficiency target and a 70% marginal rate on specialised

services.

• 30 objectors (mainly teaching trusts and specialists) will

remain on 2014-15 prices, but face the loss of 2.5%

CQUIN payments plus other penalties.

• A number of hitherto strong performers have told HSJ

they faced significant deficits under either option.

Implications

• We need to think through the dynamics of a

system in which deficits become the norm for

acute providers.

• This situation is undermining the credibility of a

range of provider policies, from the tariff, to the

failure regime, to the Dalton Review

recommendations.

• The NHS Five Year Forward View will also

become even harder to implement with the

provider sector preoccupied by financial

problems.

Dave West

Senior Bureau Chief

HSJ/HSJ Intelligence

Commissioning and primary

care …and why clinical commissioning

groups may be on the way out

Commissioning: self imposed

restructure

1. Co-commissioning: Between NHS England and clinical

commissioning groups – of primary care and specialised

services.

2. NHS England national: Some reorganisation to change

focus

3. NHS England regional and local: Major change from four

regions and 25 area teams to bigger regional teams with 15

“sub-regions”.

4. NHS England: Focus on strategy, specialised

commissioning, (and in the short term “grip”?).

5. ‘Improvement architecture’: The futures of NHS Improving

Quality, NHS Leadership Academy, clinical networks, clinical

senates, AHSNs & others are under review

Primary care - strategy

• The primary care strategy has become the NHS

strategy (NHS Five Year Forward View)

• The plan is for GP practices to network / move

into bigger providers; and to extend the range of

services and activity carried out in primary care

• Also promise in FV of more resources and focus

on increasing workforce

• The FV envisages new integrated provider

organisations taking on leadership, planning and

funding of services

• So what is the point of clinical commissioning

groups….?

Shane Gordon,

North East

Essex CCG

Peter

Wilczynski,

Corby CCG

Paul Husselbee,

Southend CCG

Sam Barrell,

South Devon &

Torbay CCG

Dave Briggs,

Leicestershire &

Rutland CCG

A “whole health economy” NHS

• Financial strife & need for major service change

= management of “whole system” not individual

organisations

• National bodies are creating “whole system,

geographically based intervention regime”

• Monitor (foundation trusts) & NHS Trust

Development Authority (trusts may merge)

• But what are health economies?

CCGs’ declining influence

• Integrated providers taking over CCGs’ roles

• “Whole health economy” approach and structure

– eg Greater Manchester?

• Joining together health and social care

infrastructure

• But CCGs are legal bodies – with GPs as

leaders – will they fight back?

Ben Clover

Senior Correspondent, Acute Sector

HSJ/HSJ Intelligence

The provider sector over the

next 12 months

Performance is going to fall across the

board – most visibly in A&E

Performance is going to fall in referral-

to-treatment times

Performance is going to fall in cancer

waits

The sector is facing failure on a large scale – management teams will

be less independent.

This generation of leaders will not have lived through such a slump in

performance and funding.

David Williams

Senior Correspondent, Integration

HSJ/HSJ Intelligence

• Theme 1: Integration is a rising political priority for

all three major parties.

• Theme 2: Councils will have an increasing say over

NHS spending.

• Theme 3: Integration is a critical challenge for NHS

England’s leaders.

The political imperative

• Fragmentation of services is an issue for ordinary

voters.

• The political answer to the problem: budget

pooling.

• Social care is broken: budgets have been cut 26

per cent 2010-2015 (ADASS figures)

• Yet no party says social care will be protected

after 2015.

The Better Care Fund

• A £5.3bn shared pot spanning health and social

care.

• Flawed premise: aims to save money by moving

care out of hospital

Will lead to:

• Financial headaches (especially for CCGs)

• Increased joint planning between CCGs and

councils

• New ways of delivering health and social care

The Better Care Fund – some likely

innovations:

• Multidisciplinary teams of health and social care

professionals based in primary care

• A single point of access to health and social care

services

• Risk stratification

• Joined up data

• Focus on indicators such as dementia diagnosis,

falls prevention, supporting carers.

• Councils want to get their hands on the NHS

budget

• They are unlikely to entirely get their way (see

Greater Manchester)

• But councils will increasingly get a say in local

NHS planning

• NHS and council budgets will increasingly blur at

the edges

Council involvement in NHS spending

The new care model vanguard

29 “vanguardistas” (Simon Stevens, 2015)

• Multispecialty Community Providers (MCPs)

• Primary and Acute Care Systems (PACS)

The new care model vanguard…

MCPs and PACs are exciting because:

• They join primary care with acute and community

services

• They will have capitated budgets

• They will give providers responsibility for

population health

The new care model vanguard…

The vanguard matters because:

• A glimpse of the future – the Forward View into

action

• A test of current leadership

• George Osborne has staked £2bn (arguably) on

the Forward View

James Illman

Correspondent, Efficiency and

Technology

HSJ/HSJ Intelligence

The efficiency challenge:

using better data to drive

savings

The efficiency challenge

• NHS needs to deliver at least £22bn of annual

savings over the next five years’ to close a £30bn

funding deficit forecast, and that is providing that it

receive real terms increases of 1.5% a year

(Source: Five year forward view).

• This is a HUGE target.

The efficiency challenge

A Huge challenge:

• The low hanging fruit has already been plucked.

• Consensus that pay restraint will not be

repeatable over the coming years.

• New models of care will not be a silver bullet.

They will take time to bed in.

• So, the NHS must get a grip on driving down its

‘bread and butter’ costs such as procurement,

agency staff bill, back office costs and drugs bill.

The Carter review

Lord (Patrick) Carter of Coles

• Labour peer

• Former chair of US health IT firm McKesson’s (now

defunct) UK arm

• Former chair the NHS co-operation and competition panel

• Based in the Treasury

• Previously carried out review of NHS pathology services

The Carter review

• Lord Carter and his team have been working with 22

trusts

• The programme builds on work originally kicked off by

the DH based on its procurement strategy, Better

Procurement better value better care programme,

published in 2013.

• The Better procurement strategy set a target for all

trusts to submit their procurement data to a new

central data hub so that price comparisons could be

made by April 2015.

• Not a definitive score of an organisation’s efficiency.

But, starting point.

The Carter review

The review has focused on five core areas of spend:

• Staffing, particular agency/temporary staffing

costs

• Medicines

• Consumables (rubber gloves etc.)

• Medical devices

• Estates management

• Broad areas but they are striving for granular

details.

The Carter review: up to £10bn of savings

on offer?

No official announcements will be made before the

election but…

• Savings in the region of £8bn to £10bn discussed

• The DH’s target to cut £2bn off the NHS’s £22bn

procurement bill by 2015-16 is proving challenging

Conclusions

• Success rests on quality

• The DH has talked a good game about quality

data benchmarking for years. Now is the time for

action.

• A potentially game changing moment in NHS

efficiency.

• Trusts and suppliers can be held to account.

Shaun Lintern

Correspondent, Workforce

HSJ/HSJ Intelligence

• Workforce – Significant change and focus on the nursing

workforce post Francis report.

• Growth in medical staff continues trend seen over the past

decade

• Challenges – Financial; quality; seven day services;

regulatory

• Reform of pay, terms and conditions

• Industrial relations at all-time low

• Threat of further strikes and unrest

• Future of medical and non-medical contracts

• Seven day services & the BMA

• Reform of AfC contracts and unsocial hours

premia

Alastair McLellan

Editor, HSJ

Rob Knott

National Director, Department of Health

Mike Farrar

Independent Management Consultant

Working with the NHS in 2015

and beyond

Audience debate

New services from

HSJ Intelligence

The HSJ Intelligence mission

A strategic targeting and insight tool designed to help

suppliers build, maintain and deepen effective

partnerships with NHS clients • Save time and effort

• Identify the best opportunities

• Understand needs to enable the co-creation of solutions

• Provide an information safety net

HSJ Intelligence: the first year

• 100 in-depth investigations into the priorities of

leading NHS providers

• 30 in-depth investigations into the priorities of

leading clinical commissioning groups

• 30 exclusive briefings into key NHS trends and

issues

• 200 plus individual data points – updated at least

once a quarter

New for 2015

• Ambulance Trusts

• Academic Health Science Networks

• 10 data points

Where next?

1) Coverage: deeper/wider?

2) Viewpoint: healthcare economies?

3) Functionality: company wide access?

4) Service: bespoke research?