28 November 2006 CHIEF EXECUTIVE’S BRIEFING Tom Taylor Chief Executive

2006/ 07 Position Achieving most targets but not MRSA and Finance Healthcare Commission ratings Quality of Services – good Use of resources - weak

Healthcare Commission Ratings UHBFTSaTH Core StandardsFully MetFully Met National TargetsFully MetFully Met New National StandardsGoodGood - Fair- Fair - Good- Excellent

MRSA Staff testing policy to be agreed today Isolation ward at both sites being identified DoH MRSA team invited to review our procedures Serious Untoward Incident and Root Cause Analysis required by SHA for every bacteraemia

Financial Position Month 7 = £2.268 million deficit forecast when the effects of additional in-year pressures are accounted for.

Additional in-year pressures (Unidentified (May Board) £2.2 million ) £M PWC0.360 Doctors Funding0.692 Procurement0.500 AfC

Financial Savings “forecast v actual” (as at month 7) See P Spilsbury slide Note: The total savings reported to date: £1,268,210 vs. forecasted position: £1,550,529. Financial gap of £282,319. The operational savings delivered were above plan by £70,000 The programme savings delivered were below plan by £ 353,008 (70% approx. are procurement savings)

RAG Financial Savings identified at risk (as at ) Programme As at 13 th November 06 As at 2 nd October 06

Staff/ Public/ MPs/ OSC/ LA/ Trade Union objections PWC Turnaround proposals Patient car parking charges Staff car parking charges Skill mix review Bed reduction (through efficiency) Manpower reduction Overtime restrictions Non-pay restrictions Clinical/ managerial restructure Strategic Service Plan Proposals

“That leaves 60 organisations … that will not remain in their current form, which leads to the issue of how you reconfigure” Andrew Cash Director General – Provider Development Department of Health

Does this County want a Solihull/ Good Hope solution?

National Context – a critical year 2007/8 is a turning point. Why? 2007/8 Operating Framework  sort the money out  achieve recurrent stability  limited national priorities  devolved central budgets 2008/9  free choice  waiting in effect eliminated  full PbR in operation  and… Era in rapid growth ends in % ??

Financial requirements  All organisations to at minimum break-even with general expectation of surplus  2006/07 in-year deficits recovered by organisations  All cash support will be interest-bearing via national loans/deposits scheme with SHA as gateway  PCTs to demonstrate the creation of an uncommitted reserve of at least 2% in 2007/2008 plans  PCTs to demonstrate a bottom-line shift in activity from hospital to community and place a value on that

Cost improvement and efficiency  We will expect cost reductions to be a minimum of 3.5% on top of any local issues  Henceforth we will distinguish between Cost reduction plans & Business improvement plans  We will expect further reductions in workforce costs & headcount for all secondary care providers as part of CIPs and as necessary preparation for 2008/09  We will set up a Regional Clearing House service to support shifts across organisations & 2°→1° care

Other key assumptions  The “full cost recovery” principle will apply to PCT provided services and to be demonstrated in 2008/09  Much greater scrutiny of prescribing plans - Keele analysis shows potential for major savings on statins and other drugs not being realised  PCTs to adopt 30-day payment limits in all transactions with NHS Trusts – track in FIMs  All capital will be accessed through interest-bearing debt - SHA will publish tests shortly (including ROI criteria)

Payment By Results  Tariff uplift of 2.5%  Emergency threshold of 50% at 2005/06 outturn  PPA 50% → 25% and will be removed in 2008/09  Capping: existing rules apply but may be local flexibility for biggest impact (7.5% of turnover)  Unbundling: Presumption in favour

Some absolute standards for March 2008  5 weeks maximum wait for outpatients  6 weeks maximum wait for MRI/CT/Other diagnostics  11 weeks maximum wait for inpatients  18 weeks RRT: 85% unplanned, 95% planned  GUM: maximum wait of 48 hours for urgent appointment  MRSA: 60% reduction on 2003/04 base or n<12  5% reduction in emergency beddays on 2003/4 base

Our Key Test of Local Delivery Plans 1.Are Boards signed up to plans? 2.Are plans based in a long-term financial strategy? 3.Are plans based in a strategic commissioning vision? 4.Can PCTs set out a public statement of what will be achieved this year? 5.Do plans address national priority areas and achieve national targets? 6.Are plans internally consistent (esp. links of activity, workforce, expenditure)? 7.Are plans shared across a health economy? 8.Are plans consistent with scale of challenge? 9.Are plans realistic and deliverable? 10.Do plans use opportunities provided by System Reforms?

Outline Timetable DateProducts DecemberOperational Framework published Final confirmation of tariff uplift SHA publishes detailed local LDP guidance and process End of JanuaryPCTs and Trusts submit agreed set of products, including LDP trajectories, draft Commissioning Strategy, draft Public Statement, subset of final FIMs, demand managemenr proposal, some programme plans, and survey of Reform Issues FebruaryConfirm and Challenge process MarchFinalise SLA negotiations End of MarchSign-off SLAs Boards sign-off LDPs and submit AprilSHA signs-off LDPs with Boards Agree performance management approach for 2007/8 with high-risk organisations NB: We are four months ahead of last year