1. Finance and Funding in an NHS Organisation Emma Partridge – NHS Capital Manager and Louise Stead – NHS Contracts Manager

2. Agenda Background of NHS and HEFT How the NHS is funded Performance targets Current issues within the NHS Working for the NHS/Finance

3. Background of the NHS and HEFT

4. Background of the NHS Britain pre-war Labour Gov’t 1945 Launched in 1948 budget £437m 2011/12 budget of £106bn Serves population of 61m people Employs 1.7m people (4 th largest employer in the world)

5. Structure of the NHS

6. Foundation Trust Status Means the freedom to make decisions - Manage own budgets - Manage operational services - Tailored to meet needs of local population - Regulated by Monitor

7. Structure Parliament Secretary of State for Health/DoH10 Strategic Health Authorities (SHA) NHS Trusts Hospitals, Mental Health Services, Ambulances, Learning disability Primary care Trusts Monitor As regulator Foundation Trusts Accountable to members through governors Care Quality Commission

8. Background of HEFT Originated as a small fever hospital Number of mergers took place One of the largest Trusts in the UK Based over 3 main sites and many satellite units Gained Foundation Trust status in 2005 2 nd largest employer in Birmingham (over 11,000 employees)

9. Clinical Activity at HEFT Also Birmingham Chest Clinic. We also have a number of smaller satellite units so people can be treated as close to home as possible. 618 Acute Beds 39 Paediatric Beds 64 Maternity Beds 17 ITU / HDU 493 Acute Beds 14 Paediatric Beds 39 Maternity Beds 12 ITU / HDU 229 Acute Beds 3 ITU Beds

10. HEFT Activity Facts & Figures (11/12) Also: Renal Dialysis, Cystic Fibrosis, HIV patients, GUM, Bone Marrow Transplant, Blood Bank, Assessment Areas……………… Heartlands Hospital Solihull Hospital Good Hope Hospital HEFT A&E Attendances115,84747,33576,026239,208 Emergency Inpatients37,6636,63722,48566,785 Elective Inpatients8,2754,2134,27316,761 Day Case Inpatients27,30315,94828,60371,854 Outpatient Attendances354,844218,741260,091833,676 Births6,9634093,79111,163

11. Financials 2011/12 The Trust earned income of £607m Savings targets of £23m for the year Capital expenditure of £18.7m Financial risk rating of 3 Governance Risk rating Amber-Red

12. How the NHS is funded

13. How NHS is funded Taxpayers money through tax/NI contributions Amount received determined by economic health of the country Charitable funds Private Healthcare Grants Research and development

14. Funding Process Initial funds are held by Primary Care Trusts PCTs are allocated funds from department of health Weighted capitation formula is used to determine each PCTs target share and available resource A commissioning system is used to allocate funding based on local needs of population Each PCT is required to show a breakeven position at the end of the year

15. Payment for Services Payment by Results (Pbr) is the National Tariff Implemented by the DoH The currency for this is Healthcare Resource Groups (HRGs) Each HRG carries a price The HRG is determined by the diagnosis and treatment of each patient

16. Flow of Clinical Activity at HEFT Inpatient Activity (HISS) O’patient Activity (UG) A&E Activity (MSS) Manual Activity (e.g. Crit Care, Sexual health) Support Services Data (Pathology, Radiology ) Clinical Coding / Data Quality Monthly Download = assign HRG / £ Measure Performance Against Targets Charge Commissioners for Activity

17. Payment by Results (PBR) PBR Guidelines are issued by the Department of Health (DoH) on an annual basis Content of guidelines National Tariff and Reference Costs Market forces factor Best Practice tariffs National Performance Targets CQuINs

18. Tariff Movements

19. PBR Exclusions Some procedures are excluded from PBR such as: - High cost drugs and devices - HIV - Cystic Fibrosis - Critical Care - Neonatal Cot Days - Chemotherapy The reason for these exclusions is the complex nature of these treatments and difficulty in costing them

20. Local Delivery Plans are held between the Commissioners eg Primary Care Trusts, Care Trusts and Local Commissioning Boards and the Providers (Us) Plans are generally based on outturn from the previous year These are broken down into following elements:  Activity by Specialty and HRG  Monetary Value of the above  CQuIN - Commissioning for Quality & Innovation (currently 2.5% increase on the baseline budget)  MFF – Market Forces Factor  National and local targets (such as 18 weeks and CQUIN) Contracts with the Commissioners

21. 2012/13 LDPs

22. PERFORMANCE

23. Targets for Monitor Cancer Waits A&E Waits (4 Hours) 18 weeks (admitted / not admitted) Infection Control (MRSA and C-Diff) Regulate foundation trusts to ensure they comply with their terms of authorisation. These are a set of detailed requirements covering how foundation trusts must operate – in summary they include: the general requirement to operate effectively, efficiently and economically; requirements to meet healthcare targets and national standards; and the requirement to cooperate with other NHS organisations.

24. Financial penalties in Contract Volume & ratio targets Non GP referrals C- Sections Ratio of new to follow up O/P appointments Well vs Unwell babies Antenatal admissions/no delivery A&E conversion % Ratio of short stay to 08/09 Readmissions in 14 days Elective & non elective XSBDs Emergency bed days vs 08/09 Emergency admissions vs 08/09 Nationally specified 18 Week RTT – up to X% of elective income could be lost Rates of C Diff – up to X% of income could be lost 4 Hour A&E wait – X% of A&E service line income could be lost if performance is below 95% Cancer targets – X% of service line income could be lost Breach of same sex accommodation rule – fine per breach. Never Events (eg leaving a swab in a patient) - we will not be eligible for payment for the patients care.

26. Commissioning for Quality and Innovation (CQuIN) A number of targets around improving quality and innovation are set between the PCTs and the providers. If targets are met the Trust could be set to receive an additional 2.5% of funding on top of their baseline budgets. 2012/13 CQUIN Value is £12.2m Each target is weighted and so given its own value. If target is not met the Trust will forfeit the additional funding for that particular target. Targets differ between acute and specialised services contracts

27. Implications of not meeting quality targets Fined up to 2% of contract value Monitor and CQC requirements Public Perception/Patient Choice Primary Care and Partners Perception Coroners Court and Health and Safety Executive

28. CURRENT ISSUES WITHIN THE NHS/HEFT

29. £20 Billion savings by 2015 Trusts are asked to make savings of 4% per annum based on turnover £20 Billion savings means a 4% reduction in prices the trust charge for activity.

30. NHS Reform White Paper released ‘equity and excellence: Liberating the NHS’ Set to improve efficiency, productivity and quality How?? - To put patients first - To focus on outcomes - To empower NHS staff How will this affect HEFT?

31. White Paper Structure

32. Trusts running into financial difficulty Historic debt Too few patients Bad activity mix Uncontrollable costs Affect on HEFT

33. NHS Global NHS on the international stage HEFT opportunities, CIP

34. Cabinet Re-shuffle September 4 th 2012 Andrew Lansley, the architect of the Coalition’s controversial NHS reforms, replaced by Jeremy Hunt NHS/ HEFT - ?

35. HEFT Finance Team

36. Overview of Finance Finance Director Operational Business Support 42 Group Business Consultants Finance Operations Trust Financial Services 48 Procurement 36 Income and Contracting 18 Performance 50

37. Finance Staff Development TFS (inc Income)ProcurementPerformanceOBSTotal Headcount66365042194 Qualified12715 4925.3% CIMA4 48 ACCA3 69 ICAEW2 2 CIPFA 33 AAT3 3 ACC 12 Couching 123 Supervisory 2 2 Procurement - CIP's 7 7 Studying1105193518.0% CIMA3 0811 ACCA2 0911 CIPFA 022 AAT6 0 6 ACC 3 3 Leadership 1 1 Masters 1 1 Procurement - CIP's Unqualified432930811056.7%

38. Staffing grading in the NHS NHS Doctors Consultant contract The rest Agenda for change contract BandType of roleSalary max (£) 3Admin support, health care assistant18,157 4Personal assistant, junior nurse21,318 5Credit manager, most nurses26,839 6Starting CCAB trainee, senior nurse33,436 7Part qual CCAB trainee, ward manager (sister) 39,273 8Senior staff – 4 separate bands a, b, c.d CCAB qualified can be 8a 80,000 Incremental pay annually, maximum level CCAB AAT (depending on ability & experience)

39. QUESTIONS? www.heartofengland.nhs.uk www.nhs.uk/NHSEngland/thenhs/nhshisto ry/Pages/NHShistory1948.aspxwww.nhs.uk/NHSEngland/thenhs/nhshisto ry/Pages/NHShistory1948.aspx www.dh.gov.uk/en/Publicationsandstatistic s/Publications/PublicationsPolicyAndGuida nce/DH_117353www.dh.gov.uk/en/Publicationsandstatistic s/Publications/PublicationsPolicyAndGuida nce/DH_117353