1. REVIEW OF MATERNITY SERVICES TOPIC GROUP 4 th November 2009 FINANCE

2. PCT FUNDING Weighted capitation formula sets target allocation – to reflect relative population needs Actual current funding is largely historical Distance from target taken account of Along with Pace of Change policy To determine % growth

3. Weighted Capitation Formula Population – all registered with a GP and non-registered within geographic boundary “Weighted” to take account of: –Age –Additional need –Health Inequalities –Unavoidable geographical variations in costs

4. As a Result Hertfordshire’s allocation in 2009/10 £1.533 billion Actual funding per head of £1390 (9.8% less than England average of £1540) Target funding per head of £1357 (11.9%) less than England average of £1540) Hertfordshire over-funded compared to the formula by £36m (2.5%)

5. Analysis of 2008/09 Expenditure

6. How Trusts are Paid “Payment by Results” activity : National Tariff –In maternity services this is applied to ante-natal clinics held in hospitals, deliveries in hospitals or at home, post natal clinics in hospitals All Other Activity : Local Prices –In maternity services this is all other services, mainly community midwifery, payment made on a “block” basis, moving towards activity-based contracts

7. Payment by Results Activity Payment for this activity is: –National “tariff” –Plus “CQUIN” (Commissioning for Quality and Innovation) linked to quality improvements –Plus “Market Forces Factor” to cover geographical differences in cost

8. National Tariff Maternity Services HRG name Spell tariff (£) Normal delivery 19 years and over with CC1,881 Normal delivery 19 years and over without CC1,174 Normal delivery 18 years and under with CC1,921 Normal delivery 18 years and under without CC1,177 Assisted delivery with CC2,288 Assisted delivery without CC1,728 Caesarean Section 19 years and over2,579 Caesarean Section 18 years and under2,654 Caesarean Section with complications3,626 Clinical contact for observation (ante- or post-natal)499 Clinical contact with investigation (ante- or post-natal)708 Clinical contact with full investigation (ante- or post-natal)731 Admission for observation only798 Admission with investigation1,040 Admission with full investigation1,450

9. Payment by Results Activity National tariff is based on historical average = “reference costs” of Trusts, so reflects actual costs Payment related to volume Updated annually Money follows the patient

10. Payment by Results Activity Patient has choice of place of delivery and type of delivery PCTs work with local providers to ensure good quality services provided

11. CQUIN (Commissioning for Quality and Innovation) 0.5% of Tariff Reflects a move towards payments related to quality. In 2009/10 this included improvements to the experience of patients for maternity services at local hospitals West Herts and E&N Herts Trusts: 25% - 30% of the 0.5% (c.£250k-£300k per Trust) Related to : –Increasing the number of midwives to provide 1:1 care for women in labour –The ante-natal pathway must adhere to NICE guidance, i.e. maximum of 8 contacts for normal pregnancies and 11 for high risk. –A 0.5% reduction in the proportion of all births by caesarean section Trusts have to demonstrate compliance

12. Market Forces Factor Cambridge University Foundation Trust13.9% East and North Herts Trust15.5% Princess Alexandra Hospital Trust16.0% West Herts Hospitals Trust17.8% Barnet and Chase Farm Hospitals20.3%

13. East and North Herts PCT : Spend per head of weighted population on maternity services 29.9% higher than cluster average

14. West Herts PCT : Spend per head of weighted population on maternity services 32.8% higher than cluster average

15. Total £80million