A Strategic Plan: 2014-19

Warrington & Halton Hospitals NHS Foundation Trust

1

Strategic Plan for y/e 31 March 2015 to 2019

This document completed by (and Monitor queries to be directed to):

Approved on behalf of the Board of Directors by: Name (Chair) Allan Massey

Signature

Approved on behalf of the Board of Directors by: Name (Chief Executive) Mel Pickup

Signature

Approved on behalf of the Board of Directors by: Name (Finance Director) Tim Barlow

Signature

Name Mike Barker Job Title Deputy Director – Strategy & Commercial Development e-mail address mike.barker@whh.nhs.uk Tel. no. for contact 01925 662070 Date June 2014

2

Contents 1 Declaration of sustainability ................................................................................................................. 4

2 Introduction .......................................................................................................................................... 5

3 Strategic context and market analysis ................................................................................................ 10

3.1 Healthcare needs analysis .......................................................................................................... 10

3.2 The Commissioning Response ................................................................................................... 11

3.3 National quality of service drivers ............................................................................................... 13

3.4 Capacity Analysis ....................................................................................................................... 13

3.5 Staff and workforce analysis ....................................................................................................... 14

3.6 Competitor Assessment .............................................................................................................. 15

3.7 Market Assessment .................................................................................................................... 18

3.8 Summary .................................................................................................................................... 20

4 Sustainability ..................................................................................................................................... 21

4.1 Risks to sustainability ................................................................................................................. 21

4.2 Impact of external challenges ..................................................................................................... 21

4.3 Strategic performance review ..................................................................................................... 23

4.4 Trust Board self-assessment tool and outputs ............................................................................ 25

4.5 How we have engaged people in our plans ................................................................................ 25

5 Supporting or enabling strategies ...................................................................................................... 26

6 Strategic options and plans ................................................................................................................ 30

6.1 Transformation programme ........................................................................................................ 30

6.2 Modernisation programme .......................................................................................................... 33

6.3 Strategic change programme ...................................................................................................... 36

6.4 Risks and mitigation.................................................................................................................... 39

6.5 Communication plan ................................................................................................................... 39

7 Financial and investment strategy ...................................................................................................... 41

3

1 Declaration of sustainability

The board declares that, on the basis of the plans as set out in this document, the Trust will be financially, operationally and clinically sustainable according to current regulatory standards in one, three and five years’ time.

Confirmed

This five year Strategic plan describes Warrington & Halton Hospitals NHS Foundation Trust’s (WHHFT) vision to be the most clinically and financially successful healthcare provider in the mid Mersey region, and confirms the objectives and supporting strategies in place to enable us to achieve this. Our vision is built on a solid history of delivery over our six years as a Foundation Trust and within this document we describe the plans, systems and processes we have in place to achieve our aims. This plan sets out the work we are undertaking to further improve the clinical quality of our services to improve the care and experience for our patients. Over the past year the Trust has been assessing the financial challenge in the coming years and identifying potential options for further productivity gain and service transformation in order to reduce the cost base at the same time as delivering on quality and safety (a key feature of the Francis Report). This analysis has indicated that the scale of the challenge is equivalent to annual CIP target of c. £11m savings or more bluntly savings of c. £53m to deliver financial balance over the next 5 years. Our plan will demonstrate how we will address this challenge initially through a concentrated programme to generate significant functional productivity and specialist staff productivity gains. However, we also recognise that productivity gain alone will not achieve the scale of savings required in the Trust. Therefore the plan signals how we intend to make a fundamental change to the delivery of services to bridge the financial gap whilst still improving quality and safety so additionally, it also outlines how we have reviewed our core business model and the options available to us in relation to long term sustainability.

Our assessment is that there is a challenge ahead but from what we understand of the picture nationally, not one beyond that of most NHS acute Trusts. Pace and changing behaviours are critical to achieving success as it will be a challenge to deliver. Our immediate priority within the first year of this strategic plan is to be much clearer on our clinical and service strategy in order to shape a case for change with options which can be agreed with our commissioners. However, alongside this we will also focus on implementing our productivity and CIP programme to deliver the next two years of identified CIPs. We have therefore established a programme to: drive a robust execution of CIP programme for 2014/15 and 2015/16; deliver a strong programme of medical productivity as an enabler to unlocking the clinical productivity gains; and develop and start to deliver the service strategy and transformation opportunities. The plan also shows how the quality strategy will demand that the Trust make all decisions based on improving the patient experience and delivering high quality safe healthcare from sustainable, appropriate, and high performing services.

4

2 Introduction 2.1 About the Trust Warrington and Halton Hospitals NHS Foundation Trust forms part of Mid Mersey health economy and is 18.5 miles east of Liverpool, 16 miles west of Manchester and 8 miles south of St Helens with a turnover of c. £210m. The Trust manages two major hospitals - Warrington Hospital and Halton General Hospital. The majority of emergency care and complex surgical care is based at Warrington Hospital whilst Halton General Hospital is a centre of excellence for routine surgery and is also home to the Cheshire and Merseyside NHS Treatment Centre building where our orthopaedic surgery is performed. Although both hospital sites specialise in particular aspects of care, outpatient clinics for all specialties are provided at both sites so people can access their initial appointments close to home wherever possible. Warrington Hospital and Halton General Hospital are around 10 miles apart and are easily accessible from the North West’s extensive motorway network.

Key facts

• There are 600 beds across our hospitals • 4,100 staff work across our wards and departments • The trust has an annual turnover of over £210 million • We serve a local population of 313,463 people (118,752 in Halton and 194,711 in Warrington) • We provide almost 500,000 individual appointments, procedures and stays in hospital • We became an NHS Foundation Trust in December 2008 and have over 13,000 public members • We have cut hospital infection rates by over 90% in five years

Our core purpose is to provide high quality, safe integrated healthcare to all our patients every day, and in doing so we therefore aim to: ensure all patients are safe in our care and have the best possible experience; be the employer of choice for the staff who deliver our healthcare; and provide sustainable local healthcare services. 2.2 Plan overview The drive to shift less complex acute care out of hospital settings and more complex specialist work on to fewer, larger sites has left those running district general hospitals “caught in a pincer movement”. If they are going to survive they will have to reinvent what a district general hospital does.

David Bennett, Chief Executive Monitor April 2014

The Strategic Plan for 2014/15 - 2018/19 is structured to respond to a number of key challenges, which are summarised at points 1-9 below and discussed in more detail later. The key influences will shape the strategy, but it is imperative that the strategy is flexible enough to adapt accordingly to ensure that the organisation can develop and evolve to the needs of the Local Health Economy.

1. The need to develop sustainable clinical services which deliver improved care in terms of clinical effectiveness, patient safety and patient experience.

2. To support the design, development & integration of primary, acute, community based health services and our social services partners.

3. To support the Local Health Community in providing care closer to home for the patients of Warrington, Halton and neighbouring areas.

4. Deliver the level of access/clinical activity that meets the expectations of our patients and commissioners. 5. To deliver the range of services within agreed financial boundaries, whilst supporting the development of the

Better Care Fund. 6. To deliver major site infrastructure and utilise IM&T transformational change to support increased use of

Telemedicine to reduce admissions to hospital. 7. To work with partners to develop a truly integrated service with Single Points of contact to signpost patients

to the most appropriate service/location. 8. To consolidate the organisational leadership changes and to embed a culture of true staff engagement and

involvement in clinical decision making. 9. To embed 7-day services into the culture of the organisation and in the service models being developed as

part of our Clinical Services Strategy.

5

The Trust intends to meet these challenges through the development and ultimate delivery of this 5 year strategy which encompasses several ongoing workstreams within the organisation, including a 5 year clinical services strategy (CSS), the implementation of a comprehensive programme of service redesign and through developing a variety of partnerships and networks both within the local health economy (LHE) and also regionally with providers in both Merseyside, Cheshire and where appropriate beyond. The Trust works in close collaboration with the LHE, in particular both Clinical Commissioning Groups (Warrington and Halton) to ensure that the 5 year plan is congruent with the commissioning intentions. The Trust CSS is being formulated in close partnership with the Clinical Commissioning Groups (CCGs) to ensure that the Trust is investing in the appropriate services and divesting in services that the CCG and NHS England may want to commission in an alternative way in the future. 2.3 Vision, Objectives and Values The Trust has a track record of delivering high performing clinical services for the communities within the boroughs of Warrington and Halton. This continued success delivered throughout six years as a Foundation Trust is due to our dedicated staff, financial stability and investment programme, robust governance processes and the joint commitment and assurance by our Board of Directors and Council of Governors to:

Provide high quality, safe integrated healthcare to all our patients every day

Over the last 12 months, working with our governors and external stakeholders, we have defined the long term vision for the Trust in a simple statement supported by a set of strategic objectives and underpinned by a set of core aims which are increasingly at the heart of determining the way in which we approach their delivery. These chime with the changing ethos within the wider NHS which reflects the learning from a range of national work but most particularly the public inquiry into the failings at Stafford Hospital led by Sir Robert Francis QC. We aim to build on this solid foundation to deliver our Vision for the sort of hospital we want to be:

The most clinically and financially successful healthcare provider in the mid-Mersey region

In order to achieve our vision we believe we need to focus on the QUALITY of our services, on the PEOPLE who deliver them and on ensuring our organisation’s SUSTAINABILITY, within the wider LHE in which we operate. This triple aim is what we call our ‘QPS’ framework – it is the underpinning strategic framework for everything that we do and provides our core strategic aims:

• QUALITY: Delivering excellence for our patients.

• PEOPLE: Committed to and caring for our staff

• SUSTAINABILITY: Being here for our communities, now and going forward Our triple aim is supported by nine strategic objectives and a series of detailed enabling strategies that set out the specific steps we will take to achieve each aspect, and by when.

6

2.4 Strategic aims, strategic objectives and our support strategies to deliver our triple aim

Strategic Aim Objectives Strategies to deliver

Quality Delivering excellence for our patients

1. We will reduce harm and focus on having no avoidable deaths by managing and reducing clinical and operational risks.

2. We will improve outcomes, based on evidence and are deliver care in the right place, first time, every time

3. We will focus on the patient and their experience, adopting ‘no decision about me without me’ as a way of life and that we get the basics right so our patients will be warm, safe, clean, well fed and well cared for

Quality Strategy Clinical Services Strategy Risk Management Strategy Patient & Public Engagement Strategy Nursing Strategy

PEOPLE Committed to and caring for our staff

4. We will ensure that our teams are competent, available in the right numbers to deliver our services and fit and well in work so that we improve their working lives.

5. We will communicate openly with our teams and expect the same from them in return. We expect staff to take accountability and will support them to do so. We want to be an employer of choice and we encourage loyalty from our staff and recognise their discretionary efforts.

6. We will reward talent, supporting the development of leaders as role models within the organisation and invest in the education, training and development of our teams.

Workforce Strategy Organisational Development Strategy Training & Learning Strategy Communications Strategy Talent Management Strategy Succession Management Strategy Personal Performance Review Framework

SUSTAINABILITY Being here for our communities, now and going forward

7. We will ensure we have effective leadership and provide robust assurance to our Board of Directors ensuring compliance across all areas of regulation and develop and encourage our governors and members.

8. We will ensure we have robust contracts for services provided and develop service line management so that we understand how effectively we use our resources, invest in IM&T and look for opportunities to collaborate on services for reciprocal benefit.

9. We will be recognised as a good corporate citizen, market our services effectively and develop and diversify our business whilst also pursuing the collection of charitable funds.

IM&T Strategy Site Development Plan / Estates Strategy Communications Strategy Marketing Strategy Medium Term Financial Plan Membership Strategy Constitution Service Line Management Strategy

2.5 Values We have set out below, our core values as an organisation – those statements that will remain absolutely fundamental to what we do regardless of the political, social or economic context

• We put patients at the heart of everything we do • We have a ‘can do’ attitude • We take pride in the service we provide • We strive for improvement • We are welcoming, friendly and caring • We respect each other

During 2014 we will be reviewing our values and launching a new QPS Behaviours framework which will bring together values, expectations and competency into a single space. This will ultimately lead to a re-launched set of behaviours focused around our QPS triple aim, enabling us to fully link our overall strategic aims with every single individual within the organisation.

7

2.6 Influences & Risks External influences will be a driving force over the coming years in the journey to becoming a model DGH and these will change over time. The Trust will evaluate these factors and review them regularly to ensure that the direction of travel is consistent with Department of Health policy and local CCG drivers. Each one of these external factors will influence the development of specialities within the organisation and effect the provision of services on the site. The PESTLE analysis below illustrates the key external influencing factors that the organisation must consider and be able to adapt to when developing a long-term Strategy.

Political • Francis Enquiry 2013 • Impact of Foundation Trust pipeline on neighbouring Trusts • Coalition government commitment to ‘rebalancing’ public & private sectors • Introduction of Any Willing Provider destabilises provider market • Increased competition through an increase in the number of providers • Impact of integration with social care • Patient Choice and NHS Constitution changes and developments • Election 2015 - change in Government could mean different policy approach

Economic • Continued impact of tariff deflation combined with increasing levels of inflation • Increased challenges for NHS Trusts to undertake organisational restructuring and

deliver an ambitious cost improvement programme • Redesigning the use of existing resources and driving greater efficiency • Potential reduction of private health insurance cover within private companies

increasing demands on NHS • Increased use of private top-ups, especially for cancer care • Reduction in Local Authority provision of Social Care services

Social • High socio-economic deprivation indicators for Merseyside area • People are living longer with more complex illnesses • Impact of population growth and an ageing population • Patient choice will mean changes to how people access their health services e.g. at

home; in the community, independent sector • Focus on health improvement and prevention to succeed in achieving healthier

outcomes • Increasing levels of illness from lifestyle choices driving biggest risks to health • Trend for community based alternatives to hospital care

Technological • Greater access to the internet, email and mobile telecommunications means that patients can and want to access services in different ways

• Developments in clinical technology present opportunities to improve clinical outcomes and overall cost effectiveness - telehealth, telecare and telemedicine

• Increasing availability of new drugs to support conditions • Improved safety and clinical practices will mean continued progress in ‘de-intensifying’

interventions • Expanding diagnostic capabilities • Availability of IT systems to support efficient service provision models

Legal • Continuing impact of European Working Time Directive, Freedom of Movement of Goods and Services and International Financial Reporting Regimes

• Further developments in case law and managerial responsibilities around Corporate Manslaughter, Code of Practice for Infection Control, Mental Incapacity Act 2005, Equality Act 2010.

Environmental • Requirement to reduce Trust’s carbon footprint • Developments subject to BREEAM controls • Increasing cost of transportation • Increasing cost of utilities such as heating and lighting

The SWOT analysis below identifies the key internal influencing themes that have been identified in the process of developing the Clinical Services Strategy. These have been themed as there is some variation within the specialities, but alludes to the areas where the organisation can make changes and predict interactions / consequences of decision making.

8

Strengths Weaknesses • Excellent performance track record across all KPIs. • Sound clinical quality metrics and good patient

experience scores. • Good and improving staff survey results. • 2 site configuration limits operational risks in terms

of managing elective and emergency capacity. • Strong performance with regard to Urgent Care. • Strong clinical reputation for specific services (e.g.,

Trauma & Orthopaedics) • Track record of working collaboratively with Local

Health Economy partners to deliver transformational change in clinical pathways.

• Delivery of a broad range of clinical services.

• Urgent care services centralised on Warrington site. • Loss of major vascular services in 2014/15 as part of

local reconfiguration • Increasing sub specialisation and lack of junior

medical staff. • Future viability of certain services remains

questionable due to long term sustainability issues. • Lack of integration with community based services • Short, medium and long term financial challenges • Large estate with high backlog maintenance costs • Strong historic reliance on temporary staff resource

drives up pay costs.

Opportunities Threats • Physical capacity to accommodate future service

growth on Halton Campus • Strategic aim to develop specialist centres of

excellence and repatriate activity from neighbouring providers

• Collaboration with other providers on formal service tenders

• Increase partnership working with primary and community care providers to establish enhanced clinical pathways

• Market share analysis shows growth potential within existing referral markets

• External reviews have highlighted future efficiency savings to be released.

• Future service reviews for Women’s & Children’s services

• Organisational size – population base c.350k. • Profile of local competitors. Similar sized DGHs all

with similar catchment populations. • Specialist services may gravitate toward existing

centres based in major conurbations (Liverpool and Manchester)

• Long term commissioning intentions to divest in hospital based services.

• Scale of cost improvement challenge over next 5 years.

• Ability to attract high quality personnel given relative size of organisation.

• Potential impact of local service reconfigurations (i.e. vascular) on other services yet to be fully understood

By identifying these current influences and risks the Trust can mitigate them as part of the planning process and adapt if/when these aspects change. The presentation of the key external and internal influencing factors drives the decision making process, but also ensure that alternative/contingency options are considered to safeguard that the Trust is sustainable regardless of any unpredicted change in Government policy We are clear that achieving our vision will be challenging. We have thoroughly assessed the financial and non-financial challenges ahead of us and put simply we are going to have to reinvent what a district general hospital does and at its core that means over the next five years we are going to need to:

1. Restructure the delivery of urgent and emergency healthcare provided by the Trust 2. Restructure the delivery of elective healthcare provided by the Trust 3. Develop more community based care 4. Improve our productivity and sustainability 5. Improve our estate and physical infrastructure 6. Modernise our IM&T platforms 7. Re-invent our brand, image and reputation to distinguish us from the rest 8. Pursue a range of strategic collaborations, partnerships and grow in areas where it makes sense to do so.

Our future plans are therefore based on delivering these eight priorities. There is a clear work plan of the key tasks which the Trust needs to address to cement its place in the local health economy. This strategy will form the basis for future decision-making; new developments or initiatives will be assessed against their contribution to the delivery of the Trust strategy and will form the basis for service plans and from there ultimately form the basis of individual annual objectives and personal development plans. We will continue to keep this strategy under review, both in terms of progress against plan and in relation to its continued relevance given the rapidly changing environment.

9

3 Strategic context and market analysis “We must radically review the organisation of hospital care if the health service is to meet the needs of patients... this will require service reconfiguration. Decisions about service redesign must be clinically led.”

Royal College of Physicians At all levels within the NHS today significant challenges are being faced. The provision of services in the UK is coming under unprecedented pressure and despite improvements the current delivery system is unable to meet the needs of the 21st century. The main drivers for reconfiguration are: demand for healthcare, in particular acute services, is increasing; there are wide and unacceptable variations in care across hospitals in England; there is a growing acceptance that services should be centralised where necessary; as a consequence of the increase in demand for acute services and the variation in patient outcomes the workforce is coming under unprecedented pressure; hospitals alone cannot deliver the healthcare needs of the modern population; and the scale of the financial challenge facing the NHS means that increasing productivity is not the whole solution. The Merseyside and Cheshire patch consists of a number of Trusts all of similar size, serving similar population numbers and most at the lower end of activity levels required to service the full range of DGH activities. Each Trust is facing a challenging financial position which is only heightened by their geographical location and there is a high number of specialist Trusts. Overall, these challenges mean that ultimately providers, locally, will be looking at collaboration to maintain viability. The situation in Warrington and Halton is no different from those challenges faced in neighbouring areas, but it does face some unique challenges and could benefit from a variety of opportunities.

3.1 Healthcare needs analysis

Warrington and Halton Hospitals NHS Foundation Trust primarily serves the local authority boroughs of Warrington and Halton, each of which is made up of a number of distinct and different communities with their own needs and issues. Using data from the Office of National Statistics (ONS) we understand that by 2020, there would be 3,000 more people living in Halton than there was in 2012. That would mean a 1% rise in the number of children, 2% rise in those aged 65-75 years old, a 2% rise in those aged between 75 and 84 and a 3.5% rise in those aged over 85. There would also be a reduction of around 0.9% in those aged 15 to 64. The picture of growth is greater in the neighbouring Warrington CCG area - the town can expect to see 17,000 more people living there than in 2012. Aged related growth is expected in all ONS categories with the biggest changes in the older population which will see 0.8% rise in 65-75 year olds, 3.2% rise in 75-84 year olds, and 3.9% rise in 85+ year olds. Children and working age adult populations are also expected to grow by around 2.5% combined. These demographic changes alone present an increased pressure on our health care system. Associated with the aging population we are seeing increased levels of morbidity, an increase in complexity of case mix, prevalence of long term conditions and complex health care requirements. Within our catchment geography are some areas with high levels of deprivation, with high levels of incapacity due to chronic ill health with higher than benchmarked levels of hospital admissions for both emergency and elective care. Our primary catchment area has a higher prevalence of:

• Coronary Heart Disease • Dementia • Depression • Chronic Kidney Disease • Hospital admissions as a result of self-harm (10-24) • Hospital admissions caused by injuries (15-24) • Hospital readmissions within 30 days (65+) • Admissions to residential care from hospital (65+) • % spent on residential/nursing homes (65+)

10

It also has poor health outcomes

• Under 75 mortality from cancer and cardiovascular disease • Emergency admissions of alcohol related liver disease • Proportion of people feeling supported to manage their condition • Unplanned hospitalisation • Emergency admissions not requiring hospitalisation

In addition , Warrington has significant challenges in relation to inequalities - with a 9.3 year difference in life expectancy (men); 7.1 (women) between the most affluent and deprived wards; and a difference in educational attainment at KS2 and KS4 between between boys and girls; children in care, eligibility to school meals and special educational needs.

3.2 The Commissioning Response

3.2.1 Warrington CCG

Warrington CCG – our main and lead commissioner - is seeking like all CCGs to improve outcome for patients across the five national outcome domains, which means helping live longer, healthier lives and when they do need care that it is provided safely and gives a good experience. Strategically, to achieve change in all of these areas, it will implement the Primary Care Home model of working as a key building block to achieve these outcomes for the population. It will seek to cement primary care as the home of care coordination, where the care plan and care co-ordination systems around the registered population will deliver: real integration; teams structured around the person; and individually tailored responses whether from health, social care or third sector services. Operationally it will focus on pathway improvements across 10 key areas including urgent care but in the first 2 years it will focus primarily on redesigning care in seven areas:

• Urgent Care; • Long Term Conditions / Frail Older People; • Mental Health; • End of Life; • Children’s Services; • Preventing Premature Death / Public Health; • Primary Care

The CCG’s allocation forecast indicates a relatively flat situation for acute funding with investment monies being used to deliver improved community based service provision to bolster and support its Primary Care Home model.

Sector (£000s) 2014/15 2015/16 2016/17 2017/18 2018/19

Allocation 243,858 255,037 263,605 269,851 276,181 Acute 133,037 132,839 134,281 135,398 136,864 MH 25,746 26,372 26,685 27,391 27,323 Community 24,198 30,300 30,908 33,735 33,803 Primary Care 36,250 39,788 38,236 38,557 42,098 Contingency 1,222 1,602 1,414 2,963 3,510 Surplus 1,223 1,282 2,650 2,727 2,805

3.2.2 Halton CCG

Similarly, Halton CCG is seeking to ensure that people live longer, healthier and happier lives. But over the next five years NHS Halton CCG, Halton Borough Council face significant financial challenges, which are driving them to do things differently and transform all aspects of health, social care and wellbeing in Halton. By redesigning primary care access it aims to enable 7 day GP access same day appointments. Integrating Acute and Community services means it can align clinical pathways enabling a seamless approach to patient care. Focusing on the vulnerable through multi-disciplinary teams will allow for significant efficiencies. ‘Joined-up Care’ is the theme for Halton and it wishes to develop integrated commissioning and integrated provision as a vehicle to enable a greater degree of care to be provided out of hospital settings. This also provides a major opportunity for the Trust to collaborate or vertically integrate services. Halton CCG’s allocation forecast also indicates a relatively flat situation for acute funding with

11

investment monies being used to deliver improved community based service provision and specifically the development of Urgent Care Centres within the borough.

Sector 14/15 £000s

15/16 £000s

16/17 £000s

17/18 £000s

18/19 £000s

Allocation 180,231 186,453 189,960 193,821 197,732 Application less savings 168,005 175,615 178,645 183,086 182,494 Savings required 10,450 8,734 8,541 7,297 11,124 Surplus required 1,776 2,104 2,773 3,439 4,116

3.2.3 The mid-Mersey Commissioner Strategic Review (End to End Review) Work has been commissioned by all of the commissioning groups within the mid-Mersey economy to help them better understanding the opportunities for reconfiguration at a health economy level. This work has more to do at this stage and has not yet formally reported, however, our understanding is that if our local commissioners were to do nothing we would see an 11% growth in emergency admissions by 2023/24. More starkly, over 10 years the greatest increase in spend will be seen in the acute care setting, approximately £50M across Mid Mersey CCGs (£15M over three years) without any change. Overall it is showing that grouping of commissioning intentions across mid Mersey has shown that by far the biggest area of focus for interventions is for the elderly and those with long term conditions – this is consistent with the areas seen to be growing in the retrospective analysis and provides confidence that the right areas are in focus. It suggests that there appears to be an opportunity to reduce variation by standardising referral thresholds, admission criteria, and pathways for high volume conditions – this would improve the quality of care while managing demand and reducing spend. There is also significant opportunity to reduce variation in length of stay and deal with this demand once in hospital. At present modelled interventions are projected to keep pace with underlying growth over the next 3 years, after which this underlying demand is projected to overtake the reductions in activity that these initiatives are expected to make. Furthermore, working up analysis alongside local knowledge suggests that practices that have a focus on health and wellbeing and integrated care benefit from a reduced demand for acute services. Public health initiatives and preventative schemes may have an impact over the longer term but would need investment now for longer term benefits to be realised. The commissioners are ultimately seeking to model their collective interventions that impact on activity based on achieving out of hospital care in the appropriate setting for a number of cohorts, either through avoiding an attendance or admission, or through early supported discharge and a reduced length of stay in acute care. In principle modelling the impact of ‘the hospital only where the hospital is needed’. As such the key areas include:

• Reduced unplanned admissions for long term conditions and areas that should not usually require acute care (emergency admissions for ambulatory care sensitive conditions and also emergency admissions for acute conditions that should not usually require hospital admission)

• Reduction in the length of hospital stay for those who do not require acute care (early supported discharge) - patients with dementia, elderly patients and patients receiving end of life care.

3.2.4 The Better Care Fund The June 2013 Spending Round announced the creation of a £3.8 billion Integration Transformation Fund – now referred to as the Better Care Fund – described as ‘a single pooled budget for health and social care services to work more closely together in local areas, based on a plan agreed between the NHS and local authorities’. In Warrington, the fund is £13.9m from 2015/16 (including £1.28m of capital). The Better Care Fund offers an opportunity to bring resources together to address immediate pressures on services and lay foundations for a much more integrated system of health and care delivered at scale and pace. But it will create risks as well as opportunities. The £3.8 billion is not new or additional money; £1.9 billion will come from clinical commissioning groups (CCG) allocations in addition to NHS money already transferred to social care. For most CCGs finding money for the Better Care Fund will involve redeploying funds from existing NHS services. The Better Care Fund will entail a substantial shift of activity and resource from hospitals to the community and it is estimated that hospital emergency activity will have to reduce by 15%. This could place additional financial pressures on providers already facing the quandary of how to maintain and improve quality of care while achieving financial balance. In addition, the Better Care Fund does not address the financial pressures faced by local authorities and CCGs in 2015, which remain very challenging. Some of the money will be awarded based on performance in 2014/15 and 2015/16. Stretch performance targets may be set in the following areas:

12

• Delayed transfers of care • Emergency admissions • Effectiveness of re-ablement • Admissions to residential and nursing care • Patient and service user experience

3.3 National quality of service drivers

The Francis Report is the final report into the care provided by Mid Staffordshire NHS Foundation Trust. The report’s chair, Robert Francis QC, concluded that patients were routinely neglected by a Trust too focused on financial targets, so much so that it lost sight of its responsibility to provide safe care. The report contains 290 recommendations which have implications for all levels of the health service and all who work in the NHS. Many of the recommendations following the Francis, Berwick, & Keogh reports that define quality care as providing Patient Safety, Patient Experience, and Effectiveness of care, are already in the process of being implemented at the Trust. In order to develop an action plan, the report and its recommendations have been shared widely with groups of staff, the Trust Board, and other key stakeholders to gain a wide range of ideas for implementation. These ideas formed an initial action plan which was approved by the Board earlier in the year and is monitored regularly by the Quality Assurance Group. The Trust is keen to use these reports as a springboard to providing better quality care and a number of themes have stimulated planned action:

• Focus on a culture of caring: There will be an increased focus on nurse training, education and professional development on the practical requirements of delivering compassionate care.

• Improving leadership: Develop a programme for leaders in Band 3-7 designed to enable them to lead departments and enable all nursing staff to complete skills lab training and continue to work to ensure that matrons spend at least 60% of their time on the ward, and undertake patient safety culture survey.

• Communication with Patients: Regular interaction and engagement between nurses and patients and those close to them should be systematised through regular ward rounds, and all staff need to be enabled to interact constructively, in a helpful and friendly fashion, with patients and visitors.

3.4 Capacity Analysis

3.4.1 Estates analysis Our benchmarking analysis of our estate is based on a review of publicly available data from the ERIC Healthcare database and a regional peer group which we consider a robust approach for estates, because cost in this area are more comparable by geographical proximity than by size and type of trust. A number of estates metrics have been explored using data from the ERIC Healthcare database for 2011/12 and compared the Trust to the average value of all the acute medium Trusts in the North West. All data that has been averaged uses a mean value rather than a weighted average based on, for example, the size of the Trust. Due to the small savings that can be achieved at the mean, we can conclude the realisable upper quartile savings will be harder to achieve. The potential cost saving opportunities we believe exist are as follows:

• Contracted-out: The largest opportunity at mean, of over £335,000 and hence the most realisable of the savings. These results show that a different mix of contracted-out services should be investigated.

• Laundry: WHFT is spending 6p per item more on washing than the upper quartile of the geographical peer group.

Other costs reviewed appear comparable to our peers. The cost of grounds and gardens maintenance is significantly most efficient. Maintenance costs (capital investment and building & engineering) are efficient, with modest savings at the upper quartile and this is also true of expenditure on cleaning staff, with only £65,655 of potential savings at the upper quartile. 3.4.2 Bed analysis Analysis was undertaken to identify the effect on the bed base of reducing all consultants working above Trust ALOS for the HRG to Trust ALOS for the HRG. The vast majority of potential bed day reductions comes from non-elective care. We believe that there are significant numbers of patients in the 5-20 LOS range and these patients are the less complex discharges and should be targeted to reduce LOS. Overall, potential bed reduction opportunities amount to

13

no more than 23% of the bed base, based on the data for FY 2013. This is supported by LOS targets derived by benchmarking the Trust against peers at HRG level. The Trust can achieve a reduction of 11 beds by achieving the mean elective LOS for medium sized acute Trusts. The opportunity is significantly greater, 96 beds, if the mean LoS is achieved for non-elective patients. Further bed reductions may be deliverable through reducing variation in the number of beds required across different days of the week and months of the year. 3.4.3 Theatre utilisation analysis Our analysis indicates that of the theatre sessions that go ahead, a utilisation of 76% is achieved, which is below the Trust target of 81%. There is an opportunity to increase in-session utilisation by either putting additional patients on lists where the time currently not utilised is greater than the time taken by the surgeon to complete one operation, or by reducing the number of lists. The potential benefits are up to 1646 additional cases or the release of 462 sessions, over a 12 month period. Improving medical productivity and maximising planned theatre sessions as per the job plans should also be a key target and is being addressed via the medical productivity programme of work within the Transformation programme. 3.4.4 Outpatient benchmarking analysis The NHS Productivity indicators suggest that the Trust has some opportunity to reduce the cost of its outpatient function. Therefore, we have analysed two areas - clinic capacity and utilisation and the ratio of FUPs: New appointments. We also investigated the changes in these areas over the last two financial years. Our key findings indicate:

Area (Currency: £ 000) Total cost of excess Realistic Gain (25%)

Loss from non-attendance £1,054 £263

Of which DNAs £677 £169

Total £1,054 £263

Our analysis indicates that a programme of outpatient redesign to better match demand to capacity is required. There is likely to be further opportunity to improve outpatient productivity through the standardisation of outpatient clinic templates, this will be investigated and actioned through the outpatient redesign programme.

3.5 Staff and workforce analysis

There remains potential to reduce costs/increase income through maximising the productivity of key medical resources. 3.5.1 Income per DCC PA per consultant Analysis of income per DCC PA per consultant was undertaken to identify variation within the specialty and the potential to reduce variation and either generate more income or reduce costs. The table presents the results based on the potential to increase income if consultants below the Trust average income per DCC for the specialty move to the Trust average.

Income Generation (£m) if all consultants moved to specialty average income per DCC PA

Cost reduction (£m) if moved to average and reduced PAs

Anaesthetics 0.12 0 ENT 0.22 0 General Surgery 3.43 0.4 Medicine 1.55 0.6 Obstetrics and Gynaecology 0.71 0 Ophthalmology 1.42 0.2 Paediatrics 0.55 0 Trauma and Orthopaedic Surgery 0.55 0 Urology 0.47 0 Total 9.02 1.2

3.5.2 Consultant Income Generation As a rough estimate our consultants need to generate c.£200m in income every year. With 128 consultants that WHFT currently employs, this is an average of roughly £1.58m per consultant. Some consultants are generating less

14

than £100,000 per DCC PA over a 6 month period, which means that they will not achieve the £1.58m ‘target’ over the financial year. Analysis of income per DCC PA per consultant was undertaken to identify variation within specialties and the potential to reduce variation and either generate more income or reduce costs. The variation could be for a number of different reasons and profitability at a specialty and consultant level will be explored further and addressed appropriately within the service level reviews, which the Trust has initiated. 3.5.3 Job Plan Analysis Analysis of consultant job plans identified variable results. The graph presents the split of average DCC, SPAs, additional and total average (based on whole time equivalent staff only). There are various specialties with average SPAs greater than 2, against a recognised national move towards 1.5 SPAs as standard and in some Trusts 1 SPA as standard.

Further analysis is underway to confirm the benefits deliverable through improved medical productivity. A review of consultant job plans against pay, clinical sessions scheduled and clinical sessions delivered is the first step in this programme of work. A review of SPAs, on-call and job planning policies will also be completed. 3.5.4 Consultant SPAs At a reasonable capped SPA of 1.5 at £10,000 per PA, the Trust would save, approximately, £500k. At the top end the potential savings would be nearly £1.2m if SPAs are reduced to 1 (at £12k per PA). However, General Medicine does not contain a large proportion of the potential savings in this area.

3.6 Competitor Assessment

The Trust forms part of Mid Mersey health economy and is 18.5 miles east of Liverpool, 16 miles west of Manchester and 8 miles south of St Helens with a turnover of £210m. It compares favourably to its two neighbouring DGHs of St Helens and Knowsley (an aspiring Foundation Trust with £237m turnover and Countess of Chester an FT with £186m turnover. All 3 organisations provide the full range of services to populations of c300k. St Helens is also the regional burns and plastics centre. In addition, there are a number of small specialist Trusts in the Mersey health economy such as The Clatterbridge Centre, The Walton Centre, Liverpool Women’s Hospital, The Heart and Chest Hospital and Alder Hey Children’s Hospital. Two tertiary centres are also on the Mersey economy – Royal Liverpool and Aintree University Hospitals.

The mid Mersey and Mersey health economies are fragmented and complex with a large number of relatively small providers many of which are specialist and receiving specialist tariffs. Community services are largely provided by Bridgewater Community Trust which is an aspiring Foundation Trust (£166m). The table (below) outlines the key metrics for the Trust’s neighbouring providers.

15

Provider Key facts Strengths Weaknesses St Helens & Knowsley Teaching Hospitals NHS Trust • Population: 350,000 • Turnover: £237m • Admissions: 92,371 • Inpatient Beds: c 700 • Workforce: >4,000 • CIP Forecast: £30m

between 2014-16

Provides a full range of DGH services and houses the Mersey Regional Burns & Plastic Surgery service. It is the largest provider of acute services to Knowsley residents and is mainly commissioned by Halton and St Helens CCGs. It has benefitted from a full PFI rebuild on both its original hospital sites in Whiston and St Helens.

Rated as one of the top performing acute Trusts in the country (Dr Foster). It has new (PFI) hospital facilities on the Whiston site. The Trust continues to rank highly in the AQ programme. Within St Helens two GP surgeries have been established at the hospital in partnership with NHS Halton & St Helens CCGs, providing patients with extended access to GPs

The new PFI funded hospital brings additional challenges as the fixed cost base of the hospital is high and it is not a Foundation Trust.

The Royal Liverpool and Broadgreen University Hospitals NHS Trust • Population: 750,000 • Turnover: £430m • Admissions: 85,887 • Inpatient Beds: 780 • Workforce: 5,600 • CIP Forecast: Unknown

Is the major adult acute university teaching hospital for Merseyside and Cheshire and is set over 3 sites. It provides general hospital services to the adult population of Liverpool but also provides specialist health services including cancer services for Merseyside, Cheshire and beyond. It aspires to be a centre for biomedical, clinical and health services research in order to support teaching and training in the health professions

Offers high quality treatment and diagnostics across more than 20 specialties and also provides several nationally and internationally regarded services. It is a major centre for diagnosis, treatment, care and research in cancer. It is also a major teaching hospital with a strong record in research. It has an agreed PFI full hospital rebuild scheme in place which is out of the ground. It is established as a hyper acute stroke centre.

The new PFI funded hospital may bring additional challenges as the fixed cost will be high. It is also not a Foundation Trust and currently it has poor quality estate.

Countess of Chester NHS Foundation Trust • Population: 445,000 • Turnover: £186m • Admissions: 79,952 • Inpatient Beds: 665 • Workforce: 4,000 • CIP Forecast: £20m

between 2014-16

Provides services on the Countess of Chester Health Park, and a 64 bedded Intermediate Care Service at Ellesmere Port Hospital. It aspires to provide the best possible patient experience, efficient delivery, whilst also pushing boundaries.

The Trust won the prestigious 40 Top Hospitals Award for the 12th consecutive year - one of only 5 Trusts in the country to achieve this status. There were just 2 cases of MRSA during the whole year and the incidence of C. Diff has reduced by 38%.The Trust has recently invested £8.7m in improving the physical infrastructure, environment and equipment within the hospital

High agency costs Low annual turnover – challenge to provide the full range of DGH services

Wirral University Hospital NHS Foundation Trust • Population: 400,000 • Turnover: £275m • Admissions: 99,373 • Inpatient Beds: Unknown • Workforce: >5,500 • CIP Forecast: £30m

between 2014-16

Operates across 4 sites; • Arrowe Park

Hospital, • Clatterbridge

Hospital, • Victoria Health

Centre and • Wirral Women and

Children’s Hospital The Trust’s goals are developed to help make its vision of “Excellence in Healthcare” a reality, with the support of its internal and external stakeholders

In 2010 NW Deanery highlighted areas of exceptional practice and the Wirral Millennium System confirmed the Trust as being in the forefront of innovation in clinical IT. It enjoys CQC ranking amongst the top 10 for stroke and maternity services in the country. It has a new £1.3 million Surgical Elective Admissions Lounge and has completed an £11.5m refurbish of its Wirral Women and Children’s Hospital

Geographically the Trust is based on the Wirral which is more remote than neighbouring Trusts.

Wigan, Wrightington & Leigh NHS Foundation Trust • Population: 318,000 • Turnover: £193m • Admissions: 86,415 • Inpatient Beds: 758

Strategic focus on quality and uses this as differentiator in market Operates from three sites all with a unique and different focus

Provides specialist orthopaedic services regionally and nationally £70m capital development programme to upgrade facilities across all sites

It is based on the outskirts of Greater Manchester and borders Warrington but there is no logical patient flow between the boroughs

16

• Workforce: 4,275 • CIP Forecast: Unknown University Hospitals of Aintree NHS Foundation Trust • Population: 330,000 • Turnover: £241m • Admissions: 74,420 • Inpatient Beds: 712 • Workforce: 3,463 • CIP Forecast: Unknown

• FT since 2006 • Teaching hospital of the

University of Liverpool • Tertiary centre providing

specialist services to around 1.5m residents in Merseyside, Cheshire, South Lancashire and North Wales.

• Tertiary services include Respiratory Medicine, Rheumatology, Maxillofacial and Liver Surgery.

• The University of Liverpool School of Clinical Sciences has a major presence at Aintree - Professorial Units in Infection and Immunity, Metabolic Medicine and Surgery and Oncology

• Recognised centre for multidisciplinary health research

• £20m redevelopment of A&E recently

It is based within 10 miles of the Royal Liverpool which makes it vulnerable to service rationalisation within the city catchment area

The table below highlights the most recent known performance in terms of mortality of those Trusts in the local area in comparison with Warrington and Halton. These mortality measures are adjusted to take into account how likely each patient is to die based on their age, diagnosis, other diseases, urgency, gender, social deprivation and previous history or hospitalisation. After adjustment, some hospitals still have higher than expected death rates and some have lower than expected rates.

NHS acute trust In hospital +30 days (SHMI)*

In hospital (HSMR)**

Aintree University Hospitals NHS Foundation Trust 113 89 Countess of Chester Hospital NHS Foundation Trust 106 108 Mid Cheshire Hospitals NHS Foundation Trust 112 110 Royal Liverpool and Broadgreen University Hospitals NHS Trust 107 99 St Helens and Knowsley Hospitals NHS Trust 103 102 Wirral University Teaching Hospital NHS Foundation Trust 105 108 Wrightington, Wigan and Leigh NHS Foundation Trust 106 95

Warrington and Halton Hospitals NHS Foundation Trust 105 98

* Summary Hospital-Level Mortality Indicator (SHMI): deaths after hospital treatment and up to 30 days after discharge ** Hospital Standardised Mortality Ratio (HSMR): deaths in hospital based on certain conditions

The next two charts (below) present our understanding of the quality measures for each of the organisations from CQC and NHS Choices.

In addition to the acute Trusts on the patch, there is the community services provider (Bridgewater Community Healthcare NHS Trust) which provides a range of community health services to the residents of Halton and Warrington. Bridgewater’s strategy is to achieve FT status and focus on care closer to home, more integrated working with the patient at the centre and personalisation. It has set out the following strands for service development:

• Working in partnership to deliver a platform of integrated care with partner organisations to meet the growing health needs of our communities

17

Trust Wide

• Improving the delivery of care in community settings, bringing care out of hospital and developing services closer to people’s homes

• Improving access to services: educating, informing and empowering people, to maximise their ability to use them. Removing barriers that prevent access by minority groups

• Providing universal services, that fully meet the health and social care needs of individuals within whole populations, from birth to death

• Utilising innovative and cost effective approaches, including technology, to deliver community healthcare and provide more immediate communication and monitoring, with easier access for patients

At a macro level the health economy is relatively efficient and generally at or below reference cost index. All of the Trusts are serving similar population numbers and at the lower end of levels required to service the full range of DGH activities. However, the key point to note is that given the relatively low cost of providers on the patch and the high number of Trusts servicing at the lower end of the scale of populations, the potential to reduce the cost base by 5% per year on average is somewhat limited. Thus there are strong drivers to collaborate and consider changes in service models in order to deliver safe and efficient services and this is also driven by the relative proximity of providers which are only short distances apart.

3.7 Market Assessment

The purpose of our market assessment was to undertake a review of the Trust’s current health economy and assess the local market in which it will be operating or the next 5 years. This was predominantly a desk top based research activity which included a review of: national and local context; commissioning strategies; high level market analysis; local competitor analysis; and trend analysis within our Divisional structure.

FCEs Emergency admissions • WHFT has 10.9% of the FCE market share with 8 other

NHS acute providers - no one provider dominates the FCE market most of the providers have 10-15% share of the FCE market with a turnover between £200-250m.

• All of the providers provide the full range of DGH services as such lots of duplication of services on the patch.

• St Helens and WHFT have both experienced 2% growth in FCEs over the last 4 years. Countess of Chester has had a significant growth at 11%

• St Helens has a 14.9% share of emergency admissions amongst the providers. WHFT has a 12.5% market share with Countess of Chester a 9.3% share and Royal Liverpool a 12.1% share of activity.

• The activity is spread fairly evenly amongst providers with no one dominating but making it an overall expensive model of delivery and difficult to deliver the 7 day working requirements

• The trend over the last 4 years has been a reduction in admissions with WHFT experiencing the largest rise in admissions (3%). Mid Cheshire has experienced an 18% reduction in emergency admissions over the period

• There are 2 dominant providers in planned admissions – Royal Liverpool and WWL which together have over 40% of the market (21.7% and 19.4% respectively).

• WHFT has 8.3% market share, St Helens 4.5%, Countess of Chester 11.9%. St Helens focusing on acute services, Countess of Chester and WHFT fairly even on acute and elective inpatient activity.

• In terms of growth RL and WWL have significantly increased planned admissions over the 4 year period - Countess of Chester has increased by a third and St Helens has increased by 6%.

• Private providers have also experienced significant increases in NHS activity during the period

• WHFT has almost double the level of activity than St Helens and represents an opportunity but also a threat from WWL and Royal Liverpool.

• Length of Stay across the patch for acute providers ranges

from 1.8 to 2.6 days (note this is not case mix adjusted). WHFT has a LOS of 2.1 days and St Helens a LOS of c 2.2. WHFT is in line with competitors on the patch.

• The trend has been modest reductions in LOS across the 4 year period. The largest decreases have been in the Royal Liverpool and WWL. This may be down to the decrease in emergency admissions and increase in planned admissions during the period.

• WHFT has reduced LOS by 0.1 days over the period compared to 0.2 days in St Helens and 0 days in Chester.

• The productivity analysis is exploring the potential for WHFT to reduce LOS further.

Planned admissions Length of stay

18

Trust Wide

Day case Accident and emergency • Royal Liverpool, WWL and Wirral have the highest

market share of the DC market with 41% between the 3 trusts

• WHFT and St Helens have similar market shares at 10.3% and 10.5% respectively. Countess of Chester has a 11.1% market share

• There has been significant growth in daycase activity over the 4 year period. Royal Liverpool 23.5% increase in activity, Countess of Chester 18.6% increase in activity and St Helens 26.2% increase in activity

• Growth in WHFT has been more modest at 6.2%. Given the growth in the daycase market there is an opportunity for WHFT to expand in this area

• A&E attendances are fairly evenly split across all of the 9 providers with St Helens the highest level at 15% and WHFT at 13%

• No one provider dominates the A&E market • WHFT and St Helens are the only 2 organisations on the

patch to have had a significant growth in A&E activity over the last 4 years (9% and 12% respectively). This may be due to demand management schemes taking hold or alternative provision being put in place on the other Trust’s footprint

• There is an opportunity to work with commissioners to develop integrated care pathways and alternatives to A&E

• Royal Liverpool has 18.8% market share by far the most significant share, likely due to the tertiary services provided.

• WHFT, St Helens and Countess of Chester each have c10.5% market share of new outpatients

• Over the last 3 years new OP attendances has declined by -1.6% in Royal Liverpool with a significant increase in St Helens by 5.4% and in Chester, WWL. WHFT has seen one of the most modest increases of 0.7%

• There is an opportunity for WHFT to increase market share in this area through developing relationships with GPs and CCGs. Market share can also be increased by increasing the Trusts’ footprint and targeting areas on the boundaries.

• Royal Liverpool has c.20% market share of follow up

attendances. St Helens has 10.9% share and Warrington 11.3% share

• Over the past 3 years St Helens and Chester have experienced growth in follow up attendances (by 10% and 19% respectively). This is in line with the increase in new attendances

• WHFT and Royal Liverpool have both reduced OP follow up appointments by 5% and 8% respectively

• There has been a drive to reduce new to follow up rates nationally, which may be the reason for the reduction in follow attendances in the period in WHFT

Outpatients (new) Outpatients (follow up) 3.7.1 Summary of opportunities at Divisional Level Unscheduled Care

• The trend in Warrington is a small increase in emergency admissions and significant growth in A&E activity over

the last 4 years and the CCG is implementing a long term conditions programme to streamline the patient pathways with the aspiration of improving quality, reducing avoidable admissions and reducing LOS. In addition there is an aspiration to have integrated neighbourhood teams.

• There is significant opportunity for the Trust to work with partners across the health and social care economy to manage admissions and discharges. Risk sharing agreements would help to break down funding issues

Scheduled Care

• The CMTC offers Warrington an opportunity to expand and develop the T&O service and increase market share.

• There is scope to collaborate and create a hub and spoke approach for services such as ENT, urology,

ophthalmology and T&O Women’s, Children’s & Support Services

• Over the last 3 years there has been a 15% increase in births at St Helens with a 3% reduction at WHFT. The

Trust has upgraded maternity facilities in order to market services more widely to ensure no further loss of activity.

• Development of a tiered MLU service in Halton which will enable Halton residents to have births in their own borough.

• The Trust has market leading pathology services, which provides better than competitor turnaround and it should seek to market it’ services outside of the commissioned areas but also consider strategic partnerships with other similar sized units with a preference towards Cheshire and Wirral.

19

3.8 Summary

Our assessment indicates that there are a set of key themes for the Trust to focus upon and progress:

Drivers

1 Growth of Services

• A number of services identified as potential high growth services • Market analysis has identified that there is demand in the market for the services

2 Collaboration • Nature of competitive landscape dictates that not all hospitals in the area can continue

providing all services (lots of services with low volumes). • Clear collaboration opportunities identified

3 Trust Brand & Image

• Nature of competitive landscape dictates that differentiation will be key • Increased importance of patient choice and feedback

4 Quality • Foundation Trust status • Improving mortality rates in comparison to local competitors

20

4 Sustainability This section of our strategic plan considers the likely impact of the identified challenges on our key service lines and the resulting sustainability risk as well as the enabling strategies in place to support our strategic plans.

4.1 Risks to sustainability

With a population of 313,000 the Trust operates on the lower end of the “ideal scale” for a full range of District General Hospitals ideally a 450,000 - 500,000 population base. The Trust is surrounded by Trusts all with population sizes of <350,000 providing the full range of services. The transfer of vascular services, increasing subspecialisation and reduction in junior doctor numbers staffing rotas will be challenging for WHHFT as well as for the other Trusts around our LHE. The scale of activity for some of the Trust’s specialties and neighbouring Trusts is in the lower quartile when compared to Trusts across the country. The clinical viability of some of WHHFTs services into the future is questionable, therefore, it is vital that we secure clinical and financial viability of the organisation into the future. Analysis of the financial and clinical contribution of services identified that there are a number of specialties that currently make a negative contribution to overheads. In addition, there are number of specialties that make a loss particularly when point of delivery is factored into the analysis. Pace and collaboration with local providers will be required to deliver in tight timescales to ensure a clinically and financially viable service model for WHHFT. There are a number of core business opportunities open to the Trust (which the Trust can implement independently) including site reconfiguration, new model of ambulatory care, new model for complex discharges and service expansion. These opportunities will support the reduction in the cost base and deliver income generation. A thorough benchmarking of internal variation of theatres, beds, outpatients and job plans indicates the potential to improve performance and reduce costs by moving to mean performance in the Trust. A focused programme to drive performance in these areas will be executed and form the basis of early years CIP delivery. Workforce and estates benchmarking was undertaken using a peer group of similar trusts to identify further areas for consideration. This again showed the potential to reduce costs and will be explored further to support the CIP delivery in years one and two. The total functional productivity gain (excluding medical productivity) is identified to be in the range of £5m-16m however, pushing to upper quartile would yield further benefit. Additionally, a review of income per DCC per PA per consultant identified significant variation in a vast range of specialties. A programme of medical productivity will need to be designed and executed to unlock the potential – this will require a change in behaviours in the Trust and will be required to unlock the functional productivity potential, estimated to be between £1.3m and £5.7m impact. The scale of the potential from internal productivity gains alone is between £5.9m and £20m (although the higher end assumes that extra capacity created through improved productivity results in increased income which will be dependent upon commissioners) most of this potential is for mean performance and thus by pushing to upper quartile there may be opportunity for greater gains particularly in terms of beds. The focus of years one and two will be on unlocking the productivity gain identified through a structured strong programme of execution centred upon driving medical productivity whilst planning the delivery of the Service Transformation. However, productivity gain alone will not tackle the full range of risks to sustainability given increasing subspecialisation and reduction in junior doctor numbers and staffing rotas. Taken together these issues alone indicate that it is clear that the Trust has to change however, it cannot implement major transformational change alone.

4.2 Impact of external challenges

There are two primary external drivers locally – the commissioner led strategic review of healthcare across mid-Mersey and the nationally driven Better Care Fund implementation. 4.2.1 The mid-Mersey Strategic Review The commissioners are ultimately seeking to deliver a new model of care with ‘the hospital only where the hospital is needed’ principle at its heart and therefore, based on the management of long term conditions close to home wherever possible. They will focus on generating system-wide savings from the acute sector in order to be able to re-

21

invest into community and primary care settings, either through avoiding attendance or admission, or through early supported discharge or through a reduced length of stay in acute care. The likely impact of the modelled reduction in emergency admissions and emergency length of stay on the Trust would be a reduction in income for the Trusts of £2.25m. Assuming that costs can be recovered from the bed shift associated with early supported discharge this would potentially offset the income reduction through a saving of £2.6m.

Avoidable emergency admissions Early supported discharge

Sum of projected spells -783 -

Sum of projected bed days -5,984 -20,479

Sum of projected total tariff -£1,612,606 -£643,277

4.2.2 Better Care Fund The Better Care Fund is being implemented locally in the context of an ageing population and an increasing number of people who have one or more long-term conditions. These two factors mean that the needs of patients and service users increasingly cut across multiple health and social care services. Increasing demand and financial pressures mean there is a need to focus on prevention, reducing the demand for services and making the most efficient and effective use of health and social care resources. The overarching aim in order is “to move from a reactive hospital based system of unplanned care to a preventative, anticipatory, whole person approach to care. Services will be integrated across the health and social care spectrum and redesigned with the patient and their carers at the centre, with the intention/aim that they are easy to navigate and promote equity, accessibility and choice. Our aim is to enable people to be self-sufficient, providing necessary care and support to people in their own homes and communities”. The Better Care Fund will comprise the following:

2014/15 2015/16

Warrington CCG Contribution £5,767,000 £13,913,000

Halton CCG Contribution £3,945,000 £10,598,000

Our commissioners expect the overall implications for the acute sector to be:

• Reduction in emergency admissions • Reduction in A&E attendances and admissions • Appropriate admissions into acute sector • Reduction in the need for emergency bed days • Reduction in the lengths of stay

Furthermore, the shifts in activity will deliver shifts in resources too from acute settings into the community. There is a role for the Trust to play for our acute provider to help provide services closer to home where they may have traditionally been provided in the hospital setting. This requires careful consideration in relation to the establishment of the Primary Care Home model and 2014/15 will provide a year in which the Trust can start to work more closely with commissioners to redefine the model of district general hospital provision. Overall through the BCF, commissioners plan as a minimum to reduce inappropriate A&E attendances by 15% across 4 years and reduce inappropriate non elective admissions into secondary care by 15% over 4 years, moving emergency activity closer to home and increasing diagnostic activity in urgent care centres. This will also allow the CCGs to re-invest in care closer to home.

22

4.3 Strategic performance review

Over the last few years, the trust has successfully delivered significant changes to the way in which we provide services which has allowed us to both improve the quality of services to our patients and to ensure that we use the resources available to us as efficiently as possible. During 2013-2014 we have continued to strengthen and perform well on quality by investing in our staff in key areas. We have strengthened our clinical teams with more doctors, more nurses and more allied health professionals recruited in key targeted areas of the trust. Staff numbers (headcount and whole time equivalent) have grown during the year. Importantly in terms of quality, the trust has invested in new facilities and services within maternity and dementia and in the use of information technology (IT) to support enhanced clinical delivery. We have developed new strategies for nursing, dementia and quality. We have performed well in relation to external assessment by the Care Quality Commission and have implemented the Friends and Family initiative across inpatient; accident and emergency and maternity services. In 2013-2014, the trust’s improvement priorities were:

• Reduction in medication errors related to insulin • Zero tolerance to hospital acquired MRSA bloodstream infections • Reduction in catheter associated Urinary Tract Infections • Reduction in incidents that result in severe or catastrophic harm • 62 day cancer access target • Reducing mortality rates • Pressure Ulcers – reduction

The trust is pleased to report an improving performance across each of these areas for 2013-2014 with the exception of the number of reported hospital acquired MRSA bloodstream infections where the trust is reporting three cases against a threshold of zero (an increase from 2012-2013 when performance was one MRSA against a threshold of three). 4.3.1 Key performance targets in year

Area Commentary

A&E The trust achieved the 95% A&E access target for the year 2013-2014 – with a final figure of 95.55% for the trust across the year. This is an excellent achievement for A&E and minor injuries as many hospitals struggled to meet the target over the year.

Mortality We are in expected ranges for both mortality measures – SHMI and HSMR. We have continued to see a trajectory of reduction in both key mortality rates of HSMR and SHMI across the year.

18 week referral to treatment

The trust delivered its commitment for access from GP referral to treatment for the people of Warrington and Halton in under 18wks for over 90% of all referrals for the 6th year in a row. In addition we have seen the second and third phase of the planned transfer of activity across to Halton with orthopaedics and spines in phase II and the remaining general surgery, urology, breast and gynaecology in phase III. This has successfully seen our trust achieving 18wks for orthopaedics in January and continuing to receive the highest patient’s ratings for surgery of any hospital across the North West.

Cancer

We remain one of a very small group of trusts who has achieved all nationally set cancer targets throughout 2013. This year saw the introduction of a new local rule on allocation of breaches at day 42 on a cancer pathway. This has seen many hospital trusts failing at least one of the national access targets. Our trust has worked incredibly hard to continue to deliver this commitment and target.

Infection Control

One area where we have struggled this year has been around infection control against a very challenging baseline target for the trust. There were three cases of MRSA bacteraemia against our nationally set target to have zero in year. There were 31 cases of hospital acquired C-difficile where our threshold for the year was no more than 19. The Trust reviewed each case and there was no cluster of related outbreaks of C-difficile so these were individual cases. NHS England has said that the trust is performing well in terms

23

of infection control against a very low threshold and that that threshold has been increased for 2014-2015. However, the trust has committed to returning to our previous excellent performance in this area of work which has seen infection rates fall by around 90% in the previous five years.

The trust has also delivered continued excellent performance against national access targets in spite of challenges that have been experienced in other NHS organisations. The trust successfully delivered the 18 week waiting time target performance for both admitted and non-admitted patients throughout the year as well as maintaining achieving the four hour accident and emergency waiting target in each quarter and for the year. 4.3.2 Regulatory ratings The Care Quality Commission has made two unannounced visits to the trust in 2013-2014 as part of its on-going inspections programme. The trust met all standards it was assessed against. Halton General Hospital – general inspection October 2013

• Inspectors from the CQC spent two days at Halton General from 1st October 2013 October as part of their unannounced inspection programme. The team included inspectors and also a member of the public who spoke to patients. They visited wards and departments observing care in practice and spoke in depth to both staff and patients. The inspection started with an evening visit to the Minor Injuries Unit and also took in the wards at the main hospital. The trust’s Cheshire and Merseyside Treatment Centre on the site, which has reopened as an orthopaedic surgery centre, was also visited.

• The report found that care at Halton met all of the essential standards that they look for in their four core areas of consent to care and treatment; care and welfare of patients; management of medicines; and staffing.

• The report shows that patients are well cared for, communicated with and their needs met at Halton. Patients spoken to felt that they had a full and clear understanding of their individual programmes of care and treatment. They commented that they felt they were given sufficient details and answers to any questions they may have, which they felt allowed them to make informed decisions.

• Inspectors noted a person-centred approach to care and treatment, both in the written records examined and in their observations of the interaction between staff and patients that demonstrated consultation and engagement with each patient as an individual. Medicines were managed appropriately and patients were seen to be given excellent pain relief. They also found that the trust has the right staff in post on the wards with staff morale seen to be high.

Warrington Hospital – themed inspection on dementia care January 2014

• Inspectors from the CQC inspected Warrington Hospital on 28th January 2014 in an unannounced themed inspection looking at quality of care provided to support people living with dementia to maintain their physical and mental health and wellbeing. They went to the Accident and Emergency Department and elderly care wards. They spoke with staff on the wards and departments they visited, observed care being delivered and spoke with patients and family members. The CQC’s inspectors were accompanied by an ‘expert-by-experience’ – someone who has personal experience of using, or caring for someone who uses, this type of care service.

• The inspection found the hospital met all three standards it was measured against - Care and welfare of people who use services; Cooperating with other providers; and Assessing and monitoring the quality of service provision.

• The report says that people the team spoke with told them they were happy with the service they received in the hospital. Comments from patients to the team included ‘The staff seem very jolly with my relative, and chat with her whilst they make sure she is alright’, ‘The staff have been very caring and informative about the medical condition and treatment for this’ and 'The staff have been great with him all the time he has been here’. The report also says that care they observed was delivered by nursing staff in a kind and responsive manner. They saw that family members were involved in discussions about their relatives.

• The inspectors also saw that the hospital had a process to ensure that people with dementia who had different support needs were identified on admission and provided with care and treatment that met their individual needs. They tracked four patient's pathways through the hospital and found that this was effective.

• Most of the staff inspectors spoke with had received training specifically related to dementia care and they all spoke positively about this.

24

The Care Quality Commission has not taken enforcement action against Warrington and Halton Hospitals NHS Foundation Trust during the first quarter of the FY 2014/2015 – the three month period immediately prior to plan submission.

4.4 Trust Board self-assessment tool and outputs

Monitor has stated through its own independent research that effective strategic planning requires the following three steps:

• Planning process: Board engagement, sufficient skilled resource, effective planning timetable

• Plan with content: Based on accurate and correctly analysed inputs, establishes an evidence based vision, explains how initiatives will be delivered.

• Delivery: Ensure delivery is monitored, has staff engagement Boards were encouraged to work through a series of structured questions to determine if their organisation is completing strategic planning “fully and rigorously.” The Trust Board undertook this self-assessment exercise on 30 April 2014 and identified six areas, which were considered as needing improvement and seven areas considered as strengths. The primary focus in 2014 will be on resolving the areas where improvement is required and this will be supported by the appointment of a new senior manager lead for strategy and commercial development early in the financial year.

4.5 How we have engaged people in our plans

We have worked hard engage as widely as possible on the development of our strategic plan. The development of our clinical service strategy has been built from the Divisions upwards and has in itself involved a detailed process of divisional level engagement. This has in turn fed into our corporate process. Over the past six months, the Trust ran a series of detailed processes which has sought to ensure ongoing Board level grip and oversight of the process and Governor involved design and debate in the strategic initiatives for the organisation. In addition, several workshops have been held with our commissioners which have focused on sharing strategic plans, commissioning intentions, financial challenges and investment priorities. The CCGs financial and activity plans have been shared with the Trust and the commissioning assumptions therein have driven the financial plans of the Trust’s own strategic intentions in response. Thus commissioner – provider plans are aligned.

During 2014 we will strength our approach to engagement not just in the planning process but in order to establish a new culture of openness and involvement and engagement in how we reinvent what a district general hospital does. With the introduction of a new senior leader for strategy, communications, marketing and commercial development, we will bring forward ambitions for embedding patient experiences in to our planning and design processes in a way that our commissioners have managed to develop at population level.

25

5 Supporting or enabling strategies

In order for the Trust vision to be achieved it is underpinned by a number of supporting strategies which are outlined in the following paragraphs within this section. 5.5.1 Quality Strategy Our quality strategy was refreshed at the end of 2013 and focuses on three core components: delivering a safe organisation for patients; delivering a clinically effective organisation for patients by; and delivering an excellent quality of experience for patients. Over its lifespan it aims to deliver a safe organisation for patients by:

• Developing a culture where patient safety is integral to the day-to-day provision of clinical care • Establishing greater integration and whole system working between professional groups and Commissioners

in an integrated work programme forming both contractual and local standards • Setting out the structures and processes necessary to deliver and monitor patient safety throughout the

organisation and to demonstrate a positive effect on clinical care and patient experience • Ensuring the Healthcare Evaluation Data (HED) system is in place to review, prioritise and monitor quality

and patient safety indicators • Implementing proactive mechanisms (Global Trigger Tool) to monitor for adverse events routinely throughout

the Trust. Our quality strategy also aims to deliver a clinically effective and safe organisation for patients by:

• Developing a culture where clinical effectiveness is integral to the day-to-day provision of clinical care • Setting out the structures and processes necessary to deliver and monitor clinical effectiveness throughout

the organisation and to demonstrate a positive effect on clinical care and patient experience • Ensuring the review of current practice and amending clinical pathways as appropriate. • Implementing national guidance including NICE and NCEPOD recommendations, standards and policy

ensuring that best practice is disseminated and under performance is addressed • Ensuring that the Board of Directors is assured of robust arrangements for the management of clinical

effectiveness activity through review of existing reporting arrangements By focussing on patient experience, through our quality strategy, we want to place the quality of patient experience at the heart of all we do, where “seeing the person in the patient” is the norm. We have set the following objectives to achieve this:

• Build on existing work to further develop robust systems and processes for gaining both quantitative and qualitative feedback from users

• Develop more robust analysis of complaints and PALS contacts to inform service improvement • Ensure that the way in which we manage complaints provides a responsive, patient focussed service. • Develop systems and processes that appropriately link willing patients, governors and other stakeholders

with teams trying to make service improvements • Develop training and an accompanying toolkit to assist team / department leaders to maximise and sustain

the capacity and capability of individual team members to impact positively on patient experience • The Trust Board will play an active leadership role in advocating improvements in the patient experience • Develop a minimum data set and dashboard for teams and departments to drive reliability and consistency of

patient experience • Every service within the Trust will use patient experience to gain insight and identify opportunities for

improvement • Every service within the Trust will, having identified opportunities for improvement, implement at least one

patient experience improvement project annually • The Director of Nursing will lead Trust wide initiatives to make improvements following the identification of

themes from patient feedback. • The Trust will further develop systems and processes to provide feedback to users and other stakeholders,

both at service / department and corporate level. • Develop new Patient Experience key performance indicators for corporate monitoring, and a system of

service reviews to theme/ triangulate patient experience data. • There are a number of performance indicators that we use to monitor the patients experience of our care

provision in different areas of our hospitals. These will be defined as part of the annual planning cycle at strategic and divisional level. There are, however, a suite of indicators that we believe are always important and should always be monitored.

26

Our goal is to see year on year improvement against our five core questions in our patient survey as well as year on year improvement as to whether our staff would recommend our hospital to friends and family. 5.5.2 Site Development Strategy The site development plan forms part of the Trusts overall financial plan and also forms the basis of the estate and building elements of the Trusts capital programme. The plan is compatible with the development of the Trusts clinical services strategy. The critical building works between 2014 and 2016 involves the demolition and re-provision of facilities between the Warrington and Halton sites to generate efficiencies and savings and improve conditions and environment to enable more strategic future site use. This will see Warrington emerge as the emergency (hot) site and lead to Halton becoming a day case and surgical centre (cold site). Years 1 and 2 of our programme will involve:

• The demolition and removal of facilities at Warrington including Cheshire House, Daresbury, Kendrick and residential accommodation and at Halton minor works to make land available.

• The provision and construction of new facilities at Warrington for administrative services, to extend to the stores and catering facilities and facilities management and the flagship development of a new centre of excellence for Ophthalmology on both the Warrington and Halton sites.

Our longer term plans will focus on the development of the Halton site which will modernise and improve facilities and services whilst also rationalising site usage and enable a reduction in running costs. This will in turn lead us to the creation of an elective and day case flagship centre for the region. 5.5.3 Facilities Services Setting aside the capital investment programme for the built environment, the role of the facilities team as a whole is to plan its services around both the clinical priorities and the contracts agreed with our commissioners. The facilities team has the challenge of being more agile in the delivery of their services as clinical requirements change. For example, the move to 7-day services will bring some changes to the facilities function. Although we have a comprehensive 7-day cleaning service on our wards if we are to move toward, for example, more out-patient activity at weekends and during the evenings then we will need to revisit our arrangements for cleaning. Similarly more operating at weekends may change our approach to maintenance within the operating theatres. Changes to theatres scheduling and the level of activity within theatres also brings with it changes to decontamination rotas and the way in which we look to provide our decontamination services. This means revisiting working hours and may mean moving to extended shifts. The opportunities for taking a more commercial approach to the management of the Trusts estate and its retail functions is a real opportunity for facilities services in future. As part of our transformational programme we are working with specialist advisors to explore opportunities for using our estate as a means to generate additional revenue to support clinical services. 5.5.4 IM&T Strategy The IM&T strategy aims to balance many competing priorities on the Trusts IT services in an effective and rational way as the NHS enters a period of intense and rapid change. It is aimed at providing services that are focussed on improving access to patient information and supporting speedier and more effective decision making. After extensive consultation the Trust developed a long term IM&T Strategy in 2013 and it will continue to deliver on the commitments within that strategy over the remainder of its life in 2016. We will, within the life of this strategic plan however, commence a review and refresh of that IM&T Strategy but we do not envisage this being until 2015. Most organisations invest in five areas:

27

• Service Desk • Infrastructure (Networks and PC devices) • Applications • Business Intelligence • Innovation and Change.

We are no different in that respect and we will address these five areas through three workstreams aligned to our QPS framework:

• Connecting people: with information as we move from PCs to Tablets

• Consolidating and optimising current systems: with new ways of working and investing benefits to reduce our costs

• Move to paperless: by implementing an EPR to replacing paper with electronic notes to support quality care Our major developments over the next two years will include the following:

• Introduction of iBleep

• Upgrading of the wireless infrastructure

• Introduction of mobile devices and electronic document management systems

• Development of care co-ordination systems

• Introduction of an e-rostering system for all areas

• Better integration of communication systems

• Introduction and development of patient web access technology and systems

• Introduction of e-Prescription connectivity

• New integrated PAS system and an integrated electronic patient care record

• Development of dashboard based BI solutions

• Delivery of electronic medicines management systems

5.5.5 Workforce The Trust strategic people plan is designed to support the achievement of the nine objectives for the hospital. It specifically underpins the achievement of delivering sustainable, appropriate and high performing services for our patients and communities, supporting and developing our workforce, and is underpinned by the vision have having a truly engaged workforce. Our overall objectives for the next 5 years can be summarised as follows:

No Objective What this means

1

To develop effective leadership capability throughout the Trust

We will be developing our leaders through a variety of routes, right through from the tools and training that we give to managers in their first appointment leading a team, through to more formal development for middle and senior managers which will enable them to motivate and engage their teams. The development we offer will start will start with more basic leadership capabilities and will progress to equipping all our leaders with the skills and capabilities to lead their teams through the significant change we can expect to experience over the next 5 years.

28

2

To have the right people with the right skills in the right place at the right time and cost

Our workforce planning will become more sophisticated over the next 5 years to take account of significant change across the health and social care system. Taking account of changes such as the provision of more services across 7 days, person centred care and the more integrated approach to patient pathways will present challenges in relation to supply of people with the right skills. This coupled with funding, education and commissioning challenges will mean we have to look at new workforce models for the delivery of care, often in partnership with other organisations. Where we have shortages the challenge to deliver our service at an appropriate cost will continue through the duration of the 5 year plan. This will also mean that we will have to review on an on-going basis the appropriateness of our mechanisms such as on call arrangements.

3

To equip all staff with the skills, knowledge and behaviours required for their current role, and future career, to support the delivery of safe, effective, high quality care and services

We have an on-going need to provide a level of education and learning support to all colleagues to enable them to do their jobs effectively. We will increasingly make demands on all staff in relation to new ways of working, technology and changes to care pathways and we will need to ensure that our education and learning plans take account of all of this. As we work towards delivering on all elements of our Quality Strategy we will adapt our provision of learning to ensure it is focused on delivering improved outcomes. Will provide learning in a different way, making more use of e-learning and self-directed learning rather than the current reliance on classroom learning.

4

To provide an environment that helps all our people work effectively

Over the next 5 years we will be using more regular feedback from colleagues to inform our activities to ensure we are resolving issues that get in the way. We will be continuously improving our communication channels and ensuring that we have mechanisms in place to help our people raise issues if they need to. We will also be developing and rolling out tools to help develop career pathways for colleagues and also talent management processes which will help us develop successors to key roles and help talent in the organisation to flourish.

5 To support the health & wellbeing of colleagues

We have developed a health and wellbeing strategy and will be developing a plan for each year to include specific initiatives that will encourage people to take responsibility for their own health and wellbeing as well as support that we can provide as a Trust. We will hope to build on this as a great way to motivate and enthuse staff in what they can do.

Headcount in the Trust as at June 2014 is 4,171 and we anticipate that this will remain relatively stable. Small changes will happen as a result of efficiency initiatives across the Trust to achieve our Cost Improvement Plans (CIP) targets for 2014/15 and 2015/16. In addition work will be undertaken reviewing staffing models and flexibility under Agenda for Change terms and conditions to drive improved productivity and reduce pay costs to identify potential contributions to the cost improvement target over the next 5 years. Whilst some investment may be required to support 7 day services this will be required to be off-set by improved efficiency of clinical pathways and support where appropriate from the LHE. Turnover and sickness absence are both higher than we would want although both have shown a reduction in 2013/14. The Organisational Development strategy and the impact of our recruitment plans are hoped to gradually start to improve this as we build staff engagement with our future plans. A further reduction in both is being targeted over the next two years. Locum and agency spend has been high in some services and significant action during 2014/15 will be required. The investment in permanent nursing roles following targeted recruitment activity and a planned move to a managed service for the provision of temporary staff are just two areas that will help reduce the agency spend, with a targeted reduction over one, two and three years, which is supported by the experience of other organisations who have implemented this approach.

29

6 Strategic options and plans We are now at a crossroads in our development and our future sustainability depends on our ability to deliver three core things: transformed and modern urgent and emergency healthcare; modern and excellent elective healthcare; and increasing amounts of community based care. We will need to take three steps to deliver these three outcomes over the next five years and our strategy is structured to reflect these three steps:

1. Transformational programme focused on ensuring profitability and efficiency over years 1 and 2 by improving our productivity, controlling costs more effectively, improving our estate and physical infrastructure, modernising our IM&T platforms and repatriating activity wherever possible. This will endure over the full five years life of this strategic plan with the early years work enabling further development and modernisation.

2. Modernisation programme which encompasses modest service level growth, growing levels of collaboration and where appropriate integration with others.

3. Strategic change programme in order to deliver stability beyond year 5, which includes the development of a range of strategic partnerships and/or merger and/or acquisitions.

6.1 Transformation programme

The Trusts Transformation Programme sets out a 5-year plan to deliver a minimum of 4% efficiency improvement (combined internal only and partnership pathway driven) per annum. The Trust engaged Ernst & Young in 2013 to identify potential areas of transformation which could lead to the scale of cost reduction required over the next 5 years. The savings identified in these areas are being validated as part of the development of the programme. The transformation programme is designed to support the clinical services strategy and ultimately reduce the costs of delivery whilst continuing to deliver high levels of patient service and experience. The financial challenge over the next 2 years is to deliver an estimated £23m of savings which equates to approximately a 5.5% reduction of the operating budget in each of the two financial years. The Transformation programme is overseen by a multi-disciplinary Innovation & Cost Improvement Committee (ICIC) chaired by the Chief Executive. The Programme Support Team adopts project management office (PMO) disciplines providing both support and leadership for Transformation/Innovation projects, and an assurance mechanism to track benefits realisation and successful delivery of these projects. The main transformational themes that are expected to deliver the scale of savings is summarised in the table below (note that the savings quoted are an indication of the level of savings and may vary subject to the success of implementation)

Workstream 2014/15 CIP

2015/16 CIP

2016/17 CIP

2017/18 CIP

2018/19 CIP

Tactical £6.2m £3.3m £3.3m £3.3m £2.1m Workforce and controls £2.5m £1.7m - - - Operational productivity £1.8m £4.3m £4.3m £3.9m £4.6m Lean and technology £0.5m £0.5m £0.5m £0.75m £0.75m Strategic service redesign £0.87m £1.7m £1.3m £2.0m £2.0m Total £11.9m £11.5m £9.5m £10m £9.5m CIP as % of turnover 5.6% 5.3% 4.4% 4.7% 4.4%

6.1.2 Tactical Cost Control Our plan is to deliver £9.5m worth of savings over the next two financial years through tighter cost control and cost avoidance measures by focusing on:

• Changing how we procure our services to a more effective and efficient model which will deliver significant savings

• Better demand management of referred tests in pathology/radiology • Reducing costs pressures through our existing agreements and service level agreements • Reducing our expenditure of medicines and taking advantage of technical market adjustments • Reducing our insurance premium exposure

30

6.1.3 Workforce Our plan is to realise £4.2m of savings over the first two financial years through tighter workforce planning and control measures which will focus on:

• Reducing our overall dependence of bank, agency, locum and overtime costs • Improving medical productivity and gaining through reductions in costs from waiting list initiatives • Redesigning how we provide admin support across our medical specialities and realising productivity gains

as well as cash • Improving our overall medical productivity through better use of skill mix and resource allocation • Improving our global approach to workforce planning, introducing new initiatives such as apprenticeships

and international recruitment where it makes sense to do so 6.1.4 Operational Productivity We have identified achievable opportunities for improving operational productivity which is worth £6.1m in the first two years of our planning cycle by improving theatre and bed use and also redesigning outpatient activity.

Year 1 Year 2

Improving Theatre Utilisation to generate income, reduce costs and improve efficiency

Generate greater throughput Provide more surgery in right place at right time Initiative better demand management procedures to reduce costs Increase day case procedures

Expansion in to additional capacity to continue to generate income

Improving Bed Utilisation to reduce costs and drive efficiency

Reduce escalation beds Close one ward to release income Redesign patient flow through the hospital

Close a further ward

Outpatient redesign to better match demand to capacity

Reduce waiting list initiatives Reduce DNAs Reduce new to follow ups Improve consultant job planning and productivity Modernise how patients flow through Outpatient Departments Introduce a series of nurse led and virtual clinics

Scheme initiatives continue through year 2

6.1.5 Lean & Technology Our plan is to realise £1m of savings over the first two financial years through the introduction of new systems, improving workflows and improving better coding and as such we will focus on 10 priorities:

• Introducing electronic document management systems which will reduce staffing costs within some medical areas

• Introducing real time patient workflow systems in order that patient arrivals, transfer and discharged are tracked centrally, which will reduce staffing cost wastage on tracking patient information

• Introducing a demographically targeted appointment reminder process to reduce DNAs • Introducing mobile access for mobile services which will reduce travel time for frontline staff accessing

systems • Introducing automated discharge workflows which will transform our discharge planning process through

better co-ordination • Improving the recording of activity through more robust procedures for data entry • Introducing quality reporting systems in order to help reduce 30 day readmission costs • Introducing electronically enabled prescribing and medicines management systems to provide connectivity to

GP Practices • Consolidating diagnostic test ordering in order to reduce duplication • Introducing self-service business intelligence systems

6.1.6 Strategic service redesign Our plan is to generate around £2.5m worth of new income to the Trust with at least £500K contribution over the next two years whilst also developing service line management capability within the Trust as a vehicle to leverage greater margin on individual service lines through years 2-4. We have a detailed work programme in place and a high level this can be summarised in the following table.

31

Initiative Description

Collaboration

Develop formal collaborative partnership with GP consortia within Halton CCG area Develop formal collaborative partnership with private outsource provider to improve surgical income Develop formal collaborative partnership with GP consortia in Western Cheshire CCG area

Tender Award Establish provider consortium with St Helens and Knowsley to enable partnership bid for GUM community services across mid-Mersey

Repatriation Establish Private Patients activity income stream

Internal Process improvement

Roll out Service Line Management and enhanced business planning processes to ensure greater capability across the Trust to exploit opportunities

Marketing and Territorial Gain

Establish re-branded and marketing programme for CMTC to generate additional income Seek partnership opportunities to increase income at CMTC

Charitable Funds Develop charitable funds strategy and market opportunities to generate additional revenue 6.1.7 Transformational programme governance arrangements The Innovation and Cost Improvement Committee is effectively the steering group for the transformation programme. Its prime role is summarised below:

• Co-ordinate the delivery of the Transformation programme • Ensure that change proposals are assessed in terms of the impact on service quality. • Promote a culture of innovation in practice across the organisation • Promote all activities relating to innovation and change, including the Choices project, NHS innovations and

work with NHSIQ. • Review and appraise business cases for quality/service improvement in order to advise the Hospital

Leadership Team on those with practicable application. • Secure effective cross-Division, multidisciplinary working on cross-cutting themes and issues. • Tracks progress with implementation

Prior to transformation schemes being implemented they are assessed to ensure that they are: • Financially deliverable • Have measures in place to ensure that clinical safety is not compromised and the quality impact is

32

• understood • Have evidence of staff engagement or be able to show how wider input will be gathered during more • detailed work to shape delivery

For all schemes, a formal project initiation document (PID) is expected to be created. The PID includes Monitors quality impact assessment (QIA) and a summary of outcomes required from the change that are deemed as critical to the quality of any revised pathway or process. The Quality Assurance process is designed to identify prior to CIP implementation the risks from a financial, quality and delivery point of view, and follow-up during implementation to monitor any unintended consequences.

6.2 Modernisation programme

We have developed a programme of work, designed to support our Divisions to undertake a detailed analysis of individual service lines/specialities to test for long term sustainability and where necessary develop plans to address any areas of weakness. We will use the Monitor sustainability tests to ensure the strategies are developed to deliver services which are clinically, operationally and financially sustainable, and which provide a high quality experience for our patients. The underpinning demand and activity projections to support our strategic analysis will be jointly agreed with our commissioners and we will continue to engage with key stakeholders to inform and challenge our analysis and strategic options. It should be noted that we have reviewed the specialties the Trust offers that could potentially be divested from so as to minimize loss. Using SLR data we compiled data for all specialties (including by points of delivery) where the service is either not core or is a significant loss maker; split costs into fixed, semi-fixed and variable with a ratio of 2:7:1 respectively (this is an approximated average); assumed costs from divestment would reduce the cost base at a rate of 0% of fixed, 50% of semi-fixed and 100% of variable costs; and then compared this to the income leaving and hence an estimated profit / loss position from divestment was compiled.

We have concluded that divestment from an entire specialty would be unprofitable. If broken down by point of delivery, divestment can be marginally profitable in only three services, however, these gains are so small that it would be impractical to do so. It is still true that the trust does not serve a large enough population to operate a full service in some specialties and as such it will need to collaborate and/or consider trading services in the future. As part of our planning process we also ran a clinical service options review which explored opportunities to collaborate, leverage technology and integrate services to create a viable portfolio of services. Specifically it: explored opportunities to collaborate, integrate pathways of care and further service transformation opportunities (both clinical and non-clinical) in the Trust using a SWOT analysis with each of the Divisions; tested opportunities with external stakeholders such as Bridgewater Trust, commissioners, other acute Trusts as appropriate; and finally tested service viability options within the Trust. To enable the development of service line strategies and ensure a consistent approach we have classified our portfolio of services against the following areas and identified the following high level strategic options:

Service Line Strategy

Unscheduled Care

Scheduled Care

Women’s, Children’s & Support Services

Invest • • Divest Redesign • • • Partner • • •

The Clinical Service Strategy builds on our vision to the most clinically and financially successful healthcare provider in the mid Mersey region and alongside our Quality Strategy is the means by which we will drive sustainable quality improvement. By engaging with our patients, staff, commissioners and local communities our Clinical Services Strategy will provide the framework by which we review each of our clinical services, developing them as necessary, forming partnerships with other providers where this provides the best model of high quality care and occasionally withdrawing from provision of a local service. The strategy will also identify any areas where we believe we could offer a better service than other providers so will also highlight new areas in which we could provide health care. It is expected that the Clinical Services Strategy will be summarised by the end of Q2 2014, reviewed and prioritised by the end of Q3 and implementation to follow thereafter. The current split of the draft strategies suggest that many of the services will be redesigned to fit with the needs of the services and this plan is congruent with the aims and the challenges of the organisation.

33

6.2.1 Unscheduled Care Strategy Our strategic focus within our unscheduled care division will be on restructuring the delivery of urgent and emergency healthcare provided by the Trust given that our commissioners, through the Better Care Fund, are seeking significant reductions in not just emergency attendances but also admissions. However, the division comprises a much wider array of service lines than just the emergency department and we have developed a wide range of developments for modernisation across the full spectrum of divisional activity as part of the divisional clinical service strategy.

Dependencies Key

C = Commissioner W = Workforce A = Acute Partnership E = Capital & Estates I = IM&T T = Internal Partnership B = Community Partnership

Specialty Objective Strategic Option Dependencies Year

Accident & Emergency

To be recognised as the emergency centre for the mid Mersey geographical area

Partner C, A 1 - 5

Develop Ambulatory Care at the Warrington and Halton sites and ensure Halton is part of Urgent Care Centre

Partner C, T, B, A 1 – 2

Develop frail elderly pathway to prevent / shorten hospital admissions

Partner B 1

To develop integrated pathways for patients with surgical / orthopaedic presentations, including maintaining trauma unit status

Redesign T 1

To develop strong and sustainable nurse leadership by enhancing roles

Redesign W 1 – 2

Older People’s Service

Develop Older People’s Assessment and Liaison unit (OPAL)

Invest & Redesign

C, B 1

Develop a model of care for all patients with Dementia across the Trust

Redesign W, B 1

Develop a discharge model which ensures that people stay in hospital for only the most clinically appropriate time

Redesign C, B 1

Develop care co-ordination and integrated care model

Redesign & Partner

Commissioners 1 & 2

Stroke Services

To be recognised as a centre of excellence for Stroke services in the mid Mersey geographical area working in collaboration

Partner A 1 - 5

Develop in reach Early Supportive Discharge model in Halton

Partner A, B, C 1 - 3

Complex Discharge

Develop new discharge planning model so people stay in hospital only for the most clinically appropriate time

Redesign C, B 1 - 2

Diabetes and Endocrinology

Develop the service into a ‘preferred provider service’

Redesign T, C 1 - 3

Palliative Care

Re-model the service to deliver a cutting edge service across secondary and primary care

Redesign C 1 - 5

Develop robust and accurate discharge data system

Redesign I 2 - 3

Cardiology Develop local PCI service Partner C, A 2 - 3 Development of Cardiology Imaging Service Invest I 1

Respiratory

Rationalisation of pleural procedures Redesign T 1 Implement Bronchial Ultrasound service Redesign &

Invest C 1 - 2

Develop Community Spirometry Redesign & Invest

C 1 – 2

Develop Respiratory Palliative Care service Redesign C 1 - 2

Gastroenterology

Development of Upper GI/HPB Cancer services Redesign C 1 - 3 Develop 7 Day Gastroenterology service including invasive and non-invasive diagnostics, direct access, new pathways and new skills profile

Redesign & Invest

C, I 1 - 3

34

Endoscopy Develop 7 Day Endoscopy service with direct access and access across Warrington and Halton sites

Redesign C 1 – 2

6.2.2 Scheduled Care Strategy Our strategic plans for our scheduled care division will involve modernising the delivery of elective healthcare provided by the Trust. The Trust is fortunate to be in a position to have additional capacity, which will provide opportunities for expansion and growth in some areas. However, modernising what we do and where we do it will also be critical.

Dependencies Key

C = Commissioner W = Workforce A = Acute Partnership E = Capital & Estates I = IM&T T = Internal Partnership B = Community Partnership

Specialty Objective Strategic Option Dependencies Year

Cross cutting

Develop Halton as an elective centre of excellence Redesign & Invest

W 1 – 5

Fully implement SLM model of management Redesign W 1 - 2 Redesign admission processes to improve patient experience

Redesign W,T,I 1

Develop CMTC as a commercial private surgical facility and opportunity

Redesign T 1 – 5

T&O Become the primary provider of spinal services for the Cheshire market

Invest C, W 1 - 3

Develop sports medicine service Invest T, W 1 – 5 Vascular Develop integrated diabetic foot and wound care unit Invest C 1 - 2

Ophthalmology Develop Warrington as a centre of excellence for Ophthalmology with satellite services at Halton

Invest C 1 - 5

6.2.3 Women’s, Children’s & Support Services Strategy Our strategic plans for our Women’s, Children’s and Support Services Division will involve modernising the delivery of care provided by the Trust whilst redesigning some areas in order to diversify into new sectors, such as community service provision. However, modernising what we do and where we do it will also be critical.

Dependencies Key

C = Commissioner W = Workforce A = Acute Partnership E = Capital & Estates I = IM&T T = Internal Partnership B = Community Partnership

Specialty Objective Strategic Option Dependencies Year

Maternity & Gynaecology

Develop a maternity one to one service Redesign C 1 - 3 Develop Halton community midwifery service including an MLU

Redesign & Invest C, B 2 – 4

Develop local TOP Service Partner C 1 – 2 Development of Myosure Service Redesign & Invest C 2 – 3

Radiology

Develop community based Radiology in Urgent Care Centres

Partner C, W 1 – 2

Expand MRI capacity Invest T 1 Retain viable IR Service Redesign W 1 – 2 Expand radiology services into identified peripheral areas

Redesign T 1 – 2

Paediatrics Develop community based paediatric service Redesign & Invest C 2 Increase paediatric surgery market share Invest T 1 – 5

Sexual Health

Become the leading provider of integrated sexual health services in mid-Mersey and Cheshire

Partner C 1 – 4

6.2.4 Strategic Collaboration The Trust will also continue to explore potential opportunities for collaboration (partnership / joint venture) with other providers in the local health economy as this will still be important to achieve further efficiencies, improve the quality of services provided to patients an d ensure clinical service stability resulting from ever increasing pressures from sub specialisation.

35

In 2014 we will establish a provider-led clinical development forum with neighbouring acute Trusts to explore how collectively the medical directors and senior clinical leads believe that the challenges nationally will change how to take the service forward and what should be done in a collaborative way in order to respond to the likely outcomes of the mid-Mersey strategic review. We recognise that it is inherently difficult to implement collaborative opportunities without a strong programme infrastructure aligning people and organisations behind joint goals. Therefore, we will establish this infrastructure during FY 2014/15 as our acute provider Joint Partnership Board. There is a willingness from neighbouring providers to co-operate. This will enable a targeted alliance to develop in order to get the benefits of collaboration but without the loss of autonomy required by merger/acquisition. Our initial testing with our commissioners indicates that they are supportive of this approach. We envisage that this will lead to the development and/or exploitation of clinical network models / hub and spoke arrangements / federated service models / alternative service provision and we will start by exploring opportunities around stroke and cardiology services. In essence we see an end outcome being the establishment of Health Care Groupings arrangement - an overarching legal structure to support a more collaborative management model of acute service provision. This will leverage new opportunities to reduce acute sector costs and drive through efficiencies whilst also bringing about quality and safety improvements throughout the LHE but it may not bridge the LHE sustainability gap and therefore we will also establish our strategic step change programme. However, we have also commenced early discussions with two neighbouring tertiary providers to explore the possibility of strengthening services clinically and locally. These relate specifically to potential new partnerships with firstly, The Walton Centre to ensure better local access to specialist spinal treatments and secondly, Alder Hey around paediatrics. We are also entering into discussions with neighbouring acute Trusts in Manchester regarding capacity although these remain at an even earlier stage of discussion.

6.3 Strategic change programme

“Rather than uncritically adopting the merge and centralise as our overriding ‘meme’, let’s go with ‘horses for courses’. In some places mergers and traditional reconfigurations will – after careful stress testing – clearly be needed, and they will have NHS England’s full support. But let’s also allow complementary models to emerge, be tested, and adapt over time, in different communities, reflecting their different legacy care patterns and the heterogeneity of their patients.”

Simon Stevens, Chief Executive of NHS England NHS Confederation, June 2014

With a focused programme of transformation and efficiency the Trust is financially viable – but there are risks in the medium to long term which will create additional challenges for the Trust and therefore, strategic change is likely in the long term. As a consequence the Trust will continue as a standalone entity seeking to achieve greater efficiency and reduce losses over years 1 and 2 of its strategic plan, breaking even in year 3 and generating a small recurrent surplus thereafter. However, the Trust also recognises the changing nature of the environment and even at the time of developing this strategic plan, new national policy appears to be developing with the arrival of a new Chief Executive for the NHS. In his first speech to the NHS Confederation in June 2014, Simon Stevens said he wanted to “tear up” silos between primary, secondary and community services. He reiterated that, while in some cases services needed to be concentrated, he believed in others they could be redesigned to make facilities such as district general hospitals more viable. Locally our commissioners are united behind a common set of principles – reduce the reliance on acute-based care in favour of the development of new systems that integrate care, make it more convenient to access for people and lower the per capita costs. We are already working with Halton on the development of Urgent Care Centres and we will continue to support that with a view to achieving most activity deflection back into community settings. However, in Warrington the CCG has identified its stated aim as being to establish a new networked model of care based on the development of a new community infrastructure, which it describes as its Primary Care Home Model.

36

As a Trust we too are serious about reducing the cost of care and better managing services in a way that ensures they are safe, high quality, integrated and sustainable in the long term – this is what we believe is our core purpose.

So recognising the likely need for strategic change indicated through all of our LHE assessment and analysis, we have as a Trust started to consider our strategic options and have explored opportunities to integrate services. This early review work has been supported by Ernst & Young and has enabled the Trust to consider a range of strategic change options including divesting in emergency surgery, developing urgent care centres and centralising obstetrics and gynaecology. The options we identified through this process are outlined in the table below.

Option Description Dependencies Become a Sub Acute Centre

• The Trust to identify those services that cannot be safely provided going forward and work with commissioners to seek strategic partnerships.

• A ‘local hospital model to be developed possible services include urgent care, diagnostics, day case, out-patient, ambulatory, step down care and levels of surgical and medical activity to be determined

• The model could include some vertical integration with community, social care and primary care services

• Close working with commissioners and other providers is essential

• Other providers willing to take on the provision of ‘hot’ services

• Public and political acceptance • Infrastructure for delivery with separate

organisations • A business case would be needed to

demonstrate whether a viable stand-alone option could be developed or whether merger or acquisition of/with a partner is necessary to produce a viable, safe and sustainable clinical model

• Support from Monitor and TDA would be needed to progress.

Become an Integrated Care Organisation

• A Trust providing a range of acute, community and social care services with the emphasis on pathways

• The range and nature of acute services will be determined by critical mass and clinical safety

• Shared vision with commissioners willing to change current service models

• Requires an Integrated vision with local social care providers

• Cultural shift for traditional acute providers • Future of Bridgewater as an FT • A business case would need to test whether a

standalone viable model could be developed or whether merger/acquisition would be necessary

• Local Authority support

37

DGH with tertiary services

Become a DGH with tertiary services • Trust to have reputation and skill set to deliver the service or collaborate with another local trust to deliver

• No tertiary services at the moment – would be difficult to establish in this market given the large number of specialist centres both towards Liverpool and towards Manchester

• Changes in commissioning of specialist services is unlikely to create opportunities for market entry

Hot/Cold site model with another acute Trust

• Provide the maximum range of ‘cold’ services usually Urgent care, some limited elective surgery, day patients, out patients, diagnostics. Could also include services that do not need to be located on the ‘hot’ site such as Obstetrics/Breast. These services would need to provide for a larger population base beyond the WHFT boundaries

• The link with another centre could offer the opportunity for ‘cold’ provision to serve a larger population base

• Could include some community/social care integration

• A willing partner prepared to provide ‘hot’ services and transfer provision of some cold services to the WGH site.

• Geography/distance could influence the extent of potential clinical collaboration

• Commissioner support • Public/political acceptance • Potential merger/acquisition

Hot and Hotter Model

In collaboration with another organisation both with A&Es but one site hotter than the other. This tends to be an option on the journey to a hot and cold model.

• Close working relationships with other providers potentially leading to merger/acquisition

• The business case would need to explore the future medium and long term sustainability of the model

• This may be a transition phase - on a journey to hot and cold

From the strategic options considered two have emerged as likely to be viable in the future, either the development of an integrated care model with the Trust at the heart of it or integration with another acute provider to either create a ‘hot and hotter’ model or a ‘hot and cold‘ acute model. Given the stated aim of introducing new models of care in the community, such as a Primary Care Home model in Warrington, and the focus on 10 areas of pathway change and adjustment by our commissioners, the development of an integrated care model, is the Trust’s preferred option. We are committed to reinventing the model of district general hospital provision and firmly see an opportunity to think about a ‘hospital without walls’, which aligns to our lead commissioner aspirations for its health system. We have therefore agreed to start the redesign process with the Lead Commissioner and assess and implement benefits of pathway integration across the acute, community and social care. In this way we can achieve a joint provider - commissioner view of potential quality improvements and cost efficiencies e.g. reducing hospital length of stay over the long term. We believe the benefits for patients are significant. However, we recognise that progress to prosecute strategic change depends on wide scale support outside of the Trust and thus is dependent upon a variety of factors outside of the Trust’s control. The development of a robust case for change will be required and we will work with our commissioners on the development of this throughout the next two years. We intend to do this through a Local Health Economy-wide Transformation Board which we call the Integrated Transformation Board. This is commissioner driven and will need to develop an agreed work programme during 2014, however, it is now firmly established as a system-wide board, aligning all organisations - providers and commissioners - to a common vision and agenda around the creation of integrated, person centre care. We believe this approach to be congruent with the latest thinking, nationally; Monitor’s latest publication, ‘Facing the future: smaller acute providers’, June 2014, sums up the situation facing the Trust neatly:

38

“The NHS as a whole needs to prepare for the expected changes by identifying new models of care. This may mean smaller hospitals working differently with community providers to deliver better out-of-hospital care, or exploring new ways to integrate primary, community and social care with lower risk urgent and elective care. This will call for a creative approach…New approaches will have to take account of the constraints facing the healthcare sector. They will need to consider whether the right balance is struck between risks to quality of care and risks to access to care, for example, and the impact of greater clinical specialisation, workforce shortages or effects of payment systems on smaller providers. The right approach will vary according to local circumstances. For example, in rural and remote areas questions of access may be of particular importance”.

6.4 Risks and mitigation

We have considered in detail the potential risks in relation to our strategic plans. These are captured within our Board Assurance Framework and Risk Registers but can be summarised as follows:

Ref Risk Implications Mitigating actions

1 There is a risk that the identified annual CIP targets are not achieved

Increased financial challenge for the Trust

• Ensure a robust programme is set up with regular review and appropriate governance and reviews

• Ensure initiatives are appropriately resourced and supported

2 There is a risk that the medical professionals within the Trust do not cooperate with the Medical Productivity project

• Disruption to the Medical Productivity project

• Limited benefits achieved by the Medical Productivity project

• Ensure open and honest communication with Medical Professionals

• Involve Medical Professionals in Programme set up and management

• Robust programme structure and governance

3 There is a risk that the partners identified for collaboration do not have the same views on the appropriate way forward

• Impact on Trust’s future strategy

• Limited benefits achieved by Service Transformation

• Hold appropriate conversation with the right people at the right time

• Be honest in communications • Health Summit

4

There is a risk that the Trust does not maximise its potential benefits from collaboration i.e. it enters a relationship too early, for the wrong reasons or without a full picture of its impact

Limited benefits achieved by Service Transformation

• Ensure there is a clear Trust Strategy that the whole organisation is bought into

• For major change business case and engage stakeholder early

• Clear management of Service Transformation programme

5

There is a risk that the Trust is unable to run and sustain a full Clinical Service Modernisation programme with its current resources

• Disruption to programme delivery

• Lack of key decisions made

• Limited benefits achieved by Service Transformation

• Undertake clear resource planning for all projects

• Ensure appropriate leadership and governance is in place for all projects

6 There is a risk that the organisation is reluctant to change and / or is unable to change at the required speed

• Demoralisation of staff • Negative impact with

potential partners • Limited benefits achieved

by Service Transformation

• Ensure open and honest communication with staff

• Implement robust change management approach

6.5 Communication plan

Our plans present some significant challenges and in order to gear up for those challenges we have recruited a new senior manager with significant experience to lead our overall communications, marketing, strategy and commercial development functions. We are clear that our strategic plan is about “securing our future”. In order to achieve that we need to focus on

• Transforming and modernising urgent and emergency healthcare • Modernising and developing excellent elective healthcare

39

• Delivering increasing amounts of community based care.

In order to achieve these three priorities we have designed three programmes over the next five years:

• Transformational programme • Modernisation programme • Strategic change programme

Effective delivery of the overall strategic plan will require us to adopt a range of communications support work. We have developed an integrated programme across four technical disciplines which are summarised in the table below.

Programme Area Focus

Internal communications

• Creating the narrative and communicating the journey to all of our staff as we travel on it • Developing new opportunities for staff to become involved with and engaged in the design

and development of new models of care

Reputation management

• Creating the narrative and communicating the journey to all of our staff as we travel on it • Outwardly communicating the positive aspects of the Trust and it’s activities and plans

whilst managing any negative impacts upon this from other places

Stakeholder management

• Creating the narrative and communicating the journey to all of our staff as we travel on it • Tailoring our communications efforts specifically to the precise needs of our different

stakeholders according to their specific areas of interest • Managing our stakeholders unique communications needs such that we proactively bring

our core stakeholders along with our journey at the right pace

Marketing

• Developing a unique, differentiated brand identity • Establishing our market positioning • Promoting service line choice on a B2C and B2B basis

40

7 Financial and investment strategy The Trust has a financial strategy that moves the position from a planned deficit of £1.5m in 14/15 to a planned surplus of £2.0m in 18/19, whilst ensuring that it invests in services and infrastructure necessary to support the delivery of high quality, safe integrated healthcare to all our patients every day. The Trust recognises the significant financial challenge the NHS faces over the next five years, so the plan represents a realistic assessment of anticipated performance whilst accepting the need to meet patient demand and expectation, commissioner changes, efficiency requirements and remain financially sustainable. The headlines for the 5 year planning period are summarised in the table below:

Narrative 14/15

£m

15/16

£m

16/17

£m

17/18

£m

18/19

£m

EBITDA 8.8 9.6 11.0 13.0 14.4

EBITDA margin 4.1% 4.5% 5.1% 6.0% 6.7%

Surplus/(Deficit) (1.5) (1.0) 0 1.0 2.0

Cost Savings Target 11.9 11.5 9.5 10.0 9.5

Capex 9.9 14.3 9.0 4.6 4.6

Cash balance as at 31st March 6.7 6.9 9.1 11.9 15.9

Continuity of Services Risk Rating 3 3 4 3 4

7.1 Review of 2013/14 The Trust faced many financial challenges in 13/14 and ended the year with a deficit of £2.8m (including the impact £0.7m impairment costs) which is made up of an underlying deficit of £4.5m less £2.4m non recurrent financial support and income streams. The year end position is summarised in the table below:

Narrative Plan

£m

Actual £m

Variance

£m

Surplus/(Deficit) 1.2 (2.8) (4.0)

Less impairments 0 0.7 0.7

Surplus/(Deficit) excluding impairments 1.2 (2.1 (3.3)

Continuity of Services Risk Rating 4 3 (1)

Cash balance as at 31st March 2014 14.0 13.0 (1.0)

7.2 Approach to planning The trust recognises the need for the local health economy to align both operational and financial plans so a joint approach has been taken with Warrington and Halton CCGs to ensure that there is general alignment in the construct of the activity flows to reflect the demographic and non demographic changes. This has resulted in growth of 2% per annum from 16/17 onwards for all categories with the exception of non elective activity which is factored in at zero growth. It is anticipated that the trust will gain a 25% contribution from this additional activity to support the cost savings target. The Trust has agreed a contract with all commissioners covering 14/15, which accounts for 95% of total healthcare income and 87% of total income. Generally, contracts are based on an agreed forecast outturn and agreed service and demand changes which align with commissioning intentions. There are a number of service developments and

41

repatriation plans that are not included in the contract baselines but will increase income flows at the appropriate stage in the year. 7.3 Tariff and Inflationary Structure The plans are based on a national efficiency requirement of 4%, with the exception of 15/16 which is calculated at 4.5% to account for the pensions revaluation. The construct of the national efficiency requirement is summarised in the table below:

Narrative 14/15 15/16 16/17 17/18 18/19

Inflation 2.5% 3.2% 2.5% 2.5% 2.5%

Tariff deflator 1.5% 1.3% 1.5% 1.5% 1.5%

Efficiency requirement 4.0% 4.5% 4.0% 4.0% 4.0%

These efficiency requirements (above) do not take into account any local factors, such as:

• Changes to planned surplus / deficit • Interest charges resulting from the repayment of the loan for the estates rationalisation programme. • NHSLA additional premium increases. • Cost pressure resulting from the transfer of vascular services to the designated hub.

The summary income and expenditure position over the five year period is summarised in the table below:

Narrative 14/15

£m

15/16

£m

16/17

£m

17/18

£m

18/19

£m

Income 213.8 215.0 214.9 214.9 214.8

Expenditure (205.0) (205.4) (203.9) (201.9) (200.4)

EBITDA 8.8 9.6 11.0 13.0 14.4

EBITDA margin 4.1% 4.5% 5.1% 6.0% 6.7%

Non operating Income and Expenses (10.3) (10.6) (11.0) (12.0) (12.4)

Surplus/(Deficit) (1.5) (1.0) 0 1.0 2.0

7.4 Cost Savings In order to meet the planned deficits and surpluses over the five years and support the capital programme it is necessary to achieve recurrent cost savings of £52.4m over the period. The cost savings themes are structured around tactical, transformational and revenue generation opportunities (see section 6.1 for details) as described in the table below:

Narrative 14/15

£m

15/16

£m

16/17

£m

17/18

£m

18/19

£m

Tactical 6.2 2.3 3.3 3.3 2.1

Lean & Technology 0.5 0.5 0.5 0.8 0.8

Workforce and productivity 4.3 7.0 4.4 3.9 4.6

Estates rationalisation 0.0 0.3 0.6 0.8 0.8

42

Organisational reconfiguration 0.0 0.0 0.0 0.5 0.5

Service Expansion 0.9 1.4 0.7 0.7 0.7

Total 11.9 11.5 9.5 10.0 9.5

7.5 Capital Expenditure The capital programme underpins the trust mission, vision and values and requires investment of £42.5m over the next five years. This includes the balance on any schemes commenced in 13/14 that will be completed in 14/15. All capital schemes for 14/15 have been subject to detailed capital plans that have been risk rated, assessed and prioritised by the trust to ensure that the use of resources is used as efficiently and effectively as possible. The trust has embarked on an estates rationalisation programme that has been defined as Phase 1 and Phase 2. Phase 1 essentially covers non clinical estate and Phase 2 covers the clinical estate. The trust has engaged Kier Health to support this work and based on the preliminary work completed by Kier Health last year Phase 1 of the programme requires capital investment of £15.0m but achieves revenue savings of approximately £1m per year. The work on compiling a full business case is due to start in 14/15 but the financial plans have been constructed on the basis that the capital investment is to be funded by a loan drawn down over a three year period and repayments commence in 16/17. Although some scoping work has been undertaken by Kier Health in respect of Phase 2 of the programme, definite costs or timescales are not yet available so nothing has been included in the strategic plan.

Narrative 14/15

£m

15/16

£m

16/17

£m

17/18

£m

18/19

£m

Estates 6.4 10.6 6.0 1.6 1.6

IM&T 2.5 2.2 1.5 1.5 1.5

Medical Equipment 1.0 1.5 1.5 1.5 1.5

Total 9.9 14.3 9.0 4.6 4.6

7.6 Continuity of Services Risk Rating The challenging financial position means that the trust is planning to achieve a risk rating of 3 in 14/15 and 15/16 rising to a risk rating of 4 in 16/17. The start of loan repayment for the estates rationalisation programme in 17/18 results in the risk rating reducing to 3 before increasing to 4 again in 18/19.

Narrative 14/15 15/16 16/17 17/18 18/19

Capital Service Cover 3 3 4 3 4

Liquidity 2 2 3 3 4

Overall Risk Rating 3 3 4 3 4

7.7 Liquidity The challenging financial position and planned deficits in 14/15 and 15/16 reduce the closing cash balance to £6.7m and £6.9m respectively. The difficult cash position means that there will be an increased focus on cash management over the period, especially on working balances. However as the trust moves to a planned £2m surplus and a reduced capital programme means the cash increases to a planned balance of £15.9m by 31 March 2019. Clearly any increases in the capital expenditure will reduce this cash balance.

43

The annual closing cash balances are summarised in the table below:

Narrative 14/15

£m

15/16

£m

16/17

£m

17/18

£m

18/19

£m

Closing Cash Balance 6.7 6.9 9.1 11.9 15.9

7.8 Transactions There are no planned transactions that fall within the definition of a transaction in line with the Trusts constitution that is based on the thresholds contained in the Risk Assessment Framework.

44