CHAIRS AND CHIEF EXECUTIVES NETWORK

9 June 2016

Chris Hopson Chief Executive

Contents

01 FINANCES & PERFORMANCE

02 PLANNING

03 REGULATION

04 WORKFORCE

05 NEW CARE MODELS

06 NHS PROVIDERS UPDATE

Things that have changed since we last met

2015/16 closes with a £2.45bn / £3.3bn deficit and 65% of

providers in deficit; 2016/17 control

total exercise round two; £22bn plan

“unveiled”

Second cut of place-based STPs being

developed & a new strategic framework

for specialised services

Government and junior doctors

committee reach initial agreement on

contract with growing questions

over implementation

impact

New care models sees large funding cuts for vanguards

and new programmes for maternity, U&EC, cancer and MH,

diabetes

New CQC strategy unveiled and NHSI

oversight framework to

shortly be unveiled

A lot going on across a range of different fronts

Struggle through 16/17… but 2017-21 U-Bend is coming

It looks like we will just struggle through 2016/17, the

supposed year of plenty…

…but current profile of additional NHS funding, increasing activity and new policy

commitments leads to crunch period in 2017/18 – 2020/21

3.7

1.3

0.3 0.7

1.3

0

1

2

3

4

2016/17 2017/18 2018/19 2019/20 2020/21

% in

crea

se in

NH

S Bu

dget

Contents

01 FINANCES & PERFORMANCE

02 PLANNING

03 REGULATION

04 WORKFORCE

05 NEW CARE MODELS

06 NHS PROVIDERS UPDATE

System under sustained operational pressure 98% 92% 91% 88% 86% 83% 82% 80% 77% 75% 73% 67%

97% 92% 90% 88% 85% 83% 81% 80% 77% 75% 73% 66%

96% 92% 90% 88% 85% 83% 81% 80% 77% 75% 73% 66%

95% 92% 90% 87% 85% 83% 81% 80% 77% 75% 73% 64%

95% 92% 90% 87% 85% 83% 81% 80% 77% 75% 73% 64%

94% 92% 90% 87% 84% 83% 81% 79% 77% 75% 72% 63%

94% 91% 89% 87% 84% 82% 81% 79% 77% 74% 72%

94% 91% 89% 87% 84% 82% 81% 78% 77% 74% 71%

94% 91% 89% 87% 84% 82% 81% 78% 76% 74% 70%

92% 91% 89% 86% 84% 82% 80% 78% 76% 74% 69%

92% 91% 88% 86% 84% 82% 80% 77% 76% 74% 68%

92% 91% 88% 86% 84% 82% 80% 77% 76% 73% 67%

% seen in 4

hours

Type 1 A&Es

Q4 2015/

16

Source: NHS England

Worst A&E performance figures since the standard was introduced – 4Q 87%

Ambulance services under sustained demand and performance pressure

Elective operations cancelled

District nursing and health visiting

caseloads increasing just as contracts come up for tender

Mental health referrals increasing

System under sustained operational pressure

Seven year growth figures @ Norfolk and Norwich UHFT. Demand doubling over 15-20 years

And traditional levers no longer available

2016/17 NHS strategic financial framework Initial plan • Use 3.7% frontloaded settlement to eliminate provider

deficits and start 5YFV transformation • £1.8bn 15/16 provider deficit; £2.1bn sustainability /

transformation funds; £3.5bn CCG uplift; sensible tariff

Reality – what’s changed • Worse than planned 15/16 year end provider deficit:

£2.45bn / £3.3bn • Commissioning finances under pressure: loss of NHSE

surplus and HMT control over CCG 1% non recurrent • Contracting round therefore far tougher than expected • Providers hit by combination of 16/17 starting point;

ongoing pressures; tough contracting round; impact of cuts to wider DH budget etc (e.g. CQC fees; JDC costs)

• DH refuses to carry on being banker of last resort • Therefore, major current arm wrestle over 2016/17

provider / commissioning financial balance • STF: £1.8bn sustainability, £0.3bn transformation:

supporting provider deficits not transformation

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwisq6Sqr5DNAhUjBMAKHQe1DfUQjRwIBw&url=https://www.yumpu.com/en/document/view/54913523/delivering-the-forward-view-nhs-planning-guidance-2016-17-2020-21/7&bvm=bv.123664746,d.ZGg&psig=AFQjCNFYjhRYPSd1qfFcOcN2mzHJO-5vxg&ust=1465198341492117

Conflicting system level views on how to manage 2016/17 “Nail down providers” view “Support providers and be realistic” view

Individual providers responsible for provider deficit

System responsible for provider deficit

Must use 2016/17 year of plenty to eliminate deficit & recover performance

Be realistic about 2016/17 finances and performance given pressures

Individual control totals and performance trajectories must, in aggregate, eliminate deficit & recover performance

Individual control totals and performance trajectories must be achievable to create a credible framework

Every Board must have control total and performance trajectory, at required level to deliver aggregate, mandated if needed

Control totals and performance trajectories only work if deliverable and provider boards own them

Provider Boards must be held to hard account, up to and including removal, if they miss a quarterly milestone

Providers need support and accountability that recognises factors beyond their control, 16/17 starting point & overall environment

Strong, recent, last six weeks, direction of travel

16/17 finances: best guess on what happens next

Control totals • 139 signed up in February; a further 80-ish signed up in May following slight

sweetening exercise, particularly aimed at community and mental health • Pressure on remaining to follow suit, individual follow up • Those with high year on year pay bill increases will be asked to cut these back

Performance trajectories • Strong emphasis on back loading trajectories to Q4 to minimise Q1-3 trajectory misses • Indemnity if trajectory missed due to circumstances clearly beyond control • Scope to get back on track in later quarters if you miss a quarter

Accountability • Difficult to predict how hard accountability will be: • NHSI leadership determined to be reasonable and supportive; • Centre of Government desperate to regain control; • NHSE seriously worried about ability to balance off any provider deficit and want to

invest in transformation, not provider deficits.

Provider / commissioner /overall financial balance • NHSI currently targeting provider sector -£500m in 2016/17. We think end 16/17 looks

like -£500m to -£1 billion • Brexit prevents more aggressive timely 16/17 plans so recoup -£500m in 17/18 • Commissioners need to generate at least £500m surplus to cover provider deficit • CCG 1% non recurrent (£800m) used as contingency

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiyqcmPspDNAhXsA8AKHdSDCrcQjRwIBw&url=http://www.scientificpsychic.com/tarot/crystal-ball.html&bvm=bv.123664746,d.ZGg&psig=AFQjCNGBFIoD3jX3CaGI3wOhysvsHD2K4w&ust=1465199091560056

The coming U bend – DH spend by head of population

Source: The Health Foundation, Nuffield Trust and Kings Fund ‘The spending review: what does it mean for health and social care?’ December 2015

Lack of focus / in denial • Been busy with difficult 2016/17 and traditional focus on year ahead • “It’s the run up to the election they’ll have to put more money in” The Reality • Impossible to get through U Bend on current trajectory, given:

Financial starting point Rising demand and cost No flexibility on current service offering Extra policy commitments £22 billion savings plan will clearly not deliver

What we’re asking for • Decide right now whether you mean the U bend or not • If you do, fully accept consequences and start properly planning now:

Break normal NHS financial marching pace Finalise 2017/18 to 2019/20 framework by end summer 2016 Add “how will you get through 2017-20” to STP process

• You can only get through the U bend with honesty and realism; an appropriate lead time; doing something very different at pace

• A way of bringing much needed reality to the system

NHS currently in denial on consequences of U bend

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi-1YmHwpDNAhVDC8AKHYm6Do0QjRwIBw&url=http://www.ebay.co.uk/itm/1-1-2-Inch-Kitchen-Sink-Waste-P-Trap-U-Bend-/111510278635&bvm=bv.123664746,d.ZGg&psig=AFQjCNH8jOghx5Shwq2PovVAV0YS06FABA&ust=1465203356572402

The £22 billion savings plan – how credible?

Source: Comprehensive Spending Review 2015, FYFV savings technical note May 2016

• 1% public sector pay cap to 2019/20

• Renegotiating the community pharmacy contract

• Income generation • Reducing central admin costs

• RightCare • Self care • QIPP and demand

management • New Care models

• Lord Carter • Classics CIPs

But…..

Provider sector has to demonstrate we are doing all we possibly can to: • Recover finances • Recover performance • Sign up to “sweet spot as stretching as possible

but achievable” control totals and performance trajectories

• Reduce agency spend • Deliver more than £ for £ benefit on extra

£1.8bn STF funding

A battle for the dominant narrative between: • Providers not trying hard enough and not well

enough led • Providers meeting every reasonable

expectation, and a bit more, in a very difficult strategic environment

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=0ahUKEwilqILnyJDNAhWTOsAKHdpZBCEQjRwIBw&url=http://www.johnjudy.net/2011/10/fairfax-county-sample-ballot-for-november-8th-2011/&bvm=bv.123664746,d.ZGg&psig=AFQjCNGPMCxn_EquVZi2hg-qvcfVLMWYcw&ust=1465205161653065

Contents

01 FINANCES & PERFORMANCE

02 PLANNING

03 REGULATION

04 WORKFORCE

05 NEW CARE MODELS

06 NHS PROVIDERS UPDATE

STPs right idea and system starting to learn as we go…

• All agree that moving to multi year, place based, strategic plans is right idea

• Central system leaders now recognise that different patches going at very different speeds based on appetite, relationships and resources

• Moving to three segments: well advanced, making progress, still developing

• Flexing “real” sign off deadlines and central support to reflect emerging segmentation

• Capacity & capability to complete to time/ quality • Dealing with multiple overlapping footprints:

STP footprints; Smaller “natural vertical integration” footprints; Traditional local authority footprints; LETB footprints; Academic Health Science Networks; MH provider / ambulance service footprints; Local digital roadmaps; Urgent and emergency care network footprints; Maternity and other network footprints

• Local authority and general public involvement • Comms handling around big change proposals

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjAkZiPy5DNAhWHBsAKHUnqDYkQjRwIBw&url=https://calderdaleandkirklees999callforthenhs.wordpress.com/tag/sustainability-and-transformation-plan/&bvm=bv.123664746,d.ZGg&psig=AFQjCNEnlNTAO7LC-oJfWrbhIi_7VIq8-g&ust=1465205782383676

…Some big questions emerging…

• Is this about sustainability or transforming to new care

models: creating a viable acute hospital model or a viable new integrated out of hospital service…or both

• Is this more about a few really big wicked issues that we have been trying to sort out for some time…or setting out how will meet national planning requirements?

• How far is it really worth going on major service

reconfigurations that we know we will struggle to get away locally?

• What happens if we can’t get agreement…or have very

different future visions…or can’t even get the big hairy questions on the table

• What do we do if we can’t create a plan that closes the current structural financial gap because the gap is simply too big

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjd8b-m0pDNAhWMLMAKHRYxDLkQjRwIBw&url=http://www.wmscnsenate.nhs.uk/home/our-work-current-projects/our-work-partner-organisations/sustainability-and-transformation-plans/&bvm=bv.123664746,d.ZGg&psig=AFQjCNEnlNTAO7LC-oJfWrbhIi_7VIq8-g&ust=1465205782383676http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwja9pKT1JDNAhXBCMAKHZFWDeAQjRwIBw&url=http://www.slideshare.net/KingstonVA/south-west-london-sustainability-and-transformation-plan&bvm=bv.123664746,d.ZGg&psig=AFQjCNEnlNTAO7LC-oJfWrbhIi_7VIq8-g&ust=1465205782383676

…And significant governance issues remain

Source: HSJ

ISSUES TO CONSIDER

1. STPs have no statutory basis and very immature governance. How are disagreements resolved? Is top down answer from system leaders the right approach?

2. Some parts of system leadership showing clear appetite to quickly put a lot more business through STP footprints. But are they right footprints, on what legal basis and what about governance?

3. NHS still regulated as individual organisations , where director’s legal duty lies – significant governance and accountability issues feel parked and ignored not solved.

4. When everyone is responsible, who do you hold to account when things go wrong e.g. system control totals for finance and performance?

Contents

01 FINANCES & PERFORMANCE

02 PLANNING

03 REGULATION

04 WORKFORCE

05 NEW CARE MODELS

06 NHS PROVIDERS UPDATE

Clear Jim Mackey narrative emerging We're here to help and support … but there has to be accountability

• The much needed honest and realistic

provider voice at national system level

• Genuinely trying to support and build headroom for leaders…but under huge, unrealistic, system level, pressure to deliver

• Multiple helpful interventions: contracting round, CQUINs, CCG tendering, 16/17 provider / commissioner financial balance etc.

• Need to show can handle performance and finance to get other players off the pitch.

• Being robust about getting a reasonable ask, being on top of the detail and then delivering… at both a national and local level

A new NHSI oversight framework coming shortly

QUALITY CQC rating

MONEY Old metrics

Use of resources Carter

OPERATIONAL PERFORMANCE

Small set of constitutional

standards

LEADERSHIP Well led framework Systems leadership

STRATEGIC CHANGE

In progress, likely to include NCM

Earned autonomy

More autonomy

Limited autonomy

Essentially special

measures

• Local decision making free of constraints

• Fewer data and monitoring requirements

• Simpler processes for transactions

• Recognition and opportunity to spread success

A new single oversight framework for FTs and Trusts, which establishes a single definition of success and a new relationship between the regulator and the regulated

Ten initial thoughts on new NHSI oversight framework

Danger of two competing CQC /

NHSI ratings

Individual institutional vs

system accountability

Relative or absolute standards

in current environment?

Developing leadership and

strategic change domains

What, when, how and why moving

through segments

How practical will benefits of full

earned autonomy be?

FT pipeline and FT status

Clarity on voluntary support

& intervention incl. mandation

Legal base

Overall narrative and relationship to

current strategic context

CQC new strategy to 2020

• More flexible registration e.g. NCMs • Assessing use of resources • Views of quality across populations and

local areas

• Development of CQC Insight • Targeted and risk-based inspection where

comprehensive inspection is exception to the norm

• Alignment with NHSI oversight framework

• Focus on CQC VfM and changes to fees

Contents

01 FINANCES & PERFORMANCE

02 PLANNING

03 REGULATION

04 WORKFORCE

05 NEW CARE MODELS

06 NHS PROVIDERS UPDATE

Junior doctor contract

• Provisional agreement on new contract but needs to be ratified by referendum

• Additional costs to providers including additional employer pension contributions – needs close tracking

• Significant additional duties for monitoring safe working hours and breaks and rotas

• Need to track impact on wobbly existing rotas

• Bad blood lingering on both sides

Lack of a national workforce strategy recognised

Given the size of the NHS, workforce planning

will never be an exact science, but we think it clearly could be better

than it is.

The current shortage of nurses is largely of the

health, care and independent sectors’

own making

Workforce is a relatively neglected area of policy which is often pursued

as an afterthought

Some other workforce developments

Agency/locum caps - some expected zero-

sum behaviours & some unexpected

consequences e.g. therapists

Consultation on “nursing associate” role & reform of healthcare

education funding

New safer staffing work ongoing with Care Hours

Per Person focus

Consultant contract bubbling in the

background

HEE establishing Local Workforce Action Board

to cover STPs

“We are however supportive of view that appropriate oversupply

is a desirable goal within the context of appropriate value for

money” (HEE)

Contents

01 FINANCES & PERFORMANCE

02 PLANNING

03 REGULATION

04 WORKFORCE

05 NEW CARE MODELS

06 NHS PROVIDERS UPDATE

5YFV New Care Models growing

Two further new care models proposed

Reinvention of the acute medical model in small district general hospitals

Differs from Acute Care Collaboration (ACC) vanguards by specific focus on small district general hospitals, and

interest in care pathways and clinical workforce, rather than organisational

forms and operating models

Tertiary mental health services

Secondary MH providers taking on tertiary MH services such as secure MH and forensic services, perinatal mental health, Tier 4 CAMHS, CAMHS eating disorders, Tier 4 personality disorder

services

x14

x9

x6

x8

x13

Reduction in funding in 2016/17

It’s easy to be cynical but 5YFV KPIs matter

1 Brave CCGs where the council will become the strategic commissioner, the operational commissioning will move to the provider, and the CCG remains as a shell for statutory purposes

2

Fundamental changes to how we do things. PACs that may not have outpatients in the future. Move from a position where high DNA rate in geriatric outpatients (booked 6 weeks out) due to confusion or admitted already, to an open access outpatient slot tomorrow, telehealth and primary care access

3 Emergency department consultants after telehealth support to care homes launched: fewer patients come to our department to die. They die where they chose to.

Contents

01 FINANCES 02 PLANNING 03 REGULATION 04 WORKFORCE 05 NEW CARE MODELS 06 NHS PROVIDERS UPDATE

Representing your views

Mental health taskforce – Lords’ debate Baroness Brinton I ask the Minister to update your Lordships’ House on the progress of the five-year forward view task force implementation plan. Time and funds are running out and I know that many providers are keen to hear the Government’s view. The Government’s commitment to an extra £1 billion to meet the report’s recommendations after the launch is welcome but this will not be enough to deliver the report’s recommendations. Even more worrying, it seems that the funding may come from the additional £8 billion the Government have already pledged to deliver the general five-year plan, meaning that mental health will not receive any more than it would have got on the basis of its historical and deeply inadequate share of resources—about 13% of the total NHS budget, despite accounting for around a quarter of the national burden of disease. A figure of 13% is neither parity of esteem nor parity of resource. Worse, the report Funding Mental Health at Local Level: Unpicking the Variation, published by NHS Providers a week ago, raised serious concerns that the necessary investment is not reaching many local areas and services. This is despite recent funding commitments such as the £1.25 billion five-year CAMHS investment announced by the coalition Government in the March 2015 Budget.

Luciana Berger MP House of Commons Oral Question Research published yesterday by NHS Providers and HFMA showed half of MH trusts had not had an increase in budget in 2015/16, and just quarter of providers were confident that they will this year. Will the sec of state finally admit that the supposed increased investment in MH has not materialised for MH and what will he do about it?

https://hansard.parliament.uk/search/MemberContributions?house=Lords&memberId=4241http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj36fXe6obNAhVbF8AKHTPpDjkQjRwIBw&url=http://www.telegraph.co.uk/news/politics/9019327/Parliament-logo-should-be-axed-according-to-adviser.html&bvm=bv.123325700,d.ZGg&psig=AFQjCNHwZYSVdXxnHIAely_fs4OcrymACw&ust=1464870696034724

Representing your views

Representing your views

Aspiring chief executive

programme

https://twitter.com/BBCr4today

Governance Conference

Annual conference & exhibition 2016

Event bookings open for our annual event at Birmingham ICC on 29-30 November Delegates can take advantage of group discounts of up to 25% Please see our website for further details Confirmed speakers include the Secretary of State for Health and chief executives of CQC, NHS England and NHS Improvement 89% of delegates rated 2015 event as ‘good’ or ‘excellent’

https://nhsproviders.org/courses-events/annual-events/annual-conference-and-exhibition/early-bird-rates-for-2016

THANK YOU Q&A

Images from Googleimages & HSJ

Slide Number 1ContentsThings that have changed since we last metStruggle through 16/17… but 2017-21 U-Bend is comingContentsSystem under sustained operational pressureSystem under sustained operational pressureAnd traditional levers no longer available2016/17 NHS strategic financial frameworkConflicting system level views on how to manage 2016/1716/17 finances: best guess on what happens nextThe coming U bend – DH spend by head of populationNHS currently in denial on consequences of U bendThe £22 billion savings plan – how credible?But…..ContentsSTPs right idea and system starting to learn as we go……Some big questions emerging……And significant governance issues remainContentsClear Jim Mackey narrative emergingA new NHSI oversight framework coming shortlyTen initial thoughts on new NHSI oversight frameworkCQC new strategy to 2020ContentsJunior doctor contractLack of a national workforce strategy recognisedSome other workforce developmentsContents5YFV New Care Models growingIt’s easy to be cynical but 5YFV KPIs matterContentsRepresenting your viewsRepresenting your viewsRepresenting your viewsGovernance ConferenceAnnual conference & exhibition 2016THANK YOU