Trust Board Febuary 2010 - Sandwell & West Birmingham Hospitals

Considerable and significant work has been undertaken in the last few weeks on this issue of securing
agreement to a projected level of affordability and activity to 2017/18 and the impact on the financial
position of the two PCTs and Sandwell and West Birmingham Hospitals. In developing this, the emphasis
has been on trying to achieve a balanced position for each organisation, without rendering them incapable
of delivering services because of substantial cuts in infrastructure or staffing. It has been a complex and
difficult process of modelling, forecasting and negotiation.
On Monday, 18 th January, members of the finance and capacity group met with Chief executives to reach
an agreement. The agreed approach has the following features:
• The 5 th January iteration of Version 5.0 of the Activity and Capacity Model to be the basis for activity
projections, with modifications to take account of potential catchment area changes and the impact on
reducing emergency admissions of better management of long term conditions. This will then provide
Version 5.1 of the model which will be the framework within which future redesign will be
undertaken.
• This provides the basis for a highly efficient acute hospital, operating at national best practice levels
• Use of the World Class Commissioning assumptions on allocations and tariff as issued by the SHA
and Centre for the period ending in 2013/14
• Remodelling the affordability of the agreed activity from 2014/15 to 2017/18 based on the following
assumptions:
• LHE base case to set allocation growth at 2.5%+, not 1.5% (precise percentage to be defined)
• SHA base case to set allocation growth at 2.0%+, not 1.5% (precise percentage to be defined)
• SWBH will review infrastructure cost reductions related to design, to include 24/7 medical cover and
23 hour surgery
• Confirmed planning assumption that by 2013/14, the quantum reduction assigned to
decommissioning procedures of limited value will be achieved, either through implementing the
changes or by alternatives. It was noted that further debate was required on the assumed level of
reduction in 2010/11 and the proposed trajectory. It was further agreed that the three Finance
Directors would raise the possibility of transitional funding for this with the SHA.
• All organisations will review the proposed catchment population changes to identify areas and
volumes which could remain as part of the SWBH catchment. The rationale for this is that the
adoption of better management of long term conditions in primary care would result in more patients
being maintained in the local health economy and therefore less likely to access care elsewhere. In
Sandwell, this is being pursued through the Pathfinder pilot project.
• While there is insufficient data available to be able to identify with any certainty the impact of
improved healthy lifestyle services, it was agreed that it is reasonable to assert that the expected
impact would mitigate the levels of historical growth which had already been moderated in the
model. HoB indicated their view that applying these services in the context of already comparatively
low levels of elective admissions would lead to elective interventions at an earlier stage, resulting in
less volume and less acuity of emergency admissions
• PCTs will identify within the re-modelled financial projections opportunities to invest in community
services which will require expansion
• PCTs will articulate their proposals to achieve cost reductions in more detail in their WCC
submissions
In terms of further action, it was agreed that the Finance Directors would meet to agree the effect of these
assumptions and ensure alignment and consistency within the Long Term Sustainability Models and in
anticipation of the refresh of the New Hospital Outline Business Case. This would constitute the ‘sense
check’ that all the elements work together.
It will be important to discuss with the SHA the acceptability of the assumptions we are making from
2014/15 onwards and the potential for our LHE to receive more than our fair share of transition funding
to assist in ensuring this major strategic change.
This agreement now enables the Partnership to make progress on developing its plans in more detail.
3.3 Joint Overview and Scrutiny Committee Meeting
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