SaHF DMBC Volume 1 Edition 1.1.pdf - Shaping a healthier future

9. Decision making analysis – stage 6 (Value for Money)
and stage 7
This section describes the value for money component of Stage 6 and Stage 7 the sensitivity
analysis.
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Value for money
9.10 Pre-consultation evaluation
The purpose of this criterion is to ascertain how options compare financially. As part of the
pre-consultation work, a financial evaluation was undertaken and during post-consultation
this evaluation has been updated.
The financial appraisal from pre-consultation assessed options over five sub-criteria:
1. Capital Costs
2. Transition Costs
3. Site viability
4. Total surplus / deficit
5. Net Present Value.
In the pre-consultation work the five sub-criteria contributed towards an overall evaluation of
options under the „value for money‟ heading. The same framework, method and approach
has been applied as part of the post-consultation analysis, focussing on the three short-listed
options.
As part of the development of the recommendation, we have updated the baseline data and
undertaken more work on the impact on the estate and the requirements for capital. We also
propose to place greater focus on the Net Present Value calculation, as set out later in this
chapter.
As part of the development of the options for consultation the financial work entailed:
Commissioner Strategic Plans including allocation and spend forecasts, and QIPP
savings 2012/13 to 2014/15
Out of hospital strategies for Clinical Commissioning Groups (CCGs) setting out their
approach to delivering the QIPP plans, including estimates of the changes to activity
and spending priorities proposed
Trust „do nothing‟ (i.e. current configuration) activity and income and expenditure
(I&E) forecasts 2012/13 to 2014/15, including delivery of productivity savings (Cost
Improvement Plans) and length of stay reductions
Trust reconfiguration modeling under different options in terms of activity, capacity
requirements, capital investment, capital receipts and I&E impact on site viability and
total surplus or deficit
An assessment of the costs of transition
A comparison of the Net Present Value (NPV) of the potential reconfiguration
options.
In the pre-consultation work, eight options were financially assessed against the five subcriteria.
The results are summarised in Figure 9.67.
9d. Decision making analysis stage 6 and stage 7 383