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

Figure 9.95: Summary of sensitivity analyses – Value for Money 25
Positive VfM rating
Negative VfM rating
Sensitivity tests
VfM evaluation
(# of + / -)
Op A Op B
Op C
VfM evaluation
(rank out of 3)
Op A Op B Op C
Sites below 1%
surplus after
reconfiguration 1 (#)
Op A Op B Op C
Do N
Recurrent amount required
to bring all sites within £1m
of 1% surplus 1 (£m)
Op A Op B Op C Do N
Base modelling outputs
a) Demand growth I: 1%pt pa higher, trust income allowed to grow
-1
1
-6
-4
-7
-8
1 2 3 2 3 4
1 2 3 1 1 4
5
5
11 12 31
10 10 28
33
29
b) Demand growth II: 1%pt pa higher , trust income fixed
-7
-8
-9
1 2 3 6 6 7
8
51 52 65
84
c) QIPP plans I: 60% of plans achieved, trust receive income
-3
-3
-7
1 1 3 1 1 2
4
10 10 26
23
d) QIPP plans II: 60% of plans achieved, trust income is capped
-9
-9
-9
1 1 1 8 9 9
8
95 103 105
131
e) QIPP plans III: 110% of QIPP achieved (Trusts recover costs)
-2
-6
-7
1 2 3 3 4 4
6
13 13 32
36
f) Efficiencies I: Monitor inflation and 90% CIPs
-5
-7
-8
1 2 3 6 7 7
8
64 67 78
101
g) Efficiencies II: Monitor downside
-5
-7
-8
1 2 3 6 7 7
9
81 87 96
122
h) LOS reduction I: 10% reduction achieved
-8
-8
-8
1 1 1 3 3 4
5
14 14 31
33
i) LOS reduction II: no reduction on maternity, paeds &critical care -6
-8
-8
1 3 3 4 4 4
5
13 15 32
33
j) Transition costs: 20% higher than plan
1
-6
-7
1 2 3 2 3 4
5
11 12 31
33
k) Consolidation savings I: 50% of consolidation savings achieved -6
l) New build/refurbishment cost I: 30% higher than plan
m) Lower net land receipts: 30% lower than plan
n) Higher cost of capital: NPV discount rate of 4.5% instead of 3.5% -1
-8
-1
-7
-9
-8
-7
-7
-9
-8
-7
1 3 3 3 4 4
1 3 3 3 4 4
1 3 3 2 3 4
1 3 3 2 3 4
5
5
5
5
12 14 31
12 13 32
11 12 31
11 12 31
33
33
33
33
o) Time to deliver reconfiguration: 2 year delay
1
-6
-7
1 2 3 2 3 4
5
11 12 31
33
p) Lower outpatient activity: 40% of activity retained instead of 80%
-2
-6
-7
1 2 3 3 4 4
5
11 11 32
33
q) Period for NPV assessment from 20 years to 60 years
r) Theatre efficiency run 50 hours a week instead of 40 hours
s) New build/refurbishment cost II: 30% lower than plan
t) Lower fixed cost saving from local hospital: 75% of plan
u) Imperial College I: NHS contributes 100% capital; no revenue
impact
v) Imperial College II: NHS contributes 100% capital; full revenue
impact (est. 11.5% of capital)
-6
-1
-3
2
1
4
-3
-6
-8
-6
-6
3
-7
-7
-7
-8
-8
-9
1 2 3 2 3 4
1 2 3 2 3 4
1 2 3 2 2 4
1 3 3 4 5 5
1 2 3 2 3 4
1 2 3 2 3 4
5
5
5
5
5
5
11 12 31
10 11 30
10 11 30
18 19 35
11 12 31
11 12 31
33
33
33
33
33
33
25 Notes from Figure 9.95
1. The gap to reaching net surplus within £1m of 1% of income (in line with the criteria used to assess financial viability of sites). Note that this is slightly less than the
calculation in VfM metric (iii) which quantifies the gap to achieving net surplus of at least 1% of income
9d. Decision making analysis stage 6 and stage 7 414