Haringey Clinical Commissioning Group. Business Case: Older People with Frailty Value Based Commissioning

Transcription

1 Haringey Clinical Commissioning Group Business Case: Older People with Frailty Version No: 11.0 March

2 Abbreviations in this document BC BCF CCG CQUIN CSU DH HRG HWB IPU LBH MIG MoU NCL NHSE OBC OPwF PbR PROMS PDOMS QIPP VbC VFM Business Case Barnet and Chase Farm Hospital Better Care Funding Clinical Commissioning Group Commissioning for quality and innovation Commissioning Support Unit Department of Health Healthcare Resource Group Health and Wellbeing Board Integrated Practice Unit London Borough of Haringey Medical Interoperability Gateway Memorandum of understanding North Central London NHS England Outline Business Case Older People with Frailty Payment by results Patient Reported Outcomes Patient defined outcomes Quality, Innovation, Productivity and Prevention Value based commissioning Value for money 2

3 No Content Page The Business Case 1. Executive summary 1.0 Introduction 1.1 Purpose of the Business Case 1.2 Building on The outline business case 1.3 Options in this Business Case 1.4 Recommendations The Strategic case 2.0 Introduction 2.1 The Case for change 2.2 Development of localities 2.3 Project scope 2.4 Risks 2.5 Conclusion 3. The Economic case 3.0 Introduction 3.1 Criteria success factors 3.2 Long list of options 3.3 Long list of contract models 3.4 Assessment of the long list 3.5 Commissioner and provider consideration 3.6 Quality and risk appraisals 3.7 Economic appraisal of short list 3.8 Proposed option 3.9 Further development of the proposed option 3.10 Conclusion 4. The Commercial case 4.0 Introduction 4.1 Commercial objectives 4.2 Commercial considerations 4.3 Proposed incentive mechanism 4.4 Performance and payment bands 4.5 Commercial implications 4.6 Procurement strategy and implementation timescales 4.7 Conclusion

4 No Content Page The Business Case 5. The Financial case 5.0 Introduction 5.1 Key assumptions 5.2 Financial envelope 5.3 As is financial case 5.4 Value based commissioning financial envelope 5.5 Payment for outcomes and bundling 5.6 Risks 5.7 Sensitivities and scenarios 6. The Management case 6.0 Introduction 6.1 Evidence of achievability 6.2 Project management arrangements 6.3 Project plan 6.4 Communication and engagement summary 6.5 Use of special advisers 6.6 Outline arrangements for change and contract management 6.7 Outline arrangements for benefits realisation 6.8 Quality 6.9 Risk management 6.10 Contingency 6.11 Conclusion 7. Conclusion 7.0 Conclusion 55 Appendices (separate documents, to be made available on request) A B C Risk register Equality impact assessment PROMs Recommendations for Older People Living with Frailty including dementia VERSION CONTROL Version Date issued Brief summary of change Owner s Name February 15 PM suggested edits for business case Sarah Young & 3 March 15 Edits inc to respond to RL comments Sarah Young th March RL edits Rachel Lissauer March Final edits Sarah Young 4.0 and & 11 March Final edits Rachel Lissauer March Final edits and proofing Sarah Young March Final proofing Sarah Young March Capsticks comments Robert McGough March Edit to conclusion Sarah Young

5 1. Executive Summary 1.0 Introduction This Business Case (BC) relates to value based commissioning (VbC) for Older People with Frailty (OPwF) in Haringey. We want older people in Haringey to have responsive, co-ordinated health and social care. This will become increasingly important as demographic changes lead to greater demand for multiple services, coordinated to meet people s needs. Our starting premise is that the needs of older people will best be met by professionals and front-line staff working closely together with a clear, shared focus on maintaining physical and mental health and increasing healthy life expectancy. The current organisation and funding of health and social care makes cross-organisational working and shared focus on the causes of ill health difficult to achieve. This Business Case proposes a way of building this collective focus on outcomes of care and aligning incentives so that they support this approach. Building shared ownership between organisations of the costs of caring for a particular population group will bring a focus on value: how to achieve the best outcomes of care per pound spent. It is suggested that value based commissioning (VbC) will support this improvement of quality and efficiency of care for older people with frailty, through: Measuring patient outcomes: this involves careful definition of a population cohort with similar health care needs. Outcomes have been agreed by patients and front-line staff and methods of collecting and measuring these identified Creating an over-arching organisational structure responsible for overseeing the full range of care (the Integrated Practice Unit or IPU): this involves developing a shared model of provision, or IPU, for identification and management of older people who are 75 years old and over and are frail/pre-frail. An outline design has been agreed with frontline staff from providers across the health and social care pathway Moving to bundled payments / contracts for full care cycles: Understanding costs across the system for this cohort and moving towards a system of creating a unified budget for this population, so that the system costs can be viewed and managed as a whole. A baseline of current costs has been created by reviewing 2014/15 activity by provider. It involves re-casting the contracting approach away from payment by results (PbR) for acute Trusts; block contracts for community health services and separate payment systems within local authorities. To do this, agreement is required to allocate existing funding to create incentives to deliver a shared ambition for the 7,000 residents of Haringey who are 75-years old or over and who are pre-frail and frail. Such an approach seeks to break the mould. It will only work if there is a community of shared interest among providers and commissioners, and strong commitment to developing and leading transformation in care for older people. 5

6 1.1 Purpose of the Business Case This is one of three projects in in the VbC programme for which there are currently two separate business cases, the other being for people with diabetes for Haringey and Islington. A third project, relating to mental health, is developing to a later timescale. The outline business case and this business case have been produced drawing on good practice within HM Treasury s Five Case Model. The approach is based on the HM Government guidance which has been agreed with the Senior Responsible Officer of the VbC Programme. It comprises the following: The strategic case: This sets out the national and local context, including: the needs of the population cohort and the financial challenge posted by an ageing population. This also introduces the VbC project setting out the vision and objectives, the scope of work and an overview of the work carried out to date, including the development of the outcomes Economic case: The economic case considers the different contract model options which could drive integration in order to successfully delivery VbC. It sets out the critical success factors and evaluates different contracting options against these criteria Commercial case: The commercial viability of the preferred contract option, identified in the previous section, is explored here in more detail. This section considers the scope of the required services by looking at the service delivery model, the Integrated Practice Unit (IPU). It considers the contractual, logistical, operational and procurement aspects of delivering this solution Financial case: The purpose of this section is to set out the forecast financial implications of the proposed option as set out in the economic case and the proposed agreement as described in the commercial case Management case: This section addresses the achievability of the project. Its purpose, therefore, is to set out in more detail the actions that will be required to ensure the successful delivery of the project in line with best practice. 1.2 Building on the outline business case This Business Case builds on the Outline Business Case (OBC) presented to the Finance and Performance Committee in November The OBC considered options for the different contractual routes that could be used to promote joint working and an integrated approach from providers. It considered, for example, an alliance model (in which providers work within an overarching contract); an integrator model (in which a single provider acts as the integrator across organisations); a federated model (in which providers have a formal or informal arrangement between them) and a lead provider model (in which a provider assumes responsibility for delivery for service delivery and achievement of outcomes). The OBC evaluated these different options against key criteria and identified that a Lead Provider arrangement offered highest probability of promoting a focus on outcomes together with bringing greatest clarity of governance arrangements. A federated model was identified as a close second option. The OBC then looked at different approaches to linking payment for achieving outcomes and at the pace with which providers in a federated or lead provider arrangement could be expected to take responsibility for the costs of care associated with older people with frailty. Four options were previously considered in the Outline Business Case (OBC) by Enfield and Haringey Clinical Commissioning Groups (CCGs) as summarised in Figure 1 below. 6

7 Figure 1: Options previously considered in the Outline Business Case, August Do nothing/business as usual: This meant not pursuing value based commissioning for older people with frailty and instead allowing other relevant initiatives to be operationalised including the roll out of The Better Care Fund and related schemes for delivery of integrated care. 2: Enter into a value based commissioning shadow contract arrangement: Included as an alternative for the first year of a value based commissioning contract. A shadow contractual arrangement would be set up without financial incentives or penalties for the first year. 3: Enter into a value based commissioning contract arrangement for a Full Bundle : a contract in which the total costs of all community and acute healthcare are identified and activity, processes and outcomes are bundled into one contract. 4: (Preferred): Enter into a value based commissioning contract arrangement for a Partial Bundle : a contract in which the outcomes only are bundled for each provider as a percentage of the total contract value for the agreed population spend. Option 4 was the preferred option. This would involve identifying a certain proportion of the overall value of the contract which would be linked to outcomes. The Lead Provider would not, therefore, have responsibility for the full costs of care associated with Older People with Frailty from all providers from the outset (the full bundle ). Instead, the Lead Provider would have responsibility for the proportion of the contract value linked to outcomes. The rationale for this preference was included in the OBC and was approved by Haringey s Finance and Performance Committee and Enfield s Financial Recovery and QIPP Committee. This option has been further explored and refined as reflected in this Business Case. The key developments that have been taken forward between the Outline Business Case and this Business Care are: A staged approach from partial to full bundle: The key rationale for this staged approach is that it draws together the advantages of a partial approach: enabling the Lead Provider to build their capability in organising across organisations and reducing financial risk at the outset; with the benefits of a full bundle. A full bundle approach (in which the Lead Provider has responsibility for the full costs of the population cohort) will offer greatest scope for delivering system-wide change. It enables the Lead Provider to channel resource into those aspects of service delivery that will make greatest impact on health outcomes. The proposal put forward within the BC is to appoint a Lead Provider that will have responsibility for years 1-3 for managing the outcome-related element of the financial bundle and will take responsibility for the full contract value from years 3-5 of the contract. Project scope: The project for Older People with Frailty that was initiated in November 2013 was a joint undertaking between Haringey and Enfield. Haringey s Finance and Performance Committee and the OPwF Steering Group were advised on 27 February 2015 that, whilst Enfield are moving forward with value based commissioning for older people with frailty, they are working to a later timescale for approval of a business case and appointment of a lead provider. Haringey CCG will continue with the process of finding a lead provider to co-ordinate care and services for older people with frailty within Haringey and are working with Islington CCG to find a lead provider for the value based commissioning model for people with diabetes. 7

8 Financial scope: The financial case has been revised to reflect the changes to both contract and project scope, so that the financial model indicates a staged increase in the value of the partial bundle and reflect costs for Haringey s population cohort only. A further analysis of the financial risks involved in value based commissioning and where these sit within the health system has been set out, as requested by the Finance and Performance Committee. Risk: The Finance and Performance Committee requested close consideration of the key risks around the construction of the financial envelope and the new contracting arrangements. Table 5, added to the commercial sections, sets out these risks and the actions being taken to mitigate them. Provider assurance process: Alongside above developments, CCGs in North Central London have been working collectively with the Commissioning Support Unit (CSU) to design a provider assurance process. This culminated in a notice to providers issued on 27 February 2015, on the CCG website and via contract finder. This links to a Memorandum of Information that provides further detail on the programme. The provider information day is on 20 March 2015 for organisations interested in being a lead provider for older people with frailty for Haringey CCG and for people with diabetes for Haringey and Islington. 1.3 Options in this business case The business case considers the Strategic Case, Economic Case, Commercial Case, Finance Case and Management Case in relation to the project. It considers three high level options in relation to the VbC project as follows: Option 1: Do nothing/business as usual This means not pursuing proposed VbC model for older people with frailty and instead allowing other relevant initiatives to be operationalised, embedded and deliver results, such as the Better Care Fund and the roll out of localities. Another example is that a Super CQUIN could be used which would require a contract variation only and a percentage of the value of the contract could be linked to outcomes. Option 2: Full implementation of VbC This means that all current CCG contractual arrangements relating to the services that would, in future, be commissioned through this model, will come to an end. Further, all of the associated financial envelope (the full bundle) would be managed by (a) new provider(s) with a specified portion assigned to outcomes. Option 3: VbC based on a hybrid model (PROPOSED) There are two elements to the hybrid model. Firstly, applying a partial bundle only, which means assigning a portion of the contract value to the delivery of outcomes. This would be managed by a Lead Provider(s) under an overarching contract which includes the other providers and the commissioner with the activity portion (a more traditional contracting model) remaining within a separate contractual arrangement between the commissioner and each individual provider. Secondly, a staged approach from a partial bundle to a full bundle would be developed (Option 2 below) over the course of the contract. The business case concludes that the most appropriate option for the VbC project for older people with frailty is to follow Option 3 below, implementing VbC using a hybrid model and following a staged approach from a partial to a full bundle over the lifetime of the contract. 8

9 1.4 Recommendations Haringey s Finance and Performance Committee and Governing Body are requested to approve this Business Case and, in particular, the following: That Haringey moves forward as a single CCG working with its providers to take forward outcome-based commissioning for older people with frailty To progress with further work in developing the service model that will support delivery of outcomes for Older People with Frailty in Haringey To proceed with the work required to progress VbC for older people with frailty in Haringey in line with Option 3, described above. This will include entering into new contractual requirements to support VbC. When a provider is identified to provide a leadership role to this work, the Governing Body will be asked to approve this decision The governance timescales for the London Borough of Haringey are being explored. The Local Authority has indicated that it would want to consider the decisions set out in the business case as both commissioner and provider. Any allocation of future funding would be considered formally through the Borough governance structure in

10 2. The Strategic Case 2.0 Introduction This Business Case (BC) relates to value based commissioning (VbC) for older people with frailty in Haringey CCG. The NHS faces a huge challenge in the coming decades: it must meet increasing demand for healthcare while at the same time improving quality of care for patients, and it must do both of these things within a constrained financial environment. Demand is rising due to an ageing population and increasing numbers of people with multiple long term conditions, thus putting increased strain on the NHS. Change is required and whilst efforts in recent years have made improvements, they have not achieved the system change that is required to truly deliver integrated care. CCGs in North Central London (NCL) have committed to a programme of VbC, focusing on mental health, diabetes and older people with frailty, across the five boroughs to fundamentally change the way healthcare is commissioned and delivered. Value based healthcare is about developing a shared common purpose to achieve the best possible outcomes for patients per pound spent. Developing a shared common goal unites the interests of all - patients, commissioners, providers - in support of a sustainable and high quality healthcare system. The expected benefits of the value-based approach are improvements in outcomes that matter to groups of patients with similar needs, at no greater cost to deliver. This BC describes the aim to deliver agreed outcomes for those patients and allocate a proportion of existing funding to create incentives for delivery of those outcomes to deliver a shared ambition for the 7,000 residents of Haringey who are 75 years old and over and who are pre-frail and frail. 2.1 The case for change NCL perspective By 2020, the majority of our services will be provided through integrated chains of providers working to an agreed set of outcomes. The alignment of incentives to outcomes and the creation of a single financial envelope for all health costs will generate further impetus for providers to work together to remove the unnecessary costs created by the overlaps and lack of coordination of care. The existing perverse incentives within current contractual structures will be mitigated by incentives to providers and shared savings between providers and commissioners to ensure financial viability and delivery of the outcomes that matter to patients. The current model of care delivery is unsustainable. Rising demand, NHS constitution commitments and limited financial growth, mean the NHS faces unprecedented demand. If we do nothing, the increases in activity, funded predominantly through a payment by results model, will mean a funding gap that will be unaffordable. Given that the population is growing and ageing, this will place an increasing strain on services. If we are to ensure operational resilience and delivery of the NHS constitution standards, we will need to ensure that the care provided delivers the outcomes that patients want, as well as being delivered in the most efficient manner. 10

11 VbC Programme context In , the five CCGs in North Central London launched their VbC programme, comprised of four early adopter projects relating to 3 populations: people with diabetes, older people with frailty and people with mental health issues The CCGs have worked in collaboration with local authorities as commissioners for Social Care and with providers and patients and their representatives across the programme, taking account of the patient flows within NCL. Phase 1 completed in February 2014 with service users, clinicians and managers involved in establishing the outcomes that they want to prioritise and measure. The early adopter projects were selected. Haringey and Enfield worked together on a project to commission for value for their older population with frailty, the subject of the previous outline business case. Phase 2 completed in August 2014 to deliver an outline business case for change, to summarise thinking so far on: defining the population cohort; outcomes and measures; design of a proposed IPU, the financial and activity baseline and contracting methods. The outline business case pulled together the thinking and direction of travel across all these areas and informs the commissioning intentions for 2015/16. Phase 3 moves us into approval of this business case and implementation for delivery of the outcomes where CCGs and Providers will work to agree the shape of the commissioning model that will provide a contractual mechanism for providers to work together to deliver an agreed set of outcomes for 2015/16. The shape of this commissioning model must enable providers to take collective ownership of those outcomes by working together within an agreed model of Integrated Practice Unit. As the CCGs approached the end of Phase 3 and towards the start of a process to identify whether there was a willing and capable lead provider, Enfield CCG Governing Body reached a decision to pause its participation in the project. Whilst the CCG remains committed to value based commissioning, it requires absolute clarity on how value based commissioning for older people with frailty will support its plans for financial recovery. Enfield will therefore progress with this work to a revised timescale. Phases 1 and 2 have included a range of patients, patient representatives, clinicians, frontline workers and management from providers. A summary of stakeholder inclusion, issues discussed and matters outstanding to be taken forward in Phase 3 and beyond was noted in the Outline Business Case. VbC Programme objectives The North Central London CCGs want to create the right incentives for enabling people to: Remain independent Recover quickly Remain well in mind and body. To do this, a recognised focus on outcomes is needed: Patients, carers, clinicians, commissioners define outcomes which matter to a population group (e.g. people who suffer from psychosis, diabetes, mental health) We prioritise these outcomes together We think about what and how we can measure We cost out a year of care or bundle for a patient group (e.g. frail elderly at high risk) Providers work together in new ways to deliver outcomes (e.g. keeping people well at home) Commissioners focus on monitoring outcomes. 11

12 The following objectives related to all the VbC projects in Phase 2 in 2014: To set up and support delivery of the VbC project for older people with frailty through effective governance and ways of working To engage services users, clinical leaders, providers and commissioners in co-design of outcomes and the clinical delivery models necessary to deliver those outcomes across the full cycle of care for this population To develop a business case for change supported by activity and finance modelling and a baseline view of performance against the agreed outcome measures To demonstrate success through early adoption of the outcomes through new delivery models for identified population cohorts To develop and appraise contract and reimbursement options for each population cohort and build capability for contracting outcomes. VbC Older people with frailty Enfield and Haringey project governance The Enfield and Haringey Transformation Board was agreed as the accountable body for VbC services for older people with frailty. With representatives from key organisations across the health economy served by the North Middlesex Hospital and essentially covering the boroughs of Enfield and Haringey, it brings together providers and commissioners to work through the challenges that required a joined up approach to resolution. The Project links to all 4 of the high level themes in its work plan A VbC OPwF Steering Group was set up to oversee the design of key pieces of work including an outline business case for commissioning of VbC services for older people with frailty by 31 August The Steering Group is comprised of representatives from providers and stakeholders. A Core Group which managed the project / operational delivery of the key pieces of work Other time-limited groups were also set up including clinical and technical groups and a one off local expert reference group which enabled providers and commissioners to work together on specific VbC elements. The vision Haringey is committed to ensuring that older people who need responsive, co-ordinated health and social care have the highest quality support in their local communities. This will become more and more important as demographic changes mean greater demand for multiple, complex services wrapped round people s needs. We have an ambition for the 7,000 residents who are 75-years old or over and who are pre-frail and frail: To improve health outcomes add more years to life and increase life expectancy for all residents and increase equity for men and women in all the localities in both boroughs To increase life spent in good health adding life to years, with people living longer in good health and enabled and confident to manage their self-care or long-term conditions with support from their care navigator, carers and family. We will do this by: Creating health and social care support and treatment wrapped around the patient to support and reable, so that they have increased prospects of living longer in good health, independently in their own homes, able to get on with their lives Increasing focus on both mental and physical needs with to support residents, carers and families to achieve parity of esteem. 12

13 VbC Objectives for older people with frailty This vision is reflected in the outcomes agreed by stakeholders in Phase 1 as illustrated in Figure 2: Figure 2: VbC Objectives for older people with frailty Health status achieved and retained (survival, degree of recovery/health) This means improved health outcomes add more years to life and increase life expectancy for all residents and increase equity for men and women in all the localities in both boroughs Process of Recovery (Time to recovery, maintenance of/return to normal activities, disutility of care of treatment process e.g. treatment-related discomfort, complications, adverse effects, diagnostic errors, treatment errors). For local people, this means health and social care support and treatment wrapped around the patient to support and reable, so people have increased prospects of living longer in good health, independently in their own homes, able to get on with their lives Sustainability of health (sustainability of recovery or health over time, long term consequences of therapy/lack of e.g. care-induced illnesses)this means adding life to years, with people living longer in good health and enabled and confident to manage their self-care or long-term conditions with support from their care navigator, carers and family. Dementia (increased diagnosis/assessment and patient/carer support)this is our commitment to parity of esteem, increased focus on both mental and physical needs with to support residents, carers and families. Benefits The potential scope for this investment will deliver the following high-level strategic and operational benefits of which there are three distinct types: Benefits related to health and wellbeing - The outcomes defined, locally by patients and providers which are intended to be realised for the improvement of health and wellbeing for the local population see Figure 3 below Project benefits - derived directly from the VbC proposals as a whole as are shown in the benefits logic mapping in Figure 4 below. This illustrates how the goals of VbC and the Integrated Practice Unit link to the delivery of the goals within the Better Care Fund Programme for older people Wider system benefits - relating to the Health and Wellbeing Board and CCG Governing Body strategic goals realised within the health and social care system and economy. 13

14 OLDER PEOPLE LIVING WITH FRAILTY OUTCOME SET 19th February Mortality Rate / Age of death 1a. A measure of mortality rate 1b. A measure of average age of death OBJECTIVE MEASURE CSOM (Clinical & Social Outcome Measure) 1a. Death rate in people in segment in defined time period 1b. Average age of death of people in segment in defined time period PROM (Patient Reported Outcome Measure) Existing Survey 2.Health related Quality of Life (includes ADLs) 2a. A measure of quality of life OPLwFL: EQ-5D (full) - 5Qs Dementia: DEMQOL (full) - 28Qs 3. Patient Identified Outcomes related to Quality of Life 3a. Independence OPLwF: CORE (partial) - 1Q A measure of the feeling of independence Dementia: DEMQOL (partial) - 1Q (rpt) 3b. Isolation OPLwF: CORE (partial) - 1Q A measure of the feeling of company and contact Dementia: DEMQOL (partial) - 3Qs (rpt) 3c. Burden OPLwF: PDI (partial) - 1Q A measure of the feeling of being a burden to family/friends Dementia: PDI (partial) -1Q 3d. Support A measure of the feeling of being well supported 3e. Depression A measure of depression 3f. Time spent at place of residence A measure of time spent at place of residence 3g. Appropriate discharge A measure of appropriate sustainable discharge 4. Evidence-based outcomes related to care process: 4a. A measure of the rate of acquired infection rate whilst receiving care 4b. A measure of the rate of pressure sores whilst receiving care Average number of days spent at place of residence in people in segment in defined time period Average number of people who are still at home a specified time after discharge (i.e. 91 days after discharge) in defined time period Rate of acquired infection (C.diff, E.coli, MRSA, MSSA) in people in segment whilst in any acute care setting in defined time period Rate of pressure sores in people in segment whilst in care in defined time period 4c. A measure of the rate of falls Rate of falls in people in segment in defined time period 5. Patient identified outcomes related to care process: 5a. Listened to A measure of feeling decisions are listened to and acted on 5b. Control A measure of feeling in control over care 5c. Dignity A measure of being treated with dignity 5d. Care Coordination A measure of feeling care is coordinated 6 Carers 6a. Carer stress A measure for carer stress 7. Fragility Fractures 7a. A measure of fragility fracture rates Rate of fragility fractures (people in segment who have a diagnosis of osteoporosis and had a specific fracture) in defined time period 7b. A measure for the recovery period to previous level of mobility post-fragility fracture Long-Term Outcomes 8. Rate of change in health-related Quality of Life (inc ADLs) over time A measure of quality of life over time 9. A 'good death': location/pain/own views considered A measure of a 'good death' 10. Nutrition A measure of nutrition over time DEMENTIA SPECIFIC OUTCOMES 11. Dementia Diagnosis/ Assessment a. A measure of dementia diagnosis rates Average time taken from time of fragility fracture to previous level of mobility in people in segment in defined time period Prevalence gap of observed and estimated dementia prevelance for the population segment OPLwF: CORE (partial) - 1Q Dementia: DEMQOL (partial) - 1Q (rpt) OPLwF: EQ5D (partial) - 1Q (rpt) Dementia: DEMQOL (partial) - 4Qs (rpt) OPLwF: GPPS (partial) - 2Qs Dementia: DEMQOL (partial) - 1Q (rpt) OPLwF: GPPS (partial) - 2Qs Dementia: GPPS (partial) - 2Qs OPLwF: PDI (partial) - 4Qs Dementia: PDI (partial) - 4Qs OPLwF & Dementia: Patient perceived continuity from multiple clinicians (partial) - 12Qs Carers of OPLwF & Dementia: CSI (full) - 13Qs OPLwFL: EQ-5D (full) - 5Qs (rpt) Dementia: DEMQOL (full) - 28Qs (rpt) Carers of OPLwF & Dementia: VOICES Survey (partial) - 9Qs OPLwF: NHC (partial) - 7Qs Dementia: NHC (partial) - 7Qs PDOM (Patient Defined Outcome Measure) New Survey b. An objective measure of early diagnosis Average number of weeks from GP referral to diagnosis of dementia in people in segment in defined time period c. A measure of early access to services Extent person/carer has early access to services to make decisions about their care 12. Dementia Patient/carer support: a. A measure of the extent people with dementia/their carer feel supported TYPE OF OUTCOME MEASURE AVAILABLE Carers of People with Dementia: Personal Social Services Survey of Adult Carers in England (partial) -2Qs SUBJECTIVE MEASURE Availability of Measure for this population segment Key Option available Option unavailable Figure 3: VbC Outcome set for older people with frailty 14

15 Figure 4: Benefits Logic: VbC Older people with frailty Issues relating to the health and social care pathway were identified in a series of design workshops in 2014 involving clinicians and frontline staff delivering care for older people in Haringey and Enfield. Views were sought on how services could be transformed so that patients, their families and carers are truly at the centre of care. A summary of perspectives is in Figure 5: A 75-year old patient living alone and socially isolated with complex health and social care needs: Family far away; falls managed by neighbours with multiple long term conditions affecting physical and mental health (diabetes, chronic kidney failure, leg ulcers, cognitive deficiency and undiagnosed dementia). Mobilising on zimmerframe and shopping with assistance included in her care package Current experience Future experience Access to services Access to many services at GP, with social and community care and management of LTCS through acute outpatients. Transport difficulties Access to services co-ordinated by careco-ordinator who liaises with GP, social care, community care and OPAU. Transport arranged to appointments which are co-ordinated on fewer dates. Prevention Care plan and co-ordination No prevention or management of social isolation and associated anxiety Care plans not regularly shared. Scattergun approach to appointments. Multiple attendances with transportation difficult and no coordination Frailty identified and prevention included in care plan with Third Sector organised weekly outing to day centre Care co-ordinator reviews care plan with patient and her family, her GP and social care. Plan reviewed regularly by locality core integrated care team Diagnostics Through GP and the OPAU Co-ordinated and managed through locality with GP liaising with geriatrician Frailty care and services Falls managed after emergency admissions, regular outpatients Frailty assessment & care with falls managed and no emergency admissions. Figure 5: The health and social care pathway - Older people with frailty 15

16 2.2 Development of localities Haringey continues to develop arrangements for the implementation of locality teams to deliver Integrated Care and the Better Care Fund programme. Developing VbC together with these initiatives enables a holistic service approach which will embrace locality plans: A focus on supporting primary care to plan and co-ordinate older people s care The development of multi-agency and multi-professional locality teams that will provide a co-ordinated service close to people s homes Expansions in rapid response and co-ordinated home from hospital teams. For people with frailty the model of care will be based around locality teams that can support case management and co-ordination of care. We will commission services that work on a borough-wide basis to support independence. This will include, for example, broadening access to rapid response and an integrated discharge team. GPs and community teams are already organised around each of its four localities (known as collaboratives ) each with a population of between 55,000 and 80,000. Two of these localities operate as federations. All localities are beginning to build an organisational infrastructure that will allow them to deliver initiatives to improve the quality of primary care in their area. The CCG will use its responsibilities as a co-commissioner of primary care to link primary care into the organisation of an IPU. Haringey has also secured Health Education England funding for integrated locality teams to enable the training and education required by staff to work across agencies and professional groups to improve coordination of care. This is being targeted at the co-ordination of care for older people (75 years old and over) who are at high risk of hospital admission. With this funding Haringey is able to organise sessions, involving GPs and community teams, to identify the ways of working within collaboratives that best support improved care co-ordination for this particular patient cohort. An education and training strategy has been developed and two training sessions being held within each collaborative area. 2.3 Project scope The proposal is that improvement of quality and efficiency of care for older people with frailty will be delivered through a value based commissioning approach. This approach comprises interdependent and reinforcing components, which are described below: Measure patient outcomes and cost across the full care cycle Organisation in Integrated Practice Units (IPUs) around patient populations/medical conditions Move to bundled payments / contracts for full care cycles Integrate care delivery across separate facilities Underpinned by: the creation of an enabling Information Technology platform. Measure patient outcomes and cost across the full care cycle Developing outcomes that matter to the local population is key to the success of VbC, where the outcomes are the incentive that brings providers together to deliver the right care in the right place first time. However, there are a number of national outcomes frameworks that are essential to consider when developing outcomes. Key points from engagement events to define outcomes summarised that: Outcomes are what matters to people around their health and care they receive Outcomes are specific to a segment of the population who have similar needs Outcomes should be measured across a full cycle of care Outcomes should be co-defined together with patients. 16

17 Developing the outcomes Service users, clinicians and managers involved in establishing the outcomes that they want to prioritise and measure in Phase 1, with a two-day stakeholder event involving 78 stakeholder representatives. The outcomes for older people with frailty were defined as in Figure 3 above, which were agreed as the categories outlined in Figure 2 above. The outcomes that mattered most within each CCG population appear to be well aligned with the other NCL CCGs as well as the most frequent outcomes generated in mixed groups 1. A summary of engagement in the format of you said, we did was included in in the OBC. Each outcome needs an output value that can be used to calculate a baseline position, and compare progress across time periods for the same population. The final shortlist of outcomes that form part of the NCL VbC Older People Living with Frailty Outcomes is set out in Figure 3 above. Recommendations for PROMS Older People Living with Frailty including dementia are set out in Appendix C. A single integrated care dashboard which tracks quality of delivery from both a setting and outcome perspective is now operational for The Better Care Fund. This can be developed to align with VbC outcomes in due course. Organise in (an IPU(s) around patient populations/medical conditions Entry criteria: The definition of the population for the business case is all patients who are 75 years old and over. This would coincide with the appointment of the accountable GP for patients 75 years and over as part of their Core Contract. Case finding tools: Risk stratification has been operational in Haringey CCG for the past year as part of supporting integrated care and the use of MDT case conferences. Its focus has been on those patients who have had hospital admission activity, A&E activity, with some general practice activity, to identify those most at risk of a hospital admission over the coming months. This process is limited and needs to change in order to deliver robust stratification based on the pre-frail and frail populations. A virtual clinical group was set up to agree a definition of frailty, which reviewed a number of options and took account of Camden CCG s experience in use of the Edmonton Score. Consideration of tools to identify frailty has included review of existing tools as well as emerging ones: A pragmatic approach has been taken for 2014/15 using current risk stratification tools in both CCGs to identify the top 2% patients at risk to support delivery of the Directed Enhanced Service under as part of the GP contract for It is unclear at this stage what changes will be made to this services for 2015/16. It is clear, however, that the current risk stratification tools are unable to stratify the population in terms of pre-frail and frail and any future tool must be able to deliver this to enable the work of the integrated locality teams. A future approach being activity considered is the e-frailty tool which is being developed nationally. This is a cumulative deficit approach, which will shortly be trialed to run behind the GP systems (roll out of System One trial imminent). Any future application of the e-frailty tool 1 NCL VbC OPLwF Developing Outcomes Hierarchies, Outcomes Based Healthcare, December

18 would not only improve identification of people with frailty but also define the population cohort, and related activity and financial analysis more accurately. Exit criteria: Patients may leave the IPU if a health or social care episode ends and they are no longer frail or pre-frail (for example, after a period of reablement). Patient exclusions There has been considerable thought on exclusions, with a scoping paper suggesting the following 2 : Patients who are not frail Patients who requite specialist care including: Patients under end of life care Patients with organ system failure (e.g. end stage renal failure, end stage heart failure) Patients who require specialist care teams (e.g. immediate care following acute event (e.g. MI), surgery related care, psychiatric care, all cancer care). In determining these criteria, there is an agreed need to distinguish between and separate out the contractual and operational approaches: whilst the above clarifies the contractual and budget considerations (and is consistent in the general approach that specialist care is out of scope), all parties are keen to highlight that this does not detract from care co-ordination and end-to-end care of patients to the point of death. The entry and exit criteria have been developed further by Outcomes Based Healthcare to ensure that we identify the flow of patients through and between normal commissioning routes and the IPU. The Proposed IPU The Integrated Practice Unit is essentially the operating model within which all providers will work to deliver a single system capable of delivering the agreed outcomes. Figure 6 summarises the outline design of an IPU proposed from design workshops held with stakeholders including providers and patient representatives. Their shared aim is for primary, community and secondary health and social care and voluntary sector agencies to work together with the patient to jointly assess their holistic needs, plan and deliver care and support to help improve their health, well-being and independence and reduce their risk of subsequent crisis-driven interventions such as hospitalisation. While integration of those services is critical to deliver system changes, all those service areas may not be part of the contractual VbC approach for 2015/16. Where they are not then commissioners will need to use other commissioning processes to enable integration. The emerging model has a number of features that will need further development and implementation including: a. Access to a single point of entry into a hub, including referral and screening b. Prevention and pre-frailty c. Care co-ordination including the relationship with core integrated care teams within the wider integrated multi-disciplinary Locality Teams d. Diagnostics e. Frailty care / services in the IPU f. Self-care. 2 NCL VbC FOP Scope Final Criteria Summary, Outcomes Based Healthcare, July

19 GPs Social Services Patient/family/carers Acute Trusts Short or medium-term acute & community interventions, including self-management intermediate care, enablement & Rapid response functions Single Point of Access To The Hub Assessment & case management Primary and Community Management and risk stratification including low level prevention Specialist functions to help assess, care plan, case manage and deliver Care co-ordinator & The Patient Diagnostics and treatment Figure 6: Summary of the proposed IPU model UNDERPINNED BY: Infrastructure issues such as co-location, shared records, workforce development, 7 day working etc The key features of a frailty IPU are a core offer, with step up and specialist level input: Figure 7: The Key features of a frailty IPU The Core offer Case finding to identify frail and pre-frail, care planning / needs assessment Straightforward access to navigation/sign-posting. Focus on availability of information in required language Improved offer and links to vol sector support for socially isolated and vulnerable groups (dementia, people in care homes) Clarity about who to call next and responsibility for care coordination ( lay ) Step up Active, integrated case management for vulnerable patients, MDT referral and review Named person responsible for co-ordination and case management Holistic care plan, involving carers, regular follow up and review Access to social care and community services 7 days where needed / feasible Improved referrals between agencies, shared access to information Specialist level input Shared information, accessible in hospital, primary care and by profs in community MDT pre-opau or Ambulatory Care with range of professionals available Physically easy access to MDT. This proposal reflects earlier thinking on design of localities teams, which are being rolled out in Haringey. 19

20 The development of Locality Integrated Teams will form part of the Integrated Practice Unit, in particular, any activity that falls out of the contracted activity of the IPU. It is anticipated that this next phase in design will be taken forward by commissioned providers working with a Clinical Network of Frailty. Further consideration is therefore required for the following: The intention to extend and reinforce the IPU s role in prevention and pre-frail support by amending the eligibility criteria in and so that there would be no age criteria and people could be assessed on their status of frail or pre-frail. A large part of the implementation of the Better Care fund (BCF) is Admissions Avoidance which includes the identification of people at risk of an unplanned admission and developing services that will co-ordinate care around the person to support their independence and prevent issues escalating and needing urgent care. It is proposed that these services will be organised into Locality Teams based around a collection of GPs. As indicated above, Haringey GPs are currently organised into four localities. The CCG will use its responsibilities as a co-commissioner of primary care to link primary care into the organisation of an IPU. This linkage may occur in a variety of ways: through the development of an enhanced service or through commissioning primary care for its role in leading identification of people with frailty or signs of pre-frailty and coordination of care for older people with complex needs. Move to bundled payments / contracts for full care cycles Contracting options: Commissioners and providers considered different contracting options and models. These options are summarised in the Economic Case in Section 3 and explored more fully in advice from Outcomes Based Healthcare 3. The financial targets to be achieved in are set out in Section 3, together with a breakdown of costs included. As suggested above, any future application of the e-frailty tool would help define activity and financial analysis more accurately. Integrate care delivery across separate facilities The Integrated Practice Unit outlined in Figure 6 above will be developed by the successful provider from July 2015 to align to the locality integrated teams. This further development in will involve local clinicians and frontline staff, working together to identify which elements of the care and case management of those teams will be part of the Integrated Practice Unit. The model will essentially be focused around primary, community, social care and voluntary and community services to deliver integrated services to a wider population so further work required to determine the activity that will form part of the Integrated Practice Unit. Points to note are that while integration will include Primary and Social care, neither will be included in the contractual arrangements in (explored further in Sections 3 5). Underpinned by: the creation of an Enabling Information Technology Platform Developing a shared record able to underpin integrated services delivery is a business critical function for all CCGs within NCL, not just for this population within this VbC programme, but for integrating services around a number of populations: people with long term conditions, creating an integrated urgent care system. The development of a shared record is being proposed as an enabler to the new SPG Transformation Programme being designed to deliver the NCL Strategic Plan. 3 Contracting for Outcomes, a value based approach, July 2014, Outcomes Based Healthcare, 20

21 2.4 Risks The main risks associated with the potential scope for this project are summarised in Appendix A, together with their mitigations. The top five risks identified are in Table 1: A. Contract risks Risk description/ cause and effect 1. Financial case: The modelling or assumptions of the current service and start-up costs of a new service are not sufficiently developed or agreed to inform contracts. Risk is of inaccurate baseline costs or failure to implement. 2. Provider(s) appointment: The appropriate route to identifying and appointing providers is delayed which puts delivery timescales for the programme at risk B. Project risks: To overall achievement of project aims 6. VbC has perverse impact on other contracted activity, ie activity in no VbC cohorts spikes as a response to some activity being within a block contract. Design of Vbc contract terms must include recognition of this risk and penalties attached. 7. Delivering the enablers including interoperability in order to create the platform for change for the initiatives go live in Demand for services increases before efficiency savings can be realised through improvement of services and/or unmet need. This would mean the costs of service could destabilise commissioner and/or provider budgets. Existing mitigations & controls How are we managing this risk? What are the key controls in place to prevent the risk? Detailed baseline analysis has been undertaken which has been quality assured by commissioners through independent financial experts A programme lead is in place to manage process. Governance and commercial risks being actively managed at VBC programme level SRO for VBC will take responsibility for approving decisions Existing channels of contract management to monitor levels of performance for older people An interoperability working group is managing the issues in the borough Impact (1-5) Full bundle 5 Partial bundle 4 Likelihood (1-5) 3 Total risk (0-25) The efficiency targets are aligned with the Better Care Fund and QIPP Planned Actions: Further quality checking has been and will continue to be undertaken with providers Additional work required with analytic team at CSU to ensure monitoring system can be put in place for accurate activity reporting for this cohort. Risk reviewed at each VBC Steering Group A working group involving Swan Partners and CSU contracting lead is in place to explore the best way to mitigate the risk of unforeseen shifts in costs between the main contract and the VbC contract. Review and reporting on performance on a quarterly basis as part of the ongoing project management Further management and consideration required by the Integrated Care operational group of the development of localities. Consider identifying potential level of unmet need, for example using A&E attendances or GP registration rates as proxies. 2.5 Conclusion The principal aim of the project is to provide a new commissioning model which is based around commissioning for outcomes. The intention is that this will provide consistent, integrated, high quality and efficient service provision for older people with frailty in Haringey that will support improved health outcomes. To meet this broad aim and to deliver effectively VbC in Haringey there are a number of decisions that must be made in relation to VbC as follows: Determine which contract model will best deliver VbC Determine whether a full or partial bundle outcome payment system is preferred Determine the preferred incentive mechanism over the contract period. 21

22 3. The Economic Case 3.0 Introduction In this section there is analysis of the range of options that have been considered in response to the scope identified in the strategic case. This includes consideration of: the critical success factors, the options for the way forward and the contractual models, together with an appraisal of the costs and benefits. 3.1 Critical success factors The critical success factors, and therefore the qualification criteria as above are: 1. The contracting model must deliver the agreed outcomes 2. The contract model must be able to deliver the NCL Integrated Provider Unit (IPU) model of care delivery 3. The existing provider landscape must be able to feasibly adopt the contract model. The above criteria were developed and proposed by the CSU following discussion with the VbC project lead the Diabetes project. They have been confirmed by the Senior Responsible Owner and were ratified by the VbC Steering Group in September The long list of options The long list of options discussed with stakeholders, considered by commissioners and outlined in the Outline Business Case includes the 4 options below 4. Of these, Option 4: Enter into a VbC contract arrangement for a Partial Bundle was agreed. There is was then consideration of the 7 different contractual models from Options A-G. A summary of assessment against the critical success factors is in Tables 2 and 3 below. Option 1: Do nothing/business as usual This means not pursuing value based commissioning for older people with frailty and instead allowing other relevant initiatives to be operationalised, embed and deliver results. These include the Admissions Avoidance Local Enhanced Service, The Better Care Fund and related Integrated Care and Locality Team planning and roll out. Do nothing here means not pursuing a VbC approach, and assumes that the BCF programmes together with development of locality teams will be delivered with some benefits in This option is, therefore, not completely do nothing and cannot as an absolute baseline reference for the other options. The extent of the potential benefit is interpreted within the Haringey BCF plan. The likelihood is a continued emphasis on the development of multi-agency working, driven by BCF plans. This may deliver progress. However, the BCF as currently set is a two year programme. It is likely that the drive towards pooled health and social care budgets will continue. However, the programme will be adapted as a result of political changes and does not, therefore, represent a lasting, local statement of strategic intent. The goal in Haringey is to have a strongly held, medium-long term strategy to commission for outcomes and to develop an integrated model of care for older people with frailty. Outcome based commissioning would therefore be intended to be the over-arching vision, with pooled commissioning being a 4 It should be noted that further options were also sought from providers - no further suggestions were received. 22

23 mode of delivery and reduced non-elective admissions being one likely outcome alongside other important outcomes of care. In terms of meeting the critical success factors in Tables 2 and 3, this option is the least likely to meet the criteria. Option 2: Enter into a Value based commissioning shadow contract arrangement This option has been included as a potential alternative arrangement for the first year of a value based commissioning contract in It could be a stand-alone approach or could be combined with Options 3 and 4 below. This would introduce the VbC focus on measuring outcomes across the health and social care system for the total population segment. Overall contracts with each provider would remain largely unchanged. However the entire 2% of the 2.5% CQUIN (0.5% being nationally mandated) could be aligned to specific outcomes for 2015/16. CQUINs could be weighted to ensure that all providers need to deliver on a particular outcome (or metric) in order for full payment to be triggered. Alignment of CQUINs to the delivery of outcomes could be a bridging measure whilst methods for further contractual change are established. However, the level of ambition for the CQUINs is likely to be limited unless there is a significant infrastructure put in place to support delivery. It is also important to note that Local Authorities do not have CQUINs, so they would have no financial imperative to participate within a provider network. This arrangement maintains the commissioner/provider dynamic and is likely to initiate monitoring rather than delivery of outcomes. In terms of meeting the critical success factors in Tables 2 and 3, this option could potentially meet all criteria. However, it does not create a strong impetus for providers to develop collaborative working or to set up an infrastructure to deliver outcomes, particularly if the CQUIN works alongside activity based contracts. Option 3: Enter into a VbC contract arrangement for a Full Bundle This is a contract in which activity, processes and outcomes are bundled into one contract as illustrated in Figure 8 below. One route into outcomes-based commissioning for a given segment is to identify all costs and activity associated with the population in scope, across all providers, over a set period of time, typically a year, and bundling all of those into a new contract. In this scenario, all providers involved in the care-pathway share accountability and are incentivised for the delivery of specific outcomes, as well as allocating payment for activity and processes using one of the contractual routes. However, this scenario is problematic, given the current legal landscape for NHS contracting, especially related to Primary Care services commissioning. One available option would be to exclude primary care from the bundle and to use an NHS Standard Contract, but this is significantly less likely to deliver the outcomes being sought. Another option is to only include primary care within the outcomes component, leaving all other primary care contracts as is as we have set out below. The involvement of primary care with the other elements is likely to require the use of an overarching contract entered into by all providers and Commissioners with the outcomes element. 23

24 Figure 8: Full bundle excluding NHSE contracts. Source: Outcomes Based Healthcare, Contracting paper, 14 and This option is the most ambitious version of the preferred way forward. It would introduce the VbC whole system approach and incentivise performance against agreed outcomes across the health and social care system, for the total population segment and all related costs. It offers the greatest scope for realizing benefits, because the full costs and outcomes for the population cohort would be bound together. This option would be best be managed by a mature provider network with experience within the health economy of monitoring outcomes and working as a mutually-interdependent group of providers. In the short to medium term, however, it is unlikely to provide the necessary financial sustainability for commissioners and providers, given the degree of uncertainty about the cost envelope for the population cohort; the lack of a formal provider network and the level of financial risk related to over or under performance against outcomes. Getting the financial baseline for the population cohort correct is essential for this option, as the financial risk and impact is even greater for this option than the partial bundle (see Table 2). In terms of meeting the critical success factors, this option could potentially meet two of the criteria. In the long term it offers greatest potential for benefit realisation and for achieving the desired multi-agency approach for this population cohort. However, given that older people with frailty are not routinely being identified, together with the complexity involved in establishing an accurate baseline financial envelope, the proposal here is that the health economy currently is not ready to adopt this contract model. Option 4: Enter into a VbC contract arrangement for a Partial Bundle This route to outcomes-based commissioning for a given segment is to identify all costs associated with the population in scope across providers as above, and then select a share of these costs to be bundled into a new outcomes-based contract as illustrated in Figure 9 below. This would mean all other contractual arrangements would continue, subject to other separate contract negotiations. 24

25 In this scenario, providers share accountability for achievement of outcomes, and only the portion of their budget/costs that is linked to collective outcomes achievement is bundled. This can be dealt with readily under the one overarching contract whilst keeping existing core contracts separate. This is permissible because the separate regulatory requirements are met by the existing contracts remaining in place with the outcomes achievement being dealt with separately in the overarching agreement as a separate but linked contractual relationship. This can be beneficial in that the timing of expiry and alignment of existing contracts is much less of a problem and it can overlay existing arrangements and be varied to meet changes in the providers. Given that it is linked to the existing providers contract and the value could be under the procurement threshold (and feasibly no other providers could deliver these outcomes) there should be less concern over procurement and challenge though the Commissioner should still always keep a clear record of their decisions and justifications for choice of procurement route, especially if no prior advertising or process is undertaken. Figure 9: The Partial Bundle. Source: Outcomes Based Healthcare, Contracting paper, 2014 and This option is a less ambitious version of the preferred way forward. It would introduce the VbC whole system approach and incentivise performance against agreed outcomes across the health & social care system, for the total population segment and a proportion of related costs. It is more likely to achieve financial sustainability in the short to medium term, given the partial nature of the contract bundle which increases sustainability and reduces the degree of uncertainty and associated level of financial risk related to over or under performance against outcomes for commissioners and providers alike. This option allows the providers an opportunity to work together contractually to deliver the outcomes with the activity, financial incentives and outcomes wrapped into an overarching contract as an adjunct to their main NHS Standard Contract for all other activity. This may allow providers time to gain confidence about working together as a single system and incrementally increase the range of outcomes and scale of payments within the bundle. In terms of meeting the critical success factors, this option could meet all criteria. The less known factor here is whether this contract model provides the right levers to deliver the IPU requirement (if all other existing contractual arrangements remain in place). 25

26 3.3 Long list of contract models Options A-G to deliver a preferred option range from loose to tight agreements as in Figure 10: Figure 10: The contracting spectrum. Source: Outcomes Based Health contracting paper, 2014 and The options are outlined below, to include key features and advantages and disadvantages all extracted from Outcome Based Healthcare s contracting paper 5 : A: Loose federation Features Commissioner holds several contracts directly with each provider. Each provider retains full responsibility for the services they deliver. Option to form a joint management team, with a governing body comprised of representatives from each provider, in order to manage this collaboration effectively, though there is no formal contractual obligation upon the Providers to do so. Payments made by the Commissioners under the terms of each individual Provider contract. Outcomes Based Healthcare guidance suggests this is the most straightforward option to implement, requiring minimal change to existing commissioning arrangements. However, there are no shared contractual obligations to improve outcomes. This means that achieving common agreement to changes to each provider s resources if this is necessary is likely to be challenging. 5 _campaign=contractingpaper 26

27 B: Formal federation Features Commissioners hold several contracts directly with each provider. Each provider retains full responsibility for the services they deliver. Providers organise delivery of their services via a memorandum of understanding or a service level agreement, reflecting a common understanding around services, priorities, responsibilities, etc. Option to form a joint management team, with a governing body comprised of representatives from each provider, in order to manage this collaboration effectively. For some forms of contract a contractual obligation to support integrated service provision could be utilised as a specific term under the contract with the Commissioner (only enforceable by the Commissioner). There are two approaches to achieving this formal federated working with providers to deliver the single system: Commissioners hold the standard NHS contract with all relevant providers and there is a memorandum of understanding between providers reflecting a common understanding around services, priorities, responsibilities, that enables them to work together There is an overarching contract for each provider, in addition to their standard NHS contract, that commissions the delivery of outcomes, the collaborative working, the development of the integrated practice unit and that this contract has a percentage of the current overall contract aligned to delivery of the agreed collaboration and delivery of the outcomes. This would contractually oblige providers to work together without going down the lead provider route, which may initially cause some tension between providers. This contract could also include the element of activity that we most want to impact emergency admissions for those aged 75 years old and over. Payment for all providers would therefore be based on delivery of the agreed outcomes, with some risk share for 20015/16. Guidance suggests this model has more structure by introducing a Memorandum of Understanding (MoU) - though these are not normally legally binding - between the providers. It can provide a clearer basis of working and integrated delivery between the providers, even if they maintain separate service delivery under their own contracts. Unless a binding arrangement is agreed and executed there are still no contractual incentives or levers to mandate joint working to deliver specified outcomes and depends on individual providers enthusiasm until this can be put into place. Potentially Commissioners may look to develop the MoU into a more formal and contractually binding arrangement which can embody the principles of the integration and the work expected from each party. It is relatively straightforward to set up and may not require Commissioners to revise existing arrangements and can sit above the various service contracts. Using an overarching contract, however, with or without the emergency admission activity, contractually obliges providers to work together to deliver the outcomes and payment to all or any provider will be based on delivery of the outcomes, which will be the same for all providers. This may be seen by providers as a more attractive option to the lead provider model where some current providers will need to enter into subcontracting arrangements with another provider who is the lead provider and this may lead to provider tensions.. Decision making processes under these arrangements can be quite complex as there is no formal joint senior-level decision-making body, and there is more likely to need to be a 27

28 consensus based model which can be cumbersome unless all the involved parties are aligned. Providers would need to develop their own provider network to deliver the outcomes as they will all have agreed to the same overarching contract. C: Alliance Outcomes Based Healthcare advises that the NHS Standard Contract does not currently permit an approach where one contract is entered into by multiple providers. There is potential to introduce alliance contracting based principles across providers with an overarching agreement entered into by all parties in addition to the providers core service contracts. Prime contractor models D: Corporate joint venture Features A joint venture is set up to contract for services where all providers involved in the care pathway/bundle have a representation and agree on terms of collaboration for delivery of services; Commissioner holds one contract directly with the Joint Venture. Formation of an integrated care pathway between primary and acute and community care services for a specific segment of the population. Generally, provider joint ventures or partnering/consortia arrangements involve two or more parties who agree to work together, committing defined resources to achieve common objectives. If a separate legal entity is established, the joint venture will be known as a corporate joint venture. If a separate legal entity is not established, the joint venture arrangement will be a form of contractual joint venture - which would be akin to a formal federation. Guidance suggests the advantage of this option is a reduction in the need for management resources for the Commissioner (essentially pushing this onto the Joint Venture). There is potential for greater consistency in provision through proper supply chain management across a broader spectrum of services, enhancement of integrated care through a mechanism which relies upon increased collaboration between providers. This option can be complex to define the financial risks and how they would be apportioned across the supply chain: it is resource intensive to ensure joint management board works (though this would be the same for many of the potential models). In an equal joint venture then the parties will need to have an effective decision making mechanism to enable them to take decisions against each other where in the interests of the overall performance. E: Integrator Features Commissioner has one contract, specifying desired outcomes. Integrator subcontracts with all providers necessary to provide pathway. Integrator is performance managed by Commissioner, and, in turn, performance manages all the providers. 28

29 Financial risk sits with integrator to be flowed down to the Providers as appropriate under sub-contracts. Integrator DOES NOT provide care but will look to recover its management/risk based costs for delivering the model. Guidance suggests the advantage of this option is a reduction in the need for management resources for the Commissioner (essentially pushing this onto the Integrator). There is potential for greater consistency in provision through more developed supply chain management across a broader spectrum of services, potentially allowing easier involvement of innovative third sector organisations. There could be enhancement of integrated care through introducing a contractual mechanism via the Integrator which relies upon increased collaboration between providers. Providers are not individually incentivised to contribute to the whole. The management model may be based on a stick (penalty) model rather than a carrot (incentive) model, meaning providers could become disengaged and deliver the bare minimum. All of the supply chain will need to be engaged and to agree the terms of any flow down of the contract there is a risk of the Integrator enforcing down a position to protect its bid position and margin. This could destabilise the supply chain. F: Lead Provider Features Commissioner has a single contract with the Lead Provider. Lead provider organises other providers along the pathway and is responsible for subcontracting delivery of their services but cannot decommission material subcontracted providers without approval by Commissioners. Lead Provider provides, manages and maintains patient records system to be used by staff working at all providers Lead Provider manages and performance manages all services and monitor outcomes in all services Lead Provider ALSO provides care. Outcomes Based Healthcare guidance suggests that providers can directly work together, supported by the contracts between them, to ensure the pathway is as efficient and effective as possible. Incentives can be more effectively constructed to ensure all providers benefit from effective operation of the scheme. However, it must be carefully constructed to ensure visibility of the pathway and issues within it and to enable intervention by the Commissioner in dealing with subcontractors if necessary. The lead provider would oversee all services. Commissioners would be able to hold one organisation to account for delivering agreed outcomes and performance across the entire care cycle. The lead provider would normally directly employ a multidisciplinary/multi-agency management team and provide the IT solution for all Trusts so should be able to deliver this objective. This model does provide a single leadership structure and clear accountability for integrated working. The lead provider would be accountable for reviewing need for all services and planning resources accordingly, though this would need to be undertaken in conjunction with subcontracted providers and not imposed upon them. The success or failure of this model depends on trust and management relationship between the lead provider and subcontracted providers. The lead provider is accountable for the performance of subcontracted providers and therefore will need their agreement to make any changes needed to integrate care or improve quality. The Commissioner remains accountable for the service, but is reliant on the lead provider to hold subcontracting providers to account. The lead provider is dependent on his sub-contracts to effectively flow 29

30 the risks down to the supply chain and a failure to do this adequately can destabilise the contract and the providers. Identifying one provider as the prime contractor may disengage other providers who consider they may be more appropriate for that role. There is a risk that the lead provider could also enforce stricter contract terms or lower remuneration on the subcontractors to cover its management overhead for the structure. Competition and Procurement concerns would need to be addressed in this model. If a single contract approach is being adopted then the Commissioner would need to ensure that a single contract could cover all the relevant services (likely to be either NHS Standard Contract or Alternative Provider Medical Services (APMS, or a variant of these to include primary care with community services). Careful contractual arrangements would be required to set out clearly what is expected of the lead provider and subcontracted organisations. The key risk of all variants of this model is if the lead provider makes decisions about resources that are not agreed by the subcontractors. It potentially limits Commissioners ability to maintain leadership across services if required; the main contractual relationship for providers would be with the lead provider. For example, the lead provider may wish to provide a particular service itself and attempt to decommission a subcontracted provider. G: Single Provider Features One single contract with one provider Provider delivers the vast majority or all services directly and will subcontract for those services it is unable to deliver directly May require full integration/merger of different existing providers into a new organisational form (i.e. an Accountable Care Organisation type model). Guidance suggests the advantage of this option is a reduction in the need for management resources for the Commissioner (essentially passing this onto the one Provider). There is potential for greater consistency in provision through one contract across a broader spectrum of services, and enhancement of integrated care through consolidation of provision under one organisation. The main, significant risk of a single provider model is the considerable disruption to services created by loss of key staff and/or existing estates if one provider takes over the services from the current provider body. There would be issues in terms of competition and patient choice to be addressed in such a model. If the provider failed there would be a greater risk of a need to ensure the protection of a wider spectrum of services. 3.4 Assessment of the long list In the Outline Business Case, the critical success factors were defined as: 1. The contracting model must deliver the agreed outcomes 2. The contract model must be able to deliver the NCL Integrated Provider Unit (IPU) model of care delivery 3. The existing provider landscape must be able to feasibly adopt the contract model. 30

31 Table 2: Short list Option 1. Contract model able to deliver outcomes 2. Contract model able to deliver IPU model 3. Existing provider landscape able to adopt Option 1: Do nothing No Option 2: Shadow contract Short list???? No Option 3: VbC full bundle No Option 4: Partial bundle? Yes A: Loose federation No B: Formal federation? Yes C: Alliance No D: Joint corporate venture No E: Integrator?? No F: Lead provider? Yes G: Single provider No Appraisal of contract model options The contractual models are also been assessed against suggested criteria for investing existing funds: 1. Delivery of Outcomes 2. Feasibility of implementation 3. Effective provider management and collective ownership of outcomes 4. Clinical governance 5. Clinical leadership and engagement Scoring has been applied as follows: Figure 11: Scoring for options appraisal (September 2014) 31

32 Table 3: Appraisal of contract model options Option Outcomes Feasibility of implement -ation Effective provider managemt A. Loose federation B. Formal federation Clinical governance Clinical engagement TOTAL C. Alliance N/A 0 N/A N/A N/A 0 D. Corporate joint venture E. Integrator F. Lead provider G. Single provider N/A 0 N/A N/A N/A Commissioner and provider considerations A paper summarising the above key decisions was discussed with providers at the VbC Steering Group on 11 September and with Enfield and Haringey CCG Governing Bodies on 25 September. The purpose was to share the core narrative / key line of argument and seek views on some key areas for decision in order to inform thinking and next steps, including: 1. Confirming agreement with our criteria for appraising the options and contractual models and the suggested weighting of the options The Steering Group confirmed the preferred option above, noting that a federated contract model was the next strongest contender. It was suggested that arrangements could be put in place for three years, with an openness to consider the partial bundle being set at 10% of value of current expenditure on 75 years old and over. 2. Consideration of key risks and their mitigations including those outlined in Table 1 The risks identified were confirmed and the risk of demand for services increases before efficiency savings can be realised highlighted. Other risks raised have been added to the risk register. 3. Agreement to establish VbC Provider Network working group arrangements The Group welcomed the opportunity to engage in more detailed planning and requested both a technical and a clinical group - to develop the approach and implementation, including the agreement and monitoring of the financial model, risks, arrangements for agreeing, gathering and monitoring outcomes. All providers were subsequently offered the opportunity to participate in technical and clinical meetings from November 2014 to January

33 3.6 Quality and risk appraisals The shortlisted options are assessed below against key risks which relate directly to the contract model and which the model is likely to have an impact upon. These were identified in the business case for the VbC diabetes project and are equally relevant to this project, as follows: 1. Governance: Failure to set up a single robust governance across providers and organisations 2. Cultural: Cultural divides are not effectively managed potentially jeopardising integration and joint working 3. Resilience: External factors are not effectively managed e.g. changing demand, failure of another provider/supplier 4. Legal: Legal restrictions prevent full adoption of the model 5. Logistical: The IPU attributes are not adequately supported 6. Provider: There is insufficient provider appetite for the contract model 7. Reputational 8. Clinical governance. The results from the risk appraisal show that the Lead Provider model (Prime Contractor) is the most suitable, with risks scored from 1-4, with 1 being high risk and 4 being very low risk: Risk rating 1 High risk 2 Medium risk 3 Low risk 4 Very low risk Figure 12: Risk appraisal of contract models Note that a risk register for contract and project risks is also at Appendix A. 3.7 Economic appraisal of short list The financial appraisal in Section 5 considers the costs, both implementation and ongoing management costs, relating to the shortlisted contract model options (a full consideration of the financial envelope relating to the as is situation and the preferred option is set out in the Finance Case and financial model). The implementation costs are being estimated (see Section 5 The Financial Case), and the ongoing management costs are expected to be cost neutral. Where the contract model is more complex, however, and it is highly likely that more extensive legal, procurement or other work would be required, the contract model has been assigned a lower score. 33

34 3.8 Proposed option Four options were previously considered in the Outline Business Case (OBC) by Enfield and Haringey CCGs as summarised in Figure 1 above. Option 4 was the preferred option to enter into a value based commissioning contract for a partial bundle, combined with preference for a prime contractor lead provider (option F). From the above analysis and stakeholder engagement, the preferred option was assessed as the most likely to deliver outcomes and the IPU model, be adopted by the existing provider landscape and support an integrated IT system. The rationale for this preference was included in the OBC and was approved by Haringey s Finance and Performance Committee and Enfield s Financial Recovery and QIPP Committee in November Further development of the preferred option The preferred option has been further explored and refined in relation to the contract, project and financial scope, as follows: Contract scope The CCGs agreed to take a consistent approach across the VbC programme. Through discussions, the partial bundle preferred option has been further developed into what we now describe here as a hybrid model. This means first assigning a portion of the contract value to the delivery of outcomes. This would be managed by a lead provider(s) under an overarching contract which includes the other providers and the commissioner with the activity portion (a more traditional contracting model) remaining within a separate contractual arrangement between the commissioner and each individual provider. This is a partial bundle arrangement. Secondly, a staged approach from a partial bundle to a full bundle (Option 2 below) would be developed over the course of the contract. The business case concludes that the most appropriate option for the VbC project for older people with frailty is to follow Option 3 below, implementing VbC using a hybrid model and following a staged approach from a partial to a full bundle. After setting out the broad strategic context and the case for change in the Strategic Case, the Business Case also considers the options in relation to the delivery of Option 3, the hybrid model. There are a number of decisions required in relation to delivery of the hybrid model which are set out in the commercial and financial cases. Project scope Haringey s F&P Committee and the OPwF Steering Group were advised on 27 February 2015 that Enfield are moving forward with value based commissioning for older people with frailty, but are working to a revised timescale. Haringey CCG will continue with the process of finding a lead provider to co-ordinate care and services for older people with frailty within Haringey and are working with Islington CCG to find a lead provider for the value based commissioning model for people with diabetes. 34

35 Financial scope The financial case has been revised to reflect the changes to both contract and project scope, so that the financial model indicates a staged increase in the value of the partial bundle and reflect costs for Haringey s population cohort only. Provider assurance process Alongside above developments, CCGs have been working collectively with the CSU to design a provider assurance process. This is the subject of a notice to providers issued on 27 February, on the CCG website and via contract finder. This links to a Memorandum of Information that provides further detail on the programme. The provider information day is on 20 March 2015 for organisations interested in being a lead provider for older people with frailty for Haringey CCG and for people with diabetes for Haringey and Islington. More information is in Section 4.6 below Conclusion Based on the above appraisal, taking into account the qualitative, risk and financial aspects of the various options, the proposed option is Option 3 VbC based on a hybrid model for Haringey only. Firstly, applying a partial bundle only, which means assigning a portion of the contract value to the delivery of outcomes. this is a partial bundle arrangement. Secondly, a staged approach from a partial bundle to a full bundle over the course of the contract. The proposal is for delivery through a Prime Contractor Lead Provider model. This model ultimately offers the commissioners a single contract with the Lead Provider whereby the Lead Provider will be responsible for the whole provider network delivering the outcomes across the pathway. This will enable providers to directly work together, supported by the contracts between them, to provide efficient and effective care and incentives can be constructed to ensure all providers benefit from effective operation of the scheme. The incentive structure to support this will be explored further in the next chapter and this model will be taken forward for exploration throughout the rest of the business case. The CCGs are willing to have an open dialogue with providers about how this will work in practice and in the first instance it could be introduced through a single overarching contract for the partial bundle element with the Lead Providers role defined under this contract and the intent to move to a single contract model over time. 35

36 4. The Commercial Case 4.0 Introduction In this Section the commercial viability of the preferred option and contracting models is explored. It addresses the next level of detail in how the chosen contracting model is structured in order to: Support the changes required to transition to the model; Deliver long term viability and efficiency Allocate risks and incentives on an efficient, optimal and equitable basis; and Secure the requisite level of commitment from stakeholders. Key documents have been considered in the development of this commercial case: Outcomes Based Healthcare produced a guide to contracting which has informed initial thinking about the contractual approach 6 Capsticks procurement checklist which supports the above approach. A version populated with draft responses to questions was in the Outline Business Case Monitor s guidance on procurement of integrated services 7. The decision making process for selecting a partial bundle payment mechanism is explained as are the proposal re incentives. 4.1 Commercial objectives A number of key decisions were identified in the OBC need to be made when designing the contract detail that will achieve the desired outcomes. These include: 1. Contract terms: duration, break clauses, risk/gain share arrangements 2. Incentive mechanisms, including: The Bundle size Outcome weightings Performance and payment bands 3. The payment mechanism bundled payment options for the outcome top-slice to lead provider and between sub-contracted providers 4. Any lead provider role, expected pace of change, communications strategy 5. The process for selecting and agreeing the appointment of any lead provider. These matters are considered in Sections below. Set up costs and proposals for how these will be treated is covered in Section 5. 6 Contracting for Outcomes, July 2014, Outcomes Based Healthcare 7 Procurement, patient choice and competition regulations: guidance, July 2014, Monitor 36

37 4.2 Commercial considerations Since the Outline Business Case, there has been further agreement reached on the proportion of the contract which will relate to VbC outcomes over the life of the contract. The proposal agreed - by a commissioner contract terms meeting in December 2014 and subsequently considered by a Contract Delivery Group meeting attended by CCG Directors of Finance within NCL in 2015 is summarised below: 1. The proposed contract term to be for five years (3 + 2 years), noted this will start midyear 1 July 2015) 2. A Full Bundle to be in place for contract year 3 3. Set up costs to be funded separately by the programme and / or via local CQUIN 4. The percentage of the annual financial envelope to be attributable to the achievement of VbC outcomes increasing from 10% to 50% over contract years 1-5: 5. Agreement reached re what is in / out of the financial envelope, for example, social care costs are below the line and not included in the financial envelope, nor are Primary Care or voluntary sector activity. 4.3 Proposed incentive mechanism Financial considerations for the proportion of contract value for payment on outcomes to deliver the contractual model have been further considered since the Outline Business Case. There has been further agreement reached on the proportion of the contract which will relate to VbC outcomes over the life of the contract. A Contract Terms meeting in December 2014 considered the percentage of annual financial envelope attributable to the achievement of VbC outcomes for each contract year. The final proposal set out below has since been revised 8 as a stretching but not destabilising proposition. Year 1 10% Year 2 15% Year 3 20% Year 4 25% Year 5 30% One unanswered and yet important question relating to the design and implementation of performance-based programmes is: does the size of the incentive payments affect the achievement of goals? A number of researchers in economics and psychology have explored this subject but no research has been undertaken to address this specific issue in healthcare. There is no empirical evidence around the effect of incentive size, specifically in relation to outcomes-based payments in healthcare. However, where incentives are used, it is generally accepted that if incentives to meet a goal are too small, organisations will make little effort and generate small changes. If incentives are material enough, it drives bigger changes. In other words, the size of the incentive does matter. However research also suggests that incentives which are too large can also lead to a phenomenon called choking under pressure, when increased motivation and effort can result in a decline in performance. There is considerable variance in the size of current pay-for-performance schemes in the NHS. Implemented in 2009/10 covering 0.5% of acute provider annual contract incomes, CQUINs are currently set at 2.5 % contract value for all healthcare services commissioned 8 The previous proposal was for 35%, 40% and 50% in contract years 3, 4 and 5. 37

38 through the NHS Standard Contract. Primary care Quality Outcomes Framework payments accounts for around 17% of general practice income. Overall, there is no consensus around how much of the healthcare budget for specific segments should be reassigned to being paid on the basis of achieving desired outcomes. That decision should be made at the Commissioners and providers discretion, taking into account the factors identified above and local factors. Outcomes Weight Allocation Having established the overall amount available for achievement of outcomes, Commissioners and providers need to agree which outcomes will initially be commissioned for. For example, in North Central London, 27 outcomes indicators organised in 6 groups were identified within the Older People with frailty segment. While the Commissioners have indicated their intention to measure all outcomes, featuring all of them in an outcomes-based contract is not necessarily practical in the first instance. Some outcomes can be immediately measured utilising data currently collected nationally and that is publicly available (e.g. mortality and complication rates). For these, it is possible to establish a baseline value and initiate monitoring immediately. A number of patient-centred outcomes on the other hand, are not currently being measured. For many, there are tools readily available to start data collection; for others, the development of new measurement tools may be required. Therefore, the availability of measurement tools and ability to establish baseline values might be a significant determinant of which outcomes will initially be included in any outcomesbased contract. Once the decisions around exclusions are confirmed, commissioners and providers must determine the weight carried by each of the outcomes included in the contract. The process for defining the weights is at the Commissioners and providers discretion, taking into account consultation with patients. A pragmatic approach may be required in the first instance to assign equivalent weights to all outcomes and readjust these in the subsequent commissioning cycles, once the collection mechanisms have been refined and following further consultation with patient representatives. The allocation of weightings to each of the outcomes should reflect their relative importance. This process assigns numeric values to judgements, which ideally should be supported by objective information. This decision ideally is made taking into consideration patients collective views. At the least, it should reflect expert views and be undertaken by a group of people representing all of the interested parties i.e. providers, Commissioners and patient representatives in the first instance. 4.4 Performance and payment bands Determining the size of the incentive and outcomes weights are initial steps towards designing an outcomes-based payment system. Another key step is to determine the desired performance levels and the remuneration associated with different achievement thresholds, i.e. performance and payment bands. There are a number of examples in the NHS consisting of different approaches to payment and performance band design. The most common and simple method consists of a 3-band schedule, such the example below: Band A desired performance Band B minimum acceptable performance Band C unacceptable performance. 38

39 More important than determining the number of performance bands, or their descriptions is, however, to determine: The desired performance threshold associated with each band The monetary incentive/penalty associated with each band When baseline measures for the outcomes are defined and ready to be monitored, Commissioners and providers must agree on the desired performance levels that will trigger payment. This can be defined as a percentage change relating to previous year baseline scores or with desired absolute scores. Either way, the most important decision is around where to set the lowest and highest performance band limits, and defining the type of incentive according to the lowest and highest payment band associated with desired performance. Figure 13 below provides three examples of performance banding and associated pay using a percentage change model. This is for illustrative purposes only; the numbers associated with each performance and payment band were selected randomly. This process will be developed in the FBC. Figure 13: Types of incentives, Outcomes Based Healthcare; Source: Each of the above incentive categories can be employed, independent of what contractual route is selected or type of reimbursement bundle (partial or full bundle), since the incentive is applied exclusively to the outcomes portion of the contract. Evidently the proportion of the baseline budget/costs that will be allocated to outcomes achievement will determine the size of the financial impact for each of these choices. It is worth taking into account whether any investment in transformation will be required when considering whether to choose between the three broad types of incentive described below: A. Just Gain, No Pain In this type of incentive model the lowest performance band is not set in order to penalise providers for non-achievement of outcomes: providers are reimbursed in full (100%) for any given outcomes achieved, while the real incentive is in the incremental pay they receive for achievement higher levels of performance. B. Incremental Gain Under this scenario, payment bands are set so as to incentivise providers for achieving desired outcomes, but somewhat penalised if minimum requirements are not met. C. Just Pain, No Gain In the most austere model, providers do not receive any additional payments for outcomes achievement. All funding for this model must come from within existing budgets. The incentive is in achieving minimum requirements in order to recover the part of their budget that was linked to outcomes and in not getting overly penalised for meeting very low performance standards. 39

40 Commissioners need to take into account what is desirable (some gain) with what is feasible within financial constraints. The decision around performance thresholds or difficulty in achieving each performance band relative to baseline will also influence how each of these incentive categories affect providers. 4.5 Commercial implications Below is a list of headings which could be used when the preferred option involves a reconfiguration of existing provision: Contract Management: There will be one five-year contract (3 + 2 years) for the VbC outcomes (this would be a form of overarching contract in a similar form to that which was developed for custodial healthcare systems by NHS England) across the pathway with the Lead Provider and the other contracted providers as well as the commissioner. This will set out the initial contractual relationship between the Lead Provider and the other providers NHS Standard Contract arrangements extracting the VbC activity (excluding the outcomes) will also be put into place. This is beneficial at present because the timing of expiry of contracts and alignment of existing contracts is then much less of a problem and it can overlay existing arrangements and be varied to meet changes in the providers. This also allows a much easier transition into the full bundle approach later on when the Lead Provider takes on one contract to cover the VBC activity and outcomes which have been separated out and developed through the partial bundle stage. The level of CCG management of the subcontracts between the Lead Provider and the subcontracted providers is being developed. It is likely that in early years, the management framework used will be developed in conjunction with the commissioners. Reporting would follow the standard contract process, i.e. there would be a contract management group and quality review process though this could be streamlined through obligations on the Lead Provider under the Single Overarching Contract. Continuous Improvement: This will be expected as standard and will follow existing contractual obligations and language. Human Resources (including TUPE): It is anticipated that the TUPE Transfer of Undertakings (Protection of Employment) Regulations will not apply to arrangements as they currently stand as providers will be sourced from the existing provider landscape Any changes in patient care would be agreed with staff. Implications for staff will need to be reviewed regularly by individual organisations and through the project governance processes. Facilities: There will be no new capital builds and providers will use their own existing facilities or those of their partners. 40

41 Equipment (for example, analysers and associated technology): Providers will use existing equipment. This may require reconfiguration or movement. The capital costs of this will be covered by providers. Information technology: The Lead Provider will deliver a CCG strategy of integrated digital and personal records and will work with providers to collect data and measure outcomes across the pathway. Logistics: Support services will continue as per the current arrangements. Further investment requirements: There are expected to be implementation costs to be quantified. There will be CQUIN payments available to incentivise providers. However, there are expected to be savings for providers over the duration of the contract due to increased efficiencies as well as investment in community services through the Better Care Fund in Provider assurance strategy and implementation timescales The intention is to assess the capability of providers (through a provider assurance process) for the delivery of a new five-year contract for the outcomes bundle to be based on the Prime Contractor Lead Provider and staged progress to full bundle option. Advice from procurement specialists is that a provider assurance process is an appropriate course of action, in accordance with the obligations of the CCGs under the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations The process has, therefore, been developed to support selection of the lead provider. The following sections assume that Option 3 (a staged approach from a partial bundle to full bundle over the course of the contract) is implemented although there is still the risk of legal challenge for all options. In developing the proposed provider assurance approach, the key legal considerations taken into account were patient engagement and public consultation requirements, procurement requirements and competition requirements. Figure 14 below provides an overview of the proposed approach to provider assurance to select the provider(s) with whom this model will be implemented. This includes the following features to meet the obligations of the guidelines that govern these activities: An up-front advert/notice informing the wider market of the proposals, giving details of a provider event where providers can learn more and contribute their thoughts. The notice will refer to the three gateway conditions that must be met by any lead provider, therefore allowing providers to review their ability to meet our core requirements. These have been developed from the outcomes against which the service will be commissioned, and the given attributes of the IPU, which will deliver the service A provider information and feedback event will be an opportunity for the programme to provide further details of the outcomes, IPU and clinical models, and for the providers to give feedback on their ideas as to how this can be successful from an operational / contractual perspective Following the event there would be an assessment of the available providers who satisfy the three gateway criteria, and who could therefore act as Lead Provider. This will take the form of a questionnaire (based on evaluation criteria derived from outcomes). In the context of this assessment, we will determine if we are able to identify with reasonable certainty those providers that are capable of providing the services (or that are capable of developing the capacity/infrastructure to do so) and which provider (or providers) are most capable of meeting the needs of patients and of improving services, and represent best value for money. 41

42 Use of outcomes Activity No. of providers Business Case: Older People with Frailty Overview of the proposed provider assurance process Aim of the provider assurance process is to put the best interests of patients first STAGE ONE Market Assessment STAGE TWO Gateway Review and Questionnaire Stage STAGE THREE Detailed Assessment Questionnaire Many X x x Notice issued to register interest Market briefing & feedback event Questionnaire issued to providers Questionnaire responses reviewed Providers identified Detailed assurance in conjunction with commissioners Outcomes of the assessment process Outcomes determine gateways Providers to self assess against gateway questionnaires Outcomes determine questionnaire. Providers reviewed against gateways Iterative process may be required, depending on numbers of providers involved at this stage Outcomes determine detailed assurance requirements Figure 14: Overview of the provider assurance process; Source: VbC team 4.7 Conclusion In this section, consideration was given to the possible payment and incentive mechanisms that could be utilised and concluded that a staged approach to the full bundle was the preferred option. This would provide a measured pace of change whilst still supporting the achievement of improved outcomes. It then went on to consider the provider assurance process that will be put in place in order to assess the possibility of a Lead Provider to manage the staged approach to the full bundle. A number of details in relation to contracts, logistics and procurement will need to be explored further as the project progresses. The CCGs are willing to have an open dialogue with providers about how this will work in practice. The following Finance Case will consider the financial envelope to deliver the proposed solution of a Prime Contractor Lead Provider model with a staged approach to a full bundle and the Management Case will consider how this will be delivered and plans moving forward. 42

43 5. The Financial Case 5.0 Introduction This section sets out the high level financial considerations relating to the implementation of the value based commissioning (VbC) approach for people who are frail and 75 years old and over across Haringey. It should be noted that at this stage a whole population approach has been taken for the financial baseline (rather than application of the percentages of the population who are frail and pre-frail). 5.1 Key assumptions There are some key overriding assumptions that underpin the approach to defining the financial business case. These are set out below: There is no additional funding over and above the current financial envelope available from the CCG, either initially or across the length of the contract Capital expenditure is not known to be required to implement the new service delivery model Contract years run in line with financial years, commencing 2015/16 Costs and activity information relates to the following specific NHS providers: The Whittington Hospital NHS Trust North Middlesex University Hospital Trust University College London NHS Foundation Trust Royal Free London NHS Foundation Trust Barnet and Chase Farm Hospitals (Royal Free London NHS Foundation Trust) Barnet, Enfield and Haringey Mental Health NHS Trust 5.2 Financial Envelope 2013/14 The current financial envelope has been generated by a range of approaches given the availability and accuracy of key data sets. Costs were calculated by creating an activity and financial baseline for all activity for people 75 years old and over. This has been challenging for some providers, and where activity has not been easily obtained with this age profile, a formula for patient / service user prevalence has been applied. Outcomes Based Healthcare worked with the CCG to define outcomes which matter to people, and define how processes of care can be organised around clearly defined outcomes. They have provided expert clinical input to the development of the service delivery model and analysis of the activity and financial data. International and national benchmarks, information and evidence have been considered in generating the key assumptions. Source Data Financial data is based on months 1-6 of 2014/15 to ensure that recent system changes brought about through the implementation of the BEH Clinical Strategy are reflected appropriately. Detailed sources of all data and assumptions made in gathering data for different settings are set out below: 43

44 Table 4: Data and Information Sources Data Set Primary Care Secondary Care Inpatient Secondary Care Outpatient Secondary Care Non-PBR Community Care - Annual budget for patient cohort Community Care Continuing Healthcare Demographic Growth Social Care Tariff inflation / Efficiency Source CCGs SUS Data SUS Data SLAM Data CSU CCG CCG Financial Plan assumptions for 2015/16 planning round CCGs CCG Financial Plan assumptions for 2015/16 planning round Calculating the Financial Envelope Different approaches have been taken to calculate the relevant costs across each care setting based on the level of detail, the robustness and the availability of financial and activity information. Primary Care: There is no detailed breakdown of primary care activity and therefore difficult to identify an appropriate estimate of the costs which are likely to be linked to this patient cohort. Outcomes Based Healthcare has provided an expert view on the percentage of costs that relate to the treatment of people 75 years old and over which is estimated at c.25% of the Core GP care and Out of Hours costs relating to 75 years old and over. Details as to how these percentages have been derived have been separately documented by Outcomes Based Healthcare. Secondary Care: In line with the approach for 2015/16 contracting, SUS and SLAM data has been provided by the CSU for months 1 to 6 of 2014/15 and forms the basis of the financial and activity information relating to the current secondary care providers. OBC have applied their specialist clinical knowledge to identify the activity, based on Healthcare Resource Group (HRG) information, which was deemed to be core to those to patients 75 years old and over. Community Services: Community Services costs have been calculated through analysis of activity. Each service line was reviewed by Outcomes Based Healthcare to identify if the likely activity within it was core for the cohort or not. 2013/14 data was used to identify the % of patients that were aged 75 or over and this % was applied to the 2014/15 data set. The proportion of activity overall was then applied to the annual contract value to determine an estimated financial envelope. Mental Health: Trust financial and activity reports were used to identify the specific service lines which were to be included for this cohort, e.g. memory services, dementia etc. Social Care: Financial and activity data is based on 2013/14 outturn data provided by Local Authorities to Haringey and Enfield CCG. Data included a range of services such as Enablement/Reablement, Assessment, Review & Case Management, Long-Term Community Care, Supported Accommodation/Housing-Related Support, Equipment & Adaptations, and Council-Funded Voluntary Sector Grant-Funded Services. 44

45 Current Financial Envelope Formal agreement with Haringey Council would be required for any element of social care cost to be included. There may be some areas of social care activity, however, that lend themselves to be part of the model given they will be a significant element of locality integrated teams, for example, enablement. This has yet to be confirmed with the local authority and therefore the value is included as a memo entry within this case. Similarly, due to their specific commissioning arrangements at this point in time, primary care related activity and corresponding costs have also been excluded from the overall financial envelope which will be managed through the new service contract. Given the above, the revised NHS financial envelope (excluding Primary Care and Social Care) is therefore estimated to be c 25.4m for 2014/15. This estimated figure is very sensitive to the assumptions made, particularly within the acute setting. This is due to the fact that current reporting does not identify frailty and therefore an estimate of this has been made through the identification of specific HRGs by speciality. It is understood that an e-frailty index is being developed nationally and once this is available, it will identify at a patient level the cohort which should be managed through the IPU. Once this has been embedded, further iteration of the financial envelope will be possible, however this will not be available until year two of the contract at the earliest based on current understanding, hence the HRG approximation approach in the meantime. 5.3 As is Financial Case Based on the above the financial envelope for 2014/15 of c 25.4m, adjustments for demographic growth, non-demographic growth and tariff inflation/efficiency changes have been made to the 2014/15 base data to derive an estimated financial envelope for 2015/16 onwards (2015/ /20). Demographic and non-demographic growth equates to c3% growth across acute activity in each contract year. The tariff inflation / efficiency changes reflect 2015/16 national planning guidance and incorporates the assumption that providers will be opting for the Enhanced Tariff Option for contracting purposes in 2015/16. The resultant projected financial is shown in the tables below. "As is" Baseline (14/15) 15/16 16/17 17/18 18/19 19/20 Total Community services Secondary Mental Health Savings Set-up costs Sub Total - NHS Financial Envelope Primary care Community CHC Voluntary sector Social Care Costs Total - Financial Envelope The total NHS financial envelope for the proposed five-year contract period is therefore c 132.3m. 45

46 5.4 Value Base Commissioning Financial Envelope To generate the VbC business case financial envelope, consideration was given to set up costs and financial savings. Set up Costs It is understood that there will be minimal set up costs involved in the mobilisation and implementation of the new service delivery model due to the fact that the VbC approach is more about a way of working than a significant change to premises or equipment. In the event that Trusts select the Enhanced Tariff Option for 2015/16 contracting purposes, Commissioners will look to establish a CQUIN around VbC which supports the development of the service and will more than address any initial set-up costs. Financial Savings Whilst the move to this service delivery model is not financially driven, it is anticipated that that its implementation will support the Commissioner s and Trusts in delivering the overall Better Care Fund and Quality, Innovation, Productivity and Prevention (QIPP) targets. For Haringey in 2015/16 there is a savings target of 1,247,850 associated with delivery of the Better Care Fund targets which will require a reduction of 705 adult admissions. Investments of 1.3m will be directed towards developing an infrastructure that both supports delivery of the Better Care Fund target and underpins the clinical model for Value Based Commissioning. Given that savings associated with admission avoidance will continue to be expressed as QIPP schemes and negotiated with Trusts, no additional savings assumptions have been built into the financial model for VbC. The resultant financial envelope for the VbC case is shown below. The value for the five year contract period remains the same as the as is case above of 132.3m. Preferred Option (VbC) Business Case Baseline (14/15) 15/16 16/17 17/18 18/19 19/20 Total Community services Secondary Mental Health Savings Set-up costs Sub Total - NHS Financial Envelope Primary care Community CHC Voluntary sector Social Care Costs Total - Financial Envelope Payment for Outcomes and Bundling The annual financial envelope will be split into two parts. The first part will be payable on the achievement of the agreed patient outcomes (the outcome element) and the second part in respect to the core activity and process element of service delivery (the core element). The outcomes element is therefore at risk and if the providers fail to deliver some or all of the agreed outcomes, the level of total income they receive will be reduced. The commissioners are keen to pay the full financial envelope to the providers however quality of outcomes will be key and as such, increasingly challenging thresholds associated with each of the outcomes will be set over the five-year contract term. 46

47 The VbC partial bundle option has been proposed as increasing in value over the contract term. In this case, 10% in year one, then 15%, 20%, 25% in subsequent years, with 30% in year five. In determining this percentage, consideration was given to ensuring that a meaningful amount was at risk but at the same time ensuring that providers would not be destabilised. Commissioners considered applying a flat % for outcomes however it was felt that to drive the necessary change and given the size of the total financial envelope, that this would need to be c30-40%. However, whilst this was the objective, it was recognised that the system needed a transition phase and hence the decision taken to have an increasing % payable on outcomes as the new clinical model is developed and embedded. The following table shows that the overall element at risk at 10% in year one is c 2.5m, rising to c 8.2m in year 5. Preferred Option (VbC) 15/16 16/17 17/18 18/19 19/20 Total Outcomes % 10.0% 15.0% 20.0% 25.0% 30.0% Outcomes 'm Process & Activity % 90.0% 85.0% 80.0% 75.0% 70.0% Process & Activity 'm Total The key to managing this balance rests with the thresholds and targets which are set against each outcome, if too challenging, the provider is less likely to achieve them and hence forego the associated financial value, if too lenient, the quality of service and patient outcomes may not be improved. It is envisaged that the thresholds and targets associated with each outcome will increase over the contract term to drive ongoing quality and outcome improvements. While it is recognised that realistic but challenging outcome thresholds will be set, it is possible that the providers may not achieve 100% of them. The second table illustrates the actual amount which could be received by the providers in the event that they achieve 95% of the outcomes and therefore receive 95% of the outcome element of the financial envelope Scenario 1 15/16 16/17 17/18 18/19 19/20 Total % Outcome achieved 95.0% 95.0% 95.0% 95.0% 95.0% Outcomes achieved 'm Process & Activity % 100.0% 100.0% 100.0% 100.0% 100.0% Process & Activity 'm Total Under this scenario, the amount which the providers would receive could potentially be reduced by c 1.3m over the 5 year contract term. As set out above, the commissioner will be looking to set challenging but not unachievable thresholds for each outcome. In doing so, they will take into consideration the mobilisation plan. Consequently it is expected that the providers will be able to achieve a significantly high proportion of the available monies. Furthermore, the commissioners may choose to reinvest any monies not paid out against outcomes related to services and VbC providers or 47

48 others to ensure that while providers may suffer financially from poor performance, patients do not. Bundling It is the commissioner s intention that the provider contract holder (assumed to be a lead provider) will receive the outcome element of the total annual financial value that is due to them based on performance. It will then be up to them to agree with the relevant provider how that is distributed. In the early years, the framework to do this will be worked up in conjunction with the commissioners. Over the course of the contract, the commissioners will transfer the core bundle to the lead provider as well. Details of the timing of this will be informed by mobilisation of the new service delivery model however current assumptions are that this will be for year 3. Throughout the contract term, the core element will effectively be a block but to ensure transparency and deliverability of the service model and associated quality, there will be a clearly defined set of metrics against which the providers will be monitored and managed. 5.6 Risks Table 5 overleaf sets out the key risks associated with the financial envelope. In allocating these risks, consideration has been given to the party best placed to manage the risk. The indicative scoring is based on a 1-5 rating, with 5 being high. 5.7 Sensitivities and Scenarios In light of the quality of the information available to date and the corresponding assumptions which have been made, a number of scenarios and sensitivities have been run to understand the impact on the VbC financial case. The financial impact of each of these scenarios for 2015/16 and also over the whole of the five year term is set out in the table below. Preferred Option(VbC) cost Financial Envelope m Sensitised Cost Financial Envelope m Variance gain / (loss) m Preferred Option(VbC) Cost Financial Envelope m Sensitised Cost Variance Financial gain / (loss) Envelope m m No. Sensitivity FY15 / 16 FY15 / 16 FY15 / 16 5 years 5 years 5 years 1 Overall demographic growth set at 1% higher than VBC (0.3) (4.1) 2 Overall non-demographic growth (i.e. unmet needs) set at 1% higher than VBC (0.3) (4.1) 3 Acute tariff inflation/ efficiency set at 1% less than VBC (i.e. assume lower efficiency target set by NHSE) (0.1) (2.0) 4 Community services price inflation/ efficiency set at 1% less than VBC (i.e. assume lower efficiency target set by NHSE) (0.1) (1.2) 5 Mental Health services price inflation/ efficiency set at 1% less than VBC (i.e. assume lower efficiency target set by NHSE) (0.1) (0.8) The table above illustrates the low financial impact in year for each of the scenarios. 48

49 Table 5: Key risks of the financial envelope Risk description/ Existing mitigations & controls How are we cause and effect managing this risk? What are the key controls in 1. Block VbC Contract leads to higher charges through wider Acute contract (owner: CCG) 2. Managing Provider Sub-Contracts without additional resource (Owner: Lead provider) 3. Managing outcomes outside of Lead Provider s direct control (Owner: Lead provider) place to prevent the risk? Clear definition of patient cohort and relevant HRG codes in scope Activity reconciliation across VbC and acute contracts are regular intervals, more frequently in year one Block approach to wider acute contract. Investigate potential additional funding streams, e.g. from NCL Investigate potential opportunity to cover costs through top sliced funding across all providers. Development of effective working relationships with other providers Clarity across providers on model of care and how this links to outcome achievement Fair and transparent process to distribute payments on achievement of outcomes across provider network Achievable and clear thresholds for achievement of outcomes negotiated with CCG. Impact (1-5) Likelihood (1-5) Total risk (0-25) Planned Actions: A working group involving Swan Partners and CSU contracting lead is in place to explore the best way to mitigate the risk of unforeseen shifts in costs between the main contract and the VbC contract An over-arching contracting is being developed that will provide a clear contractual structure between Commissioners, the Lead Provider and other, linked providers The over-arching contracting being developed between providers will be key in setting out financial arrangements and behaviours between providers. 4. Demand growth above the demographic and nondemographic growth contained within the financial envelope (c3% p.a.) (Owner: providers) Effective development of GP relationships to assist in self-management and prevention approaches Effective development of the clinical model to support early discharge and care outside of the acute hospital setting The financial model has been based on projected population increases. The risk of unforeseen growth in the population cohort. Identification of un-met demand will need to be managed carefully in the planning of the model of care. Note: Key contract and project risks are in Appendix A. 49

50 6. The Management Case 6.0 Introduction This section addresses the achievability of the VBC project firstly by considering national and international case studies. It then goes on to explore the programme management required to deliver the project, the communications and engagement strategy and the risk management. 6.1 Evidence of achievability This management case principally concentrates on the achievability of the VbC project by considering the actions that will be required to ensure the successful delivery of the project. Figure 15 below sets out a summary of the evidence from case studies of the success of similar approaches both nationally and internationally highlighting the potential benefits, both financial and non-financial. Figure 15: Evidence of achievability. Source: Oxfordshire CCG Business Case: To support the introduction of Outcomes Based Contracting for Older People, 19 November Programme management arrangements This VbC project is an integral part of the overall VbC programme in NCL, which comprises a portfolio of projects covering Mental Health, Older People with Frailty and Diabetes. The programme is managed by a NCL Programme Steering Group. 50

51 Sarah Price, Chief Officer Haringey CCG is the Senior Responsible Officer for the overall programme as well as for the older people with frailty project. This OPwF project is supported by a Project Lead and an interim project manager. Project roles and responsibilities The following roles and responsibilities have been identified for the VbC project: Project Management Office: providing PMO support at a programme level across the projects Value coaching (contracting and outcomes): ongoing coaching at a project level to discuss and address specific project circumstances and challenges Programme communication and engagement: prepare and issue programme level communications Project knowledge management: ensure lessons learned and progress is shared across all projects Business case support Finance Data analysis Contracting. Haringey CCG has lead commissioners in place for integrated care and locality team development who are actively involved in the project (one is a joint post with the London Borough of Haringey). At a future point, the commissioning leads will assume responsibility for the project, working with the lead provider(s). Commissioners will report through their borough specific governance arrangements for Integrated Care. A VbC Steering Group oversaw the project to 2 March This Group will cease to meet now that the provider assurance process has begun. 6.3 Project plan A high level plan for phase 3 and implementation is set out below: Figure 16: VbC programme high level plan for phase 3 51