Full Business Case. County Hospital Medical Equipment Business Case

Transcription

1 Full Business Case County Hospital Medical Equipment Business Case June

2 Document Control Version Date Issued Brief Summary of Change Owner s Name V0.1 First draft Arcadis JW V0.2 Updated to include Training Policy and Maintenance Policy Arcadis - JW V0.3 Option Appraisal and Capital cost additions Arcadis - JW V1.0 Final release to CPB Arcadis - JW V1.1 Updated for comments from NHSI Arcadis - HD V1.2 Financial tables updated to separately reflect NHSI funding UHNM - CM 2

3 Contents Glossary of Terms and Abbreviations 5 1 Executive Summary Introduction & Background Commissioner and Stakeholder Support Capital Programme Case of Need Economic case Summary of FBC Scheme Capital Cost summary Financial Case Management Case Timescales UHNM Trust approval Recommendation 11 2 Strategic Case Error! Bookmark not defined. 2.1 Introduction & Background Error! Bookmark not defined. 2.2 University Hospitals of North Midlands NHS Trust Error! Bookmark not defined. 2.3 Strategic Case for Change Error! Bookmark not defined. 2.4 Capital Programme Error! Bookmark not defined. 2.5 Investment Objectives Error! Bookmark not defined. 2.6 Case for Change Error! Bookmark not defined. 2.7 Summary Error! Bookmark not defined. 2.8 UHNM Board Support & Approval Error! Bookmark not defined. 2.9 Commissioner & Stakeholder Support Error! Bookmark not defined Equality and Diversity Error! Bookmark not defined. 3 Economic Case Error! Bookmark not defined. 4 Commercial Case Error! Bookmark not defined. 4.1 Procurement Route and Contract Structure Error! Bookmark not defined. 4.2 Summary of Scheme and Costs Error! Bookmark not defined. 4.3 Training for new equipment Error! Bookmark not defined. 4.4 Maintenance programme for new equipment Error! Bookmark not defined. 5 Financial Case Error! Bookmark not defined. 5.1 Introduction Error! Bookmark not defined. 5.2 Key Features of Financial Case Error! Bookmark not defined. 5.3 Trust Financial Position Error! Bookmark not defined. 5.4 UHNM Income and Expenditure Error! Bookmark not defined. 5.5 Impact on balance sheet Error! Bookmark not defined. 5.6 Cash flows Error! Bookmark not defined. 5.7 Conclusion Error! Bookmark not defined. 3

4 6 Management Case Error! Bookmark not defined. 6.1 Programme Error! Bookmark not defined. 6.2 Capital Programme Board Error! Bookmark not defined. 6.3 Outline of Change Control Error! Bookmark not defined. 6.4 Risk Management Error! Bookmark not defined. 6.5 Benefits Realisation Plan Error! Bookmark not defined. 6.6 Post Project Evaluation Error! Bookmark not defined. 7 Conclusions & Recommendations Error! Bookmark not defined. 8 Recommendation Error! Bookmark not defined. 4

5 Glossary of Terms and Abbreviations Abbreviation Full term ABC CBC CCG CQC CSF CRL DCF DDA DH EAC ESL FBC FM GMP HBN HMT HSE HTM / N I&E IM&T LTB LTFM MSFT NPV NHSI NHS TDA Acquisition Business Case Capital Business Case Clinical Commissioning Group Care Quality Commission Critical Success Factor Capital Resource Limit Discounted Cash Flow Disability Discrimination Act Department of Health Equivalent Annual Cost Essential Services Laboratory Full Business Case Facilities Management Guaranteed Maximum Price Health Building Note Her Majesty s Treasury Health and Safety Executive Health Technical Memorandum / Note Income and Expenditure Information Management and Technology Local Transition Board Long Term Financial Model Mid Staffordshire NHS Foundation Trust Net Present Value NHS Improvement NHS Trust Development Authority 5

6 Abbreviation Full term P21+ Procure 21+ PMO PPP PSCP RIBA RSUH RWT SFI SGH SSB UHNM TSAs UHNS VAT Project Management Office Public Private Partnership Principal Supply Chain Partner Royal Institute of British Architects Royal Stoke University Hospital Royal Wolverhampton NHS Trust Standing Financial Instructions Stafford General Hospital Sustaining Services Board University Hospitals of North Midlands NHS Trust Trust Special Administrators University Hospitals of North Staffordshire NHS Trust Value Added Tax 6

7 1 Executive Summary 1.1 Introduction & Background In February 2014 the Secretary of State approved the Trust Special Administrators recommendations for the future of Mid Staffordshire NHS Foundation Trust. This recommended that University Hospital North Staffordshire NHS Trust assumed responsibility for the staff, assets and services delivered at the former County Hospital and Royal Wolverhampton Trust assumed these responsibilities for Cannock Chase Hospital. The entity of Mid Staffordshire Foundation Trust was to be dissolved. In July 2014 the Board approved the Acquisition Business Case for County Hospital and submitted it to the NHS Trust Development Authority for their consideration. The Acquisition Business Case proposed that University Hospitals North Staffordshire NHS Trust acquire the services and facilities from Mid Staffordshire Foundation Trust. The Acquisition was to be undertaken on the basis that the clinical model set out in the Trust Special Administrator s report dated December 2013 would be implemented. Following the approval of the Acquisition Business Case, and a subsequent Addendum November 2014 by the Trust Development Authority, the University Hospital of North Staffordshire NHS Trust acquired the responsibility for the delivery of a number of clinical services at Mid Staffordshire NHS Foundation Trust for a period of 29 months from 1 November The two Trusts combined to form the University Hospitals of North Midlands NHS Trust. This Full Business Case presents the case for the Replacement of Life expired Medical Equipment. This Business Case sets out the need for 5.987m capital 3.364m of which is requested from NHSI and 2.623m funded by the Trust. This investment is to support the implementation of the model of care approved by the Secretary of State in February 2014 and is one of a series of cases that will be submitted by University Hospitals of North Midlands NHS Trust against the agreed 83.2m capital allocation outlined in the Acquisition Business Case. The urgent requirement to complete capital works that enable University Hospitals of North Midlands NHS Trust to implement the Trust Special Administrators model has led to the decision by University Hospitals of North Midlands NHS Trust to proceed straight to Full Business Case bypassing the Outline Business Case stage. University Hospitals of North Midlands NHS Trust understand the risk of doing this and in an attempt to mitigate this risk have ensured that the Full Business Case addresses the option appraisal work. In addition it is recognised that to achieve the target timescale of completion by April 2017 the usual approval processes will be fast tracked to ensure that the commencement and implementation of this project is not delayed. 1.2 Commissioner and Stakeholder Support The standard process for the development of a large capital investment of this nature would be for the Trust to develop a programme setting out options that would be consulted on widely with a range of stakeholders. In this instance the principles underlying the need for significant investment were tested by the Trust Special Administrators process. The Trust Special Administrators model of care was widely consulted upon with Commissioners, Staff, Patients and Regulators. Commissioners confirmed their support for the Trust Special Administrators model of care. Details of this process are set out in the Acquisition Business Case, Section 2. 7

8 1.3 Capital Programme The Acquisition of services and facilities from Mid Staffordshire NHS Foundation Trust required changes to be made to both the County Hospital and the Royal Stoke University Hospital estate. This will enable University Hospitals of North Midlands NHS Trust to meet regulatory and commissioner requirements and to deliver the benefits and synergies identified in the Acquisition Business Case. The Capital Business Case (July 2014) formed an appendix to the Acquisition Business Case and presented a number of investment projects across the estate to ensure that: Each hospital site delivers the optimal solution; The overarching capital investment programme achieves the desired outcomes set out in the Acquisition Business Case. The Capital Business Case requested a total capital allocation of 83.2m which will be applied for via a number of separate business cases each business case will be a subset of the total funding solution. This enables individual elements to be finalised whilst ensuring that the capital programme can be completed within the agreed 29 month timescale. In addition to the 83.2m provided by the Trust Development Authority through the Capital Business Case, University Hospitals of North Midlands NHS Trust is contributing over 16.5m of operational capital towards the works required to configure both hospital sites. 1.4 Case of Need Following the review undertaken as part of the IHSS Acquisition Business Case (ABC) to evaluate the age, condition and risk associated with the Medical Equipment at County Hospital, it was concluded that there is significant risk which needs to be addressed. The principal risk relates to the significant number of items being life expired which may result in a full or partial failure of the item. This in turn might result in increased clinical risk. A full Due Diligence review was undertaken by EC Harris and the subsequent Due Diligence report identified that an allowance of 12.7m was needed to replace life expired items. This was later amended to a 10m allowance needed for Medical Equipment as part of the ABC. In 2014/15 and 2015/16 an internal business case was approved by the Trust for 4m from internal Trust capital. This FBC outlines the need for the remaining 5.987m funding to support the 2016/17 financial year. Initial estimates of requirement were based on a replacement value of the equipment which is life expired with respect to industry nominal lifetimes. Further work has also been done to clarify the requirement for replacement equipment including: 1. Validation and physical audit of medical devices at County hospital. 2. Further analysis and reporting from the Medical Equipment management database at County hospital. 3. Engagement with clinical teams in order to understand their priorities for Medical Equipment replacement. This has resulted in a plan and a high priority schedule for replacement of Medical Equipment urgently required to be replaced in order to maintain safe services at County hospital. 8

9 1.4.1 Project Objectives The Trust has developed a set of key objectives for the Medical Equipment investment programme as follows: To affect a safe transfer of medical devices from the former MSFT to the former UHNS and ensure that patient care is not negatively impacted. To harmonise the approach to the management, maintenance, replacement and use of Medical Equipment across both sites as quickly and safely as possible. To implement a robust replacement programme for Medical Equipment which will ensure that the Medical Equipment in use is safe, fit for purpose and supports operational and business continuity. To ensure that the Trust complies with recognised standards of clinical governance and all statutory and mandatory requirements for the management of medical devices. To ensure that ageing, unreliable and potentially unsafe equipment is replaced so that there is reduced risk to the safety of patients and to the reputation of the Trust and its ability to deliver services. 1.5 Economic case The economic appraisal determined that the preferred option for the delivery of the project objectives is Option 2. See further details in Section 3. This option has been selected on the basis that it will: Enable delivery of the TSAs clinical model Realise the required benefits and project investment objectives Be delivered within the necessary timescales and within the constrained capital envelope 1.6 Summary of FBC Scheme The scheme focuses on life expired items and those posing the biggest risk to delivery of clinical services. A full list of items which require replacement has been created. Further details can be found in Appendix 1. It should be noted that the current estimates may change but will be managed within the overall allocation and the given phasing. Additionally, the challenge and prioritisation associated with internal Trust steering groups and sub-group processes will modify the plan according to urgent clinical need and service provision as those processes are brought to bear 1.7 Capital Cost summary Total Capital Cost requested for the scheme for the 2016/17 financial year is 5.987m This is requested as following: NHSI Funding 3.364m Trust funding 2.623m 1.8 Financial Case Both the revenue and capital implications of the proposed investment have been considered and reflected in the Trust s Long Term Financial Model. The Long Term Financial Model demonstrates the affordability of the proposed development. 9

10 Within this business case 3.364m is requested from NHSI as part of the Acquisition case capital allocation and the further 2.623m will be funded by the Trust from internal capital resources. It should be noted that within the overall capital programme 10m for life expired Medical Equipment has been included however this case focuses on the remaining Capital needed to support 2016/17 Financial year requirements. Any Medical Equipment associated with the implementation of the TSA clinical model at the County Hospital and RSUH (i.e. not included in the life expired list) will be procured by the Corporate Services team, through the procurement of individual schemes or on a stand-alone basis as required. 1.9 Management Case Delivery of the overall capital programme will be governed by the Trust s Capital Investment Group to ensure the effective management of the programme. The Programme Board will provide the essential oversight of programme delivery, costs, benefits, risks and dependencies. The Programme Board will report to both the Capital Investment Group and the Trust Executive Committee. Figure 1: Management Structure 1.10 Timescales All spend related to this Full Business case is expected to be made during the 2016/17 financial year. 10

11 1.11 UHNM Trust approval All capital business cases needed to deliver the proposals in the Acquisition Business Case and the subsequent Addendum require formal approval from the appropriate delegated body of the Trust. With the capital value of this particular scheme being 5.987m approval is being sought from the Trusts Board. To be able to be considered for approval this business case needs to demonstrate that it meets five tests as follows: To be part of the Acquisition Business Case The need for Life expired Medical Equipment to be replaced was identified in the Acquisition Business Case To be included within the revenue allocation identified within the Acquisition Business Case, or to have the revenue implications approved from other sources. Revenue implications associated with replacement of Medical Equipment are within the Acquisition Business Case. To deliver the functional benefits envisaged including quality and safety this Full Business Case aims to deliver the following functional objectives and benefits in line with the agreed Objectives and Benefits (see appendices): Ensure implementation of TSAs clinical service model within designated timescales Improve patient privacy and dignity; reduce control of infection risks; provide appropriate capacity to deliver the TSAs model and the UHNS service model. Improve functional relationships/adjacencies and increase operational efficiency. Address legacy estates issues to provide a safe patient environment, i.e. statutory compliance, Eliminate high-risk backlog maintenance. Provide improved working environment for staff. Ensure the Trust receives value for money from capital investment To be in keeping with the Trust s 2025 Vision this Full Business Case works towards the Delivery of Patient Excellence and Clinical Safety Recommendation The Board is recommended to approve this Full Business Case on the grounds it meets the five tests as set out in Integrating Health Services for Staffordshire Capital Expenditure Report. 11