1. Annual Health Strategy Summit
Dr Stephen Dunn,
D S h D
Director of Strategy
NHS East of England
Twitter: #NTSummit

2. Competition in the
East of England
Dr Stephen Dunn
Director of Provider Development
and Strategy
NHS East of England
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3. East of England approach
• For the last four years we have been actively promoting
competition to drive up quality and performance
• Established Commercial Advisory Board & independent
Competition Panel – only examples nationally
• One of the biggest users of Extended Choice Network
• Identified £1.9bn tendering opportunities over three year
period – undermined by NHS preferred provider policy
• Run the first NHS competition to find a Foundation Trust
to take over failing NHS Trust – Beds and Luton
• Run the first open process whereby public and private
sectors have competed to run a DGH - Hinchingbrooke
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4. A better patient experience Improving people’s health Reducing unfairness in health
We will deliver year on We will ensure fewer Working with our partners,
year improvements in people suffer from, or die we will reduce the
patient experience prematurely from, heart differences in life
disease, stroke and expectancy between the
We will extend access cancer poorest 20% of our
guarantees to more of We will make our health communities and the
our services service the safest in average in each PCT
England We will ensure healthcare
We will ensure that GP is as available to
practices improve We will improve the lives marginalised g p and
g groups
access and b
d become of those with l
f th ith long t
term looked after children as it
more responsive to the conditions is to the rest of us
needs of all patients
We will cut the number of
We will ensure that smokers by 140,000
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NHS primary dental
services are available We will halt the rise in
locally to all who need obesity in children and then
them seek to reduce it

5. We are not ideological
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6. With QIPP we need fresh ideas
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7. NHS M&A
• Bedfordshire & Luton was a struggling Mental Health
Trust with quality and safety issues
• An interim CEO was put in while we ran the first ever
competition for another foundation trust to take it over
• 20 Expression of Interest and 4 bidders
• Robust evaluation with 24 skilled evaluators
• D li
Delivered i j t eight months
d in just i ht th
• As part of their winning bid SEPT set out to invest £6.8m
in services and £13.5m in estates over next three years.
y
• There has already been a significant transformation in
commissioning and contractual arrangements
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8. Bringing in the best
SEPT have an outstanding track record:
• their CEO being awarded NHS leader of the year 2010
• one of first mental health trusts in the country to
achieve FT status
• rated excellent / excellent in the Annual Health Check
• rated eighth best healthcare organisation to work for
• the first MH trust accredited at level 3 against risk
management standards by NHS LA
• the first MH trust to achieve University Status
Status.
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9. Dealing with financial failure
• Hinchingbrooke is a financially challenged trust with a
c£40m debt on a c£90m turnover.
• c66% of historic deficit (£25.6m) relates to the
combination of the capped PbR transitional funding
adjustments, and management errors.
dj t t d t
• The deficit which incurred in 2005/06 (£7.8m) was partly
as a result of the lower than projected activity to the new
Diagnostic Treatment Centre when it opened.
• Following a consultation in 2007, options were
considered f repaying th hi t i d bt
id d for i the historic debt
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10. Objectives
• To secure a sustainable future for Hinchingbrooke’s
services and staff and to deal with the hospital’s
hospital s
historical financial issues, while maintaining quality for
patients and securing value for money for tax payers
• To find a new partner to manage Hinchingbrooke
hospital and provide the full range of modern acute
hospital services under an innovative operating
services,
franchise agreement
• To run an open and transparent competitive tender
process to find the best partner for the hospital from
within the NHS, or from the independent or third sectors,
or a combination of th
bi ti f them
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11. Background
• A 2007 public consultation, run by NHS Cambridgeshire,
on services to be provided at Hinchingbrooke,
recommended that broadly the same range of services
continue at the hospital site
• In May 2008 OBC recommending an operating franchise
for Hinchingbrooke was approved by SHA Board
• In July 2009, the DH confirmed its support to work with
y , pp
the SHA to develop the operating franchise model
• The procurement of an operating franchise began in
October
O t b 2009 following a competitive di l
f ll i titi dialogue process
• The competition was open to the NHS, independent and
voluntary sectors
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12. The operating franchise
• The Trust will enter into an operating franchise
agreement with the franchisee for a specified period
(between seven and ten years)
• Under the agreement, the franchisee will commit to
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delivering broadly the same range of services currently
provided at the hospital (incl. A&E and maternity) but
ultimately respond to commissioners’ evolving needs
commissioners
• The franchisee will pay the Trust a fee which will be used
to contribute to repaying the historic deficit
p y g
• Staff and assets remain within the NHS. The public will
continue to receive NHS services
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13. What happens if franchisee fails?
• Commissioners will buy services from the franchisee and
monitor performance and service quality
• CQC and Monitor will ensure that national standards and
quality are maintained through inspection and regulation
• In the event of financial failure, the franchisee has
guaranteed to cover Trust debts up to £5m and pay a
termination payment of £2m
t i ti t f £2
• In the event of termination, staff and assets will remain
with the Trust Board which will use the termination
Board,
payment to secure essential service continuity
• If Trust Board fails, Monitor will be the ultimate backstop
fails
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14. Major engagement
• 17 staff briefings held at Hinchingbrooke
• 10 public newsletters
• 6 independently chaired stakeholder panel meetings
• 11 press releases issued
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• 9 newspaper adverts placed
• 49 patients and carers visited Q&A stalls at the hospital
• 56 evaluators scrutinised the bids for local people
• 11,118 visits to Hinchingbrooke Next Steps web pages
• 4i d
independently chaired public meetings
d tl h i d bli ti
• 4 presentations given to patients’ and parish groups
• 7 council scrutiny committee meetings
• 31 interviews on TV and radio 14

15. 15

16. A rigorous process
• Bid involved two stages of dialogue. Dialogue 1 confirmed
Bidders’ capability and capacity. Dialogue 2 demonstrated
p y p y g
that Bidders’ cost saving initiatives were deliverable, clinically
safe and aligned with workforce and IM&T strategies
• 56 evaluators drawn from NHS Cambridgeshire
evaluators, Cambridgeshire,
Hinchingbrooke HCT, NHS East of England, legal & financial
advisers and stakeholders, involved in assessing submissions
• Bidders interviewed by project board on 7th September, the
stakeholder panel sub group on the 8th, and GPs on the 9th
• Circle and Serco Health progressed to ITT on 27 September
September.
ITT submissions received from both bidders on 20 October.
• ITPD2 and ITT processes internally audited
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17. QIPP and GP consortia savings
Nominal £m ITT (7 years) ITT (10 years)
Breakeven £132.5m £227.6m
Trust Comparator
T C £97.6m
£97 6 £145.6m
£145 6
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18. Outcome
• Process produced two credible potential partners, both
of which secure the QIPP ask under contract
• Circle is planning to repay all of the debt over 10 years
• Circle aims to do this by empowering clinicians to
improve productivity and reduce length of stay
• Following interviews the Project Board, Stakeholder
Panel and GPs all recommended Circle and the
Hinchingbrooke MD says Circle are the clinician’s choice
• At all stages of the procurement, bidders have had to
satisfy financial and commercial criteria regarding their
financial position
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19. Circle
• Circle is a part employee owned social enterprise that
forms the largest partnership of clinicians in Europe -
over 2000
• Circle is co-owned and managed by the doctors, nurses
and all staff who work i Ci l ’ h
d ll t ff h k in Circle’s hospitals, t t
it l treatment
t
centres and clinics
• Circle has significant experience of transforming NHS
services from their Nottingham and Burton day surgery
hospitals, where they treat around 130,000 NHS patients
per annum
annum.
• Circle has delivered 20% improvements in productivity in
its first years of operation
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20. Reform implications
• HNS and BLPT reflects many of the White Paper’s key
priorities
• freeing up the provision of healthcare - any willing
provider, meeting NHS quality and price requirements
• greater choice, innovation and improvement
• no hidden bail-outs
• White Paper signals the end of NHS trust model
• following White Paper clarification sought and
Paper,
exemption for Hinchingbrooke granted
• Health bill includes provision for future franchises
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