Hillingdon CCG INITIAL BUDGETS AND FINANCIAL PLAN 2015/16. Governing Body 27/03/2015. Jonathan Wise Chief Finance Officer BHH CCGs

Transcription

1 Hillingdon CCG INITIAL BUDGETS AND FINANCIAL PLAN 2015/16 Governing Body 27/03/2015 Jonathan Wise Chief Finance Officer BHH CCGs

2 Contents Executive summary and recommendations Context and background National context NHSE guidance and allocation PbR changes Specialised commissioning Local context NWL financial strategy Key assumptions - Contract Status/Outcome (incl. tariff) - Better Care Fund - Primary care co-commissioning Part 1: 2015/16 Programme Budgets Budget setting process, methodology and assumptions Main budget assumptions Budget overview and summary Budget analysis Part 2: 2015/16 QIPP, Investments, Activity projections & Risk Assessment QIPP Investments Activity projections Risk assessment BHH Risk Share Part 3: Running cost budgets Budget overview and summary Borough, BHH shared and CSS in-housed Part 4: Practice budget setting Part 5: Cash and balance sheet Part 6: Next steps 2

3 Executive Summary (1) This document sets out the initial budgets and financial plan for 2015/16 for Hillingdon CCG, in the context of the strategic and financial circumstances in which the CCG is operating. 1. Hillingdon CCG is forecasting a 14/15 outturn surplus of 3.2m(M11) but a closing underlying deficit position of 7.7m. In December NHSE confirmed that Hillingdon CCG was assessed as 7.7% below its target allocation, and as a result it has therefore received a higher than average increase in allocation in 15/16 of 7.6%. 2. The 15/16 financial plan (pre NWL strategy) would be a deficit. The application of the NWL financial strategy, provides a net increase in allocation of 8.8m, (OOH investment of 10.3m, less non-recurrent contribution of 1.5m) produces the surplus of 3.348m (1%). Pre NWL Strategy NWL Strategy (net) Post-NWL Strategy 15/16 Surplus/(Deficit) (5.452m) 8.8m 3.348m [Note: All aspects of the NWL financial strategy are subject to NHS England agreement as part of their review and signoff of 15/16 Operating Plans for all CCGs, and as part of this, ensuring adherence to statutory and other requirements on CCGs.] 3. The CCG s 15/16 underlying position moves from a 7.7m deficit position to a 3.3m surplus closing position, assuming the NWL financial strategy OOH investment is recurrent, as intended. ( A full analysis is on slide 28). 4. The 15/16 plan as submitted is fully consistent with NHSE Business Rules (slide 5), however all CCG 15/16 plans are subject to final agreement with NHSE. 3

4 Executive Summary (1) 5. Key assumptions and features of the 15/16 plan are: a) Consistency with national planning assumptions (see pages 11-13) b) The net pressure from the tariff changes has been reflected in the expenditure budgets and is offset by an anticipated allocation of the same value (as advised by NHSE). c) Pending finalisation of the CCG s main Acute and Mental Health SLAs, a best assessment has been made of likely contract values. d) 15/16 QIPP plans total 7.7m, 2.3% of recurrent baseline. The 14/15 forecast delivery is 8.3m (2.6%). e) There is a total of 2.7m recurrent planned investment included in the plan (plus 3.1m of QIPP re-provision schemes). The planned investment programme has 2m earmarked for Mental Health initiatives in line with Parity of Esteem and 0.7m for Primary Care infrastructure. f) The main in-year risks relate to potential contract overperformance, QIPP under-delivery and other unplanned cost pressures (e.g. continuing care, GP Prescribing). The risk assessment (shown on page 55) shows that these risks are mitigated in the financial plan by the 0.5% contingency, in-year contract reserve and management of the investment programme. g) The 15/16 financial plans reflect activity forecast increases in elective admissions, day cases and A&E attendances and reductions in non-elective admissions and outpatients attendances, the latter being the main focus of QIPP plans (see slides 49-50). h) NWL financial strategy Draft NWL budgets for 15/16 have been reflected in initial CCG budgets (see slides 14-15) which includes 3m of transitional support for THH. 6. Running costs budgets are within the reduced running cost allocation. 7. Practice Budgets The plans and principles governing budget setting for GP Practice budgets are set out in slides Cash & Balance Sheet - Assumptions regarding balance sheets and Cash flow forecasts are set out in slide Next Steps Local and national timetables covering budget sign off and finalisation of contracts are set out in slide 69, together with proposed development of outline plan for 16/17 by 30 th June. 4

5 Consistency with NHSE business rules 1% headroom 0.5% contribution to NWL Strategy plan plus nonrecurrent investment Contingency Included at 0.5% 1% surplus 1% surplus Normalised position Running costs Drawdown rules Mental Health Parity 3.3m surplus (subject to NWL Strategy) Budgets within allowance Not Applicable Expenditure increase above allocation increase 5

6 Recommendations The Governing Body is asked to: 1. Agree the initial programme budgets as summarised on slide 27, based on the key assumptions set out on slides Note the current assumptions regarding the NWL financial strategy on slides Note the financial risk assessment and mitigations on slide Agree the continuation in 15/16 of a BHH in-year risk share, as per slide Agree the running cost budget on slide Agree the approach to practice budget setting on slides 57 to Agree the next steps outlined on slide 69. 6

7 Context and background National context: Financial context and CCG allocations NHSE planning guidance 2015/16 PbR changes Specialised Commissioning Local context: NWL financial strategy Key assumptions - Contract status/outcome - Better Care fund - Primary Care Co-Commissioning 7

8 2015/16 Mandate allocation (1) The provisional Mandate quantum for 2015/16 as at December 2013 was 99,900m, of which the recurrent amount allocated was 98,840m. Following further discussions with the Government, 1.98bn of additional investment in the NHS in England was announced by the Chancellor of the Exchequer in the Autumn Statement on 3 December This funding, described by the Chancellor as a down payment on the Five Year Forward View is intended: To kick start the transformational programmes set out in the Forward View through a year one budget of 200m; To make a step change in primary and community care infrastructure through an investment fund of 250m for each of the next four years; To increase from 80m to 110m the already planned investments in mental health access; and To cover 1.5bn of funding pressures on front-line services 8

9 Allocation growth 15/16 BHH & NWL & National The table below sets out the impact of the revised 15/16 allocations: BHH receives 20.9m increase in growth of which 5.0m relates to winter resilience. Funding has been targeted at CCGs below their target allocation. As a result of the targeted approach, those CCGs below their target (Dec 13 announcement) have moved closer to their target. Those CCGs above target have also moved closer to their target. CWHHE figures are included for information. For information Hammers Brent Harrow Hillingdon BHH Ealing Hounslow mith & Fulham West London Central London CWHHE NWL National '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 New growth (Dec '14) 7,322 18,085 22,486 47,893 26,860 22,037 4,950 6,499 4,897 65, ,136 2,409,052 Previous growth (Dec '13) 6,362 9,012 11,599 26,973 14,639 11,380 4,158 5,697 4,233 40,107 67,080 1,343,719 Increase in growth 960 9,073 10,887 20,920 12,221 10, ,136 46,056 1,065,333 of which General (1,092) 7,772 9,286 15,966 9,908 9,097 (539) (1,019) (708) 16,739 32, ,333 Winter resilience 2,052 1,301 1,601 4,954 2,313 1,560 1,331 1,821 1,372 8,397 13, ,000 Previous DFT % (Dec '13) 6.28% -8.80% -7.73% -2.76% -5.14% % 12.79% 33.49% 26.33% 7.17% 3.27% 0.00% Closing DFT% (Dec '14) 5.64% -5.04% -4.80% -0.94% -3.97% -9.29% 11.28% 31.52% 26.24% 7.36% 4.10% 0.00% Closing DFT m* 20,525 (13,662) (16,000) (9,137) (18,694) (31,627) 25,296 81,830 53, , ,160 0 *Note excludes NWL Financial Strategy 9

10 NHSE planning guidance-december 2014 Key aspects of NHSE financial planning guidance are: Para We expect each CCG s spending on mental health services in 2015/16 to increase in real terms, and grow by at least as much as each CCG s allocation increase. Slide ref Slide 50 Para 6.15 Commissioners and providers will need to consider the underlying activity pressures specific to them and to their local health economy and type of provision. This should reflect local demographic pressures (nationally, ONS population projections imply roughly 1.3% activity growth per year due to a growing population and changing age mix) while also considering nondemographic trends (for example, new treatments). At a national level, we might expect the overall activity growth pressure, before application of any demand management reduction, to be around 3% per year. We recognise that growth rates will vary for different health economies and encourage providers and commissioners to agree on activity growth assumptions. Slide 28 Para The total additional funding of 1.98bn announced in the 2014 Autumn Statement provides certainty of funding in 2015/16, including for issues such as operational resilience that would previously have been resourced from in-year allocations. As a result, there will be no further in-year allocations during 2015/16. SRGs should develop local capacity and demand plans that reflect operational resilience funding (including for winter) at the same level received in 2014/15, but funded from baseline allocations. Slide 32 Para All commissioners must set aside 1% non-recurrent spend in 2015/16. This will be released for investment in strategic plans for example, the implementation of the new care models discussed in the Forward View, subject to risk assessment by NHS England s Regional Teams. Source: National Planning guidance Dec 14 Slide 5 10

11 National context: 2015/16 PbR key changes (1) The original 15/16 tariff proposal was rejected by providers following consultation. Following this NHSE/Monitor offered an Enhanced Tariff option (ETO) applying a lower level of efficiency and a higher marginal rate for emergency admissions, with a risk share on specialist activity or a Default Tariff Rollover option (DTR) which rolls over the 14/15 tariff but for which no CQUIN is applied. Providers were required to make a choice by the 4 th March. Area Original Tariff Proposal Revised Tariff Options Following Consultation Challenge Basis of tariff prices Prices are adjusted to ensure that they reflect the price relativities of the 2011/12 reference cost dataset, but at the same time reimburse the same total quantum as the 2014/15 tariff (when using 2012/13 HES activity). This is achieved through the application of a scaling factor to the prices derived from the 2011/12 reference cost base. This is the initial target cost base (i.e., a 2014/15 cost base), which is then adjusted to 2015/16 (using uplifts and efficiency adjustments. No change Calculation of tariff prices Standard efficiency assumption for all providers = 3.8% Base inflation assumption = 1.9% Adjustment is made at a HRG sub-chapter level to reflect the impact of the allocated costs of CNST which has the impact of increasing national prices. After accounting for allocated costs of CNST, national prices will be, on average, 0.8% lower than in 2014/15. ETO - includes a revised gross tariff deflator of 3.5%, Therefore under the ETO, national prices will only be approximately 0.5% lower, on average, than the prices in the 2014/15 national tariff compared to 0.8% in the original tariff proposal. DTR - there is no deflator applied to national prices, as 2014/15 national prices continue to apply. But CQUIN worth up to 2.5% is foregone for the entirety of 2015/16. (There is no benefit from the additional funding for CNST premium increases that has been incorporated into the 2015/16 tariff.) Maternity risk shares By April 2015, the maternity pathway payment system will have been mandatory for two years. A national variation has been operational since April 2013 to allow any risks associated with the new pathway payments to be shared between providers and commissioners. For 2015/16, this national variation has been removed, as we believe there has been a sufficient period of time for the sector to adapt to this payment approach. No change 11

12 National context: 2015/16 PbR key changes (2) Area Original Tariff Proposal Revised Tariff Options Following Consultation Challenge Best practice tariffs expanded to several new services Emergency marginal rate rule Relationship between payment and outcomes for acute services is strengthened through extending best practice tariffs (BPTs). Four existing BPTs have been amended day-case procedures outpatient procedures endoscopy, and primary hip and knee replacement outcomes. A new BPT is also introduced for 2015/16 for non-elective admissions for heart failure, which is designed to incentivise better adherence to National Institute for Health and Care Excellence (NICE) guidance. Rate at which non-elective admissions are reimbursed over and above agreed baselines rises to 50% (from 30%), to equally share risk between providers and commissioners. The rule for 2015/16 continues to include the changes to local baseline setting and reinvestment transparency introduced in 2014/15, Mental Health Re-emphasis of care clusters as the clear default payment arrangement and required reporting unit for all relevant adult mental healthcare. Parity of esteem between physical and mental health services is supported including through NHS England s allocation of 40m for early intervention in psychosis, which is estimated to be equivalent to an uplift of around 0.35% in all mental health services in 2015/16 No change ETO the marginal rate re-imbursement for Trusts becomes 70%. DTR - the marginal rate re-imbursement for Trusts reverts to the 2014/15 position of 30%. ETO - incorporates the 2015/16 proposed uplift for early intervention mental health services. DTR providers won t benefit from the 2015/16 proposed service uplift for mental health; Specialist Services Providers and commissioners required to equally share the financial gains and losses for specialised services, unless a more innovative and effective payment approach can be implemented New national variation and new local price-setting rule that requires NHS England teams and providers to start with a default 50:50 gain and loss sharing arrangement applied to a stated base value of nationally priced and non-nationally priced prescribed specialised services. This is in response to the growth in activity in this area. This baseline will be set according to 2014/15 planned activity, but will not apply to specialist mental health services. Not proposed that the 50 per cent be retained by commissioners to be spent on any defined areas. ETO - the marginal cost reimbursement for specialised services is raised from the originally proposed 50% to 70%. DTR providers retain current arrangements for specialist services. 12

13 National context: Specialised Commissioning a) London CCGs/NHS England London Co-commissioning of Specialised Services Group (LCCSSG). 14/15 misattributions During 2014/15 CCG SLAs have been adjusted to ensure contracts fully align to commissioning responsibilities. Adjustments were in both directions dependent upon the nature of the historic misinterpretation of the identification rules. The resource transfers were made in M10 and contract variations are due to be finalised in M12. The Imperial and RBH contract variations were not enacted in 14/15 due to the large number of Out of London Commissioners. No further contract variations are anticipated in 15/16 pending revised Identification Rules from 2016/17. b) Consultation on arrangements for the transfer of commissioning responsibility for renal dialysis services and bariatric surgery from NHS England CCGs. The outcome of this consultation is that renal dialysis and bariatric surgery will not transfer to CCGs for 2015/16. The task and finish group will lead on developing a plan for the co-commissioning of these services in 2015/16. Two services will be transferring to CCGs from 1 st April 2015, namely outpatient referrals from primary care for neurology, and specialised wheelchairs. c) Consultation on priorities for NHS England investment in specialised services NHS England has launched consultation about how it will prioritise which specialised services to invest in. This runs for 3 months from 27 th January. NHS England is also undertaking an engagement exercise to seek views on which specialised services should be prioritised for service reviews as part of a rolling programme of reviewing how each specialised service is delivered. For the purposes of budget setting a) above has been incorporated but b) has not been incorporated because the information is not yet available. It has been assumed that the impact of b) is cost neutral. 13

14 Local context NWL Financial Strategy The North West London (NWL) Financial Strategy is proposed to continue in 15/16, with detailed budgets proposed for Governing Body agreement, and the impacts (assuming agreement) are included in CCG 15/16 financial plans. It should be noted that all aspects of the NWL financial strategy are also subject to NHS England agreement as part of their review and sign-off of 15/16 Operating Plans for all CCGs, and as part of this, ensuring adherence to statutory and other requirements on CCGs. The business rationale for a NWL-wide financial strategy is: - SaHF is a NWL-wide programme and the probability of successful implementation would be significantly enhanced by a NWL-wide financial strategy. - Individual CCGs are in radically different financial positions with surpluses/deficits which are predominantly the result of inherited PCT positions, and surpluses/deficits correlate with under/over funding positions. - If the wide disparity in CCG financial positions is not addressed through a NWL-wide financial strategy, SaHF implementation as a whole could be compromised. - A NWL-wide financial strategy provides resilience to all CCGs in the light of potential future funding changes, and also in facing provider issues together. The financial strategy for 15/16 proposed comprises two component parts: 1) Pooling of CCG and NHSE non-recurrent headroom to support non-recurrent costs. 2) Continuation of SaHF Out-of-Hospital investment fund to support investment in primary care and community services 14

15 Local context NWL Financial Strategy The principles for accountability and future proofing for the five year strategy remain as agreed in 14/15:- Contributions to the financial strategy each year should be determined based on affordability, with the CCGs in the strongest financial position contributing the most. All CCGs have equal right to draw from, and responsibility to contribute to, the financial Strategy CCGs commit to ensuring funds are invested in a way that represents value for money and reduces recurrent costs over time while maintaining high quality services All CCGs hold each other to account for delivery of aims for which the budget is set. The planned impact in 15/16 on Hillingdon CCG is as follows: 1) 0.5% contribution of 1.5m 2): 5m recurrent OOH investment (in addition to the 5.3m recurrent investment in 14/15 ) to make a total investment over the 2 years off 10.3m 3) 3m transitional support for THH These planning assumptions have been reflected in the opening budget 15

16 Contract Status/Outcome The contract figures in the opening budgets have been set using the planning assumptions set out in this paper (see slides 24-25). The CNWL contract has been finalised-all other contracts are yet to be finalised or signed. The opening budgets therefore reflect our best assessment of the likely agreed 15/16 contract baseline values. Contract Agreement is anticipated by in line with the national timetable. A 2% risk reserve has been set aside in the Acute opening budgets to cover in-year over-performance (this is subject to agreement of contracts at the assumed values the in-year risk reserve could therefore increase or decrease subject to contract agreement). 16

17 Better Care Fund The Better Care fund (BCF) is a National initiative intended to deliver integration between health and social care in order to improve health and care outcomes for people over 65 years. The BCF plan is a key element of Hillingdon local plans for older people. Hillingdon s BCF plan was formally approved without conditions by NHS England (NHSE) on the 6 th February Section 75 agreement is due for Approval by the HCCG Governing Body 27 th March 2015 and will take legal effect on the 1 st April Hillingdon s BCF Plan Summary The focus of Hillingdon s plan is on the 65 and over population, whish is a reflection of the increasing demand placed on NHS and local authority services by an ageing population and the improtance for the wellbeing and independence of older residents of more joined up models of care being established. The plan comprises of 7 schemes, which are included in the section 75 agreement. Section 75 agreement key features are: Value of the pooled fund for Hillingdon is 17,991k, which was approved by HCCG Governing Body December 2014 Agreement duration: 1 st April 2015 to 31 st March 2016 Hosting arrangements: Hillingdon Council will host the pooled budget Risk Share: Each organisation will manage its own risks for the purposes of the 2015/16 agreement Governance: HCCG Governing Body and the Health and Well Being Board Dispute resolution: Any disputes will be referred to the Chairman of the HCCG Governing Body and the Chairman of the Health and Well Being Board. 17

18 Better Care Fund The Section 75 agreement for the delivery of the approved BCF plan contains pooled funding totalling 17,991k in 2015/16. 15,642k of the total sum is included within the CCG s 2015/16 allocation which this includes 4,772k previously funded through NHSE directly to LBH. It is proposed that LBH will invoice HCCG for 15,642k and then provide a credit note for 10,032k, the amount required to fund the HCCG contracts contained within the BCF Plan. This will ensure that there are no cash flow issues that may delay payment to HCCG providers. A summary of the key components in the final BCF financial plan for 2015/16 are set out below. Key components of Expenditure 2015/16 000s NHS Commissioned Services 10,402 Care Act Additional Requirements Protecting Social Care 838 7,121 Overall BCF Total Expenditure 17,991 Funding Sources:- Hillingdon CCG LBH Total 15,642 2,349 17,991 18

19 Better Care Fund The funding retained by the CCG to commission services is 9,372k together with the performance payment of 660k arising from the nationally set target to reduce emergency admissions of the 65 and over population as set out in the report. Achieving a reduction of 3.5% non-elective over 65 admissions will be the sole indicator used to set the performance element of the BCF. If the reward element of the fund is not materialised trough failure to reduce hospital admissions, CCG will retain this funding to continue to pay for non-elective activity. It has been agreed that for 2015/16 each organisation will manage any risks arising from the pooled budgets for which they have responsibility to commission and manage. The proposed funding to protect Social Care of 7,121k comprises the current section 256 funding of 4,772k and capital funding of 2,349k. In addition there is a contribution of 838k to support the implementation of the Council s responsibilities under the Care Act. 19

20 Primary Care Co-commissioning NW London CCGs have applied to take on joint co-commissioning from 1 st April The project team is now supporting the CCGs to conduct their governing body and member practice votes, which are necessary to enable co-commissioning to begin on 1 st April Work is also now continuing with NHS England on a memorandum of understanding that will define the specification to which joint co-commissioning will operate. NHS England (London) is working with CCGs from across London on a memorandum of understanding (MoU) that will define the specification under which joint and delegated co-commissioning will operate. It lists the primary care commissioning functions set against both responsibilities and tasks for the joint committees, CCGs and area teams. Both the MoU and NHS England s engagement of the CCGs are in their early stages. All parties acknowledge that more detail is needed beyond that currently available, covering roles and responsibilities as well as processes. This information is critical to the NWL CCGs ability to plan for any financial and resource implications of the MoU. When NW London CCGs made their application for joint arrangements, June was suggested as a potential target date for an in-year upgrade to delegated arrangements. This was agreed in principle subject to sign off by the NHS England National Team. This timeline now appears unlikely. The approach to delegation will be revisited by the joint committees when further NHS England guidance on upgrading has been published. For the purposes of budget setting, primary care co- commissioning is assumed to be cost neutral in 15/16. It should also be noted that accounting arrangements have yet to be agreed nationally. 20

21 Part /16 Programme Budgets 21

22 Approach to budget setting process for 15/16 The budget setting process for 15/16 has been designed to follow good practice: Clear distinction between recurrent and non-recurrent income and expenditure. the impact of outturn and full year effects from 14/15 reflected in baseline. budgets reconciled to activity plans. budgets reconciled to cash plan. budgets based on realistic assumptions for inflation, demographic growth, etc. QIPP embedded in individual budget lines and contracts (no balancing items). Risk assessment of QIPP. budgets appropriately profiled across the financial year. budgets supported by a clear sign off and in year management regime. in year contingency established to cover known and unknown risks. budgets reconciled to agreed contracts and contracts agreed by 1 April. CCG budgets devolved to practices (where applicable) using CCG agreed methodology, including risk sharing arrangements. 22

23 Triangulation of budgets, contracts and QIPP A critical aspect of the process has been to ensure that budgets, contracts and QIPP plans have been kept in alignment. Budget setting Integrated Financial Plan Provider contracts QIPP plans 23

24 Budget setting key assumptions (1) 24

25 Budget setting key assumptions (2) Other key assumptions: Assessment of contract outcome (including a provision for in-year risk on acute contracts subject to this) Specialised services changes - assumed neutral see slide 13 QIPP delivery of 7.7m - see slides Quality premium no assumptions made re: 14/15 achievement (as per NHSE guidance). NWL financial strategy see slide Allocation as per NHSE see slide 9 Contribution to National Retrospective Continuing Care Risk Share- 1.8m Return of 14/15 2.5m BHH risk share contribution plus repayment of 1.5m of legacy debt to Brent (reducing o/s amount to 7.6m) Contribution to London-wide strategy 0.15% of allocation for implementation of London Health Commission Net Pressure arising from ETO/DTR national tariff decision is matched by an additional allocation Pressure arising from 14/15 Spec Commissioning Transfer re High Cost Drugs at THH is fully funded-slide 26 3m of THH Transitional Support funded from North West London strategy 25

26 2015/16 Allocation Summary HILLINGDON 000s 2014/15 CCG Programme Revenue Resource Limit at Month ,571 Adjust for 14/15 NWL Strategy and other non-recurring allocations: (eg, 14/15 THH transition funding, Winter resilience & RTT funding offset by 14/15 Brent repayment and 14/15 BHH Risk Share (15,647) contributions) CCG recurrent baseline before uplift 296,924 Allocation Uplift per NHSE (per slide 9) 22,486 Better Care Fund (previously paid direct by NHSE to LBH) 4,772 Total 2015/16 Recurring Allocation per NHSE 324,182 Anticipated Allocations: 14/15 Surplus c/f 3,200 Return of 14/15 BHH Risk Share 2,500 Brent Repayment 15/16 (1,500) London-wide Strategy Contribution (0.15%) (500) Specialised Commissioning HCD Transfer Pressure 700 Net ETO/DTR Impact per NHSE 895 THH Transitional Funding 3,000 GP IT (assumed allocation at 14/15 level) 777 Sub-Total Anticipated Allocations 9,072 Total 15/16 Allocations pre NWL Financial Strategy 333,254 NWL Financial Strategy - 0.5% Contribution (1,500) NWL Financial Strategy - OOH Recurrent Investment 10,300 Total 2015/16 Allocations 342,054 26

27 2015/16 Initial Budget Summary Budgets Opening budgets Comments 2015/16 000s Acute 220,611 Includes In-year Contract Reserve Mental Health 22,222 Continuing Care 17,193 Community 32,300 Includes QIPP costs reprovision of 2.5m and BCF Social Care funding of 4.7m previously paid by NHSE Primary Care 5,716 Includes Integrated Care Planning Prescribing 34,445 Corporate & Estates 4,514 Sub-TOTAL 337,001 Contingency 1, % CCG TOTAL Net Spend 338,706 ALLOCATION 342,054 See Slide 26 Surplus / (Deficit) 3,348 27

28 Overall bridge 14/15 15/16 Underlying Position CCG Underlying Deficit 2014/15 m NOTES (7.668) Per Month 11 FOT Resource Growth (Programme) Uplift per NHSE Dec 2014 (7.6% increase) Resource Reduction (Running Costs) (0.639) Reduction in RC Allocation 5m recurrent support (in addition to 5.3m in NWL Financial Strategy 15/16 OOH Investment /15) Provider Tariff Deflator (1.694) 3.5% Provider Efficiency per 15/16 ETO Activity Growth-Demographic (5.117) 1.7% Demographic growth Activity Growth-Non Demographic (8.498) 3% Acute,4% CHC,6% Prescribing,1% MH & Comm Acute SLAs, System Resilience & 111 Contract Other Cost Pressures (8.954) Pressures 8.2m, Continuing Care EMI Placements 0.8m New Service Developments / Investments (2.702) Mental Health 2m, Primary Care 0.7m QIPP-Gross Savings (10.892) QIPP Savings- Slide 46 QIPP-Reprovision Costs QIPP Reprovision Cost-Slide 46 UNDERLYING SURPLUS 2015/ Continuing Care share of National Provision 1.8m, THH Transition 3m, Local Winter Resilience 0.9m,GP IT 0.8m, QIPP Project Costs Non-Recurring Spend in 2015/16 (7.600) 1.1m Non-Recurrent Allocations Non-Recurrent in-year Surplus/(Deficit) /16 IN-YEAR SURPLUS (Underlying plus Non- Recurrent) Anticipated Allocations 9.1m (slide 26) less 1.5m contribution to NWL Strategy 28

29 Overall Budget bridge 14/15 15/16 CCG Total Opening budgets Budgets 2015/16 000s 2014/15 Budgets at Month ,571 Adjustment to Outturn and FYE 5,648 Non-recurrent items (10,034) Comments 14/15 Acute Over performance 5.4m,14/15 THH Traded FOT 1.5m less Reduction in NHS Property Charges 0.7m and other budget underspends 0.6m Winter Resilience & RTT 4.5m, Non-Rec Schemes & Other Acute 1.6m,In- Patient Psychiatric Liaison Service 0.6m, Continuing Care Contribution 1.1m, Corporate budgets 2.2m (e.g QIPP, Whole Systems) Opening 15/16 Budget 308,185 Tariff (net) (1,694) Assumes 3.5% Provider efficiency Activity growth 13, % Demographic growth plus Non- Demographic Growth QIPP Gross Savings (10,253) See QIPP Schedule QIPP Reprovision Costs 3,146 See QIPP Schedule Other cost pressures (Rec + Non Rec) and Non-Rec allocations 16,528 BCF (previously paid direct by NHSE) 4,772 New Service Developments / Investments (Rec +NR) 2,702 TOTAL Initial 15/16 Budget 337,001 Recurring Pressures 8.9m & Non-Rec Spend 7.6m (Slide 28) Mental Health 2m and Primary Care 0.7m 29

30 2015/16 Initial Budget Summary Acute (bridge to 15/16) Budgets Opening budgets 2015/16 000s Annual budgets 14/15 205,152 Adjustment to outturn and FYE 6,939 Non-recurrent items (6,110) Opening 15/16 budget 205,981 Tariff (net) (1,011) Activity growth 9,496 QIPP Gross Savings (6,522) QIPP Reprovision Costs 391 Other cost pressures (Rec + Non Rec) 12,276 TOTAL Initial 15/16 budget 220,611 Comments In-Year 14/15 Acute Over Performance 5.4m, plus FYE of THH overperformance 1.5m Winter & RTT 4.5m, Non-Rec Schemes 1m, Other 0.6m 1.7% Demographic growth & 3% Non-demographic THH Transition 3m, LAS & 111 Contract Pressures 1.8m, Other SLA Pressures & HCD Drugs 4.3m, System resilience 2.9m, IFR 0.3m 30

31 2015/16 Initial Budget Summary Acute (15/16 summary) Budgets Initial budgets 2015/16 000s In Sector Main NHS SLAs 160,994 Out of Sector Main NHS SLAs 20,702 Ambulance and Other NHS SLAs 12,305 Independent/Commercial Sector Providers 3,377 High Cost Drugs, NCAs and Cost per Case 10,858 Other Acute Services (UCCs, Walk In Centres, and 111 service) 5,886 Other Investments (e.g. Readmissions Re-investment 1.3m 2,861 Other Winter Pressure schemes 1.3m) Contract/In-year Risk Reserve 3,628 TOTAL 220,611 31

32 2015/16 Initial Budget Summary Mental Health (bridge to 15/16) Budgets Opening budgets 2015/16 000s Annual budgets 14/15 21,284 Adjustment to outturn and FYE (653) Non-recurrent items (555) Opening 15/16 budget 20,076 Comments Underspend on planned IAPT Investment In-Patient Psychiatric Liaison Service at THH funded on non-rec basis in 14/15 by CCG. Tariff (net) (251) Assumes 3.5% Provider efficiency Activity growth 542 QIPP Gross Savings (285) Other cost pressures (Rec + Non Rec) Service Developments / Investments (Rec +NR) 140 2, % Demographic growth, 1% Nondemographic growth Proposed Investments in IAPT,CAMHS and Perinatal Services. The test of Mental Health Parity of Esteem is that Mental Health spend is keeping pace with the general uplift that CCGs received. The Mental Health bridge shows that the increase on mental health spend from 14/15 outturn to 15/16 plan is 10.7%. This compares with the uplift the CCG received in the Dec 14 announcement of 7.6%. This is due to the fact that investments in IAPT, CAMHs and growth are greater than planned mental health QIPP. TOTAL Initial 15/16 budget 22,222 32

33 2015/16 Initial Budget Summary Mental Health (15/16 summary) Budgets Initial budgets 2015/16 000s Main NHS SLAs 18,759 Collaborative and Voluntary Sector SLAs 116 Child & Adolescent Mental Health 332 Adult Cost per Case 1,103 Other Pressures / Investments ( IAPT,Dememtia) 1,912 TOTAL 22,222 33

34 2015/16 Initial Budget Summary Continuing Care (bridge to 15/16) Budgets Opening budgets Comments 2015/16 000s Annual budgets 14/15 14,633 Adjustment to outturn and FYE 332 Higher costs in EMI Placements in 14/15 Non-recurrent items (1,130) 14/15 CCG Contribution to National Provision Opening 15/16 budget 13,835 Activity growth 788 QIPP Gross Savings (293) QIPP Reprovision Costs 237 Other cost pressures (Rec + Non Rec) TOTAL Initial 15/16 budget 2,626 17,193 Additional High Cost EMI Placements 0.8m & 15/16 CCG Contribution to National provision 1.8m 34

35 2015/16 Initial Budget Summary Continuing Care (15/16 summary) Budgets Initial budgets 2015/16 000s Continuing Care Adults 9,238 Joint Funded 3,058 Funded Nursing Care 2,007 Continuing Care Children & Complex Placements 1,106 Continuing Care Retropsective Contribution 1,784 TOTAL 17,193 35

36 2015/16 Initial Budget Summary Community (bridge to 15/16) Opening Budgets budgets 2015/16 000s Annual budgets 14/15 28,353 Adjustment to outturn and FYE (586) Opening 15/16 budget 27,767 Tariff (net) (444) Activity growth 630 QIPP Gross Savings (1,633) QIPP Reprovision Costs 2,518 BCF 4772 Budget Transfers -1,322 TOTAL Initial 15/16 budget 33,300 Comments Gross Savings on Wheelchair, Pressure-relieving equipment and other Community equipment schemes Reprovision costs relating to the above and also other Community schemes e.g. Dermatology Allocation previously paid direct by NHSE Integrated Care Planning to Primary Care 36

37 2015/16 Initial Budget Summary Community (15/16 summary) Budgets Initial budgets 2015/16 000s Main NHS SLAs 21,138 Other Community Services (Hospices, Intermediate Care, Carers, Voluntary Services, etc) 3,194 QIPP Reprovision/Community Outpatients 3,196 BCF Transfer to LBH 4,772 TOTAL 33,790 37

38 2015/16 Initial Budget Summary ( 000s) Operational Resilience Funding Schemes 14/15 15/16 Explanation Funded Centrally in 14/15 7 Day Working-THH Subject to final evaluation of scheme effectiveness Addiitonal Staffing-THH Subject to final evaluation of scheme effectiveness Escalation beds-thh 750 Reduced 15/16 requirement due to additional 400 schemes put in place by CCG to mitigate actiivty pressures Sub-Total THH 2,124 1,600 Primary Care Capacity OOH Schemes as per 14/15 Voluntary Sector OOH Schemes as per 14/15 Social Care Schemes OOH Schemes as per 14/15 Other OOH Schemes as per 14/15 Sub-total 2,524 2,000 Locally Funded in 14/15 Mount Vernon Beds Being reviewed for VFM Other Local Schemes-April In-Year Schemes 500 Contingency for addiitonal in-year measures Sub-Total-Locally Funded TOTAL 3,343 2,900 Funding Hillingdon Tranche 1 1,600 1,600 15/16 Included within allocation Tranche Local Contribution 819 1,300 Total Funding 3,343 2,900 Expenditure less funding 0 0 The table opposite shows operational resilience schemes, expenditure in 14/15 and planned expenditure in 15/16 and funding received in 14/15 (received nonrecurrently) and 15/16 (now included in recurrent baseline). In 2014/15 the CCG funded an additional 819k internally to the 2.5m funded centrally. The 15/16 budget provision assumes 1.6m for THH compared to 2.1m in 14/15 due to the expected reduced requirement for escalation beds. The 15/16 budget also assumes 400k for MV beds with 500k contingency to give an overall budget of 2.9m. 38

39 2015/16 Initial Budget Summary Primary Care (bridge to 15/16) Budgets Opening budgets 2015/16 000s Comments Annual budgets 14/15 3,498 Adjustment to outturn and FYE Non-recurrent items (164) Prime Minister s Challenge Fund funded internally Opening 15/16 budget 3,334 Activity growth 90 Other cost pressures (Rec + Non Rec) 268 GP Networks Transfers 1,322 Integrated Care Planning New Service Developments / Investments (Rec +NR) 702 Primary Care Investment TOTAL Initial 15/16 budget 5,716 39

40 2015/16 Initial Budget Summary Primary Care (15/16 summary) Budgets Initial budgets 2015/16 000s Local Improvement Schemes 1,963 Integrated Care Planning 1,502 Other Investments (e.g. 5ph and 700k for Primary Care Infrastructure) 1,983 TOTAL 3,958 40

41 2015/16 Initial Budget Summary Prescribing (bridge to 15/16) Budgets Opening budgets 2015/16 000s Comments Annual budgets 14/15 33,584 Adjustment to outturn and FYE 345 Non-recurrent items FOT Overspend based on M9 PPA Opening 15/16 budget 33,929 Tariff (net) Activity growth 2, % total growth QIPP Gross Savings (1,520) Other cost pressures (Rec + Non Rec) TOTAL Initial 15/16 budget 34,445 41

42 2015/16 Initial Budget Summary Prescribing (15/16 summary) Budgets Initial budgets 2015/16 000s GP Prescribing 32,677 Central Drug Costs 910 Oxygen 368 Other Prescribing (Scriptswitch, Prescribing LIS) 490 TOTAL 34,445 42

43 2015/16 Initial Budget Summary Estates & Corporate (bridge to 15/16) Budgets Opening budgets 2015/16 000s Annual budgets 14/15 6,067 Adjustment to outturn and FYE (729) Non-recurrent items (2,075) Opening 15/16 budget 3,263 Comments Reduction in NHS Property Charges 14/15 Non-Rec budgets (e.g Whole Systems & Transformation Project costs, GP IT) Growth 33 QIPP Other cost pressures (Rec + Non Rec) & Non-Rec Allocation 1,218 QIPP Project Costs and GP IT TOTAL Initial 15/16 budget 4,514 43

44 2015/16 Initial Budget Summary Estates & Corporate (15/16 summary) Budgets Corporate - CCG Pay (Medicines Management, Continuing Care & Safeguarding, Other Programme Costs) Initial budgets 2015/16 000s 1,336 Corporate - Londonwide Programme 182 Corporate - Transformation (QIPP Project Costs & & Other Transformation) 1,423 GP IT 777 Estates & Property Costs 796 TOTAL 4,514 44

45 Part /16 QIPP, investments, activity analysis and risk assessment 45

46 15/16 QIPP The table shows the CRO/SRO, start date and QIPP target for each scheme in Hillingdon s QIPP programme. The net QIPP Plan is 7.7m (2.3% of recurrent baseline). Each scheme has been assessed for deliverability. The risk against non-delivery is shown in the risks page. DRAFT 15/16 Hillingdon CCG QIPP Schemes CRO SRO Scheme Start Date Deliverability of Scheme Gross Saving '000s Reprovision Costs '000s Net Savings Ambulatory Emergency Care MG HD High Intermediate Care RG JW High - 1, ,018 Care Homes Programme KJ JW High Falls & Falls Prevention Service plus Fracture Liaison Service KJ JW High Walk In Centre MG HD High Talley Re-Procurement SM Ska High Audiology Diagnostics MS CD High Small Contract Productivity MS CD Low Community Rehab Equipment SM SKm Low Wheelchair Procurement SM ME Medium - 1,105 1, MSK (Inc Spinal, Pain & Rheumatology) RG SKm Medium Dermatology MS KB High Gynaecology MS KB High Ophthalmology RG KB High Neurology MS KB High Cardiology Phase 1 RG CD High Cardiology Phase 1 RG CD High Integrated Cardiology Model RG CD Medium Integrated Cardiology Model RG CD Medium Diabetes Phase 1 MS SA High Integrated Diabetes Model MS SA Medium Respiratory Scheme MS CF High Integrated Respiratory Model MS CF Medium Cancer LTC MS MI Low Health Champions MS SA/CF High Shifting Settings of Care SVS JV High Integrated Care Programme (ICP) KJ JV Medium Practice Commissioning Improvement (PCI) MG HD Medium Community Consultant Led Team SM JW High Paediatric Asthma Programme MG MMc Medium Additional Paediatric Schemes MG MMc Low Prescribing MN VT High - 1, ,520 Care Home Pharmacist Admissions Avoided MN VT High Better Management of High Cost Drugs MN VT Low CHC Procurement of Complex Children MG NY Medium CHC Patient Review KJ NY Medium Reduction in Running Costs IG CJ High Total - 10,892 3,146-7,746 High Medium Low 90% to 100% Confidence in Deliverability of schemes 65% to 89% Confidence in Deliverability of schemes 64% and Below - Confidence in Deliverability of schemes 46

47 QIPP monthly delivery expectations The QIPP savings has been phased based on the expected implementation date and anticipated ramp up time; the incremental in-month savings are shown in the graph below. 47

48 ACTIVITY PROJECTIONS 14/15 18/19 (1 of 2) 4% Hillingdon CCG to Planned Activity Change 3% 2% 1% 0% -1% -2% Non-elective Non-elective spells - all spells - G&A specialties Daycase Elective Spells - all specialties Daycase Elective Spells - G&A Ordinary Elective Spells - all specialties Ordinary Elective Spells - G&A All First Outpatient Attendances - all specialties All First Outpatient Attendances - G&A First Outpatient Attendances following GP Referrals - all specialties First outpatient attendance following a GP referral - G&A All subsequent outpatient attendances - all specialities A&E attedances all types -3% -4% 48

49 ACTIVITY PROJECTIONS 14/15 15/16 (2 of 2) The chart on the previous slide shows the planned percentage change in Acute activity across a number of activity indicators. These plans incorporate expected demographic growth, non-demographic growth and reductions achieved by QIPP programmes in the following areas: Non-Elective Admissions A number of QIPP schemes will reduce Non-Elective admissions in 2015/16 below the 14/15 level despite expected demographic and nondemographic pressure. The largest of these is Admission Avoidance followed by ICP, improved management of Long Term Conditions, Ambulatory Care Schemes and a number of other smaller schemes. Elective Admissions QIPP ambition for elective inpatients is relatively small, less than growth in other areas, but a number of schemes will make a reduction. Outpatient Attendances Hillingdon s largest outpatient QIPP plans have a more significant impact financially than they do on overall activity since they shift activity to a community setting. However a number of schemes will reduce activity. These are the Integrated Diabetes Model, Ophthalmology pathway re-design and Neurology (Headaches). Accident & Emergency- Increase in line with expected growth. The anticipated net reduction in NEL admissions takes into account changes to pathways after A&E attendance (e.g Ambulatory Care). 49

50 2015/16 Investments There is a total of 3m recurrent planned investment included in the plan (plus 3.1m of QIPP re-provision scheme). 2m of the planned investment is in Mental Health of which 850k has been approved by the GB during 2014/15 The schemes relate to IAPT 0.6m, CAMHS 0.1m and Perinatal Mental Health 0.15m The balance of the programme will be prioritised for consideration by the Governing Body for its meeting on 1st May. A further 0.7m has been identified for investment in Primary Care infrastructure to support the development of GP networks across the borough. Other investments outside local CCG discretion e.g. LAS, IFR have been included as cost pressures 50

51 Key risks and mitigating actions The key risks and mitigations are balanced in the most likely case. The worst Full case Probability shows a Potential 1.7m overspend against the plan and the best case a 1.7m underspend Value against the of Risk plan. Value FINANCIAL RISKS: of Risk being realised of Risk 000s % 000s Acute SLAs - (Overperformance against SLA plans) 4,000 50% 2,000 QIPP Under-delivery 1,400 40% 560 Performance issues 1,000 30% 300 Prescribing % 250 Other Unplanned Cost Pressures e.g system resilience 1,200 30% 360 TOTAL FINANCIAL RISKS 3,470 Full Value Probability Expected of Mitigating of Value of MITIGATIONS: Action Success Mitigation 000s % 000s 0.5% Contingency Held 1, % 1,705 Other Reserves, Investment slippage etc 4,500 35% 1,575 Implement Actions to Deliver Extra QIPP to 4% target % 240 TOTAL MITIGATIONS 3,520 NET RISK/HEADROOM 50 BEST CASE IMPACT 1,705 WORST CASE IMPACT (1,765) 51

52 BHH In-year risk share The agreed BHH in-year financial risk share is separate from the NWL-wide financial strategy. The objective agreed was to establish a mechanism for CCGs to share the in-year risk on external issues (as opposed to those that are within the CCG s internal ability to control). As each CCG s financial plan has been set with a common set of assumptions, the ability to cover in-year risk is independent of the CCG s underlying financial position. It is proposed to continue with a BHH in-year risk share in 15/16 with the detailed criteria and operation to be considered by CCG Finance Committees. 52

53 Part 3 Running costs 53

54 CCG Running Costs Allowances The total amount available nationally for CCG running cost allowances in 2015/16 is a 10% reduction on 2014/15 allowances. The reduction noted above translates to per head allowances of in 2015/16 (compared to in 2014/15. Unlike programme spend allocations, there is no pace-of-change for running cost allowances and so changes in the population of a CCG are immediately reflected. To support strategic planning NHS England have also published indicative running cost allowances for to The resultant allocations for BHH are as follows: Brent CCG 000 Harrow CCG 000 Hillingdon CCG 000 Totals /15 7,795 5,814 6,833 20,442 15/16 7,009 5,263 6,194 18,466 16/17 7,002 5,291 6,237 18,530 Note: 2m (c10%) reduction in 2015/16 17/18 6,993 5,319 6,276 18,588 18/19 6,985 5,346 6,314 18,645 The CCGs have delivered the required 10% savings through the CSU in-housing business case. This has resulted in savings being delivered with no impact on existing 54

55 CCG running cost budgets Key assumptions: CCG borough team: Budgets for this team remain unchanged with the following exceptions: Pay budgets have been updated to reflect the increase in employers Pensions contributions Amendments to reflect proposed establishment changes to Primary Care support posts as advised by COO (subject to GB approval) Non-pay budgets for London Levies reflect the published schedule of charges and Estates budgets reflect actual charges expected BHH shared budgets Budgets for this team remain unchanged with the following exceptions: Pay budgets have been updated to reflect the increase in employers Pensions contributions Amendments to reflect the revised establishment of the Continuing Care team which now spans BHH and an additional senior Estates post. In-housed CSS In-housed CSS costs reflect budgets set for the final 6 months of 14/15 less non-recurrent costs then calculated for a full year. Hillingdon CCG Initial Running Cost Budgets are as follows:- Budgets Total cost /head 000s CCG borough team 2, BHH shared posts 1, CSS in-housed 2, TOTAL 5, Allocation 6, Headroom / (Over-commitment) As shown in the table above the proposed running costs budgets are within the revised allocation. *Plans are in place to review the split of CSS costs between running costs and Programme and also to refresh the split between CCGs as this is yet to be completed. This could affect the level of headroom shown in the table above. 55

56 Part 4 Practice budget setting 56

57 Background/context We plan to undertake the 15/16 GP practice budget setting exercise across BHH CCGs using a consistent set of assumptions, principles and rules. One of the main principles is that the 15/16 GP practice budgets should reconcile to 15/16 contract baselines. However, it is our experience that the detail of the contract baseline will not be available in time for Months 1-3 reporting. Therefore draft budgets will be calculated based upon 15/16 contract offers to providers. The main components of the budget setting process are set out below as follows: - Governance / Reference Group - Scope of budgets - Budget setting principles - QIPP adjustments - Other contract adjustments - Validation and successful contract challenges - Fair shares - Risk management - Prescribing - Activity correctly assigned to CCG, but unallocated to GP Practice - In-year reporting - Monitoring performance 57

58 Governance It is recommended that within each CCG a Reference Group comprised of Clinical, Finance and Information leads is established for working through the detail of the15/16 budget setting process and making recommendations to the Governing Body. Scope of budgets held at GP Practice level Acute activity covered by Payment by Results (PbR) including A&E and Non-Contracted Activity Acute non-pbr inpatients Non PbR outpatients (All providers) Acute unbundled diagnostic tests Private providers (BMI, Spire, In Health) Direct access budgets (Main providers) GP prescribing Walk in centres/ucc (Main providers) Non PbR outpatient procedures High cost activity that cannot be financially managed at a practice level will be managed at the CCG level. Community outpatient services AQP and Out of Hospital Services also to be incorporated subject to availability of activity and cost data that can be attributed to practices. 58

59 CCG Allocation methodology and Fair Shares Formula 15/16 Recurrent allocations to CCGs and primary care allocations to NHS England Area Teams were agreed by the NHS England Board at its meeting on 17 December Recurrent allocation to CCG was calculated by Determining target allocations based on relative need for healthcare services Establishing baselines(previous year s allocations) Calculating opening distances from the target Determining pace of change policy (moving CCGS closer to their target allocation through differential growth). The national weighted capitation formula is used to calculate CCGs target fair shares of the available resources. The weights per head are based on: need due to age (the more elderly the population, the higher the need per head, all else being equal); additional need over and above that due to age (this includes measures of health status and a number of proxies for health status); an adjustment for unmet need and health inequalities; unavoidable higher costs of delivering health care due to location alone, known as the Market Forces Factor Pace of change balances providing stability in funding with moving those furthest under target closer towards their target. Same principles are used to set practice based budgets. NHS England has not updated the CCG 2015/16 weighted population estimates, which determine the target share of resources for CCGs; both model parameters and data have been held as they were when indicative 2015/16 allocations were announced in December NHSE is currently developing a project to develop a full model update, aiming at 2016/17 allocations. 59

60 Budget setting principles Budgets managed at practice level, where there is patient-level information available to support this and is considered sufficiently robust e.g. acute contracts, walk-in centres, acute noncontracted activity. Acute Budgets held at CCG level that are subject to risk management arrangements e.g. admissions costing over 10k are assigned to a high cost risk budget, critical care activity is held at CCG rather than GP practice level etc. Budgets will be held at CCG level where there is not currently the information to support the budget being held at practice level (e.g. mental health, community contracts). Budgets to be set in line with the scope signed-off by the Reference Group. The Full year forecasted amounts are subject to the following: Quality Innovation Productivity and Prevention (QIPP) schemes. Other Contract Adjustments. Budgets to add back to agreed 15/16 contract values. Budgets to include market forces factor for all PbR services. Once the final information is available (anticipated in Month 4), Budgets will be updated to reflect the agreed contract baseline values and the split of PbR/Non PbR. Activity is to be attributed to practices based upon latest available Exeter data. An Unallocated budget line will be set up for activity which cannot be allocated to a practice as the information is not available or the patients are not registered with any Practice but are residents of the CCG Borough. 60

61 QIPP These are the demand management/saving/quality improvement schemes that are part of the 15/16 agreed CCG QIPP programme. It is envisaged that these will be applied to individual budget lines / practice budgets based on specific practice spend profiles, subject to agreement by the Budget Setting Reference Group. QIPP re-provision budgets to be assigned responsibility to GP Practice or CCG-level (as appropriate) 15/16 National Tariff Payment System (PbR) Changes See Slides above 61

62 Other Contract adjustments These are adjustments applied to contracts in line with National guidance or local negotiation and will be applied to practice budgets based on practices relative historic spend in these areas / providers. Included are adjustments such as (if agreed during contract negotiations): - Non Elective Threshold any non elective activity above the outturn activity is charged by the Trusts at 70% of tariff (reflecting 15/16 enhanced tariff options (ETO) - Outpatient Follow Up Ratios included in contract are first to follow up outpatient ratios. If follow-ups exceed these ratios, the Trusts are not paid for the excess. - Planned Procedures with Thresholds (PPwT) have been excluded from the Acute contracts in accordance with the Sector policy. - Emergency 30 day readmissions attract a reduce tariff. - Elective Intervention Rates. - Internally Generated Demand. - Non GP Referrals C2C and Other. - Short Stay Non Elective. - Excess Bed Days. 62

63 Validation and successful contract challenges Budget setting data and in-year monitoring data is proposed to be mapped to practices using the latest available Exeter data to ensure that activity is accurately mapped to GP Practices. The CCG will validate contract monitoring data and issue challenges. If these challenges are successful, either practice data is amended directly or credit notes are issued in which case GP Practices will receive a pro-rata share of the credit. Risk Management It is proposed that a risk management pool will be established for High Cost Acute Spells (defined as those with cost greater than 10,000) based upon 14/15 outturn by top slicing all practice budgets proportionally. High Cost spells would therefore be excluded from practice based budgets using detailed data in the reference period (e.g. Jan 14 Dec14) Any under or overspend on the risk pool would be reallocated to practices at the end of the year in proportion to budget baseline. In addition, we propose to establish a reserve to be held at CCG level for material population changes in-year at practice level.(e.g. 0.3% of total practice budgets) 63

64 Prescribing A total prescribing budget will be set, based upon 14/15 outturn, and adjusted for agreed inflation uplift offset by QIPP deduction and for draft budgets this approach will be replicated at practice level. Weighted Capitation formula (Fair share formula) was developed by NHS England for prescribing as well. There is first an adjustment for need related to age and sex and then an adjustment for additional need over and above that due to age. The adjustment for age and sex uses the weights developed by the Prescription Support Unit (PSU) known as ASTRO(09)-PUs. The model for additional need includes both need and supply variables as for the other components. The need variables include for example the Low Income Scheme Index (LISI), the proportion of those aged 70 years and over claiming disability living allowance (DLA), and the standardised mortality ratio. Within each practice budget an element based upon 14/15 outturn, could be set aside for (an agreed list of) Primary Care High Cost drugs. Over and under performance on the Primary Care High Cost drugs element of the practice budget will be offset at year end. Any underspend or overspend across the CCG overall on high cost drugs will be charged proportionately to practices. The prescribing budget will cover the cost of walk-in centre prescribing where this is provided within the practice. 64

65 Timetable & process Budget Setting Reference Groups are in place as follows:- Brent Budget Setting Reference Group Harrow: Budget Setting & Finance Reference Group Hillingdon: Budget Setting Review Group Membership of Hillingdon Group Chair of Finance Committee Deputy CFO Head of Primary Care Strategy CCG Finance Advisor Hillingdon Key dates : Governing Body sign off principles 27 th March First cut budgets issued 30 th May Final budgets issued In-year reporting timetable issued 27 th June 30 th April 65

66 Part 5 Cash and balance sheet 66

67 Cash and balance sheet Draft cash-flow and Balance Sheet projections for 15/16 have been submitted to the NHSE as part of the draft 15/16 financial planning submissions, and will be updated in the April 2015 submissions. Monthly cash-flows are based upon: Estimated 14/15 year-end forecasts for creditors and debtors 14/15 monthly spending patterns 15/16 financial plans Balance Sheet opening balances will be based upon forecast 14/15 year-end balances for debtors and creditors. 67

68 Part 6 Next steps 68

69 Next steps Local timetable 1. Governing Body meetings (Hillingdon 27 th March) 2. Sign off of budgets by budget managers by 30 April 3. Practice budgets timeline as per slide Development of draft 16/17 plan by 30 June 69